How to embrace showrooming during the holidays

Showrooming quickly became a Voldermort-like word, one which should never be uttered around brick-and-mortar retailers. According to Retail Customer Experience, the practice of going into a retail store to look at products and then search for them online or on mobile at a later date is becoming a reality, and retailers like Best Buy are embracing the practice rather than combat it.


From the article:

For many retailers, the fear of showrooming is based primarily on price competition — and for good reason. Consumers care about price and use mobile technologies to search for the best deal. In fact, some consumers have even demonstrated their willingness to purchase holiday merchandise from an online competitor while they are interacting with the product in a brick-and-mortar retail store.

But what Best Buy and a handful of other retailers have come to understand is that not all retail products are commoditized. Although price matters, it isn’t the only dimension consumers look for in an exceptional holiday shopping experience. And in many cases, the price advantage online retailers have enjoyed can be neutralized through other in-store strategies.

With that in mind, there are a few strategies that brick-and-mortar retailers can use this holiday season to embrace showrooming and convert it into retail success:

Showrooming as a negative concept is grounded on the notion that online-only retailers can beat their brick and mortar counterparts by cutting costs of distribution and sending this value on to their customers. However, it overlooks the obvious fact that most buyers in the majority of retail categories continue to need the “intimacy” of trying something on or having tactile interaction to see how it works for them, never mind still often enjoying the shopping experience itself. By leveraging physical store space to offer enhanced multichannel shopping opportunities, retailers can capture business from online competitors. When done well, omnichannel integration combines online, social, mobile and in-store resources to deliver an experience that far surpasses the experiences offered by online competitors.


In-store promotions, Big Data to the rescue

For big retail brands to compete on a global scale, they need to be able to execute campaigns on a superior level. According to a recent Forbes article, crowdsourcing information and leveraging Big Data can be the key for retailers to break into the upper echelon of effective retail localization.


From the article:

“When brands pay for in-store merchandising, such as an end-cap display, 49 percent of the time it’s actually missing – it’s not in the store,” said Justin Behar, CEO of Quri, a retail intelligence company based in San Francisco. The company, which has been working with its customers to collect data during the past year, also found that promotional pricing is incorrect 22 percent of the time.

Quri is one of several new companies leveraging mobile workforces and the power of big data to help uncover inefficiencies in stores so that brands and retail partners can remedy issues quickly.

Armed with smartphones, remote workers in locations across the world complete small tasks at big box stores such as Walmart or Target TGT -0.84% (for about $5 to $7 per task). These tasks include verifying that promotional displays are set up as per guidelines or checking a salesperson’s knowledge of pricing information. The driver of this new mobile workforce, according to Behar, was the introduction of the iPhone. The Apple AAPL -1.1% device equipped workers with rich camera capabilities and barcode scanners on a large, distributed scale.

“We do the dark data side of big data – it’s data that brands haven’t been able to get before in a structured way,” said Behar. “We use this crowd force at scale to go into thousands of stores daily and effectively measure the in-store conditions.”

Once this data is collected, analytics are applied, he added.

“In 24 hours on a real-time basis, all of that data is being surfaced and organized, and a layer of analytics is put on top so that our brand customers can log into our Web-based analytics tool and see the results,” said Behar. “They can drill down and see that Store 131 in Wichita, Kan., doesn’t have the promotion. The early visibility allows them to take action.”

holiday 2013 retail infographic

Getting Ready For The Holiday Shopping Rush [INFOGRAPHIC]

You may remember the Black Friday infographic we posted a few weeks back, well the folks at Firefly Store Solutions are back with another great infographic, this time with the 2013 holiday season in mind.

From Firefly Store Solutions:

What do retailers want for the Holidays? More shoppers, of course. While the retail landscape is constantly changing, one thing is for sure. The holiday season can make or break store’s sales year.

Firefly Store Solutions wants all its customers, partners and friends to have a profitable holiday season and to that end, we’ve created a graphic reminder for independent retailers – Your Holiday Retail Checklist: 5 Tips For Getting Your Store Ready For The Holiday Shopping Rush.

holiday retail checklist
Infographic by Firefly Store Solutions.


Can Best Buy serve as a model for struggling retailers?

Best Buy’s well-documented decline two years ago, and subsequent rise from the ashes over the past 12 months, is shaping up to stand as a model for other retailers that find themselves in freefall.


According to a recent Forbes article, Best Buy’s stock is up 250% from a year earlier and took a commanding lead coming out of Black Friday. So what’s in their secret sauce that has given them a second chance?

From the article:

Best Buy’s comeback is a beacon of hope for other struggling retailer’s, but very few will enjoy the same fate.

For everything that was going wrong inside of Best Buy’s stores, the market environment outside has been exceedingly friendly in 2013. Retail and consumer IPOs have been hot, stocks at large are enjoying their best year in over a decade and even issues like a government shutdown this fall did nothing to derail the rally.

All that helps explain why Best Buy has tripled even though it is still grappling with the challenges of a retail turnaround. While 2014 may be another winning year for equities, few expect it to be as explosive, which will be a hurdle for any retail stock looking to repeat Best Buy’s trash to treasure revival.

JC Penney may have looked like a tempting possibility after the department store chain touted a 10.1% increase in same-store sales for November. Though the increase was likely thanks to hefty discounting, positive comps is a critical element in buying the retailer time as it moves on from Ron Johnson’s failed effort to remake its image.

A brief rally was cut short though, and the news since has not been good. Hayman Capital’s Kyle Bass told Bloomberg his hedge fund has fully exited its stake and the company also revealed a SEC inquiry into its September capital raise, which came shortly after CEO Mike Ullman dismissed talk of the need for more capital.

The challenge in betting that retailers are doomed is that they tend to go bankrupt very slowly, then all at once. So a key component to the recipe for a big comeback is liquidity. JC Penney may be in decent shape thanks to the September capital raise, but even positive comps from a poor 2012 holiday season might not be enough to change the mood around the chain.


In-Store Merchandising: Ensuring Brick-and-Mortar Stores Hit Their Sales Goal

As retailers strive to provide personalized in-store experiences,the planning and execution of retail floor space is a top priority. However, without accurate store-level knowledge down to the fixture level, plans and forecasts are only crap shoots. Retailers lose $10-30 million in sales per billion dollars in annual revenue due to the problem.


According to a new trendagram published by RIS News and sponsored by RBM Technologies and Capgemini, half of all retailers surveyed estimate 2-5% waste with EVERY merchandise campaign implemented.

Other findings in the trendagram include:

  • 3 in 10 retailers measure store-level compliance frequently enough to catch problems
  • 53.8% say the biggest challenge is the disconnect between merchandising, marketing, and store ops
  • 63% say the most valuable merchandising technology is the optimization of assortment against key customer segments
  • 43% say an optimized end-to-end merchandising lifecycle is extremely important to retail success.

With the right suite of visual merchandising management solutions, an accurate merchandising planning process is attainable. With these tools, communication becomes clear and precise, and retailers save time and money. Visual merchandising management solutions enable retailers access to real-time information needed to carry out accurate localized campaigns to their stores.

When the right product and messaging is delivered to the right store, at the right time, on the right fixture, retailers can drive the customer experience envisioned in the original planning process.

You can download the entire trendagram on the RIS News website.


Using image recognition to simplify mobile POS

A number of merchants in the Dallas, TX area are testing out a new mobile POS system that uses facial recognition to speed up the checkout process. According to Mobile Commerce Daily, the system is called Cartwheel and has been rolled out to 15 businesses in the Dallas area.


From the article:

A number of different vendors have been releasing mobile POS systems to ease the transaction process for smaller merchants.

There is a lot of competition in the restaurant space with mobile apps such as Dash, TabbedOut and MyCheck (see story).

Then there are larger competitors such as Google Wallet, Isis and PayPal.

However, many of the mobile POS systems require further hardware such as contactless terminals, and not only does that require more investment from merchants but it also seems that NFC is struggling to catch on (see story).

Cartwheel Register is taking a different approach by keeping it all within the app and not even requiring bar codes to make a purchase.

“The bottom line there is the only thing a merchant needs to run a store is their smartphone,” Mr. Cervin said.

“Second is the implication on transaction price,” he said. “Traditionally today there’s a price for a transaction and double the price for keyed in and oftentimes merchants aren’t aware or they get penalized because the swiper doesn’t work well.

“It ends up costing the merchant a lot of money. We have one rate, and it’s the same no matter what, whether it’s American Express, Visa or MasterCard. And it’s a competitive rate to the swipe transaction. Third is the idea that the interface on a tablet and phone gets the item level recording and being able to understand their business better.”


Micro-location, the next big thing in shopper marketing

When Apple rolled out its newest iOS this past fall, most people probably did not pay attention to the quickly mentioned iBeacon. According to ClickZ, what existed on a single slide of a much larger presentation actually poses some interesting new opportunities for retailers.


From the article:

Unlike GPS (which relies on satellites and line of sight), iBeacon is all about proximity and works indoors. Retailers can place beacons around departments, in aisles, in front of the store; anywhere they and their customers will benefit from the ability to alert customers’ apps about specials, draw directory maps, or provide information upon crossing into a micro-location.

It’s a new way to “showroom.” A consumer can view a product online and then go to the store to sample it and purchase it; the iBeacon improves in-store navigation by telling the consumer where it is as he enters the particular micro-location. I’ll use the example of my wife, who loves to shop for shoes, to illustrate how this micro-location works.

Generally, her shopping journey starts by conducting some online research and product comparison/ reviews. As she narrows her decision, the site will inform her about local availability and she marks/likes them. She uses traditional mapping info to find the nearest retailer and off we go to the mall. Here’s where iBeacon comes in.

The retailer can place the sensors throughout its aisles and assist my wife, armed with her BLE-enabled iPhone, to find the shoes she looked at online with in-store mapping.

As she enters the mall or store, the local iBeacons communicate with her phone via BLE. The different iBeacons will tell her the location of the shoes she wants (pumps, flats, dress shoes, etc.), use local iBeacon data to navigate her through the store, and inform her about specials and item information as she stands in front of them or enters each micro-location. In addition, the iBeacons can cross-promote merchandise by navigating her past specific aisles and products.


RBM Supports MetroPCS Execution of Localized Campaigns Across Network of Stores

CAMBRIDGE, Mass.–(BUSINESS WIRE)–RBM Technologies, provider of the only retail communications platform that supports fixture-based planograms, localized campaigns and execution compliance, today announced that MetroPCS has implemented RBM’s Visual Merchandising Manager (VMM) solution across its network of stores nationwide. The VMM platform supports MetroPCS with localized campaign planning and execution.


VMM consolidates dispersed campaign data into a single database to more effectively drive in-store execution of localized assortments. It utilizes unique store attribute data and fixture configurations to deliver an accurate localized product mix to each retail location. RBM’s solution also enables store managers to report merchandising issues and re-order campaign materials from corporate headquarters in real time.

Merchandising, planning, supply chain and store execution all benefit from the implementation of VMM, providing local teams with real-time, interactive planograms to react instantly and accurately to corporate merchandising directives — right down to the individual fixture level.

“Wireless carriers are constantly offering customers new plans, promotions and devices in their stores,” said Dan Wittner, EVP and chief operating officer at RBM Technologies. “By implementing VMM, MetroPCS now has access to an enhanced centralized communications solution that enables them to deploy campaign directives at the store and fixture level while ensuring compliance across their entire network of stores.”