iRetail?

By Alex Delotch Davis | March 2, 2011

“This is not going to be a novelty. It’s going to be a sea change in how retailers transact and interact with customers.”

That’s a pretty big prediction from Ken Nisch of JGA speaking on the impact of the iPad in the retail environment.  We’ve long been talking about how to integrate digital into the shopping experience.  Next was how to integrate social media.  It appears that the iPad has provided a way to do both that’s easy, cool and cost effective.

In an article for the Calgary Herald, Sandra Jones profiles many ways that retailers are integrating the iPad into the shopping experience.  Everything from using it to source inventory from the sales floor to executing transactions.  And we’re not talking the cool, hipster kids who are trying this.  Burberry and Things Remembered were among the retailers she listed who are prototyping in-store applications for iPads.

Click here to read the Calgary Herald article.

Back at Christmas a local Atlanta developer decided to create a pop-up shopping district in some available retail space.  It was a genius idea.  Anyway, one of the stores was a pop-up coffee shop.  I stopped in and ordered a cup at the makeshift counter and after the guy made my coffee in some sort of press, he swiped my card on his iPad.  I was a little leery at first that he might be storing my information for his own thievery (I checked my account later), but it’s actually a brilliant tool for mobile merchants and the other awesome retail trend, pop-up stores.

Just two weeks ago I found myself in an insane travel quagmire at JFK airport in New York.  As I schlepped my carry-on, and stuff, through the airport, I was shocked when I walked into the Delta terminal.  It was like a waiting wonderland.  There were all different styles of waiting space, bar tops, booths, and of course the traditional airport seating.  But coolest of all, there were iPad stations where you could play games, watch the news, order food and all manner of other things some of which cost a small fee.  But I thought, what a creative use of the iPad and I’ll always fly Delta.

So while, I’m conservative and would have to be very sure in order to call something a “sea change,” Nisch may not be far off.  The iPad may be changing retail and business to consumer relationships forever…forever, ever?

Posted in Activation at Retail, Prototype Testing, Retail Design, Retail/Market Trends, Technology | Tagged , , , , | 1 Comment

What’s in It for Me? – Improving Customer Experience

By Alex Delotch Davis | February 23, 2011

Sydney Barrows claims that there are 5 elements to creating a noteworthy customer experience.

Whats in It for Me? – Improving Customer Experience – Entrepreneur.com.

Her 5 elements include:

  1. what customers see,
  2. what they hear,
  3. what they smell,
  4. what they touch,
  5. how they are physically affected (e.g. temperature)

According to Barrows, “The feeling this combination of elements gives customers at the moment, or leaves them with, has a profound effect on sales.”

Visual impact, environmental comfort and auditory stimulation are all givens.  But smell and touch have been a challenge for retailers.  Some places have it easy in that area.  The coffee smell in a Starbucks definitely sets the mood.  The smell of chocolate in a candy store.  But smell is harder to capture in a mass retailer or a clothing store.  What smell will appeal to the customer?  Overdoing it risks averting some customers.  I have friends who have a really hard time spending too much time in Bath & Body Works.  The combinations of scents can be overwhelming.

No matter what your opinion about what those 5 things are, one thing can be agreed upon — the customer is king.  More than ever, the customer is focused on being the star of the show — not the brand, not the product, the customer.

Posted in Activation at Retail, Retail/Market Trends, Service Retail | Tagged , | 1 Comment

When 31 Flavors is Just Too Much

By Alex Delotch Davis | February 8, 2011

Baskin Robbins offers 31 flavors.  Heinz had 57 varieties.  Starbucks has 87,000 drink combinations.  Walmart averages 100,000 products.  Cold Stone Creamery boasts 11.5 million “ways to customize your ice cream treat.”

Most retailers believe that more is better because customers want choice.  However the work of researchers Sheena Iyengar and Kanika Agrawal suggest the exact opposite.  In an article for Strategy + Business magazine entitled, “A Better Choosing Experience” Iyengar and Agrawal detail their observation of consumers who are consistently overwhelmed by too much choice.  According to them, “there are neurological limits on humans’ ability to process information, and the task of having to choose is often experienced as suffering, not pleasure.”

“Choice overload,” as they call it, occurs when shoppers become frustrated with trying to compare and contrast a variety of products, particularly more than seven.  As a result, shoppers will either choose the thing with which they are most familiar or choose nothing at all.  In an analysis of 401(k) plan participation for one company, researchers found that when presented with only two fund choices, 75 percent of eligible employees participated.  The rate of participation dropped to 61 percent when plan offerings were increased to 59 choices.

Iyengar and Agrawal suggest four solutions to the problem of choice overload:

  • Cut the number of options.
  • Offer expert or personalized recommendations.
  • Categorize product offerings
  • Condition consumers by gradually introducing complex choices.

The article gives excellent examples of how retailers and manufacturers have employed one or all of these tools to help customers overcome choice overload and ultimately increase sales.  A worthy read with surprising insight into the shopper mind.

Posted in Activation at Retail, Grocery, Mass Merchandiser, Retail Banking, Retail Design, Retail Research | Tagged , , , | Leave a comment

Men Don’t Shop. Period.

By Alex Delotch Davis | December 14, 2010

We all have actual experiences that help us buy into this stereotype about men.  Most women have been to the store with a man — spouse, parent, brother or friend — who was annoyed at the idea of walking aimlessly around a mall or Walmart.  As a man, you may even feel a twinge of discomfort at the idea of shopping a massive department store, crowded shopping center or maze of a grocery store.  You don’t do it unless you absolutely must.  In this case, there may be some truth to the stereotype that men don’t shop and there are all kinds of research to back that up.  However, as household and social dynamics change, men are increasingly heading to the store on their own.  And we’re not just talking Home Depot and Best Buy.  Men are shopping for the household at the grocery store and big box.  This presents an opportunity for the savvy retailer who pays attention to their male shopper.

According to a recent NPR article aptly titled, “In Search of the Elusive Male Shopper” men exhibit distinct behaviors when shopping, one being refusing to ask for help.  Men prefer to figure it out for themselves before they will ask for assistance and risk appearing unknowledgeable or stupid.  One suggested remedy for that barrier is touch screen shelf signs where men can research without having to admit what they don’t know.

On the flip side, a 2006 article from BusinessWeek suggested that maybe we are pigeon-holing men.  By categorizing them so narrowly as either a metrosexual who likes shopping or a Neanderthal who, as Paco Underhill put it, “wanted to kill something reasonably quickly and drag it out the door,” we’re missing the men who fall into several categories in between.

Miller Zell recently conducted a study of men and their shopping preferences.  “Caveman and the Credit Card” examines male shoppers beyond the stereotypes and the in-store triggers that motivate them to purchase.  The complete report will be available very soon.  In the meantime, tell us about a store or shopping experience that you think clearly considered the male shopper in the design plan.  We know there are some retailers out there who totally get it.  Here’s a list from Forbes to get you started. “10 Best Clothing Stores for Men.”

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

Dollar Stores Could be Missing their Best Opportunity

By Alex Delotch Davis | November 1, 2010

Value leaders like Family Dollar and Dollar General seem to be having trouble sustaining the boom generated after the initial shock of the recession.  Many analysts and retail watchers, we included, thought their time had come.  Dollar stores had an opportunity to connect with a barrage of new customers faced with surviving an uncertain economy.  The first line of economic defense is always to cut spending and the local dollar store was a no-brainer for many consumers who were battening down the financial hatches.  However, it hasn’t worked out to be that easy.

According to The Wall Street Journal, although sales are rising for the discounters, margins are not rising at the same rate.  “Bargain prices on food, drinks and other ‘consumables’ may get customers in the door, but discount retailers rely on higher-margin discretionary purchases for profit growth.”  So when everyone went to the dollar store this time around, rather than aimlessly wandering through the store and filling baskets with angel figurines, votives and gift bags, people were heading to the food aisles, checking off the list and walking straight out.  No glass candle holders for mom or random toys for the kids.

What should the dollar store do?  How do they connect?

Should they draw in, tighten expenses, and focus on increasing volume on low margin products?  That could work, however if they expanded their consumables categories, that would position them in direct competition with grocery stores and Walmart’s low cost leader position.

Or

Should they try to push the higher margin products more than they have in the past and tap into the emotional mind state of the shopper focused on cheap chips and soda?

Right now, these stores have the people’s attention.  But the reason that people leave dollar stores, and other discounters, in better times is because the stores don’t feel as good.  Everything about the dollar store concept, the fixtures, the lighting, the signage, the merchandising is a reminder of the fact that you really need to shop there because things aren’t so good.  When things are better, shopping there is like a savings adventure, a treasure hunt if you will.  But when you have to shop there it means something different.  So when finances improve and the rations are over, shoppers are eager to get to the nicer store.  It’s is a physical indication that things are on the rise – it’s worth the extra dollars for the indulgence that you have been deprived of for so long. 

But what if spending an extra dollar on a child’s toy is communicated as an indulgence?  Spending an extra two dollars on yourself or a friend could be a comforting indulgence when things are in wait and see mode.  Although, raising the retail design standard in a dollar store could take away the discount image that makes people feel like they’re getting a good deal, it could also make people feel inspired to spend just a little more to get that inspirational feeling that everyone needs when things are scary.

Connecting with shoppers now, in today’s buyer’s market, could be costly.  In-store communications is going to be the most cost-effective option.  However, stores need to decide if it’s worth it for them to examine the psyche of their shopper and then invest in adjusting to it while they have a captive audience.

Posted in Activation at Retail, Retail/Market Trends, Specialty Retail | Tagged , , , | Leave a comment
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