American Eagle Outfitters In-App Merchandising Key Element In Omni-Channel Strategy

American Eagle Outfitters is expected to see a surge in mobile-commerce sales this holiday season. According to Mobile Commerce Daily, the clothing and accessory retailer is investing in enhanced product merchandising in its mobile applications. New updates include pinch and zoom on product pictures as well as the ability to read product descriptions on every product page by swiping up.

Below, Anne Sophie Hurst – a senior client services director at Fluid Inc. speaks about her analysis with mcommerce and teenage apparel stores.

Mobile-savvy shoppers

Mobile commerce continues to be the fastest growing area of ecommerce and while its percentage of overall retail is still relatively small, if retailers do not have a strong mobile app experience they risk losing mobile savvy customers

Recognizing that teenagers are among the most advanced shoppers on mobile, the American Eagle Outfitters app places a big emphasis on enhancing the shopping experience.

mcommerce_merchandising

Enhanced personalization

One strategy American Eagle Outfitters and other retailers are likely to employ during the upcoming holiday season is a greater emphasis on personalization in their apps.

Fast-moving retailers will also be taking advantage of Apple’s release of its latest software update – iOS 8 – and its new phone, the iPhone 6, to enhance the mobile app shopping experience before the holidays.

american_eagle_merchandising

App-based promotions

One strategy American Eagle Outfitters has seen success with is app-based promotions enabling shoppers to earn a discount they purchase in the app or show the app in store. An American Eagle Outfitters executive speaking at eTail West 2014 earlier this year reported when the retailer tried this strategy, it led to a tenfold increase in app downloads and the app ranking No. 2 in the Lifestyle category (see story).

As American Eagle Outfitters and other teen retailers continue to fine-tune their mobile app strategy, one area of focus is likely to be enhancing the social shopping capabilities.

Read full article here

Finally – Zara gets it right when implementing RFID tags on merchandise

Retailers have been trying to implement RFID tags for over 10 years. Retailers such Wal-Mart and JCPenney have tried to put RFID tags on merchandise but fell short because of costs and smart shoplifters. Zara has learnt from others mistakes and is rolling out the technology in a 1,000-stores by the end of this year, according to the Wall Street Journal.

WSJ_zara_merchandising

See the Wall Street Journal article in it’s entirety:

For more than a decade, radio frequency identification chips were touted as a game-changer for retailers. But when they tried to apply the inventory-tracking technology, merchants such as Wal-Mart Stores Inc. WMT -0.68% and J.C. PenneyCo. JCP -0.49% discovered that what looked good on the drawing board didn’t always work so well in warehouses and stores.

Penney, for instance, started attaching RFID chips to merchandise in 2012, but the radio signals interfered with existing anti-theft sensors. Penney removed the anti-theft sensors, but thieves caught on and shoplifting surged. The company scrapped the project.

Now, apparel powerhouse Inditex SA, ITX.MC -0.22% parent of the Zara chain, says it has learned from competitors’ experience and is rolling out RFID technology throughout the operations of its signature brand.

RFID technology ‘gives us great visibility, knowing exactly where each garment is located,’ says Inditex CEO Pablo Isla. AFP/Getty Images

The chips, about twice the size of a standard mobile-phone SIM card, help the world’s largest fashion retailer keep better track of its stock and replenish its clothing racks more quickly, said Pablo Isla, chairman and chief executive of Inditex, which reports first-half results on Wednesday.

“It gives us great visibility, knowing exactly where each garment is located,” Mr. Isla said. “It really changes how we operate our stores.”

RFID chips can store information about whatever item they are attached to and, when prompted, emit that data via radio signals to a scanner. Inditex is burying the chips inside its garments’ plastic security tags, an innovation that allows the “fast fashion” chain to reuse them after the tags are removed at checkout.

By the end of this year, more than 1,000 of the 2,000 Zara stores will have the technology, with the rollout completed by 2016, Mr. Isla said.

The scale and speed of the project is drawing notice in the industry. The Spanish retailer says it bought 500 million RFID chips ahead of the rollout, or one of every six that apparel makers are expected to use globally this year, according to U.K.-based research firm IDtechEX.

Zara, which operates in 88 countries, generates two-thirds of Inditex’s €16.7 billion ($21.6 billion) in annual sales. For the first half ended in July, Inditex is forecast to report sales of €8.08 billion and net income of €908.6 million, according to FactSet. In the year-earlier first half, Inditex reported sales of €7.7 billion on net income of €951 million

Inditex began experimenting with RFID in 2007. Mr. Isla asked his engineers and logistics experts to figure out how to reuse the chips—a solution that would minimize costs and ensure that the tracking devices wouldn’t follow customers out the door, a concern among privacy advocates.

A breakthrough came during a brainstorming session at Inditex headquarters in northwest Spain, Mr. Isla said. An employee suggested putting the chip inside the slightly larger security tags Zara attaches to each item, a combination that experts in the field say no other large company has used.

The security tag’s plastic case would protect the chip, allowing for reuse, and it would be removed at checkout.

One benefit was on display on a recent morning, when store manager Graciela Martín supervised inventory-taking at one of Zara’s biggest outlets in Madrid. The task previously tied up a team of 40 employees for five hours, she said. That morning she and nine other workers sailed through the job in half the time, moving from floor to floor and waving pistol-shaped scanning devices that beeped almost continuously while detecting radio signals from each rack of clothing.

Before the chips were introduced, employees had to scan barcodes one at a time, Ms. Martín said, and these storewide inventories were performed once every six months. Because the chips save time, Zara carries out the inventories every six weeks, getting a more accurate picture of what fashions are selling well and any styles that are languishing.

And each time a garment is sold, data from its chip prompts an instant order to the stockroom to send out an identical item. Previously, store employees restocked shelves a few times a day, guided by written sales reports.

If a customer can’t find an item—say a medium-sized purple shirt—a salesperson can point an iPod’s camera at a barcode of a similar item and, using data gathered by the chips, see whether it is available in the store, in a nearby Zara store, or online.

By the end of this year, more than 1,000 of the 2,000 Zara stores will have radio frequency identification, or RFID, for inventory tracking, with the rollout completed by 2016. A Zara store in Madrid. Reuters

Some early adopters got only limited payback from investment in RFID. Early last decade, Wal-Mart pushed its suppliers to put chips on cases of items or stacks of cases, rather than on individual items. Wal-Mart scaled down the project after suppliers complained about the high cost of the technology—a problem Inditex doesn’t face because it manufactures its own clothing.

But the technology has slowly been catching on. In the U.S., Macy’s Inc. said this week it would expand use of RFID tags after tests showed they helped improve sales, margins and markdowns.

Other European retailers have recently embraced the tracking technology. France’s Oxylane Groupe, owner of sporting goods chain Decathlon, said it will put hundreds of millions of RFID chips on goods it sells. U.K.-based Marks & Spencer, MKS.LN -0.39%which specializes in clothing, home products and luxury food items, said it plans to track everything it sells.

Bill Hardgrave, dean of Harbert College of Business at Auburn University and a consultant on RFID, said his retailer clients have boosted sales between 2% and 30% after installing tracking devices. Traditional retailers usually know where 60% of their inventory is at any time. With RFID technology, accuracy levels exceed 95%, he said.

“Zara might not be the first, but when they implement a new technology, they do it so well that they catch up very fast,” said David Frink, chief technology officer at German clothier Gerry Weber International AG, one of the first retailers to put RFID chips on all its products.

Write to Christopher Bjork at [email protected]

16 of Target’s embarrassing (but entertaining) in-store execution mistakes

Over the weekend the popular social news company Buzzfeed posted 16 embarrassing (but entertaining) images of poorly executed merchandising displays at Target. With over 2 Million views, Target must be very aware they a big issue on their hands now. Even though Target was the butt of the joke, many other retailers have no tools in place to control the management of what products and signage are actually placed in each store.

Take a look of some of the mistakes taken place on the sales floor:

1. The time they might have caused a sexual awakening in a lot of teenage readers:

target_display

3. The time they put this unfortunate image in people’s heads:

Poorly_executed_merchandising_display

4. The time they failed to grasp what healthy food is:

Target_instore_compliance

6. The time they didn’t understand what “clearance” meant:

Target_clearance

8. The time they pushed the limit on how much people will pay for a banana:

target_pricing

For the full list please visit: http://www.buzzfeed.com/briangalindo/16-times-target-failed-so-hard-they-won?bffb&utm_term=4ldqpgp#205wm2c

Disney Store, JC Penney, Retail Localization

5 Secrets For Effective Visual Merchandising

The visual presentation in the store has always been the major customer motivation accounting for the a majority of retail purchase.

Your window display has the potential to attract the customer, reel them in and ultimately lead to purchase. However, there are a few key points every merchandizer should keep in mind.

1. Show less, Focus more
The human mind has a limited attention and focus span and therefore it is advisable to keep the display simple and uncluttered. Leave a lot of space around. The most common mistake is trying to show too much at the same time. Props should be simple in shape, preferably something that provides a large mass of color or texture, such as blocks, covered boxes or risers.

2. Love odd numbers
Always place an odd number of elements in a group. Since it’s easier for the brain to zone in on the middle and the arrangement is slightly off balance, the eyes moves around to look at each frame or object. A perfectly balanced arrangement ie even no is dull to the eye.

retail-inventory-technology

3. Repeat, repeat and repeat
Use variations of identical elements as that creates a very powerful display mechanism. It’s a simple idea but can have a lot of impact on the mind of the consumer and it’s hard to miss such a display.

4. Contrast is key
Make sure the items or frames you want to focus clearly contrast with the background. This includes color contrast as well as material texture contrast. For example, don’t put a metal frame on top of a glossy background. Try making the background dull and repeated so that the frame that displays important information stands out.

5. Attract first, provide choice later: Pyramid method
Place one element at the top of the display which is clear and focussed. Below that, in the form of a pyramid, place other elements which provide choice. It’s hard to go wrong with a pyramid display.

6. BONUS: Always embrace a software solution to execute your campaigns. An idea is only as good as it’s execution. So while your presentation might look fabulous in your laptop, the real thing in the store must be as efficiently done.

“Good visual merchandising is a mix of art, inspiration and science. While great visual can sell lousy product, poor visuals can do nothing for great merchandise.”
Paco Underhill, Why We Buy

Get comfortable with having some empty space in your high fashion displays. Crowding is a symbol of low value. So anything that is high value deserves a lot of space around it. If you keep an expensive item in a crowd the human brain perceives it to be of lower value.

Above all, use the K.I.S.S. theory of display: Keep It Simple, Sweetheart!

Author: Maniraj Singh Juneja, is a director at Amitoje India: One of India’s best store branding and execution firms based in New Delhi. Check www.amitoje.com for more details. You may write to him at [email protected]

What to Look for in a POS System

There are plenty of point-of-sale providers retailers can choose from — but not all POS systems are created equally, and not all have the features that can actually better your business, in terms of improved customer convenience strategies that also deliver on your business needs and goals (including those in multiple channels) at any given time. Here are a few key features all retailers should look for when choosing a POS system.

The capability to “meet” customers anywhere

Consumers are becoming increasingly comfortable with the idea of using a mobile device, including smartphones and tablets to perform the same functions that fixed or desktop systems have traditionally provided, including checking and opening emails, online research of product information — and completing purchases. Given that major retailers like Apple, Nordstrom and Urban Outfitters have already begun to execute their own iterations of what the new mobile retail experience will entail, retailers of all sizes should be prepared for changing customer expectations, including being “met” by the retailer as part of the purchase and checkout experience.

When you choose POS technology equipped to work as a mobile device in tandem with a traditional fixed POS system (and those systems “talk” to one another), you equip your customer service team to act as a mobile checkout resource from anywhere in the storefront, with the aid of a mobile point-of-sale checkout system. The “check out anywhere” capability not only improves the customer experience; it optimizes your company’s investment (and ROI) in staff’s time, and minimizes the risk of lost sales that can result when customers forgo making a purchase because of long checkout lines.

POS_system_retail

The ability to manage inventory in real time

Real-time inventory management isn’t just a way to optimize your cash flow and stock on hand. Customers now expect that a retailer knows and shares exactly what is in stock at any given time, and they use that information as part of their purchase decision process. According to a January 2014 study published by Accenture and Forrester Research, 71 percent of consumers expect to view in-store inventory online; 50 percent expect to be able to buy online and pick up in-store. You don’t have to be a behemoth retail outfit to replicate the real-time inventory and supply chain controls (that have made brands like Wal-Mart leaders in the industry) to deliver on this expectation, but you do need a POS system specifically equipped to provide real-time inventory management (particularly if you’re an omni-channel retailer with multiple storefronts and e-commerce channels).

Select a system that allows you to balance stock across locations, enter purchase orders, receive inbound inventory and assign barcodes to new products for anywhere — including a till, back office and a mobile device. With such real-time inventory management and response capabilities, you achieve improved internal controls — and a competitive advantage: Despite customer expectations, Accenture estimates that only a third of retailers have operationalized real-time inventory management at even a basic level.

The ability to uniquely target customers based on business needs

The capability to offer appropriate customer promotions based on the unique goals, performance history and inventory levels across multiple locations in your retail operation can be a complex matter that not all POS systems are equipped to handle. When you choose a POS system specifically designed to accommodate multisite operations, you can target customers based on their purchase and promotional redemption history while taking into account the unique business needs of each of your retail locations at any given moment. With such a POS system, for example, you can design unique offers for specific customer segments, at the times specific retail locations need the most sales support. For example, you might message staff through your POS system to “upsell” loyal VIP customers with a limited-time discounts valid at defined locations, during slow hours of operation. Once a specific sales threshold is reached, you can expire the promotion in the POS system, on a location basis.

A point-of-sale system is much more than a way to process customer transactions, collect sales data and manage inventory. When you choose a POS specifically designed to improve your existing internal processes and customer offerings, you don’t just find a way to conduct “business as usual” — you can leverage new opportunities to strategically optimize every function of your retail business, from the inside out.

About the Author –

Tim Flachman of Bepoz America is a POS expert who writes about topics including event technology, retail software, entrepreneurship and more.

http://bepoz.com/retail-pos

Web-only retailer Rue La La hires a chief merchandising officer

The Boston-based commerce retailer Rue La La announced last week that it hired Lisa Rhodes as president and chief merchandising officer. With over 30 years of retail experience; Lisa Rhodes was CEO of women’s apparel retail chain Dots, and was senior vice president of Wal-Mart. 

According to Internetretailer.com, in her new role at Rue La La, No. 81 in the Internet Retailer Top 500 Guide and No. 11 in the Mobile 500 guide, Rhodes will handle merchandising for the brand’s offerings in fashion for men and women, as well as the company’s home category.

“This is an exciting time at Rue La La,” says Rhodes. “With its success in mobile commerce, an extensive network of brand partners and focus on engaging content, Rue La La is positioned to reach a new generation of consumer.”

Prior to joining Rue La La, Rhodes served as the CEO of Dots LLC, a now-closed women’s clothing retail chain. Rhodes as also served as the senior vice president of apparel at Wal-Mart U.S., where she grew the ladies, men’s, kids, intimates, shoes, and accessories businesses. She has also held positions at clothing chain Maurices, Marshalls and Macy’s Inc.

“Lisa brings a unique skill set of passion, strategic thinking, innovation and bottom-line business management that has proven to inspire and take businesses to the next level,” says Steve Davis, Rue La La’s CEO. “Her extensive experience as a merchant and retail leader will complement our team and further cement the company’s role as in innovative, groundbreaking e-retailer.”   

Back-to-School Spending to Rise

The back-to-school season is soon upon us, retailers everywhere are looking forward to the second-biggest selling season of the year. According to the National Retail Federation annual survey, total spending is expected to reach  $74.9 billion—up about 3 percent from $72.5 billion in 2013.

The 3% growth, analysts say are driven by the increased demand for electronic items and a longer list of items parents’ needed to restock their children’s supplies from last year. The average family with children enrolled in grades kindergarten through high school will spend $669.28, up 5 percent from last year, resulting in $26.5 billion in sales. The average back-to-school spending for a college student is expected to rise 10 percent to $916.48, sending total college spending to $48.4 billion.

back to school NRF

Below is the full report

WASHINGTON, July 17, 2014 – Driven by increased demand for electronic items and parents’ need to restock their children’s school supplies from last year, families this summer will spend slightly more on back-to-school items than last year. According to NRF’s 2014 Back-to-School Survey conducted by Prosper Insights & Analytics, the average family with children in grades K-12 will spend $669.28 on apparel, shoes, supplies and electronics, up 5 percent from $634.78 last year. Total spending on back to school will drop slightly to $26.5 billion as the survey found there are slightly fewer students in households this summer.

Combined spending for back to school and college is expected to reach $74.9 billion.*

“Slow improvements in the economy may have contributed to the growth in confidence among back-to-school shoppers, and while we are encouraged by the overall tone of the results and expect to see continued improvement in consumer spending through the year, we know Americans are still grappling with their purchase decisions every day,” said NRF President and CEO Matthew Shay. “Throughout the history of this survey, spending has fluctuated based on family needs each year, and this summer, we expect parents to continue to use caution, but also make smart decisions for their family budget that is a good balance between what their children ‘want’ and what they actually need.”   

NRF this year broke out spending by grade, and according to the survey, families with high school students will spend the most. The survey found the average family shopping for high school students will spend $682.99, while spending on middle school/junior high comes in a close second at $682.13. Parents with elementary school-age children will spend an average of $580.94.

NRF PRESIDENT AND CEO MATTHEW SHAY:

“Slow improvements in the economy may have contributed to the growth in confidence among back-to-school shoppers, and while we are encouraged by the overall tone of the results and expect to see continued improvement in consumer spending through the year, we know Americans are still grappling with their purchase decisions every day.”

Parents ready to spend more on what’s needed; more plan to buy those items at specialty stores

Overall, every category will see an increase in spending, including healthy increases in average spend on supplies and electronics. According to the survey, back-to-school shoppers will spend an average $212.35 on electronic items, up 7 percent from $199.05 last year, with total spend expected to reach $8.4 billion. High school students and their families specifically will spend an average $229.88 on electronic items.

Perhaps due to school districts’ growing requests for classroom supply contributions, spending on school supplies will increase 12 percent to an average of $101.18, compared to $90.49 last year. Additionally, shoppers will spend an average of $231.30 on clothes, up from $230.85, and $124.46 on shoes, up from $114.39 in 2013.

While department and discount stores will be the most visited among school shoppers, millennial students** may be driving an increase in planned spending at specialty stores. The survey found 53.8 percent of back-to-school shoppers will shop a clothing store, up from 51.5 percent last year and a survey high; 27.5 percent will shop at electronics stores, up from 25.9 percent last year and another survey high. Six in 10 (64.4%) will visit discount stores, 59.1 percent will shop at their favorite department store, 42 percent will shop at office supply stores, 38.2 percent will shop online, and 20.5 percent will shop at drug stores.

For the first time, NRF asked school shoppers about their plans to shop at local/small businesses for their needs: 17.4 percent will support local/small retailer to buy school items.

Planned BTS Spending – In Billions

Charts from the NRF Foundation’s Retail Insight Center. To access this data and more research please visit the Retail Insight Center.

Tweens, millennials to play a big role in back-to-school shopping this summer

As seen in recent years, early-bird shoppers are once again leading the charge for school shopping, but some parents and their children this year will wait until the dog days of summer to tackle their school lists, continuing the game of cat and mouse with retailers. According to the survey, one-quarter (25.4%) will take advantage of retailers’ late summer deals and shop one to two weeks before school, up from 21.8 percent last year; one in five (22.5%) will shop at least two months before school starts, and another 44.5 percent will shop three weeks to one month before school starts. Additionally, 4.3 percent will shop the week school starts, and 3.4 percent will start after the start of the school year.

There’s no question that today’s millennial high school students are unique in many ways, and when it comes to shopping, these kids want to make sure they are a part of their parents’ buying decisions. According to the survey, teenagers are planning to spend $913 million of their own money on school items, ensuring their style shines through all year long, with the average 13 – 17 year old planning to spend an average of $34.40, up from $30.13 last year. Pre-teens will spend an average $22.27 of their own money, totaling $544 million.

And, when it comes to the influence these students have on their parents’ purchasing decisions, the evidence is indisputable. The survey found 9.7 percent of parents admit their child influences 100 percent of what they buy for back to school, up from 7.6 percent of parents last year and the highest in the survey’s history. Broken out by grade, 12.4 percent of parents with high school students say 100 percent of their purchases are influenced by their teenagers. Most parents (34.8%) say at least half of their back-to-school purchases are influenced by their children.

“It’s safe to say this generation takes back-to-school shopping much more serious than their older brothers and sisters did, with many kids today influencing almost everything their parents buy for the upcoming school year,” said Prosper Insights Consumer Insights Director Pam Goodfellow. “Students will make sure to keep one eye on social media and the other on retailers’ websites as they seek out what’s new and exciting in their hunt for fresh, fashionable and relevant back-to-school gear.”

12%
Increase in spending on supplies for BTS shoppers

Men plan to outspend women and increase budget over last year; Adult millennials to spend most on children in school

Compared to the average adult, men will reach deeper into their pockets for their children’s school needs this summer. According to the survey, men will spend an average $754.30 on school items, up 12 percent from last year. Women will spend an average of $588.80, down $11 from $599.30 last year. Additionally, 25-34 year olds will be the highest spending age group at $822.01, followed by 35-44 year olds ($716.78), 45-54 year olds ($694.83), and 18 – 24 year olds ($682.66).

Six years later, economy still affecting Americans’ school spending plans

Since 2009 NRF has been asking school shoppers about how the U.S. economy will impact their spending plans, and while it’s evident the impact has lessened, eight in 10 (81.1%) Americans this year are still affected, up slightly from 80.5 percent last year. Specifically, more families will buy store brand/generic items for school (34% vs. 32.8% last year), 25.6 percent will make do with last year’s items, up from 23.7 percent last year, and 19.6 percent will shop online more often to save money, up from 18.5 percent last year and the highest percent seen.

Big year for mobile back-to-school shoppers

As more Americans become comfortable with the notion of using their mobile devices to shop, families this summer are planning to turn to their handhelds to aid in their shopping. The survey found 36.7 percent of smartphone owners shopping for school items will research products using their mobile device, up from 34.7 percent last year and the highest since NRF started asking in 2011; one in five (21.8%) will make a purchase via their smartphone, up from 18.2 percent last year and another survey high. And while many will simply shop online directly through their smartphone, one-quarter (25.1%) will use their device to find information about a physical store.

School shoppers that own tablets will also use their device more to shop this summer; 31.4 percent will purchase school items via their tablet, up from 29.9 percent last year, and 45 percent will research products, up from 41.8 percent last year.pecifically, 37.4 percent will research products, and 27 percent will use their tablet to purchase items.

MILLENNIALS AND THEIR FAMILIES EAGER TO STOCK UP FOR COLLEGE

Like school shoppers, college families want supplies, electronics

Having a longer list of items to buy that are also commonly known to be pricier than their younger counterpart, college students and their families are the real “golden geese” when it comes to school shopping. NRF’s 2014 Back-to-College Survey found the average college student and their family will spend $916.48 on dorm furniture, school supplies, electronics and more, up 10 percent from $836.83 last year. Total college spending is expected to reach $48.4 billion.

Combined college and school spending is expected to reach $74.9 billion.*

“The ‘varsity’ class often gets overlooked each summer as back-to-school shoppers drive the news, but the truth is that today, college students and their parents contribute a significant amount to the economy,” said Shay. “Not immune to economic challenges, college students themselves and their parents will take great care when checking items off their lists. Retailers, hoping to get a head start on this extremely competitive shopping season, will attract these millennials with promotions through Instagram and other social channels, as well as through content that speaks to these tech-savvy, fashion-forward students.”

Planned BTC Spending – In Billions

Charts from the NRF Foundation’s Retail Insight Center. To access this data and more research please visit the Retail Insight Center.
NRF PRESIDENT AND CEO MATTHEW SHAY:

“The ‘varsity’ class often gets overlooked each summer as back-to-school shoppers drive the news, but the truth is that today, college students and their parents contribute a significant amount to the economy.”

Like back-to-school shoppers, college shoppers to invest in supplies, electronics; more families than ever to shop online for items

When it comes to purchases of electronic items and computer-related equipment, college students and their parents plan to spend an average of $243.79 on laptops, desktop computers, netbooks, tablets, smartphones and more, up 20 percent over last year’s $203.28 and the highest amount since 2009. Graduate students will spend the most on electronics ($275.24). After cutting back last year, spending on school supplies is expected to increase 19 percent to $74.80 on average.

Likely driven by fashion-forward millennials hoping to head to college in style, parents and their students will spend 13 percent more on apparel ($138.73 vs. $122.70 last year). Others will spend on food items ($103.87 vs. $104.44 last year), shoes ($77.60 vs. $65.60), personal care items ($78.08 vs. $65.08), and gift cards ($55.56 vs. $65.12.)

Overall, broken out by grade, freshmen and their families will spend the most at an average of $908.69, followed by graduate students ($856.29), juniors ($791.08), sophomores ($670.89) and seniors ($567.52).

With an array of items to stock up on before classes start, parents will take their college students all over town to get the best deals. According to the survey, most (50.5%) will shop at discount stores, up from 48.3 percent last year, and department stores (46.6%), up from 42.7 percent last year. Online will be a popular destination for shoppers: more than two in five (44.6%) will check out retailers’ websites for special promotions, up from 37.1 percent last year and the highest in the survey’s history.

Others will shop at collegiate bookstores (41.9%), office supply stores (36.3%), and clothing stores (34%). Additionally, 13.2 percent will shop at small/local businesses.

Men will outspend women by a smidge

Usually the big spender when it comes to college shopping, men are no different this year. The survey found men will spend an average of $976.43 to get their dependent ready for college, up from $963.27 last year. Women will spend an average of $859.73, up significantly over last year’s $717.32.

Men won’t waste their time getting to the electronics store either: the survey found men will spend an average of $260.34 on shiny new gadgets, up from $227.06 last year. Not to be outdone, women will spend $228.12 on average, up from $180.81 last year.

Recognizing the benefits of end-of-season prices and promotions, parents of college students and the students themselves may be taking a cue from K-12th grade shoppers and planning to begin shopping later this summer. According to the survey, one-quarter (25.6%) will begin shopping one to two weeks before school starts, up from 19.9 percent last year. But there are still plenty of early-bird shoppers: nearly three in 10 (28.2%) will shop two months before school, and one-third (33.4%) will shop three weeks to one month before school. Fewer shoppers will go after school starts, perhaps knowing there will be less likely of a chance to get a hot item to show off to classmates (6.5% vs. 10.8% last year).

“College shoppers generally cannot take the kind of gamble their younger counterparts can by waiting until the last minute to buy what they need for school – especially given their timeframes to return to class or even make a big move across country – but this year, we are seeing that they too want to play the waiting game to see if deals are better later on,” said Goodfellow.

Online, mobile shopping to aid budget-focused college students and families in shopping efforts

For seven out of 10 (77.2%) college students and their families, the economy is a contributing factor to how, when, where and why they shop for college items. Though the findings are much lower than previous years when nearly 85 percent said the economy would impact their spending plans, families today are still making adjustments to ease the impact on their budgets.

The survey found one-third (33%) will do more comparative shopping online because of the economy, up from 31.7 percent last year, and 21 percent will shop online more often as a result, up from 18.6 percent last year and the highest in the six years NRF has been asking the question. Additionally, 10.1 percent said the economy is impacting students’ living situations, and 12 percent said the economy is impacting where students go to college (i.e. two-year versus four-year, closer to home, public versus private, etc.).

When it comes to mobile usage, nearly six in 10 (57.8%) will use their smartphone in some fashion as they shop for college items. Of those with smartphones, the survey found one-third (33.8%) will research products, the highest since NRF added mobile shopping questions to its survey in 2011. Additionally, one in five (22.4%) will purchase items, up from 19.1 percent last year and another survey high, and 29.8 percent will look up retailer information, up from 20.9 percent last year.

More than half (54.5%) of tablet owners will use their tablet to shop for college items. Specifically, 37.4 percent will research products, and 27 percent will use their tablet to purchase items.

About the survey

NRF’s 2014 Back-to-School and Back-to-College spending Surveys were designed to gauge consumer behavior and shopping trends related to back-to-school spending and back-to-college spending. The surveys were conducted for NRF by Prosper Insights & Analytics. The poll of 6178 consumers was conducted July 1-8.The consumer polls have a margin of error of plus or minus 1.3 percentage points. The total spending figure is an extrapolation of U.S. adults 18 and older.

Prosper Insights and Analytics delivers executives timely, consumer-centric insights from multiple sources. As a comprehensive resource of information, Prosper represents the voice of the consumer and provides knowledge to marketers regarding consumer views on the economy, personal finance, retail, lifestyle, media and domestic and world issues.www.ProsperDiscovery.com

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. www.nrf.com                 

5 Tips to improve in-store execution

As retailers strive to meet customers’ needs through an omni-channel environment, the complexity of brick and mortar retail is forever growing. Campaign intricacy is accelerating and with the immense amount of POP, kits, products, and creative going out to stores, few retailers feel confident in their stores’ ability to execute localized campaigns quickly or effectively. In addition, communication from headquarters down to store level is indirect and not easily traceable. This inefficiency not only wastes time and leads to confusion, but also impacts profit margins via substantial unnecessary printing and shipping costs, and lost sales due to untimely and inaccurate product mix and messaging.

In such a tech savvy world, it seems difficult to understand that a display is not set up in time or products are not on shelves where they are supposed to be. The culprit might be in-store execution is still done with out-dated tools like spreadsheets and manual checklists. Investing in in-store execution software, can guarantee right product and messaging is delivered at the right place and time.  

Below Shopperception posted tips on improving in-store execution based on suggestions from Mike Anthony from Engage Consultants:

Retail Technology, Shopper Marketing

1- Avoid out-of-stock and lack of compliance.

It is impossible to carry out a promotion with no products on shelves. Although it may seem improbable, Engage consultants describe that in some store audits they have made; over 10% of the entire range in the store is out of stock. The problem is that retailers sometimes make profit from fees rather than conversion.

In these cases, Mike Anthony advises brands to increase the percentage of fees paid based on performance basis. Making payments conditional upon execution would help reward compliance and avoid out-of-stock as opposed to retailers receiving payments no matter what they do.

The same dedication and planning devoted to advertising and developing in-store promotions should be applied to negotiating retailer support. Many times, retailers make decisions that impact the effort negatively because they were not properly informed in the first place. Whether it is increased space for existing products, extending a range, or additional visibility to support a promotion, the agreement should be clear and thorough.

2- A good brief for agencies

The same planning is needed the other way around. Retailers should be able to inform brands the range of possibilities available. Advertising agencies and marketers may be unaware of what can and cannot be done inside the store.

Of course, some boundaries can be more flexible and limitations can be bent, but in order to do so, it is necessary to provide the information from the start. Marketers should include retail reality and expectations on their brief so that agencies can work with a more realistic scenario from the beginning.

3- Employees inside stores are key

The role of retail employees is a huge topic in itself; it is becoming more and more significant as showrooming advances and social media gains force. Why? Customers are getting used to receiving valuable data before making up their minds either from internet ecommerce sites or from friends with real-time interactions with smartphones.

To cope with this savvy shopper trend, retailers need to transform their workforce into knowledge-based teams. This will be possible when they automate tasks and increase customer-facing activities. We once mentioned digital price displays that save a huge amount of labor hours that can be devoted to engaging the consumer.

Regarding promotion executions, store employees are the ones who will make sure all the elements are in place and customers receive the information needed.

4- Measure results

Most marketers lead a very hectic work life; as soon as one activity finishes they are already launching a new campaign. Most times, little time is left for measuring results and even less time is allocated to analyzing them. Considering all the resources spent before the promotion is launched, marketers should devote some time for closure and feedback when the promotion ends, if not how could they know whether the pallet display or the end-aisle was more effective, for example?

Nowadays, local, real time, precise data and analytics can provide new benchmarks for performance within stores. This is certainly useful for improving marketing approaches as well as enhancing store operations as the one mentioned above.

In this context, when an international beer brand asked us about the possibility of tracking shopper engagement and conversion on two different areas on the selling floor based on different stimuli, we planned a project to deliver objective metrics in a complete category using our tool. You can read more on the beer case here. This shows that many marketing managers are eager to attain valuable insight by measuring results.

5- Observe shopper behavior near the shelf

Most brick-and-mortar stores know that their future lies in being able to transform their business into more efficient customer service organizations. Technology is central for this process to occur.

Retailers need to collect and analyze information related to how shoppers behave within their stores so that they can improve the overall shopping experience. In doing so, they will also be capable of providing brands with more precise boundaries for in-store promotions.

For brands, action is very limited without an understanding of what happens inside stores. Managers need to determine if factors that can be controlled need to be changed so as to develop new growth strategies.

For example, item affinity may lead to interesting promotions matching products that go very well together. Thus, it is essential that marketers learn more about what products and categories could be adjacent to another to allow more convenient shopping.

We believe campaigns can become cost effective and more successful if agencies and brands can adapt to new shopper missions and thus understand what happens in front of the shelf in each category inside stores.

 To conclude, Albert Einstein once said “In theory, theory and practice are the same. In practice, they are not.” In-store execution is that convergence point; it is where the right product is displayed at the right price in the right place so that lookers can turn into buyers as brands and retailers work together to improve the overall shopping experience.

“Reverse Showrooming”: A Bricks & Morter Retail Benefit

Contributor: Janet Valenza, president, is a past c-suite executive from the Young & Rubicam family of companies. Pop-Up Artists is a strategic marketing agency that creates focused physical shops integrating e-Commerce, for retail and luxury brand clients.

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We’ve all heard the Bricks & Mortar retail complaints about “showrooming.” Someone comes into the store to see, touch and experience the product only to return home to the Internet to shop price and buy it elsewhere. It’s true, and a real drag. But what if that same Retailer could use “showrooming” to their advantage?

The good news is the Retailer can! How? By displaying samples of eCommerce Brands, taking orders through the existing eCommerce Brand website and getting a cut of the deal. The Retailer can even charge a base rent, calculated on sales per square-foot, using the same model that Bloomingdale’s uses for their shop-in-shops. Any sales above the base would be eligible for a percentage to be earned by the Retailer.

Here’s how the Retailer wins. First he / she can test new categories without any financial inventory risk. That’s right: No inventory risk! The biggest risk in retail is removed! Not only that, instead of laying out cash for inventory, the Retailer can take it in with the base rent, adding to profitability.

In a clothing boutique, for example, the Retailer can test jewelry. A small sample presentation can be created, and remain live for six weeks in Bricks & Mortar, with the store staff taking orders through the existing Brand’s website. If it works the Retailer can continue the relationship. If not, the Retailer simply opts to bring in a new Brand. The Bricks & Mortar now has a risk-free way to build their assortment and their business!

Another benefit to the Retailer is newness. The sample presentation creates another easy reason to invite the Customer back into the store. It’s a traffic driver. And it’s newsworthy for press purposes.


Janet can be reached at 917.497.5319 or [email protected]. For more information: www.pop-upartists.com

Retail Margin Risk: 5 Critical Supply Chain Steps To Ensure Merchandise Plan Execution

Systematically Identifying and Eliminating Supply Chain Performance Related Issues Can Help Retailers Mitigate Events that Put Margin at Risk

As retailers strive to meet customers’ needs through an omni-channel environment, the complexity of brick and mortar retail is forever growing. Campaign intricacy is accelerating and with the immense amount of POP, kits, products, and creative going out to stores, few retailers feel confident in their stores’ ability to execute localized campaigns quickly or effectively. In addition, communication from headquarters down to store level is indirect and not easily traceable. This inefficiency not only wastes time and leads to confusion, but also impacts profit margins via substantial unnecessary printing and shipping costs, and lost sales due to untimely and inaccurate product mix and messaging.

In an article posted by Integrated Solutions For Retailers, Richard Wilhjelm, explains retailers’ margins are in jeopardy due to unforeseen but predictable supply chain risk factors. Posted below, are 5 critical supply chain steps to ensure retailers are executing their merchandise plans accurately and efficiently.

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By Richard Wilhjelm, VP, Sales & Business Development,Compliance Networks (reprinted with permission)

Every year, retailers spend hundreds of millions of dollars to create the perfect merchandising plan. Industry demographics are measured and focus groups created in an attempt to define the desired customer. Once the perfect customer and corresponding products are identified, sophisticated forecasting, planning and allocation systems are utilized to construct complex merchandise plans to achieve specific margin objectives.

Unfortunately the results, particularly during promotional or seasonal events, are often missed margin opportunities combined with damage to the retailer’s valuable brand because of out-of-stocks (OOS) at the shelf. While in-store execution issues often lead to OOS, the culprit is just as often chain performance. In truth, the retailer’s margin was in jeopardy from the beginning due to unforeseen but predictable supply chain risk factors.

The penalty for retailers is high, but is also segment dependent, because consumers react differently to an OOS depending on the product category. But in total, North American retailers lost some $89 billion in sales in 2011, according to research released last year by IHL Group, which specializes in the topic.

Margin Risk
Margin risk, from a retail perspective, is defined as the potential permanent loss of margin due to internal and external related performance related events. Performance events can be internal, changed or late purchase orders or external, late or incomplete shipments and poor ASN accuracy. In either the case, the margin opportunity may be lost for that fiscal period or may not return at all until next year.

Margin Has a Shelf Life
Retailers are coming to the realization that like their products, margin has a shelf life. In the past, the consumer was patient mainly due in part to the fact their options were limited. If an advertised product was not in stock, often the consumer would take their rain check and return in 2 or 3 weeks when the product was back in stock. The need for expensive safety stock was not required and the margin opportunity was preserved, the best of both worlds for the retailer. But today’s consumer has more options. Whether it is increased competition from traditional brick and mortar companies with an Omni-channel offering or pure e-commerce plays like Amazon, or even mobile commerce, the consumer no longer has to be patient. He or she has options and more increasingly are demonstrating the capacity to exercise them.

Opportunity for Supply Chain
A common question we often hear is how supply chain can be viewed as less of a cost center and more of a margin contributor. Within most retailers there exists a tension between the merchant and supply chain teams. Merchants are perceived to be higher in the enterprise hierarchy because they are the generators of gross margin while supply chain executives are often portrayed as “cost of doing business.” But with the new dynamic in the industry and an emphasis on speed and execution, supply chain executives play an ever increasing role in merchandise plan execution and overall retailer profitability. By maintaining proper fill rates, ensuring on-time deliveries, demanding ASN accuracy and minimizing trouble shipments, the retail supply chain executive can influence the overall performance of the supply chain and mitigating both internal and external factors that put margin at risk.

Five Critical Steps Supply Chain Steps to Ensure Merchandise Plan Execution
Where does the supply chain executive start in their quest to influence margin performance? While opinions will vary where the best place to start is, most will agree the desired outcome is a more predictable and consistent supply chain. In the presence of variability, there will be safety stock to mitigate margin risk. By eliminating the variability and providing merchant teams with actual performance related information, retailers can drive down their overall safety stock and improve profitability.

The following are five steps supply chain executives can take to ensure merchandise plan execution:

Step One – Focus on On-time Deliveries and Fill Rate (increase sales) – The velocity and cadence of promotional events in the retail industry is greater than ever before. Ensuring orders are complete and on-time is critical to most merchants and fundamental in reducing margin risk.

Step Two – Monitor & Reduce the Purchase Order Lifecycle (reduce supply chain days) – Continuously monitor the purchase order lifecycle for opportunities. A shorter purchase order lifecycle is more responsive to demand signals, less prone to out-of-stocks and requires less working capital to fund.

Step Three – Monitor ASN Accuracy Religiously – Poor ASN accuracy can doom inventory integrity leading to poor merchandise plan execution. While it’s important to audit vendors for accuracy, it is also important to focus valuable audit resources on the lower performing vendors versus the higher performing vendors.

Step Four – Monitor Transportation Performance – Ensure vendors are adhering to the routing guide for transportation requirements. The selection of a wrong carrier can result in additional supply chain days while multiple shipments during the same week can accelerate transportation expenses.

Step Five – Over Communicate With Your Vendor Trading Partners – Provide vendors 24/7 access to key performance data. Immediately alert vendors to past supply chain failures, or if possible, alert them to upcoming execution opportunities. Over communicating performance data to key trading partners will result in visibility for all parties involved.

Summary
The value of merchandise plan execution is critical to any retailer’s margin objectives. By systematically identifying and eliminating supply chain performance related issues, retailers can mitigate those events that put margin at risk. In a recovering economy where working capital still remains constrained, the supply chain professional who can run a predictable and consistent supply chain, influence margin performance, and increase operating cash flow will be invaluable.

About The Author

Richard Wilhjelm currently serves as VP, Sales & Business Development for Compliance Networks, a supply chain performance improvement solution provider. He is responsible for strengthening executive-level relationships with customers and key prospects.  Richard has over 25 years of sales and marketing experience in the supply chain software industry.