When competing for a share of shoppers’ hearts and wallets, promotions are a good way to increase traffic and sales, which in turn can help you become more profitable. Promotions draw in new customers and infrequent shoppers, and all those socially-oblivious laggards who just don’t see the need to shop with you (until now ???? ).
To help make your customer hunt a little easier, this month’s All Things Retail webcast talks about the kinds of promotions you can create with Retail Pro enterprise retail software. Retail Pro is designed to for ultimate flexibility so you can tailor your retail management software to your business operations, and the promotions capabilities in Retail Pro are no exception.
Retail Pro promotions come with 8 types of promotions out of the box:
These promotions can be used on their own or in any combination of promotions, which means you have total control over creating and testing as many diverse and complex promotions as your marketing team can throw at you.
When you choose the type of promotion you will run, you get to set the activation rules that will trigger your promotion to be automatically applied to a customer’s transaction. You can set the start and end date and determine to which products the promotion will apply. You can also choose to activate the promotion for all or distinct subsidiaries, brands, countries, or business entities within your enterprise.
Next, you set the validation rules. These rules validate whether the customer’s purchases qualify for the promotion. The promotion can be activated by your choice of any of the following criteria:
At the sale of a particular item or combination of items
When a set threshold amount is met at the sale subtotal
If the customer uses a coupon
If the customer meets a particular qualification, i.e. if the customer is part of your loyalty program, etc.
These validation rules allow you to cast the promotion for as broad or as targeted a group as you determine is profitable for your business.
Once validation rules are set, you can then set the reward rules, which determine what reward and how much of it the customer would get for meeting the reward rules.
Retail Pro POS tracks the redemption of the reward, helping you get a better report on the promotion’s performance.
Careful planning and solid promotions tactics can play a significant part in converting a shopper from someone who’s only ever walked past your store to a repeat customer who loves the way your products fit their life and will buy from you even when you’re not having a sale.
So how do you create the kind of promotions that encourage good shopping habits?
That may be a question for business psychologists and your marketing team, and definitely will depend on your business’ unique circumstances and brand value in consumers’ eyes – but it’s evident that promotions impact retail operations in critical ways.
Historical data sets tracking sales during and after promotions show that customers resume normal purchase habits once a promotion is complete. Whatever your promotions strategy, it’s best to think long term – creating customer purchase habits rather than simply meeting this quarter’s sales goals.
JC Penney abandoned their long-lived coupon strategy in favor of everyday low prices and experienced disheartening sales and earnings. At a time when everything is accessible for less on Amazon, JC Penney’s coupons played a critical role in generating the buzz that would bring shoppers to their stores.
Once that buzz fizzled away, so did discount-trained shoppers, and everyday low prices became everyday low sales.
2. Supply chain and replenishment blunders can cripple promotion performance.
Promotions put pressure on your supply chain operations and retailers are often left with an unprofitable inventory glut or lack in the post-promotion period. Sales exceeding your forecast sounds like a positive problem to face, but stock outs leave mean lost sales both during and after the promotion. Retailers must be responsive and on top of their replenishment game.
Of course, for some retailers, stock outs are part of the strategy to create buzz. Ty in the 1990s stringently controlled the supply of Beanie Babies available to the public, even discontinuing toys rising in popularity to spur frenzied sales over scarce supply.
3. Promotions affect sales for other products, and creative inventory management
Promotions influence sales for other products, and smart inventory management can help you maximize its positive effects. When preparing for the promotions period, order more complementary, non-competing products, since basket analysis often shows a lift in sales of these items due to the halo effect. For example, a promotion on jackets can cause an increase in scarf sales in cooler months.
The same promotion can cause cannibalization of sales for items in the same category, so order less of the competing item for the period of the promotion. The pull-forward effect can also impact post-promotion sales, especially for commodities like laundry detergent, which has a long shelf life. This occurs when shoppers stock up on the sale item, causing a hiccup in their regular purchase frequency and therefore lower sales in the months following the promotion.
Promotions are important elements in the retailer-customer relationship, and how you set expectations today can impact how your business performs for decades to come. In any case, you can count on Retail Pro to give you the flexibility you need to create the promotions strategy that makes most sense for your business.
Retailers today need to know just about everything to stay ahead. Not only do they need to know who their customers are, but they need to know when they shop, how they shop, and what exactly they are shopping for. Understanding their customers and providing them with tailored experiences allows them to strengthen customer loyalty – a hallmark of greater revenue.
Historically, retailers based decisions on intuition, often planning campaigns around what they thought the customer wanted. Today, data and analytics has taken the place of these gut instincts, and retailers now have factual data observing patterns of behavior. Using in-store data such as past buying behavior can help retailers create targeted campaigns, and accurately cross sell and upsell.
Customer satisfaction is critical to business success. With so many options out there for customers, having accurate data about how to make customers happy is becoming increasingly important. Developing relationships with customers, and providing them with relevant promotions and discounts can help boost loyalty. Having the right tools in place to mine through data allows retailers to better understand where customers are in the purchase funnel and develop programs and offers to meet their needs.
Retail Pro International has written 360° Customer View- Why Knowing Your Customer is Mission Critical. This whitepaper provides insight into how data and analytics can help retailers create meaningful relationships with their customers. It outlines the importance of using data to drive sales by growing relationships, boosting retention and improving customer satisfaction.
Get the 360 Degree Customer View whitepaper today to discover how a 360° customer view can help you:
Improve campaign effectiveness with an omnichannel view
Create more up-sell and cross-sell opportunities with purchase history
Boost retention with relevant offers and special deals
Increase customer satisfaction — give shoppers what matters most
Have you wondered what will you gain by switching to the latest Retail Pro software?
Regardless if you have been a Retail Pro user for years or are a retailer looking to retire your other tools in favor of this world-class software to improve your operations – either way – our new webcast series was made just for you.
Every other week we will get together for a quick 5 minute chat on how your team can accomplish their daily retail operations more efficiently with powerful functionalities in the latest Retail Pro software.
Send Sale & Fulfillment
Open & Close Day Procedures
And many others….
Tune in to our Retail Pro YouTube channel, subscribe so you never miss a webcast, or just watch Episode 1 here today! First webcast is on Open Day procedure.
Download the whitepaper now to learn more about how artificial intelligence can help retailers improve customer experience and retention.
For years, retailers have looked for ways to influence customer behavior, from the early days of paper punch cards to sophisticated, big box SAP and SAS based CRM and ERP systems.
Since then, loyalty programs have evolved from basic check-in solutions to more sophisticated check-in solutions that were able to communicate with customers via mobile app, text or SMS messages, and email.
While such solutions garnered some initial traction, retailers still yearned for a greater understanding of their customers, including SKU-level transaction details.
Today, retailers face two critical challenges in their quest to leverage data for better customer experiences: increasingly demanding shoppers and technology limitations.
1. Generation E (Expectations)
Customers—particularly Millennials—have become more informed, less tolerant, and increasingly demanding.
Their ever-increasing ability to shop around, research, compare, share, and explore alternative products, prices and options forces retailers to truly know their customers and understand their shopping motivations.
69% of consumers say their choice of retailer is influenced by where they feel most appreciated and can earn loyalty or rewards program points (Maritz).
Regardless of whether the shoppers are Baby Boomers, Generation X, Millennials or even Generation Z, retailers must realize that all of their customers belong to Generation E (Expectations), where they expect to build a relationship with their favorite brands and be appreciated for their business in exchange for their loyalty.
2. Tech limitations
The retail industry’s technological landscape is comprised of web developers, CRM and ERP providers, payment processors, network providers, and many more.
But the technology upon which nearly all brick and mortar retailers are still fully dependent is their Point of Sale (POS) systems, which are often highly fragmented and cumbersome.
With thousands of different POS providers in the market, and no true standardization, many retailers struggle or fail to integrate multiple data sources and retail channels (Mobile, eCommerce, In-store).
Furthermore, while the POS gives retailers access to critical KPIs like daily sales numbers, top selling products, and returns by cashier, but retailers need the ability to associate transactions to an individual customer in an actionable way.
This level of insight is integral for retailers to provide a truly personalized customer experience.
To address both of these retail challenges, SMB retailers are evaluating alignment and fit of the following trends and tasks to their retail strategy.
To continue reading more about the challenges and opportunities of improving the retail customer experience, download the whitepaper now.
Many brick and mortar retailers have invested in providing customers exciting, engaging and satisfying shopping experiences in order to effectively compete against e-commerce.
Online retailers have done a remarkable job of offering shoppers the goods, pricing, and availability they want. The most recent figures available show continued strength for e-commerce sales: According to the U.S. Census Bureau, total e-commerce sales for 2016 were estimated at $394.9 billion, an increase of 15.1 percent (±1.8%) from 2015. Online orders increased 8.9% in the third quarter of 2016.
Retailers with a base of operations in the physical world are now not only deftly entering the e-commerce arena, but they are leveraging their physical presence as well.
Brands becoming part of the in-store experience
Today, brick and mortar retail is on its way to becoming a media channel. In fact, some have suggested that retailers will not simply offer products for sale, but actually charge brands an upfront fee for the privilege of being a part of the in-store experience. So retailers might have a larger selection available online to customers, but a few, select lines are actually available to see “in person” on the showroom floor.
Think of brand boutiques in larger stores as a similar example of the strategy, but more curated, and the brands pay the retailer for the privilege.
Beacons used for personalized suggestive selling
Beacon technology is another way retailers can learn about shopper behavior.
These devices can learn where shoppers linger within a store and also provide shopper-specific information if a client agrees to opt-in to that type of data collection. That information can then be used by retailers to personalize the in-store experience, for example, suggesting available merchandise.
Beacons can also remind shoppers of products they may have overlooked during the current shopping trip that they have previously bought. Beacons can also spotlight products a customer has previously expressed interest in, as the technology detects customers’ lingering in particular locations.
Instead of associates spending all their time and energy on duties such as stocking shelves, counting inventory, cleaning, etc., they can instead focus on providing the best customer service possible. Managers can then invest more time learning how the store functions as a destination and how it can improve to exceed customer expectations.
This month, Retail Pro went to St. Gallen, Switzerland to hold an on-site training class for tech staff at Akris, an internationally-recognized luxury fashion house.
Founded 90 years ago, Akris remains a family-owned business with strong local ties. Its clothing creations are known as much for comfort and wearability as for high fashion.
Today, third generation brothers Albert and Peter Kriemler manage the business, which grew from its humble beginnings into a global fashion label available via their brand stores, as well as in over 300 high-end department stores throughout Europe, Asia, and the United States.
Akris has been using Retail Pro POS and retail management software in its 17 brand stores since 2000, and is looking forward to growing deeper in its use of robust Retail Pro functionality.
Recently, Akris began thinking of additional ways that Retail Pro could be used to streamline company operations, so they contacted Retail Pro University, Retail Pro International’s training department, to discuss training options.
Retail Pro worked closely with the IT staff at Akris to develop a custom training solution to address the company’s current and future needs. A class was held on-site over a five day period in March at the company’s headquarters in St. Gallen. Attendees included representatives from the Akris IT department, software development team, and operations staff.
Retail Pro Training Spurs Creative Thought for Solving Business Challenges
Akris already had a strong background in Retail Pro and did not need a basic training in how to use the software. Instead, they wanted to gain an in-depth understanding of how particular features could be leveraged in their current environment, and their impact on future operations.
To accommodate their unique requirements, the training process moved fluidly between product demonstrations, discussions, and consulting on how to best use Retail Pro features within the Akris IT system.
At one point, the team, inspired by a key feature, paused training to actually test drive it. They developed new tools and reports in their test environment on the spot to ensure it could be easily implemented.
Multi-Subsidiary Deployment & ERP Integration
Akris team members also collaborated on system configuration in a multi-subsidiary deployment to determine how to achieve the best results for stores across geographies. Akris has stores in the United States, Europe, and Asia, and flexibility in Retail Pro enabled them to navigate through complex regional requirements for functions like merchandise transfers.
As a manufacturer, Akris uses an ERP system to manage product development. Through tight integration between Retail Pro and the Akris ERP, merchandise is introduced into the system through vouchers and transfers between stores and subsidiaries.
In March, Retail Pro held an on-site training class with the business applications team at Akris at their headquarters in St. Gallen, Switzerland. Left to Right: Cerine Stephen, Jelena Scheller, Charles Davidson, Lukas Knutti, and Katie Ernest.
Plans for Growth & Deeper Use of Retail Pro
Many of the features they would like to implement have long existed in Retail Pro 9, and simply had not been leveraged. During the training session, the team developed a strategy to begin phasing in the use of strong features like commissions and markdowns. Akris is looking to expand on the current Retail Pro deployment as it grows and will possibly add new stores in the future.
Want to Increase ROI in Your Retail Pro?
Retail Pro University offers training courses and videos, as well as custom and on-site training options to help your retail and IT teams become Retail Pro experts. These training options can be a cost-effective solution for retailers experiencing high turnover or rolling out new functionality.
This January, NRF’s Big Show hosted 35,000 attendees, 510+ exhibitors and 300+ speakers. And though there was talk of innovation and continued discussion about personalization, many of the conversations centered around data: how to gather it, how to use it, and how to protect it.
Brian Krzanich, CEO of Intel, talked about retail transformation, during a morning keynote. Strategic gathering of data and implementation based on that information lets retailers gain insight and predictive abilities that are new and exciting. The result is a store that can provide customers more control over product selection, special promotions, etc., while the retailer receives more data. The better the data, the more responsive a retailer can be to customers’ desires. And the most responsive retailers will be rewarded not only with more sales, but with a loyal customer base.
Virtual reality — once limited to video games — is becoming a force in retailing, Krzanich said, explaining that VR solutions can play a big role in understanding customer movements within a store, as well as predicting where they’ll go next. Intel demonstrated the use of virtual reality for store configuration and planograms in addition to shopping in a virtual version of the customer’s own home.
“You can see how in your store, your customer can have a very different experience, and you’re going to get data about what they are looking at,” Krzanich said. “What styles they like. What colors they’re looking for. What’s interesting to them. What they put into their shopping cart but then take out at the end of the day and don’t purchase. All of that data is available.”
And it’s valuable. A study by MyBuys found that 40 percent of survey participants said they buy more from retailers that personalize their shopping experience across channels. Of course, collecting “big data,” and then using business analytics to distill it is not new. But the ways in which information is being gathered — e.g. the aforementioned virtual reality — is.
“With as many tech options as are out there to help retailers address various customer-facing elements of retail strategy, enterprise retail on the backend now has to deal with security concerns, with the increased complexity of managing all those technologies, with integrating all the data, getting maximum use out of them, etc,” noted Alexandra Firth, director of marketing, of Retail Pro.
Retail Pro provides software solutions for retailers globally, and is acutely aware of the need to provide security around all that data. Information security products and hiring consultants can be expensive, and the retailers most prone to getting hacked — small to midsize businesses — are also the ones least able to afford the investment. A few tips for SMBs:
Conduct a security audit. Learn where the gaps in coverage are and then hire a consultant to focus on those specific areas.
Train employees about the risks of phishing and viruses.
Determine which data is most important and then protect it. Not all information is vitally important to protect.
It’s a perfect time to focus on strengthening security, Firth added, because 2017 is shaping up to be a back-to-basics year. “Retailers are focusing on internal, structural evolution, evolving their process and procedures,” she said. “They are simplifying, streamlining — and making themselves more efficient. Simply put, they are optimizing their operations.”
In-store personalization has been slow in coming, but at this year’s NRF Big Show, vendors showcased technology that indicated the tide may be turning. And why not? Retailers are well aware that the ability to create a personalized experience for every customer could methodically lead shoppers to the point of purchase.
However, while retailers have embraced personalization techniques online, that success has not provided the impetus for similar in-store implementations. The benefits personalization offers e-commerce are known and envied by their brick and mortar counterparts. But there are myriad types of personalization – navigational and predictive, for example. Personalization can be based on third-party data, database segmentation, past purchase history, location and more. It’s complicated to start on the path to personalized selling and it doesn’t get easier.
That may change shortly, as the costs of the technology have decreased, third-party integrators are more fluent with the necessary equipment and software, and the benefits are becoming more evident. Shoppers, too, expect a unified commerce, tech-driven experience in which in-store mirrors online, and vice versa. Vendors are more motivated than ever to provide retailers with tools that will help them reflect the online experience inside a physical store. In addition, increasingly, those tools are easier to use and to integrate with existing systems.
One of the big challenges for retailers is determining how to make in-store personalization attractive to shoppers; some customers see the technology as overly intrusive. In its second annual “Creepy or Cool’ survey, RichRelevance found customers embraced personalization when it suited their needs.
“For the second year in the row, the study finds that shoppers think it is cool to get digital help finding relevant products and information – on their own terms when they choose to engage,” said Diane Kegley, CMO of RichRelevance. “However, they are creeped out by digital capabilities that identify and track without a clear value offered in return.”
However, it’s difficult for retailers to understand exactly what shoppers’ expectations are at any given time because they are shifting and evolving. To address that, part of the focus of this year’s NRF was the underscoring of the need for retailers to get back to basics and to develop scalable, repeatable and reliable processes that support their enterprise order management capabilities. A solid foundation built on those principles is likely to be more responsive to constantly changing – and expanding – shopper expectations.
Much of the ordering technology that is currently available to retailers is focused on the flow of product from one channel to the next. Understanding and pleasing the customer, unfortunately, has until now been simply the result of having solid ordering technology. The customer experience is largely an afterthought.
Many of the vendors at NRF believe that consideration of customer satisfaction and their preferences will move to the forefront this year. While order systems must be accurate and efficient as well as cost-effective, those characteristics are no longer a differentiator in retail. Instead, they are a requirement. What will distinguish the great retailers are those that can receive orders and provide internal inventory visibility across all sales channels as well as track customer satisfaction with store fulfillment.
Although efficiency and process are obviously important to retailers, personalization offers the potential of increased sales as well as customer loyalty. People enjoy patronizing businesses that know their tastes and provide that personal touch. In addition, retailers can further improve the customer experience by providing insight into inventory and delivery, which in turn helps the customer feel empowered. As retailers continue to blend the right mix of product, service and ordering flexibility, they encourage a sense of empowerment that enhances the customer experience.
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.