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Catering to the Teenage Customer

BY CSA STAFF

There are more than 32 million teens in the United States (and more than 40 million people aged 12 to 22) with more than $175 billion in spending power—and they have no qualms about spending most of it.

To entice these shoppers to spend their dollars, retailers should focus on how to engage their tech-savvy teenage customers, according to Ron Ehlers, former VP of information systems for Pacific Sunwear of California in the TOPSS session “Catering to the Teenage Customer.”

TOPSS is produced by Chain Store Age and Retail Technology Quarterly.

“Teens tend to be early adopters of new technology and they communicate primarily through texting and e-mail,” Ehlers said. “With that said, this is an important way to communicate with our customer base.”

Pacific Sunwear has been using its Web site to provide a primary source of information and another channel of distribution since 1999. But Ehlers suggested that retailers should take technology to the next level through mobile communication.

“The industry has noticed a change in the way our shoppers shop,” Ehlers said. “For example, sales of watches have dropped significantly over the past few years because many teens don’t wear watches anymore—they just look at the time on their cell phones. Phones are truly the connection to their world.”

To tap into this platform, Ehlers said companies should consider expanding mobile-marketing initiatives that enhance the in-store experience.

Ehlers suggested a concept that includes a workbench or handheld device that would be given to managers and sales associates. A Bluetooth signal on a customer’s phone would trigger the device when they walk in. The customer’s shopping profile would then be revealed to the salesperson, indicating, for example, that they spent over $500 on a specific brand last year at the store. This data flow takes direct marketing to the next level.

“A salesperson can approach the shopper and offer incentives specific to their needs, lifestyle and taste,” Ehlers said. “But since this is an extremely personal platform, you have to be careful not to turn them off.”

Companies can add a few more personal touches to the in-store shopping experience, as well. For example, customers could create an online playlist of their favorite songs by logging onto the retailer’s site. And when shoppers walk into a location, their mobile device would send another signal to push their songs to the top of the in-store playlist.

Retailers can also provide the opportunity for music-download impulse purchases, Ehlers said, adding that Starbucks is already offering a similar program.

“This allows customers to download what is currently being played in the store directly to their iTunes or iPhone,” he explained. “This is a 99¢ sale that keeps the customer engaged and keeps them coming back for more.”

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CompUSA may get a new look

BY CSA STAFF

ADDISON, Tx. After opening a new format store last month, CompUSA may be changing the format of its other stores, depending on customer demand and product interest.

According to reports, the elements found in the prototype store, located in Texas, will be incorporated into other CompUSA locations across the United States.

The nearly 7,700 square-ft. relocation site includes an Apple shop featuring Mac computers, iPods and Apple accessories, and a full-length LCD TV wall.

Additional expansions include extended gaming, which includes an entire wall devoted to the Nintendo Wii, PlayStation3 and Xbox 360 gaming platforms, plus a PC gaming setup to test equipment and play new titles.

While businesses can get their share of support with a specialized services section, all consumers can visit the store’s redesigned IT support area.

“This new store aligns CompUSA’s vision to better serve its three core customers, the technology enthusiast, educated professional and small and medium businesses,” said Gabriela Villalobos, the retailer’s sales and operations evp.

CompUSA announced in April that it would narrow its focus to three core customer groups rather than try to serve a mass audience.

The move was part of a comprehensive restructuring, initiated last February, that included an overhaul of senior management and the closure of half its store base as the privately held chain looked to improve sales and profitability.

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Walgreens withdraws from CVS provider plans

BY CSA STAFF

DEERFIELD, Ill. After many months of talks over low and below-market payment rates by CVS Caremark for four prescription plans, Walgreens has withdrawn as a pharmacy provider from the plans.

Patients affected include members of prescription benefit plans managed by CVS Caremark for ArcelorMittal, Johnson Controls, Progressive Casualty Insurance and Wisconsin Education Association Trust.

Most of the affected members live in Illinois, Indiana, Michigan, Ohio and Wisconsin.

Trent Taylor, president of Walgreens Health Services, the managed care division of Walgreens, released the following statement:

“This is not where we wanted negotiations to lead,” he said. “We’re sorry that our pharmacy patients and CVS Caremark’s clients are caught in the middle, and we’ll do all we can to ensure a smooth transition for our patients to another pharmacy. Meanwhile, we’ll continue to work on resolving this issue with CVS Caremark.

“Leaving a benefits plan is an extraordinary step for us, but it demonstrates how extraordinarily low our payments were from CVS Caremark. We can’t continue accepting reimbursement rates that are drastically below market, while offering patients needed special services such as 24-hour pharmacy access and drive-thru pharmacies.”

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