Posts Tagged ‘retail trends’

The One and Only Question Facing Sears

Tuesday, January 3rd, 2012

By Doug Stephens

Amid the sounds of tearing gift wrap and popping champagne corks, ailing giant Sears Holdings Corp. announced over the holidays its intent to close as many as 120 stores.  This of course, came as little surprise to the industry that has witnessed the slow motion train wreck that Sears has become over the last several years.  The company has desperately been throwing a variety of ideas against the wall in the hope that something sticks.  So, far nothing has.

Yesterday Bloomberg news quoted Sears Chief Executive Officer Lou D’Ambrosio as saying that a combination of more technology and physical store improvements would help to put the retailer back on track and that Sears has to get better at delivering what its customers want across multiple platforms.  Mr. D’Ambrosio by the way, came to Sear’s by way of companies like Avaya and IBM, so he’s clearly no lightweight in discussions around technology.

Few would argue with the idea that Sears lags technologically or that its stores are dingy and dilapidated.   Even fewer would dispute the truth that Sears has to execute across multiple channels to be successful – that’s just table-stakes in today’s industry.

When tactics are mistaken for strategy

The problem I have with Lou D’Ambrosio’s thinking is that I believe Sears real problems are far more fundamental and critical.  In fact, I would argue that both the lagging technology and shoddy store conditions at Sears stores are symptoms of a far more deadly syndrome and one that goes to the very root of the company.  In my opinion what’s killing Sears is a complete and utter lack of clear and forward-looking vision.  No one has created a cogently articulated picture of what the Sears of the future looks like.  No one has made a promise to consumers about delivering something remarkable or uniquely valuable.

It’s a classic example of a business mistaking tactics for strategy.  Last year the “strategy” was licensing store space to Sear’s vendors.  This year it’s renovations and technology.  Who knows what will it be next week, month or year.   Certainly not the store staffer responsible for representing the brand to the consumer.  And therein lies the problem.  Sears has lost all sense of brand essence and purpose.

The one and only question

Frankly, there’s  only one question that the leadership at Sears needs to answer.  “What can Sears offer the world that the world can’t get somewhere else?”  The answer to that one question becomes the cornerstone for the entire strategy going forward. It becomes the prime occupation of every Sears employee – from Mr. D’Ambrosio down.  The answer to that question is all that matters.

If the answer is “nothing”, then there’s no technology or store renovation plan on earth that will save Sears.

 

 

 

 

 

 

Social Media Doesn’t Suck (But Your Marketing Might)

Monday, October 24th, 2011

By Doug Stephens

Hardly a day goes by that I don’t read at least one article that debates the inherent value of social media.  The marketing community continues to hunt for the illusive equation that will neatly equate a brand fan or follower to sales.  One article I saw recently actually suggested we go to extent of sub-segmenting Facebook fans with psychometric precision to understand their underlying motivation for “liking” us in the first place.  Is this even possible? And if it is, how do we execute on the information?

Let’s consider this whole issue differently for a moment.  Let’s look at it from the Follower’s point of view but first, let’s clarify what a like or a follow really is and more importantly, what it is not.

In and of themselves, likes, follows, YouTube views etc. are not exchanges. They don’t imply a commitment to buy or to maintain a long-term relationship with you.  There is no promise of patronage or fidelity.  All that fans and followers are granting is their “permission” to communicate with them.  When they choose to like or follow they are simply telling you they’re willing to listen.  Ultimately, if your brand’s message is good enough, they may even be prepared to start a relationship with you – if you earn it.

So, what have you got to say?

Let’s start with that.  Now that you’ve been given permission to exchange, what does your brand actually have to say to its followers? How will you enlighten, enthuse, entertain or give value to them?  Will you design remarkable and creative messaging that they actually talk about or will you bore them with banal coupons, offers and other nonsense that goes largely unnoticed?  Will you respond to their Facebook fan posts in real time, with a consistent and trustworthy brand voice, or will you allow posts to go unanswered, as 95% of wall posts currently do?  Will you actively follow up on their complaints about your brand on Twitter or will you ignore them like 79% of all complaints on Twitter are ignored?  What will you do or say, that is worth their attention?  What value will YOU deliver?

The R.O.I on boring your followers isn’t great

Every day, most of us are exposed to up a staggering 5,000 marketing messages.  How many even prompt a second look?  How many are remarkable enough for us to tell someone else about?   If we’re being honest, the answer is probably, not many.

In the end, how can we expect people who gave us a chance to wow them, to stick around after we bore and disappoint them?  If the majority of the marketing that brands offer is of low value, how can we possibly expect social media to pay us back with high value? Frankly, social media owes us nothing.  Instead of asking what the value of a fan or follower is, we’d be wiser to ask what value we offer to those who follow us.  Isn’t that where the value has to begin?

The Future of Retail: The Destination is You

Monday, October 3rd, 2011

By Doug Stephens

Since the time of the Roman Empire, retail as a concept, has been about destinations. Whether a small specialty shop, a department store or a website, retail has always meant going somewhere to get something.

As retail has evolved over the centuries, each new type of destination has delivered an increased level of convenience.  The urban specialty shop put multiple stores within walking distance of one another.  The department store offered multiple categories under one roof.  The big box gave us more categories and products than most of us ever imagined and now the Internet- the biggest of big boxes – is the ultimate category killer.  But while these innovations have improved the relative ease with which we can shop, the concept of destination has remained. We are still required to consciously make a trip, be it physical or otherwise, to get what we need.

This is about to radically change.  Increasingly it will be the products that seek out consumers and in the process, render consumers the destination.

As we move through our day, opportunities to make purchases will present themselves in a completely synchronous and contextual way.  We will not think in terms of destination as much as in terms of opportunities to buy the things we need, wherever those opportunities arise. The “rules” about where we can find the things that we need will be challenged as “anything/anywhere” shopping becomes the expectation and ultimately the norm.

Here are four recent examples of how the death of the destination is playing out in retail right now.

Home Plus QR Code Shopping

Recently Tesco’s Korean grocery chain Home Plus installed innovative subway signage that allows busy commuters to order groceries while they wait for their train.   Consumers simply scan the quick response (QR) codes of the items they want and pay for their order using their mobile device.  The order is then shipped, at their convenience, to their home.

ShopBox

Recently the 3rd Ward design incubator made news with its ShopBox installation in Brooklyn’s Dekalb market.  The “store”, a recycled, retrofitted and completely unmanned steel shipping container, allows shoppers to browse products through storefront-like windows and then using an order-by-text system to complete a purchase.  All items are then shipped directly to their home.  While being highly experimental, ShopBox nonetheless challenges conventional thinking around what a store is.

Facebook Timeline

In a recent post I commented on the extent to which Facebook’s Timeline innovation could be literally revolutionary for retail.  In short, very soon you may be riding the bus to work when you get a mobile Facebook update from a friend that says they’ve just read a great book.  Without giving it a great deal of thought, you click on the accompanying book title in their update and within a few seconds, download a copy of the same book to your tablet and be well into chapter one by the time you arrive at work.  Music, books and movies are the starting point but other products and services can’t be far behind.

TV Adver-Buying

If you like the shoes that Tina Fey is wearing on 30 Rock, pause the show, select the shoes in the size you need and buy them by waving at your television.  Then hit play to continue watching the show.  While you’re at it, say goodbye to the 30 second (or even the 10 second) commercial.  Internet TV will blur the lines between surfing and viewing and allow for contextual product placement within taped and even live programming.  Furthermore, companies like MasterCard are playing with motion and sound driven TV payment based on their QkR payment platform, making checking-out instant and easy.

What about destination retail?

To say that these and other technologies will eradicate the need for physical retail would be overly sensational and highly unlikely. It isn’t, however, an exaggeration to say that our expectations of physical stores will change dramatically.  More and more we will expect these destinations to deliver unique and memorable experiences that we simply can’t anywhere else – digitally or otherwise.

The ultimatum that these technologies and concepts present, however, is that consumers will increasingly choose businesses that offer either anywhere convenience or only-here experiences. Everything in the middle may as well be invisible.

Here’s a brief video of a chat I had recently with the team at the Lavin Agency in Toronto on the subject of how this concept of destination in retail is being revolutionized.

[vimeo]http://vimeo.com/30923966[/vimeo]

The Declining Need for and Escalating Value of Human Service

Sunday, September 18th, 2011

By Doug Stephens

Technology has been steadily reducing the number of human service interactions we require in an average day. For at least the last decade, the list of what we as consumers can do for ourselves is growing rapidly.   Between kiosks, web based solutions and mobile apps, most routine customer service functions (product knowledge, price checks, inventory inquiries etc.) are now completely do-it-yourself.

With this “self-serve revolution” in place, it’s easy to regard human, person-to-person service as a somewhat archaic commodity for which the market value must be dropping.  I’ve actually heard retail executives say as much, inferring that customer service people have become merely low value cogs in the machine.  Not only do I completely disagree, but I’d go so far as to say that any company that adopts this attitude is making a colossal and potentially fatal mistake.

There’s no app for empathy

What technology has done is to automate the most routine and repetitive customer service tasks; the real mind numbing stuff that deserved to be mechanized.  What is hasn’t done (at least not yet) is automate advanced problem solving skills, empathy and likeability.  Hence, customer service as we know it, is evolving to become less about functional skills and more about cognitive reasoning and emotional intelligence – the really hard stuff!

Technology hasn’t lowered the value of personal service, it’s raised it.  As the need for personal, human service declines, its value in circumstances where it is required becomes exponentially higher!  It’s precisely because we can do so much ourselves that when we encounter something we can’t, it’s literally jarring.  Consequently, the stakes are immediately higher.  These are situations where the customer has already reviewed your frequently asked questions board, called your automated help line and read your user’s manual.  They’ve made every attempt to solve their own problem – all to no avail.  The only remaining option is to call an expert who can help.  The human being they call or visit at your business is the last and most vital stopping block between your customer and your competitor’s doorstep.

Moments of Truth

A great example of a company that gets this concept is Zappos. 75% of Zappos sales are transacted without any interference from a human being – all totally systematized.  Most businesses would invest proportionately in the side of the business that generates the majority of sales – the automated 75%.  And yet, Zappos puts incredible emphasis on the hiring, training and compensation of the people who respond to the 25% of sales that do require personal service.  The rationale is simple; the 25% personal sales are regarded as do-or-die moments of truth when the system won’t cut it and when the customer needs the brand to truly perform.  These are the sales that create memorable experiences and word of mouth.  To skimp on talent at these most pivotal circumstances discredits the entire brand.

The best analogy I’ve heard is that the role of the customer service person today is much like that of an airline pilot.  The pilot is not paid to fly the plane – that’s almost completely done by the autopilot system.  Rather, the pilot is paid to be there in the critical moment when the system fails.

Mobile Reality Check

Monday, June 6th, 2011

Many of the headlines we read would have us believe that consumers are running rampant, begging for opportunities to browse, shop and even transact retail purchases on their mobile devices.  While there’s no question that mobile commerce and payment are coming fast, it’s often difficult to gauge precisely how fast.  The answer is critically important for marketers as they wade into mobile marketing initiatives and tactics.

In part 1 of Mobile Reality Check, I’m joined by Gary Schwartz, Founder and CEO of Impact Mobile.

Over the past nine years, Gary has played a leadership role in the mobile industry. He founded Impact Mobile in 2002 running the first cross-carrier short code campaign in North America.

In 2006, Gary founded the mobile committee for the Interactive Advertising Bureau (IAB) and sits as Chair of the Mobile Entertainment Foundation (MEF).

Gary has been involved in mobile marketing from virtually every conceivable angle and is the recipient of the Asia and Japan Foundation Fellowship as well as the Macromedia Peoples’ Choice Award and Dodge Foundation award for innovation. He is also the author of the upcoming book, Click2K’Ching: The Mobile Shopper & The Impulse Economy.

I had an excellent chat with Gary from his offices in Toronto in which he shed light on some of the truths and tall-tales with respect to mobile consumerism.

[youtube]http://www.youtube.com/watch?v=8Ee1DqPLCPQ[/youtube]

The New Media Marketer’s First Date

Thursday, June 2nd, 2011

Image credit: artofmanliness.com

We’ve all been on a first date and can relate to the awkward pauses in the conversation, the often-confusing body language and the painful uncertainty about how to end the night – should you kiss, hug or merely shake hands – who knows?

This, in many respects, sums up the current state of new-media marketing.  Marketers and consumers have embarked on their first date and neither is completely comfortable with the other just yet – particularly in the social and mobile spaces.

Some of the “research” that’s being conducted would lead us to believe that consumers are literally clamouring for the attention of mobile and social marketers.  These sometimes-questionable statistics suggest that consumers are virtually lining up for contact from brands on social networks and on their handheld devices.  Other studies provide a far more sobering view of a consumer who is worried about privacy and security.  It’s difficult to sort out truth from hyperbole.

Part of the current awkwardness comes from the fact that for close to a century, marketing has fundamentally lacked any intimacy.  Conversations with customers became industrialized.  The company with the biggest media machine typically won attention.  It wasn’t a date – it was an orgy!  The Marketer’s objective was simply to keep adding consumers to the wide-end of the marketing funnel. It was about “eye balls” and “feet through the door”.

New marketing, on the other hand, seeks to initiate an ongoing relationship.  The goal is not simply to buy new customers but to win the customers you have all over again, every day.  It’s a conversation in the truest sense and as close as a marketer can get to looking their customer in the eye.

In a recent interview with Guy Kawasaki, speaker and author of the new book Enchantment, he summed it up this way –   In order for a brand to “enchant” a consumer three things need to happen.  First, the brand needs to be genuinely likeable. Secondly, it needs to be trustworthy.  And finally, it needs to have a great product.  If these three conditions exist, consumers are likely to be willing to open themselves up to an ongoing relationship with a brand.  Although this sounds easy enough, Guy also acknowledges how few brands have mastered the equation.

In the digital world, getting “liked” is relatively quick and easy.  Research shows that consumers are quite open to “liking” retailers and brands online.  Where brands often fail is in building trust.

Trust is earned over time.  It comes with consistently demonstrating respect. It means putting the interests of the other party ahead of your own.  And this is where I feel many brands jump the gun.  The moment consumers express a willingness to interact, they’re all too often bombarded with irrelevant and sometimes intrusive messages. The result is often the systematic destruction of the very trust brands so desperately need to build.

New Media is NOT a Short Cut

The epiphany for new-media marketers is this – new media isn’t faster than mass media.  In fact, it’s slower because it’s based on real, human interaction. It’s not based on impulse but rather on meaningful interaction.  It takes time and it takes work.

Marketers have to build a new level of patience into their marketing plans when approaching their new media strategy.  They need to incorporate the time to build the trust of their admirers and only when the time is right, deliver remarkable value with great products and service.  This isn’t easy in a world that demands quarterly financial miracles and immediate results but it’s essential to reap the rewards of new media.

And for those who are currently questioning the ROI of new media, I would offer that despite having over 100 years of practice with mass media, many businesses are still screwing it up too.  The problem with new media has nothing to do with it’s inherent effectiveness, but more to do with our lack of understanding of how to skillfully employ and measure it.  It’s not up to social and mobile media to prove its value, it’s up to us as marketers to prove we’re capable of thinking differently about what marketing is in the first place.

Note to Macy’s: You Are the Company You Keep

Wednesday, May 25th, 2011

By Doug Stephens

Retail is in a state of historic upheaval and nowhere is this more evident than in the department store channel.  Virtually every major department store chain is experimenting with initiatives, strategies and tactics to find some light in what has become the very dark tunnel of the current retail market.

This week for example, Macy’s announced that it will be opening a new store outside Chicago.   What makes this particular store newsworthy however, is that it will be located in a discount/outlet mall – something that has been out of the question for Macy’s. While they’re no strangers to sales and promotions, Macy’s has until now steadfastly resisted the lure of the discount mall.

But here’s what I found particularly interesting; Macy’s says that while the location is indeed in a discount mall, the store will not be a discount store.  They intend to sell the full-line of regularly priced goods that you’d find in any other Macy’s location.  In fact, according to Macy’s spokespeople, the company views this opening merely as an opportunity to close a gap in their store coverage. No big deal.

The Customer Decides Who You Are

Someone once said, “Companies are not the owners of their brands, only the custodians.”  In the end, it’s the customer who determines what the brand stands for and represents. In other words, the customer owns your brand.

Customers really don’t care about your comparable store growth, profit percentages, store coverage or anything else that often drives strategic brand planning.  They care about the essence of the brand itself.  They care about the promise the brand makes to them and whether or not that promise is kept.

Whether Macy’s cares to admit it or not, the decision to proximate with discount retailers makes them (at least in the consumer’s mind) a discount brand.  It shifts, ever so slightly the axis of the business and potentially sets it off into a new orbit.

So, if this is a one-off move, one really has to question the logic.  Why put the brand at risk for the revenue potential of one store?

My guess is that what we’re really witnessing, is the thin edge of the wedge on a new and decidedly different Macy’s brand strategy –  one that could prove treacherous to say the least.

Does Love Scale?

Tuesday, April 19th, 2011

Image courtesy of the I Love You Blog

This week Wal-Mart announced its purchase of social media firm Kosmix to help it better manage and capitalize on its social and mobile marketing efforts.  What is clear from the announcement is that Wal-Mart recognizes the unrelenting shift to social and mobile media as an integral component of doing business and is literally buying in.  What is less clear but inferred in the move is that Wal-Mart also understands the challenges involved in scaling the real-time, personal interactions that positive social business demands across such a mammoth organization.  While Wal-Mart won’t be the first large company to engage in social media, it is nonetheless, the largest retailer on earth.

And so, that leads me to ask the questions: Can social media really be scaled beyond a certain point before it becomes mass media in disguise? Does an abundance of structure and protocols, undermine the spirit of a conversation in the first place?  Does social media lose its sense of intimacy if we feel that it’s been manufactured through an enormous infrastructure of contractors and systems?

To be honest, I don’t really have an answer to this but would be interested to hear if others think genuine and meaningful social interaction be achieved on a massive scale.

What do you think?

What’s In-Store for the Future?

Wednesday, March 16th, 2011

By Doug Stephens

There’s an ongoing debate about the viability of “bricks and mortar” retail in a digital world.  With online and mobile commerce growing at a double-digit pace and physical stores lagging far behind, how long will it be before clicks overtake bricks?  Some extremists predict an almost complete eradication of physical stores.

While I agree that a very high percentage (and eventually the majority) of what we buy we’ll buy online and/or have automatically replenished, I also believe there will always be a place in our society for physical stores.

image courtesy of Frog Design

Why We Shop

The rationale lies in the reasons why we shop in the first place.  The first and most obvious reason is to acquire the things we need and want.  It’s clearly this aspect of of shopping that the internet has had the greatest impact on.  The ability to select from hundreds of products, compare options, order what we want and have it on our doorstep the following day has put perilous pressure on traditional store models.

But the second and perhaps more important reason we shop has remained unchanged since the beginning of time. Shopping is a social activity. We venture to stores for the same reason we congregated in the market bazaar over a thousand years ago – to be a part of the crowd, to people-watch and for a few hours to lose ourselves in the magic of aimless browsing.  At it’s core, shopping has much less to do with economic need and a lot more to do with human gratification.

The Changing Definition of “Store”

What’s certain is that our beliefs about the purpose stores serve is changing quickly. The once well-defined line between online and in-store experiences is now being obscured. Social and experiential elements of the physical store are being incorporated into online stores.  Apple for example recently applied for a patent that seems aimed at making online shoppers actually feel like they’re in the store by merging aspects of the two experiences.  Likewise, collaborations like that between Adidas and Intel, are proving that in-store experiences can be more web-like by bringing information and media right to the customers finger tips in a highly interactive way.

But the question remains, with consumers becoming increasingly comfortable buying just about anything online, what real value will stores bring to the brands they represent?  Why build stores?

The Store As Media

We’ve traditionally used media to drive consumers into stores.  If marketers could get us across the store threshold, their job was largely done.  In other words, the store was the end of the marketing funnel – the goal line so to speak.

Increasingly, stores will instead act as branded media.  They will function less as places that simply sell products and more like interactive galleries, showrooms and workshops – places where consumers can have aesthetic, visceral and emotional experiences with the brand – that can’t be replicated online. In this sense the store will become the customer’s first brand touchpoint – not the last.  The entry point of the marketing funnel.

With this shift, the financial expectations of stores will change.  Brands will regard their stores less as sales and profit centers and more as a marketing and media expense.  Conventional store success metrics like sales per square foot and inventory turns, will steadily give way to marketing and media-based metrics.  A good day in-store won’t be entirely about how many widgets were sold but also about how many positive impressions were generated and how those impressions converted into social buzz and ongoing brand interactions.

Today’s stores work to fill the customers cart with product.  The store of tomorrow will work to fill customer’s handhelds with branded media, applications and other digital incentives to form a relationship with the brand.  In other words, the store of the future will not simply aim to open the customer’s wallet but also to open their minds and hearts to the brand in its totality.

This concept represents a profound paradigm shift  and one that will be problematic for many retailers to get their arms around.  For savvy retail brands on the other hand, it will represent the next frontier of retail supremacy.

Death of the Focus Group: Research Meets Mobility

Saturday, February 5th, 2011

By Doug Stephens

I sat on a panel discussion this week that explored how social and mobile media is changing the way customer feedback is collected, analyzed and acted upon by retailers. One specific question asked how mobile devices can be used in a retail environment to facilitate better customer feedback or improve responsiveness to complaints. Within the context of this discussion, the idea was to comment on how mobile is being used as a customer service channel but it occurred to me that there’s a much more important data track.  One  that provides a completely new and revolutionary opportunity for marketers.

Say versus Do

First, one has to appreciate the historic problem with consumer research and the challenge it’s always posed for retail marketers.  Consumer research often attempts to predict future consumer behavior but the reality is that consumers very often say things that don’t correspond at all to what they eventually do in store.  In fact, there’s often a gaping disconnect between a consumer’s needs as articulated in focus groups and the basket of stuff that gets taken home from the store.  If the two matched up even the least bit closely, marketing would be a cinch but they often don’t and with good reason – consumers rarely have a clue why they do what they do in stores!  And in other cases, focus group participants simply don’t tell the truth, which probably doesn’t come as any great shock.

Data, data everywhere…

One thing is for sure, the problem with consumer and shopper research isn’t born out of a lack of data.  We’ve got  a plethora of information on both ends of the shopping spectrum, loads of focus groups, surveys and intercepts to gauge needs on the front end and a steady flow of point of sale data to analyze purchases on the back end.  What have been missing are the critical insights in the middle – what shoppers actually do in the store!  This has largely been the realm of anecdotal data and lab-based studies, both of which are often highly inaccurate.

Every move you make

That’s where I believe mobile apps, near field communication, location based services and other intelligent retail technologies are poised to revolutionize our approach to consumer and shopper research.  For the first time ever, researchers will be able to connect the expressed needs of consumers with their actual, physical path to purchase.  Questions like where they go in the store and where don’t they go, where they stop and what they race right by will finally be precisely answerable.  We’ll have visibility into the specific events that trigger a customer to abandon their visit or buy more than usual.  We’ll see more clearly what occurrences precede a complaint.  We’ll even have the potential to see where they’ve come from and where they go after leaving the store.  And what’s critical is that marketers can view this kind of information in aggregate according to what thousands of consumers do, not simply within a narrow and controlled study group.

But understanding the consumer’s physical path is only one of the new streams of data.  The other and more important stream will reveal what they actually engaged and interacted with in the space.  Which in-store marketing messages did they connect with and for how long, which coupons did they download, which products did they scan but put back without buying?  Marketers will see where consumers required more or less information to make a decision and perhaps even when they compared prices with competitors before deciding.  Even insights on how different ages, sexes and races move through a given retail environment are entirely possible.

Finally marketers can validate the reams of data they currently collect with credible information on the consumer’s actual in-store behavior.  This presents a whole new world of opportunity to give retail consumers what they want – potentially without ever once asking them.  It’s also chance to better understand the gap between what consumers say and what they do.

In fact, it’s entirely possible that this new ability to validate in-store consumer behavior will render front and back end consumer surveys a thing of the past.