From the Editor’s Desk
Welcome to the new and improved Chain Store Age! We’ve changed the size of our magazine (yes, the pages are bigger — it’s not your imagination), and updated the style and size of our type fonts with the goal of making CSA more reader-friendly and allowing us to incorporate more visuals going forward. We’ve also introduced a new logo, one that better reflects retailing’s omnichannel environment.
Our print redesign is part of a larger update of CSA’s brand identity that is reflected in our digital products as well. Our website is now incorporating more video — including, most recently, a terrific series of interviews with the nation’s leading real estate developers that were conducted at the annual RECon show in Las Vegas — along with such regular features as Store of the Week and Hot Concepts.
CSA’s e-newsletters have been revamped, with enhanced coverage and more photos. The daily has a new name, CSA DayBreaker, and the mix of news has been expanded to include technology coverage. Given the huge impact technology is having on every single aspect of the retail experience, we felt it crucial to incorporate technology into our daily news coverage. More than ever, DayBreaker is a must-read for busy retail executives who want to stay on top of the news and ahead of the competition. (And speaking of technology, veteran retail tech reporter Dan Berthiaume has joined our staff as a senior editor. Don’t miss his TechBytes column online and his expanded tech coverage in print.)
Our real estate newsletter, SiteTalk, has been renamed OnSite, and our store planning & design, construction and facilities newsletter, SpecsTalk, is now called StoreSpaces. New, exciting features have been added to both. We’ve also changed the name of the corresponding sections in the magazine to reflect their digital counterparts.
We hope you like the changes, both to the magazine and our online products. As always, your feedback is very welcome!
It’s hard to believe, but we’ve hit the mid-year point already! I thought it would be interesting to take a quick look back and see what articles initiated the most interest among our online readers. Here are chainstoreage.com’s 10 most viewed stories of the year to date:
①Johnson out as CEO of J.C. Penney; Ullman back
②Retail Store of the Year: And the winners are…
③Top 10 Most Innovative Companies in Retail ④13 Hot Trends for 2013
⑤Macy’s to close six locations, open nine others
⑥Walmart in line to open 500 Neighborhood Market stores by fiscal 2016
⑦Reinventing Retail: Hointer, Seattle
⑧Dick’s to open 40 stores in 2013 and debut Field & Stream format
❾Five Below to open 60 stores in 2013 and expand into Texas
⑩The J.C. Penney Debacle: Five Lessons Learned
It’s not surprising that J.C. Penney bookends the list. From Ron Johnson’s exit to Mike Ullman’s swift return, the company remains the biggest and most fascinating story in retail. It will be interesting to see how the next six months play out. So here’s a request for more feedback: After all that’s happened so far, how do you think Penney fare going forward?
Omnichannel: It’s Not Just for the Front End Anymore
Upon hearing the phrase "omnichannel," most retailers probably envision reaching out to customers across front-end touchpoints, such as store, PC, mobile device and social media. But fulfilling customer needs across those touchpoints does not occur in a vacuum. Tamara J. Saucier, VP industry, retail solutions for cloud-based supply chain collaboration provider GT Nexus, recently took time to explain the impact of the omnichannel revolution on back-end retail operations, and how retailers can adjust their supply chains to maximize the effectiveness of their omnichannel strategies.
Everyone is talking about how an omnichannel approach is revolutionizing retail front-end operations. How is it affecting retail back-end operations?
There has been a lot of focus and investment on engaging consumers, which has changed consumer expectations for delivery and service. Now we are seeing a shift in focus to the back-end supply chain to enable and support those new expectations. The supply chain is at the very heart of profitability and service. The key to enabling omnichannel retail is a supply chain that provides complete visibility into all inventory and investments, including goods that are in holding across all channels, in transit or at consolidation points.
Retailers have to be agile enough to identify all goods throughout the entire supply chain that are available to expedite, reroute or allocate to consumers. And they need to understand the cost and value of these decisions. This is a different paradigm for retail. It is affecting processes, systems and even organizational structures.
How does omnichannel supply chain visibility help retailers meet the needs of the omnichannel consumer?
Knowing where all goods are across the production life cycle is essential to the omnichannel supply chain. Enabling visibility to the lowest level of granularity will allow retailers to be much more responsive to their market.
If a retailer has visibility into its factory floor and shipment pipeline, then they now know which goods are available to expedite, which can be air-shipped to replenish hot selling items, which can be re-routed to different locations, or which could be drop-shipped direct to consumer. Having these options positions retailers to meet fast-changing consumer demand in a way that provides the highest level of service, yet remains wholly transparent to the end customer.
How can omnichannel supply chain visibility help retailers realize the full potential of RFID?
More and more retailers are deploying RFID, but often their vision is set primarily on in-store benefits. There’s room to capture significant ROI by tagging earlier in the supply chain, at source, to improve compliance, visibility and transparency.
Using RFID at the point of manufacture can improve packing accuracy, reduce concealed shortages and eliminate the need for higher volumes of buffer stock. Improved shipment accuracy supports item-level proof of delivery that can translate into new capabilities in available-to-promise commitments.
It also provides a certified chain of custody, which can support authentication for transparency relating to regulatory compliance, CSR and/or counterfeiting.
How can retailers enable their supply chains to be more omnichannel visibility-ready?
Doing more at the source is key. This is where the cost of change is less and the impact to agility is highest. Customization of goods, generation of store-ready merchandise, providing flexible pack strategies, preparing shipments for direct ship or cross dock can all be done at the factory level to not only reduce costs and time, but to make the supply chain more agile and transparent.
Given the diverse sourcing strategies across branded and private label goods, retailers must have a framework or platform to capture a single view of the supply chain. This is a major challenge when there are multiple parties involved in the supply network, each having their own processes, tools and logistics models. Visibility across all sources is critical. It is imperative that the visibility supports execution capabilities. Finding ways to do more at the source and securing actionable inventory intelligence is a major priority for injecting responsiveness into the omnichannel retail supply chain.
Speakers at the recent Internet Retailer Conference & Exposition in Chicago discussed how the retail industry is using a number of digital technologies to assist performance in areas such as CRM, marketing, driving customer traffic and converting sales. Following are a few brief highlights:
Liberty Jane Clothing, an online specialty retailer of clothing and accessories for American Girl dolls, uses the Pinterest social platform to give its customers an inside view of the company and create a more personalized relationship with them.
"You can create an authority profile and become a visual Sherpa for your niche," said Jason Miles, co-founder and marketer of Liberty Jane. "You can give a visual insider’s view of the company. It’s a nice way to get close to a customer or run a contest."
Miles recommended that retailers use third-party Pinterest analytical solutions to track current hot topics on Pinterest and see what type of traffic and participation the platform is driving to their e-commerce site. He also said retailers should take advantage of the new "Rich Pin" functionality that allows pins to contain more metadata. But he said social media activities should not occur in a vacuum, using Facebook as an example.
"If you spend money developing Facebook fans and don’t move them through other platforms, you’re in trouble when Facebook goes out of vogue," said Miles.
Brooks Brothers is connecting data to the customer experience in order to replicate the highly personalized shopping environment of its stores on its e-commerce site.
"We are connectors. Our job is to connect data to the customer experience with a software package," said Cindy L. Lincks, director of analytics for Brooks Brothers.
For Brooks Brothers, this package includes the Adobe Target, Analytics and Scene 7 solutions.
Aided by Adobe technology, Lincks said Brooks Brothers uses CRM data to define customer groups and map out customer touchpoints. The company then automates cross-departmental reporting and frequently adds Web metrics to better support its business intelligence software.
"It’s not just what appeals to the masses," said Lincks. "It’s meeting individual customer needs as they move through the site."
PetFlow, a pure online player, found that its initial efforts to expand its marketing activities to Facebook didn’t work out so well.
"Google is not like Facebook — the consumer is searching with purchase intent," said PetFlow co-founder Alex Zhardanovsky. "Facebook users aren’t sitting there with a credit card on their desk."
After initial efforts to develop Facebook fans and convert them to customers wound up costing $300 to $400 per customer, PetFlow started targeting its core customers, who were higher-income female animal lovers age 40 and older, by targeting consumers who had "liked" other retailers such as Amazon.com, Saks and Neiman Marcus. Within two months, PetFlow jumped from 10,000 to 200,000 Facebook fans.
To convert those fans into customers and evangelists, PetFlow began running funny ads with cute animal photos that customers voluntarily reposted, liked, commented upon and shared, vastly extending the reach of the ads at no extra cost to PetFlow.
"Facebook advertising lives on," said Zhardanovsky. "We’re still generating sales from ads we posted months ago."
"If you spend money developing Facebook fans and don’t move them through other platforms, you’re in trouble when Facebook goes out of vogue."
— Jason Miles, co-founder, Liberty Jane Clothing