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Focus on: Loss Prevention

BY Katherine Boccaccio

Despite the challenges in its category, Birmingham, Ala.-based book retailer Books-A-Million has embarked on an aggressive growth plan that added 41 new units to its store count in October and November 2011. The expansion, which put the 250-store retailer squarely in the No. 2 bookseller slot after Borders’ liquidation earlier in the year, has been accompanied by a newly honed focus on improving its loss-prevention program system-wide.

Books-A-Million teamed with shrink management supplier Checkpoint Systems, Philadelphia, to implement a loss-prevention solution focused around electronic article surveillance (EAS).

Rolled out in about 90 stores initially, the Books-A-Million implementation involves Checkpoint antennas located at the doors of each participating store, which detect radio frequency circuits on paper tags throughout the units.

By combining radio frequency technology with Checkpoint’s energy-saving ECO electronics brand of antennas, along with robust communications and remote alarm data-capture, the system maximizes loss-prevention effectiveness.

Books-A-Million is also using Checkpoint’s Alpha Keepers & Mini Spider Wraps with an RF circuit to protect DVDs. If the tagged product is not deactivated at the point of purchase or the DVD Keeper or wrap is not removed, the product will alarm the antennas, alerting store personnel that someone is attempting to take products without purchasing them.

“The system provides both deterrence and detection,” according to Chad Tice, VP loss prevention at Books-A-Million. The physical presence of the antennas at the door, and the tags, wraps and keepers on products, provide deterrence. The system provides detection if someone tries to leave the store with unpaid merchandise.’

The new system is already seeing positive results.

“Our mix of legacy loss prevention systems wasn’t well suited for books and didn’t enable us to utilize source tagging for greater efficiencies and a better customer experience,” Tice said. “We made a capital investment with Checkpoint because it provided a superior plug-and-play solution, has a national footprint and offers dedicated in-house experts who provide quality implementation results on a consistent basis. In fact, we’ve already seen an immediate impact by generating merchandise recoveries and expect a positive impact on shrink.”

A second phase of program implementation is scheduled for the first quarter of 2012, and will introduce the system to 50 additional Books-A-Million stores.

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An Online “Want” List

BY CSA STAFF

Move over, “Like” button. There’s a new feature on the social media block that makes it easy for retailers to know what shoppers really want.

Merchants are testing the waters with a new “Want” button that can be added to online product pages, so shoppers can keep track of items on their wish list and inform their Facebook friends about what’s on their radar. Brands are embracing this concept to get endorsements and learn more about customer preferences, while increasing conversion rates and average order values.

The Want button from Wanttt.com — where fans can discuss trends and popular items — is already gracing the online product pages of more than 200 retailers, including Finish Line, Moosejaw and Sharper Image. When a shopper clicks the button — often touted under an item’s product details — a small pop-up screen appears where users can add comments about the product. The news that a shopper is interested in a certain item goes straight to Twitter and their Facebook news feed, spreading details to their friends about which items they want.

“The ‘Want’ button is similar to an online wish list in that shoppers can keep track of what they want and inform their friends, but it does so much more for us than just that, from expanding the brand to driving sales,” explained Sam Grossman, director of marketing at San Francisco-based Sharper Image. (The consumer electronics and gifts brand, whose products are sold direct to the consumer and at department and specialty stores, was purchased by Iconix Brand Group in 2011).

Since Sharper Image implemented the “Want” button solution in late 2010, it has significantly boosted the company’s search engine optimization results.

“Adding links to our product detail pages from the Want site has enhanced our rankings for key products in organic search results, so we’re getting more brand recognition and click-throughs from natural search,” Grossman said.

Even more, Sharper Image has experienced a big jump in sales, as shoppers who use the feature convert at five times the rate of other shoppers. “Want” users’ average order value is also 21% higher than other shoppers.

“The button is similar to a positive review of a product — it increases shopper confidence in the product, consequently increasing sales,” Grossman said. “We’ve had great success with it so far.”

In addition to adding a “Want” button, retailers are also embracing other Facebook widgets such as “Like” and “Share” onto their shopping cart and product pages. The key to embracing all of these social media tools is to fully integrate them into the design and flow of the site and checkout system, according to Susan McKenna, CEO of Winnetka, Calif.-based McKenna’s Marketing.

“Making social widgets passive on the far right-hand side of the page away from viewing isn’t going to help much,” McKenna said. “Retailers need to place these buttons next to the product image or near its description text.”

Merchants can also prompt shoppers with a message on the checkout page to “share this with friends.” Incentivizing customers to do so is also a powerful tactic.

“Give shoppers, who refer friends to the site by using these features, coupons or ‘points’ that can go toward something they can benefit from, such as discounts,” McKenna said. “Incentives have a huge return on investment, and they don’t take too much effort to implement.”

Retailers can also extend their social media and online wish-list initiatives by integrating them with a mobile platform. For example, wish-list mobile software such as Myregistry.com for the iPhone allows users to not only create a wish list via a mobile device and pass it along via social networking sites and text messages, it also allows users to scan a bar code on any item in a store and add it to an existing list that can later be shared with friends and family.

“The growth and blending of social media and mobile platforms will undoubtedly change the way we shop for gifts, especially as smartphone saturation continues to grow in the U.S. and worldwide,” McKenna said. “Retailers need to start thinking more about how they can leverage this type of technology to truly stand out against competitors.”

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Focus on: Innovation

BY CSA STAFF

The physical and virtual retail worlds continue to converge thanks to innovative technology, especially as consumers rapidly adopt digital solutions and apply them to their retailing experiences.

“Consumer-driven solutions are what keep customers at the epicenter of the shopping experience, and that’s what retail is all about,” said Sahir Anand, VP and research group director for Aberdeen Group, Boston.

As retailers competitively position themselves for 2012 and beyond, they are integrating digital innovations such as mobile POS, social media analytics and mobile payments. Here is a review of these hot-button trends and why they are gaining traction within the retail industry:

Mobile POS

Digitally driven consumers are entering stores armed with much more knowledge than the average store associate — a crucial point forcing retailers to embrace the power of mobility at store-level.

By putting mobile solutions in the hands of associates, retailers are cultivating more informed sales associates who can help the shopper through the decision-making process — beginning in the store aisles up through the checkout experience. Half of U.S. consumers prefer to receive assistance from associates with tablets and smartphones, according to research conducted by The NPD Group for NCR.

Cupertino, Calif.-based Apple single-handedly showed the retail industry that a multifunctional untethered POS was a possibility. Comprised of nothing more than its signature consumer iPod touch devices and a local area network, associates access inventory availability, schedule Genius Bar appointments, and tender credit, debit and cash transactions. (Cash is held in dedicated cash drawers hidden under displays.)

Jumping on the mobile POS bandwagon, Home Depot, Atlanta, got creative and deployed customized smartphone-walkie-talkie mobile POS devices. With 30,000 units available across 2,000 stores, pundits describe the program as the industry’s largest mobile POS retail rollout.

Many chains, however, are opting for the simplicity of iPod touch technology. Nordstrom, Seattle, for example, added approximately 6,000 iPod touch mobile checkout devices enterprise-wide last July. Similarly, Urban Outfitters expanded its iPod touch -based mobile POS across its Urban Outfitters, Anthropologie and Free People brands last year.

Small retailers are also getting in on the act. Little Artika, a Phoenix-based specialty multichannel retailer of baby and toddler merchandise, uses iPod touch technology. The company, which also operates an e-commerce site, integrated an iPod touch into its small footprint cash wrap, which also has a fixed PC-based register system.

To further expand the breadth of the technology, associates who are iPod and iPhone users are encouraged to download a proprietary app that allows them to use their personal smartphones as a mobile POS during their shift.

Meanwhile, Ron Barry, the company’s managing principal, uses his iPad on the sales floor, accessing inventory files to answer shoppers’ specific merchandise questions, which further augments the shopping experience.

“Besides being a selling tool, my iPad acts as a virtual display for our POS server,” he said. “There is no need to have a [fixed] monitor, keyboard and mouse sitting around gathering dust next to our POS server. We just connect from the iPad and display the server’s screen remotely.”

The device is also POS of choice for the company’s sample sale-style events held at its warehouse.

“Since we don’t have tills in our warehouse, the iPods, a portable cash drawer and a Web connection are all we need to serve shoppers — and we can do this without making a large capital investment in permanent hardware,” Barry explained.

Social Media Analytics

In the past, if a shopper had a good retail experience, she told five friends. If she had a bad one, she told 10. Thanks to social media, those experiences are going viral to hundreds of her friends in a single post.

Savvy companies are embracing social media as their newest marketing weapon, and they are using all comments — good and bad — to better manage their shopper relationships. However, too many chains fail to capture redemption rates of social media campaigns, which jeopardizes their ability to nurture long-term consumer relationships and drive sales. By integrating social media monitoring analytics, retailers can assess the value of their social communications.

Los Angeles-based Guess? uses analytics to gather information from social media sites.

“Social media analytics allows us to improve our level of understanding and ensure we are targeting communications with shoppers,” said Ben Yen, director of business intelligence for Guess. “We are able to quantify our fan base, understand the lifestyle traits of our social media fans and discover who our brand ambassadors are.”

Guess is among the 41% of chains that have successfully deployed social media monitoring within > their e-commerce domains, according to Aberdeen. Meanwhile, 21% use analytics to define specific key performance indicators, such as customer satisfaction, retention and customer frequency rates.

Mobile Payments

Consumers are increasingly eager to use their mobile devices to actually pay for their purchases. While m-payments are still in their infancy, Seattle-based Starbucks is proving this is a viable means of tendering transactions — and driving loyalty. The chain’s program, called Starbucks Card Mobile, encourages shoppers to download a free app on their BlackBerry or iPhone. The app enables users to input pre-paid gift card account numbers that act as a virtual wallet and pay for purchases.

Starbucks accepts m-payments at approximately 6,800 locations, and more than 1,000 Starbucks in U.S.-based Target locations. To date, 26 million transactions have been conducted via a mobile device, according to Adam Brotman, the company’s senior VP and general manager.

Predictive Analytics

As the number of retailing channels and customer touch points continue to increase, so do the volumes of collected data.

“The amount of data that a retailer collects doubles every 18 months,” said Anthony Paoni, professor, Kellogg School of Management, Northwestern University, Evanston, Ill. “Momentum continues to grow as more consumer data flows to retailer databases, not only through business software, but through personal consumer devices they use to interact with their favorite chains.”

Data are used to understand shopper preferences, market more targeted campaigns and make better assortment decisions. But focusing solely on historic data is not going to help companies make forward-thinking decisions.

“Just like a car, you need a rearview mirror to see what’s behind you, but more importantly, you need a good windshield,” Paoni said. “Retailers need to ensure they can look ahead at how key performance indicators will shape future business decisions.”

New York City-based Barnes & Noble relied on the power of predictive analytics in its transition from a physical “book company” to being considered a digital technology company, according to Marc Parrish, the company’s VP retention and loyalty marketing.

The bigger challenge was migrating its decades-long loyal shoppers into the new world of e-books and e-reading. By integrating Aster Data predictive analytics from Miamisburg, Ohio-based Teradata, the task became much more manageable.

“We needed to identify our highest-value customers, learn which ones had the highest propensity to buy in a digital age and which ones won’t,” Parrish said. “Simultaneously, we wanted to optimize — not cannibalize — sales across all channels.”

Besides being able to anticipate shoppers’ needs and demands and better engage with them, the company has made cultural changes to adopt the analytical tool.

“The world of data is dramatically changing. It will continue to grow over the next five years, and so will the technologies needed to manage it,” Parrish said. “It is robust analytics solutions that will produce the best insights into business.”

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Feb-08-2013 12:03 pm

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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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