Category Archives: Industry Trends

by Jennifer Bosavage

Is Your Mobile Site Optimized?

By next year, half of the world’s 4 billion cell phones will be smartphones — and the total number of cell phones will be larger than the world’s population, according to The Ohio State University’s National Center for the Middle Market. More that 173 million people in the United states alone  owned smartphones (71.6 percent mobile market penetration) during the three months ending in June, up 4 percent since March, according to Comscore. Adoption has been rapid.

That smartphone in your customer’s hand is the mainframe computer of yesteryear. As physicist and author Michio Kaku noted in a recent book, “Today, your cell phone has more computer power than all of NASA back in 1969, when it placed two astronauts on the moon.” For example, the iPhone 5’s 1GB of RAM is up to the task of storing the 6 megabytes of code that NASA developed in 1969 to monitor the status of its spacecrafts and astronauts. All that technology is now harnessed in a device that shoppers use to compare prices, locate products and even pay for purchases.

Retailers are under more pressure than ever to develop sites that are easy to navigate, attractive and fast. Shoppers want mobile-friendly sites and have grown impatient waiting for non-optimized pages to load. A recent study from Modify found that 30 percent will abandon a purchase if their mobile experience isn’t optimized. Modify also said:

  • 51% of shoppers research online and visit store to purchase
  • 17% visit store first, then purchase online
  • 44% research online, and purchase online
  • 32% research online, visit store to try, then purchase online.

Basically, stores need to have an attractive, streamlined mobile site as well as an in-store experience that delights the customer. And often, that experience starts with the smartphone as the entry point.

Mobile users spend more than other consumers, too. Considering that mobile shopping is expected to account for $163 billion worldwide, retailers must optimize their sites for mobile users and welcome the device into their stores by integrating it into the buying experience. Consider developing a retail app for your business; more than 60% of smartphone users download apps, and of those, 75% are free. In addition, 61% of smartphones are GPS enabled, so consider how beacon technology could help drive sales.

More than a third of smartphone users “check-in” and share their locations when they are shopping. Many of those prefer to receive coupons on their phones, and they welcome coupon apps. Those are likely candidates to embrace loyalty technology, which companies such as AppCard can help you manage.

The Ohio State research also found that $163 billion in products will be paid through via some type of mobile wallet by next year. And by 2019, half of those using the devices today will be using smartphone mobile wallets as their preferred method of payment.

Retailers should look at 2015 as a time to optimize their mobile web sites and implement technology to accept of mobile wallets at the point of sale. As mobility moves into the in-store experience, it’s clear that the omnichannel is taking root.

 

 

 

 

by Jennifer Bosavage

Click And Collect Brings New Customers To Retailers

Shopper arrives to collect online purchase from brick and mortar store as part of click and collect offering.

One of the most popular trends today in online retailing is customers buying online and picking up in-store, a practice referred to, cleverly, in the U.K., as “click and collect.”

In fact more customers are asking for the service from the retailers they most often frequent.

It’s a hybrid shopping experience: Customers can purchase an item anytime anywhere and then pick it up at their convenience at the retailer.

Using this delivery model, a retailer can cultivate a convenient, streamlined image to the busy consumer; in addition, some stores are quite adept at drumming up related sales — upselling — at the time of pick up.

A year ago, Accenture and hybris software, an SAP company, commissioned Forrester Consulting to study how retailers can deploy successful omnichannel strategies.

The Forrester study found that consumers expect more options from their retailers in the era of omnichannel: 71% regard in-store inventory online as a required feature, and half expect to buy online and pick up in-store.

The Forrester research found that too often, retailers seemed to be complacent about their omnichannel capabilities.

On the contrary, omnichannel is constantly evolving as customers’ expectations continue to grow.

Despite the convenience of having an item shipped directly to a consumer, a new survey from retail technology company POPcodes reports that 86 percent of customers  who order products online and pick them up in store do so to avoid shipping fees.

The POPcodes study also found that 57 percent of consumers use the “order online, pick up in-store” option because they believe it makes returns and exchanges easier.

Four out of 10 respondents said they have picked up an online order in person.

“This survey reiterates what many of us in the retail world already understand:  The Internet has certainly changed the way consumers shop, but they will always have a special place in their hearts – and wallets – for shopping in a store,” Gregg Aamoth, CEO and co-founder of POPcodes, said in a statement. “Retailers simply have to figure out how to better tie the virtual and physical shopping worlds together.”

If you’re not offering click and collect, the time is now to get a strategy together.

Customers are clamoring for it; the POPcodes research reported that 97 percent of consumers who have chosen that option said they would do so again.

Buying online and picking up in-store personalizes the online transaction, opens an avenue for an upsell and is an effective competitive weapon.

Bridging the gap between online and in-store shopping is a win-win for both retailers and consumers alike.

 

by Retail Pro

#Instakors Is Latest Mobile App for Social Shoppers

Today, Michael Kors became one of a handful of companies embracing Instagram as a way of selling product. In and of itself Instagram is a handy way for marketers to get the word out about their products. However, currently, there’s no seamless way for a retailer to “seal the deal” after a potential customer “hearts” (equivalent to “liking” on Facebook) a particular post. Still, the aim is to make shopping from mobile devices simpler than ever, while promoting a sense of community. And it appears to be working.

The brand is not alone in trying to encourage a social tie-in with shopping. A number of upscale retailers — such as Nordstroms and Marc Jacobs Beauty —  have implemented ways to help Instagrammers buy their favorite products. Michael Kors’ solution is similar to several available; after registering at #Instakors with an email address, a user who likes a shoppable photo will receive a linked email to buy the product. The Kors mantra: Like it. Shop it. Own it.IMG_4716

It’s just one step too long to being truly convenient; that email requirement is kind of clumsy. But Instagram has not made mention of streamlining the process and providing live links anytime soon. So, a number of enterprising developers have tried to fill the niche. For instance, LikeToKnow.it, helps fashion bloggers monetize their efforts by operating in a similar way to #Instakors; readers who “like” a clothing photo receive an email with links to items in that post.

A different take on the Instagram shopping quandary came from Dash Hudson, which this past July raised $400,000 in seed funding. Rather than relying on the additional email step, Dash Hudson features photos of clothing in its own app. The issue of photo permissions looms large with this, but it works like this: A teenaged girl follows model Cara Delevingne on Instagram. The follower “likes” a particular photo that has been rendered shoppable — and a purchase button offers the opportunity for immediate gratification. It’s easy and fast. What’s fascinating is the lack of a shopping cart. Apps like Dash Hudson are great for one-off purchases, but would not be suited for purchasing multiple items (as one might do at a grocery store). However, Dash Hudson is catering to a somewhat exclusive audience; not too many people will buy more than one $595 Sophi Hulme bag at a time.

“It’s an elegant solution. We killed the shopping cart so you can get anything from your favorite brands in a few touches,” said the CEO of Dash Hudson Thomas Rankin in an interview last month. “It’s a new experience, but with the same things you expect from a traditional retailer – like free shipping and returns. That denim on denim outfit Rosie Huntington-Whiteley is lounging in? Get it in seconds. Simplicity is what makes people fall in love with us.”

That goal of offering customers simplicity is a guiding force behind Retail Pro’s solutions. In particular, it guided us in our partnership with Merchant Warehouse and our decision to deliver the Genius solution to Retail Pro 8, Retail Pro 9 and Retail Pro Prism customers. Simplicity is important to our customers, so they can offer technology that helps shoppers enjoy the retail experience. For example, the “future proof” nature of the Genius solution means emerging payment technologies, such as EMV and NFC, and loyalty/couponing applications, etc. can be added with ease to any existing Genius engagement device.

The overarching goal for any retail solution should be simplicity. As Leonardo DaVinci said, “Simplicity is the ultimate sophistication.”

by Jennifer Bosavage

Don’t Forget the Customer When Implementing Beacons

Beacon technology can help a retailer understand a shopper’s buying patterns while he or she is in the store — pretty valuable information especially when it comes to understanding why certain items fly off the shelves, and others seem to grow roots. It’s also helpful in learning why some shoppers rarely buy anything at all. But the shopping experience is two way, and if there is anything technology adoption has taught us, it’s that the customer must also perceive a benefit from any implementation.

Ideally, a retailer can, through Beacon technology, offer a shopper targeted discounts and other rewards based on his or her store history. Perfect, right? It could be a win-win for both parties. The trouble, however, is that customers are hesitant to hand over access to their personal information. With recent well publicized retail POS breaches, retailers’ mobile security systems are under close scrutiny.

In “Best Practices: Beacon Location and Security and Encryption,” James Buchheim, CEO of Stick and Find agrees that care should be taken when deploying beacons to ensure their infrastructure cannot be used by unauthorized third parties. He suggests:

  • Using a non-deployer unique UUID
  • Ensuring Major (which identifies location) and Minor (which identifies location within a location) schema is not decodable by 3rd parties (random)
  • Change Major and Minor frequently (example: once per minute)
  • Deploy and configure with a secure, private password

Retailers should also consider adding data encryption to their beacon solutions. And, applications that trigger value transactions should use encrypted beacons. Of course, publicizing this to shoppers is critical for customer buy-in. A recent study on Apple’s iBeacon found that while the technology can be quite effective when implemented well, over saturation and irrelevant messages can be “disastrous” for a brand.

For retailers to realize beacon technology’s full potential, customers have to embrace it. Buchheim offered four excellent tips:

  1. Always offer customer value in return for knowing their location. Only two years ago, many retailers dismissed the value of discounts, coupons, etc., with their shoppers. They (erroneously) believed that customers would simply adopt technology for its own sake. What happened was shoppers brought their own technology into the store and started comparison shopping online. Today’s savvy retailers know that customer incentives must be part of their approach.Beacons_by_jnxyz.education_(13570744845)
  2. Ensure customers fully understand how their location data used/recorded. No surprises. Customers will perceive retailers as “spying” on them if there is not full disclosure.
  3. Take steps to protect live or historical data in mobile app or other platform. Market your commitment to security.
  4. Do not share user location data with 3rd parties without permission(s). A no-brainer, but always good to reiterate.

Bottomline: It’s always important that an IT solution address a particular problem or challenge. But with beacon technology — in which information is pushed to customers based on their personal shopping habits — that need is even more acute.

by Jennifer Bosavage

Easy and Intuitive Is the Way To Win with Mobile Payments

With the introduction of new technologies such as Apple Pay, and its soon-to-debut competitor CurrentC, mobile payments have picked up significant transaction at the point of sale (POS). A recent study from Gartner predicts that mobile commerce revenue in the United States will account for 50% of all digital commerce sales by 2017.

It has been challenging for retailers to get consumers to embrace mobile payments. Prior to Apple Pay’s launch in October, customers were happy to pay with their magnetic striped credit cards, accepted at virtually every retail POS. For many, the idea of moving to a mobile “wallet” was fraught with worry about data security. For example, in July, the U.S. Computer Emergency Readiness Team issued an advisory that more than 1,000 U.S. businesses have been affected by the Backoff malware, which targets point-of-sale (POS) systems used by most retail industries. That’s a lot of worry to go around.Mobile_payment_01

In addition, some consumers had tried mobile payment apps, and were frustrated and disappointed. Even the uber-popular Starbucks system can get hung up on a finicky scanner. So the message from consumers is loud and clear: If it’s not secure and intuitive (i.e., easy), we’re not interested.

Apple Pay may have overcome those hurdles. For now, it is focused on providing secure mobile payment for consumers, in an efficient, simple manner, via Near Field Communications (NFC). It works with credit card companies, rather than around them, as CurrentC does. But, while Apple focuses like a laser beam on transactions, CurrentC incorporates customer information, including loyalty benefits. That could make for a complicated, though more complete, rollout for CurrentC. Meanwhile, Apple does plan to include more features in the months ahead, but has chosen a more integrative approach.

The credit card companies typically charge 2% to 3% of a given transaction to the merchant; CurrentC saves that fee normally imposed by credit card companies from the payment process by circumventing them and using automating clearing house (ACH) payments. However, in an online introduction to Apple Pay, the company said it won’t charge users, merchants or developers for transactions. It’s likely that Apple is collecting a fee for each transaction, but mum’s the word on those details right now.

It is interesting how Apple forged the partnership with the three biggest card networks, Visa Inc., MasterCard Inc. and American Express Co., to process payments. As a former vice president of a large upscale department store explained to us: “Apple’s negotiation and techno-skills won them the distinction of having Visa, MasterCard and American Express recognize Apple Pay as a ‘Card Present’ transaction, which will definitely be a big disrupter in the payment ecosystem. This is especially true if your payment solution doesn’t produce the single-use cryptogram and Token thus relegated to the more expensive ‘Card Not Present’ space.”

But there is that pesky issue of security. Users with Apple Pay installed on their phones have very little to do a locked phone held over the payment terminal wake up with a finger on the TouchID scanner and the transaction is done momentarily. It might take a bit of persuasion to convince Mr. and Mrs. America that their credit card numbers are not floating around in cyberspace.

“I was directly involved in the early deployment of Google Wallet at a large national retailer, and I agree that adoption was impacted by low consumer confidence in the security and the high concern (quite justifiably) that their purchase histories would be sold,” the department store exec said, noting that Apple has publicly stated it doesn’t collect purchase history. So, not only does Apple not know what was bought, it doesn’t know where you bought it or how much you paid for it. “Assuming that is true, which is actually harder to do than you’d think, that would address a big part of consumer fears. From a technology perspective, Apple has combined multiple on-phone and in-network security strategies to deliver one of the most secure payment methods available. That said, most consumers — especially those who already mistrust big banks and big business — don’t really understand the security measures that have been in place for years. Even the Apple faithful have recently lost a little confidence with the recent iCloud exposures.”

Although consumers are becoming more comfortable with the idea of mobile commerce and payments, the average consumer needs reassurance that these systems are safe and secure. It’s one thing for a customer to use mobile payment method at Starbucks for a $4.52 grande caffe latte, and another to use it to buy a $850 48-inch plasma television. A retailer must be prepared for both transactions.

by Retail Pro

What’s in store for retail in 2015?

Radio-frequency identification technology, new POS software security features, omnichannel distribution and a wealth of other factors are all taken into account when retail professionals think about what's in store for next year. 

Although the merchandising landscape was shaken by the explosiveness of the Internet near the turn of the century, the organized chaos that ensued as largely dissipated. That doesn't mean technology won't have an impact on the retail industry next year. 

Focusing on what the customer wants
Retail Customer Experience contributor James Bickers noted some enterprise leaders don't know how to regard trends appropriately. Whenever a buzzword comes to mind, such as "beacons" or "app," some professionals may be to eager to jump the gun. In other words, don't develop a mobile applications unless your customers asked for it. Believe it or not, there are some companies for which it wouldn't make sense to develop and launch such software. 

So, what do consumers want? Bickers referenced a survey conducted by the magazine, acknowledging a number of key points:

  • The majority of shoppers (86 percent) believe that a retailer possessing an online channel is "important," "very important," or "critical."
  • Just under half (45 percent) of respondents maintained shipping charges have a profound impact on which merchants they choose to purchase products from. 
  • Exactly 63 percent of participants have downloaded a retailer's mobile app, a third of which maintain they rarely use them. 

The good word of others 
It appears that blog content is going to strongly influence how consumers choose to spend their money. Shoppers already take other people's opinions into consideration by looking at short reviews and ratings posted on product pages, so it makes sense that many are looking for more in-depth, expert critiques of select goods. Specialty retail companies, in particular, will need to pay attention to this trend. 

The American Genius spoke with Influence Central CEO Stacy DeBroff, who regarded the research her company conducted on consumer purchasing behavior. She acknowledged that 92 percent of mothers buy products after reading blogs posted by people who detail their experiences with said goods. In addition, 91 percent of moms trust blogs for accurate, honest information regarding items when researching them online. 

In other words, content reigns supreme. How can retailers use this to their advantage? Sharing these blogs on product pages may actually discredit the writers' good word. Find unique, indirect ways to connect with these pieces. 

by Retail Pro

The rise of brick-and-mortar among ecommerce specialty brands

Given the ubiquity of digital media, some may be befuddled to learn that a select few online specialty retail companies are setting up physical stores. 

The uninitiated would perceive such a move as somewhat of a step backward, but those familiar with merchandising know how much brick-and-mortar venues contribute to brand development.

People want to purchase specialty products (hunting apparel, running shoes, Olympic lifting items, etc.) from businesses that have a tangible presence in commerce. Basically, physical outlets provide consumers with the chance to validate the quality of particular goods. Depending on whether a business passes such a test, its reputation will be affected significantly. 

A different take on brick-and-mortar
Specialty merchants aren't simply setting up run-of-the-mill stores and hoping everything falls into place. They rely on retail customer intelligence tools to help them deduce what kind of experience people are looking for. When a consumer visits a tangible store, he or she is looking to develop a certain attachment to the items on display. 

According to Street Fight Magazine, that's exactly the type of environment men's apparel brand Bonobos is trying to create. The source noted the brand originally started as an ecommerce venue, but then expanded into the physical space to allow its customers to interact with its products. 

However, Bonobos isn't taking the traditional brick-and-mortar route. While Bonobos' venues allow customers to test fabric and try on clothes, the purchases themselves are processed as ecommerce orders, meaning items are delivered days later. The source maintained this allows Bonobos to sell a wider variety of inventory at a fraction of the price.

The shift to ship-from-store 
Essentially, the specialty men's apparel store is leveraging its new stores as order fulfillment centers. This strategy is similar to the one Macy's has adopted, according to Fortune. Macy's has taken a different route than Bonobos in that it began as a brick-and-mortar chain and is now investing in ecommerce. 

In order to support its online operations, Macy's is leveraging its tangible locations to satisfy purchases made on its websites. In addition, the retailer is allowing its stores to pool inventories to ensure shortages don't occur. 

"The customer is driving innovation," said Macy Chief Omnichannel Officer RB Harrison, as quoted by Fortune. "She or he is increasingly expecting a seamless experience between a digital and in-store environment." 

As far as how omnichannel strategies will progress in the future, it depends on how creative executives are. The more versatile and open-minded they are, the better they'll be able to satisfy consumers with high expectations. 

by Retail Pro

Ecommerce and specialty retail join forces

While many specialty retail brands typically operate in the physical world, executives are acknowledging the benefits of the virtual arena. 

Once trust has been established between a customer and a company, it's likely the patron will begin purchasing products from that merchant online. Why? He or she has physically tested the retailer's items several times before, so the consumer already knows what to expect as far as quality is concerned. 

Progressive thinking 
According to Fortune, Neiman Marcus Group, a merchant specializing in luxury apparel, recently announced the acquisition of Munich-based ecommerce website Mytheresa.com, which was founded by Christoph and Susanne Botschen in conjunction with Acton Capital Partners. 

Neiman Marcus already brings specialty clothing to well-to-do consumers living in 120 countries, generating nearly $5 billion in sales every year. The enterprise is looking to expand its reach without having to set up additional brick-and-mortar stores. Instead, it hopes to leverage ecommerce as a means to provide luxury clothing to those who have yet to encounter the Neiman Marcus brand. 

"This acquisition is an important component of our long-range strategy to more broadly serve affluent customers around the world. Mytheresa has a very nice foothold in Europe and a developing foothold in Asia," said Mytheresa.com CEO Karen Katz. 

What needs to be in place 
While Neiman Marcus is likely already familiar with the steps needed to procure ecommerce software, other specialty retail outlets that have yet to penetrate the digital realm likely don't know where to start. Forbes contributors Grent Gleeson and Jeff Oxford detailed how to set up a website, from choosing a solutions provider to designing the interface. 

  1. Exceed expectations: There are plenty of platform providers out there that are PCI DSS compliant, but do their architectures surpass the standards defined by the Payment Card Industry? Look for solution developers that go the extra mile regarding security. Look for systems that employ tokenization, black box authentication and endpoint encryption.
  2. Make it smart: What defines a smart-looking website? One that's easy to navigate and projects the character of the brand. Specialty retail ecommerce stores should appear sleek, refined and constructed by knowledgeable professionals. As a general rule of thumb, finding a specific item should take no longer than 30 seconds. 

In addition, the checkout process shouldn't be ignored. If it takes more than two minutes for a person to finalize a purchase online, then revisit the steps and start over. 

by Retail Pro

What defines a positive in-store experience?

Although ecommerce is a popular topic of discussion among merchandising professionals, they would do well not to ignore one of their greatest sources of revenue: brick-and-mortar stores. 

According to Street Fight Magazine contributor Anne Stephen, online sales account for a mere 10 percent of the industry's total retail transactions, with in-store purchases making up the difference. 

With this in mind, no outlet is the same. Each one provides a unique customer experience that pertains to the store's brand, how the products are presented and the way in which salespeople interact with shoppers. The question is, how do retailers measure the success of their in-store experience models? 

Start with the KPIs
​In-store beacons that measure movement and POS software can both contribute to a merchant's key performance indicators. Stephen maintained that the ultimate goal is to understand how business decisions affect customer perceptions and then adjust delivery methods accordingly. 

How should shopper behavior be measured? From the moment a person enters a store, the way they carry themselves should be acknowledged. Customer A may know exactly what she wants and walk at a faster pace in an effort to get to the section of the store she's looking for. In contrast, Customer B may display signs of browsing: slow pacing, wandering looks and kino tests (touching). 

What are you selling? 
Once measurements are established, store managers must observe the way their sales staff contributes to the customer experience. Is there a blanket solution applicable to every specialty retail outlet? Absolutely not. 

While one merchant may specialize in mobile devices, another may provide consumers with designer apparel. These two mediums inspire different mindsets among shoppers. Listed below are the best approaches for each retailer to take:

  • Smartphones: Describe what the prospective buyer can do with the technology and detail each device's limitations. Be sure to acknowledge that people aren't necessarily tech-iliterate.
  • Designer clothing: Don't describe the feel of the clothing – that's what dressing rooms are for. Instead, focus on the inspiration of the design and the emotions the appearance is supposed to evoke. 

Not as good as they hoped 
On a more general note, retailers of every ilk need to pay more attention to their patrons. According to Commerce Tuned, a survey of 2,000 people residing in the United Kingdom showed 38 percent of respondents will leave a store if representatives fail to return to them in three minutes. 

There will be times when an assistant needs to look up certain information. In order to prevent abandonment from occurring, it would do store managers well to provide their employees with tablets to help them find specific intelligence. 

by Retail Pro

Putting the “specialty” in specialty retail service

When a customer chooses to disregard a discount apparel store and visit a specialty retail store instead, they expect a certain level of expertise.

For example, upon entering an Under Armour store, the patron intends to learn more about that specific brand. What puts Under Armour over Nike? How is does it's product design differ from Adidas? These are just a couple of questions to which shoppers are seeking answers. 

The competition is tight 
As there are numerous apparel manufacturers specializing in athletic clothing, outdoor gear, seasonal fashion and so on, companies need to find ways to assert their dominance over the market. Of course, this is easier said than done. 

Benzinga acknowledged how Urban Outfitters, Free People and Anthropologie Group are constantly aiming to gain a piece of the apparel pie. These three groups cater primarily to the late-millennial generation, appealing to a culture that focuses on subtle social rebellion and acceptance of diversity. 

They're not ignorant of ecommerce software, either. The source noted Urban Outfitters's net income for Q2 2014 stood at $67.51 million – $8.85 million less than the same period last year. Apparently, the specialty retail brand set aside capital for revamping its marketing strategy and improving its website. 

What approach should in-store representatives make? 
When a person enters an Apple store, they likely already know they want to purchase a product manufactured by the company. He or she could have visited a Best Buy to purchase an iPhone or iPad, but the individual wanted a different experience, one that reflects the attitude of the brand. 

Retail Customer Experience contributor Doug Fleener maintained that four kinds of specialty retail representatives exist. He outlined their character traits and sales approaches, which are listed below:

  • The Gawker: A person hears a customer talking, but the information is going in one ear and out the other. He or she doesn't possess comprehensive knowledge of the company's products or service offerings.
  • The Stalker: Someone who follows customers as they walk around a store in the hope one of them will have a question regarding an item. The person fails to engage shoppers proactively. 
  • The Talker: A representative who is friendly and can inform people about each of the brand's products and provide expert opinion. However, this person typically focuses too much on making a sale and forgets to create a meaningful connection.
  • The Rockers: Those who establish empathy between themselves and the customer. They assess the persons needs and desires and find an item that best suits them. 

While personality is essential, specialty retailers must also provide employees with technology that allows them to complete sales on the spot.