November 8, 2017

2017 Holiday Shopping Forecast — Black Friday is No Big Deal?

Black Friday is here again! Well not here, yet. But that’s how it's worked for years, it’s here even before it’s here, right? It’s the big event before the big event. Retailers and the advertising industry create news and events around announcing that it's almost here. Getting the engines primed, right? In the meantime, Amazon is dominating the early deals game, announcing Black Friday action, 50 days early! So yeah, it’s here.
Black Friday is still the single biggest day of spending and shopping on the calendar. But while online opportunities expand, popular attitudes around friday-focused brick-and-mortar feeding frenzies have cooled a bit. Two years ago REI made noise with their OptOutside campaign, staying closed on Thanksgiving and Black Friday in a sort of sacredly secular celebration of the outdoors and non-consumerism — and generated a lot of conversation in the process. They stuck to it last year and just announced they will continue the tradition moving forward.
Then last year we saw more stores choosing to stay closed on Thanksgiving.
Even the Mall of America closed on Thanksgiving last year, opening at a tasteful 5am on Friday morning. Malls are feeling the pinch as much as any individual retailer as spending continues to rise, but primarily in newer transaction channels. Malls are generally claiming a desire to spare the employees and the shoppers all that stress but reducing overhead in the face of stiff competition is also pretty fundamental.
So what does that mean for expectations this year?
According to a study from Field Agent, both Black Friday and Cyber Monday are polling at just over 50% of respondents saying they are “very likely” to shop on those days. The question now is not so much about When or, which days will get the most sales activity — but rather Where and How will customers choose to shop this year? Over half of respondents said they plan to buy “most” of their holiday gifts online. This is the first year this expectation has hit a majority percentage.
With shifting behaviors we also see shifting values. “Affordability” and “quality” are top values this year, while “traditions,” and “brand names” are falling to the bottom of the pile. Amazon is loving it, Macy’s not so much. Macy’s and Nordstrom are forecast to see outright declining sales through holiday season as malls struggle to draw shoppers.
Amazon, WalMart and Target lead the field for retailers overall. soundly dominates the website category with 62% of shoppers expecting to use it. is #2 at 11%. Amazon and WalMart also lead with customers in the mobile app category.
With online and mobile shopping sliding into the forefront of all shopping experiences this year it only makes sense that the in-store frenzy of Thanksgiving Day and Black Friday shopping may be a thing of the past. The same study cites a lot of frustration from a majority of shoppers around overcrowded stores with under-trained agents and fickle availability of in-demand inventory. These realities may accelerate the trend toward better shopping experiences that hinge on more convenient technology.
Make no mistake that physical stores are an asset to the brands that use them well and staff them well. But the familiar narrative around Black Friday highlights some very apparent pain points for customers. And in turn, smart technology and savvy shoppers have deemed all that FOMO and frenzy to be an easy trade off for a happier holiday experience.
Jeff Smack
Director of Interactive Media

October 26, 2017

The Spirit of Halloween Spending

As Halloween approaches this year’s spooky spirit is at an all time high.
According to the National Retail Federation's Annual Halloween Survey on eMarketer, Halloween spending will increase by 8.3% from last year with record spending at 9.1 billion. Now that’s a lot of candy!
The excitement for creepy lawn decor, trick-or-treating and late night costume parties is nothing new, but our path to purchase is evolving and becoming more complex. Luckily, more sources of inspiration have become available with the increased use of social media platforms. But the real heavy lifting of idea generation can be attributed to Halloween enthusiasts and creative people alike, who are sharing them on social platforms for all to snag.
Interestingly enough, for planned Halloween purchasing channels, the survey shows online ranked as number five; behind discount, Halloween, grocery, and department stores.
The NRF reported that 35.2% of respondents conducted online searches for Halloween celebration inspiration with Facebook and Pinterest as top choices, but stats show that those searches are not converting to ecommerce. This means that over a third of the American population is using online sources for costume, decor and treat ideas before they plan to step foot in brick and mortar stores.
Retail is reminded of how important it is to be aware of influencers in the customer journey. But it’s exciting to see holiday spirit grow as it can only mean good things for the industry and hopefully some pretty sweet costumes!
Emily Mondloch
Market Research & Insights

October 20, 2017

Contemporary Coupons — More Than Old Fashioned Value

I was the kid that thought it was fun to cut the coupons out of the Sunday paper then sort and organize them for the proper category placement in my mom’s coupon organizer. Sure, you could call that OCD, but it instilled in me a habit that still holds true today.
No longer am I waiting for the Sunday paper, but rather, going to my grocery store’s website and loading the coupons straight to my loyalty card. Why, because, well who doesn’t like to stumble upon a good deal and save a little money. Free pint of Haagen Dazs, yes please!
This trend doesn’t end with the grocery store. Within minutes of searching, customers can find a discount or online coupon within a variety of retail categories.
And these savings aren’t just targeted to those of us that grew up with physical coupons, they have also transcended generations. Millennials are savvy and fickle shoppers. They aren’t as brand loyal and their willingness to buy private-label brands and try lower price brands has kept retailers on their toes. It’s their desire for a good value that will lead to choosing the brand that offers a discount.
And with the availability to find savings online and load them to a loyalty card or combine multiple coupons through an app, these fickle shoppers have become frequent online couponing users.
Now the question is, how to keep your brand top of mind for these millennial shoppers. Maybe it’s following the Bed Bath and Beyond method. Their coupon for 20% off shows up at my house and in my inbox regularly. Sure, I rarely use it, but when I need something and I don’t have the physical coupon, the first place I go is online. Just having it available when I need it is a definite perk.
Now, if only there was a digital coupon organizer. Good thing there is an app for that: Krazy Coupon Lady. Might have to give that a try!

Christie Hach

Account Director

August 18, 2017

Back To School Boosts Brick and Mortar Retail Brands

With the new school year beginning, back-to-school shopping is kicking into full gear and parents are looking to shop with retailers who match their mental checklist of needs.
A report from Fung Global Retail & Technology, featured in an article on Retail Dive, tells us “more than 80% of consumers plan to shop at mass retailers during back-to-school, an increase of 24% over the past year.”
Brands with fast, one-stop-shop and value-friendly qualities will be seeing the highest sales this season to no surprise. Tradition stands strong this year as brick and mortar retail dominates back to school shopping over prominent e-commerce brands such as Amazon, who have seen more wins than losses in recent times.
Morning Consult conducted a nationwide poll a couple weeks ago that show Wal-mart as a parent’s top choice for back-to-school shopping. “When asked whether they would patronize a particular retailer, 63 percent of parents said they would go to Wal-Mart Stores Inc. for their student’s back-to-school items. Target was second, with 50 percent of the respondents saying they would shop there, and 34 percent of parents said the same about Inc.”
The rhythm of back-to-school shopping seems to be determined by customers who want to do it quickly, do it well, and get it over with. Popular budget concerns skew destination decisions towards mass merchant and discount stores, as well as the assumption that the majority of buyer purchases will be influenced heavily by their children.
This year’s unnecessary stresses are being avoided by parents who can bring their child to one store and get everything they need for a reasonable price, and we don’t blame them!
This annual tradition refreshes us on the differentiated values brands have to offer across the landscape. Various matters call for different types of consumer behaviors, and brands who can stay relevant, aware and up-to-date will be favored in fitting situations.
Emily Mondloch
Market Research & Insights

June 27, 2017

Generating Returns at Retail

On-the-move shoppers have discovered a cross-channel method to ensure success of their purchase process. An emerging trend among younger, more affluent women is to order a few pieces of clothing that have won consideration with deliberate plans to return or exchange part of the order after finalizing some decisions.
In an article by Retail Dive, a study done by Narvar shows 48% of shoppers have returned an online purchase in the last year, and the vast majority (82%) of those who returned an item were repeat customers. This means the return of an item is not usually a rejection of a product, or a demand for a refund, but rather a second opportunity for the brand to support a happy customer or generate additional sales.
Returns are no longer an afterthought; they are becoming part of an earlier decision-making process. Bedroom mirrors are now being used as dressing rooms, and as shoppers take full advantage of the convenience of ecommerce, retailers need to ensure ease of experience. The ability to track a return order and receive status updates delivers value to these customers and will likely earn repeat customers.
It is especially vital to give new customers a good first experience. Narvar's report claims, “Retailers need to over-deliver with new customers who return their first purchase to keep their business.”
As customers continue to search for more convenient methods of shopping, retailers need to be aware of their evolving behaviors and adjust their strategies accordingly.
Emily Mondloch
Market Research & Insights

June 20, 2017

Improving Chat Technology in Retail

Internet users have been communicating through chat technology for a long time. According to a quick look at Wikipedia, it was born in the 70s. But most of us 18 and older will point to AOL Instant Messenger as our first introduction. Today, we use mobile text, Facebook Messenger and hundreds of other chatty applications. It's largely a social thing.
Companies today are repurposing chat as a customer service tool. Poshmark, for example, has opened an online dressing room where sellers can give their customers fashion advice. They are way ahead of the game.
We've also discussed Nordstrom's adoption of mobile text as a shopper concierge in previous posts. While we see some bright examples on the front edge of this trend, chat in retail is still an up-and-coming tool that has yet to meet customer expectations in a comprehensive way.
An eMarketer article called, “Live Chat Not So Live, Study Finds” says that only 39% of companies have implemented chat and “currently 29% of US consumers prefer to interact with digital retailers via online chat.” Unsurprisingly, Millennials are most likely, but this shows that it is still not a preferred option.
A primary research study featured on eMarketer done by SuperOffice shows the average wait time for customer chat requests was 2 minutes and 40 seconds. Considering attention spans and the current speed of services available, that's too long of a wait for customers to form positive perceptions about chat. And around 20% of the companies in the study never answered the chat request. This only teaches users to avoid the channel altogether in the future.
Chat is a familiar experience to most users, so it won't take long for people to get accustomed to it as an easier and faster option in retail. But the operational reality needs to be improved if users are going to adopt it.
While human customer service via chat is stepping up it's game, we're also seeing early attempts at chat-bot technology. Chat-bots are basically a conversational search engine that responds like a subject matter expert on the other end of the line. But this also has a long way to go. The potential is unrealized. You may remember this unfortunate example.
Whether the chat experience is with a live person, a convincing AI or a good algorithm, younger generations will shape the future. Currently, they seem to prefer less direct human interaction via phone or salespeople. So once brands meet the stakes, we believe that chat can become a viable and even favored customer service feature in the near future.
Emily Mondloch
Market Research & Insights

June 16, 2017

Amazon Buys Whole Foods – Our Reaction

There’s of course a lot of investment politics behind the deal that have little to do with better meeting an end customers’ needs. Whole Foods CEO John Mackey has had a few different things to say this week about the potential and the conclusion of the deal.

However, Amazon’s choice to purchase a premium brick-and-mortar grocery brand with a national footprint represents the potential for some pretty radical changes coming to retail that have been knocking on the door all along.

We’ve been talking about clicks and bricks and “Tearing Down the Walls” between the mobile/online customer experience in this blog for a few years. The location-based, real-world, in-store needs of brick-and-mortar shoppers that are able to be addressed by mobile technology has been a very hot subject for awhile but to date we haven’t seen anything of this scale.

Amazon has dabbled in brick-and-mortar with a series of tests over the past few years and the retail industry has questioned, “why not grocery?” but this acquisition seems to validate the location strategy of brick-and-mortar real-estate as an asset for a previously “online only” delivery-based business model.

The equity and positioning of these two brands together stands to unlock a lot of potential for mobile experience at brick-and-mortar retail that has only been a bit of dabbling to date, by comparison.

Expect to see fluid options between grocery delivery, curbside or in-store pickup based on mobile shopping lists with options for one-click ordering as users manage their needs on-device and fully integrate that support into their grocery routines. Mobile store maps, product suggestions and timely cross promotion of merchandise between a user’s purchase history and live inventory could all come to life in a new way.

Of course, every grocery shopper is not an Amazon grocery shopper or a Whole Foods Shopper and the operational and cultural realities could present significant challenges, but if the merger of their respective retail worlds is well executed, the potential to lead by example in the field of total customer experience seems truly massive.

Jeff Smack
Director of Interactive Media

May 23, 2017

Location, Location, Location-Based Marketing in Retail

The “Location-Based Marketing in Retail Roundup” was published by eMarketer in April. You can request a copy of it here. If you are not already a subscriber you'll have to provide some contact info.
The research in this “roundup" marks a continuation of the industry trends we’ve seen over the past couple of years and validates a lot of the forecasts we’ve been tracking as well.

What are the major components of mobile and location-based marketing in 2017?

A Mobile-First Customer Strategy:
This goes far beyond a mobile-friendly design of websites and email. Those things must be taken for granted at this point. We are seeing a mobile majority online.
Understand the Customer’s In-Store Needs:
These can be tied to the mobile device in the form of personalization, mobile pay, order ahead, in-store pickup and location-based offers.
Relevant and Useful Public Information:
Location-based marketing in the form of current and clear public information in maps, listings, reviews, search and social can put your brand in a prominent position while the customer is researching away from your store or your people. You have to convince them you are able to address their need before you ever have an opportunity to actually address that need.
Some Early Trends to Watch:
Retailers that have ironed out their mobile customer culture are looking to new ideas and finding opportunity with beacons for store perimeter marketing. At this phase, they are still “marginally valuable to the customer.” So if the rest of the mobile marketing house is not in order, they are not a practical focus of attention.
In-store augmented reality falls into this bucket as well. The roundup describes how Bloomingdale’s invented a SnapChat treasure hunt following the Pokémon Go craze that was an unbridled success. When you’re doing so much else correctly, you are free to be brilliant. But these trends should not be an operational focus if there are more systemic issues to be addressed.

Barber Martin’s POV

The major conclusion is that physical stores are important and can be a significant competitive advantage at retail, despite what we’re seeing with struggling brick-and-mortar brands and the fading “indoor mall” location strategy. It seems logical that a variety of stores all right next to each other would simplify shopping and facilitate fairly quick comparison buying. But the physical store is totally optional for the research-shopping experience today. And relative to online research, it’s inefficient. This phase of purchase consideration has largely been extricated from the physical world.
However, people are still going to stores and prefer them across a variety of categories when it comes time to make the purchase.
This means that when customers show up at the store, they’re much more ready to convert and they’ve already made a lot of decisions, narrowing their consideration to a very limited set of options. A customer that walks in the door is a much better informed consumer and a much more intentional shopper. Sales staff is not likely to add significant value beyond a point of view to the in-store offerings and locating the items.
One survey in the eMarketer roundup said that by 2020 most shoppers will say they want to be totally left alone to do their own thing while in the store.
In-store purchasing dominates by large margins for high dollar items like cars, appliances and jewelry. The preference for in-store transaction still beats digital purchasing across all categories except books, toys and games and entertainment. This is surprising given how apparent the rise of ecommerce and mobile marketing has become.
The clear variance comes when the same questions are asked to customers segmented by age. Only those over 60 said they preferred in-store shopping. All other age groups prefer the shopping experience online, just short of buying. Only those in the youngest segment, ages 18-29, said they prefer to do the majority of their shopping online, and of that set, only those age 21-29 said they preferred shopping on a mobile device.
Keeping an eye on these industry trends over the past many years allows us to distill a few clear observations:
1. It is apparent that location is still crucial to the purchase experience across all channels – even with the most digitally inclined consumers.
2. The trends that favor new behaviors and emerging technology accelerate younger, and what younger people do today informs what older people are more likely to do tomorrow.
So if location strategy can be a significant advantage at retail and almost all of the pre-transaction homework is done on a whim across a variety of connected devices, we can safely conclude that we should no longer speak of “brick and mortar vs. ecommerce” but will more reasonably see things in terms of the reorganization and total integration of online and offline into one consumer experience.
This realization points to the rise of mobile payment and shopping lists as well as store location floor maps to allow the customer to manage the shopping experience via mobile device, preserving total customer control of the whole process.
Brands may have fewer locations or more minimized real estate, but the sales per square foot will be a leading metric and the locations must perform. We’re likely seeing the sun set on terms like “mobile customer” and “digital marketing.” It’s just customers and marketing because these things are embedded into the total experience.
If all of these elements are well designed, the purchase process matures before the customer visits the store. They may order ahead, knowing they can pick up at the counter and in turn use the time they are saving to browse or try new things in store. The store visit is now a lower funnel process with opportunity to upsell or increase cart size, only after winning the right to transact in the first place!
This means that the impulse shopping and the consideration mindset is back, but only if the store has earned it by meeting the prioritized need and supporting the easy purchase. By providing that value, the store has drawn the customer’s casual interest and increased the likelihood of a larger cart by saving or even creating time for the customer to “shop” in the more traditional sense.
By delivering a good mobile strategy for an integrated experience in store, the retailer is now driving traffic again, because more customers will come to that store for a better experience while the competition suffers and wonders why. There will always be niche exceptions, but retail brands with strong brick and mortar will have to earn consideration and capture purchase intention online to succeed.
Jeff Smack
Director of Interactive Media

March 27, 2017

Creating New Routines in Retail

As the difficult trend of declining brick-and-mortar retail sales continues, lately, the big question seems to be “how can brick-and-mortar brands compete against prominent online shopping platforms?” Making the experience easier for customers is the answer.

New and better strategies are being implemented to meet customers at their mobile devices. Front-running brands like Nordstrom have partnered with companies like “like2bu.y” to allow customers to browse and purchase items from the company's Instagram account.

Text-to-buy software is also a fairly new tactic that brands are using to insert themselves in front of a heavy mobile user customer base. Again, Nordstrom has been ahead of the game and are using an app called “Textstyle”. They have implemented Textstyle with their store employees as concierge.

In store, the customer agrees to use Textstyle with the sales associate. The customer can then use that number along with their Nordstrom account to text the employee at any hour of the day, anytime, with ideas or a name or picture of an item they would like to purchase. The employee then uses the app to search for the item and sends a buying code to the customer who then responds back texting “buy.” That item is then delivered to them within no more than 3 days. There is even room for fashion advice and personal interaction. The employee is also required to check back in with the customer about the delivery of their order.

If an informed purchase process doesn’t require much effort from the customer, Nordstrom makes the sale. They have figured out a way to sell without requiring a trip to the store or even an online shopping cart process.

An eMarketer poll states “66% of US Retail Executives see digital channel modernization (replatforming/platform upgrade, responsive design) as leading strategic priorities.” We can see that smarter digital reach is on the radar across the landscape now. Despite declining brick-and-mortar retail sales trends, competitive brands aren't settling for a loss. As newer creative ideas for reaching customers digitally continue to emerge, customers will begin to raise expectations, and big brick-and-mortar brands will have a hard time boosting sales without meeting those expected measures.

Emily Mondloch
Market Research & Insights

February 27, 2017

Specialty Retailers — Tap Into the "Network Effect"

Why turn to Amazon instead of ordering products from specialty brands you love? Trust. By now, you probably trust Amazon. While they don’t sell everything, they very likely sell something close at a few different price points. Amazon has found a way to be at the front of the consumer’s mind before they even consider the next purchase. Not to mention the convenience of research experience and fast, cheap (or free) shipping.
These factors contribute to the surprising fact that 58% of people make the majority of their purchases with Amazon.* So what is a specialty retailer to do?
Adrien Nussenbaum, the U.S. CEO of Mirakl, digs into this for an article on Chain Store Age. He reminds us of ways that specialty brands with physical stores can gain an edge with their customers against the giant, Amazon.
Specialty brands should remember the importance of leveraging brick-and-mortar as an asset for opportunity, instead of a liability of overhead.
Brands need to be inventive to establish stores as a destination. They can do this by offering the customer a bigger reason to visit that doesn't hinge on simple "product for price" transaction. Nussenbaum explains that tying this approach to location to online community of people with lifestyles relating closely to the brand can create a “network effect.” Customers connect with each other at the store and share a connection with the brand. This leads to brand loyalty and involvement among individuals but also anchors a community.
Specialty brands are much better positioned to connect to passionate and interested people in niche communities. Open-minded leaders in niche retail must find the right mix of resources and strategy using location and experiences to connect with customers. And more importantly to connect customers to each other through the brand.
Here are a few examples of specialty, niche or hyperlocal brands making it work:
Lululemon offers their customers in-store yoga flow classes on Savasana Sunday.
REI encourages their people to "Opt Outside" and offers a variety of “skills classes."
Sur La Table offers cooking classes that are searchable by location and culinary styles
• Richmond’s own Carytown Bikes offers community rides every week at two different levels of intensity.
All of these examples allow customers some flexibility to join an event that fits their life and connect with the community and the expertise of the brands.
*Mintel — Online And Mobile Shopping, US
Emily Mondloch
Market Research & Insights
Jeff Smack
Director of Interactive Media

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