Clicks & Bricks
Technology is revolutionizing the way consumers shop, both in stores and online. Here is how one retailer is working to bridge both worlds.
British retailer Marks & Spencer is taking a giant leap forward in its goal to becoming a multichannel leader and merging the worlds of physical and online shopping with the opening of its new concept store in Amsterdam.
The centerpiece of the 5,000-sq.-ft. space — which marks the company’s return to the Netherlands after a 10-year absence — is an "E-Boutique" dedicated to womenswear.
The shop features what the retailer calls "the world’s first virtual rail," a display that seamlessly integrates digital rails with physical rails of clothing. It is made up of three stacked 46-in. video screens and three physical rails, with each holding about 50 items of clothing. The display will showcase the latest trends and be updated every six weeks.
Shoppers can place orders for free delivery to the store through in-store order points (photo left) or with iPad-equipped associates. Or they can make purchases via their own mobile phones, using the store’s free Wi-Fi. Customers can also "shop to go," choosing from the edited selection of fashions that are available to buy in-store on any given day.
"The Netherlands has embraced online shopping — customers adore the ease and convenience of buying clothes this way, which is why we were determined to return with our very latest multichannel thinking," said Laura Wade-Gery, executive director e-commerce multichannel at Marks & Spencer. "The E-boutique … allows us to offer our latest fashion collections from a much smaller footprint."
The rest of the store is dedicated primarily to food and beverages, ranging from sandwiches, salads and wines to M&S’ signature prepared meals and groceries.
The Amsterdam concept shop is just the beginning of M&S’ push into the Netherlands. The company has also launched a new Dutch website, and plans to open a full-line store in The Hague in 2014, and a flagship in Amsterdam by spring 2015.
Peaking at the Right Time
Randy Dewitt,CEO, Front Burner Restaurants
Headquarters: Addison, Texas
Type of business: Casual-dining (Twin Peaks)
Number of units: 36 Twin Peaks restaurants in 16 states
Restaurant veteran Randy Dewitt has found his calling in the sports-bar segment of the casual dining industry. The former Brinker International executive founded Rockfish Seafood Grill in 1998, and served as CEO until 2008 when it was sold to a group of private equity firms. He is moving full speed ahead with a second brand, called Twin Peaks, which he and fellow restaurateur Scott Gordon launched in 2005.
Serving up comfort food and drinks (including an extensive selection of draft beer, poured ice cold at 29 degrees) in a mountain sports lodge-styled environment, Twin Peaks is equally well known for its cadre of young, attractive waitresses in revealing uniforms (think short shorts and equally brief red plaid tops). The brand has been rapidly garnering loyalty among the male set with its "Eats-Drinks-Scenic Views" mantra, and Dewitt and Gordon are busy expanding it under the parenting umbrella of Front Burner Restaurants.
With 36 locations and counting, Twin Peaks’ timing appears to be spot on. The chain was named Franchisee of the Year in 2011 by the International Franchise Association, and recently awarded a weighty franchise territory to GT Hospitality Restaurant LLC, which will build 16 units in Kentucky, Ohio and Virginia over a seven-year period. The company has mapped an expansion strategy that follows a 25%/75% company-owned/franchised ratio.
Chain Store Age senior editor Katherine Boccaccio talked with Dewitt about the Twin Peaks brand, its marketing tactics and what it will take to build a national presence.
How exactly did you come up with the Twin Peaks idea?
They say ‘necessity is the mother of invention’ and I needed to close a seafood restaurant that was underperforming. I knew a talented operator, Scott Gordon, who was willing to start up a new concept with me. The idea for Twin Peaks came from my curiosity about the success of Hooters. They dominated the category of sports bars with an all-female staff, and yet neither Scott nor I were fans. So I began to think about how to do it better. We knew there were others like us who would want a better atmosphere and higher-quality food. We thought, ‘What would a guy’s ideal man-cave be like?’
What was the next step?
We chose a hunting lodge theme, and everything fell into place around that. We went to work creating the systems and procedures to ensure Twin Peaks would have the most attractive Twin Peaks Girls, teeth-chattering cold beer, made-from-scratch food, and state-of-the-art audio/visual equipment. Oh, and the name Twin Peaks? That was my wife Michele’s idea.
Is your demographic entirely men, or are you having success with the ladies and families as well?
Although our target customer is a sports-minded male, the smart ladies know where to find them and come in all the time. We also see a lot of families with teenaged boys!
Describe your restaurant design and theme.
We carefully design each of our stores to have a signature mountain-lodge feel. We use unique stones and rustic timber to create a cabin environment complemented by fire pits on the patios, hunting gear and fishing equipment to adorn the walls.
We want our stores to be the ultimate man cave for our guests. It doesn’t matter if you’re in Olathe, Kan., or The Las Vegas Strip — all of our Twin Peaks stores are consistent and on brand.
How important is social media?
Our social media strategy is imperative to connecting with our consumer. Our guest is a beer-drinking male, and we know what those men like. We make the effort to tag a Twin Peaks photo with every post — whether it’s our hearty comfort food, 29-degree draft beer or our beautiful Twin Peaks Girls. That’s what sets us apart in our social media efforts. By understanding who our audience is, we know what to post in order to garner the most significant response and keep those individuals coming back, both online and in our restaurants. We have seen a huge growth in our customer loyalty and our overall success because of it.
What about your marketing events and promotions?
Because we’ve grown so rapidly, our marketing team is more important than ever to engage with our guests, keep our brand consistent and to create original promotional strategies. We host annual parties and events, from our national all-star bikini contest to holiday costume days and game-watching parties. The marketing team does whatever it takes to uphold our Twin Peaks DNA with the ultimate goal of pleasing the guest.
Will you continue to expand your retail offerings?
Our goal is to increase merchandise sales both in store and online, and to make this piece of our business a strong revenue driver. Our hope is to build brand fans who promote for us by wearing our awesome shirts and hats. Online and offline retail will be a focus in 2013-2014.
What are the chain’s expansion plans?
We are opening approximately two restaurants per month, so look for around 70 to 80 stores by the end of 2014. About 25% of those will be corporate-owned and 75% will be owned by franchisees.
What are your typical site selection criteria?
Our ideal site is a freestanding restaurant and large patio on a major freeway with a heavy mix of retail and office nearby. Other generators for us are upscale apartment complexes and sporting venues. The majority of our restaurants range in size from 5,500 sq. ft. to 10,000 sq. ft. Our prototype for ground-up construction is 6,800 sq. ft. with an 1,800-sq.-ft. patio.
What differentiates Twin Peaks from the competition?
I believe what sets us apart is the level of detail we put into making our overall experience the best. Everything in our kitchen is made from scratch and the kind of quality that you would expect in a polished casual-dining restaurant. Our draft beer is served so cold that ice crystals form at the top of the glass. The Twin Peaks Girls are not only beautiful, but are fun and talented, with long-term goals and ambitions. On top of that, Twin Peaks has a company culture that works hard, but takes time to have fun and celebrate our achievements. All of these elements are what set us apart from our competitors.
How would you describe your leadership style?
I find people who know what they’re doing and believe in the Twin Peaks brand DNA. After that, I stay out of their way and evaluate results. I try not to micromanage team members.
What do people generally say when you tell them what you do?
‘Can I trade jobs with you?’
The numbers tell the story: According to the U.S. Census Bureau, there are more than 52 million Hispanics living in the United States, making people of Hispanic origin the nation’s largest ethnic or race minority. The Bureau forecasts that by 2050, this demographic will number 132.8 million — or about 30% of the population. By 2015, one in three newborns will be of Latino descent. And while the overall U.S. population is getting older, the Latino community remains young: More than 60% of the U.S. Hispanic population is under 35, and 75% is under 45.
As much as the Latino population is growing, so is its buying power. By 2015, it is expected to reach $1.5 trillion, according to a study by the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business. A report by Nielsen, "The Hispanic Market Imperative," noted:
"If it were a standalone country, the U.S. Hispanic market buying power would make it one of the top 20 economies in the world."
Given the dramatic growth of the Hispanic market, retailers everywhere should be sitting up and taking note, argued Simon El Hage, senior VP, director of strategic planning for the Hispanic advertising agency Casanova Pendrill, which is part of Interpublic Group of Cos.
"Any retailer that does not understand that Hispanics are a highly complex culture, with regard to how they shop and what they shop, of course are going to miss the boat," El Hage said. "Retailers have to understand that this country is becoming bi-cultural."
Indeed, experts and demographers agree that the United States is on the path to ethnic plurality, largely as a result of the exploding growth of the Latino population, particularly in states like Texas, California, New Mexico, Arizona, Nevada, Florida, New Jersey, New York and Colorado. (The nation’s most populous state, California, also has the largest Hispanic population, and Los Angeles County had the largest Hispanic population of any county, at 4.8 million.) It’s also worth noting that those states with the highest rate of Latino growth in the 2012 Census Bureau estimates were places not normally seen as ethnic magnets, including North Dakota, South Dakota, Alaska and Montana.
Smart retailers, of course, have been marketing to Hispanics for some time. Here are a few examples:
Anna’s Linens: In 1987, Alan Gladstone felt the Hispanic demographic was so underserved that he opened Anna’s Linens. The Costa Mesa, Calif.-based home decor and home textiles retailer has been expanding ever since. It now operates more than 300 stores across the country, with many of the locations in Hispanic areas.
"All retailers were trading down to [Hispanic shoppers] with cheap merchandise at cheap prices," recalled Gladstone, who serves as chairman and CEO of the family-run business, "but my experience was that they wanted steak cheap, not cheap steak."
To appeal to Latino consumers, Anna’s Linens makes sure its offerings parallel the preferences and tastes of the market. The stores offer a clean, cheerful shopping environment, the latest in home fashions and low prices.
"We give them an environment they can’t find anywhere else, and we make the customer feel good about herself," Gladstone said.
Employees at Anna’s Linens — from hourly to management employees — mirror the customer base. About half are Hispanic, which means there is someone in the stores who shoppers can relate to and who speak their own language.
"We have a lot of knowledge [about our shoppers] because we employ the people we’re trying to sell to," Gladstone said.
On-target marketing is also key in appealing to Latino consumers. One of Anna’s Linens’ recent ad campaigns involved a parody of the popular Spanish-speaking telenovelas.
"Telenovelas are the most-watched programs by Hispanics," Gladstone said. "[Our ads] are campy and, with their take on the novela storylines, work really well in Spanish and also resonate in English."
Anna’s Linens’ success with Hispanic shoppers in the United States bodes well for its most recent venture: expansion into Puerto Rico. The chain opened its first store in Puerto Rico in 2012, following it up with four additional units.
Walmart: This past spring, AHAA | The Voice of Hispanic Marketing named Walmart the Marketer of the Year. The chain spent about $60 million on Hispanic marketing in both 2011 and 2012, and is doubling its 2013 multicultural advertising spend, with most of it going to targeting Latinos.
"Our Hispanic market spend is mirroring the growth in the Hispanic market," said Veronica Marshall, spokeswoman, Walmart, Bentonville, Ark.
Walmart’s outreach to the U.S. Hispanic community is not new. But its increased spend is part of a sweeping initiative that has moved the chain to a strategy where everyone takes responsibility for multicultural marketing as opposed to a silo-like approach.
"Everyone from marketing to merchandising to operations is trying to reach the Hispanic shopper, making sure our advertisements are culturally relevant and that we have the right products in store," Marshall explained. "We want to reach them in the most authentic way possible."
Walmart also does a great job when it comes to measuring its Latino involvement, according to Roberto Orci, chairman of AHAA.
"It’s no good to say something’s a priority if you’re not measuring it," he explained. "But Walmart can tell you store-by-store, day-by-day how they are doing. So when they say 100% of their business growth in the next 10 years will be multicultural, they are talking at the store level."
Having 170,000 Latino associates helps the discounter stay on target.
"Our associates are at ground zero in terms of serving the customers every day," Marshall said. "And many (associates) also are Walmart customers, so we look at our associates not only as the folks who work in the stores, but as folks who use our services and purchase the products in the stores."
Once a month Walmart also reviews business with its multicultural and business partners.
"Solutions can come from everywhere, and everyone has a voice and is part of the process," AHAA’s Orci added.
Sears Holdings: "Sears champions diversity, but how do we do that? We don’t mention it; we just do it," said Shannelle Armstrong-Fowler, spokeswoman, Sears Holding Corp., Hoffman Estates, III.
Sears gets it right through a triumvirate of essentials: the right messaging, the right products and the right in-store experience. Without all three coming together, the customer can’t be fully engaged, Armstrong-Fowler explained.
Hispanic shoppers do not represent a single entity, the Sears spokesperson noted. They come from a number of different countries, and from several levels of acculturation. As a result, Sears keeps it simple.
"We have to be careful not to overly complicate this formula," Armstrong-Fowler said. "There are clusters [of nationalities], no different to what you find in any population. So we have an umbrella strategy, and the individual stores do things that are more targeted."
Sears also uses social media to target shoppers. (According to a study by uSamp, Hispanics participate in social media at a higher level than the general population.) Kmart launched Latina Smart, an online community dedicated to empowering Hispanic women. It now has more than 28,000 Facebook fans and nearly 2,500 Twitter followers. The initiative also includes a scholarship program for young Latinas and a 10-week paid internship at the corporate Sears office.
This program, said Armstrong-Fowler, is a result of listening to conversation on Twitter and Facebook. "It’s a two-way street," she added, as the young Latinas who benefit from the program also help Sears. The company learns what Hispanics want from it, and how they like to interact with it.