Author Archives: Jennifer Bosavage

by Jennifer Bosavage

How Much Info Is Too Much?

With the rise in mobility, comes an increase in data. And,if it seems to you that virtually everyone on earth has a mobile phone, you’re right: According to the United Nations Telecommunications agency’s most recent figures, more than 6.8 billion cellular subscriptions are in existence worldwide, and that’s pretty close to the world’s population figure of 7 billion. With all those cell phones in use, m-commerce — specifically, using handheld devices to purchase goods and services — is quickly becoming ubiquitous. And with that comes the realization that a whole lot of data is being generated, and cataloged.

With big data capabilities, merchants are using retail business intelligence to improve the shopper experience in their stores.

With big data capabilities, merchants are using retail business intelligence to improve the shopper experience in their stores.

During Tuesday’s keynote panel at the Consumer Electronics Show, “How Mobile Is Fundamentally Changing our World,” technology experts from across the industry addressed how mobile connectivity is transforming business and personal lives. the panel discussion was hosted by John Ford of CNBC, and included Jan Brockmann, chief technology officer and senior vice president of Electrolux; Phil Abram, chief infotainment officer of General Motors; Steve Mollenkopf, CEO of Qualcomm Incorporated; and Jeroen Tas, CEO HISS of Philips. The panelists discussed concerns regarding mobile connectivity, including privacy and data collection in addition to how different sectors are evolving due to the influence of constant Internet access; for example, the smart home, automobiles and the health care industry.

“We are, as an industry, at a very strong point of experimentation,” said Mollenkopf. “People are trying to figure out what are these new categories, how do they work, who’s going to win, what will the consumer understand and what will the consumer put up with in terms of data being taken about their daily lives, and how will we manage that as an industry.”

That last point is key: How much of their personal information will consumers be willing to share, particularly with retailers? And, with the Internet of Things being touted as the “next big thing,” there is concern that the continuous collection of every ounce of data will reveal too much about individuals. Correlating the “just right” pieces of information can unravel a person’s anonymity, exposing information not intended for public consumption.

“This pervasive collection of data inevitably gives rise to concerns about how all of this personal information will be used. Will the data be used solely to provide services to consumers?” said Edith Ramirez, Chairwoman of the Federal Trade Commission in her CES keynote. “Or will the information flowing in from our smart cars, smart devices, and smart cities just swell the ocean of ‘big data,’ which could allow information to be used in ways that are inconsistent with consumers’ expectations or relationship with a company?”

Retailers are in the position to collect huge amounts of data. Consumers should always be provided with clear and simple notices of the proposed uses of their data and a way to opt-in, or out. Where possible, retailers could also de-identify information; data concerning trends in fashion do not need to be personally identifiable, for example. Trends are, after all, general observations. As Ramirez noted, fostering consumer trust is just good business sense.

by Jennifer Bosavage

CES 2015 Will Use Beacons: You Can Get There From Here

File this under putting one’s money were one’s mouth is: Today, the Consumer Electronics Show announced it would be using Beacon technology as part of an indoor positioning system for attendees. The navigation system is powered by Bluetooth Low Energy beacons, and will help attendees navigate the estimated four million square feet of show space.

The technology is similar to that which can be used inside stores to find products or service associates, as well as facilitate mobile payments. An attendee launches the CES app on his or her smartphone and then selects a show destination, such as an exhibitor’s booth. The app directs the user to the destination via beacons that have been placed within the show floor.

Beacon technology is spawning a number of retail projects that will expedite the adoption of mobile payments, as well as energize other areas of the overall shopping experience. For example, Index, which offers technology that analyzes consumer behavior, will support Bluetooth-based beacons to detect a customer’s presence and deliver personalized messages on a countertop iPad or even on the shopper’s mobile phone.

“We are excited to deploy our new indoor location technologies on such a massive scale,” said Marc Wallace, CEO and co-founder, Radius Networks, in a release. One are that the technology could be instrumental in popularizing within the retail segment is gamification. “Radius Networks previously partnered with CES to implement an award-winning scavenger hunt program at the 2014 CES that was designed to drive attendees to key areas of the show floor,” said Wallace. “Since then, proximity technology and the Internet of Things have taken off.  This year, we are excited to demonstrate how easy-to-deploy, low-cost beacons can completely change the way people approach indoor location.”

Gamification could be a big part of drumming up excitement in customers. For example, having customers opt-in to a treasure hunt helps retailers expose more merchandise to shoppers, who might otherwise have opted for a quick, focused shopping trip. Finding that hidden “treasure” might also mean identifying some impulse or add-on purchases, further extending the sale in an entertaining manner.

 

by Jennifer Bosavage

Sometimes, Self-Service Is All the Interaction Needed

Remember the Looney Tunes cartoon with Pepe Le Pew and the little black cat? Poor Pepe struggles with an inability to pick up on the cues that his beloved really just doesn’t want to be bothered. She prefers to remain alone, solo, all by herself — you get the picture. To go about her business as she pleases.

Retail customer trends reveal that consumers still choose brick-and-mortar store locations for a significant portion of their shopping.

Retail customer trends reveal that consumers still choose brick-and-mortar store locations for a significant portion of their shopping.

Much has been made of retailers wanting to free associates from the cash wrap to interact with customers. The theory is that by creating a relationship between associates and shoppers, sales will increase. However, there is evidence that, in fact, in various circumstances just the opposite can occur.

A study last year by the Coleman Fung Institute at the University of California, Berkley, considered two situations. In the first, liquor stores in Sweden converted from full-service to self service format. Researchers found that not only did those stores offer a wider variety of products in the aftermath of the switch, but also that sales rose, particularly of products with difficult-to-pronounce names:

“Products with difficult-to-pronounce names might experience such a sales increase because consumers may fear being misunderstood or appearing unsophisticated if they mispronounce a name when ordering from a sales clerk; once a store introduces a self-service format and eliminates the need to pronounce a name, consumers may become more comfortable pursuing an otherwise mildly embarrassing or frustrating transaction.”

In other words, having sales staff on hand, being personable and forming relationships with customers might, in some cases, have a detrimental impact on sales, as the customer does not want to appear ignorant. That suggestion is supported by the revenue figures: The market share of products with difficult-to-pronounce names increased 8.4% in stores that switched to self-service.

The second environment studied was that of a pizzeria that had just added Web-based ordering to its phone and counter-service offerings. The researchers found in this case that customers’ purchases of more complex items increased, and orders of higher calorie foods also rose:

“The increase in high calorie items might be driven by a desire to avoid negative social judgment of their eating habits, while the increase in the complexity might be driven by a desire to avoid negative social judgment by appearing difficult or unconventional.”

The average order was found to be 14% more complicated, and have, in general, 3% more calories.

Overall, the researchers come to a conclusion that psychologists have recognized for a long time: People avoid social interactions that they perceive to be uncomfortable. While the online pizza orderers may have wanted to exercise more control over accuracy, the report’s authors found that to be a contributing, but not sole, factor in the increase of more complex (and caloric) selections. Rather, individuals change their behavior to put forth a positive image, often to avoid being embarrassed.

For retailers, “forcing” a relationship on those who are uninterested may have the same negative consequences as not engaging a more social customer. So, the next time you push your associates to interact with customers, consider the potential repercussions. While improved interaction provides plenty of benefits, don’t be blind to the potential negative effects. Don’t confuse improved with increased.

All of which underscore the importance of knowing your customer really, really well. Because if you’ve got a little black cat as a customer, the last thing you want to be is an over-attentive skunk.

by Jennifer Bosavage

3 Technologies To Ring In the Retail Year

Retailing incorporates an enormous amount of customer-facing technology, perhaps more so than any other market segment. While other segments certainly use technology, for example, manufacturing, the focus is mainly interna: How can we build things better? In retail, not only do stores depend on technology to reduce costs and improve efficiency, but they also use technology to engage and attract customers. For retail, technology is all-encompassing.

As we look to 2015, a number of technologies will emerge as those best suited to helping retailers achieve their business goals — and that is the true test of technologies worth investing in. Here are three worth noting.

Proximity marketing. Sometimes called “hyperlocal marketing.” this is a successful method of enticing nearby customers — who are equipped with Bluetooth- (or WiFi-) enabled smartphones and have opted in to your marketing program — into a store. In other words, proximity marketing simply uses cellular technology to send marketing messages to mobile-device users who are in close vicinity to a business. Stores are sending ads to customers most likely to buy: They are previous customers who have agreed to receive these messages, and are close to the store. It’s far more targeted than a business who sends a text blast every Thursday to every customer who has opted-in to its marketing program, because of its ability to hone in on location. That text message is unlikely to get the guy who’s washing his car to drop his bucket and run to the store to save 15% on a pair of jeans. But if that guy is 15 feet from the store entrance, he just might go in and make a purchase. NinthDecimal (formerly JiWire) reports that 53% of consumers are willing to share their current location to receive more relevant advertising, and, 63% of consumers feel a coupon is the most valuable form of mobile marketing.

RFID. A properly implemented RFID system pretty much guarantees stock information is accurate. Each item is

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

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

unique, easily identifiable and can be registered with no human intervention. The fashion industry is benefiting greatly from RFID. Take, for example, American Apparel. According to a blog on RFID Arena, this retailer normally supplies online sales from the warehouse. However, when an item is not available in the warehouse, the system checks different stores’ stock levels, finds the item and allocates the order to the appropriate store. The stores become mini-distributors by packing and shipping the goods to the customers. This has a direct impact on customer satisfaction, and is possible because of RFID. With the growing popularity of click and collect — shoppers buying online but wishing to pickup their items in-store — RFID tracking will become even more mission critical to retailers.

Mobile Wallets. Finally, shoppers in the U.S. will embrace mobile wallets, most likely enticed by Apple Pay, available on the iPhone6. Chevron gas stations, for example, have announced they will start accepting the payment early in 2015. Sure, Google Wallet has been around since 2011, but it took the genius of Apple’s marketing to show consumers how simple — and secure — the technology can be. The “tap to pay” phenomenon may reach a tipping point soon. No longer spooked by security breaches at retailers including Target, Home Depot, and Michaels, customers appear comfortable with the new technology. Because Apple’s system, for example, doesn’t save transaction information, customers are less apprehensive about using it to make a purchase at a store.

by Jennifer Bosavage

Three Cool Mobile Apps Consumers Will Use in 2015

As mobile shopping continues to grow — 60 percent of Amazon’s holiday traffic originated from mobile devices, for example — customers are going to start demanding ways to streamline the experience. Today, it’s a treat to find a retailer who has integrated inventory online with its brick and mortar counterpart. And e-commerce sites that offer in-store pickup are also a shopper’s dream. In the coming year, however, those options will slowly but surely become must-haves for retailers hoping to increase their piece of the pie. Here’s a look at three apps that are worth paying attention to in the coming months.

Mobile apps and shopping sites offer a great deal of convenience to consumers, but retailers should keep the customer experience in mind when implementing their mobile options.

Mobile apps and shopping sites offer a great deal of convenience to consumers, but retailers should keep the customer experience in mind when implementing their mobile options.

Curbside

The Curbside app works with a number of retailers in the San Francisco area, including Target, Macy’s, Sears and Gamestop. (Sears offers “In-Vehicle Pickup” at other stores as part of its Shop Your Way loyalty program.) The customer can search for and buy products from local stores that can be picked up the same day. The user can search across multiple retailers and locations, and check out with one tap. At some stores, curbside pickup is available; at others the order is awaiting customer pickup. If successful, this could usher in a new wave of customers, particularly those with small children who may otherwise find it inconvenient to run errands with kids in tow. In addition, Curbside has introduced “Handoff,” which lets one person create the Curbside pickup, and invite someone else to pick it up.

Postmates

Postmates is Uber for deliveries. Users place an order from a restaurant or store and are matched with a Postdates courier. The courier retrieves and delivers the order in under an hour. Couriers go through a background check and must be customer-service savvy. They can earn $25/hour and work either part or full time. For users, pricing starts at $5 and is determined based on the distance of delivery. Furthermore, it doesn’t matter if the business offers delivery, Postmates handles it independently.

Instacart

Many parts of the United Statesre served by grocery chains’ online delivery service. In the Northeast, for example, it’s Peapod, owned by Stop and Shop. While Instacart delivers groceries, it provides the service to different chains, so a shopper could use the app for Whole Foods on Monday and, if you’re in Philly, Reading Terminal Market on Saturday. The great advantage is the variety of stores offered by the service. Retailers do not need to set their own logistics, freeing themselves up to concentrate on their core business rather than on delivery vans.

Mobile will only continue to grow in 2015, as customers look to employ apps that will help them be more productive and efficient shoppers.

 

by Jennifer Bosavage

Christmas Present And Future

The Christmas holiday season has come to a close

And next comes the question we just have to pose:

For you, dear retailer, was it a success —

Or was it plain and simply a mess?Retailers are cautious of slim Christmas sales.

 

Was your POS system mobile and free —

Or were customers driven right up a tree?

Were inventories in sync online and in-store —

Or were items missing, to be found never more?

 

Indeed, RFID holds such great promise,

But never found its way onto your to-do list.

Clienteling and customization are all the rage

However, you never got on the same page.

 

And yet, dear retailer, please don’t despair.

Not everyone had iBeacon covering their lair.

Tomorrow’s the start of holiday planning ’15

And you can become a lean, mean, retail machine!

 What’s your plan for 2015? Tell us in the comments below.

 

by Jennifer Bosavage

Keeping High Rollers Happy With Loyalty Rewards

In the old days, the general store knew each of its customers by name, and even offered house accounts as a convenience for customers. Although those accounts were kept on handwritten ledgers, it was really the humble beginnings of the loyalty clubs we know today: Because you shop here regularly, we will allow you to run a monthly tab.

From club memberships to mobile apps, merchants encourage customers to return by offering them incentives like discounts or gifts in exchange for their loyalty.

From club memberships to mobile apps, merchants encourage customers to return by offering them incentives like discounts or gifts in exchange for their loyalty.

As a result, shopkeepers got to know their customers. Today’s loyalty clubs offer that advantage as well as, hopefully, a few more perks for customers. Retailers that capture data regarding past shopping history can use that information to reinforce that customer behavior — “Come back to Joe’s when you need paper clips again” — but it does little to extend revenue. The report, “Customer Lifecycle Engagement: Imperatives for Midsize-to-Large Companies,” reveals that marketers think they know their customers well: 53 percent of respondents said they have an excellent understanding of customers’ purchase history, followed by 42 percent for basic demographic information such as gender and age. However, the reported concluded that they lack the deep data insights that would enable them to send personalized, relevant campaigns. Less than 25 percent of marketers are using channel-preference data, propensity scores or household composition. Such often-overlooked pieces of data will reap results, because of their inherit value and because competitors are unlikely to be considering that information.

Loyalty data of past behavior is valuable because when the correct analysis is applied, it becomes predictive — and that’s where retailers will really profit.

While some retailers are stingy with what they offer customers in return for personal data — a strategy that, ultimately, will be unsuccessful — beware of giving away too much in an attempt to improve loyalty. A study by the Harvard Business Review revealed that offering too many perks or services can be unproductive.

Authors Louise O’Brien and Charles Jones in, “Do Rewards Really Create Loyalty?” note that small businesses have traditionally compensated loyal customers with free or bonus items. But as companies grew, it became harder to tell which customers were being loyal as well as the most valuable to keep:

“Rewards programs are widely misunderstood and often misapplied. When it comes to design and implementation, too many companies treat rewards as short-term promotional giveaways or specials of the month. Approached that way, rewards can create some value by motivating new or existing customers to try a product or service. But until they are designed to build loyalty, they will return at best a small fraction of their potential value.”

There is a difference between the loyal customer who comes in monthly and spends $50 and the one who spends $500. Both are loyal, and both are probably worth rewarding, but the customer spending more would probably enjoy (and respond favorably to) receiving a unique promotion. Most companies treat all customers as equals: Everyone gets a 10% off coupon. Those VIP customers are quick to pick up on this and if they aren’t made to feel special, they are likely to find appreciation in the arms of your competitors.

O’Brien and Jones note, “A company that offers average-value products and services to everyone wastes resources in over-satisfying less profitable customers while under-satisfying the more valuable loyal customers. The outcome is predictable. Highly profitable customers with higher expectations and more attractive choices defect, and less desirable customers stay around, diluting the company’s profits.”

What are you doing to keep your high-rollers happy?

by Jennifer Bosavage

Apple Pay Heats Up Mobile Payment Popularity

The technology to make mobile payments is growing in popularity.

The technology to make mobile payments is growing in popularity.

Mobile payment strategies have been around for much longer than you may recall — but until Apple Pay rolled out this Fall the mention of “mobile wallets” prompted quite a bit of eye rolling. But remember how tablets were stuck in neutral until the iPad came along? A bit of that Apple magic has been sprinkled onto its payment solution, according to recent figures. This holiday season saw an increase in use of mobile payments, and that’s most certainly been driven by Apple Pay.

An ITG survey recently said that Apple Pay — which debuted on October 20— accounted for 1% of digital payments, while Google Wallet, launched in 2011, was responsible for 4%. The study’s authors noted that the 1% figure was impressive given that the service is only available to Apple customers with the newest hardware and it is currently supported by a relatively limited list of merchants. Sixty percent of new Apple Pay customers used Apple Pay on multiple days through November, suggesting strong customer engagement. In comparison, new PayPal customers used the service on multiple days during the same time period just 20% of the time.

Apple Pay could pose a major threat to market leader PayPal’s current dominance of the Mobile Payment space, according to Steve Weinstein, senior Internet analyst at ITG Investment Research. Weinstein said that PayPal’s infrastructure barriers, including challenging relationships with payment counterparties and no biometric capability, means it will be difficult for PayPal to match the ease of use and consumer appeal of Apple’s solution.

As the service grows in popularity, Apple will profit commensurately. Banks and payment networks will pay the iPhone maker more than 15 cents out of a $100 purchase. ApplePay uses NFC and Bluetooth to enable mobile, “touchless” payments. During in-store transactions, Apple passes a cryptogram and token to merchants using NFC, and Apple will be paying a (lower) “card present” rate. But, when using Bluetooth, or when making an in-app purchase using Apple Pay, the transaction fee will be the equivalent to a (higher) “card-not-present” rate. As the CEO of a company that specializes in gathering mobile shopper preferences mentioned to us yesterday: “Until Apple came out with ApplePay, no one was really thinking about using Bluetooth connectivity for this.” Indeed.

The challenge for Apple is that there are many perfectly good iPhones out there, whose owners are in no rush to upgrade. When and if they do upgrade to an iPhone 6, the number of mobile payments seems likely to jump. So, while the number of users using Apple Pay will likely grow significantly during 2015, it’s unlikely to “go viral,” so to speak.

In addition, many retailers are upgrade weary having just replaced — or are in the midst of swapping out — their swipe pads to implement chip-and-pin security measures, to meet the mandated deadline of October 2015. Adding an NFC reader to those devices is roughly $40.

And some retailers have opted to sign up with a competing, yet-to-be-seen offering from MCX, called CurrentC. The key will be how consumers take to CurrentC, which is being embraced by many top retailers, including Walmart, RiteAid and Target, at the exclusion of Apple Pay. By some estimates, that shuts Apple out of more than a trillion dollars in potential annual revenue.

We’ll know in the middle of next year whether Apple will pick up disillusioned CurrentC users, or pack up and leave the market to MCX.

Smart money may be on the Apple magic, but MCX may have a trick or two up its sleeve . What do you think?

 

 

 

 

by Jennifer Bosavage

Clienteling Helps With All Those Returns

 

 

The holidays will soon be over — and with that comes all those returns.

Surely someone wants that luxurious mint green cashmere Armani sweater, violet Diane Von Furstenberg wrap dress or deep orange Prada bag, just not the first owner.

So back it comes.

As a retailer, you are trying to make way for Spring fashions, and as delightful as these items are, they are just not a fit for this time of year.

You need to move them, pronto.

However, mark downs can make items seem “cheap,” and, particularly in luxe goods, perception is everything.

How to get these products into appreciative hands?

Analyze your shopping data and you just might find some happy homes for these “misfit” goods.

The most loyal among your shoppers may be in store for some good deals if you can decipher which customers should be targeted for specific items.

By narrowing down the prime candidates, retailers can clear out merchandise in a way that is much more appealing than throwing it on a clearance table.

That is where clienteleing— the art of tailoring of a sales message to a particular customer or segment — excels.

Luxury shoppers in particular respond well to a personalized approach, as evidenced by the popularity of the “private shopper” at high-end retailers.

Retailers can start by analyzing their most loyal customers’ information.

What are their shopping habits, and what might entice them to come into the store?

Perhaps a promo code in an email or text message to these valued customers is in order.

Another idea is to compose an email with a personalized URL such as www.JensShoes/CustomerName.

Now you’ve created not just a multi-channel experience but a personalized one to boot. (Excuse the pun.)

Within the email should be some unique information directed at that particular customer.

For example, if a male shopper purchases a similar type item every year at the same time for his wife, the retailer can send him an email with some enticement for him to return.

Or, a phone call from the lead sales associate can work wonders.

Technology sometimes seems at odds with old-school ways; thinking of associates armed with tablets in a general store with its neighborly ways seemingly offers an anachronistic view of the retail experience.

But not really; by embracing technology, retailers can nurture an atmosphere of familiarity, one where everybody knows your name — and your shoe size.

 

by Jennifer Bosavage

Cloud Computing Helps Retailers Go Mobile

According to Forrester Research, the public cloud market is estimated to reach $191 billion by 2020, quite a boost from 2013’s $58 billion. Cloud applications will lead the charge, accounting for approximately $133 billion in revenue by 2020. Cloud platforms will bring in roughly $44 billion in sales, and cloud business services will amount to some $14 billion in revenue during that time.

At the same time, mobility is a prime objective for retailers, who are looking to improve flexibility among workers; retail executives are looking at cloud computing initiatives to fulfill that mission. In a new report released this week, “Elevating Business in the Cloud,” KPMG reported that companies are often choosing to implement cloud technology not only to improve cost efficiencies — which is the #1 reason — but also to facilitate a mobile workforce.

The survey was also conducted two years ago, when companies were first begining to implement BYOD strategies and create more mobile employee workforces. While just 15% of respondents in 2012 sited the enablement of a flexible and mobile workforce as a driver of cloud usage, in the recent survey 42 percent of respondents said mobility was a transformative mechanism to implement cloud solutions.

Perhaps more than any other group, retailers recognize the importance of using cloud to connect with consumers. Compared to other industries, retail executives in the survey were more likely to say their organizations are using cloud to improve alignment and interaction with customers, suppliers and business partners. According to the report:

“To maximize holiday revenue, for example, it is critical for retailers to turn to cloud solutions to attract and support mobile shoppers. Consider that Shop.org expects sales in November and December 2014 to grow between 8 and 11 percent over last holiday season – to as much as $105 billion. Mobile-optimized e-commerce or customer support tools, for example, can give retailers a competitive advantage during the peak holiday season, when providing personalized and instantaneous service is the new requirement for success. Retailers that aren’t able to respond to the expectations of empowered consumers will see them jumping ship, as they tap into online pricing and product information and seize the best deals elsewhere.”

Cloud computing can support initiatives such as clienteleing, a customer-centric approach that analyzes shoppers’ data and offers customized, personal solutions that can benefit retailers as well as their customers. Today’s shoppers are exacting: They want good value, quality service, a great all around experience.

As Jeanne Johnson, a Principal on KPMG’s Management Consulting team who focuses on consumer markets, pointed out in a statement, “Today’s empowered consumers expect more from their retail experience, and this adds pressure and uncertainty to retail businesses and operating models. Consumers expect to be known, recognized, and offered personalized insight and offerings. They want to interact with the brand in person, on-line, on the go – on their terms. They also prefer ready access to knowledgeable and responsive associates across those various channels.”

Cloud computing is making that personal experience a reality. Employees can access the cloud from wherever they are in a store;  transactions are no longer chained to the cash wrap. They can go where the action is — which is where the customer is. Increased employee productivity (54%) and higher employee satisfaction and flexibility (48%) are the top two benefits the survey respondents attributed to using cloud to improve workforce mobility, and greater productivity means higher transaction values for the retailer.