Effects of Omnichannel Promotions on Retail Profitability

 

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Amazon is saturating the market with new ways to keep customers shopping with them. The recently passed shopping holiday, Amazon Prime Day, garnered record sales numbers, surpassing Amazon’s Black Friday and Cyber Monday. Results like these are causing brick and mortar retailers to think more strategically on how they compete against Amazon and other online-only sellers.

Many retailers are looking to omnichannel selling as the next differentiator. Retailers like Macy’s, Bed Bath & Beyond, and Home Depot regularly leverage promotions and coupons to encourage in-store-only customers to shop their website and vice versa.

Harvard Business Review, in an article on making the most of omnichannel retailing, discussed research from a Temple University team to gauge profitability of omnichannel promotions, with special emphasis on one particular variable influencing customers’ decision to shop in-store or online: proximity to the nearest store.

The researchers randomly selected 56,000 members of a Chinese department store’s loyalty program and sent targeted coupons based on their shopping history:

  • Coupons redeemable in-store only
  • Coupons redeemable online only
  • Coupons redeemable in either channel

The control group was sent no coupons.

For a week, the researchers monitored the targeted group’s purchases and their effects on the retail chain’s profits, net of coupon costs, etc., segmenting customers based on their distance from a physical store location.

Shoppers who live within 5km of a store were found to be insignificantly impacted in their shopping behavior by coupons.

For shoppers who live further from stores and who had previously only shopped online, profits doubled with the in-store-only coupon, and increased 800% with the omnichannel coupon.
Profits fell by 51% from commuting shoppers who previously purchased only in-store but were given coupons redeemable online only.

The study concluded that omnichannel promotions are more profitable when drawing online-only shoppers to stores, where environmental influences like impulse buys and the ability to try on and experience goods like apparel, makeup, and shoes increase purchase likelihood. Comparing prices, too, is more tedious in stores than online, so shoppers are more likely to purchase what’s in front of them in the aisle.

Another effective strategy for using coupons to bring shoppers in-store, as seen at Walmart and other retailers, is offering free shipping for in-store pickup options rather than home delivery.

“If customers come to your [physical] stores regularly, you should not encourage them to shop online,” said Xueming Luo, marketing professor at Temple University who led the research team.
In light of retail commentators recommending store closures to deal with lost profitability against ecommerce, this research brings surprising good news to retailers looking for ways to optimize their omnichannel retail strategy. Retailers recognize a key factor that observers overlook: it assumes sales from a closed store will become online sales – but those sales are in fact extremely difficult to win back.

Luo point out marketplace evidence reinforcing advantages of physical retail for an omnichannel strategy: formerly online-only retailers (Amazon included) are investing in brick and mortar locations. “Online shopping is very goal-oriented and transactional,” Luo says. “Traditional retailers’ strength is the in-store shopping experience, and they need to play that up.”

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Going omnichannel?

See how you can unify your data and retail technologies with Retail Pro to get a 360 degree view of your business and build your omnichannel tech strategy today.

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Introducing the new Retail Pro Webcast: All Things Retail

Have you wondered what will you gain by switching to the latest Retail Pro software?

Regardless if you have been a Retail Pro user for years or are a retailer looking to retire your other tools in favor of this world-class software to improve your operations – either way – our new webcast series was made just for you.

Every other week we will get together for a quick 5 minute chat on how your team can accomplish their daily retail operations more efficiently with powerful functionalities in the latest Retail Pro software.

  • Replenishment
  • Promotions
  • Orders
  • Disbursements
  • Customer management
  • Send Sale & Fulfillment
  • Open & Close Day Procedures
  • And many others….

Tune in to our Retail Pro YouTube channel, subscribe so you never miss a webcast, or just watch Episode 1 here today! First webcast is on Open Day procedure.

 

 

 

5 Years of Tech Innovation Later, Retail IT Turns to Optimizing Operations for Better CX

Much of retail strategy has been locked in on improving customer experience with customer-facing tech innovations. This year, retailers are improving customer experience from the inside out, starting with their retail operations.

 

Retailers are Still Catching Up to Trends from 5 Years Ago

 

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For the past half-decade technologies at NRF’s Big Show focused on improving customer experience with tools like in-store mobile and trends like omnichannel and its latest evolution, unified commerce. Technology trends keep evolving to address retail challenges, with more complex solutions debuting every year. Exhibitors at this year’s NRF technology expo made admirable attempts at showing retailers how AI and virtual reality can augment the store experience today.

It’s true that some retailers, notably Rebecca Minkoff and Amazon’s strategic dabble in brick and mortar, are experimenting with headline-landing technologies: a luxury spin on RFID-driven self-checkout for the fashion brand and just-walk-out convenience for members at Amazon Go.

But even these innovations are reflective of the same core concept pulsing at the heart of retail this year: optimizing operations for greater efficiency (which leads to a better customer experience).

In reality, most retailers are still trying to catch up to trends set at NRF – tying together disparate data sources, gaining more visibility in their operations, and applying that understanding to improve their processes.

Retail just doesn’t evolve as fast as technology.

But each small step taken toward building a strategy on modern technology is an objective gain for both cost-saving efficiency in the business and customer experience.

 

The Best Customer Experience Resource for Retail this Year: Your IT Team

 

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When we think customer experience, we picture the actual interaction in stores. But so much has to go right behind the scenes before a retail associate can actually give customers the personalized attention they want!

And wrangling the tangled web of retail technologies is no easy task, so retailers’ IT teams are hands down the most valuable CX resource.

Let’s be honest – the plethora of tech options out there in the wild helping retailers improve customer experience have left retail IT teams mopping up after the tech revolution. But the turn to optimizing operations will actually help CX. Enterprise retail on the backend is addressing security concerns and integrating data and technologies to create memorable retail experiences.

 

Customers Appreciate When You Keep Their Credit Card Data Secure

Much of a customer’s experience with a retailer is taken for granted and is only missed when it’s compromised – like credit card security. 2016 saw an alarming number of POS data vulnerability in large retail and technology companies, including giants like Target and Oracle.

Retailers are always playing the defensive game here and the technology decisions retail IT teams make can help fortify retail data against cyber terrorists.

Some POS software is more effective at lifting the PCI compliance burden for retailers. Using out-of-scope POS and retail management software like Retail Pro – meaning, the software never touches credit card data – together with integrated payments can reduce retailer liability and keeps customer data safe.

 

Customers Just Want to Believe You are One Unified Brand (Not a Disparate Retail, Outlet, and eCom Retailer)

Serial shoppers often will frequent each of a retailer’s channels, scouting for the prettiest or most convenient option for the best price and experience. They expect to see a retailer’s inventory online so they can plan purchases around their schedule, and they are frustrated beyond measure when faced with retailers’ channel limitations – like store associates refusing to accept returns of ill-fitting online purchases because they can’t look up the online transaction, for example.

Retail IT teams inherited the challenge of integrating product and shopper data between POS and eCommerce. The ability to lookup inventory availability improves customer experience and comes from a unified data source on the backend.

Helpfully for retailers, this also connects data between shoppers’ research-related activities on the retailer’s website and actual conversion. Having visibility in to integrated data gives greater insight to optimize bottlenecks and improve the sales process, especially in stores.

 

Customers Like Using Mobile and Wish You Would Too

Customers have been using mobile in stores since the first iPhone. Retailers, however, have been slow to reciprocate with mobile software, and are losing opportunities to personalize the customer experience with real interaction.

Mobile as a retail trend will soon reach prehistoric status, yet it’s only just beginning to inch its way out of the back office to be used as a customer-facing tool for engagement on the sales floor. Part of the reason is the added IT complexity of configuring and managing multiple devices. But part of the pitfall is simply that retailers have not yet formed a clear strategy for how they will use mobile in their stores.

As retailers are adopting modern POS to replace or augment legacy systems, software with device agnostic flexibility is becoming top choice. Consistent software between fixed and mobile POS decreases employee learning curve, thereby increasing probability of adoption and actual use.

 

Mobile and omnichannel and integrated payments have been trends long discussed at NRF. This year, as retailers turn their focus inward toward internal, structural evolution and evolving their process and procedures, these trends are actually (finally) being reality.

 

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Helping retailers optimize retail and unify commerce | #nrf17 

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Helping you optimize retail and unify commerce. That’s what we’re all about at Retail Pro.

Whether your focus for 2017 is to increase efficiency on the sales floor or back office, improve your customer experience, go mobile, go global, or go unified, we’d love to help you do it.

Request a demo today or visit us at NRF to share your story and see how Retail Pro can help you optimize your retail business.

NRF’s Big Show | January 15 – 17 | Retail Pro Booth #4025

Will we see you at #nrf17?

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Hi there!

Just a couple days left until NRF’s Big Show! If you’re going, we’d love for you to come by our Retail Pro booth #4025 to say hello!

Until then, safe travels! See you soon!

Schedule an NRF meeting with Retail Pro

Here’s what you’ll see

You’ll see the modern, flexible Retail Pro retail management software that brands like Under Armour, Puma, Frye, Oakley, Samsonite, and L’Oreal use to increase efficiency in stores and across channels, create an awesome customer experience, and unify commerce – profitably.

These are just some of the Retail Pro capabilities that help you optimize retail. Come by our Retail Pro booth #4025 to see how Retail Pro can help YOU optimize your retail!

Learn more on our website
 


 
On the Sales Floor
 
In the Back Office
 
All Over the World
 
  On the Sales Floor   In the Back Office   All Over the World  
 
POS
Customer Mgmt
Employee Mgmt
Inventory Mgmt
 
Replenishment
Promotions
KPI Reporting
Multi-Subsidiary
 
Multi-Region
Multi-Currency
Multi-Language
Multi-Tax
 

How to create awesome customer experiences

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The experience you create in your stores and the way you treat your customers impacts how likely they are to shop with you again.

Find out how luxury luggage retailer Rimowa makes their customer experience awesome at every touchpoint. Then, book your NRF meeting to talk with us in person about how Retail Pro can help you create your customer experience!

Book my NRF meeting now

 

3 Tips for Using Your Retail Data to Attract More Customers

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For retailers, much of the work that goes into making a sale is done before your customer ever sets foot in your store. Here are 3 tips for using your retail data to attract more customers.

 

1. Use outbound marketing as a targeted follow-up to inbound marketing.

Fresh, high-quality content is available to sales prospects 24/7. Whether it’s on the web, in stores, or via email, information is out there, waiting to be consumed by eager customers. Savvy retailers are using their content assets to attract customers, and it’s working: Interesting, relevant material attracts leads to a business’ site, social media presence and/or store. That content must position your company as a market leader. Valuable content that informs the customer is key. The more specific your content, the more focused you can be.

2. Collect data on your customer.

To really provide such highly focused, relevant content, you must understand customers’ interests and tastes, as well as their demographic information. Only then can you tailor both your content, which attracts customers, and the message, which will be used to close the sale. Outbound marketing only succeeds when it reaches the appropriate audience. Personalized campaigns can go a long way when you are courting a customer. Let the data you gather help inform the way you engage with customers.

3. Use predictive analytics.

Look back and use past performance to gauge future sales. Predictive analytics examines a variety of data and then systematically offers the makeup of the best leads. Big data crunching can help find those sweet spots invisible to the naked eye. In addition, sales teams knowledgeable in the science of data analytics can gain insight into purchasing triggers. Paying attention to small triggers can get your retail marketing campaigns out ahead of the competition’s.

 

 

 

Visit Retail Pro at NRF booth #4025 Jan 15-17!

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For more than a decade Retail Pro has been an NRF show-favorite. Some years were highlighted by innovation ideas, others with launches of products that are well ahead of their time.

This year, our goal is to help you settle the dust on industry hype.

Get a stop at booth 4025 on your calendar to see how with Retail Pro you can optimize your operations and profitably unify commerce.

 

NRF meeting

 

 

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Battery Life Important for mPOS Success at Holiday Time

 

Personalize every shopper experience with Retail Pro Prism

Mobile POS systems are becoming increasingly important to many retailers.

With the Christmas season just about officially starting, retailers are readying the last few tools needed to make point of sale transactions as efficient as possible. One area in need of improvement is the battery life of mobile POS devices.

Often used for “linebusting,” mPOS is a great way to ensure customers have a smooth, expedited checkout experience. It’s also a terrific means of engagement with customers on the sales floor. Many retailers have transformed the customer experience by integrating mPOS into the checkout.

But the batteries used in the tablet devices are notorious for having short lives.

Retailers with extended sale hours, for example, would need to have mobile battery packs on hand to keep devices functioning, even if it they were fully charged when doors opened. Few things are more frustrating than missing out on sales because there is no way to authorize transactions.

Larger retailers and those handling greater numbers of transactions – holiday rush, anyone? — are seeking longer battery life to reduce the need to recharge. That way, store staff can transact sales continuously for an entire shift, reducing overall recharging requirements as well as the number of devices retailers need to keep on hand.

Overall, battery life in consumer electronics is constantly being upgraded. Today, for example, laptop battery life is roughly two and a half times longer than it was in 2012. So it’s logical to assume that mPOS battery life will ultimately improve as well.

To that end, manufacturers are debuting new products that have batteries that can be swapped out easily for rapid replacement, along with docking stations that can be used to simultaneously charge not only mPOS devices but also the accompanying mobile or tablet devices.

Other improvements are on the horizon as well: Often, mass market devices are not durable enough to withstand the hazards of the sales floor. Spills and drops leave many merchants with broken devices, and software or connectivity malfunctions are sources of further frustration. Many retail merchants are therefore migrating from popular commercial hardware to more purpose-built retail solutions. Ruggedized solutions (from Panasonic, for example) are becoming popular also.

Implementing tools that can reduce line time and improve the customers’ interaction with sales associates is, of course, a move in a positive direction. Retailers need to be aware of potential pitfalls brought on by poor battery life and be ready to quickly circumvent any problems that arise.

Ironically, new technology that fails can irritate customers more than the previous “old system.” So, until improved battery life is commonly available on mPOS devices, make sure your equipment is fully charged, and you have spare battery packs or devices on hand.