Mobile Apps shaping the way customers are shopping

Mobile technology will change the way Retailers interact with their customers, the way customers shop and the way they have options to move on if Retailers are not spot on. Check this iPhone application, called Checkout SmartShop - a shopping assistant meant to help you find online and local prices when you’re out and about shopping.

The App lets you enter barcode on your iPhone (better would be scanning or taking pictures) and find out the price and availability of the product elsewhere, online and other stores. you get to see the user reviews and store locations also with the app.

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With Apple selling 1 million iPhone 3Gs over the first weekend, you can well imagine the impact, SmartShop kind of app can have on Retailers. Question to Retailers, Do you have your mobile strategy in place??

The Yin and Yang of Retail

A very well written blog post on the relationship based on trust between Retailer and Vendors when it comes to shipping displays, running promotions and packaging.

Why would I stop a vendor from shipping displays, running promotions and changing packaging? Because I don’t trust that they know what they’re doing. I’ve seen too many hastily designed displays, too many promotions that build up like expired plaque on my planogram, and too much packaging that shows how little they understand the value of real estate. From here, it’s a short leap to understand why I’d ask for “just hand me the check book” entitlement programs. Entitlements are insurance policies against vendor marketing failures. Pay me up-front. I expect you to fail.

All this makes sense until a brand shows me that they understand what I do for a living and then proves it. Show me quantitative packaging and promotion research measured against your end users who shop in my stores. Show me how you’ll forecast it, ship it, sell it through, and then clean it up after it’s done. If you can do this, I’ll test anything you want because I’ll believe that you know what you’re doing and you won’t make a complete mess of the one thing I have that you don’t – my stores.

http://note-to-cmo.blogspot.com/2008/07/yin-and-yang-of-retail.html

Obsessive Compulsive Disorder and Retail

Fun article coming from WSJ today.

Excuse Me, Do You Work Here? No, I Just Need to Fold Clothes

The ranks of obsessive folders have swelled in recent years as a generation of Americans has done stints as clothing-store clerks. According to the U.S. Bureau of Labor Statistics, annual nonsupervisory employment in clothing and clothing-accessory stores grew to nearly 1.3 million workers in 2007, up nearly 20% from 1990. Gap Inc. says it has trained "hundreds of thousands" of Gap store employees in the art of folding since the late 1980s.

Along the way, legions of retail grads have spent countless hours neatly folding T-shirts and jeans and stacking them on tables and shelves. Now, their peculiar idea of perfection is straining marriages and leading to bizarre behavior ranging from buying clothes based on an item's foldability to straightening up sloppy displays while shopping.

Tracking Offline Conversions

Great article on ways to track offline conversions and the need for 360°multi-channel analytics. A must read for everyone who is involved in Multi-Channel retail or getting into the same.

Tracking Offline Conversions: Hope, Seven Best Practices, Bonus Tips

Don't forget to read the comments too, a whole lot of discussion and clarifications are happening on the article's comments.

STORES Top 100 Retailers

The 2008 version of the STORES Top 100 Retailers study is out. Wal-Mart retains the first position yet again.

Wal-Mart remains the No. 1 retailer by revenues — a position it isn’t likely to cede any time soon as it alone accounts for 21.7 percent of aggregate Top 100 sales. Change is afoot, however, as CVS has vaulted into the No. 3 spot as a result of its acquisition of Caremark, reflecting the evolution of the health and wellness industry as served by drug stores. Home Depot managed to hold on to the No. 2 spot despite the depressed state of the housing market, while Kroger, the supermarket leader, slipped one place to No. 4.
Mass merchants are well represented in the Top 10, with warehouse club operator Costco Wholesale ranking fifth, Target sixth and Sears Holdings — parent of Sears, Kmart and several chains of hardware and home furnishings stores — in the eighth position. No. 7 Walgreen has been displaced as the volume leader among drug store companies, though it has been beefing up via acquisitions. Rounding out the Top 10 is SUPERVALU, which this year has its wholesale and distribution business included in total revenues.

Get the Top 100 Chart here.

Multi-Channel Customers Spend More, Less Loyal

Interesting bits coming from a survey conducted by Opinion Research Corporation.

While multi-channel consumers spend nearly twice as much as their single channel counterparts on average, they are also more likely to purchase from multiple providers, according to a new study from Opinion Research Corporation, an infoUSA company (NASDAQ:IUSA). Consumers who use more than a single channel to interact with an organization – for example, shopping online as well as in a company’s store – also tend to spend more than those who rely on only one channel.

“Multi-channel retailing is growing at a rate of approximately 30% a year in transaction value,” said Jill Glathar, Ph.D., Vice President and Director of the Market Planning and Development Practice at Opinion Research Corporation US. “Multi-channel customers are often the most astute about pricing, and as such, may not be the most loyal. Successfully implementing a multi-channel strategy to retain them requires an understanding of the behavior and attitude of this savvier type of customer.” This means that companies may now have to do more to keep such consumers, which can add additional costs in marketing and/or customer service.
The research also indicated that internet shopping will continue to grow, with 65% of respondents expecting to make a web-based purchase in the future, vs. 42% who use this channel now. This suggests that the internet will continue its transition from a research or browsing tool to more of an actual selling channel. Somewhat surprisingly, telephone shopping will also continue to rise, as 39% of respondents plan to use the telephone to make purchases in the future, compared to only 21% who currently do.
Additionally, the survey found that consumer’s multi-channel usage varies by industry. For example, big box retailers such as Borders and Home Depot (17%); mass merchants such as Walmart and Target (16%); department stores (14%) and restaurants (11%) have had the most success at implementing multi-channel strategies.
“The ability to successfully integrate direct and indirect channels in to a customer-centric multi-channel sales and service environment will really define the market leaders of tomorrow.” Dr. Glathar said.

Read the Survey results here and here.

Retailers and Mobile Technology

Good story on how Retailers are using Mobile Technology

Consumers are not yet using their mobile phones to do all their shopping, as some forecast, but retailers are still finding them a powerful tool.

2008 FMI Show Session Handouts

Multiple Food retail and wholesale operators gathered at the recently conducted The FMI Show plus MARKETECHNICS and got to see the latest consumer product trends and explore strategies for satisfying customers and generating growth. For all of us who could not make it to the Show, FMI has released the presentation decks that were used. There are lot of good presentation on Retail Technology, few good presentations on how to reduce shrinkage, Data Security, Category Management among others. Something that will keep you occupied for few days atleast.

 

• Emergency Preparedness Update
• Organized Retail Crime — Issues and Opportunities
• Winning the War on Shrink
• Anti-Theft Technology and Fixture Updates
  • Anti-Technology and Fixture Updates
  • Anti-Technology and Fixture Updates-2
• Energize Your Bottom Line
• How Do Retailers and Manufacturers Win With High Gas Prices?
• Impact of the Changing Senior Market on Retailers
• Let’s Walk the Store With a New Perspective
• Succession Planning for Success
• Sustainability in Action
• What’s New in New Products

• How to Market Fresh Foods to Moms and Children
  • How to Market Fresh Food to Kids-Moms 2
  • How to Market Fresh Foods to Moms and Children
• Latin America: Evolving Formats — Changing Consumers (Presented in Spanish only)
• Next Generation of Category Management
• Pharmacy’s Connection to Health and Wellness
  • Connection to Health-Wellness 2
  • Pharmacy’s Connection to Health and Wellness
• Shopping for Health — The Growing Health and Wellness Market
• Understanding Local From a Consumer Perspective
• Understanding Multicultural Consumers

• Green to Gold — How Smart Companies Use Environmental Strategy to Innovate and Create Value

• The Food Retailing Industry Speaks 2008

• How to Grow Your Business by Connecting the Dots Between Food and Health

• Two Guys, 10 Issues, Countless Opinions

• MARKETECHNICS: Produce Traceability
• MARKETECHNICS: State of the Store: Grocery Technology and Business Processes

• MARKETECHNICS: Benchmarking Trends in Retail Technology
• MARKETECHNICS: CAO: Lessons Learned
• MARKETECHNICS: Data Security - A Business Perspective
• MARKETECHNICS: Jump the Curve to a New Future
• MARKETECHNICS: New Technologies Lower Costs and Improve Store Service

Ice-Cream Social, Courtesy Wal-Mart

Wal-Mart is promising low prices on ice cream and sundae toppings during the summer.

To celebrate these savings and kick off the American Summer, Wal-Mart will host what may be the world's largest ice cream social event on Sunday, May 18, complete with complimentary ice cream sundaes in more than 2,500 Wal-Mart Supercenters across the country. Wal-Mart will have on hand more than 5,000 ice cream scoopers to build an estimated 1 million free ice cream sundaes, complete with whipped cream and other toppings, from 11:00 a.m. to 4:00 p.m., while supplies last.

Now, 1 Million Free ice-cream sundaes is a lot of money (My guess would be USD 1 Million), but the amount of traffic the event will bring to it's 2500 supercenters will certainly result in much more dollars for the Retailer.

More here:

http://news.moneycentral.msn.com/ticker/article.aspx?Feed=PR&Date=20080515&ID=8650858&Symbol=US:WMT

Research: How Consumers Actually Shop For Retail Products Across Channels

From Forrester Research, How Consumers Actually Shop For Retail Products Across Channels.

While cross-channel shopping is expected to top $1 trillion by 2012, less is known about specific consumer behavior that drives customers across channels. In a recent Forrester consumer survey, we found that for considered purchases where shoppers research products first, more than half of consumers begin their research process online. Those consumers who begin their research process online are also more likely to ultimately purchase products through the online channel. Although consumers are actively cross-channel shopping for their considered purchases, retailers fail to create a seamless multichannel shopping experience. To meet the multichannel imperative, retailers should conduct frequent cross-channel reviews and competitive site assessments, educate customers with comprehensive product detail pages, and ensure that product promotions are consistent across channels.

Good Read.

Wal-Mart Launches Online Resource Guide to Save More

Wal-Mart has launched an Online Resource Guide, "Save More".

Wal-Mart launches today a new on-line platform for customers hungry for ideas to stretch their dollars during tough times. The site, located at http://www.walmart.com/savemore, will feature tips and advice from Ellie Kay -- America's Family Financial Expert® and best-selling author of 11 books including her most recent release, A Tip A Day With Ellie Kay.

With 20 years of financial experience, Ellie has appeared on numerous television and radio talk shows speaking about practical ways in which women, families and children can better understand how to save and spend their money. Her advice will serve as a resource for budget-conscious shoppers looking for tips and tools as they face a summer of rising costs for gas, food and other necessities.

In addition, Wal-Mart merchants and everyday shoppers will have the ability to contribute content to the site by offering their own ideas on how to spend wisely and save more money. Over the last six months, nearly half of Americans say they have tried to become more practical in their purchases and more budget conscious.

Tough times calls for Innovative ideas. The site allows for users to share their tips also, although I am unable to see user shared tips so far. All in all a good way to engage consumers. Making sure that they know, Wal-Mart cares for them in these tough times. No wonder Same-store sales are up.

Understanding the Indian Retail Customer—in Bits and Bytes!

The India Practice of Diamond Management & Technology consultants has come up with an insightful research article titled, "Understanding the Indian Retail Customer—in Bits and Bytes!". Summary in their own words:

Organized retail in India is expected to grow at an astronomical pace over the next four years, making it critical for companies to differentiate themselves in a highly competitive environment. Retailers can use a datadriven approach to create a competitive advantage by better understanding customers and their needs. Retailers should overhaul/build their data analytics capabilities now if they hope to remain ahead of the curve.

Good Read.

Retail Technology Review

Just came across a brand new website dedicated to Retail Technology, Retail Technology Review. The site has content focusing on RFID, Mobile Computing, Digital Signage, PoS systems, Internet Retailing, Supply chain and more. All in all a very good looking website with good content.

Grocery Game - Retail Insights and you have a winner

By reading this TMCnet article, "The Grocery Game helps food shoppers save money", I got introduced to The Grocery Game, a website that claims to save you hundreds of dollars on grocery bill each month. Idea is simple, if you're ready to do a little stockpiling at home, just paying attention to the discount cycles at the major chain supermarkets, can allow you to buy nearly all your food and other household necessities at near-wholesale prices. Match that with manufacturers' coupons and weekly specials, you can save even more than bulk discounters like Sam's club or Costco.

The Grocery Game takes help of "high-low" pricing strategy followed by most chain supermarkets.

In those stores, most items are not on sale at any given time, and on average will be more expensive than at stores like WinCo and Wal-Mart that follow the "Every Day Low Prices" approach, which relies less on short-term discounting, three industry consultants said.
But to lure shoppers into the store, high-low supermarkets always have some items on sale -- and the sale prices generally dip below what's available at the discounters, according to Gault and the industry consultants.

...

High-low pricing was pioneered by department stores in the early 20th century and has been standard in the supermarket business since the 1950s. The quarterly cycles have taken root in the business patterns of both retailers and manufacturers, Lilien said, with managers relying on discounts to meet their quarterly sales volume targets.
Newspaper advertising has been central to the high-low strategy since its inception. While supermarkets now list their discounted items on their Web sites and e-mail coupons to customers, the schedule of the weekly newspaper insert still determines when displays are rearranged and sales begin and end, said Bob Reynolds, a Moraga retail economist and consultant.
"In the culture of the business, even in this day and age, it is that print ad," he said.

The Grocery Store has built a nice payment structure around their service,

For a dollar, first-time members can try Teri's List for four weeks! After that, it's is just $10 every eight weeks for one store. Most areas offer only one store list. But if you happen to be in an area where more than one list is available, for each additional store list you choose, you'll be billed an extra $5 every eight weeks.

Little bit of Retail Insider knowledge can take you a long way. Stay tuned :)

Stimulating Retailers or Self, that is the question

With the first wave of US economy stimulus checks being deposited into bank accounts past week, retailers have started getting aggressive to pick up their shares of the checks. Forbes.com is reporting that, retailers like Sears and Kroger are giving 10% bonus to those who turn their stimulus checks into company gift cards. Another story reports that other retailers like Walmart, Lowe's, CVS etc are offering discounts this weekend. But that may not be sufficient to pull the consumers to stores, recent polls are suggesting that most of the people will convert the checks into cash and pay off debt or add to their savings.

The checks and payments are part of a $168 billion tax rebate plan passed by Congress to help spur the lagging economy. Under the plan, individuals who have filed their tax returns for the year can receive up to $600 and families can get up to $1,200, plus $300 per child. The rebates are expected to reach 130 million households. The direct deposit payments began on Monday and paper checks go out May 9.

This quarter results will tell us who which retailer picked up maximum store traffic thus boosting amount of cash on their balance sheets.

Men ignore price tags as a show of virility

The Times of India has an interesting discussion with Paco Underhill, Retail Anthropologist where he talks about how men and women behave while shopping.

"For a man, ignoring the price tag is almost a measure of his virility." Or, "When two women shop together, they talk, advise, suggest and consult...hence the long time in the store..." But when she's shopping with a man, "he makes it plain that he's bored and antsy and likely at any moment to go off and sit in the car...or stand outside and watch girls."

He also talks about Indian Retail Industry.

The Indian retail market, valued at $300 billion, poses its own unique challenges. Organised retail comprises only 3% of this market. But Paco believes we are more than ready for it, "If you can be the largest manufacturer of steel, buy Jag, put satellites into orbit, you can spruce up distribution networks and lower the cost of getting goods to market..." Indian consumers know they deserve better — a better product at a better price.

As for the dominance of mom-and-pop (kirana) stores, he believes that "some amount of trauma" as they reinvent themselves, "is natural". "Rebirth is healthy", he says, foreseeing a transformation in less than 5 years. But the country needn't look at Europe and North America as models of a retail boom. India shouldn't borrow, but invent. "Look at emerging markets like Brazil and Dubai for retail ideas".

FutureBazaar's aggressive Future Plans

Internet Retailer is reporting that FutureBazaar is re-launching on a new e-commerce platform this summer in a move to attract US, Canada and UK based Indian consumers. FutureBazaar expects that it will be able to get 20% sales from such customers to increase its revenues from present $18 Million to $200 million by 2011.

For the e-commerce platform, FutureBazaar has chosen ATG Platform.

It chose to relaunch this year on an e-commerce platform from Art Technology Group Inc., or ATG, because of the flexibility it offers to add capacity and e-commerce features to accommodate growth, Banerjee says. ATG will replace FutureBazaar’s existing SAP e-commerce platform, but will retain SAP technology for back-end operations like fulfillment and warehouse management, he adds.

FutureBazaar also plans to launch a mobile version of its web site as early as December to support mobile shopping—a service being used by a rapidly growing base of Indian cell phone subscribers, Banerjee says.

Conversion rate analytics to Retailer's rescue

Retail Store Ops blog has a post on how retailers are adopting sophisticated traffic counting systems and developing conversion rate analytics to track how many shoppers are actually making purchases.

Given the economic slowdown and increased pressures to show top and bottom line growth, missing out on capturing customers while they are in a store is becoming an opportunity retailers can no longer afford to miss. Major retailers such as Virgin Megastores, Marks & Spencer, and Crabtree & Evelyn have served as a few of the early case studies for the benefits of measuring and improving conversion rates.

There are some interesting numbers thrown in the blog post. For example,

Virgin has credited the analysis with uncovering variations of up to 20% in average transaction values between stores, as well as a 15 point difference in conversion rates between its highest and lowest performing stores.

...

Once retailers start collecting the performance analysis from individual stores, they are often surprised by the results. “If you were to ask a retailer how many shoppers they convert, the assumption is typically north of 50%,” said David Smyth, Vice President of sales operations for Experian FootFall. “In reality, the average conversion rate ranges between 20% and 40% for most retailers. Using that average, that means about 70% of shoppers are leaving the store without buying anything. That means retailers are leaving an awful lot of money on the table.”

So you can understand the importance of Conversion Rate Analytics. Even a 1% improvement could potentially mean millions of dollars. But conversion rate analysis is more difficult then what it is for Online stores. Many retailers measure the sales and try to deduct the store performance on the same. Factors like store traffic are ignored in these cases.

Biometric Payments and Data Privacy

This news article caught my eyes because of the data privacy issues I see in this. Apparently a retail store in Chicago area stopped allowing biometrics payments, the reason being, the company behind the technology, Solidus Networks Inc., a provider of payment processing, is no longer operating its biometrics unit. The company went bankrupt sometime back. Now the question arises, what happens to all the Finger scans that the company must be having.

"If you think you've got problems when someone steals your Social Security number," said Saffo, "it's a much bigger deal if they steal your thumbprint."
Decentralized biometric systems that enable customers to keep their fingerprint information in their own cell phone or personal computer are inherently safer than centralized systems, Saffo said, though nothing is absolutely safe.

What does law say in such kind of scenarios?

Hypermart, the next big thing in Indian Retail

Big Retailers in India are planning to start Hypermarts after having successfully launched smaller format retail stores.

Reliance, Aditya Birla and Tata’s Star Bazaar are focusing on large European-style hypermart roll-out while old hands like Spencer’s and the Future Group too are scaling up their hypermart formats. Hypemarket are the next stage in retail revolution for some brands. They will get higher margins, volumes and more brand recognition.
“The supermarts have already established brands, now hypermarts can levearge that brand recognition and create a captive customer in smaller markets. European style of hypermarket with roomy isles and white lights seems to be favoured by the new players in India”, says a marketing consultant attached to an Indian retail business house.

Why this will be successful in India, See this definition from Wikipedia,

a hypermarket or multi-department store is a superstore which combines a supermarket and a department store. The result is a very large retail facility which carries an enormous range of products under one roof, including full lines of groceries and general merchandise. When they are planned, constructed, and executed correctly, a consumer can ideally satisfy all of their routine weekly shopping needs in one trip.

This will be successful because, Indians like to take their shopping at malls as weekend outings for the family.