omni-channel-distribution-retail

A marked change in the approach to omnichannel

As retailers are examining (and reexamining) their omnichannel strategies in the wake of new technologies and industry trends, one thing is for sure, the technologies such as mobile and tablets that are supporting omnichannel initiatives are not going anywhere.

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In an interview with MediaPost Mark Larson, KPMG’s global head of retail notes that brick-and-mortar retailers are not fearing this new wave of technology, rather they are embracing it.

From the article:

Q: When it comes to tech, how are retailers changing most?

A: As more retailers recognize that omnichannel shopping presents a transformational opportunity, we think those that own physical stores are now viewing these stores as assets, not liabilities. And they are taking greater advantage of technology in the in-store environment. We’re seeing retail brands come up with more ways customers can use smartphones in the store, and also arming associates with more technology, so they can better help customers.

Q: Apple and Sears have long gotten a lot of attention for this. And this year, Macy’s practically gave smartphones a speaking role in their holiday ads, as if to say, “We’re cool! We know people like to shop by phone!” Is that a good idea?

A: I think so. First, it’s defensive. You demonstrate that you understand tech and can compete with the pure-play online retailers. But it also is very much an offensive strategy. It demonstrates to customers that they don’t have to go online to get digital convenience, that it can be integrated into the in-store experience, too.

Q: What do you think will be the biggest change, going forward?

A: An increase in omnichannel behavior, with retailers using mobile more as an enabler. We’ll see more of people buying online, and picking up in-store; and buying in-store, and having it delivered to their home.

Q: What are the risks of increasing the use of mobile in stores?

A: Obviously, information security and privacy, but those can be mitigated. I think a big risk is finding the appropriate match of tech with your brand and your style of merchandise. That needs to be carefully thought out. And then there is always the people risk—you need to make sure associates are trained and understand the technology, so that they can create a good experience for customers.

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Technology front and center at NRF’s 2014 Big Show

Anyone what has ever attended NRF’s Big Show (that’s us!) knows that it is the must-attend event for those in the retail technology space. This year should be another one for the record books as the Big Show takes over every square foot of the Jacob Javits Center.

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In preparation for this year’s convention, Paula Rosenblum wrote a great article on Forbes outlining the top five retail technology trends she expects to see front an center this year.

#1: Technology to improve the customer experience in stores. Real estate is retailers’ biggest expense but sales and traffic growth to stores have been slowing as consumers continue their inexorable move on-line. It’s true that close to 90% of sales still consummate in stores but many shoppers ask themselves “Why should I take the time and trouble to go to a store, when I can just buy what I want on line?” This fact is not lost on retailers and they are continually searching for ways to create a more compelling in-store experience without breaking the bank on costs. After all, you can’t just say “Never mind” and close your stores. Leases were not meant to be broken. The store must go on.

#2: Cross-channel Order Fulfillment. We live in a world of instant gratification. If a retailer is offering something for sale, a shopper rightfully expects she can have that thing. Now. She doesn’t really care that the product she wants is in a different store, or that it’s in a warehouse on the other side of the country. By offering a product up for sale, a retailer makes an implicit promise – that the item is available for sale. In the old days, store employees would call ‘round to other stores to find out if they had a particular product in stock. That works, but it’s not very efficient. Retailers will be buying technology to make good on those implicit promises without spending valuable employee time or money. I expect this technology to be a hot topic at the Big Show. The industry buzzword for the concept is “omni-channel fulfillment,” but we know the customer doesn’t care about buzzwords. She just wants what she wants. It’s pretty simple, really. Well, it’s easy to say at least, but not so easy to do.

#3: Promotion and Price Optimization. Unless you’ve been vacationing on Mars , you know that retailers have gotten more and more promotional – especially around the holiday season. In fact, I had the opportunity to appear on a Russian TV news show this year to talk about Black Friday weekend and associated sales. Yes, Russia. The whole world is watching. It’s the Superbowl of shopping. Historically, these promotions have been a bit of a game of “chicken” between retailers and shoppers. Each waits for the other to blink. But the expansion of Black Friday madness has altered the power dynamic. The consumer is totally in the driver’s seat. Retailers will be looking at technology to help them find the most effective promotional and end-of-season prices.

#4: Big Data and Predictive Analytics: This is a very broad topic and it seems everyone’s talking about it. “Big data” has become a catch-all phrase to cover most everything, but in retail it seems to be settling in to refer to information available on shoppers and consumers in general. Things like their paths to purchase, their product reviews, reports from social media…information that wasn’t available before the internet, smart phones and social media. Predictive analytics are designed to help retailers buy more precisely so they can sell more intelligently. It’s a subject that’s been given a bad rap in the media, but really has no nefarious notion behind it. It’s just retailers’ attempt to do a better job of being…retailers.

#5: Data Security: Honestly, this wouldn’t have been very high on my radar screen three weeks ago, but the Target TGT -0.39% data breach has gotten a far more negative consumer response than anyone expected. I’m not sure if it was the somewhat odd way Target and the banks handled the matter – I still don’t understand why the banks and Target didn’t just issue new cards and get them into consumers’ hands. December 15 is probably the quietest time in the holiday season…it could have been all over by December 17. There is clearly something I’m missing here – or if the combination of NSA surveillance coupled with lack of security is a final straw for many. In any case, the very surprising blow-back is going to re-focus retailers’ attention, all the way up to the Executive Suite, on improving security.

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Packaging Optimization Is Key to Big Supply Chain Benefits

If you thought that minor changes in your supply chain practices couldn’t yield big results, think again. A recent Chain Store Age article highlights the benefits of packaging optimization in an effort to get the most value out of your supply chain.

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From the article:

In today’s data-driven world, there are now ways to analytically assess and optimize the size and shape of boxes that are shipped around the world. Understanding the optimal size and shape required has multiple positive impacts. First, it reduces the amount of corrugate required. Second, it reduces excess space (“air”) in the box which results in less damage. Third, it improves the density of the goods being transported (e.g., more packages in a truck) which results in few trucks and therefore lower freight costs. And lastly, less corrugate, less filler, and fewer trucks equals sustainability benefits.

However, packaging engineering is not typically part of most supply chain organizations’ strategy and physical distribution is not taken into consideration when designing consumer packaging. Traditionally, the focus is on consumer appeal, as expected, but retail supply chain specialists should be taking a closer look at packaging design as another way to optimize the supply chain.

Other examples and success stories are plentiful, but it is our experience that only a minority of companies have dedicated the time to explore the potential. Thinking outside the box as it relates to your packaging design is only going to grow in importance as retailers continue to realize the cost savings, supply chain efficiencies and sustainability benefits of employing a smart packaging optimization strategy. As U.S. chains increasingly focus on international markets for growth, looking for ways to streamline their in-country supply chain will be another tool to compete with local competitors and capture some of the online retail sales that are expected to exceed $1.2 trillion* globally this year.

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What are the steps necessary to create a successful pop up shop?

We have written extensively about pop up shops over the past year. In fact, 2013 might have been the year of pop up shops for Merchandising Matters.

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The folks over at POPAI put together a great article that examines what exactly goes on behind the scenes to build a great one. From outlining who should be involved in the process, how to pick a perfect location, and why they have become so popular in the first place, it is definitely worth a read.

From the article:

Brands, retailers, and agencies tend to build pop-ups for two reasons, said Ilona Taillade, Co-founder and CCO of BrandSpots, a full-service pop-up provider in Europe. The reasons are “1. Pop-ups are a tool to provide feedback and an opportunity to get to know the consumer. 2. Pop-ups are a testing spot to find out what works and what doesn’t.” I’d also like to add in the reason of getting press.

Since Pop-ups are temporary stores that only last anywhere from one day to five weeks, brands, retailers, and agencies can try anything in the space and see how their shoppers respond to it. Whether they have physical feedback cards, look at blog posts from bloggers or hope for print publications, Pop-ups are a great space to get feedback. The atmosphere is different from any permanent brick-and-mortar, so shoppers are willing to have a different shopping experience.

Pop-ups can draw in new shoppers and make old shoppers more loyal. No matter what, a Pop-up will tell you who your shoppers are and who they can be by offering your stores in a new location. They provide a space where you can test new displays, new environments and new sales strategies.

Overall, Pop-ups are a great way to see what your product can do and get press for it.

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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.

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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.

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Infographic by Firefly Store Solutions.

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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.

retail-localization-campaign-compliance-trendagram

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.

Black-Friday-retail-infographic

Retailers’ Black Friday Checklist [INFOGRAPHIC]

For most retailers, Black Friday (and the days that follow) is the do-or-die time of the season to boost sales and capitalize on months of campaign planning and execution. The folks over at Firefly Store Solutions created a great infographic outlining the keys to success for retailers to make the most of this hectic shopping holiday.

From their website:

Black Friday is right around the corner and retailers are gearing up for the kind of foot traffic that will turn their balance sheet from red to black. If last year’s numbers are any indication, sales should exceed 60 billion dollars in 2013. Black Friday is crucial to a store’s success and it is imperative that every independent retailer take full advantage of this once-a-year opportunity.

firefly store solutions black Friday checklist
Infographic by Firefly Store Solutions.

optimal-retail-store-design

What Makes an Optimal Retail Store Layout?

Have you ever walked out of a retail store and spent twice as much as you planned? If so, don’t blame yourself. The truth is, all of the displays, counters and aisles have been systematically organized to influence spending. There is a science to how retail stores arrange and prioritize their floor space and the most successful businesses know how to keep a customer spending far beyond their shopping list.

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Store layout is merely one of the many secrets to retail shopping. And with the Holiday season upon us, retail stores across the country have begun introducing their seasonal layouts to make their products irresistible to your holiday spirit.

The methodology is intriguing and goes deep into the human psyche for maximum impact. Here are five techniques retail stores use to optimize their layout:

Create the Ideal Layout

There are many ways to lead customers through the aisles and it all depends on the type of store. For example, most grocery stores adopt a grid layout to wind customers up and down the aisles. Setting up attention-grabbing displays at the end of an aisle will make the customer walk past all of the other items on the way.

Electronics stores tend to use a loop layout with a circular path around merchandise in the middle. Free flowing layouts encourage shoppers to freely walk throughout the store and are used by many specialty stores. The shape and size of the sales floor and items for sale will ultimately determine the layout.

Build a Sensational Entrance

A perfect store layout means nothing if customers aren’t attracted to walk inside. In addition to eye-catching signage, storefronts typically display colorful or interesting products to create a desire to explore.

When customers first enter a store it is important to not obstruct their entrance with checkout counters or service areas. It is also wise to avoid placing merchandise in the first 15 feet of the entrance, also known as the “decompression zone.” A better approach is to put up in-store displays known as “speed bumps,” that slow the customer down and grab their attention.

Prevent the “Butt Brush” Effect

Nobody likes to have their personal space invaded, especially when shopping. This theory was confirmed when famed customer behavior expert Paco Underhill performed a study observing a shopper’s resistance to pursue merchandise in close proximity to someone else—even if they are highly interested.

An easy remedy for this situation is to provide wide aisles and adequate space between displays and tables. Losing a sale because a customer felt too confined is unacceptable because it’s avoidable. Having extra space allows more than one shopper to browse the same area.

Personalized Shopping Experience is King, Shopper Marketing

Create a Visual Break

Customers get bored walking down a long aisle; which means they are not paying attention to a lot of the merchandise on the racks. As a matter of fact, Ikonic Tonic chief experience officer Brian Dyches believes up to “20 percent of the store’s merchandise is skipped over” which is a large enough statistic to act upon.

One way to reignite the shopping spirit is with signs and displays halfway down a long aisle. If the customer stops to examine the display, their interest has been reawakened by a cleverly positioned visual break.

Minimize Counter Size

When a store has tall, bulky counters it can make the customer uncomfortable during checkout. There is a psychological effect in play here, so it is wise to have counters at a lower level with plenty of space for their items. Shoppers waiting for checkout are susceptible to impulse buying and need to be happy, not flustered.

If it’s a slow time, advise employees to wander the sales floor. This will make the store appear busier and also make them available to answer questions. Once a customer is ready to checkout, the employee can ring them up on the spot or escort them back to the register.

About the Author:
Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing solutions firm, and also serves on its Board of Directors. She has more than 15 years experience in the bankcard industry in direct sales, sales management and marketing.

under-armour-brand-house

Under Armour’s Brand House to get NYC Flagship

Launched earlier this year in Baltimore, Under Armour’s Brand House is heading to the Big Apple. According to the Baltimore Sun, plans are set to open their first NYC store, but no information is available yet as to when they plan to open.

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From the article:

Under Armour founder and CEO Kevin Plank briefly mentioned the new store on a conference call Thursday when the company released its third quarter earnings. Plank said the store would open in SoHo in the spring and will be part of the Brand House platform.

Though few details are available, the store is expected to be the largest Brand House yet. It will be an evolution of the prototype the company has been using to highlight growing areas such as women’s and youth apparel and footwear and immerse the shopper in the brand’s “make all athletes better” mission.

The new store is part of Under Armour’s push into New York, set to follow the opening of its first New York office early next year as its seeks to expand the brand beyond sporting goods specialty stores.

In addition to the Baltimore store and plans for Tysons Corner and New York, Under Armour has four other specialty stores, in Westfield Annapolis Shopping Mall, Westfield Montgomery Mall in Bethesda and in Natick, Mass., and Vail, Colo. The designer will have 112 factory outlets by the end of next year.