Category Archives: Customer Engagement & Business Intelligence

by Retail Pro

A short, enjoyable shopping experience is important to consumers

Although price, shipping and other factors are important parts of the shopping experience, but they are not the only elements merchants should consider. When price matching and free shipping become increasingly common options among retailers, finding another differentiation point can be critical to winning over consumers. 

Based on recent findings from The Integer Group, that point of difference may be influenced by the gender of the customer. Price and item quality are the two main concerns for men and women, but the values they rank after those two considerations are nearly contradictory to each other. For male respondents, the ability to get in and out of the store is an important factor in when and where they shop. Because of this, many men will be shopping online this holiday season, rather than braving the crowds on Black Friday or afterward. To provide the best experience possible for those men that do visit brick-and-mortar locations, though, retailers should offer a seamless experience that smoothly ushers them from the aisle to the point of sale with as few obstacles as possible. 

Meanwhile, female respondents stated that they are more interested in having an enjoyable shopping experience. According to Integer, they want to immerse themselves in the festive atmosphere that surrounds some stores during the holiday shopping season. Meeting this desire is more nebulous than trying to speed the shopping process, but minimizing frustration through excellent customer service can encourage customers' overall goodwill. 

Ecommerce continues rising in prominence
Another differentiating point for merchants this holiday season will be the robustness of their ecommerce options. Integer found that more consumers will be spending their time with online retailers, rather than visiting mass merchants or department stores. While visits to these two types of locations combined beat out ecommerce on its own, the Web-based shopping option otherwise dominates much of the next few weeks. Brick-and-mortar retail still reigns on Black Friday and for last-minute purchases, but on Cyber Monday, Thanksgiving weekend and throughout December, Integer found that most customers will be spending more time shopping online than in stores.

Notably, this number does not account for how much customers will purchase through ecommerce, but the channel's convenience and utility as a research tool is affecting consumer  buying habits. 

by Retail Pro

Technology should augment the in-store experience

For most merchants, technology is a critical part of the business. Retail software enables the easy management of sales, while some level of hardware is necessary to run applications and complete transactions. However, some industry professionals may grow distracted by the latest innovations and forget that the newest advancements should complement their operations rather than running in parallel or even competition with the rest of the organization. 

Writing for ScreenPlay Interactive, Ken Lonyai recently reported that some retailers may be investing more in technology than in customer service. The source noted that after sending an email through Whole Foods' corporate website about an ongoing problem with a local store, an email response took one week to arrive. Because nothing way resolved, Lonyai proceeded to call the Northeast Regional Office eight days later. Instead of finding help, Lonyai was met with the office covering for the store. Rather than the website enhancing the customer experience, it proved ineffective as the reply time was slow. Additionally, it resulted in a lost patron. 

Chris Petersen, president of Integrated Marketing Solutions, remarked on RetailWire that technology that is not integrated into the shopper's journey will be ignored or potentially decrease sales. He noted that even as most consumers review products online, the majority still purchase items in stores, so innovations should work in concert with traditional brick-and-mortar sales. In his opinion, mobile apps that help store employees convince consumers to buy from their locations are retailers' best tech investment. 

by Retail Pro

Shoppers who spend earlier conduct more research

As the major holiday shopping season approaches, many consumers are hitting retail stores early to find the best deals available. As more customers pour in through their doors, merchants will need to scale up their store operations and run powerful retail software that creates a convenient shopping experience. 

One key fact retailers should include in their plans for November and December is that their customers will be more informed than ever. According to SGK Inc's 2013 Early Holiday Shopper Survey, more than half of pre-October holiday buyers used their mobile devices for product research, and many ran price comparisons before purchasing an item. Rather than avoiding the crowds, many early shoppers will also be in stores on Black Friday, and they will have consulted inserts and circulars, websites, emails and their friends and family to find the best deal before stepping into a shop. Many will also request price matching, the survey found. 

"By starting early, spreading purchases over a wider time frame, using layaway and actively researching, shoppers are more likely to find the right offers for them," Jim Lucas, executive vice president, global insights at SGK, according to the report. 

Retailers should also take note that customers who research items on their mobile devices are likely to spend more than other consumers. Those merchants able to adapt to better informed shoppers could benefit from increased sales in the next couple of months. 

by Retail Pro

Privacy and convenience are two important customer concerns

Loyalty programs are an important part of many retailers' business strategies. They help encourage additional purchases, draw shoppers back into brick-and-mortar locations, gather customer data and often enable the personalization that many consumers crave. While Mintel reported that enrollment in these initiatives is up for all retail categories, it also found that many customers (32 percent) are concerned about how tracking their purchases might affect their privacy. 

The inherent contradiction between consumers' desire for privacy and personalization may come as a surprise to some retail industry professionals, but 13 percent of loyalty members are frustrated with the amount of information requested of them, and 10 percent want more control over their privacy in their programs.

Additionally, some consumers (16 percent) do not think their loyalty programs represent their shopping habits, and 20 percent of the millennials polled are even more likely to believe this. A few of these customers may believe that they are offering their personal information without receiving anything in return, which may need to be addressed by merchants. 

"Reassurance of privacy is undoubtedly a key strategic tool in loyalty program engagement, but there is a paradox at play here between personalization and privacy," said Ika Erwina, retail and technology analyst at Mintel. 

Responding to shoppers' concerns
While there are a number of potential solutions to the privacy issue, a greater degree of transparency may reduce some consumer concerns. However, many of the features that consumers most appreciate in loyalty programs do not rely on personal data. According to Mintel's study, the most important attributes to loyalty members are the convenience of receiving rewards and earning points, as well as monetary rewards. Those benefits that are more reliant on personalization, like exclusive deals and coupons, still matter to shoppers, but not as significantly. 

Disentangling privacy and personalization may be difficult, but enhancing convenience should not be. Nearly 30 percent of respondents to Mintel's survey reported that they lack the time to redeem their loyalty points. Providing multiple options to do so, such as at the point of sale, through ecommerce channels and other methods can overcome this matter. Emphasizing these features over more data-driven benefits could assuage some consumer concerns. For younger shoppers, focusing on social and environmental problems may also be helpful, Mintel suggested. 

by Retail Pro

Brick-and-mortar should focus on value, not price

Even as the ecommerce market expands, some retailers are considering how to draw customers back to their brick-and-mortar locations and what they can do to compete against online merchants. Trying to match online prices is one option some industry professionals take, but the minimal overhead of Internet-based sales leaves this an uncertain strategy. Furthermore, it might not be the right one.

According to Internet Retailer, many shoppers seek something more than low costs when purchasing items online. Categories like books and clothing are often bought based on their price, but consumers prefer 24/7 convenience in the routine commodities category, while variety was the most important factor when buying groceries.

"We're a big fan of value, and not a big fan of using price, price, price to go after consumers," Susan Lee, a partner at consulting firm Simon-Kucher & Partners, told the source. 

Lee suggested that when shoppers enter brick-and-mortar locations, retailers should consider why the customers are there. Internet Retailer noted that someone who is painting his or her home might also buy brushes and other related items when employees take the opportunity to speak with the individual. This level of attention can be hard to replicate online, and just as price is not always the motive for ecommerce, retail industry professionals should not assume the same about in-store purchases. 

by Retail Pro

Customers may come to expect digital wallet options at POS

The point of sale is arguably the most crucial moment in any customer-retailer relationship. Its success can sum up the sometimes lengthy shopping process and every detail along the way. Good customer service, a quality product, attractive displays and effective advertising all lead up to that event. Should a sale not go through, everything building up to it resulted in nothing. The consumer's time selecting a product or service has gone to waste, and the business hasn't made a sale. 

Because the POS is so critical, retailers should focus on it at least as much as any other perk they might offer customers. Increasingly, this may mean adding mobile payment options for shoppers. Citing a Chadwick Martin Bailey study, Bankrate noted that only 16 percent of the survey's respondents used a mobile wallet in the past six months. Despite this, PayPal's newly revamped app is now effectively a digital wallet, rather than just an outlet for e-commerce, as The Verge recently reported. Unlike other attempts to succeed with the technology, the source remarked that PayPal's current use by more than 132 million active participants may give it an advantage lacking in competing payment apps. 

As GigaOM highlighted, the app can already pre-order food from about 1,000 cafes and restaurants, or even pay at the table. This is in addition to the clothing stores and other retailers also working with PayPal. Integrating similar payment options may be the key to bridging physical and online commerce. 

by Retail Pro

Consumer spending increases slightly, confidence takes small drop

There are many factors that help retailers understand how the industry is performing and what they can expect in the near future. Perhaps two of the most important elements that merchants analyze is consumer confidence and spending, as these paint a picture of how shoppers are feeling and whether or not their optimism is translating into increased retail sales.

According to The Associated Press, consumer spending rose throughout July, as data from the U.S. Commerce Department found this figure jumped by 0.1 percent. While it's not a strong gain, it is a step in the right direction, and it follows June's spending increase of 0.6 percent. The source explained that nondurable goods, such as clothing, were the main items purchased during July, with a 0.8 percent boost.

As for consumer confidence, this took a small drop recently, as reported by Daily Finance. The Thomson Reuters/University of Michigan Consumer Confidence Index fell from 85.1 in July to 82.1 in August. Despite this decline, the news source noted that overall, consumers appear to be confident in the nation's economy as well as their own financial conditions. These factors could contribute to a successful next few months for retailers, which is welcome news as the holiday shopping season quickly approaches. 

by Retail Pro

Mobile commerce on the upward path within the retail industry

Smartphones and tablets are no longer just tools that allow users to stay in touch with contacts or work remotely – they are now being increasingly used for shopping. Whether it's patrons paying with their devices at brick-and-mortar locations or consumers using the gadgets to browse for and purchase items while on the go, it's no longer a secret that mobile is taking the sector by storm.

According to recently released research by comScore, mobile commerce grew 24 percent year-over-year in the second quarter. This represents a total of $4.7 billion spent through the gadgets, the study revealed. Apparel and accessories were the most bought products through mobile commerce, while computer hardware and digital content followed behind, comScore found.

To give an example of how prevalent mobile is within the retail industry, a study by Placed Inc discovered that a significant amount of back-to-school shoppers are using the devices to research, compare and purchase their supplies for the upcoming school year. Internet Retailer reported that the research revealed almost half (48 percent) of patrons are accessing coupons and deals with their gadgets, and 20 percent are actually buying items through their smartphones and tablets.

by Retail Pro

What does the second half of 2013 have in store for US retailers?

With the back-to-school season underway and the busiest shopping period of the year fast approaching with the upcoming holidays, U.S. retailers have a lot to look forward to. However, a less-than-stellar first half of 2013 has dampened merchants' optimism, as sales figures dropped slightly.

Advertising Age explained that many retailers are expressing caution about the second six months of the year following a dismal performance between January and June. Big-name brands such as Target, Kohl's and Macy's have reported lower sales and traffic, both in stores and online. There are several reasons for these declines, including higher payroll taxes and a fluctuating housing market, the source noted.

Despite this, businesses are ramping up their promotional efforts in preparation for the busy holiday shopping season. The news provider stated that Macy's is increasing its marketing strategies in the hope of attracting customers with its message that the brand offers a great deal on its products.

More businesses will certainly be following suit in the coming weeks to boost their revenues, and to handle the influx of customers both online and in their stores, merchants can use retail management software to oversee all of their operations.

by Retail Pro

What does the second half of 2013 have in store for US retailers?

With the back-to-school season underway and the busiest shopping period of the year fast approaching with the upcoming holidays, U.S. retailers have a lot to look forward to. However, a less-than-stellar first half of 2013 has dampened merchants' optimism, as sales figures dropped slightly.

Advertising Age explained that many retailers are expressing caution about the second six months of the year following a dismal performance between January and June. Big-name brands such as Target, Kohl's and Macy's have reported lower sales and traffic, both in stores and online. There are several reasons for these declines, including higher payroll taxes and a fluctuating housing market, the source noted.

Despite this, businesses are ramping up their promotional efforts in preparation for the busy holiday shopping season. The news provider stated that Macy's is increasing its marketing strategies in the hope of attracting customers with its message that the brand offers a great deal on its products.

More businesses will certainly be following suit in the coming weeks to boost their revenues, and to handle the influx of customers both online and in their stores, merchants can use retail management software to oversee all of their operations.