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Effective Local Store Marketing

BY CSA STAFF

By David Holland, DataSource

Local store marketing, or “neighborhood marketing,” refers to complex and variable distribution based on the needs of individual business locations. Many local marketing campaigns take place in a reactive, disruptive, and last minute environment. These responsive situations provide the greatest opportunity for an emotional connection with the consumer – which is why local store marketing is so important.

Successful local store marketing requires meeting the needs of the store based on consumer, competition and store characteristics on a local level with timely, accurate integration of messaging across multiple channels.

Often, the common process for procuring local marketing materials are “one-off” requests which result in a series of emails, phone calls, drafted proofs, editing – and ultimately delays. Or, if timing is really tight, and a local marketer cannot get what they need, when they need it, they may resort to “rogue marketing,” creating their own marketing pieces, without regard for brand compliance or consistency.

With so many variables in execution, the final result is rarely reflective of the brand.

Let’s take a look at three tools for effective local marketing:

1. Digital Asset Management

All brands track and store marketing assets differently. Some use outside creative agencies and others store assets on company servers, sharing approved files with suppliers and storing only the most recent file on their server. Tracking and organizing art files, photography assets, and templates is complicated enough without trying to make sure franchisees have the latest versions available. One solution is an online, centralized digital asset management system that offers fast access to workflow tools, branded pieces and file tracking, ensuring accuracy across any medium.

This centralized environment creates easy access to the latest version that can then be shared with the marketing team, agency, other brand partners, and the local market. Brand standards are more easily upheld, and it is less likely that creative time is wasted on duplicating content that has already been completed or is now obsolete. When assets can be retrieved and posted quickly, it becomes fast and easy to drop them into design templates, allowing anyone to execute branded campaigns with real-time access to pre-approved content

2. Intelligent Location Profiling

A franchise’s various locations may have different language preferences, hours of operation, pricing tiers, offerings, and other local market variables.

Intelligent location profiling (sometimes called store profiling) is a process to collect and maintain local store data is in a central repository where it can be easily accessed, updated, and used to drive local marketing content. Generally, some of the data can be found across different departments, however collecting and storing this information so it is easily updated is challenging for most distributed marketing teams without a technology solution that streamlines.

An accurate store profile accomplishes several objectives for local store marketing. It enables easier customization of marketing materials and quick access to templates for improved speed-to-market across all channels. Intelligent location profiling improves budget forecasting and reduces waste in the supply chain as you can order and deliver only what is necessary for each specific local market.

3. Easy Online Brand Portal

Franchises should seek marketing asset management technology solutions that support end users with a fast and easy way to create and execute localized multi-channel branded marketing pieces. Easy access to customized materials makes the likelihood for rogue marketing less likely, and brand compliance more easily upheld. With automated fulfillment set up, execution is made easy for the local marketer that does not have time to find, integrate and manage production. A robust solution will do many things, including providing integrated reporting, detailed tracking, integration across all departments, and the ability to split billings and shipments, and more. Technology advancements are rapid so keep an eye on new options and review marketing execution strategies to get the most out of your marketing spend.

Local Store Marketing techniques are evolving everyday and companies need a solution that makes the brand delivery process easy for everyone. When selecting a solution, brands should look for full service partners that can offer comprehensive end-to-end local marketing management with the services and support to not only integrate and operationalize the technology, but also to help streamline the process of delivering materials to the local level.

David Holland is CEO of DataSource, a managed marketing services provider. He can be reached at [email protected].


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As sales languish, Gordmans plans online offer

BY CSA STAFF

Off-price department store operator Gordmans reported another quarter of weak sales under the control of private equity ownership as its searches for a full-time CEO and eyes e-commerce expansion in 2015.

Omaha-based Gordmans Stores, which operates 94 stores with an assortment focused on apparel and home décor, said its sales during the 13-week first quarter ended May 4 increased 8.8% to $143 million as the result of new store expansion. Same store sales declined 2.7% on top of a prior year decline of 10.5%. A loss of $700,000, or four cents a share, was well below a prior year profit of $3.2 million, or 17 cents a share. First quarter results were negatively affected by expenses of two cents a share related to the departure of former CEO Jeff Gordman and a three cents a share impact due to increased interest expense related to a $45 million loan that was taken out last fall to pay shareholders of the company controlled by Sun Capital Partners a special dividend of $3.60 a share.

"Our first quarter sales performance was driven by the 10 new stores that we opened in fiscal 2013 and the three new stores that we opened in the first quarter of fiscal 2014, partially offset by a comparable store sales decline of 2.7%," said Scott King, Gordman’s chairman and interim CEO who joined the retailer’s board a little more than a year ago. King assumed the interim CEO role in late March when former CEO Jeff Gordman stepped down the day fourth quarter results were released. King has been with Sun Capital since 2003. "While we are disappointed with our first quarter results, we are encouraged that comparable store sales improved as the quarter progressed. We believe that the initiatives that we have put in place to realign our merchandise mix, modify our store presentation and adjust our marketing to focus on merchandise, value and urgency and utilize information obtained from our loyalty program will produce improved comparable store sales results as the year progresses."

The company also touted the fact that its loyalty program launched in 2013 now boasts 2 million customers, an increase from 1.5 million at the end of the fourth quarter. More than 60% of the company’s sales represent loyalty transactions and the average loyalty transaction has equated to a double digit percentage increase over the average non-loyalty transaction, according to the company.

The company plans to open four additional new stores in the second and third quarters of 2014 and is belatedly looking to enter the modern retail industry by selling merchandise online. The company said it is, “developing a strategy and an assessment of utilizing e-commerce as an additional channel in which to service guests and is evaluating potential omnichannel expansion by fiscal 2015.

In the meantime, the four new stores yet to open this year will give the company a total of 97 units by year end. That represents a 43% increase from the 68 stores the company had in operation at the end of 2010, the same year the company went public, and also highlights the anemic same store sales performance given the youthful nature of its store base.

The company has also said it doesn’t expect trends to improve anytime soon. Same store sales during the second quarter are expected to decline in the low single digits due to aggressive plans to clear merchandise in advance of the fall season. As a result, the company forecasts a loss of between 16 cents a share and 13 cents a share during the second quarter.

"We ended the quarter with inventory per average store below last year’s level, however, our aged inventory position as a percentage of total inventory is higher than historical levels due to our sales performance,” King said. “As a result, we are planning to aggressively address this issue in the second quarter with additional markdowns to clear aged clearance goods. These actions will have a negative impact on second quarter gross margins, but should lead to an improved inventory position and improved gross margin in the back half of the year.”

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Delia’s seeks CFO

BY CSA STAFF

Omnichannel retail company Delia’s, which markets apparel, accessories and footwear to teenage girls, is looking for a new CFO. Current financial chief David Dick has resigned and will remain with the company through Aug. 1.

“I want to thank Dave for his hard work and dedication to Delia’s throughout the last six years,” said CEO Tracy Gardner. “He was actively involved in helping the company navigate a number of challenges and was instrumental in securing recent financing that is central to the execution of Delia’s’ strategy going forward. On behalf of the entire company, I wish him well in his future endeavors.”

Dick’s departure coincided with the company’s first-quarter results, which continued their downward trend. Total revenues decreased 26.3% to $25.9 million from $35.2 million in the first quarter of fiscal 2013. Comparable sales, including comparable store sales and direct-to-consumer sales, fell 24.7%, primarily driven by reduced website and mall traffic. In addition, catalog circulation for the quarter decreased 15.2% compared to the prior year quarter predominantly due to a reduction in unprofitable circulation.

“At this early stage of our turnaround, we are encouraged by our first quarter progress in what continues to be a challenging macro retail environment. While our total revenues decreased 26% in the first quarter, our comparable store performance was down 21% and sequentially improved each month of the quarter,” said Gardner. “Our merchandise margin rates, inclusive of obsolescence, were rebuilt to the highest level we have seen in the last six quarters as we delivered merchandise margin dollars that were only down 13% on a comparable store basis. This improvement in merchandise margin levels is an important first step that we would expect to see at this point in our turnaround.”

Gardner also emphasized that the company achieved its targeted first quarter reductions in inventory levels and operating expenses.

“Our team has made tremendous progress in developing a product assortment that appeals to our girl’s fashion sense and her desire for great value. We are seeing our girl respond to the customer engagement strategies and enhanced store shopping experience that were rolled out in the first quarter. We are optimistic that the sequential improvements we have seen in the first quarter will continue forward while we remain focused on transforming Delia’s into a customer-centric teen brand that enables her to express her individual style. I want to thank our entire headquarters, distribution center and store teams for their hard work, passion and dedication to helping Delia’s reach its potential," she added.

The company relocated one store and closed two during the quarter, ending the period with 99 stores.

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