Blending the Physical and Virtual Store Experience
There has been a recent trend in retail of new dynamic store formats that make the physical store experience more closely mirror the virtual store experience. Examples include Staples “omni-channel” stores that feature kiosks offering access to Staples’ full product inventory and RadioShack’s new concept store in Manhattan that includes interactive product fixtures such as display speakers that customers can test with music from their own personal devices.
As customers continue to blend channels and supplement their lives with constant connectivity, a similar blending of the virtual and physical store environments makes sense. A large percentage of customers are entering the store having already performed basic product research online, and will not appreciate having to hunt for goods or information that were available at the click of a mouse on a retailer’s e-commerce site.
However, effectively redesigning the physical store experience to meet the needs and expectations of digital consumers means more than throwing in some touch-screens or connecting the store to customers’ mobile devices. It means a complete rethink of what the store experience is all about, and does not automatically mean going in a “futuristic” direction. For example…
Indie retailers are getting it right (the Human Element, Part I)
Independent book and music retailers have experienced something of a resurgence in recent years while large chains operating in these verticals have struggled. Go to a large chain that either specializes in or carries book and music products, and you will typically find a wide but shallow assortment of popular, mainstream writers/performers, genres and publishers/record companies. If you want to poke around to find older or more obscure releases, you’re probably out of luck.
On the other hand, independent retailers usually have a selection of the most popular offerings, but also specialize in providing a vast array of products to satisfy more eclectic tastes. Independent record stores have especially thrived by stocking deep inventories of vinyl LPs, which are making a comeback among hardcore music fans. Customers can find almost anything they are looking for, probably place a special order for anything that is out of stock, and the neighborhood nature of independent stores means staff will often come to know their regular customers and be able to make personalized recommendations based on their individual taste and buying history.
Which brick-and-mortar retail model sounds more like e-commerce? Add in the fact that browsing in a store offers tactile rewards that a website cannot provide, and there is no contest between indie and chain retailers in who provides a more personalized customer experience with access to a wider product assortment. And the typical indie store operates using a very low-tech model. Larger chain retailers seeking to “virtualize” their store experience need to remember that e-commerce offers some very humanistic features that technology alone cannot replicate.
The customer carries the store in their pocket
Naturally, the intelligent application of technology still plays a major role in making the physical store environment more comfortable for omni-channel shoppers. And one very important aspect of applying technology intelligently is realizing just how much technology the customer carries in their pocket when they enter a store. Whether a store has any customer-facing Internet access tools (such as touch-screen kiosks) or not, most customers are now coming in fully connected to the Internet via personal mobile devices. Instead of moaning about “showrooming,” retailers can turn this to their advantage and provide a more individually tailored and responsive store experience that crosses multiple channels while saving considerable sums of money on technology infrastructure costs.
For starters, retailers can now develop mobile apps that perform many of the functions, such as price/product information, that are usually performed by in-store kiosks. And on an opt-in basis, retailers can use also location tracking to determine not only when customers are passing by or entering a store, but where they are inside the store. Retailers can then send instant mobile coupons based upon a shopper’s purchase history and proximity to certain items.
To help combat the inevitable comparisons with competitors’ prices that customers will conduct with their mobile devices, retailers can also offer on-the-spot targeted mobile discounts to meet or beat lower prices found on competitors’ website, saving otherwise lost sales and boosting customer satisfaction and loyalty.
Store associates should be part of the mix (the Human Element, Part II)
Store associates are another crucial ingredient when creating an omni-channel store experience. By arming associates with tablets, smartphones or other web-enabled devices (and making sure they are properly trained), retailers can turn them into human versions of the cookies that track and respond to customer behavior on websites. Some higher-end retailers have already pursued this strategy, using web-enabled devices to empower associates to recognize customers and have full access to their preferences and history the moment they enter the store.
However, the pervasiveness of omni-channel activity, both in retailing and in consumers’ private lives, necessitates retailers of moderately priced and even discount goods to start giving their store associates virtual capabilities. As prices in general have come down, customer experience has become more of a differentiator, and it is easier than ever before for consumers to choose to shop at a slightly pricier retailer to obtain vastly superior customer service and satisfaction.
Cold weather chills Coca-Cola’s Q2
ATLANTA — Coca-Cola says slow economies in Europe, Asia and Latin America and cold weather conditions across multiple regions affected consumer spending as well as its overall nonalcoholic ready-to-drink beverage performance.
Coca-Cola reported worldwide volume growth of 1% in the second quarter ended June 28, and 3% year-to-date. It also grew global volume and value share in total nonalcoholic ready-to-drink (NARTD) beverages as well as in sparkling and still beverages for the quarter. But volume growth in the quarter was below the company’s expectations.
Coca-Cola Americas grew volume 1% in the quarter and 2% year to date, with North America volume down 1% and Latin America volume up 2% in the quarter. Coca-Cola International grew volume 2% in the quarter and 4% year to date, with second quarter Eurasia and Africa volume up 9%, Pacific volume up 2% and Europe volume down 4%.
“Our second quarter volume results came in below our expectations, reflecting an ongoing challenging global macroeconomic environment and unusually poor weather conditions in the quarter,” said Muhtar Kent, chairman and CEO of the Coca-Cola Company. “While we are not happy with our performance, we did gain global volume and value share in total nonalcoholic ready-to-drink beverages as well as in sparkling and still beverages in the quarter. Despite the headwinds in the quarter, we are committed to improving upon our results, with current dynamics leading us to believe that our performance will be better in the second half of the year. We remain confident in our 2020 Vision and our system’s ability to execute with precision around the world. In this context, we remain firmly focused on investing alongside our global bottling partners to strengthen our system for the future, to deliver the brands and beverages that consumers love and to achieve our long-term performance goals.”
Worldwide sparkling beverage volume was even in the quarter and up 2% year to date. Despite unseasonably cold and wet weather and continued volatile macroeconomic conditions in many markets around the world, the company grew global volume and value share in sparkling beverages in the quarter, led by marketing campaigns such as Share a Coke in Europe and Coca-Cola Open Summer in North America. Worldwide brand Coca-Cola volume grew 1% in the quarter and 2% year to date, with growth in the quarter across diverse markets, including Thailand (+24%), India (+18%), Nigeria (+15%), Russia (+11%), Argentina (+7%) and the Philippines (+7%).
Worldwide still beverage volume grew 6% in both the quarter and year-to-date, with solid volume and value share growth across beverage categories, including packaged water, juices and juice drinks and ready-to-drink tea. Excluding the impact of acquired volume, primarily the Aujan partnership in the Eurasia and Africa Group, still beverage volume grew 4% in the quarter. Ready-to-drink tea volume grew 10% in the quarter, with continued strong performance of key brands such as Gold Peak and Honest Tea in North America, Ayataka green tea in Japan and Fuze Tea across multiple markets worldwide. Packaged water volume grew 6% in the quarter, as the company continues to focus on innovative and sustainable packaging and immediate consumption occasions that help drive value share growth ahead of volume share growth. Energy drinks volume grew 5% in the quarter driven by growth across its global portfolio of energy brands. Juices and juice drinks volume grew 4% in the quarter, with growth across all geographic operating groups.
Coca-Cola’s North America Group’s volume declined 1% in the quarter and was even year-to-date, cycling 1% growth in the prior year quarter. Volume was under pressure due to unseasonably cold and wet weather and the timing of the Easter and Fourth of July holiday periods as well as weakened consumer spending that has impacted the overall NARTD beverage industry in North America. Reported and comparable currency neutral net revenues for the quarter declined 1%, reflecting a 1% decline in as reported volume and even price/mix, including positive 1% price/mix for sparkling beverages.
During the quarter, North America maintained volume share and grew value share in total NARTD beverages as the company continued to focus on its core strategies of building strong brands, creating value with customers and enhancing system capabilities. In addition, the company gained volume and value share in both sparkling and still beverages, with volume and value share gains across every still beverage category except sports drinks. Sparkling beverage volume declined 4% in the quarter with sparkling beverage price/mix growth of 1% and value share growing ahead of volume share. Still beverage volume grew 5% in the quarter, led by strong performance across both the ready-to-drink tea and packaged water categories with brands such as Gold Peak, Smartwater and Dasani leading the way. Further, our volume and value share gains in the juices and juice drinks category were driven by 4% volume growth for Simply and 3% growth for Minute Maid.
Kellwood Brands reshuffles executive team
NEW YORK — Kellwood Company, a leading apparel manufacturer and marketer, has appointed Lynn Shanahan to the newly created role of CEO of Kellwood Brands.
Shanahan will be responsible for the overall management of Kellwood’s portfolio of fashion brands, including Rebecca Taylor, David Meister, XOXO, My Michelle, Sag Harbor and Briggs, as well as the private label businesses and new strategic partnerships. She will report to Jill Granoff, CEO of Kellwood Company and Vince, which recently filed its registration statement for an initial public offering. Granoff will continue to provide strategic oversight to Kellwood, lead the Vince brand and manage select functional areas of Kellwood Company.
“I am excited to name Lynn Shanahan as CEO of Kellwood Brands,” Granoff stated. “Her proven leadership abilities and track record of business development across multiple brands, product categories, channels, and geographies will add significant value to Kellwood as it strengthens its portfolio and expands its industry presence.”
Shanahan has more than 30 years of executive leadership experience in the fashion and retail industry. She is founder of the C2 Group LLC, a company that partners with leading fashion and lifestyle companies to provide operating management, brand development and overall growth strategies. Most recently through C2 Group, Shanahan was president of Marimekko NA, where she was responsible for spearheading the company’s North American expansion strategy including retail, wholesale and e-commerce platforms and the opening of New York and Beverly Hills flagship stores. Previously, Shanahan served as group president for Tommy Hilfiger playing an integral role in shaping the company’s long term global vision and growth with responsibility for U.S. wholesale, e-commerce, licensing and marketing. She is also credited with building Tommy Hilfiger’s global licensing and distribution program to more than $1 billion in sales.
“I am thrilled to be joining the Kellwood Company,” Shanahan commented. “I look forward to becoming a part of this well-respected organization and using my experience to continue to build Kellwood’s impressive brand and business growth platforms.”