January was hot for retailers
Retail sales sizzled in January, beating expectations. Even the struggling department store sector managed to beat the odds.
Retail sales, excluding automobiles and gasoline, grew 0.4% in January, according to the National Retail Federation. (The numbers exclude automobiles, gasoline stations and restaurants)
“The healthy monthly gain was driven by January’s strong payroll gains, retail employment gains and business sentiment,” NRF chief economist Jack Kleinhenz said. “We haven’t seen strong January growth in several years, which indicates that consumers are increasing their spending and remain the leading driver of the economy.”
Every major retail sector tracked by the NRF reported higher sales compared to the previous month, with the exception of furniture/home furnishings stores, whose sales were flat.
Sales at electronics and appliances stores rose 1.6% the biggest increase in a year and a half.
Sales at clothing stores increased 1.0%, the largest rise in nearly a year. Department store sales climbed 1.2%, the biggest increase since December 2015.
Sporting goods stores’ sales increased 1.8%, and sales at health and personal care stores increased 0.7%.
Despite the nearly across-the-board increases, Neil Saunders, managing director of GlobalData Retail, sounded a somewhat cautious note.
“We believe that the year ahead will be a reasonable one for retail, and nothing in this month’s numbers changes that assessment,” he said. “However, growth will undoubtedly be variable across 2017, and it remains insufficient to benefit all players.”
The environment will continue to be one of winners and losers.
Careful Curation is Key to Avoiding In-Store Sensory Overload
Each moment, it seems, something new emerges to compete for our attention. Our desktop browsers manage dozens of tabs simultaneously, even though we can only process the information contained on those pages one tab at a time. Our phones ping away, constantly keeping us connected to an infinite virtual world.
And if we look away from our screens and step out into the physical world, we’re likely to be bombarded by a kaleidoscope of signage demanding our attention. In fact, everywhere we look, an ever-increasing number of stimuli compete for our attention, and that reality is having an impact on all of us. According to a study from Microsoft, humans now have a shorter attention span than a goldfish.
But what does this mean for those vying for our attention? Traditionally, retailers have stocked their stores full of bells and whistles designed to capture customers’ attention. If we’ve reached a tipping point where sensory overload leads to endless distraction, what can retailers do?
Focus on fundamentals
Every question inside the store, from layout to color scheme, must be designed with the customer journey in mind. Thriving retailers constantly engage in the process of deepening their understanding of how the consumer wants to shop and what the consumers' needs are in-store. But in the age of sensory overload, consumers need help focusing. The store cannot be a maze of distractions; it must be an oasis of captivation.
Retailers must create intentional sensorial experiences that have meaning. Rather than introducing a sensory element for its own sake, retailers should practice careful curation to the point where every single sensory detail inside a store reflects specific intent to enhance the customer journey.
The Apple Store is a model of meticulous design and careful curation. Every detail – from the inviting demo models to the aesthetics of the employee uniforms to even employees’ calm and collected attitudes in the face of large crowds – is designed to communicate the message that consumer technology is at is most powerful when it’s user-friendly for everyone. It’s that value of accessibility to all consumers, regardless of how tech savvy they are, that provides Apple with a litmus test for curating what belongs inside its stores.
As a result of that specific intent, Apple employees, armed with iPhones and iPads, bring the register and a whole lot more out onto the floor. They demonstrate the brand’s value proposition by engaging consumers with technology that makes the shopping experience faster, easier and perhaps most important of all, an engagement that is on brand.
Nordstrom’s “Space” concept store represents a different, but equally compelling application of the specific intent that goes into careful curation. Positioning Space as a boutique alternative inside the larger, classic department store, Nordstrom chose to go small by limiting the size of the store to 500 sq. ft. This delivers more intimate and more personalized experience today’s customers, particularly Millennials, increasingly want. Meanwhile, the aesthetics of transparent displays and an abundance of white space not only reduce clutter, but they also cultivate a sense of something new by curating the look of a Star Trek spaceship – an important nod to consumers who expect modern design.
It’s important to note that the specific intent of curation extends down to the products themselves. Where the department store is known as a home for name brands, Space curates a boutique vibe by mixing in smaller, less well known labels that are more commonly found in specialty shops, or online. Perceptually, the selection appears more personalized and more customer-centric.
Careful curation isn’t just subtraction
The sights, sounds and even the smells consumers encounter when they step inside a store set the tone for the experience. This is an important lesson to keep in mind for careful curation because it’s easy to confuse the need to declutter with a Spartan aesthetic. If retailers think about careful curation only in terms of the clutter they can subtract from their stores, they will miss the larger opportunity to enhance the consumer experience through specific intent.
A flashing neon sign inside a refined luxury store is a noisy distraction, but inside a video game store, that same sign sends an essential signal that the consumer experience is meant to be rich with bright, shiny stimuli. Applying an across the board clutter-free standard might avoid all such signage. But if we adopt a mindset of careful curation, a retailer’s specific intent creates a meaningful sensory experience that both meets consumer needs and becomes a living, breathing extension of the brand’s values.
Deploy technology with specific intent to curate the retail experience
The retail experience is increasingly being transformed by technology. But integrating new technology into your store isn’t the same thing as improving the customer experience. Deploying technology must be part of a larger plan for careful curation; otherwise, it can be a very expensive miss that merely adds to the clutter. Some technology, while undoubtedly cool, may not mesh with your brand’s intended experience, at least not without some thoughtful adaptation. It must have a meaningful purpose for the customer.
“Smart” mirrors represents one way in which clothing retailers can transform how we shop for apparel while reducing the amount of inventory on the floor. And Sephora’s Skincare IQ screens provides detailed product information and personalized recommendations while limiting the number of product specialists needed per shift. The screens take what we love about the online world and turn it into an offline experience where we can immediately touch and feel the featured products.
Retailers are right to deploy technology that meets the expectations of today’s technology-obsessed consumers, but like all other in-store elements, technology deployed without specific intent only ends up adding to noisy distractions. The goal for retailers is not to reduce sensory overload, but to be mindful of the challenge it presents. By thoughtfully considering each in-store element, retailers can be certain that their message permeates the noise of an increasingly cluttered world.
Scott Moore is global senior VP of marketing for Mood Media.
Reimagining Retail: Sur La Table
Recently, I was in my kitchen making Veal Provençal for my kids. As I reached for the can of peeled tomatoes, my worn out can opener broke in my hand. I turned to my Alexa device and told it to order a new can opener from Edlund. Two days later, the package awaited me when I got home.
As I was ordering the can opener, I thought of Sur la Table, a brand I really love. They’re a truly amazing company, with a great brand, wonderful stores, high quality standards and strong market recognition. Yet, when I needed a new can opener, I turned to Amazon.
This got me thinking about the future of Sur la Table’s and other retailers of commoditized goods. If, as a retail professional, I prefer to buy top-of-the-line kitchen utensils from Amazon, who’s left to shop at Sur la Table? How can they re-enchant their customers?
You’ve heard this before, but the fact is, product differentiation is hard to come by. Brands engage either in a race to the top or a race to the bottom; the product-quality middle ground is shrinking drastically. Brands now have to compete by either offering better convenience and customer service, or by becoming a destination, offering value-added experiences to their customers. While private label is great, it’s not enough.
At NRF Retail’s BIG Show 2017, Sir Richard Branson told retailers, “Don’t think of yourselves as retailers: invent new things.” And he’s right; there is no medal for showing up in retail. Manufacturers, retailers and brands that do not differentiate by providing ancillary value on top of their products are going the way of the dinosaurs.
That’s why I think Sur la Table should keep developing its cooking classes and experiential offerings. There are a whole bunch of ways I can buy a new chef’s knife, but by going to the Knife Skills 101 class, I’m much more inclined to buy it on the Sur la Table website or in store.
Likewise, the online cooking classes are a boon; my daughters get really excited following along, and it’s a treat for me to cook along with them. It now makes more sense to go to Surlatable.com than on Amazon for a pasta maker.
Showcase new product innovation
In the relatively near future, 3D printers, edible and non-edible, will be in every home. Currently Surlatable.com beams recipe videos, and it should prepare to beam instructions directly to a 3D food printer. Gaining an early lead strengthens the website’s standing as a destination for cooking buffs and the upsell potential is huge. Customers could customize 3D printed kitchenware by color, size, or handle shape.
Sooner rather than later, retailers will pivot to selling printing instructions for daily needs, rather than actually selling the things. Sur la Table could start with the silicone spatulas and other small utensils it sells, and as 3D printing takes flight, expand its offering.
Sur la Table is also very well placed to retail and maintain a network of 3D food printers. The value derived from owning the data produced by these devices, and retailing the ancillaries linked to them, is tremendous.
Build a community to capture the Network-effect
For a recent Christmas party, my wife and I hired a great local independent chef. Her skill at preparing and presenting delicious foods fits perfectly with Sur la Table’s universe and I can’t recommend her enough to all my friends. Yet there does not seem to be a space for her to appear and connect with other cooking fans, amateur or professional, on the Sur la Table website.
Although Sur la Table has taken steps to nurture its online community through its blog, it really hasn’t deviated from the traditional e-commerce model, and hasn’t tried to leverage and engage its community. By creating a platform on its website, skilled chefs, caterers and artisans could get in contact with customers and offer their services. In exchange for being referenced on the website, Sur la Table could charge vendors for each sale they make on the platform. Creating this space would not only generate profitable revenue for Sur la Table, but it would also strengthen ties with customers.
Exceed expectations by offering more
It turns out that the market for nutmeg grinders is underserved by Sur la Table. As of this writing, surlatable.com only offers two results for “nutmeg grinder.” Amazon returns nearly 300.
It doesn’t make sense for Sur la Table to hold such an inventory – even for the higher-grade ones, but neither does Amazon. In fact, Amazon stocks only high-turnover inventory. Amazon and other forward-thinking retailers serve their long tail of customers by enlisting the help of third-party vendors. These third-parties satisfy niche demands from Sur la Table’s customers, while absolving it of the need for costly inventory and fulfillment capacities.
By letting third parties own and sell inventory on their website, Sur la Table could answer a wider portion of customers’ needs, and hew closer to its promise of being the art and soul of cooking. Sur la Table would still own the customer relationship and retain customers’ loyalty, while sellers would gain exposure from Surlatable.com’s traffic.
These are only a few of the ways Sur La Table can efficiently transition from being “just” another retailer to embracing becoming an ecosystem, retaining ownership of their domain whilst exceeding customers’ expectations.
The recipe is not set in stone but like cuisine, retailers need to evolve, respectful of traditions but thinking forward to re-enchant our experience and palate.