Author Archives: Jennifer Bosavage

by Jennifer Bosavage

What Affluent Shoppers Want in 2016

For the wealthiest Americans, 2016 is coming up roses.

According to a recent report from the American Affluence Research Center, the top 10 percent of U.S. citizens have a positive outlook regarding their personal net worth and income. Two million households with a minimum $1 million net worth took part in the study. This group of affluent people account for roughly 40% of total consumer spending.

High-end luxury items are seeing strong sales.

High-end luxury items are seeing strong sales.

Nearly half (46%) of the participants have some large purchases in mind, such as new auto, a cruise, a home remodeling project, and a primary or vacation home. However, 32% of the affluent responded that they plan to defer or reduce expenditures during the next 12 months — an all-time low for the metric.

Affluent households were forecast by the National Retail Federation to spend $33 billion for December holiday gifts or an average of $2,773, which is approximately four times that of all households. But, while a merry Christmas may have been had by the uppercrust or top 10 percent, the air is about to become even more rarified. As the stock market continues to be volatile and threats of terrorism plague tourist locations, the top one percent of consumers will likely be the sweetest spot for retailers.

That’s because the “one percenters” are least likely to be influenced by any of the ripples that would make most mortals quake in fear: Job loss, Wall Street fluctuations — those are largely inconsequential to this shopper breed. But what it does have in common with the general population is a sense of the type of retail experience they want. They are looking for shopping to be easy, convenient, efficient and tailored to make them feel unique. Easy, yes, but not without style.

The super rich seek a meaningful and personalized the shopping experience. Retailers aiming to serve the niche should not only have well trained staff on hand, but also technology tools that will help them to impress their clients. For example, mobile devices for every associate is a start, but how does that help the customer looking to buy a Rolex? The goal should be to gather all the customer data that is collected in real time, analyze it and then provide pertinent suggestions and promotions based on customer context.

It’s a tough row to hoe: High-end clients may think they want the ease of an Amazon, but they often want far more attention, especially if the purchase is pricey or complex. By using data including past purchases and online browsing history, retailers can glean insights to customers shopping behavior that makes the shopping experience relevant.

Of course, interpersonal relationships will still be crucial for sealing the deal. How better to accomplish that task than through technology? Customer relationship management software and data analysis can help associates learn about customers’ tastes and build relationships. Purchases can be tracked and information used to offer tailored loyalty rewards. Ironically, an associate that uses technology to glean customer information can make the personal touch even more meaningful. And offering personal service, custom-fit for every shopper, is the key to enriching and improving revenue in the affluent shopper segment.

by Jennifer Bosavage

3 Technologies Retailers Need In 2016

As we are in the last hours of 2015, it seems like an ideal time to reflect on three technologies that made a large impact on retailers this year, and that are poised to make a “huge”— to use a word commonly used by one certain presidential candidate — impact in 2016. Retailers looking to increase visibility as well as revenue should consider these implementations.

1. Beacons and geofencing
Beacons give retailers visibility over foot traffic, in addition to the ability to push relevant information to consumers’ smartphones.

Geofencing lets retailers promote products when shoppers enter a specific, predetermined area. It’s not difficult to see how these technologies can complement each other and drive quality customers through the door. However, geofencing works best when used in combination with beacon technology, and can provide a more complete view of customer behavior. Retailers are beginning to see the potential; according to luxurydaily.com, investment in geofencing will reach $300 million by 2017. The challenge for retailers is to get customers to enable location services and bluetooth on their smartphones. Such services use battery power and, to some, bring up privacy issues. Given the proper incentives by retailers, much of that resistance can be overcome.

2.  RFID
Yes, this technology has been around–and around. But it’s time to shine has finally arrived. Juniper Research recently reported

RFID tags can be used for a number of retail purposes.

RFID tags can be used for a number of retail purposes.

that Internet of things (IoT) technologies will be implemented by far more retailers in 2016; the firm expects merchants will spend an estimated $2.5 billion in hardware and installation costs, nearly a fourfold increase over this year’s estimated $670 million spend. And RFID is a part of that investment. RFID helps retailers with in real-time asset tracking, reduced labour costs and even dynamic pricing according to stock levels and online pricing. Software applications are catching up to what this veteran technology can offer. Linking the potential capabilities of RFID tags with beacons and geofencing promises more thorough business insight and an improved customer experience.

3. BOPIS: Buy online, pick up in store
Shoppers are looking for ways to streamline their lives, just like retailers want to make their operations more efficient. By facilitating “strategic strikes” — shopping trips that are meant for specific items, in which the customer is a buyer, not a shopper — retailers cultivate goodwill. A customer who knows a trip for a specific green sweater will be met with success and will require minimal waiting on a checkout line is likely to return. Look for BOPIS to evolve to include curbside pickup. Target and Kroger recently rolled out curbside pickup services in some locations, while Sears has expanded its in-vehicle curb services to include returns and exchanges. Curbside services acknowledge that the customer is patronizing the store for a specific reason and does not want to go inside. Rather than fight that fact and risk antagonizing customers with offers to “come inside for…” smart retailers are accommodating the desire to pick up merchandise and leave. They recognize that they’ll be back again, either for a quick trip or an extended visit. Either way, a sale is a sale.

 

by Jennifer Bosavage

Retailers Go the Personalized Route

Half the battle for success in retail is getting the customer in the door or on the website, followed by the challenge of closing the sale. According to MyBuys research, highlighted in Personalization Comes of Age, 75 percent of shoppers would buy from a merchant if they received a discounted price on the merchandise. In addition, roughly the same number would buy online if a special offer including free shipping was provided.

Seems obvious that customers want to hear from retailers with pertinent information. In other words, they want to know more

As merchants streamline their multichannel store operations and focus on enhancing the customer experience, many shoppers are choosing to return to stores to make their purchases.

As merchants streamline their multichannel store operations and focus on enhancing the customer experience, many shoppers are choosing to return to stores to make their purchases.

about products and services in which they’ve expressed prior interest.  Busy people appreciate a quick reminder about products left in shopping carts — or even about those they may have been researching — especially if a purchasing incentive comes with that reminder. Discounts or other benefits, coupled with personalized messaging and recommendations can provide customers information that will help them determine that the products they’re considering are just right. A substantial number, 70%, of shoppers want recommendations on retailers’ web sites: It’s always nice to corroborate a potential purchase.

That feeling of purchase satisfaction can’t be underestimated. The MyBuys research found that few shoppers (27%) buy when they perceive they are “settling” for a product. It’s not enough for them to purchase something “just like” the one that’s desired. “Close enough” just doesn’t cut it. Therefore, to achieve true customer satisfaction, it’s crucial for retailers to supply messaging that not only corroborates the purchaser’s decision, but also makes it an undeniable value.

Of course, the retailer must be conscious of not overstepping boundaries, which may not always be intuitive. For example, while MyBuys reported that 39% want to receive personalized messages on social media, such as in a Facebook stream, they may not want to be greeted in-store with the same message. It’s one thing to be wished “Happy Birthday!” in an innocuous post from a retailer on Facebook, but another, more unsettling, experience to be told that by a store associate who is a stranger. However, couple that social media greeting with a “get 10% off on your special day by mentioning this Facebook message,” and the retailer will likely be rolling out the welcome mat that day.

Proximity marketing, enabled by beacons and bluetooth technology, are also excellent ways of drawing in customers. New data from Juniper Research found that retailers will spend an estimated $2.5 billion in hardware and installation cost of such Internet of Things technology by 2018. MyBuys found that 39% of those surveyed welcome mobile advertising, such as proximity marketing, and that number is likely to grow as installations increase.

Retailers will look to beacons and beyond in 2016, and continue to invest in data science and analytics to better serve customers both in-store and online.

by Jennifer Bosavage

Digitally Connected Display Screens Are a Sign of the Times

Consumers are accustomed to seeing large display screens in retail stores, but those screens are rapidly evolving to not only provide supplemental information on products but also to predict what products a particular shopper might want to buy.

In North America, retailers are taking advantage of the benefits of Internet of Things technology by implementing solutions that help them monitor and interpret their shoppers’ behavior. In-store contextual marketing is gaining popularity as retailers aim to capture continuous, real-time streams of data. That information comes from mobile devices, online customer activity, in-store Wi-Fi routers/beacons as well as video cameras. Acting on the intelligence that information provides can result in an omnichannel experience for customers in which e-commerce and traditional retailers are interested.

Store displays highlight retailers' products.

Store displays highlight retailers’ products.

Digital signage initially was a one-way street: Stores pushed out information on merchandise to all shoppers. Today’s technology lets retailers be far more discriminating: Content can be tailored and can change depending on the customer viewing the display. The display itself can be equipped with sensors that can detect the height or even facial characteristics of a passerby, and deliver customized information. Such real-time adaptation can maximize a retailer’s potential profit.

According to the International Data Corp., the use of digital signage in retail outlets will increase to $27.5 billion in 2018 from $6 billion in 2013. That’s a 35.7 percent five-year compound annual growth rate. And it underscores the important role digital screens can play in the customer experience.

No longer are screens glorified televisions, relegated to keeping customers entertained while standing on checkout lines. Today’s screens can be programmed with content selected and even created by the retailer. Grocers wanting to beef up sales of steak can program content showing barbecue recipes. But even more than that, beacon technology can be integrated into an IoT signage system, providing retailers the means of offering customers discounts and product information that can be displayed. Signage can even tell what areas are “hot” in a particular store and through the use of heat-mapping technology, can upsell items based on those identified high-traffic areas.

In addition, signage is becoming more interactive. Touchscreen navigation can provide customers with relevant and personalized content, the ability to check inventory, or speak with an associate using video conferencing. Connecting to social networks and displaying customer’s posts is another way of connecting with customers, particularly Millennials.

Digital Signage Today reported that, according to InfoTrends, digital signage has increased brand awareness by 47.7 percent, purchase amount by 29.5 percent, sales volumes by 31.8 percent, repeat buyers by 32.8 percent, and in-store traffic by 32.8 percent. Around the world, retailers are discovering the many uses of digital signage, and the advantage of connecting the technology to the Internet of Things. The content fills a void in situations in which salespeople are unavailable. Signage is a piece of the IoT puzzle for retailers, and it can be used as a helpful tool to provide the service and extraordinary experience customers crave.

by Jennifer Bosavage

Digital Store Must Keep Customer Top of Mind

While digital business will influence every part of the retail experience in the near future, it’s important for stores to recognize that the customer — not technology — will still be the star of the show.

Enhancing customer satisfaction begins with a well-run operation.

Enhancing customer satisfaction begins with a well-run operation.

Sure, the digital store will use technology to excite customers and to streamline store operations. But, as analysts at the  Gartner Symposium/ITxpo 2015 noted, delighting the customer is job #1.

And that is logical, for without a happy, satisfied customer base, a retailer has no foundation. To begin with, retailers must cover the basics: Does the store have sufficient inventory? Are the store associates pleasant and available to serve the customers? Is checkout hell on Earth?  How smooth is the return process? Without those pillars in place, a retailer is stuck constantly trying to invent itself. Customers won’t wait for a retailer to “figure it out,” they’ll simply take their business elsewhere.

Technology can help bolster those pillars, making them strong enough to withstand product shortages, labor issues and other challenges.

“Well established technologies, such as electronic shelf labels and RFID used in the past in the back office for stock management, are now being used in innovative ways at the front end to enhance the customer experience,” said Miriam Burt, research vice president at Gartner. “Retailers need to evaluate how these ‘old’ technologies can be used in conjunction with newer applications of technologies such as NFC, augmented reality and smart machines for robust execution of the in-store basics.”

Once the basics are nailed down, retailers should determine how they can make their customers feel special, valued and appreciated. Historically, coupons were used to thank customers. And in the 1930s, S&H Green Stamps ushered in the first “loyalty rewards” program, with shoppers collecting stamps as a reward for making purchases, and eventually trading those stamps for other goods. Today, technological personalization and innovation can be combined to offer shoppers incentives for their continued patronage. In-store beacons, for example, offer shoppers personalized deals, discounts, recommendations and rewards based on how the shopper has been interacting in all their channels.

Today’s retailers have the opportunity to use technology, and to connect multiple systems in an effort not just to provide shoppers what they want, but to help them enjoy and enriched retail experience. In addition, that experience must reach across channels, with online complementing the brick and mortar experience, and vice versa. That means not duplicating the experience, but to offer a seamless journey, one that can pick up where the other left off. That’s the type of technology-enabled service that will have customers leaving a digital business with a smile.

 

 

 

 

by Jennifer Bosavage

When Big Macs Meet Big Data

McDonalds is joining other fast-food restaurants in automating the ordering process. But at the Golden Arches, it’s happening (for now) mainly in Europe, where 7,000 touch-screen kiosks to perform cashier duty. The touch screens will only accept debit or credit cards.

In the United States, McDonald’s home base, the company recently added 62,000 employees. However, if the kiosks work well across the Atlantic, it stands to reason they’ll be here pronto. The kiosks should increase efficiency and make ordering easier for customers. McDonald’s is a company that tests its outlets on timing and accuracy, at least in the United States, using secret shoppers — so it takes satisfaction seriously.

The system will also be an excellent source of customer data. How many meals are sold? A la carte items? Do people really want an apple pie with that? That could help McDonald’s refine and expand their menus and potentially cater to regional tastes.

We shall see how quickly the kiosks move stateside. But the U.S. has not been shut out entirely; the fast food giant does offer, in select markets, a build-your-own burger kiosk. That’s a digital display in primarily California outlets but also in NYC that lets customers select from various ingredients and make their own creation. The chain has come a long way from what made it popular to begin with: Mass produced food that was uniform. Sure, it’s still relatively cheap and it is certainly speedy, but technology has allowed McDonalds to answer the call of consumers requesting their unique culinary demands be met.

The global interactive display market is expected to reach a value of more than $14 billion by 2020, according to research by Markets and Markets. That’s a huge opportunity for kiosk makers and solution providers, but it also means that retailers should start looking for opportunities in which a display or kiosk can enhance the customer experience — before the competition does.

by Jennifer Bosavage

Target’s Bull’s Eye Focuses On Local Customers

In the world of brick and mortar retail, bigger is not always better. Boutiques that specialize in catering to a particular shopper have long found that focus on their core customers is lucrative. Now Target is trying that model on for size.

Smaller Target stores have been around in cities for a little while, because the small footprint allowed the store to fit into a cityscape. When there’s no room to build a mega store, Target took advantage of a city location, but pared down its offerings in a “Target Express.” Today, all the mini stores are rebranded as “Target,” and the retail merchandizing is focused on serving the specific needs of local customers rather than trying to provide a wide variety of tastes. The Washington Post recently wrote about the new Target in a Arlington, Va., neighborhood.

Target has long made use of data analysis to target customers through the mail, offering coupons and specials to individuals based on

Retail customer intelligence and other forms of data analysis can help businesses target their advertising and optimize store operations.

Retail customer intelligence and other forms of data analysis can help businesses target their advertising and optimize store operations.

their shopping histories. Now the department store is aggregating that information to create shopping experiences that are customized for the local shoppers. So, for example, does research show there are several local knitting groups? Check out the organic cotton yarn in our craft section. Lots of nursery schools? See the expanded children’s book section. Landlocked city with no hunting or fishing clubs? Save the rifles and reels for another store.

Target seems to have learned a great deal from its debacle in Canada, where a lack of quality market research resulted in the retailer stocking irrelevant products. Management didn’t recognize the difference between U.S. shoppers and their Canadian counterparts, and the expansion was a flop. The move into micromarketing the smaller stores indicates an intent to offer shoppers a quick and easy way to find products they have in mind, rather than foster more of a browsing experience.

Such an approach means a good deal of curation by management. Determining what products will appeal most to the demographic requires data analysis, not only of purchases within the store but also of activities within the community. In a way, it is similar to the charter of a local daily newspaper: The news of the day takes on relevance only as it relates to the community. For example, a day care center opening is of interest to that city’s residents, but not to those of the state. Further, that center’s opening would indicate more children in the neighborhood, and a local Target might beef up offerings targeted at children, as well as their mothers.

Target is the nation’s sixth-largest retailer, with $73 billion in revenue last year. Once a powerhouse among style-savvy shoppers, it has lost its cache in recent years, mainly due to a faltering economy. But shoppers it may have lost to lower priced chains, such as Walmart, may be lured back as the economy rebounds and Target once again regains its reputation as being “in the know” about its customers’ tastes.

by Jennifer Bosavage

Amazon’s Brick and Mortar Is a Bold Marketing Move

Online retail giant Amazon recently opened a brick and mortar store. The ecommerce behemoth has ventured into territory where others have failed to trun a profit — RIP Waldenbooks and Borders.

But what if the stores aren’t aiming to make money, at least not primarily? What if, instead, the store is ramping up as a marketing tool for Amazon?

Amazon is one of the few large retailers to grow faster than smaller merchants.

Amazon is one of the few large retailers to grow faster than smaller merchants.

So far, only one book store has opened its doors, at that’s in Seattle. Most of the news reports have mentioned the store’s unconventional way of displaying books: front cover outward. That, of course, lessens the number of books on display, but online shoppers are accustomed to being “greeted” by a book’s cover, rather than its spine. It makes sense to me there might be a correlation between seeing a cover and buying a book.

That’s not a new idea; independent booksellers have — and do — display books that way, but it does limit how many books can be kept in stock. But criticizing Amazon for making such a “retail newbie” mistake, as some have, is ridiculous. Only 5,000 to 6,000 books will be sold at Amazon Books, a small number compared with other bookstores. But Amazon seems to be using the stores as a physical implementation of “suggested for you,” as it offers 32.8 million books for sale in varying formats: paperbacks, hardcover, Kindle, audio CD, board books and audio books. Clearly, it via its omnichannel strategy, it can provide any book desired.

Indeed, some of the criticism seems petty, but booksellers are smarting from 20 years of online competition for which it was unprepared. Some suggest there’s not much new going on in the stores, citing, for example, the brief recommendations from Amazon reviews on cards by each book (hand-scripted employee selections are staples in independent bookstores). Seems to me that’s simply implementing a best practice of making a personal connection using a low-tech method. As author Charles Caleb Colton said, “Imitation is the sincerest form of flattery.”

Others have suggested the store set-up is not conducive to shopping, noting, for example, the tables were placed too close to the entrance, discouraging browsing. But most people don’t go to the bookstore for a quick hit — it’s generally a destination. That doesn’t mean shoppers want to play hide and seek. Allowing customers to find a book quickly makes them happy, and should not dissuade them from shopping further.

In fact, reports on the stores seem to indicate Amazon is attempting to put the customer first. Making the atmosphere appealing with books easy to find, and at prices in line with those online seems to add up to a positive customer experience. A bit of the fault-finding is unsubstantiated, like the inference the stores will not have knowledgeable staff members. Take the comments of John Mutter, co-founder and editor-in-chief of the book industry newsletter Shelf Awareness in GeekWire:

It’ll be interesting to see how the book retailer that relies on algorithms and readers’ recommendations and cold sales metrics will do in a brick-and-mortar space, where customers are used to dealing with booksellers who love books and have a lot of personal knowledge of the kind that is opposite of Amazon’s corporate approach.

It will also be interesting to see how brick and mortar responds to Amazon’s algorithm of customer service, price and selection, this time in “real life.” After years of missed opportunities to engage customers, perhaps it is this push by an online giant, which heavily relies on business intelligence, that will spur booksellers to try and to implement new ways of delighting their customers.

by Jennifer Bosavage

Moms More Likely To Be Mobile Shoppers

Retailers catering to the “mom market” should be happy to hear that this segment is now more likely than previously to complete a purchase using a smartphone, according to a new survey from BabyCenter. Previously, mothers used their mobile devices primarily to compare prices and find coupons. Today, they are using mobile throughout the buying process.

The BabyCenter study is particularly interesting because it highlights a significant shift in buying behavior. According to the research:

In just one year, there has been a 33% increase in moms using their smartphones for making actual purchases, with 64% of moms saying that they had completed a purchase via mobile in the last month, in comparison to 48% who said the same in 2014. In addition, 70% have used their smartphone for shopping while they were inside a physical store, with 48% saying they would purchase items via their device if they could not find them on the racks.

In addition, 58% said they use a retailer app, up 14% from last year. In total, all of that data speaks to the importance of having an app that is optimized for mobile shopping.

Mothers are increasing using smartphones to purchase.

Mothers are increasing using smartphones to purchase.

Retailers must understand how aggravating it is for customers to be using a mobile device and  landing on a Web site that takes forever to load, with teeny tiny font size and is difficult to navigate. Few shoppers are patient enough to pinch, zoom and scroll to read about any product. It’s often easier for prospects to leave a site and go to a competitor’s. Inconvenience is an excellent motivator. A mobile site should load in less than three seconds and be easy to maneuver.

Mobile optimization is not optional — it’s mandatory. Providing superior user experiences is job one for retailers, online as well as off, and is an important differentiator for retailers. Providing an excellent online experience clearly increases user satisfaction and boosts loyalty: For example, customers bookmark sites they enjoy using. Retailers that do not require too much typing (cited by dd% of BabyCenter respondents) and offer conveniences such as one-click shopping (cited as an attractive feature by 40% of respondents) will reap the benefits of cultivating a loyal customer base.

by Jennifer Bosavage

Predictive Analytics Helps Retailers Pluck the Needle From the Haystack

Although business analytics helps retailers create more up-sell and cross-sell opportunities, sifting through all the data that is collected is a painstaking job. Going one step farther and determining relevant connections is even more arduous.

Retailers ready to embrace the power of analytics begin by layering transactional and behavioral data in order to create extremely smart and contextual customer profiles. That then lets retailers improve the customer experience through personalization and intelligence-based decisioning.

“Salespeople are investing their time poring through a heap of possibilities to find the good ones,” Eric Siegel, author of Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die, told the Harvard Business Review. “If sales is a needle in a haystack, analytics can make the haystack a whole lot smaller.”

That’s where predictive algorithms come into play. Those mathematical models use past buying behavior and other data to discover insights and predict outcomes that are important to retailers, such as the odds of closing a deal, the most suitable cross-sales opportunities and approximate deal value. That’s the type of information that saves salespeople time — and, as the adage goes, time is money.

Predicting the future isn't so much of a fantasy, anymore.

Predicting the future isn’t so much of a fantasy, anymore.

Most often, transactional data has been leading the charge at retailers. That information is numbers driven, structured and stored in databases and provides insights into how products are related through co-purchases and how shoppers and products are related. It’s that type of data that has been more commonly used to drive promotional marketing, such as targeted email campaigns.

Behavioral data complements transactional, but is unstructured. Much of it is text-based, and can be found in blogs, or social network posts. It describes more than simply “what happened,” but looks at “why it happened.” Therefore, the quality of the data is critical in order for retailers to make reliable predictions. That is a labor intensive process that cannot be ignored.

Scrubbing and verifying all that information is time-consuming because each point at which data streams are tapped, formatted and stored must be painstakingly reviewed. And whenever data is ported to another sub-system, translation errors can happen. So its mission critical that the process as well as the data be conducted methodically and carefully.

Finally, predictive analytics requires retailers to define a goal and work backward. For example, if the goal is to sell more sweaters, the information needed to boost those sales is derived from learning: Who, what and when? And, then determining how the retailer can add value. Predictive analytics can answer each of those questions for each individual customer. A deployed solution would run this campaign in a continuous fashion. Each day in the Fall, as the winter approaches, the campaign would segment a different set of customers that would receive a personalized email based on preferences inferred from past purchasing, or even browsing, experiences. Simultaneously, the system tracks which customers have bought sweaters to offer additional rewards, or to avoid spamming.

Data from online sources such as blogs, social networks and business networks is flooding the Internet. Retailers who can make sense of their sales data and shopper information can better understand their customers , identify trends early, and make better, more informed decisions.