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All dressed up and going places

BY CSA STAFF

By Steven Kramer, [email protected]

Fashion and apparel retailers are using multichannel retailing to augment the in-store experience for brand conscious shoppers. In the process, they’re delivering a compelling customer-centric expression of the retail brand that elevates the destination status of their physical stores.

The face of retail is changing with enormous rapidity. It’s reshaping the way brands engage with customers at every point of the buying process – and beyond – to boost customer satisfaction and increase loyalty.

Today’s shoppers are hyper-connected and expect to be able to mix and match channels with ease, moving fluidly across digital touch points, social networks, e-commerce storefronts, devices and store locations in a consistent and connected way.

What’s more, devices to access the digital world – smartphones, smart tags and sensors – are changing consumer expectations and introducing new ways to connect with customers. All of this makes multichannel an undeniable reality that brands need to master, and fast.

The good news for apparel and fashion retailers is that by integrating mobile platforms into the multichannel mix, they can deliver a very different in-store shopping experience that’s a unique expression of their brand values – making shopping fun and engaging but most importantly, personalized.

Introducing “MyCommerce”
Shopping in person is a physical experience that’s difficult to replicate online. Consumers get to touch the merchandise and see it up close, and for fashion and apparel retailers that’s a really big plus.

By blending the in-store and mobile channels, retailers can augment the in-store experience and deliver truly compelling “MyCommerce.” In the digital world, retailers have the opportunity to build a complete view of their shoppers to create personalized experiences. This needs to extend to their activities in-store, using customer intelligence and insights to engage with shoppers in real time and incentivize and reward shoppers for their brand loyalty.

But for incentives to work properly they have to be relevant to the person at a particular moment. When a shopper visits the store and uses a mobile “check in” app, they could receive a simple question to identify the purpose of the shopping trip, helping the retailer to deliver the right content and incentives at the right time.

There is a lot of room for creative incentives based on customers’ preferences and purchasing habits. Using the same app, customers could receive instant updates on what items complement previous purchases or gain immediate knowledge of what’s currently trending in-store. If they have a favorite designer, they could receive advance notice of a new line coming, or could be prompted to go to their favorite fragrance counter to receive a special sample or giveaway with purchase.

And at the most basic level, using their mobile phone, shoppers can instantly find what’s in stock and available in their size and color preference, with the additional opportunity to be able to order and reserve from an “endless aisle” of inventory for delivery or collection in-store next time they visit. While not as glamorous as some of the previous points, getting this aspect right meets a basic customer expectation. For retailers with old infrastructure or processes, making this information available and accurate can be challenging, but it is not an option once it has become a consumer expectation – it needs to be a reality.

Integrating social into stores
But shoppers aren’t stopping there. They want to post a photo of an item and add it to their wish list to share with friends and family, or request feedback on items via social media. Some retailers are going as far as to integrate social media into the store shelves, with C&A in Brazil putting the number of Facebook likes directly on the hanger, for example.

For the retailer, being aware of these social media interactions paves the way to delivering detailed product reviews to customers as they browse in-store and providing instant coupons or daily deal discounts to encourage shoppers to make an immediate purchase.

A surge of innovation
When it comes to getting closer to customers, and using multichannel knowledge of a shopper’s habits, retailers can start to deliver on the promise of becoming a trusted advisor.

For example, on their way to the store, consumers can use their phones to access their very own “personal shopper” or “style guru” app that identifies likes from their previous purchase history and provides personalized recommendations on what’s new in-store that might be of interest.

Along with answering the question on the check-in app about the shopping trip purpose, shoppers could add more information about their shopping trip goal, e.g., “I want to try a complete new look,” in which case they could be offered a different style from what they purchased in the past to consider, or perhaps they want to find out “what works for my shape,” following which they are presented with a choice of body styles to build their shape. Perhaps they want to track down the perfect “wedding or work outfit,” and they can instantly receive a menu of style book ideas together with in-store item locations to help them find what they’re looking for.

Retailers can also put a new twist on the “order and collect” initiative by offering “reserve and try” apps that let shoppers research and prepare to maximize the convenience of their in-store visit. Within a few minutes they can request items in their size and color preferences – or try a total look – and have items ready and waiting for them to try on upon their arrival in-store.

Doing things differently
Today’s multichannel retailing technologies have created a powerful tool for better, closer and deeper consumer engagement and expanded the choices for communicating with shoppers at the right time and right place.

By doing new things in new ways, fashion and apparel retailers can reinvent the role the store serves in the total customer experience, creating more immediacy and greater brand trust – all of which allows today’s fashion and apparel retailers to take their look to the next level.

Steven Kramer is responsible for running business in the Americas for Hybris, which provides a complete multichannel commerce solution. Previously, Steven was president and co-founder of iCongo. He can be reached at [email protected].


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Small-Mart: An urban legend in the making?

BY Jeff Green

I’ve written before about the ongoing trend of some of the biggest names in retail downsizing. Now I’m seeing how brands like Target, Wal-Mart and Office Depot are rolling out smaller new store formats in urban environments, and it has me thinking about how this downsizing phenomenon might be even more important than many people realize.

From what I’ve read lately, the difference between a traditional Office Depot and the new, smaller urban concept being rolled out is significant: At around 5,000 sq. ft. the new urban stores are about one fourth the size of the traditional stores. Target’s new City Targets, the first wave of which recently opened in Chicago, Los Angeles and Seattle, are sized at around 80,000 sq. ft. to 100,000 sq. ft. — about half the size of a standard Target. I see these retailers’ willingness to radically alter their store size as a pretty big deal. To overcome all the logistical and operational complications that often accompany the process and to consider a much smaller inventory, to me, is an indication that they’re really open to changing their way of thinking.

While the smaller stores are designed to address one of the traditional headaches of operating in densely developed urban areas — namely, the physical limitations and lack of space — other issues exist. Cities are still generally demanding higher rents (in some cases much higher rents) and will continue to present zoning and operational complications that pad sites in the suburbs do not. Basically, it would seem that national brands have reached the point where their saturation of many suburban markets has now made the untapped urban markets more appealing and worth these potential headaches.

What’s really interesting to me is the fact that, by nature, these smaller urban stores will have to carry a much more limited inventory — both because of their smaller size, but also because of the unique requirements of urban shoppers. Not only do urban shoppers like to get in and out quickly (no different than most of their suburban counterparts), they’re also more likely to prioritize the portability and efficiency of the products they purchase. Urban shoppers are less likely to have the room to transport or store that economy-sized pack of toilet paper. And, the size of the home furnishings they look for will vary, too. It’s not likely an outdoor dining set containing a large table and eight chairs will fit on the balcony of an efficiency apartment, so the size of the products being offered will require much less space on the showroom floor.

Inventory control is nothing new for retailers. It’s a process that began for many when recessionary pressures made tighter inventory controls a necessity. This urban downsizing could help retailers take their inventory control one step further and really edit their offerings based on the actual needs of the consumers, and not the perceived needs (think even more micro-merchandising by location). I think the retailers with these smaller urban stores can (and will) get creative and will ultimately figure out more ways to save space that can translate to their non-urban stores as well. Which is when the trend of downsizing could get even more interesting. After all, editing your inventory doesn’t have to be a bad thing. As I’ve mentioned before, I think it can actually be a real positive for some retailers. I’ve seen a number of restaurants, both casual and fine dining, have success with focusing on a few select items and offering a limited menu. Doing a few things really well — at least in some select locations and circumstances — just might be a trend with some legs.

It will be interesting to see how these smaller urban locations perform. I think their success might have us asking ourselves, “Are smaller, more efficient layouts just an urban phenomenon, or are they the wave of the future for all markets?

What do you think? Please make a public comment below or feel free to e-mail me privately at [email protected].


Click here for past columns by Jeff Green.

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Staples indicates weakness ahead

BY CSA STAFF

FRAMINGHAM, Mass. — If Staples is a proxy for the health of the U.S. economy don’t look for conditions to improve any time soon.

Staples reported weak second-quarter results Wednesday morning and shared a bleak outlook for the remainder of the year. That’s bad new not just for Staples shareholders, but for anyone looking for signs of economic improvement as Staples has exposure to businesses of all sizes. If economic conditions were improving it would be evident in more robust demand for the type of products and services offered by Staples.

Instead, the company said second-quarter sales declined 6% to $5.5 billion and earnings per share fell a whopping 28% to 18 cents compared to 25 cents the prior year. The earnings decline wasn’t quite as severe if a one time $21 million tax refund received during the second quarter the prior year is excluded. Excluding the tax benefit earnings per share only declined 18%. Either way, not a good showing for Staples and a troubling commentary on the health of the U.S. and European economies.

“Our second-quarter results fell short of our expectations due to softer than expected sales trends in North America and ongoing weakness in Europe and Australia,” said Ron Sargent, Staples’ chairman and CEO. “We continue to build momentum in categories beyond office supplies, but these improvements were more than offset by weakness in computers and core office supplies during the second quarter.”

Sales in the company’s North American Delivery units fell 1% to $2.4 billion as the company lost two large contract customers. North American retail sales declined 3% to $2 billion and same-store sales declined 2% with results negatively affected by fewer customers visiting the company’s stores.

Lower sales of computers, software, and computer accessories were somewhat offset by growth of copy and print, mobile phones and accessories, and facilities and breakroom supplies, according to the company. Staples ended the quarter with a total of 1,915 stores in the U.S. and Canada after opening four stores and closing five.

Things were even bleaker on the international front where sales of $1.1 billion reflected a decrease of 18% in U.S. dollars and a decrease of 10% in local currencies.

Economic weakness drove declines in the company’s European delivery businesses, as well as a 9% decline in comparable-store sales in Europe. Staples ended the quarter with 375 international stores.

Due to the weaker than expected second quarter showing, Staples revised its outlook for the remainder of the year and now envisions slower growth in the United States and continued weakness in Europe.

“We’re taking a hard look at each of our businesses, and we plan to make significant changes to improve results,” Sargent said. “We’re also building a plan to reallocate resources, take advantage of our best growth opportunities, and drive increased cost savings.”

The company expects full-year sales to be flat compared with the prior year and full-year earnings per share to increase in the low single-digits.

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