Focus on: Mobility
After a successful pilot, Best Buy Canada is expanding its use of fully integrated, enterprise mobile point (mPOS) solutions on its selling floor. The new, tablet-based technology has improved customer service, including reducing checkout times, and staff productivity.
Initially, the retailer tested the technology — Motorola’s Android-based ET1 enterprise tablet and MC40 mobile pocket-size computer — in five locations for several weeks. The ET1 tablet is designed for assisted selling, mPOS, item locator and planogram management and compliance applications, and the MC40 mobile computer incorporates inventory management with collaboration and line-busting mPOS capabilities. The stores were equipped with five of each device for employees to share.
"Our associates use a login to identify ownership of a transaction," explained Kevin Satterfield, director of IT application development and maintenance, Best Buy Canada, which operates 72 Best Buy big-box stores, 54 Best Buy Mobile stores and 140 Future Shop stores.
The mobile deployment and management solution is now being expanded into another 20 Best Buy Canada doors, with the devices being used for "end-to-end selling of all in-store products and inventory look-up for all stores," Satterfield said. The company plans to add more stores this holiday season, with a full chain-wide rollout beginning spring 2014.
Both the tablet and the mobile computer are enabled with Motorola’s Bluetooth Mobile Payment Module, so shoppers can be checked out on the spot.
"It offers debit, credit, gift cards for EMV and magnetic stripe functionality," Satterfield said, noting it also has the ability to build a transaction, suspend it and complete it at the store’s frontend register.
The mobile devices have also helped reduced customer lines at the front lanes during busy times. Service has improved, too, as the tablet and the handheld computer allow sales associates to interact with the customer right where the product is on display, according to Satterfield.
"Providing inventory data (via the mobile devices) has also armed our associates with the information that they need so they don’t have to leave the customer," he added. "Additionally, associates no longer have to take time looking for an available terminal."
From a bottom-line perspective, the cost per mobile device is far less than a standard fixed-counter terminal.
"A hardened register has a cost and maintenance cost associated to it at almost three times the cost of a single ET1 Table of MC40 handheld device," Satterfield said.
Looking for more efficiencies, Satterfield envisions leveraging the devices for other tasks.
"There is opportunity for further inventory capabilities, planogram execution, sign printing, in-store communications, assisted selling solutions, reporting and Web browsing," he said.
Ken Morris, a principal of Boston Retail Partners, said more retailers like Best Buy are moving in a mobile direction with mobile POS, meaning the "customer has become the point of sale."
"Product details and inventory information available through mobile can enable retailers to turn a ‘B’ or ‘C’ associate into an ‘A’ associate," Morris said.
Boston Retail Partner’s 14th Annual POS Benchmarking retailer survey revealed the shift to mobile, with 91% of its respondents saying that increasing spending on mobile POS is either "very important" or "important." While traditional registers will still play a role, "it will continue to diminish" and that by the end of 2014, "the shift in point-of-sale hardware will be significant."
In sync, a 2012 Motorola Solutions’ mPOS study found that 75% of retailers currently using fixed computers for customer-facing applications expect to use handheld computers, smartphones and tablets "in the near future."
Laura Klepacki is a contributing editor to Chain Store Age.
Brand Value: Some Lose Their luster
One hundred and forty one billion dollars. That’s the estimated brand value of Walmart, according to Interbrand’s "Best Global Brands" report. The annual study ranks the 50 most valuable U.S. retail brands, along with the top store brands in countries around the world.
How did Interbrand determine brand value? The brand consultancy basically looked at three key criteria: financial performance (only companies with publicly available financial data are considered); the role of the brand in driving the decision to purchase; and the overall strength of the brand, or its ability to inspire loyalty, allowing it to keep generating profit and demand going forward.
"The brands that make our list define the retail industry and determine where it’s going," said Justin Wartell, managing director, Interbrand Design Forum, Dayton, Ohio, which valued the U.S. brands in collaboration with Interbrand.
The top three U.S. brands remain unchanged from last year: Walmart, Target and The Home Depot. What’s so striking is the gap between Walmart (No. 1 now for five consecutive years) and all other retailers on the list. Target may be ranked second, but with a brand value of $25 billion it’s not even within striking distance. Neither is The Home Depot at $22.9 billion.
The most valuable brands have a lot in common, including an understanding that in today’s market, experience extends beyond the store.
"’Retail’ no longer refers to physical stores; it refers to the complete experience created by retail brands — from physical stores to digital touchpoints to service experiences to products," Wartell said. "Retailers witnessing big gains this year have committed to this holistic view of experience."
A good example, Wartell noted, is Anthropologie, which complements a remarkable store experience with an inspiring staff, an aligned e-commerce channel and a product portfolio that tells a coherent story.
In contrast, Radio Shack’s poor performance (down 26%) can be partially blamed on experience. Its flexible, small format is a start, Wartell noted. But the alignment of its channels, especially product and service, underwhelm.
The report reflects the shifting sands in the retail landscape, with some brands shining more brightly and others losing their luster. Macy’s had the biggest jump (among all countries, not just the U.S.), increasing its brand value by 62% to move up to No. 40 from 49.
Amazon was another big mover, with its brand value shooting up 46%. The e-commerce giant ranked No. 4 on the list, up from nine in 2012.
Absent from the top 10 this year was Best Buy, whose brand value plunged 52%. The chain dropped from fifth place in 2012 to 13th this year. Best Buy’s declining fortunes also reflect the challenges facing other retailers in its sector: Radio Shack’s brand value, as noted earlier, fell 26% and GameStop’s was down 29%. Those challenges extend beyond the U.S. France’s Franc, Germany’s Media Markt and Australia’s Harvey Norman — all electronics retailers — all had sharp declines in brand value.
The full Interbrand report and rankings can be viewed and downloaded at BestRetailBrands.com. It’s full of fascinating insights and information, from country overviews to succinct brand summaries.
Doing More for the Customer
Jim von Maur
President, Von Maur
HEADQUARTERS Davenport, Iowa
TYPE OF BUSINESS Department store retailer
NUMBER OF STORES 35 in 11 states (27 Von Maur stores, eight Dry Goods stores)
Seventeen years ago, in the January 1996 issue of Chain Store Age, Jack Arth, who at the time was president of Von Maur, explained how the circa 1928 department store retailer set out to differentiate itself from competitors such as the then hugely influential Federated and May chains.
“One, we had to do some things [the majors] don’t do,” Arth said in the article. “And two, we had to leave downtowns for regional malls. But that’s not all. It was important that we do more for the customer.”
Although Arth moved on from Von Maur more than a decade ago, the changes he described would ultimately define who the retailer is today. What once was a downtown Iowa concept has evolved into a 27-store, customer-centric and fashion-forward department store leader — one that is expanding and entering new markets while some others are reducing their portfolios, one that is bolstering sales forces while those others cut staff. The family-owned company opened its second location in the Atlanta metro area last fall, and is set to make its Alabama debut this November, at Riverchase Galleria, in the Birmingham suburb of Hoover. It will enter Oklahoma in late 2014, at Quail Springs Mall in Oklahoma City.
Von Maur is also growing its young women’s specialty-store format, Dry Goods. Launched in 2010, the brand has opened eight locations to date. A national expansion plan is in place.
Chain Store Age senior editor Katherine Boccaccio talked with president and fourth-generation family leader Jim von Maur about the evolution of Von Maur, and how the company has managed to stay its course through the years.
Given Jack Arth’s comments in 1996 about what it would take for Von Maur to succeed, what changes played the biggest part in the company’s continued strength?
What really allowed the chain to survive and thrive was a move that Von Maur made in the mid-1990s or so, which was to change our merchandising philosophy by eliminating home goods, which comprised about 15% of our business.
The thinking was that the store needed to be more exciting and needed to represent fashion; in fact, it needed to become a destination for the latest fashions. After a lot of intense discussion, we decided to nix home goods, and sales increased significantly.
Another change that benefited us was one that my grandfather was particularly outspoken about — that of not playing the pricing game with the customer. My grandfather felt that tiered pricing strategies insulted customers’ intelligence. So we implemented a simple, one-price philosophy, which opened up dollars to do other things like providing free gift wrap and interest-free charge cards.
How difficult was it to eliminate interest fees on your credit cards?
That was another agonizing decision because of the amount of profit lost — department stores made most of their money through the interest charges on their credit cards.
We lost a lot of revenue on the interest side when we eliminated the fees, but we more than made up for it by selling our goods at full price.
How important has the store’s look been through the decades?
Interestingly, Jack Arth’s wife was the impetus behind the signature Von Maur store design that you see today. She thought it would be nice to have an open floor plan that allowed shoppers to see where they were at all times; in other words, a store with no walls.
The powers-that-be thought it was a great idea, and today all of our stores are open.
Do you have a set store prototype?
Yes. Although each store is designed differently according to the space and the parking and the number of levels — and it can take a lot to address the nuances — we maintain a certain prototype with our central court, the atrium piano, the wide aisles and the residential feel. That’s all part of the prototype.
What adjustments, if any, did you make in response to the most recent economic tightening?
We are like the fabled tortoise: When things were on fire, and everyone was booming, we stuck to our plan and stayed disciplined and plodded along. When things got tough, we were able to stay on our path. We don’t feel the economy here; our sales have grown every year, profitability gets stronger and we keep opening stores. If anything, the economic tightening allowed us to pick up additional locations.
Who is your target customer, and has that demographic altered at all as you have marched the concept forward?
Our customer is the whole family. We want the kids to come to us for back-to-school, and men to shop us for clothing. Of course, 80% of our store caters to women so that would be our major demographic. We want to be known for shoes and accessories and the latest fashions. We don’t really have a set targeted age, and I don’t see that changing. From layette to more mature women customers, we want them all to come to us.
Regionalized inventory has long been a strength; does that become more challenging as your stores enter new and unfamiliar markets?
Yes, in terms of the learning curve. As we venture into the South, we have had to learn that there is a different way to merchandise down there. Fabrications are different, colors vary, merchandise transitions at different times. But in terms of buying by store, we’re still able to do that.
What sets Von Maur apart from its competitors?
The first thing is service. When people walk in, they feel welcome, and that is due directly to the people we have in our stores. Next is that we have the most exciting selection available anywhere. We make sure that we are offering the latest fashions; in fact, that is what we drive home with our suppliers — that we want to be delivered first, and that price is second.
And finally, our stores are so completely different from the competition in that we don’t have the vendor posters and the 30%-off signs in our stores. Instead, we have a clean and open feel, so that customers feel relaxed and not bombarded by all these images and messages.
Who in your life has most impacted how you lead?
My dad. He’s kept me grounded in the fundamentals, particularly in terms of merchandising and how to manage. In the merchandising area, he taught me to make sure to have the newest fashions, and to be fair to the customer. And, in terms of managing people, he taught me to always remember that you are there to help and to teach and to support. That’s the best way to lead, and he has led me by example.
How would Von Maur associates describe you?
I would hope they would say that I’m fair and reliable, have integrity, and that I’m leading them in the right direction.