One of the influences limiting retail sales growth is
consumer spending on cell phone and data plans, as this WSJ article explains.
To make room for bigger “phone” bills, especially while incomes are flat or
declining, shoppers are having to make choices and shift spending. Cell plan providers expect
spending on their services will continue to increase as consumers get hooked on
speed, want new equipment, bigger plans, etc. "Speed entices more
usage," Verizon Chief Financial Officer Fran Shammo said at an investor
conference last week. "The more data they consume, the more they will have
to buy."
Retailers continue to experiment with ways to neutralize the
negative effects of showrooming, but the real challenge is to find a way to live
with it and prosper, because this is a permanent change. The genie is not going
back into the bottle. A recent Knowledge@Wharton piece called "Turning the
Retail 'Showrooming Effect' into a Value-add" ties together some fresh
information with observations from some academic heavy hitters.
A recent National Association of Convenience Stores/Coca-Cola Retailing Research Council report
focuses on identifying growth opportunities for convenience retailers,
but the
learnings have implications for others as well. The project began with a
question:
“What can our shoppers tell us that would encourage them to spend more
in our
stores?” For answers, the Council, known as NACS/CCRRC, turned to some innovative shopper
research. The findings revealed valuable insights into how shoppers
think about convenience occasions, and these led to development of five new potential growth platforms. Here are two points that retailers of
all stripes can use in their search for growth opportunities with
shoppers.
In The Hub Magazine’s current issue, Michael LeBeau
offers a useful build on the “path to purchase” for the Digital Age. He
argues that what happens after the sale is a "Third Moment" that deserves
as much attention as the preceding steps. This is when shoppers use a
product and share their experience, often via social media. LeBeau’s
insight reminds us that looking at shopper behavior in the largest
possible context is key to understanding what’s happening.
A new study provides good, up-to-date facts on a topic people have
been speculating about for some time now – the major impact that mobile
is likely to have on shopping behavior. "A Tectonic Shift in Shopping
Behavior: Ryan Digital Retail Study 2012" is described in stories at
Mobile Commerce Daily and Biz Reports. When Ryan asked shoppers about
unplanned purchases, "21% of respondents say they make more unplanned
purchases because of shopping apps, 20% do the same because of retailer
texts and 22% for retailer social media."
Burberry may have signaled lower earnings to investment analysts
recently, but we think they are positioning themselves well to meet the
changed expectations of shoppers. Their new flagship store is a great
blend of old style and new technology. "The world is moving so fast.
There is absolutely no room for laziness or for resting on your
laurels," says Chief Creative Officer Christopher Bailey in this
Guardian article. The store design aims to achieve a brick-and-mortar
version of the brand’s website – to engage and serve shoppers with
speed, relevancy and continual innovation. Some of the key tactics
include:
In London last month, I had a chance to catch up with Marc de Speville,
who watches retail in Europe for Redburn, Europe’s leading independent
equities broker. When he shared his observations about how food and
electronics retailers were responding to the multi-channel trend, I was
struck by how brick-and-mortar retailers who sell such different products were starting to focus on leveraging the inherent advantages they have
over pure online players. For grocers, de Speville sees an opportunity
to break out of a capital-intensive business model. In electronics, he
sees Europe’s largest retailer leveraging physical locations while
minimizing price differentials. With his permission, I’ve summarized
our pub talk below.
The inaugural report by the Eurasia and African Coca-Cola
Retailing Research Council (CCRRC) is out, and near the end, it surfaces an idea that
caught our attention: de-averaging. Most retailers are constrained by the need
to stock stores to meet the needs of the “average” shopper who lives in the
trade area. What if technology makes it possible to “de-average” the offer – to
target an offer so specifically that a retailer could serve a smaller,
well-defined set of shopper needs profitably and efficiently – and manage the
supply chain complexity required to do so. Will technology make
large-scale, hyper-local retail a reality? Interesting thought.
To save 25% or more, three-quarters of respondents in a September
Valassis and RedPlum report said that they would be willing to sign up
for an email newsletter, two-thirds would “like” a Facebook page, and
17% would tweet or re-tweet a deal (up 5% from 2011). Shoppers are
willing to give something to get something but they don’t give it away
for “free.” For retailers, the challenge is to find the sweet spot
where it’s worth it for the customer, but it also serves the goals of
the business. The report also describes how smartphones
help shoppers save money, and some of those results might surprise you.
Using technology to create and deliver optimized product
assortments and shopping experiences – specifically, better forecasting and
customer analytics – is becoming common practice among retailers who are
outperforming their peers in year-over-year same-store sales. Eric Sherman summarizes new
research from RSR in Inc. magazine this month, where he writes: “This is an
interesting shift. In the past, forecasting systems were largely seen as supply
chain management tools, where the focus was on reducing operational costs. Now
such systems and techniques have become important to expand sales
opportunities, moving from a strictly bottom-line focus to a top-line one.”
What happens when you face the threat of losing your
customers? In “Can Electronics Stores Survive?” Ann Zimmerman delivers insights
that can benefit any retailer striving to survive. Sure the electronics
marketplace has changed – TV prices have dropped dramatically, electronics
purchases no longer require a visit to a specialty store, and a single
manufacturer now drives nearly all product innovation (Apple). But the sector’s
loss of customers didn’t start just this year. It’s been going on for some time. This signal should have and could have been noticed some time ago –
BMC Black Belt Hakan Bengtsson
traveled from Sweden to Chicago recently, and we asked
him how Northern European retailers were dealing with the trend toward multi-channel retailing. In this interview, he answers our questions and then asks some of his own. Hakan works for Centigo, a leading
management consultancy based in Stockholm, where his specialty is advising
clients on how the convergence of the web and physical stores is
affecting commerce.
Marketers and advertisers may focus on the 18-49 segment, but “The Most
Valuable Generation” is the Boomers according to a new Nielsen report. It’s hard to argue
with these numbers: Fifty percent of the U.S. population will be over 50
in 5 years. This group will control 70% of disposable income in the
country, and they stand to inherit $15 trillion over the next 20 years.
They will be responsible for spending almost 50% of all CPG dollars, but
less than 5% of advertising dollars are directed to them. The contrast
with younger segments is striking.
Men have a new way to shop for high-end clothing: Trunk Club, a 2009
Chicago start-up is now flourishing under the leadership of Brian
Spaly (founder of Bonobos). The retail model is familiar – buy clothes
at wholesale and sell for a mark-up – but Trunk Club’s service and
delivery make it stand out. Trunk Club has stylists (not salespeople)
whose job is to learn their customer’s wardrobe preferences, lifestyle
needs, and sizes and measurements. Then the stylist delivers selections
to the man’s home to try. Don’t like ‘em? Ship ‘em back, no cost. “If
the stylist service is free, I get custom-selected clothing mailed to my
home and I’m not paying a single cent more for any item I buy, why
would I shop anywhere else?” asked the author of this Forbes article
after going through the Trunk Club process.
How many POS-enabled iPod Touches can a retailer purchase
for the cost of a traditional cash register? Five, said URBN’s Chief Information and Logistics Officer
Calvin Hollinger at the NRFTech Conference. Checking out more shoppers quickly
is great, but the retailer has also developed a suite of mobile apps to help store
associates better serve their shoppers – and not just for the cool factor, but
because it makes financial sense. URBN will be removing all cash registers from
its stores within five years says Hollinger.
Scope
All clothing shopping occasions, as well as other fashion-defined products.
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View By Segment
One of the influences limiting retail sales growth is
consumer spending on cell phone and data plans, as this WSJ article explains.
To make room for bigger “phone” bills, especially while incomes are flat or
declining, shoppers are having to make choices and shift spending. Cell plan providers expect
spending on their services will continue to increase as consumers get hooked on
speed, want new equipment, bigger plans, etc. "Speed entices more
usage," Verizon Chief Financial Officer Fran Shammo said at an investor
conference last week. "The more data they consume, the more they will have
to buy."
Retailers continue to experiment with ways to neutralize the
negative effects of showrooming, but the real challenge is to find a way to live
with it and prosper, because this is a permanent change. The genie is not going
back into the bottle. A recent Knowledge@Wharton piece called "Turning the
Retail 'Showrooming Effect' into a Value-add" ties together some fresh
information with observations from some academic heavy hitters.
A recent National Association of Convenience Stores/Coca-Cola Retailing Research Council report
focuses on identifying growth opportunities for convenience retailers,
but the
learnings have implications for others as well. The project began with a
question:
“What can our shoppers tell us that would encourage them to spend more
in our
stores?” For answers, the Council, known as NACS/CCRRC, turned to some innovative shopper
research. The findings revealed valuable insights into how shoppers
think about convenience occasions, and these led to development of five new potential growth platforms. Here are two points that retailers of
all stripes can use in their search for growth opportunities with
shoppers.
In The Hub Magazine’s current issue, Michael LeBeau
offers a useful build on the “path to purchase” for the Digital Age. He
argues that what happens after the sale is a "Third Moment" that deserves
as much attention as the preceding steps. This is when shoppers use a
product and share their experience, often via social media. LeBeau’s
insight reminds us that looking at shopper behavior in the largest
possible context is key to understanding what’s happening.
A new study provides good, up-to-date facts on a topic people have
been speculating about for some time now – the major impact that mobile
is likely to have on shopping behavior. "A Tectonic Shift in Shopping
Behavior: Ryan Digital Retail Study 2012" is described in stories at
Mobile Commerce Daily and Biz Reports. When Ryan asked shoppers about
unplanned purchases, "21% of respondents say they make more unplanned
purchases because of shopping apps, 20% do the same because of retailer
texts and 22% for retailer social media."
Burberry may have signaled lower earnings to investment analysts
recently, but we think they are positioning themselves well to meet the
changed expectations of shoppers. Their new flagship store is a great
blend of old style and new technology. "The world is moving so fast.
There is absolutely no room for laziness or for resting on your
laurels," says Chief Creative Officer Christopher Bailey in this
Guardian article. The store design aims to achieve a brick-and-mortar
version of the brand’s website – to engage and serve shoppers with
speed, relevancy and continual innovation. Some of the key tactics
include:
The inaugural report by the Eurasia and African Coca-Cola
Retailing Research Council (CCRRC) is out, and near the end, it surfaces an idea that
caught our attention: de-averaging. Most retailers are constrained by the need
to stock stores to meet the needs of the “average” shopper who lives in the
trade area. What if technology makes it possible to “de-average” the offer – to
target an offer so specifically that a retailer could serve a smaller,
well-defined set of shopper needs profitably and efficiently – and manage the
supply chain complexity required to do so. Will technology make
large-scale, hyper-local retail a reality? Interesting thought.
To save 25% or more, three-quarters of respondents in a September
Valassis and RedPlum report said that they would be willing to sign up
for an email newsletter, two-thirds would “like” a Facebook page, and
17% would tweet or re-tweet a deal (up 5% from 2011). Shoppers are
willing to give something to get something but they don’t give it away
for “free.” For retailers, the challenge is to find the sweet spot
where it’s worth it for the customer, but it also serves the goals of
the business. The report also describes how smartphones
help shoppers save money, and some of those results might surprise you.
Using technology to create and deliver optimized product
assortments and shopping experiences – specifically, better forecasting and
customer analytics – is becoming common practice among retailers who are
outperforming their peers in year-over-year same-store sales. Eric Sherman summarizes new
research from RSR in Inc. magazine this month, where he writes: “This is an
interesting shift. In the past, forecasting systems were largely seen as supply
chain management tools, where the focus was on reducing operational costs. Now
such systems and techniques have become important to expand sales
opportunities, moving from a strictly bottom-line focus to a top-line one.”
What happens when you face the threat of losing your
customers? In “Can Electronics Stores Survive?” Ann Zimmerman delivers insights
that can benefit any retailer striving to survive. Sure the electronics
marketplace has changed – TV prices have dropped dramatically, electronics
purchases no longer require a visit to a specialty store, and a single
manufacturer now drives nearly all product innovation (Apple). But the sector’s
loss of customers didn’t start just this year. It’s been going on for some time. This signal should have and could have been noticed some time ago –
Facing retail challenges in Sweden
Marketers and advertisers may focus on the 18-49 segment, but “The Most
Valuable Generation” is the Boomers according to a new Nielsen report. It’s hard to argue
with these numbers: Fifty percent of the U.S. population will be over 50
in 5 years. This group will control 70% of disposable income in the
country, and they stand to inherit $15 trillion over the next 20 years.
They will be responsible for spending almost 50% of all CPG dollars, but
less than 5% of advertising dollars are directed to them. The contrast
with younger segments is striking.
Men have a new way to shop for high-end clothing: Trunk Club, a 2009
Chicago start-up is now flourishing under the leadership of Brian
Spaly (founder of Bonobos). The retail model is familiar – buy clothes
at wholesale and sell for a mark-up – but Trunk Club’s service and
delivery make it stand out. Trunk Club has stylists (not salespeople)
whose job is to learn their customer’s wardrobe preferences, lifestyle
needs, and sizes and measurements. Then the stylist delivers selections
to the man’s home to try. Don’t like ‘em? Ship ‘em back, no cost. “If
the stylist service is free, I get custom-selected clothing mailed to my
home and I’m not paying a single cent more for any item I buy, why
would I shop anywhere else?” asked the author of this Forbes article
after going through the Trunk Club process.
How many POS-enabled iPod Touches can a retailer purchase
for the cost of a traditional cash register? Five, said URBN’s Chief Information and Logistics Officer
Calvin Hollinger at the NRFTech Conference. Checking out more shoppers quickly
is great, but the retailer has also developed a suite of mobile apps to help store
associates better serve their shoppers – and not just for the cool factor, but
because it makes financial sense. URBN will be removing all cash registers from
its stores within five years says Hollinger.
