News

Focus on: Innovation

BY Deena M. Amato-McCoy

The retail industry may have been in survival mode for the last two years, but chains finally are loosening purse strings and allocating capital to new technology projects. At the top of their lists: innovative solutions that drive value among shoppers.


Global enterprise information technology spending is expected to increase 3% in 2011, the equivalent of $2.5 trillion, according to Stamford, Conn.-based Gartner. However, focusing on organic projects is too costly, time-consuming and just plain risky for many retailers. Instead, these companies are looking at a more reliable source: consumer technology adoption trends. 


“Rather than introducing new solutions they hope shoppers will adopt, retailers are learning how to leverage the technology consumers already use in their daily lives,” said Jeff Roster, VP research for Gartner. “They just need the right applications that will make sense for the consumer and simultaneously will improve the shopping experience.”


Among top priorities are solutions that can differentiate the shopping experience even as the marketplace becomes more fragmented.


“The marketplace is more diverse than ever before, but all shoppers have two things in common: Everyone is time-starved and receives an overload of information from their favorite brands,” said Renee Sang, Chicago-based global director of the Customer Innovation Network at management consulting company Accenture. “All shoppers use different technologies to interact with retailers, but chains must know how to scale IT investments to support these solutions and sustain relationships with all customer bases.”


While this sounds like a monumental task, it is possible with the help of emerging technology innovations. Overwhelmed IT executives may get a few ideas from the following trends that are gaining traction within the retail industry. 


MULTICHANNEL INTEGRATION

The number of omni-channel consumers, or shoppers who use a mix of retailing channels to make a purchase, is growing by leaps and bounds. And make no mistake, these are the consumers who will make or break a retail company going forward. Cross-channel shoppers are so powerful that they are 39% more profitable than single-channel customers, according to “The Cross-Channel Wake-up Call: Benchmark 2010,” a study from Miami-based Retail Systems Research. 


At this stage, the picture looks similar cross-industry: most chains are connecting with shoppers in brick-and-mortar stores, online and, for some, through catalogs. And this holiday season proved that shoppers are utilizing every one of those channels before making a purchase decision. 


“Omni-channel shoppers may rifle through a catalog and then go online to read customer reviews and further educate themselves about a product before making a purchase,” Gartner’s Roster explained. “The Web has become the key supporter for the in-store experience. However, all channels must work together to support that omni-shopper and the multichannel experience.”


Too many chains still do not offer a truly multichannel experience. They continue to operate separate business divisions, each one supporting separate databases, inventories and other silos behind the scenes. If chains want to deliver a seamless shopping experience regardless of the customer touch point, then integration is a must.


“Chains that learn to share resources among all channels will be successful going forward,” 
said Paula Rosenblum, managing partner, Retail Systems Research.


Retailer Solstice Sunglass Boutique made its debut in the e-commerce world last fall, and integration was priority one. By adding the Demandware Commerce platform from Woburn, Mass.-based Demandware, the chain offers online visitors a shopping experience that mirrors those at store-level. Customers also have access to the chain’s entire available inventory, as well as detailed product information. 


“We needed an e-commerce platform that would mirror our dedication to providing a unique, tailored shopping experience, and that was scalable to the broad range of inventory we offer to our customers,” said Rick Talmage, COO, Solstice Sunglass Boutique, Short Hills, N.J.


In addition to integrating store-level kiosks into the site, the chain’s online presence also incorporates many top social-networking sites, allowing shoppers to share information and photos with friends on Facebook, Twitter and even e-mail.


For those chains that have not yet thought of integrating their disparate channels, it’s not too late. Chances are an integration project could be right around the corner. 


“A perfect storm is brewing. Retailers still using first-generation technology want to interact with shoppers across all retail touch points. Meanwhile, new channels are emerging and changing the multichannel game,” Roster explained. “Upgrading infrastructure and integrating existing and new channels will eventually take cost out of operations and help build revenues as shoppers have more options to interact with brands and increase their overall spend.”


MOBILE RETAILING

Between growing consumer adoption of smart phones and shoppers’ need for instant information, mobile is becoming a force that can bring value back to the shopping experience — and help chains create the intimate, one-to-one shopping experiences they have been yearning for. 


More than 85% of new handsets available as of 2011 are designed to access the mobile Web, according to Gartner, making the timing ripe for chains to make a push toward mobile commerce. 


Consumers are already reaching for their phones to compare prices, read product reviews and make impulse purchases at home, in-store and even, heaven forbid, while shopping at a competitor.


“This device is a portal into a consumer’s world,” explained Accenture’s Sang. “It is the perfect catalyst for retailers to say the right thing at the right time to spur a purchase and sustain a relationship with the shopper.” 


Where retailers will rise above their competition however, is in how they can manipulate the technology to help their shoppers make purchases with them versus competitors. Plano, Texas-based J.C. Penney, for example, launched a mobile commerce platform and enhanced mobile apps for iPhone and Android users during the holiday season. 


When smart phone users type JCP.com into their browsers, the platform from New York-based Usablenet detects the mobile device and redirects them to a mobile-friendly site. Dedicated apps let shoppers browse circulars, bookmark items to create an electronic shopping list, receive mobile coupons and make purchases. 


Still a little gun shy? Consider this: 69% of smart phone users know that large retailers offer smart phone apps, and 48% have already downloaded at least one app, according to an Accenture study. 


“Mobile will explode when retailers offer two-way dialogue through the device versus simply pushing information,” Sang reported. “This is a powerful tool, and shoppers need to ‘let’ retailers in. Once the relationship is established, let her tell you when and how she wants those messages. These parameters will help chains rebuild loyalty and drive revenue.”


MOBILE PAYMENTS 

When gift cards were introduced more than a decade ago, retailers were giddy with the opportunity to have a mini billboard — and constant brand reminder — sitting in their shoppers’ wallets. With 1 billion more mobile phones in the marketplace than there are credit cards, according to Richard Mader, executive director of the Association for Retail Technology Standards, a division of the Washington D.C.-based National Retail Federation, retailers have a new opportunity to keep their brands in the palms of their shoppers’ hands. 


“Shoppers are comfortable with carrying a ton of information on their smart phones, so the next logical generation of mobility will be payments,” Roster said. 


While a mobile wallet that connects shoppers’ phones to their debit and credit card accounts continues to be hashed out from a standards perspective, the industry is trying its hand at a much safer opportunity — mobile gift cards. 


Irvine, Calif.-based zpizza, for example, has multiple gift card solutions across its franchises, “so mobile gift cards help us streamline that,” said Brandi Babb, director of training and operations for the 30-plus-store organic pizza restaurant chain.


With the help of its mobile marketing platform from Denver-based Mocapay, zpizza has integrated mobile gift cards into its mobile loyalty program. After downloading an app and adding billing information, users can send or reload mobile gift cards, which feature a dedicated payment code, in minutes. By displaying the code to servers during a dining experience, funds are electronically deducted from the virtual account. 


American Eagle Outfitters also launched a mobile gift card program just in time for the holidays. After choosing a card from one of the company’s three brands, senders text the mobile gift card — and a message, if they choose — via SMS. An e-mail confirms delivery of the message.


Virtual cards can also be purchased through American Eagle’s Facebook pages, where the message is posted on the recipient’s wall. 


“These new developments are further spurring the continued adoption of mobile as a new and more effective way of engaging with customers,” zpizza’s Babb said.


GEOGRAPHY-BASED SOCIAL-MEDIA TOOLS 

The buzz around social media shows no sign of slowing, but these days creating a “fan page” is about as innovative as sending an e-mail. The next generation of social media in retail will involve learning how to encourage impulse purchases with the help of location-based services. Linked to a smart phone’s GPS tracking system, location services keep shoppers connected, albeit by phone, to their favorite stores, and even “reward” them each time they “check in” to a location. 


Foursquare, Shopkick and Facebook Places are only a few of the major players in this space, and many retailers are starting to get in on the game. Lululemon Athletica offered “The Gift of Yoga” to every shopper who checked in via Foursquare or Places during November. Their reward: a pass for a free yoga class at a local studio. 


Shoppers at the Gap were rewarded for their visits during the holidays with discounts via Foursquare. Holiday banner ads online on Gawker, Mashable and Condé Nast Web sites, for example, featured a Foursquare icon worth an electronic 30% Gap discount if clicked. With the technology, as shoppers approach a nearby store, their phones’ software reminds them to pull up “Places” within their Foursquare apps to redeem the incentive.


Consumers who shopped J.C. Penney stores during the holidays and checked in via Foursquare, Facebook Deals or Brightkite received a $10 off a $50 purchase promotion.


“The beauty of social media is it’s an inexpensive platform to enter,” Gartner’s Roster said. “What makes it different is marketers are playing in a public forum that is raw, energetic and new. Retailers are just starting to use the media to grow value.”


ADVANCED ANALYTICS

There is no industry that collects as much data as retail, and it has been argued that no industry does so little with the gathered information. By unleashing the power of advanced analytical solutions, chains can augment the art of “gut instinct” sales with solid information that enables them to predict what can or will happen.


For Philadelphia-based Holt’s Cigar Co., predictive analysis allows the company to keep track of shopper traffic. 


“The past two years have been all about improving our ability to access and analyze our customer and business data,” said Nadia Trowbridge, the company’s CFO. “We wanted complete visibility to capture all possible data so we could better understand how our customers behave. If we can get a better grasp on that, we will know how to better target and sell to them.”


The two-store multichannel retailer struggled with this until it integrated its Web site, catalog and retail stores using Redmond, Wash.-based Microsoft Dynamics AX and Junction Solutions, Lincolnshire, Ill., and gained a single view of the customer, where he shopped, as well as better insight into marketing campaign results.


“Predictive analysis is a fast-growing trend, and it will remain critical as chains add touch points, including mobile, digital signage, social media and so on,” Sang said. “It is best to have an underlying foundation that helps retailers understand the right audience and right message for each channel. Knowing what to sell and say to specific shoppers is what will drive true value for a company.”

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M.Mirevski says:
Feb-08-2013 12:03 pm

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R.Marian says:
Jan-25-2013 07:15 am

This IBM Certified Application Developer - DB2 9 certification is intended for an intermediate or advanced level application developer specializing in creating applications that run on any of the DB2 platforms: Linux, UNIX (including AIX, HP-UX, and Sun Solaris), and Windows, z/OS, s/390, and iSeries. To attain the IBM Certified Application Developer - DB2 9 Certification candidates must possess the skills outlined under Recommended Prerequisite Skills below and pass 2 tests. 000-637, 000-643, 000-646

K.Perro says:
Jan-21-2013 02:11 pm

One more thing, I agree with the thing you said about social media... and I have to say that I don't like that. We are becoming shallow and ignorant. You can read more about this on my website.

K.Perro says:
Jan-21-2013 02:05 pm

Parrish is right! I totally agree with him. I always think about the future technologies. I believe that we are not able to image what's going to be in the future, we can just guess, but even us we can't believe in what we're imagining. Kris @ agora

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Focus on: Lighting 


BY CSA STAFF

The new Cole Haan in Manhattan’s SoHo neighborhood combines the brand’s signature craftsmanship with a modern perspective that extends to the lighting. The 1,720-sq.-ft. space is a showcase for the latest in solid-state lighting technology.


“It’s the first specialty store we’ve ever done that is entirely lit with LEDs,” said Lisette Ditters, director retail and hospitality segment, Philips Lighting North America. 


Among other advantages, the LEDs considerably reduce the shop’s lighting-related energy consumption.


“It is less than half a watt per square foot of lighting,” said Doug Russell, Lighting Workshop, New York, which designed the lighting.


With its custom metal cabinets, steel and wood shelving systems and oak herringbone floors, Cole Haan’s SoHo location has an early industrial aesthetic. A large, plush and inviting ottoman is located in the center of the space.


“It’s a very unique look,” Russell added. 


The lighting accentuates the store’s inviting ambience.


“It’s very warm,” Russell said. “And the ambient lighting is fairly low. We didn’t want it to feel like an over-lit retail space.”


Among the featured lamps is Philips’ 8W EnduraLED (450LM), which is designed to deliver more than 80% in energy savings. With its estimated 25,000-hr. average life, the lamp lasts 25 times longer than the standard 60W incandescent, according to Philips.


“It provides the same familiar shape and light quality as a traditional incandescent, while also providing significant energy savings,” Philips’ Ditters said. 


Other lamps used in the installation include Philips’ EnduraLED PAR 30 and PAR 38 dimmable indoor flood lamps. The LEDs, which take the place of traditional halogens in the recessed and track lighting, have a uniform beam that puts the merchandise on center stage. The lamps provide approximately 75% energy savings and have a 40,000-hr. average life.


LEDs (Powercore, from Philips Color Kinetics) are also used in place of fluorescent cove lighting, where they create a soft, uniform glow on the walls and ceilings. 


In a boost for the environment, the lighting system in place at Cole Haan is mercury-free. It also produces virtually no heat, thus cutting down on material fading. And the extended life of the EduraLEDs is expected to significantly reduce re-lamp frequency and related maintenance costs. 


“The maintenance savings with the LEDs is tremendous, especially compared to halogens,” Ditters said.


Russell agreed. 


“If the store went eight years, for example, before a remodel, you might not even have to touch the lighting in all that time,” he said. 


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Making the Connection

BY CSA STAFF

The largest retailer most people have never heard of — The Army & Air Force Exchange Service, or AAFES — has updated its store brand identity and design. The brand is now simply called the Exchange and has a new tagline, “You Save, We Give Back,” that conveys the organization’s competitive prices and mission to provide annual dividends to the Army’s Morale, Welfare and Recreation and Air Force Services programs. The updated store design reflects the same, and puts a more contemporary face on the far-flung retail enterprise, which has some 3,000 storefronts around the globe. 


“The retail concept was in need of an update, particularly in today’s competitive retail marketplace,” said Brian Shafley, president, Chute Gerdeman Retail, which was responsible for the brand and design overall concept along with store planning and fixture and graphic design. “The organization wanted to provide its customers with a retail experience that was as good or better than they could get in off-base stores and online, while also building a lifelong emotional connection with them.”


The new look debuted in September at Tinker Air Force Base in Oklahoma City. 


“We designed the prototype and applied it to the existing facility at Tinker,” Shafley explained. “It was an aggressive renovation.”


The change is apparent on the façade, which sports the new red-and-blue logo. It forms an “X” — visual shorthand for Exchange.


“Previously, they used several variations of the AAFES logo and had different names for the store brand, from PX to AAFES Store,” Shafley said. “We brought them all under one umbrella brand called Exchange, which works for both the Army and Air Force. Eventually, the storefront signs on every retail facility will be branded as Exchange. The new identity is also being used on the advertising.”


The Exchange at the Tinker base is 174, 015 sq. ft., with 14,367 sq. ft. devoted to a mall and food court area. The central attraction is the 87,918-sq.-ft. main store, which sells everything from fine jewelry and home furnishings to designer fashion apparel and consumer electronics. 


“Our main goal with the interior design was to elevate the shopping experience and give it a more contemporary look without destroying the value proposition,” Shafley said. “We also wanted the store to reflect a younger lifestyle, as most of the people on the base these days tend to be younger, with families.”


The new design provides a fresh and modern shopping experience, enhanced with lively colors and upbeat lifestyle imagery. Polished concrete, which replaced the previous VCT and carpet, adds a hip, upscale feel. Clean, open aisles allow customers to move freely through the space, and interesting focal point “vistas” at the end of aisles entice customers to explore the entire store. 


Customers enter the store from the common mall area, which has also been updated. The new entryway features a wall that honors local military personnel and their families. 


Inside the store, the customer service area has been relocated to a prominent upfront spot. With the words “Hello” and “We’re here for you” imprinted on a big blue wall, the service counter reinforces the Exchange’s brand and overall mission. 


“It’s warm, welcoming and fun,” Shafley said. “The Exchange has great service — we think it’s a real point of differentiation for [the company] — and we wanted to bring attention to it. We branded it as ‘Expert Service’ and created a series of service stations and call-outs around the store.”


Digital signage in the customer service area indicates which specific base areas are being helped by the profits generated by the Exchange. 


“We also put in a digital readerboard at the checkout that keeps track of the profits of the store and how much has gone back to the local base,” Shafley said. 


In a dramatic change, the design team laid out the store in three distinct merchandising worlds: home (includes furniture and home decor, toys and video games, housewares and pets), life (electronics, men’s wear, sporting goods, fitness and health) and style (women’s apparel, baby goods, jewelry and cosmetics). Large, impactful displays in the entry introduce the zones to incoming customers.


“The store is organized around the concept of outfitting your life,” Shafley said. “It brings out the fact that the military [personnel] and their families have a unique lifestyle and that the Exchange can provide for it.”


Key departments within the three worlds are given in-store shop, or destination, treatments. The BeFit zone, for example, combines athletic apparel, footwear, fitness equipment and nutrition in one area. A giant overhead ellipse and feature walls create a true shop feel. Metal fixture details recall the technical nature of modern workout gear.


Another primary destination is the high-energy electronics department, or PowerZone, which includes an interactive gaming pod, an enhanced HDTV wall and dedicated computer, camera and entertainment zones. The furniture department is anchored with a centerpiece model showroom setup. 


The updated approach to merchandising is evident throughout the large store. In the fine jewelry department, customers are invited to sit down and browse at an engagement diamond bar. In cosmetics, products are displayed in an interactive studio zone. 


A V-styled aisle layout takes advantage of sight lines and helps pull customers to the key destination areas and rear corners of the space. Large lifestyle graphics do the same. 


All of the components in the store, from the displays to the focal points on the walls, are modular. Even the overhead soffits, which look architectural, are built out of lightweight materials and pieced together.


“The imperative was that everything needs to be mobile,” Shafley said. “Everything had to be designed so that it could be built and sent anywhere in the world. AAFES wanted a design [it] could take hold of and put into an operations mode fast.”


A large master-brand project, the Exchange overall was a comprehensive undertaking for Chute. 


“We couldn’t have been more proud to work on this project, which is helping to improve the quality of life for our military personnel,” Shafley added. 


To see more photos of the Exchange, go to chainstoreage.com/multimedia. 


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