September 19, 2017

Will Kohl’s Harness Amazon's Foot Traffic?

Kohl’s is bringing Amazon’s brand and customer service into their floor space. The apparel giant will now allow Amazon returns to be serviced through Kohl's store locations. The move is controversial, but without much analysis the first thing I considered is that “inventory" is not enough of a motivator at brick and mortar anymore. The key is driving foot traffic into the store. Give the customer a prioritized reason to come in that is either experientially valuable or need-serving. Once they are there, inventory can do more to win purchase.

Amazon is so engrained in the broader fabric of customer behaviors with a leg up through volume of inventory, ease of experience and convenience of transaction that this move by Kohl’s does not seem that crazy to me. The convenience of brick and mortar returns for online purchases is a huge factor for higher register sales at brick and mortar.

Shopping behaviors are in flux and retail relationships have to figure out new ways to break down the literal walls of retail. If this gambit is not Kohl’s solution to that, they seem well poised for selling to Amazon. Historically speaking, groceries and apparel have been two of Amazon’s low-points. In that light, Kohl’s position looks an awful lot like Whole Foods’ prior to that acquisition. This development may well be another first-down in Amazon's game plan to expand its real estate.

Jeff Smack
Director of Interactive Media

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

January 13, 2017

Is 2017 the year for Social Commerce?

Social Commerce: A type of electronic commerce that employs social media to promote online transactions.
Popular opinion and common sense both point to social commerce as an emerging evolution of e-commerce. However, conversion data does not support this expectation. Discussion about why social media is receiving little to no credit for sales is a hot topic right now. Ultimately, the questions all boil down to this answer:
A social media user is not there with an intent or even expectation to purchase. They are there to be social.
Read more

November 28, 2016

Cyber Monday Started Last Tuesday?

Cyber Monday is today. It's right now! But don't worry too much about missing out. Everybody seems to be coming around a bit on the manufactured urgency.
Black Friday buzz simmers down as "The Holiday Creep" seeps into our collective shopping consciousness. This is what the retail industry is calling the trend for elongating the timeline on holiday deals. This has made both days more symbolic of the season.
Read more

July 8, 2016

Tearing Down Walls for the Customer’s Sake

The proverbial walls segmenting the customer experience from one channel to the next are quickly becoming a major focus of retailers and other businesses.

It’s clear what numbers are telling us about today’s trends: more digital, more mobile and more social media engagement from company to consumer. However, hiring a digital specialist and giving them a budget to start creating, facilitating and expanding digital platforms for customer engagement isn’t enough.

Customers’ demands and expectations have never been greater as word now spreads at the speed of a megabit, and demand calls for seamless integration of all these channels in order to create a consistent message and brand.

Companies are always trying to figure out what customers want and what they need to know in order to have an effective call to action. Choose your medium: Post on Facebook, update the website, design a new window display. Those things are relatively simple, but chances are there is little, if any, communication or collaboration between the departments handling those things, which ultimately increases the chances of having three separate messages instead of a clear and consistent one.

The silos we create when segmenting our business functions are for efficiency’s sake, not the customer’s. While moving money from one department to the next can help a company stay afloat, particularly in troubled times, it’s the customer that ultimately moves the bottom line.

Today, customers are utilizing more than one device when purchasing from retailers. And, at times, they’re utilizing more than one device on one purchase.

Consider a trip to Best Buy. A customer wants to actually hold a new Bluetooth speaker prior to purchasing it in hopes of avoiding a return in the near future in the event of any dissatisfaction. Standing in the aisle chatting with a store associate, the customer pulls out their smartphone, and the search for consumer reviews, price comparisons and better options ensues, if it hadn’t already prior to the customer reaching the store.

If or their mobile app weren’t there, they’d likely be out of the picture. A customer can easily walk away from a purchase if a consistent message isn’t there and even more so if the products or sale prices are different from one channel to the next. In order to even get into the competition for a sale, a company needs to have a consistent customer experience throughout its offerings.

If you’re having a seasonal sale on certain items, be sure to promote it on multiple channels in the same manner in order to leave an effective trail of breadcrumbs for potential customers. These channels don’t compete with one another; they complement one another. Working together will always benefit the whole.

Imagine Amazon decides to open up a large-scale retail store, which isn’t that far-fetched considering the e-tail giant continues to open staffed pickup locations near college campuses across the country and is expanding Amazon Books locations. Customers would immediately create expectations for this store. One might see it as an extension of their giant fulfillment centers, following the superstore concept. Perhaps, they might even go so far as employing a brood of drones as sales associates.

It would be up to Amazon to ensure their message stays consistent with the conclusions customers have already drawn about the company – quick delivery, vast inventory, reasonable prices, innovative solutions – in order to meet customer expectations and sustain customer engagement, which ultimately creates greater customer loyalty, more opportunities to reach more customers and a better bottom line.

As the retail world continues to evolve, so too should the way we communicate with customers.

Colin Riddle
Millennial Marketer

UPDATE 7.26:
Retail Dive and Digimarc released a "playbook" white paper on this topic today:
Bricks and Clicks Converging at Retail

June 23, 2016

Shoppers Expect Seamless Screen-to-Store Service

For the first time in 5 years of annual comScore online shopping surveys, it was reported that more than half of all purchases were made online.

This is not shocking. The test pool was comprised of self-identified online shoppers to begin with, but that’s effectively everyone at this point, right?

Consumers are definitely shopping more on devices but the data points to something far more interesting with regard to how shoppers prefer to buy.

Cross-channel transactions now account for 38% of all purchases and 58% of respondents say that online access to inventory is important to their purchase process. This means that cross-channel service is not just an incidental convenience allowing customers to return goods in a store that were bought online. Increasingly, customers are buying items with the expectation of partial exchange and finishing the cycle in-store with additional purchases.

We look to retailers like Best Buy and Target as they experiment with cross-transactional experiences. If the online experience is strong, the store location becomes an incredible asset and an unfair advantage against online-only competition.

For instance, Best Buy allows same-day delivery for online orders fulfilled from local stores. This test has been successful and recently expanded into new markets.

Meanwhile, Target has put to rest one of its tests. The store offered curbside service for local store purchases made online but is now reigning it in — keeping local pickup in-store for online orders.

One thing seems clear. Seamless service between screens and stores is shifting from a differentiating factor to a standard expectation. Retailers that haven’t embraced this trend may lose share and not discern why because the draw is coming from outside their brand experience and their stores.

May 5, 2016

Fast Fashion – Amazon Pushes into H&M’s Position

Amazon sells everything. Sure. But they know that the apparel category is a tough one to dominate with online-only shopping.

If you can’t see, feel, and try on the product, then the shopping experience leaves something to be desired. Screen shoppers like to return items repeatedly and often close the deal with another store. Zappo’s and Warby Parker built their business around making this customer reality easy and essentially free. It was a major hurdle to master.

Amazon does not specialize in the needs of one category or customer. They aren’t winning on this level. However they are stepping up for a big push.

Last year they sponsored the New York Men’s Fashion Week for the first time. This year, Amazon launched seven of its own fashion brands, which focus on moderate cost and casual style. They’re going after fast fashion at a time when many mall fashion brands are folding.

As this news strikes fear in the hearts of apparel retailers, H&M is poised for expansion in both physical and online retail worldwide.

H&M understands the path to purchase. They understand the style, value, and shopping preferences of the people they serve. The company has leveraged what they know about their customer to excel even while preserving their moderately priced, low margin product position. The customers that buy online trust the product, and that trust was built in the physical store.

In H&M’s case, expanding the digital experience and the physical retail locations together nurtures both as integrated aspects of the whole shopping experience, while creating a greater opportunity for happy customers to be better served.

March 8, 2016

Targeting eCommerce Success in 2017

In 2015, Target’s eCommerce growth was up more than 30% year over year. This is not good enough for company leadership, or the investors.

“So are we declaring victory? Not even close. These are the building blocks of our future,” says Target CEO, Brian Cornell.

In 2015 Target projected a 40% increase in online sales and hit 34% in Q4, up from previous quarters. They finished at 31% increase for the year, spending $1.4 billion on technology. That increase was considered a shortfall by stakeholders, so the retail giant is going big – planning to spend $2 billion/year moving forward starting in 2017. They want rapid growth and they intend to prove it.

View the original article on Fortune

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