What Can Customers Learn from Your Brand?

What Can Customers Learn from Your Brand?

A customer just made a purchase at your store. She conducted her research online, knew exactly what she wanted, and left with what she came for. This appears to be a perfectly successful transaction.

But, where is this relationship going?

1 in 3 customers look to retailers to educate them to varying degrees

Online shopping options are abundant, so a fast and convenient purchase is no longer enough to keep customers coming back. In order to gain customer loyalty in 2016, retailers need to think beyond the “right product, right price” approach. Sustaining a lasting customer-brand relationship now depends on a unique experience, engaging human interaction, and authentic, meaningful connection.

In response, we’re seeing more and more brands offering workshops and educational opportunities to entice customers and strengthen their brand appeal. According to Small Business Trends, “Nearly one-third (32 percent) of consumers are interested in going to classes or lessons at stores.”

For today’s customers who are constantly connected to digital devices, in-store classes give them a fun, participatory and personalized experience they can’t get online. Here are some retailers using classes to drive traffic to stores, create a welcoming environment, and strengthen shopping appeal.

DIY at Home Depot
Home Depot offers free Do It Yourself workshops, from building to gardening. They even offer kid-friendly tutorials and women’s-only “Do-It-Herself” workshops.

Practice Yoga at Lululemon
Lululemon, the popular yoga and lifestyle clothing retailer, hosts free weekly yoga classes in its stores. Classes are led by certified instructors from the local communities.

Get Outdoors with REI
The outdoor company REI offers both free and fee-based classes for all adventure experience levels, from outdoor photography skills to rock climbing, from backpacking to using a map & compass.

Have an Eye for Beauty at Sephora
Sephora customers can learn about the latest makeup trends, brow shaping techniques, skin fundamentals and more in its beauty and skin care classes. The classes are available nationwide and free to Sephora loyalty rewards members

Start Cooking with Williams-Sonoma
Williams-Sonoma, the premium cooking products retailer, holds complimentary hands-on cooking classes in its stores across the U.S. and Canada. Those who participate also enjoy discounts on store purchases.

Stay Connected at The Apple Store
Apple retail stores provide free hour-long workshops that teach everything from how to use a new device to creating presentations and movies. They even offer youth programs and camps.

By turning their retail spaces into learning platforms, brands not only demonstrate a need for their products, but they also enrich their customers’ everyday lives, create meaningful connections, and drive future visits and repeat purchases.

Retail environments are now much more than places to buy things. Customers care more about experiences than they do about acquiring merchandise. Brands should recognize that the customer’s loyalty depends on the full retail journey. The customer’s desire to return to the store is much greater when the experience is continually fresh, stimulating, interactive, authentic and meaningful.

Home Depot Turnaround, shopper marketing

Home Depot Standing on Firmer Ground

Home Depot is in the midst of another rebound, partially owed to the rise in house purchases and, in turn, house repairs. What is behind this turnaround is not some magic strategy or stroke of luck. According to an article on Forbes, it was solid management, on target marketing, and listening to the customer that helped Home Depot get back on top.

Home Depot Turnaround, shopper marketing

From the article:

I took a look back to Q3 2005, when that housing boom was in full swing. Lowe’s reported comparable sales increases of 6.2%. Home Depot reported increases of 3.6%. In other words, Lowe’s was outperforming its larger competitor by a factor of two. In fact, according to Wikipedia, during Mr. Nardelli’s tenure, Home Depot’s stock price remained essentially steady, while Lowe’s shares doubled in price. In other words, a lot of opportunity was missed. Earnings were adequate, but they were riding on the back of cost-cutting, not sales improvements.

Today that’s certainly not the case. In fact, at least one analyst at the Smead Value Fund gave Home Depot a slightly stronger buy rating than its rival, although both stocks are expected to perform well as the housing market continues to improve.

This begs the question: What has changed under the leadership of Frank Blake? What is Home Depot doing right? The answers can be found not today, but in the doldrums of the Great Recession, which Mr. Blake’s team took as an opportunity to right a very shaky ship. Changes were steady, yet sweeping, and included marketing, technologies, stores, and human resource allocation.

Home Depot Revamps Supply Chain Operations

Home Depot puts Renewed Focus on Supply Chain

With the expectation that the U.S. housing market is slated for a sharp rebound, Home Depot is investing serious capital in restructuring their supply chain operations, according to an article on Chain Store Age.

Home Depot Revamps Supply Chain Operations

From the article:

Executives from The Home Depot told attendees at an analyst meeting in New York on Monday that the company is focusing on improving its supply chain and Internet operations and expects a moderate recovery in the U.S. housing market. Roughly $450 million of Home Depot’s $1.5 billion capital spending budget for the current fiscal year is slated for IT projects.

In addition, Home Depot is also attempting to improve store productivity and is piloting five paint stores in the Chinese market.

Home Depot, Shopper Marketing

JC Penny’s Newest Loss is Home Depot’s Gain

Home Depot has a new Vice President of Marketing and Brand Management. According to Dividend, she is the latest transplant from JC Penney, a company that has struggled as of late to right their sinking ship.

Home Depot, Shopper Marketing

From the article:

Lisa DeStefano-Orebaugh will be joining Home Depot’s team. It was not reported when she will start at the Atlanta-based company, but when she does she will report to Chief Marketing Officer Trish Mueller.

This is the third top JCP executive to leave the company in less than a year. In June, Michael Francis left as merchandise and marketing chief and Greg Clark left as senior vice president of creative marketing in October.

Home Depot, Shopper Marketing, Forbes

Home Depot Outpaces Lowe’s As Housing Recovery Boosts Sales

With a roughly 32% increase in their 2012 Q4 earnings compared to Q4 in 2011, Home Depot is on the upswing again. According to a recent article on Forbes, this positive note is supported by the increase in new housing projects and the overall rebound of the housing market.

Home Depot, Shopper Marketing, Forbes

From the article:

“Home Depot’s results are primarily compared against Lowe’s, its key competitor and the second largest home improvement retailer in North America. The respective companies’ 2012 figures, however, show that Home Depot clearly comes out ahead. HD recorded comparable same-store sales growth of 7% during the final quarter and 4.6% for the full year. Compared to this, Lowe’s comparable same-store sales growth was below 2% for both the final quarter and the full year. HD’s full year sales growth stood at 6.2% compared to around 2.2% for Lowe’s – a clear sign that the company’s ability to address the US home improvement industry is only growing stronger. Investors have also maintained their confidence in HD’s ability throughout 2012 – the company’s stock has jumped by over 40% over the year.

The basic macro-level enablers for HD’s growth in the fourth quarter remained the U.S. housing market rebound – bringing along increased home occupancy rates, higher rates of home construction and spending as well as new home sales. A 5.6% increase in average ticket price during the final quarter also shows how buyers have been gradually moving towards bigger purchases – further confirming the general improvement in consumer confidence.”

Home Depot Mobile Device Deployment, tablets

Home Depot Rolls Out New Mobile Devices for Workers

Home Depot has started to roll out a scaled down, second generation mobile device for its sales associates, allowing more workers to use wireless technology to assist customers, CIO Matt Carey told CIO Journal. The 25,000 device roll-out is intended to make it possible for more store workers to help customers locate items and give information on products, even in areas for which they don’t have specialized expertise. It’s also an example of how Home Depot is attempting to use technology to increase the amount customers spend on each trip to the store, as well as sales to new customers, an area of focus as the chain has slowed the opening of new stores.

Home Depot Mobile Device Deployment, tablets

The device, called First Phone Junior, is a scaled-down version of the Motorola phone the company put in the hands of some associates two years ago, which allowed employees to better manage inventory, assist customers and speed checkout lines.

Home Depot only purchased approximately 15 of the first generation devices for each store, Carey said. The broader roll-out of the new device will add around 12 more devices per store and is part of an effort by Home Depot, over the past three years, to use technology to improve customer experiences.

Carey says that when he arrived at Home Depot in 2008, the company’s retail technology was comparable to what other chains possessed “in the year 1990.” To determine which products were out of stock, sales associates had to physically inspect shelves. The chain’s version of mobile computing was a computer terminal on top of a cart “powered by a boat battery,” with a scanner attached, Carey said. When merchandise was determined to be running low, the store’s manager re-ordered the items himself – there was no automatic system.

“That’s not a way to run a modern retailer,” Carey said.

Back in 2008, items were often out of out of stock because the inventory system was so poor, said Scot Ciccarelli, an analyst with RBC Capital Markets. The cost of shipping inventory to stores was higher because it was done on a smaller scale—one store at a time. And store employees spent 60% of their work day on stocking, and just 40% helping customers. The company set a goal to reverse that pattern.

Over the past few years Carey, who previously worked at eBay and Wal-Mart, helped bring in an automated inventory management system, which replenishes items by predicting depletion of stock, rather than waiting for items to run out. The new system includes 19 centralized warehouses located across the country, which order in larger quantity for all the stores in the region. The system took day-to-day general stock level decisions out the hands of local managers, automating those orders, and allowing them to concentrate more on purchases for special store displays or other areas that are specific to an individual location.

“We want our managers dealing with the exceptions,” Carey said.

Meanwhile, Home Depot invested $64 million to deploy 34,000 First Phones, which allowed associates to use a scanner on the device to continuously update and view inventory levels, according to a spokesman for the retailer. The First Phone gave associates instant access to product information, making them more helpful to customers, who often need specific, technical information on tools and parts. Jennifer Smith, senior director of store operations for Home Depot, said this allowed employees to develop a “stronger emotional connection in the aisle” with customers. This connection is helping the chain combat the effects of “showrooming,” when a customer comes to a brick-and-mortar store just to browse, only to make the actual purchase online.

Smith, who appeared at an event with Motorola Solutions in New York to unveil the new devices, said the First Phone devices empower store associates and make them “confident [enough] to have those conversations” with customers. She sees those conversations as a competitive advantage, she told CIO Journal.

The mobile device also helped speed checkout times, allowing employees to scan items for customers as they wait on line, instead of waiting until they reach the cashier. Last spring, the chain also began to allow payment through a PayPal account, requiring only a customer’s phone number and account PIN.

Putting mobile technologies in the hands of store associates won’t solve every problem a retailer may have. “Technology will not solve the basic issues, like cleanliness,” said Alison Paul, a senior retail analyst with Deloitte. She also said customers of some class of retailer, especially in the mid-market price range, are uncomfortable when they’re approached by a sales person bearing a tablet or other mobile device. “Shoppers are not all as tech savvy as [retailers] thought,” she told CIO Journal.

But she said retailers, often gun-shy about investing in technology because the returns aren’t big enough, should experiment with relatively inexpensive tools such as these. The new Motorola devices are “cheap enough that you can afford to try it out in a store, and then you can tweak it,” she said.

So far, the changes have helped the company move toward the goal of providing more customer service, Carey said. By the end of 2011, sales associates were spending 53% of their time helping customers, a spokesman said. And inventory is turning over more quickly. But, at the same time, Home Depot’s chief competitor Lowe’s began last year to arm employees with an iPhone that has many of the same capabilities.

“They have their play and we have ours,” said Carey.

[via Wall Street Journal]

Home Depot, Home Improvement, Retail Localization

Warm Weather Leaves Home Improvement Stores Smiling

While the warmer than usual weather in the early months of the year were a detriment to utility companies, those operating in the home improvement stores industry have reported positive quarterly numbers, in part due to the sunshine.

Home Depot, Home Improvement, Retail Localization

StockCall.com is an online platform where investors doing their due diligence on the Home Improvement Stores industry can have easy and free access to our analyst research and opinions on The Home Depot Inc. and Lowe’s Companies Inc. To see how companies in this industry have grown over the past years and how they are expected to perform in the future, please visit the link below. http://www.StockCall.com

Both The Home Depot Inc. and Lowe’s Companies Inc. had impressive quarters, though the remainder of the year may not be as fruitful. In its 1st quarter, Lowe’s managed to increase earnings by almost 30%, as net sales climbed by 7.9% in year-over-year comparisons. The Home Depot also got off to a good start, recently reporting fiscal 1st quarter net earnings of $1 billion as compared to $812 million a year ago. Sales also increased. Register now to have free access to our report on Lowe’s Companies Inc., and to do so please click the link below. http://www.StockCall.com/LOW120612.pdf

While the industry has started well it is not without its headwinds. Some companies have been experiencing weak sales from their seasonal goods segments, and the patchy housing market continues to be a concern. Investors and shareholders of The Home Depot Inc. can simply register for our complimentary reports by clicking on the link below. http://www.StockCall.com/HD120612.pdf

[via Market Watch]

home-depot-retail-localization

Remodeling cycle to lift Home Depot, Lowe’s

Homeowners plan to do more remodeling and spend more per project this year after delaying improvements, and that is good news for the top two U.S. home-improvement retailers Home Depot Inc. and Lowe’s Cos., an analyst said Monday.

home-depot-retail-localization

Two-fifths of homeowners plan to spend more on their homes than they did last year, compared with 33% of them who plan to spend about the same and 27% of them who said they’d spend less, according to an online survey by Piper Jaffray analyst Peter Keith, who queried 440 homeowners regarding their home remodeling goals.

In another encouraging sign, 48% of the respondents said they planned to complete a discretionary project of greater than $500 this year. Three-quarters of them also indicated they have the cash savings to pay for a large ticket project. “We now expect home-improvement industry growth to outpace GDP growth for the foreseeable future,” Keith said.

Like many retailers, Home Depot says its expanding in the online channel aggressively and targeting it as a major growth opportunity, as housing worries continue to affect the world’s largest home-improvement retailer.

The analyst upgraded his ratings on both Home Depot HD -0.19% and Lowe’s LOW -0.06% to overweight on Monday, sending both stocks up about 1% to $51.58 and $32.01 respectively, as the rest of the retail sector declined. He has a $62 price target on Home Depot and $41 on Lowe’s.

Mixed signals continue to come out of the housing sector. The Commerce Department said Monday that March retail sales of building materials and garden equipment rose 3% from February, the biggest increase in almost a year and a half. At the same time, the National Association of Home Builders/Wells Fargo housing-market survey showed home-builder sentiment dropped in April for the first time in seven months.

Delayed gratification

The Piper Jaffray survey showed both retailers were the most popular choices among places where homeowners said they’d like to spend their home-improvement dollars.

The median value of total spending expected on large projects this year rose 14% to $2,000, while the average spending per project expected this year shot up to $2,000 from $880, the 30-question survey showed.

Among the two most popular reasons behind the increase, 36% of homeowners said they had delayed updating or repairing their homes for long enough, while another 31% of them cited an improvement in their income situation or more cash savings. The survey found that declining home prices were not a major hindrance in remodeling intentions.

[via MarketWatch]