CashStar Retailer Roundtable focuses on digital discounts and disruption
By combining offers with other retailers or entities, retailers can avoid being victimized by the “adverse selection” of consumers who simply look for the largest discount they can find at a given time, Alex Rampell, CEO and co-founder of offer-based payment platform TrialPay, told attendees at the recent Retailer Roundtable event sponsored by digital gifting platform CashStar.
“Offering a massive discount just gets people to go elsewhere for a bigger discount,” said Rampell. “Those consumers do not develop into loyal customers.”
However, by enticing consumers who fit a retailer’s customer profile with combined offers, such as a promotion from Whole Foods that provided a free month’s subscription to the New York Times, retailers can help eliminate customers who only want a low price.
In addition, Rampell said digital gift cards can serve as an effective and traceable online inducement for consumers who are searching for a product that they can only buy offline, such as a fast food burger.
“Clicks on a banner ad for burgers don’t matter,” stated Rampell. “But a gift card proves its effectiveness.”
Rampell said an above-average online offer of a gift card to an established good customer can produce a click-through rate of more than 30%, compared with the .02% click-through rate of a typical banner ad.
In addition, Denee Carrington, senior analyst for Forrester Research, told attendees that mobile commerce is a bridge connecting the digital and physical worlds. Although today mobile commerce only accounts for 8% of e-commerce sales, which only account for 9% of all retail sales, she said retailers need to focus on it for a simple reason.
“Mobile enables access to the big prize,” said Carrington.
According to Carrington, Forrester data shows that U.S. mobile commerce will reach $90 billion in sales by 2017 and mobile commerce will reach a hockey stick-shaped point of inflection in 18 months, with adoption of in-store and proximity mobile commerce increasing at a 140% annual compound growth rate.
“Digital disruptors will tear down and rebuild every industry,” said Carrington.
In the case of mobile retail, Carrington advised the use of value-added mobile services, such as coupons, enhanced product information, open payment and loyalty rewards, to help reap the benefits of the digital disruption mobile commerce will cause. She also advised that these services can be proprietary and do not have to be offered in partnership with a third party.
As an example, Carrington cited a mobile advance ordering system Jamba Juice is piloting in some California stores.
“Order ahead services help you predict future traffic and provide a better customer experience,” Carrington said.
There will not be a single technology that dominates the digital wallet space, said Carrington, although she agreed with other speakers that there will be a general shift away from hardware-based solutions. She concluded her presentation with some advice for retailers who want to successfully launch digital wallet applications.
“Swiping a card is quick,” said Carrington. “A digital wallet has to offer a better, more convenient alternative. The potential benefits must outweigh all barriers. Retailers who play an active role in creating a viable digital wallet business model, including e-gift and m-gift cards, will win.”
HSN’s Grossman delivers NEW accountability message
The state of gender equality among senior executive and in boardrooms is abysmal and “leaning in” isn’t enough to fix it, HSN CEO Mindy Grossman told a group of 300 retail and CPG executives recently.
Grossman was a featured speaker at the annual Network of Executive Women (NEW) Executive Leaders Forum in Rancho Palos Verdes, Calif., last week. According to Grossman, woman “can lean in for the next 30 years and it will not be enough unless we hold boards and CEOs accountable."
“Lean in,” was a reference to a book of the same name by Facebook’s top executive Sheryl Sandberg. "As senior executives. I feel we have a responsibility to create change and to put ourselves out there and to show that the status quo is not acceptable."
According to Grossman, only 15% board members and less than 5% of CEOs in the Fortune 1000 are women.
"If 85% of company leaders are men, change will happen only if there is bold leadership willing to create change and say that it is unacceptable not to,” Grossman said. "Quantitative research proves companies that are diverse are more sustainable and more profitable. Diversity drives innovation. The more diversity of thought, race, gender and culture, the more dialogue will be at the table."
At HSN, a $3.2 billion enterprise, Grossman said the board is 40% female as is 60% of the executive team.
Today, Grossman thinks about the example she is setting for her daughter and the legacy she is leaving beyond the boardroom. As a senior executive "with a platform, network and voice," she said, "if I’m not using it for something positive what has all that risk been for? I’m a huge believer that a lot of the problems we have in the world — in our local communities, national communities and global communities – could be solved by the education and empowerment of women."
Baby business healthiest at Newell-Rubbermaid
Driven by strength in its baby and parenting and tools business units, Newell-Rubbermaid grew second quarter sales 3.5% to $1.47 billion, but profits fell slightly to $109.8 million, or 37 cents a share, compared with $111.8 million, or 38 cents a share, the prior year.
Earnings per share surged to 50 cents a share if restructuring and restructuring related costs and discontinued operations are removed from the profit picture.
Company president and CEO, Michael Polk, said Newell Rubbermaid is well positioned to accelerate core growth in the back half of the year fueled by new item launches in each of its product segments supported by brand investment. Polk said the company was confident in its forecasts for sales growth, margins and cash flow and based on the year-to-date profit performance elevated the low end of its earnings forecast range by two cents to $1.80 to $1.84.
In the second quarter, the baby and parent segment performed the best, growing sales 7.6% to $196.2 million, followed by the commercial segment where sales grew 7.1% to $203.6 million.
Sales in writing segment increased 4.1% to $477.8 million and sales in the home solutions segment increased 2% to $399.1 million. Tools was the only product segment to post a decline, dropping 2.2% to $198 million.