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.

Birchbox’s 5 merchandising strategies for their first brick-and-mortar store

Not too long after the success of online retailer Warby Parker opened their first brick-and-mortar; beauty e-tailer, Birchbox is expanding out of the subscription box and is opening their first physical retail store in NYC’s trendy SOHO district, at 433 West Broadway. Co-founders Katia Beauchamp and Hayley Barna ensures that their first retail store is much different than the ordinary beauty retailer. See the 5 ways the Birchbox’s shop is bringing a unique in-store experience to their customers:

1. Merchandised by Category

Full-size products are organized by category rather than brand—meaning you won’t have to circle the store 100 times to compare pink nail polish. Beauty brands, typically require department stores and drug stores to group all of their products together in one branded display. But because of Birchbox’s relationship with the brands, they were given the OK for the new approach. 

2. SKUs are arranged the same way they appear online

Wanting to keep the omni-channel experience the same online and in-store, Birchbox’s product assortment is laid out exactly how it is displayed online. Allowing customers to keep the same shopping patterns when viewing products.  

3. Embracing in-store technology

Interactive displays are placed around the sales floor will allow shoppers to view more product selection, read customer reviews, view personalized recommendations, learn expert tips and watch DIY video tutorials. 

4. Personalized Service

There is a “Build Your Own Birchbox” bar where shoppers can custom-mix and select sample sizes of products for $15. 

5. Hands on approach

With the new physical store, Birchbox wanted to guarantee shoppers can interact with their selection of products, an experience shoppers can not get online or through their subscription. The store offers free classes and services like hair styling, manicures and make-up applications. For those shoppers who like to do it themselves, before buying, the store has set up “Try on Bars” 

Birchbox 3

From the Fortune article:

On a sidewalk in New York’s Soho neighborhood this week, two women’s eyes lit up as they approached the glowing front window of a new retail store from Birchbox, the company best known for selling mail order subscriptions for beauty product samples. “Store opens Friday,” the security guard offered. “You know the Birchbox?”

With her gaze fixed on the wall of pink cardboard boxes behind the glass, one of the women approached the window and snapped a photo with her iPhone. She was spellbound. “Oh I know the Birchbox,” she murmured hypnotically. Even as she walked away, her eyes stayed locked on the window.

It’s no secret that in three and a half years, Birchbox, has built up a devoted following. More than 800,000 women subscribe to the company’s monthly beauty sample boxes. (The company also offers boxes for men.) Half of them purchase full-sized versions of those items on Birchbox.com. They’ve written millions of reviews on the site, and watched just as many “haul” videos showing the boxes’ contents on YouTube. They will undoubtedly be just as excited about Birchbox’s next move, a brick-and-mortar retail store, which opens its doors today in downtown Manhattan.

Inside the store, there’s plenty for them to like. Birchbox’s approach to brick-and-mortar retail carefully mirrors the digital brand it’s known for. Editorial displays carry copy with a tone that matches the website, and there are iPads that promise personalized offerings. Naturally, the store’s pink, white, and tan color scheme matches the boxes it sends to its female subscribers.

Earlier this week, Katia Beauchamp and Hayley Barna, the company’s co-founders and co-chief executives, showed off all the ways their store would be different from other brick-and-mortar beauty stores. For one, the company’s new store is merchandized by category, not brand. This would normally be an affront to beauty brands, which typically require department stores and drug stores to group all of their products together in one big, branded display. In the Birchbox store, items are arranged the same way they’d appear online, in sections like “BB Cream” (as in “beauty or blemish”) or “second-day hair products.”

Barna says the company’s sales associates were thrilled about this development because they no longer have to drag customers all around the store to show them different brands of eyeliner. The brands would have never agreed to it if they didn’t already have relationships with Birchbox, Beauchamp said. Moving from the online sales environment to an offline one—rather than the usual other way around—gave the company an advantage, she added.

Despite the many physical products placed around the store, the space leans heavily on the company’s online presence. The iPads placed around the floor offer more products, reviews, and video tutorials from Birchbox.com. A physical display in the front of the store shows a rotating inventory of the top online sellers, and a large interactive display in the back allows shoppers to input their attributes (hair type, skin color, age, et cetera) for new product recommendations using their finger.

At a counter in the back of the store, shoppers can put together custom boxes of beauty samples. Downstairs, across from a corner of Birchbox for Men products—which the company expects will be purchased mostly by women as gifts—is a Birchbox salon, where professionals offer manicures, hair styling, and makeup services. The company says it will play host to appearances from various beauty celebrities and offer free classes for subscribers on makeup techniques like contouring and nail art.

In April, Birchbox raised $60 million in new venture funding, which valued the company at $485 million. In its announcement, the company said it would use the capital to amp up marketing and possible international expansion beyond the U.S., France, Spain and the U.K.

Birchbox has since been flooded with incoming calls from interested landlords and realtors around the country, which Barna said came as a surprise. If all goes well in New York, Birchbox may expand to more brick-and-mortar stores. For now, the company says its Soho store will serve as an experiment to learn about the ways its obsessive and devoted customers interact with the products. Of course, it’s also a chance to win over any casual beauty shoppers who, for whatever reason, don’t already “know the Birchbox.”

AT&T to lead a retail revolution with their ‘lab’ stores

*Images posted belong to CNET*

AT&T has a vision for the future of phone shopping, but the vision does not stop at their handsets or phone plans. Over the past several years the carrier has been reinventing the store experience.

CNET, a leader in tech product reviews, sat down with AT&T’s retail president, Paul Roth, for a discussion around their retail strategies.  AT&T’s secretive and very effective approach has lead the carrier to be one of America’s most admirable, profitable, and recognized brands.

In the article, AT&T’s vision is simple: tout the benefits of connected devices and services through “experiences”. In order to provide these “experiences” AT&T calls on their ‘lab’ stores to lead the revolution. Paul Roth and his team works in these ‘labs’ to dabble with store details from layouts to fixtures. Most importantly the ‘lab’ stores are used to determine the order and placement of products. The use of sophisticated technologies place products, POP and accessories based on the carrier’s brand strategy, product priority, store attributes and other data sets. A retail initiative, AT&T feels is important given the exclusive range of gadgets only offered through AT&T.

CNET_AT&T_visual_display

Merchandisingmatters posted the full CNET article in it’s entirety below:

ATLANTA — AT&T wants its stores to earn the same reputation for quality as the Ritz-Carlton hotel chain, which prides itself on offering five-star service.

That goal would have been laughable less than two years ago, when Consumer Reports called AT&T the worst wireless provider in the country. But more recently, AT&T has climbed atop many industry satisfaction surveys and has garnered accolades such as a J.D. Power award for top customer service among wireless carriers.

Part of AT&T’s secret: a radical shift in the way that the carrier — and its retail president, Paul Roth — approaches its stores.

Instead of just selling handsets and phone plans, Roth wants AT&T’s 2,000 retail outlets to tout the benefits of connected devices and services through “experiences.” And Roth has at his disposal a number of “lab” stores where he and his team get to tinker with store details from layouts to fixtures, including something as minor as whether the base of podium should be white or chrome.

“We’re maniacal about that,” he said in a March interview with CNET.

The attention to detail comes as AT&T, like rival Verizon Wireless, works to revamp its retail stores and the industry as a whole grapples with a maturing smartphone market and declines in the percentage of phones actually sold at carrier stores.

While a majority of the 27.4 million smartphones it sold last year were purchased at an AT&T store, the company wants to further goose sales growth by pushing other Internet-connected gadgets, such as smartwatches and tablets.

For consumers, this means the conversation switches from which phone you want to buy to how a phone, watch, home, and car could work together to make your life easier. It isn’t simply about picking up a phone and paying for it; it’s about having a salesperson walk through different products and services, Roth says.

“Retailers are trying to find ways to add value to the transaction and turn it more into an interaction,” said NPD analyst Stephen Baker.

Minding The Store

Image

That may be, as Baker notes, a common approach in the consumer electronics industry, but it’s definitely a different way of thinking for AT&T.

The transformation of its retail strategy came after AT&T asked itself a simple question: Does retail exist in the future?

“The answer is yes, but it’s very different,” Roth said.

It’s a question likely on minds across the industry. In the 12 months that ended in February, 61 percent of all smartphones sold were purchased through a carrier store, down from 69 percent two years ago, according to NPD. Baker said he expects the decline to continue this year as consumers shop more online and at large retail chains such as Walmart, which sell prepaid phone services.

Countering that trend is its family of lab stores, one of which is located in the lobby of AT&T Mobility’s headquarters here. At first glance, it looks like any typical carrier store in a shopping mall.

And on Mondays, such as the one on which I visited, it acts as a functioning store with inventory and cash — the exception being that all the customers are AT&T corporate employees.

The rest of the week, the retail team tests out different ideas, or tweaks the look of displays, often behind closed curtains.

Roth, who has run the retail group for more than five years, was eager to share details about the new concept store. The glass entrance, for instance, is framed with orange, a call back to the hipper, younger vibe of Cingular, which was rebranded to AT&T after a series of mergers between regional telcos.

For the store, Roth and his team opted to remove the AT&T name, sticking with the blue globe logo unveiled in 2007. They believe that symbol is recognizable enough to stand alone now. The store is highlighted with reclaimed teak, borrowing a touch from Starbucks, alongside splashes of orange and white.

We wanted something to feel surprising, but familiar,” he said.

Inside the 2,900-square foot space were “experience” areas, such as a round table ringed by music accessories, all surrounding a guitar centerpiece. A miniature drive-in theater helped demonstrate a mini projector that can be hooked up to your smartphone. Roth said that AT&T hired someone from Nike to help choose the props used to “better tell a story.” (The company declined to name the individual).

At the back of the store was a demonstration of AT&T’s U-Verse home Internet and TV service, as well as its Digital Life connected home business, which allows you to remotely control things like your door locks or lights via a smartphone or tablet. Against one wall was the carrier’s full phone lineup. A few smaller circular bar tables in the center of the store provided a place for employees to talk over the devices with their customers.

What you won’t find: cash registers or sales counters.

It’s part of AT&T and Roth’s plan to improve the retail experience by making it less about the transaction, and more about providing customers with relevant information before and after their purchases.

AT&T isn’t alone in this strategy. Verizon in November unveiled a large “destination store” in the Mall of America in Bloomington, Minn., and has been opening a number of smaller “smart stores” in select locations throughout the US focusing more on experiences and a higher level of service.

The latest incarnation of AT&T’s store, dubbed the “Store of the Future” concept, debuted at this lab in July and then went public in August. Since then, AT&T has opened or renovated 15 stores to carry that look and feel. Other design elements, like the removal of cash registers and counters in favor of mobile iPad checkout systems, have made their way to other stores (a retail tactic copied from Apple).

The order and placement of the products you see at your local AT&T shop? Roth likely determined all of that at the lab store.

The plans is to roll out the Future Store concept to all of AT&T’s stores, though Roth didn’t give a time frame for when that would happen.

Attitude vs. Aptitude

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Many of the changes were in play as far back as five years ago, when AT&T opened up the lab stores to figure out what worked in retail. Today, there are multiple facilities, including one in Milwaukee, and another Arlington Heights, Ill., equipped with heat sensors on the ceiling to determine traffic patterns. AT&T’s flagship store on Chicago’s famed Magnificent Mile started showing off some of the new retail elements in August 2012.

Shortly after taking over in the retail group in November 2008, Roth began hiring employees not just for their technical aptitude, but also their sales attitude. In the world of retail, that seems like a no-brainer, but AT&T was just getting started with its transformation.

Where Ritz-Carlton has its “greenbook” guide for quality service, AT&T hands out a little blue book titled “Our Retail Promise” to store employees. The book includes reminders like giving a “warm, friendly, and genuine” greeting to customers as they walk in the door and answering all of the customers’ questions before they leave the store.

Roth pointed to two “hero” tables where AT&T highlights marquee products. One of those tables is always reserved for Apple and its iPhone and iPad lineup (“Apple has been a good partner to us,” he says.) The other table offers a display for Beats Music, a mobile streaming service that launched in February that’s exclusively tied to AT&T’s wireless service.

What gets highlighted on that one hero table is entirely up to AT&T, Roth said. He noted that handset manufacturers have tried to buy out the marquee shelf space, but AT&T has declined.

“The store is not for sale,” he said.

Even as the elements of the lab store continue to trickle down through AT&T’s retail network, Roth continues to tinker with the look, including figuring out that podium base. (It’s currently a dull chrome, but he says he plans on playing around with it).

In April, the store will start showing phones with the Isis mobile payment service downloaded onto the device. Isis, a joint venture between AT&T, Verizon, and T-Mobile, was created with the intent of turning your phone into a wallet. Isis is a big priority for the company, with AT&T Mobility CEO Ralph de la Vega calling it a significant driver of growth in the future.

Roth said he sees a chunk of the store eventually dedicated to the cellular-connected car. In addition, more of the store space will be devoted to apps and experiences tied to your mobile device. The reason is simple: “It’s all pushing the concept that the phone is a remote control for your life.”

How Seeing More Increases eCommerce Engagement

At the mall shoppers have the opportunity to take only a few steps into a store to gain a visual representation of what items are available prior to committing to viewing the stores range in greater detail. That all important first scan of the store can be critical.

On the other hand, eCommerce traditionally does not provide shoppers with a comparative experience online.

ecommerce store display

Online Retail Display

Online stores have only limited screen space in the first view to wow customers and keep them on their site and looking for more. Ten to twelve flat images in a standard grid as a first impression for customers makes grabbing their attention difficult.

The customers who do commit to exploring more typically have to scroll through pages and pages of products to find images worthy of continuing their shopping experience on that site. This situation can lead to buyer’s fatigue, where shoppers have browsed so many pages of items that they simply lose interest and leave the site.

An online presence should excite visitors enough so that they not only return but they tell others about the experience they had.

So how can online retailers overcome this?

It’s simple. By helping your site visitors find items of interest to them quicker and allow them to feel in control by providing an interactive experience.

Research shows that images are the most important factor in the online shopping experience, more important even than price. When we shop we scan many items and allow one to catch our eye, tracking subtle factors such as colour, shape and position.

What does this mean to you, the online retailer, seeking new points of difference as online shopping matures? It means that existing online image galleries are counter-intuitive to the way people shop in real life. A static, flat 2D grid does not meet the needs of customers to visually scan and interact with products.

Interactive Display – Show more. See more. Sell more.

With interactive display by Show. See. Sold. shoppers can view an entire collection in an engaging and immersive way that triggers the eye/brain connection promoting discovery and a genuine connection to the products displayed.. It is based on how we as humans find things in everyday life, which had yet to be translated to online retail product display.

Shoppers can swipe, zoom, spin and filter a product range then click through and buy. Seamless integration means images and copy are always up to date and site owners can easily control what is displayed. Show. See. Sold is all about user experience and engagement across all devices from desktop to mobile.

The end result of this process is a material uplift in time on site, conversion and basket size, all achieved with a little help from neuroscience which goes to show there is more to increasing your online sales than meets the eye.

Modern retail store layout, retail localization

6 Tips for Creating an Optimal Retail Store Layout

Mom-and-pop shop owners may not realize the impact that a retail store’s layout can have on sales. But studies show that a less-than-ideal arrangement of product displays, check-out and service counters, or aisles influences consumer behavior in subtle but powerful ways. For example, when a customer avoids a crowded aisle or feels intimated by a clerk standing behind a tall counter, you may lose a sale.

Modern retail store layout, retail localization

Here are six tips for creating an optimal retail store layout.

1. Don’t place merchandise in the “decompression zone.” When U.S. consumers enter a store, they tend to turn to the right. Position merchandise with this in mind. A psychological shift also occurs when inside a store, so patrons typically don’t notice merchandizing displays within 15 feet of the entrance, say retail strategists Rich Kizer and Georganne Bender of Kizer & Bender. They also recommend using “speed bumps” (attention-grabbing in-store displays).

2. Choose a store layout that fits your business. The grid layout used by most grocery stores steers customers up and down rows of aisles. A loop layout has a central grouping of displays, with a circular or square pathway around it. A free-flowing layout gives merchants opportunities to spur impulse buying, as shoppers can move the most freely through the store.

3. Minimize counters. Bob Phibbs, owner of the Retail Doctor, says store counters often separate the store owner or sales clerk from customers, at least psychologically. This doesn’t benefit merchants, because it creates an “us vs. them” mentality and sends the wrong signals. Phibbs suggests that owners ask unoccupied staff to wander the sales floor, posing as shoppers. This gives customers a sense of a bustling shop, which puts them at ease, he says. If a counter is essential for completing paperwork, he suggests sizing it down to no larger than a desk.

4. Beware the “butt-brush effect.” Paco Underhill, a consumer behavior expert, coined this term when he discovered that the typical customer will avoid perusing merchandise if it brings another customer’s backside into close proximity. That’s true even when the shopper is very interested in an item. Avoid this problem by ensuring aisles and floor space allow patrons adequate personal space.

5. Maintain good visibility. Reduce your inventory losses by keeping shelves low enough to enable good visibility. Take care to ensure that temporary store displays do not inadvertently provide cover for shoplifters.

6. Create a sensational entrance. Even stunning in-store layouts fail to woo shoppers if the storefront has little curb appeal. Invest in an eye-catching entrance, strategically placing signage to entice shoppers inside. Make sure that at least a few products are visible to people who pass by the shop’s windows.

[via Intuit]
Using Smartphones in Retail Store, In-Store Media

Consumers Calling on Smartphones for In-store Purchasing Decisions

A growing number of shoppers are using their smartphones to help them make in-store purchases. According to new Deloitte research, smartphones currently influence 5.1% of annual retail store sales, translating into $159 billion in forecasted sales for 2012, according to new Deloitte research.

Deloitte arrived at its 5.1% figure by examining in-store sales driven by consumers’ store-related smartphone activity such as product research, price comparison or other mobile application use.

While that figure may not be very high, Deloitte anticipates mobile’s influence, based on consumers’ smartphone use, will grow to represent 19% of total store sales by 2016, amounting to $689 billion in mobile-influenced sales. By comparison, direct mobile commerce sales will pass the $30 billion mark by that time, according to industry estimates.

Using Smartphones in Retail Store, In-Store Media

“Mobile devices’ influence on retail store sales has passed the rate at which consumers purchase through their devices today,” said Alison Paul, vice chairman, Deloitte LLP and retail and distribution sector leader. “Consumers’ store-related mobile activities are contributing to – not taking away from – in-store sales, and our research indicates that smartphone shoppers are 14% more likely to convert and make a purchase in the store than non-smartphone users. This means that mobile is an important tool for retailers to incrementally drive traditional in-store sales, strengthening the relationship between retailer and consumer to increase engagement and loyalty.”

Some findings from the study include:

  • Nearly half (48%) of smartphone owners surveyed say their phones have influenced their decision to purchase an item in a store, and the study shows that consumers’ smartphone use tends to be highest at or near the point of purchase. Based on Deloitte’s survey, more than 6 out of 10 (61%) of smartphone owners who use their devices to shop have done so while shopping at the store, and more than half (52%) reach for their phones on the way to the store.

  • Smartphone-toting consumers appear more likely to make a purchase than those who do not own one or do not use it to assist in-store shopping. When asked about their most recent shopping trip, nearly three-quarters (72%) of smartphone owners surveyed indicated they made a purchase on that day, compared with 63% of respondents who did not use a phone. Smartphone users were also more likely to eventually make a purchase: among those who did not buy anything on their last trip, 59% of those who used a smartphone eventually made a purchase, compared to only 22% of those who did not use one.

  • Mobile applications appear to be the inroads to consumer engagement. Nearly four out of 10 (37%) smartphone owners surveyed who used a smartphone on their last shopping trip utilized a third-party mobile shopping application, and more than one-third (34%) used a retailer’s mobile application.

  • As consumers buy smartphones, they are quick to tap their devices for shopping assistance, with smartphone use for store-related shopping increasing 40% after the first six months of ownership, according to Deloitte’s survey. Once these consumers are on board, they consistently use their phones for 50% to 60% of their store shopping trips, depending on the store category.

  • The survey was commissioned by Deloitte and conducted online by an independent research company between March 20 and 30. The survey polled a national sample of 1,041 random consumers and then augmented this sample with additional smartphone owners to reach a sample of 1,557 smartphone owners. The sample of smartphone owners has a margin of error of plus or minus 3 percentage points.

    [via Retailing Today]

Dollar General, Store-specific merchandising, retail localization

Dollar General to ramp up store-specific merchandising

After testing the concept last year, Dollar General planning to roll out a merchandising program that will allow it to expand or pare back certain merchandise categories based on the geographic and demographic of its individual stores.

Dollar General, Store-specific merchandising, retail localization

In last year’s test, DG dropped some 5,000 independent merchandise sets into approximately 280 stores, evp/divisional president/cmo Todd Vasos said during the company’s annual Analyst Day presentation here this morning. When the rollout is complete – a three-year process – DG expects to deploy 45,000 to 50,000 individual sets across its store base, he said.

“There’s no complexity,” he said. “These are planograms that already exist. It’s about making sure the right planogram goes into the right store.”

In terms of store growth, chairman and ceo Rick Drelling said DG can add another 8,800 units in its exiting markets – where is already operates 10,100 stores. It sees the opportunity to establish 1,200 units in new markets.

One of the biggest opportunities: California, a market the company entered recently. DG will have 50 stores in the state by the end of the year and believes California could rival Texas, where DG operates more than 1,000 stores.

[via Home Textiles Today]

Partner Collaboration Drives Merchandising Success

Innovative merchandising created through collaboration among retailers and suppliers requires careful planning and dedication, but it can be a powerful driver of incremental sales if executed properly, according to presenters at an FMI2012 session here.

“We had to start thinking more like shoppers, and had to work on breaking down barriers and silos within the company,” said Don Fitzgerald, senior vice president of merchandising at Roundy’s, Milwaukee, speaking about a partnership with The Clorox Co. that leveraged the expertise and authority of the chain’s pharmacists to drive sales of preventative-care products. “We had to do some unconventional things.”

The merchandising program, which incorporated Clorox-brand disinfectant wipes with OTCs and other items, was effective in driving incremental sales in the categories of products involved, Fitzgerald said.

One of the keys to making the program effective, he said, was having Clorox educate the retailer’s pharmacists about preventative health care.

Bob Richardson of The Clorox Co.; Don Fitzgerald of Roundy’s.“We said, ‘Let’s effectively use pharmacy as your offensive tool,’” explained Bob Richardson, director of sales and customer development at Clorox. Richardson (right) is pictured with Fitzgerald at FMI2012.

The emphasis on preventative care also played into consumer trends, he pointed out, as the costs of health care have increased and the economy has remained weak, forcing many consumers to be more concerned about the costs of becoming sick.

The merchandising platform also fit nicely into Roundy’s overall emphasis on health care and its “shop well, eat well, live well” ethos.

Similarly, a merchandising partnership between Cincinnati-based Kroger Co. and Coca-Cola’s Vitamin Water products also played well into Kroger’s “customer first” approach, explained Larry Nelson, director of DSD sales planning at the chain.

He said transparency and honest discussion about costs were essential to making the merchandising effort with Vitamin Water work.

“The only way to survive is if you both make a profit,” he said.

Larry Nelson of Kroger Co.; Wade Duke of Coca-Cola Refreshments.The comprehensive merchandising program, which is ongoing, involves tie-ins with performer Carrie Underwood and a web-based effort that ties into the in-store displays. It helped increase penetration of Vitamin Water by 26.5% in 2011, according to Wade Duke, president of the Kroger account team at Coca-Cola Refreshments. Wade (right) is pictured with Nelson at FMI2012.

The effort involves displays in the Nature’s Market sections of Kroger stores and includes educational efforts about the importance of hydration.

[via Supermarket News]

Leopard, Cabela's, Retail Localization

Cabela’s New Outpost Stores Designed for Frequent Change

Leopard, Cabela's, Retail Localization

Aiming to bring the excitement of Cabela’s to smaller, underserved markets, the retailer will debut its new Outpost store format this fall with a planned store opening in Union Gap, WA. Targeted at markets with 250,000 people or less, the 40,000-square-foot Outpost stores “will be designed to have an innovative, flexible floor plan, which will provide our customers an ever-changing visual look at the center core of the store, complemented by a revolutionary digital signage concept,” said Cabela’s CEO Thomas Millner during a recent conference call.

The merchandise at these small-format stores will include a higher concentration of Cabela’s branded products, but in-store kiosks will give customers access to the retailer’s full product line via its website. In addition, customers can take advantage of free shipping to the Outpost stores, using them as pickup locations for their online purchases.

The Outpost stores will be located in the Western U.S. and Canada, in smaller markets with high concentrations of hunters, fishers and campers. “If there even is a competitor in a market like that, they typically are not very sophisticated. There is no seasonal role of merchandise. You kind of see the same thing you see every time you go in,” said Millner.

In contrast, Cabela’s will be able to change the center part of its Outpost stores four times per year: “So early spring, late spring, early fall, late fall, the customer gets a constantly changing exciting new look,” said Millner. “And setting that off is a really unique digital signage program. It’s all designed to create that Cabela’s retail experience in a smaller market.”

[via RIS News]

Putting Your Best Store Forward

The layout and fixtures in your store speak volumes about your retail business. When’s the best time to redesign? Should you do the whole store or one department at a time? Where do you get the most bang for your buck? Where do you start? The Gourmet Retailer checks in with store designers and consultants to get their expert advice.

Photos courtesy of Chute Gerdeman Retail
With the sluggish economy, many retailers are cautious when investing in big-ticket items, including a store redesign.

"With economy being the way it has been lately, people are concerned about price but want to present their store in best way," says Anne Wallace, account manager for the New York design firm Hirst Pacific Ltd., which has consulted and executed various store designs and merchandising layouts for upscale brands such as Godiva chocolate, Rockport shoes and Shiseido cosmetics. When describing the look they want to convey, potential clients use two words. "Whether it’s a small boutique or large grocery brand, ‘luxury’ and ‘premium’ are words we hear a lot."

Vintage fixtures, such as this antique scale and the wooden crates, are in vogue. Using these one-of-a-kind items help a retailer create a unique atmosphere and stave off sameness and flatness, says Bess Liscio of Chute Gerdeman Retail.

Most retailers are opting to redesign their current stores, notes Wallace. "There have been fewer openings," she adds. "There have been fewer new ideas coming into market. But at the same time, retailers are saying, ‘We want to keep growing. How can we breathe new life into something?’"

That’s where a redesign comes in.

Because of the economy, "People are just injecting new things into their stores and not doing much in way of major renovations," says Bess Liscio, the VP of visual strategy for Chute Gerdeman Retail in Columbus, Ohio. This more piecemeal approach to store design makes it easier to keep up with trends, react and instantly add excitement to a store.

Not so long ago, store designers used to call the time for a major store design "the 7-year-itch," notes Liscio, who has worked in visual merchandising and retail design for 30 years. But even in the current economic climate, retailers are sprucing up their looks more often with smaller projects. "We call it ‘Botox’ because it’s more of an ongoing process. It’s not a major closing of the store," Liscio says about smaller redesign projects that include an updated window strategy, a redesigned entrance or vestibule, a new area or a fixture change.

Data-Driven Design
Before drawing up a new planogram – or redesigning the entryway—retailers of all sizes need to start by looking at their categories’ past performances, says Kurt Jetta, founder of TABS Group, a Shelton, Conn.-based firm that specializes in sales and marketing analytics in the consumer products industry.

"The best redesign is no redesign if you’re doing it for aesthetic reasons," cautions Jetta. "The first knee jerk thing people do, if things are a little slow, is say ‘Let’s change the store layout.’ And we really have yet to see that type of change have any impact."

"With economy being the way it has been lately, people are concerned about price but want to present their store in best way," says Anne Wallace, account manager for the New York design firm Hirst Pacific Ltd., which has consulted and executed various store designs and merchandising layouts for upscale brands such as Godiva chocolate, Rockport shoes and Shiseido cosmetics. When describing the look they want to convey, potential clients use two words. "Whether it’s a small boutique or large grocery brand, ‘luxury’ and ‘premium’ are words we hear a lot."

Most retailers are opting to redesign their current stores, notes Wallace. "There have been fewer openings," she adds. "There have been fewer new ideas coming into market. But at the same time, retailers are saying, ‘We want to keep growing. How can we breathe new life into something?’"

That’s where a redesign comes in.

Because of the economy, "People are just injecting new things into their stores and not doing much in way of major renovations," says Bess Liscio, the VP of visual strategy for Chute Gerdeman Retail in Columbus, Ohio. This more piecemeal approach to store design makes it easier to keep up with trends, react and instantly add excitement to a store.

Not so long ago, store designers used to call the time for a major store design "the 7-year-itch," notes Liscio, who has worked in visual merchandising and retail design for 30 years. But even in the current economic climate, retailers are sprucing up their looks more often with smaller projects. "We call it ‘Botox’ because it’s more of an ongoing process. It’s not a major closing of the store," Liscio says about smaller redesign projects that include an updated window strategy, a redesigned entrance or vestibule, a new area or a fixture change.

Data-Driven Design
Before drawing up a new planogram – or redesigning the entryway—retailers of all sizes need to start by looking at their categories’ past performances, says Kurt Jetta, founder of TABS Group, a Shelton, Conn.-based firm that specializes in sales and marketing analytics in the consumer products industry.

"The best redesign is no redesign if you’re doing it for aesthetic reasons," cautions Jetta. "The first knee jerk thing people do, if things are a little slow, is say ‘Let’s change the store layout.’ And we really have yet to see that type of change have any impact."


A store redesign is "useless unless you incorporate scientific elements and use information to optimize category size and placement."
— Kurt Jetta, TABS Group

A store redesign, Jetta says, is "useless unless you incorporate scientific elements and use information to optimize category size and placement." Before a retailer of any size decides to tinker with its existing store layout, it should review past category performance including how consumers have responded to past promotions.

With this past performance data in hand, retailers should apply it to their store layout and optimize certain categories. In addition to placement, retailers should consider the category’s size. "What is the right amount of coffee vs. tea cereal and other branded foods? The data is out there. You don’t have to go on gut," Jetta says.

Retailers that use a point-of-sale system may have this information at their fingertips. "If you’re capturing data now, that is best source of info," Jetta says. Surveys, trade associations, market research data that is available for purchase are among the resources that retailers should consider using, he says.

Category Placement
In addition to category size, retailers need to evaluate departments’ placement within the store.

One tip is to group complementary items adjacent to one another. Think coffee and tea and brewing accessories together, knives and cutting boards, baking mixes, bakeware and cake decorating items. For example, specialty teas have a high cross-purchase effect with coffee pots. Merchandising the two together can translate into a sales increase of 10 percent or more, Jetta says.

"The neighbors all have to make sense to one another," adds Liscio. "You have to think about how the buyer buys it and combine the things that make sense."

Redesign Magic
Before planning a redesign, "the No. 1 thing a retailer can do is shop," says Wallace. "Be out in the field. And see what other retailers, not just the competition, are doing."

It’s imperative that retailers are able to communicate their store’s vision and how they want customers to perceive the store. And retailers need to think about the way customers are shopping and what’s important to them, agree Wallace and Liscio.

In order to tackle a redesign, a retailer needs evaluate the entire store and observe how customers move through the store. "We have to imagine a full shopping experience," says Wallace. "How do things look? How accessible are products to reach, and how easy is it to find the cash wrap? You have to consider the layout."

When getting down to the nuts and bolts of store design, retailers need to consider the best-case and worse-case scenarios. "What happens when the store is full? Can everyone get to what they want? Is there space for people to line up at checkout? Is everything visible?" asks Wallace. "When the store is empty, how does it look?"

Simple changes can have big impact. And the good news is they don’t have to cost a lot of money. "If you change up the flow of traffic in the store, you can have a profound effect with little or no cost," says Wallace.

With redesigns, Jetta says he sees some retailers adding more perishable categories and moving away from mainstream packaged products.

Before undertaking such a drastic shift in retail direction, retailers should assess their strengths. "Unless you’re good at managing categories and shrink, this could be a pitfall," Jetta says. Instead, Jetta suggests that retailers consider expanding their bakeries, which is responsive to more space and complements a variety of gourmet retail formats.

Wide-Open Spaces
When redesigning a store, the retailer’s instinct may be to cram in as much as possible. This can have an adverse effect. Instead, retailers should think about incorporating open space to creating a store that is welcoming and easy to navigate.

"Not enough attention is paid to open space, and open space can be critical to store design," says Alan Guinn of The Guinn Consultancy in New York. "Nothing looks worse that a crowded shop, with floor-to-ceiling products, and narrow, skinny aisles—and people having to coordinate when they can walk down an aisle."

It may seem counterintuitive, but Guinn advises retailers to reduce the number of aisles and SKUs rather than to force customers into an uncomfortable aisle situation. "Discomfort with the shopping process will speed up their shopping experience, and if you are like most gourmet situations, you’d like to keep them in the store for as long as possible because that is indicative of increased sales," he says.

Problem Areas
Proper lighting is essential to creating the look and feel of a store. However, improper lighting along with illegible signage are two of the most common problems with store design, notes Hirst Pacific’s Wallace, who admits one of her pet peeves is signage that’s not legible from various angles.

When doing a store redesign, retailers should consider adding energy-efficient LED lighting, Guinn says.

"You may see some lumens diminished in presentation—indeed, you may want to add some additional fixtures— but your power bill should decrease significantly," he says.

Colors
Retailers shouldn’t feel obligated to decorate their stores in their logo’s colors, notes Liscio, reflecting on one retailer that had gone overboard with a two-tone decor .

If you’re stumped on a color palette, Guinn suggests primary colors yellow, beiges, a full-range of greens, especially around produce. "Green is never a bad color format to use," he says, adding that, "If you use large scale motif photos within the store …focus them on green elements."

For prepared foods, maroons and reds and to a lesser degree, yellows, are hot. Red is "the color of food purchase," Guinn notes. "Psychologically, you consume more around red colors."

Bakery elements tend towards off whites and browns, but, according to Guinn, "there’s no logic behind it." Instead, he suggests incorporating color splashes to create a fun atmosphere.

Whimsical color palates can add sparkle and interesting elements to institutional-style equipment such as coolers.

Creative Fixtures
While paint and wall coverings are an affordable way to update a store’s look, a retailer’s storytelling comes through with the fixtures throughout the store, notes Liscio.

During a recent shopping trip, she saw fine china displayed on wooden pallets, a look that’s worthy of a gourmet retailer because of its "homemade, artisan feel."

In addition to fixtures that evoke an industrial look, vintage fixtures are in vogue. Gourmet retailers may want to consider merchandising with butcher block tables or showcasing aprons on dressmaker forms, Liscio suggests. Using unique fixtures helps a retailer create a unique atmosphere, and stave off sameness and flatness, she says.

One common mistake is trying to use the same fixture to do multiple things. "There’s no way one fixture can do everything," Liscio says. "A store needs to have a ‘fixture rhythm’ where different fixtures do different things." Doing this, she says, "gives a landscape that draws (the customer) in."

The Not-So Distant Future
Experts interviewed by TGR agree that technology will play a greater role in the future of store design.

"It will help reduce cost, help control customer response, and define the overall look and feel of the shop," Guinn predicts.

Guinn says he’s expecting to see wheels of cheese with RFID tags at check in, and computer touch screens at the deli counter to replace the take-a-number wheel. (For an in-depth look on the delis of the future, read Design Down the Line on page 19.)

He says savvy merchants will implement a smart phone app for custom-weight measured items like cheeses, so they can be weighed and ready when customers arrive.

Some convenience stores have already implemented touch-screen sandwich ordering stations, Guinn points out. Development of order-and-take away apps for tablets and smart phones can’t be far behind—and may be in widespread by year’s end, he estimates.

Bottom-Line Impact
When calculating the project cost, retailers need to account for lost sales during and immediately after a redesign. The first month after a redesign, most retailers experience a 5 percent or so decrease in sales, simply because they don’t know where anything is, Jetta says. After the dust has settled, most retailers see a 7 to 10 percent increase in sales after a redesign, Jetta says.

Store Merchandising Do’s and Don’ts

Do:

  • Tell compelling stories with your products. Cross-merchandise items that make sense together and go together. Convince the customers that they need all the products even though they may not. Bring tabletop and specialty foods together for a big win (serving dish + linen napkins + serving spoon + pasta + sauce + cookbook = more sales). Add the unexpected: music CDs—think Italian music while cooking and serving Italian food.
  • Look for interesting pieces that can act as fixtures while adding personality to your space (kitchen tables, butcher block islands on wheels, etc.).
  • Try spotlighting to emphasize new or promotional merchandise. Focus the spotlights on the product and criss-cross the beams of light so lighting hits the merchandise evenly. Make sure lights are not aimed to shine in customers’ eyes.
  • Rearrange product displays every few months (or more often) to freshen up the store. Pay extra attention to the storefront.
  • Bring residential fixtures or furniture into the store. Baker’s racks and picnic tables work to help your customer feel comfortable.
  • Vintage is still in style, so retailers are going to tag sales, coming up with clever and inexpensive ways to display merchandise. An old steamer truck or wood-burning stove could be fun and add visual interest. Even using ladders to hang table linens on is unexpected.
  • Use chalkboard paint to create a large blackboard wall calendar and populate it with timely tips. ("Time to plan for holiday parties" or "Don’t forget a hostess gift"). What better way to promote products listed on your TGR In-Store Events calendar!
  • Give’ em space. Place fixtures so it’s easy to shop with a cart, wheelchair or baby stroller.
  • Appeal to all the senses. Enhance the mood with music and scent. Add TVs and keep them tuned in to Food Network or the Food Channel.
  • Add entertainment. How about a gift-wrapping day? You supply the gift-wrap and an "expert" to give your customers creative ideas.
  • Accommodate the customer’s non-shopping companion. Give them a place to hang out. This could be as simple as a comfortable seating area for the customer’s spouse, child, parent or friend. Make it look homey and residential. Serve mulled cider or other seasonal beverages.

Don’t

  • Assume your customer has any idea what he or she is shopping for. Blend the shopping experience with an educational component that both broadens product knowledge and fosters brand loyalty. If you’re already offering cooking classes, how about adding a gift advisory service?
  • Assume products will sell without enhancing the display with appropriate props that make sense.
  • On the other hand, don’t overpower the merchandise with visuals and graphics. The merchandise should always be the hero and visuals and graphics should enhance.
  • Take it all too seriously. Have fun and let it show in your store displays.

Bess Liscio is the VP of visual strategy for Chute Gerdeman Retail. Since 1989, Columbus, Ohio-based Chute Gerdeman Retail has created award-winning retail brands and has more than 150 awards including four Store of the Year awards for Kiva Spa, M&M’S World Orlando and Barbie Shanghai. The firm’s client list includes Kohl’s, Levi Strauss, Sheetz, Shopko, Swiss Farms, Target and Tween Brands.

[via GourmetRetailer]