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Focus on: Holiday Prep

BY Deena M. Amato-McCoy

There’s no question about it: Shoppers will have more options than ever before when it comes to shopping this holiday, from where and how they shop to how they pay. Given the myriad of choices available, experts agree that one of the keys to a successful holiday season — and long-term survival — is customer engagement.

By giving shoppers easy access to more customer touchpoints using both personal and store-level proprietary devices, retailers will be in a better position to drive customer relationships and sales. Here are some examples of how retailers are using innovative solutions to increase customer engagement:

• Geo-location-based Mobile Marketing

The proliferation of smart mobile devices has changed the retailing paradigm, as shoppers access e-commerce sites, social media, online customer reviews and even pay for purchases right from the palms of their hands.

By integrating a mobile platform that allows retailers to interact with consumers through their own personal devices, chains are inching closer to the “holy grail” of one-to-one personalized relationships. Geo-location-based marketing messages can help achieve this goal.

Austin, Texas-based University Co-op, which operates on the University of Texas campus, has deployed Digby’s mobile marketing platform, Localpoint, an opt-in program that delivers targeted messages to shoppers when they check in to the store, as they move through the space and when they scan bar codes and read reviews.

Shoppers download “The Co-op” app and the device’s GPS interacts with University Co-op’s SSID (service set identifier), or a name assigned to the retailer’s Wi-Fi network, creating a geo-fence. When the app is launched, the geo-fence detects a smartphone user’s proximity, and as they approach or enter a store, the app delivers personalized messages that can be stored in the app’s “offer wallet.” To redeem offers, customers simply click on their desired promotion and show the screen to the cashier. The app is available for both iPhone and Android smart devices.

Localpoint’s analytics tool gives the retailer insight into repeat visits, unique visitors, bar-code and QR code scans, offer redemptions, and time spent at each location. The tool determines patterns, and measures the economic impact and success of marketing initiatives.

“This is a fresh strategy and we are already seeing a significant impact,” said Brian Jewell, University Co-op’s VP marketing.

• “SoLoMo” Loyalty

When apparel retailer Guess?, Inc. was ready to launch its exclusive loyalty program, it decided to tap into the power of a social-local-mobile (SoLoMo) strategy.

A concept that evolved through the popularity of smartphones and tablets, SoLoMo integrates geo-location and the use of social media to allow retailers to gain a more intimate relationship with their shoppers.

“When retailers ask too much of their shoppers, loyalty tends to drop,” said Michael Relich, CIO and executive VP IT, Guess, Los Angeles, which operates 503 stores in the United States and Canada and 264 stores in Europe, Asia and Latin America. “By tying social media with our CRM [customer relationship marketing] database, we have access to more information than we could ever capture on our own.”

The retailer invites shoppers to download its mobile app to gain access to accrued loyalty points connected to previous purchases, new arrivals, a store locator, a gift-giving guide, a QR code scanner for merchandise scans and to receive geo-location-based promotions. If they link their personal Facebook account to the app, a token within Facebook gives Guess access to shopper information and navigation across the Guess fan page.

The company also aligns this information with a CRM database in the cloud “to do analytics on customer preferences and trends,” Relich explained. “Facebook allow us to learn about our customers and successfully do micro-segmentation.”

• The Next-Gen of FAQs (Frequently Asked Questions)

A retailer’s e-commerce site is often an omni-channel shopper’s first stop in the path to purchase. Details such as price, item attributes and even customer reviews are often available, helping to shape her overall decision. However, sometimes consumers need a deeper insight into merchandise.

Adorama, a New York City-based photography and related accessories multichannel retailer, improved the user experience of its website in time for last year’s holiday season. Its updated site design > features tools that help shoppers make better buying decisions, including buyer’s guides, gift-finder tools and a new question-and-answer tool from TurnTo Networks, New York City.

“Customer service is important all year long, but most importantly, during the holiday season,” said Glen Holman, CIO for the multichannel retailer. “Some shoppers troll forums and customer reviews to get answers about merchandise, but we go one step further. Our shoppers have specific technical questions, so we offer a community that can answer specific questions.”

When shoppers click on a product, they see an “Ask a Question” icon on the product’s page, which allows consumers to pose a question by clicking on a “Discuss” button. The question is sent out via email to other shoppers who have purchased the item in question. As responses come into the TurnTo tool, they are forwarded to the shopper via email and also posted on Adorama’s site.

Adorama has been using the tool for almost 12 months, and during testing, the emails had a 9% response rate, with consumers receiving an average of 4.3 answers per questions. A majority of these answers were received within 24 hours.

While other companies rely on FAQs or live chat to deliver immediate responses, these options are better suited for more common, general questions, such as those about customer service or sales information.

“Our incoming questions are very detailed and specific about our merchandise, how it works and functionality,” Holman explained. “Allowing them to ask specific questions and giving them detailed responses are big advantages over static reviews. We feel we are building communities around specific mini-topics.”

• Digital Signage

Eager to help shoppers make educated purchase decisions and find their desired product, more retailers are adding innovative digital signage solutions to in-store customer engagement strategies.

“While e-commerce is a strong piece of the [omni-channel] retailing equation, chains need to ensure their store-level experience reflects the ease and convenience of shopping online,” said Corbin Webster, an IT contractor who is currently working on projects for retailers, including Kroger and Kohl’s. “Deploying digital signage can help retailers keep the customer engaged and streamline the shopping experience.”

SaskTel, a Canadian-based wireless retailer, knows this challenge first-hand. The popularity of smart technology keeps its 11 stores buzzing with shoppers, but long waits to complete transactions were impacting the overall customer experience. When the company began a three-year store redesign program, it put consumer-centricity at the top of its priority list and chose digital signage as a means to deliver consistent information across the chain.

“The screens broadcast wireless rate plans, accessories, as well as static promotions, information that is paramount for shoppers make better purchase decisions,” explained Joel Ganong, marketing manager, SaskTel.

Currently, four digital screens feature product information, as well as up to six 42-in. monitors that display advertising messages.

Since installing the digital screens last spring, Ganong reported that SaskTel has increased sales by an average of 58%, compared with stores not yet using the electronic signs.

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Gearing Up for the Holidays in an Election Year

BY Bill Martin

When the days grow shorter and the air starts to turn chilly, retail companies prepare for their hottest time of year. As they get ready for the holiday season, retailers will do well to keep three additional factors in mind:

u Adjust for the presidential election. Typically, retailers market heavily in October and early November to drive store foot traffic as the holidays begin. Early marketing efforts, however, will not go as far this holiday season.

ShopperTrak’s analysis reveals shopping activity tends to lessen before national election days. During the 2004 presidential election, for example, retail foot traffic saw a year-over-year decline of 0.7% the week before the election and 2.2% the week of the election. Similarly, in 2008, retail foot traffic declined 3.7% the week before the presidential election and 6.3% the week of the election, when compared with the same period the year before. While economic factors account for some of these declines, especially in 2008, the data show elections do have an impact on these rates.

Retailers should plan for decreased traffic leading up to the Nov. 6 election this year and keep the marketing powder dry until after the election. Scheduling marketing efforts to coincide with when customers are ready to shop will make a bigger impact.

• Schedule against the calendar. Retailers that schedule operating hours and staff based simply on last year’s store performance and calendar will lose out this holiday season.

Movement of key shopping days on the calendar affects each season. For example, in 2010, Dec. 26 fell on Sunday, a day that generally features church service conflicts and abbreviated shopping hours. Last year, however, Dec. 26 fell on a Monday — and people who took Monday as a holiday stormed stores in record numbers. So, while Dec. 26 is often a busy day, many retailers were ill-prepared to service these additional shoppers and lost business that day.

Another casualty of calendar shift last year was the Friday and Saturday right before Christmas. Those days lost some retail steam because shoppers were more likely to stay home and begin their holiday weekend early. Dec. 17, the Saturday one week before Christmas, therefore, was the third-busiest shopping day of the season and generated $7.4 billion in sales.

Based on more than 20 years of historical foot traffic data, ShopperTrak expects the weekend before Christmas (Dec. 21 to Dec. 23) this year to be one of the biggest of the season. Since Christmas 2012 falls on a Tuesday, last-minute shoppers will go to stores that weekend without sacrificing any of their holiday plans. This year, retailers that use historical traffic patterns and benchmarking tools will gain similar, critical insights to beat out those that don’t.

• Earn customer loyalty all year. The holidays may be retail’s busiest time of the year, but shoppers make buying decisions all year long. Retailers that wait until the holidays to build customer loyalty and bring in new business are too late.

The 2011 holiday season accounted for only 21% of annual sales. And while holiday sales improved 3.7% over 2010, in-store foot traffic decreased 3.1% compared with the previous holiday season. While foot traffic has slightly improved this year, retailers must be prepared to make the most of every shopper opportunity that walks through the doors — all year long.

Holiday preparedness is more important than ever. Retailers able to stuff their stockings a little fuller this year will earn customer loyalty early and plan for positive customer experiences based on historical foot traffic.

About the author

Bill Martin is the founder and executive VP of ShopperTrak, a leading retail technology company that anonymously counts people, analyzes data and identifies opportunities to increase revenue for retailers, mall developers and entertainment venues. Find out more at Shoppertrak.com.

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Spotlight on J.C. Penney

BY Marianne Wilson

All eyes are on J.C. Penney Co. as it rolls out the first wave of its branded shops to nearly 700 stores nationwide.

The shops are the linchpin of CEO Ron Johnson’s ambitious plan to transform the Penney shopping experience from the standard department store model to one that is made up of some 100 branded shops and a central “Town Square” area. Some of the shops will focus on one brand; others on a variety of labels. All will feature their own fixtures and signage. As for the Square, Johnson told analysts and investors at a presentation in August that it will feature seasonal merchandise and will also function as a central meeting place offering classes and other activities.

The first three shops, opened in time for the back-to-school selling season, are focused on denim, with concepts for three brands — Levi’s, i jeans by Buffalo and The Original Arizona Jean Co. Set to open at press time: shops for Liz Claiborne; Izod; and jcp, a new private brand of fashion basics. Other brands that will be eventually setting up shop in Penney range from Maidenform and Vanity Fair to Carter’s and Cynthia Rowley to Martha Stewart Living and Betsey Johnson.

Also in the wings is Joe Fresh, the Canadian cheap-chic retailer, whose branded shop concept will launch in spring 2013. The brand, owned by Loblaw Cos. Ltd., operates only a handful of U.S. stores, all of them in the New York metro area.

Of the initial batch, the Levi’s shop, dubbed Levi’s Denim Bar, is the most detailed. Each Denim Bar is equipped with iPads so customers can access more sizes, styles and finishes through a virtual experience. Trained stylists from Levi’s are available to help customers. The shop is a first for Penney in that it offers mobile checkout.

But it certainly won’t be the last. Johnson has said he wants to eliminate traditional checkouts by the end of 2013, replacing them with mobile checkout devices and self-checkout kiosks. And by February 2013, the retailer will move to a 100% (item-level) RFID deployment.

Penney’s reinvention has been rocky. Its new three-tiered pricing strategy was not well received by customers. The chain has since simplified the model and is fine-tuning its advertising to better explain the changes. The company lost $147 million in the second quarter, ended July 28, 2012, compared with net income of $14 million a year ago. Revenue plunged almost 23% to $3.02 billion amid a 21.7% drop in same-store sales.

Despite the miserable quarter, Johnson is holding firm. (And to be fair, with only the first wave of shops rolled out and the new merchandise just now arriving, the transformation is really still in its initial stages.) He told analysts at the meeting in August he has seen some hopeful signs in the business since early August. He noted that sales of Levi’s merchandise are up 25% in the stores that have the branded Levi’s shops.

“I am completely confident that our transformation is on track,” Johnson said.

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