Retail 2.0 Brings the Internet to the Store

CompUSA and TigerDirect.ca, a Canada based electronics retailer, are trying a new way to connect the Internet experience and the store experience. What they are calling Retail 2.0  is a technology that ”provides online product information to in-store customers as they shop: product by product, aisle by aisle.” 

Through a network of desktops, laptops, monitors and televisions throughout the store, shoppers can research information on products just as if they were at their home or office computer.

 Comp USA has opened 32 stores featuring the Retail 2.0 shopping environment.

It may seem counter intuitive to provide shoppers with this much information in the store because you typically you want to be your shopper’s primary source of information and you don’t want them to compare and possibly see a better price elsewhere.  However, shoppers are doing this anyway before they get to the store.  Many come equipped with their Internet research in hand. So the idea is, if you can’t beat ‘em, join ‘em.  What has been coined as social retailing is about something very different from traditional retail.

The presentation below designed by Mobminds is a primer on the social retailing trend and why it might be important to your store.

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What Most Influences Your Shoppers to Make a Purchase?

What in-store elements most influence a shopper to choose one brand or product over another?  What is the best means of introducing a new product and motivating a shopper to add it to their basket?  Our informal reader poll highlighted just a few instore marketing tools. Instore experience and signage came out the clear winners.  However, the answer is that all of the instore communications tools have varying degrees of importance for creating impact with the shopper. 

The value of one versus the other depends on the product, the shopper demographic, the retail channel and the objective of the retailer or manufacturer.  In addition, one type of communication may be necessary to compliment another and drive the message home to the shopper.  Miller Zell’s Elements Report examines the impact of various instore marketing elements and their influence by generation, income and channel.  Unfortunately instore communications elements are often segmented in the retailer’s mind.  There fore, one vendor may be employed to develop a retail strategy, another to develop the retail design, yet another to install displays while some other firm develops a digital media program.  This becomes a costly version of the telephone game where the client’s objective has to be explained over and over and is interpreted in as many different ways.  At the end of the day, none of these individual suppliers can be held accountable for the total success or failure of the program.  Instead metrics have to be isolated for each portion of the process which does not provide an accurate picture of the collective value of the program elements.  This is a loss to both the retailer and the marketer. 

Integrated store development can eliminate many of the issues that arise from the typically fractured retail execution process.  This method links strategy, design, prototyping and refinement, production of fixtures, décor and graphics, installation/program management and accountability.  This holistic approach also makes it easier to facilitate ongoing improvements such as new ideas, products, displays and graphics, making continuous concept renewal a way of life.  And with the fickle tastes of today’s consumers concept refinement and reworking happens more often than it used to. 

The present store development and renovation process used by most retailers has changed little in the last fifty years.  It does not provide for maximizing the impact of all the tools that can influence shopper behavior.  It is slow, expensive and permits little accountability for results.

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Estee Lauder CEO Boosts Sales by Letting the Shopper Take the Lead

Researching your consumer and understanding their needs is vital to staying relevant in an uncertain market.  This isn’t news, but it’s advice that often goes unheeded if it means changing things that are perceived to define the brand.  

Emily Byron interviewed Fabrizio Fredo, CEO of Estee Lauder for The Wall Street Journal.  Fredo explained his effort to remake the iconic Estee Lauder brands beginning with consumer research and understanding the shopping experience from the shopper perspective.  One of the biggest insights to come out of their research is that communicating prices to consumers through signage boosts sales.  This is very different for beauty counters which are typically a full-service, luxury experience.  Estee Lauder’s beauty brands like Clinique are synonymous with personal service.  However, Fredo has found a more hands-off approach to be a successful departure.

“It allowed the consumer to make up her mind without having to ask the price,” said Freda.  “This takes embarrassment away. Surprisingly, most consumers said, ‘I didn’t know it was so affordable.’” 

Going forward, the company is investing heavily in consumer research as part of his initiative to remake the brands and expand the customer base.  The company is already reaping the benefits of customizing their store experience to consider the various trip missions and shopping styles of their customer.

“At Bloomingdale’s new Clinique counter in New York, you can have full service from a consultant, analysis from a computer or browse on your own. A corner called Clinique Express provides product replenishment. So far the counter is doing well.”

Byron reports that sales in the most recent quarter are up 11%.

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Why A Great Product Doesn’t Always Equal Great Success

Caribou coffee was ranked #1in its category by Consumer Reports.  YouGov’s BrandIndex ranks the company higher than Starbucks in customer satisfaction.  Yet, Caribou has not earned the the mass appeal of Starbucks. Why?  CEO Mike Tattersfield thinks it could be the branding.

Brandweek reports that Caribou is undertaking a major overhaul of the brand to expand its appeal.  The company has locations in over 15 states and leadership feels that the Midwestern-y, lodge image associated with their coffee is keeping consumers in some regions from connecting with the brand. With the help of Alfredo Martel, a former Yum Brands exec, some old Starbucks people and a new ad agency, Tattersfield is leading the way to a new identity for Caribou.

Tattersfield is making some pretty significant changes to the look of the logo that will hopefully carry through to the store.  What set Starbucks apart and drove their unbelievable retail sales and expansion, had less to do with the goddess logo and everything to do with their retail environment.  They introduced Americans to the coffee shop as a hang out and made each store a place where you want to spend time, meet friends and enjoy several cups of expensive joe.  In order for Caribou to drive their retail sales, they’ll have to dig deep on the rebranding of their retail environment.  It must resonate in a unique way to get the new brand message across. The look and feel of the brand is important, but the store brings it to life.

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How Can Supermarket Retailers Improve Sales Margins and Brand Perceptions

Occassionally Inside the Aisle will feature guest postings by industry insiders who offer insightful perspective on a variety of topics important to retailers.  This week, David Merrefield shares his perspective on food retailing and how grocers might use new tools to meet their objectives.

Retailing in general and food retailing in particular is in a strange position: Retailers own the physical store space, they attract shopper traffic to the store and they provide store services necessary to complete sales transactions. 

Yet, despite all that retailers do to facilitate transactions, they are strangely dependent on brand owners for promotional activity and for their profitability. Nowhere is this more true than in supermarket retailing, so let’s focus on that. 

Supermarket retailers, of course, undertake advertising campaigns to boost store traffic. These campaigns generally come in the form of item-and-price messages and image impressions, whether by means of print, broadcast or internet. But these efforts are paltry relative to the advertising muscle flexed by brand owners. And for good reason: Manufacturers are far more revenue-productive than retailers, so they are well able to pour funds into advertising. Consider these measures: Four strong supermarkets and four leading consumer packaged goods (CPG) manufacturers have nearly equivalent revenue, in the aggregate, but the CPGs produce more than nine times as much profit and have about 15 times the market value per dollar of revenue as compared to the retailers. 

More fundamentally, advertising by CPG companies is aimed at boosting brands, not retailing venues. As a result, brands’ advertisements boost brands across the entire range of supermarkets and other retailers in consumers’ catchment area, so no one store benefits particularity, since all benefit. That situation underscores why all stores are essentially required to have heavily advertised brands in their product range. Retailers must offer what shoppers seek.

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Posted in Activation at Retail, Grocery, Mass Merchandiser, Retail/Market Trends | Tagged , , | Leave a comment
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