Pop-up stores are a popular way to freshen brick and mortar presence as well as to physically connect e-commerce retailers to their customers.
They have been around for a few years, but they have steadily become increasingly popular.
In fact, the recently defunct Toys R Us chain had reportedly exploring popups as a possible comeback before deciding finally to reimagine their in-store experience.
The strategy is a cost-effective way for many types of retailers to experiment in physical retail, from e-commerce giant Alibaba to brick and mortar veteran Macy's.
Here's how you can use pop-up shops' popularity to boost your profits.
1: Collect data
Pop-up stores that are spawned from brick and mortars tend to be much smaller and more focused than their parents.
New brands or trendy items can easily be curated and then tested in a pop-up shop.
Once inside, shoppers movements can be tracked with video cameras, allowing retailers to learn what items piqued shoppers' interests, and what didn't.
2: Promote your cause
Popups are a great way to illustrate the power of cause marketing.
Retailers often have "pet" charities, and popups let retailers focus on that cause.
Specific merchandise is showcased and a portion of the profits are directed to the charity.
Press coverage is often also a welcome by-product of this strategy.
Customers expect their favor stores to align with charitable causes: 86% of consumers believe that companies should take a stand for social issues.
64% of those who said it’s ‘extremely important’ for a company to take a stand on a social issue said they were ‘very likely’ to purchase a product based on that commitment, according to the 2018 Shelton Group’s ‘Brands & Stands: Social Purpose is the New Black.‘
3: Connect with the neighborhood
E-commerce companies looking to form a local connection have found popups an ideal solution.
Recently Retail Pro International’s Authorized Business Partner in Brazil, PA Latinoamericana, participated in the 27th edition of ABF Franchising Expo, the largest franchise fair in the world.
Brazilian publication GBLjeans reports, “American retail management software platform, Retail Pro International, has chosen a local distributor, with fashion as one of the key business segments. With this new local distributor, Americana Retail Pro International intends to gain greater participation in the Brazilian market.”
Together with some of our key partners in retail technology, Targit, SAP, Toshiba, and Adyen, Retail Pro offers retailers in Brazil and all over the world a unified platform to help their business keep improving retail performance and customer experience in their stores.
PA Latinoamericana CEO, Allan Pires, comments, “We at PA Latinoamericana are really proud of all the work that’s been performed here in Brazil. Having recently partnered with Retail Pro, it is clear that we have a great path ahead of us.”
Over 400 visitors came to the booth to hear how they can build unified commerce on Retail Pro to reach better results and grow their business.
The goal was to infuse the market with insights on digital transformation processes accelerating companies around the world.
Speakers included top brands like Under Armour, Grupo Martí, Aldo Conti.
Technology experts Grupo Ambit and Retail Pro International also shared their experiences on marketing trends, omnichannel strategies, customer experience and best practices for better performance in ecommerce.
Retail Pro International CEO, Kerry Lemos, offered his vision on better customer experiences through unified commerce, emphasizing that retailers need to go beyond the omnichannel goal, expanding their tactics to maximize ROI with better data-driven store management.
The audience from different industries took notes from Lemos, who gave insights on improving operations and acting on shoppers' demands to respond quickly to industry change and increase profitability.
Under Armour shared their insights on improving brand performance and creating seamless shopping experiences across ecommerce sites and marketplaces.
The Aldo Conti brand shared its tactics and experiences during the "HotSale" period, a season akin to Cyber Monday, where thousands of companies in Mexico create huge discounts exclusively in ecommerce.
Grupo Martí, the leading retailer of sporting gear in Mexico, shared the story of how they began the journey toward digital transformation and its importance for the CEO’s strategic plans.
The sports retailer talked about breaking out of cloistered mind-sets and reallocating investments for future digital efforts.
Undoubtedly, events like this, hosted out by VTEX, are creating an increasingly powerful retail community that is changing the landscape toward unifying commerce in Mexico.
In a POS technology business built on global partnership, the path to excellence is found in each partner delivering on their promises.
In a partnership of businesses, success is discovered, created, sought out, secured, and won through ingenuity, relentless pursuit, unwavering drive, and an all-in grit that does what it takes to keep charging forward.
We commend the global and regional winners of the Retail Pro Business Partner Awards for their excellence in building the Retail Pro partnership together.
A loyalty program not only identifies shoppers but also incentivizes them to be identified. In exchange for points, punches, or cash back, each shopper will raise their hand and self-identify during each transaction.
Second, through AppCard’s integration with Retail Pro, we are able to track each transaction on a SKU level in real time for each purchase. We then marry these two bodies of data, creating a shopper profile with a running historical database of transactions.
This allows us to segment shoppers based on behavior and transaction history to target them with relevant marketing content.
Choosing a loyalty program
It’s not hard to argue the benefits of a loyalty program. But sometimes, the hardest part of this process is navigating the marketplace – there are tons of loyalty platforms out there.
We’ll break it down into three “generations.” We like to look at the types of technology as generations since each generation is an improvement to the previous.
First-generation loyalty solutions: Punch cards
The first generation of loyalty and rewards technology launched about 11 years ago.
These pioneers of the digital loyalty industry evolved the infamous paper punch card into a plastic card that could be scanned at the register.
These tablet-based systems rest on the store owner’s counter and give customers points for entering the store.
Customers earn punches no matter what they purchase, which allows $2 customer to earn the same as a $20 customer.
These devices also give customers the opportunity to sign up with their email address, allowing the business to market to them via email.
Third generation loyalty programs are those that integrate with the point of sale, allowing the business to track specific customer purchases, down to the SKU.
With AppCard for Retail Pro, retailers can gain a consolidated view of their transaction data alongside customer information across multiple locations.
This level of customer insight enables you to automate points and rewards based off purchases and amount spent, and you can start to learn customer buying behaviors and market to them individually based on their own spending habits.
AppCard uses machine learning tools, which allows for a much more targeted, and automated marketing process.
Using holiday shopper data to shape your marketing
So now we are going to apply the marketing concepts we just reviewed to the annual opportunity that is the Holiday season.
To do this we will start by asking the questions we need answers to in order to develop and execute on our targeted marketing strategy.
What is the holiday shopper opportunity?
So our first question is “What is the holiday shopper opportunity? To answer this let’s take a look at some of the statistics from the recent holiday season.
Our first stat from NRF shows that businesses see an uptick of up 20% during the holiday season. Third Door Media shows that the average business makes about 20% of their annual revenue during the holidays.
Finally, and a little more dramatically, NRF reports that over $625billion dollars are spent during the winter holidays.
What this amounts to is a major increase not only in revenue but a major uptick in foot traffic in your store.
The question is, how do we take advantage of this?
Identify & segment shoppers
To fully take advantage of this spike in foot traffic and shopper revenue we need to identify these shoppers and segment them in groups that tell us who they are and how we should communicate with them.
On a high level we will be able to segment shoppers into two groups, our regular shoppers and first-time shoppers. This seems obvious, but something as simple as knowing whether they are regulars or new shoppers allows us to curate our marketing to communicate more directly.
Our next segmentation effort will be on the transaction level. This is more granular segmentation that will allow us to create more personalized marketing communication.
For example, if a shopper buys a new pair of athletic shoes, we have two specific opportunities:
Make a recommendation to them on an additional and complementary product like a pair of athletic shorts
Create marketing based on the average life cycle of the product. A pair of athletic shoes typically should be replaced once every 6 months, so you may use this type of segmentation to send what we refer to as life cycle marketing messages whereby you target holiday shoppers that bought athletic shoes 6 months after the purchase to come back for a new pair.
We can also identify shoppers on a tiered level based on how much they spend.
How does segmentation work?
How are we able to segment these customers? On the back end, we're building a profile based on what they've purchased, how often they shop, and what their preferences are.
For example, one shopper, Jessica Smith, shops every 30 days, has spent nearly $3,000 in the past year, and is in the top 12% of shoppers based on her spend amount.
Using this information, we can tell she is a loyal customer and we should encourage her to bring friends in, and reward her for doing so! Shoppers like Jessica can be some of your strongest brand advocates.
According to a recent study by Motista, consumers with an emotional connection to a brand have a 306 percent higher lifetime value and stick with a brand for an average of 5.1 years vs 3.4 years. Further, they tend to recommend brands at a much higher rate: 71 percent vs. 45 percent.
Building your marketing strategy
Customer segmentation allows us to identify specific data points about our shoppers. These data points are useful year-round and can help us to create a data driven strategy that boosts revenue year-round as a opposed to just a flash in the pan effort.
Our strategy will consist of 3 stages, short-term, mid-term and long-term, allowing us to target shoppers year-round.
Our short-term effort will be based on high level segmentation and a little creativity.
This segment is designed to generate immediate revenue post-holiday season, build relationships with regular customers, turn new customers into regulars, and turn top shoppers to brand promoters.
Our mid-term effort will target customers based on a product purchase and will be designed to stabilize a shoppers buying cycle and generate complementary purchases.
We will do basket analysis on how we can move shoppers upward in these segments.
To generate immediate revenue, we will send two marketing messages, one to the regulars and one to the first-time shoppers. This will be very easy as we will be able to create one template for both groups.
Your regular shoppers will need less motivation (10% off) and less incentive to make another purchase.
The new shoppers will need something slightly more enticing (20% off.)
The goal is to provide your business with immediate post-holiday revenue. The by-product of this is to show existing shoppers your appreciation, further cementing your relationship, and to jump start a return visit from new shoppers.
Two campaign strategies include:
Gift Card Campaign
Target shoppers who purchased gift cards with an incentive to “treat yourself” or forward a discount to the gift card recipient to get the most out of their gift!
It’s true that lots of shoppers through the holidays might not be your target audience for repeat purchases, however, encourage them to leave a review on your social media pages to share how well the gift was received!
Our mid-term strategy allows us to get more personal with our shoppers and begin communications based on specific product purchases. There are two methods we can call on to utilize this data and incentivize additional store visits and purchases.
Life cycle marketing
The first is what we at AppCard refer to as life cycle marketing. In this strategy we look at the items that shoppers have purchased and target them with a reminder message to make another purchase based on the likelihood they will need to replace the item.
An example could be: “Time to re-up on your new fragrance! Shop our fragrances and earn 25 bonus points!” This works well with items like cosmetics, fragrances, and skincare.
The second method is recommendation based. In this manner we can look at what shoppers have purchased and send recommendations for complementary products. We often refer to this capability as digital styling, as you can take a peek into your shopper’s closets, see what’s on the hangers, and then make recommendations to them on additional wardrobe purchases.
An example of this could be “How did you like your handbag? Shop our latest wallets or accessories to find the perfect match and receive $10 off!” This works well for apparel purchases.
This type of marketing can be throughout the year, but the biggest opportunity lies in your holiday data, as there is a sizable increase in purchases during this period so you will have a larger shopper base to target.
Our long-term opportunity lies in preemptive communication leading up to the next holiday season.
By segmenting your shoppers by who made holiday purchases the previous year, you can begin the holiday marketing season early with a more personalized approach.
We recommend targeting these customers in early November with a message to get their holiday shopping started early with a larger incentive. You will also want to give a reason for this to help build on your relationship.
The message should look something like this:
“It’s that time of year again and we wanted to reach out to our best customers! Get started on your holiday shopping and save a little money this year, too.”
You can also target customers who shopped at your store on Black Friday or Small Biz Saturday, providing them a secret incentive for next year – target these shoppers with a special gift.
You can also target customers using their favorite brand with new inventory and updated versions of items purchased last year. Examples of re-purchase strategies could be: “Treat your special someone with this year’s hot new watch styles! Shop with us this holiday season and receive $10 off!”
Winter apparel and children’s apparel is also a great opportunity for repeat visits. An example of this could be “Patagonia’s latest children styles have arrived at our shop! They grow up so fast, enjoy $10% off a purchase of $100 or more.”
A few tips
Before we get into tracking ROI, I want to leave you with a few tips and hints to running a successful system.
1. Train your employees
I am going to start this section with a statement: The success or failure of any customer facing initiative will rise or fall on the shoulders of the customer interfacing piece of your business. In the brick and mortar world, this is your cashiers.
In order for your customers to participate in the loyalty program your cashiers must interact with them and acknowledge the program during every transaction. This means that part of the checkout process must now include a simple question asked by all of your employees. They must simply ask each shopper the following: Are you a rewards member? What is your phone number?
By asking this simple question, your participation rates will increase by 500%. Statistically, if you rely on your shoppers to remember that there is a program, instead of reminding them, you can expect a 10%-20% participation rate. If they ask this question, you can expect upwards of 70%. (AppCard Stats)
Uniquely, AppCard tracks your employees and the percentage of transactions that each employee does using the loyalty program. This will allow you to identify who is engaging shoppers and who needs a little TLC to get with the program.
2. Give shoppers incentives to join
The second tip is to provide shoppers with an incentive to join the program. The incentive can be $5.00 off your next purchase. This is particularly powerful during the holiday season as shoppers look to save a little money where they can.
You should look at this not as a discount you are giving, but rather a purchase you are making. You are paying your shopper $5.00 to give you their identity so that you may track their purchases and curate relative content to them to increase your conversion rates.
3. Give cashiers incentives to enroll loyalty members
Lastly, it’s fun to run cashier competitions, incentivizing cashiers to sign up the most members. Perhaps you can provide them with a gift card at the end of the month or allow them to pick their shifts for a week.
Now we are at the fun part. Suppose you choose to implement a system and strategy like AppCard for Retail Pro, you identify your shoppers, track their transactions, segment them into groups, and send them highly relevant marketing content.
How do you know that it worked?
This is the question that all marketers hate. Traditionally it has been very difficult to prove ROI, but not anymore. With a system like AppCard for Retail Pro, you have all the ingredients and tools that you need to answer this question with confidence.
You have the shopper’s identity, you have the list of shoppers that received the marketing content and you have the ability to not only track which ones came back to the store, but also what they purchased and how much they spent as a result.
For instance, you can target 3,000 shoppers that bought tennis shoes, send them 10% off their next pair and track that 378 of them came back in and made a purchase. You can then see that the 378 people spent $4,719 as a result and now you can quantify, to the penny, exactly how much revenue your customers have spent as a result. Pretty cool right?
Now there will always be someone that asks, “Well how do I know they wouldn’t have come in anyway?”
Use a control group
One of the most powerful ways to prove marketing ROI is to identify a control group, along with your target audience. A control group is a set of people who fit the criteria you’ve assigned to the campaign, but to whom you do NOT send the offer.
At the end of the marketing campaign, you then compare how the members of the campaign performed from a visits and revenue perspective against the control group, who did not get the offer.
This is how you can truly determine whether your marketing offer and messaging had an impact on the target audience.
This is the same concept we can now use to prove ROI in our marketing. If we send a message to 3,000 shoppers that previously purchased tennis shoes, and told them that because they bought tennis shoes, they get 10% off a pair of inserts, it would be hard to say that any of them returned just because of the message.
If we created a 10% control group, and 300 of them received no incentive, we could measure the purchasing pattern between the two identical groups and determine the true effect of the marketing.
We could prove that the 2,700 people that received the message spent an average of 11% more than the those in the control group and prove true ROI.
Meet Pinky, AppCard’s AI brain
Let me introduce you to your marketing secret weapon: Pinky. Pinky is AppCard’s AI solution, which analyzes your transaction data in real-time daily. Using your company's transaction history, Pinky forecasts your likely revenue by market up to 30 days in the future.
The forecast helps you to make staffing arrangements by location, predict Inventory needs and budgetary requirements.
Pinky now averages a 2.5% margin of error, making his revenue forecasts more accurate than Facebook's neural network tool.
AI analysis for campaign results
Just to take this one step further Pinky analyzes campaign results, including lift from control groups, to optimize campaign targeting. This basically means that AppCard’s AI learns your shoppers’ habits in conjunction with their responsiveness to campaigns to deliver the right message to the right shoppers at the right time.
In this real-life example from one of our retailers, Pinky targeted shoppers who missed a predicted visit with an offer for $1 off their next visit.
Within 1 week of the text message campaign, 68% of shoppers visited the store to redeem their discount.
How it works
AppCard will upload your current customers to the platform, allowing you to consolidate customer lists from your POS, current loyalty platforms, email marketing systems (Mail Chimp, Constant Contact, etc.) and texting services you may currently use.
Consolidating these CRMs will allow management the ability to manage their databases under one umbrella. Appending transaction history will allow you to automatically send personalized offers and incentives based on past transactions. We do not limit the number of subscribers, which our customers love. You receive unlimited data driven email marketing via AppCard.
In today’s real-time global economy, retailers are hunting for strategic optimizations to improve experience and spark long-lasting brand engagement.
About 85% of companies think AI will offer the competitive advantage they’re after, but only one in 20 (5%) is taking advantage of its capabilities today, according to a report by MIT’s Sloan Management Review and the Boston Consulting Group.
Retailers seek out AI-driven technologies to profitably engage customers and reduce time, cost and error in decision-making.
Research Gate reports, “AI allows retail to gain sharper predicting tools that ensure the making of sharper business decisions. Algorithms intensify the ability to view business implications and translating results like higher sales and lower costs through customer service, product inventory, and staffing.”
But for many retailers the data needed for actionable insight is fragmented and scattered across the organization, perpetuating skewed learnings and inefficiencies in customer experience.
Clean, connected data is indispensable for AI.
With Retail Pro, you have the critical, advantage-gaining resource for AI: years of structured POS data. AI learns from your data for you, giving insight for helpful customer engagement that strong operations alone cannot deliver.
Unified visibility to help you improve performance
Unified data to recognize customers and anticipate needs
Unified operations to control inventory so shoppers won't leave disappointed
Unified technologies to give you insight into how to put shoppers first
Note to retailers: Be willing to disrupt the ways you sell products to customers.
That was one of the key messages at the National Retail Federation Big Show 2019 in New York City earlier this month.
How can disruption work to a retailer's advantage, when common sense says customers appreciate stability and a sense of continuity when shopping at their favorite stores?
Sometimes, familiarity breeds contempt, as the old saying goes.
Don't be afraid to try something new, particularly if research backs up your instinct for change is correct.
Here are three ways retailers can use disruption to their advantage to delight the customer.
1: Be human
Many retailers have adopted technology that helps them respond more efficiently to business needs, but they should also be meeting customer needs effectively.
Break away from a technology for technology's sake mindset.
Every store's competitive advantage is its staff.
From founder to sales associate, those are the people who set the tone and the sale environment.
The customer wants to be uniquely known in a way that is meaningful to him or her, said Lindsey Roy, chief marketing officer of Hallmark Greetings, during her closing keynote for the NRF's Student Program.
Customers are sensitive to a brand’s authenticity and they notice its in-person interactions as well as those through social media.
While technology can fulfill some vital company tasks such as inventory requests, point-of-sale needs and logistical information, providing a meaningful human contact is crucial to nurturing a customer connection.
Customers should feel as though a retailer values their business enough to provide an associate to assist when necessary.
2: Get physical
Brick and mortar stores are becoming important as a way for retailers to combine online and in-store experiences to engage meaningfully with today's consumers.
Digital brands are now opening physical locations; offering an in-store experience is a key retail differentiator.
Despite some very convincing chatbots in the e-commerce world, shoppers enjoy the rush of adrenaline they feel when they find the just-right product in a physical store.
Even Amazon, the creator of the ultimate product recommendation engine, is acknowledging the importance of having a physical presence with its launch of Amazon 4-star retail stores.
So far, the Amazon 4-Star locations offer top-rated products, curated for each specific location.
They are designed with the "discovery shopper" in mind.
Encouraging that sense of wonder in shoppers strengthens the bond between retailer and customer and fundamentally promotes loyalty.
3: Use your data
Today's retail needs technology, but it should largely be implemented to improve how associates interact with customers.
By collecting and aggregating customer information, stores can provide richer experiences for shoppers.
Retailers that don't correctly identify customer pain points run the risk of rolling out expensive technology that doesn't enhance the shopping experience.
Technology is not a substitute for the human touch.
A recent survey by PWC found the payoffs for valued, great experiences are significant: up to a 16% price premium on products and services, in addition to increased loyalty.
Artificial intelligence can gather data using chatbots, for instance, and then use that information to assist employees who are busy working to satisfy customers' needs.
As your business continues to expand, it is critical to adopt a retail solution that is scalable, integrated, available, mobile, and secure.
The Retail Pro® POS and store management platform and SAP Business One® ERP software are designed with change and growth in mind.
The integrated solution allows you to tailor and customize your software to support your changing needs.
You can lock down critical preferences and security settings across stores, while still allowing individual locations to modify their key details with easy-to-use personalization tools.
An integrated solution like Retail Pro and SAP Business One will give you innovative ways to reach new customers, maximize efficiency, and drive profitable growth – and will keep growing with you as you grow.
Want to see how Retail Pro and SAP Business One can help you grow?
Retail Pro International (RPI) is a global leader in retail management software that is recognized world-wide for rich functionality, multi-national capabilities, and unparalleled flexibility. For over 25 years, RPI has innovated retail software solutions to help retailers optimize business operations and have more time to focus on what really matters - cultivating customer engagement and capitalizing on retail's trends. Retail Pro is the chosen software platform for omni-channel strategy by retailers in 130+ countries.