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On the Fence

BY Katherine Boccaccio

A shopping center owner and manager is on the cutting edge of mobile marketing. DDR Corp., which owns and manages 538 value-oriented shopping centers in the United States, Puerto Rico and Brazil, is testing a service in select properties that combines physical retail assets with location-based mobile marketing.

To launch the program, called ValuText, DDR partnered with Denver-based strategic marketing firm Cohn Marketing and Placecast, whose technology powers the solution. The Placecast technology combines geo-fencing — which creates a pre-defined, virtual space around a particular location — with messaging, allowing an opt-in customer to receive a promotional text message once she enters the pre-set radius.

DDR’s objective was to create a text messaging-based technology that would allow its retail tenants to formulate special offers and message those offers to customers once they crossed into the geo-fence area and opted in. To allow for a range of offers, Cohn added hyperlinks to the URL.

“A participating consumer will get an initial text message from one retailer — selected randomly — and with that first message will get a URL,” explained Michael Barber, director of digital strategy for Cohn Marketing.

The consumer then clicks on the URL to view all of the deals being offered by the various retailers at the center, a customized feature that is unique to the technology. The ValuText program, which works on nearly all phone types, eliminates the shopper having to download or activate a smartphone app to see the offers. Shoppers simply opt in once.

The program is currently in place at 27 DDR shopping centers across the nation. The six-month pilot, which launched in December, is expected to deliver enough data to allow for any necessary tweaks prior to a rollout.

“During the pilot period, we will be able to dissect our portfolio by type and know which will be most suited to this program or which will require variations to the program,” said John Kokinchak, senior executive VP and chief administrative officer, DDR, Beachwood, Ohio.

The program is especially well suited to smaller retailers because participation is free. A retailer in one of the pilot shopping centers can call DDR headquarters and give the coupon/offer instructions to marketing staff over the phone, or can go online and enter the information themselves.

Even though no national retailers are yet participating in ValuText, their offers are a part of the program. DDR utilizes technology that scans for relevant offers, collects the data online and brings relevant national retailer deals into the system.

“These promotions are existing offers that the national retailers are advertising, and we are adding those offers to our ValuText program so that our shopping center consumers will have the ability to receive a full range of offers once they opt in,” Kokinchak explained.

The opt-in by consumers is fairly straightforward. On-site signage advertises ValuText, encouraging shoppers to text a code to a pre-set number. Once a consumer opts in, she will begin receiving offers and discounts via text from the various merchants in the center. Once the shopper drives away from the center, all promotional texts cease. Because the program is location-based, notifications are triggered by proximity to the property.

DDR hopes to garner full participation from the national retailers in the months ahead and have the chains provide exclusive offers geared toward their stores in the DDR shopping centers. And while the service is still in the testing stages, it has attracted considerable interest from other shopping center developers.

“Since launching the pilot test of ValuText, we have received considerable interest from other shopping center companies, asking about implementing the technology at their centers,” Kokinchak said. “It is quite possible that this could become the single biggest mobile marketing platform for shopping centers in the industry.”

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Focus on: E-commerce Trends

BY Laura Klepacki

Retailers should expect online purchases to become a bigger piece of retail sales, particularly in the key fourth-quarter period, where they could soon represent as much as 20% of holiday sales, according to Sucharita Mulpuru, VP and principal analyst, Forrester Research, and a leading expert on e-commerce and trends in the online shopping space.

“The pie for bricks-and-mortar retail is shrinking,” Mulpuru said during a presentation at the National Retail Federation’s 101st Annual Convention & EXPO in New York City.

Along with convenience, free shipping and promotional deals are driving shoppers to the Web. The shift is expected to persist as 55% of online shoppers now say they have come to “expect” free shipping, while 52% “expect” it for returns too, according to a survey by Shop.org and Forrester.

These offers, Mulpuru explained, “are being seen as a cost of doing business, but they are also an accelerator of e-commerce adoption.”

When it comes to marketing, Web searches and email continue to be the most influential tools. In a consumer poll conducted by Bizrate Insights and Forrester, 47% of online purchasers said they learned about a deal by visiting a site directly, while 33% were informed through the retailer’s email. In contrast, only 3% were spurred to action due to a social site. With this in mind, Forrester predicts retailers will increase their search budgets, from $3.45 billion in 2011 to $5.37 billion by 2015.

With a boost from tablets, mobile shopping is expected to accelerate. Forrester projects mobile commerce will jump from $6 billion in 2011 to $11 billion in 2012 and triple to $34 billion by 2016.

While those sales numbers are significant, an even bigger impact of mobile could come from functions that leverage the in-store experience, such as cameras, speakers, microphones and scanners, according to Mulpuru. Mobile devices will be able “to push the experience in ways we haven’t seen before,” she said.

Currently, according to a survey by Shop.org and Forrester, the top uses are checking store hours (30%), finding store location (23%), comparing prices (15%) and redeeming coupons (15%).

Mobile commerce, however, is also creating headaches. One of the biggest challenges involves creating content, particularly given the variety of tablet devices and smartphones that are available to consumers. Mulpuru advised retailers to follow the blueprint of technology leaders such as Amazon and Google and take a “lowest common denominator” approach to design, whereby content can be easily translated across devices.

She also advised retailers to consider adding Android and Apple teams to their staff to help. Mulpuru pointed to an approach taken by Nordstrom, which developed its own internal ‘innovation lab’ — “a little microcosm within their IT organization.” It is made up of a handful of employees who create and run experiments.

Mulpuru also observed that the impact of behemoths — Amazon, Apple, Google and Facebook — “seem to loom over our strategic decisions.

“Nearly one-third of online shoppers begin their search on Amazon, 47% of global Web visitors go to Google daily, and 43% go to Facebook daily, she reported. “In many cases,” she said, “these are not just gatekeepers, but curators of our content.”

However, Mulpuru stressed, while it is wise for retailers to “recognize game changers and adopt new business approaches when necessary,” it is also important “not to get caught up in hype.”

Despite the big expectations, social commerce is struggling. Accounting for less than 1% of e-commerce volume, it was a “negligible contributor” to holiday sales, according to Mulpuru.

“Yet, unbelievably, retailers are not heeding the obvious,” said Mulpuru, citing a Shop.org/Forrester survey, which found 22% of the retailers polled already had custom stores on social networks, and 61% said they were still planning to implement one.

Laura Klepacki is a Pennsylvania-based freelance writer specializing in retail.

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P.Lopez says:
Apr-10-2013 12:13 pm

She also advised retailers to consider adding Android and Apple teams to their staff to help. Mulpuru pointed to an approach taken by Nordstrom. ChatRandom

P.Lopez says:
Apr-10-2013 12:13 pm

She also advised retailers to consider adding Android and Apple teams to their staff to help. Mulpuru pointed to an approach taken by Nordstrom. ChatRandom

S.Jhon says:
Nov-29-2012 12:49 pm

As All Of Us Know The Importance Of E Commerce And Online Business, So Development To Fulfill The Latest Requirements Of Users Is Necessary Step. Knowing About New Trends May Cause The Promotion Of Business Well. I Am Running An Ecommerce Based Online Business And Found These New Trends Good For My Business. Multi Store Ecommerce | Shopping Cart Software | Hosted Shopping Cart

S.Jhon says:
Nov-29-2012 12:49 pm

As All Of Us Know The Importance Of E Commerce And Online Business, So Development To Fulfill The Latest Requirements Of Users Is Necessary Step. Knowing About New Trends May Cause The Promotion Of Business Well. I Am Running An Ecommerce Based Online Business And Found These New Trends Good For My Business. Multi Store Ecommerce | Shopping Cart Software | Hosted Shopping Cart

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Making Shopping Fun Again

BY CSA STAFF

By HeeSun Kim and Young Rok Park

Imagine a place where department stores are destinations for retail and social activity, where the mere mention of the term “department store” still conjures fond memories of day-long family outings in the city. Fifty years ago, this could have been any major city in the United States, but the current epicenter of the design revolution in large-format retail, culture and fashion is on the opposite side of the planet, specifically in Seoul, South Korea.

The Myeongdong district in Seoul covers barely one square kilometer of land, but its burgeoning influence on other parts of the world is impossible to ignore. Once just a hub for typically Western culture and commerce, the area has surpassed its cousins in Tokyo and Beijing due, in part, to a new focus on all things Asian. Galleries showcase Asian artists. Restaurants feature gourmet Asian fare. Department stores — once focused almost solely on Western brands — now showcase the work of Asia’s most exciting fashion designers. Seoul is now the shopping mecca for the Asia Pacific region.

South Korean retailers are going back to basics to make shopping fun again, just as it was in its American heyday. Here’s how retailers in Myeongdong are recreating a memorable retail experience.

From a design standpoint, Seoul’s new retail spaces offer something special right up front. Architectural and design features are immediately more unique and memorable. Restrooms are more spacious, escalators nicer and public areas larger. Each of these design upgrades lets shoppers know immediately that their needs are the primary considerations.

Major department store brands, such as Lotte and Hyundai, have invested significant resources into creating stores designed to offer entertaining shopping experiences. It isn’t unusual for department stores in Seoul to offer customers access to amenities such as a garden or restaurant on the roof, childcare, on-site thrill rides, cooking or language classes. These activities aren’t just add-ons; the original blueprints called for these public lifestyle areas to be integrated into the space from the beginning.

The South Korean department store sales model is different from the one with which Western consumers are familiar. In the United States, department stores sell from warehoused inventory. Within Korean department stores, approximately 70% to 80% of retail floor space is rented to suppliers that sell their own branded merchandise. The suppliers are responsible for staffing, merchandising and sales, enabling stores to focus their attention on creating something special from a brand and design perspective. This new model enables stores to really think about their own brand identities and capitalize on the key traits differentiating their stores from those of their competitors.

This works from the customer experience and design perspectives, just as the concept did when it first emerged throughout the United States. But the new approach is, perhaps, more successful financially. A typical department store in Seoul generates approximately half a billion U.S. dollars in sales each year, and attracts and sustains consumer traffic that is exponentially higher than the level generated by its American peers. Shoppers remember and return to these easy-to-navigate and fun stores, which creates a tangible economic benefit to retail and entertainment areas near the stores.

The Lesson of South Korea: What’s next? Seoul is rapidly supplanting cities such as Tokyo and Beijing as a capitol of Asian retail in large part because Korean merchants are comfortable with being Korean, which translates to a unique vision that is ultimately communicated by a store’s look and feel. Another key consideration is the way Korean retailers are eschewing luxury for luxury’s sake. While the new retail spaces are certainly luxurious, it is the customer that takes center stage in the design process. These elements establish the recent developments in Seoul as a new movement rather than a refresh of an old one with potential benefit to other retailers and customers alike who adopt these trends from their Korean counterparts.

HeeSun Kim and Young Rok Park are VPs and managing creative directors of FRCH Design Worldwide, Cincinnati. Park was the lead designer of Liverpool, Interlomas, Mexico, which took the top spot in Chain Store Age’s annual Retail Store of the Year design competition.

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