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Many Happy Returns

BY Dan Berthiaume

It’s no secret that the volume of returned items goes up dramatically during the holidays, and providing a streamlined returns mechanism that effectively guards against fraud is a big and often overlooked part of the in-store holiday experience. Here are two solutions that take a slightly different approach to helping retailers deliver a returns process that rewards good customers, while detecting those with less savory motives.

The Retail Equation offers SaaS-based technology that tracks returns based on the individual shopper and their purchase behavior, rather than based on an item’s receipt. Personal data, such as loyalty card and credit card information, as well as identification shown at the point of return, is all used to help determine which shoppers should be offered a speedy process and which should be flagged for closer scrutiny. Retailers can set thresholds, such as making a certain number of returns in a given time period or returning more than a certain number of purchases at once for automatic flagging.

The solution has been shown to reduce the dollar amount of returns by as much as 8% and reduce shrink by as much as 13%. Retailers can also help control staffing of return personnel as a result of more efficient returns management.

Meanwhile, the OmniTrace and ReturnFlex returns management solutions from Siras also steer away from receipts to track and validate returns. However, rather than focus on customers, Siras technology focuses on validation at the product UID (unique identifier) based on centrally maintained terms and conditions from the retailer and manufacturer. Siras hosts the centralized attribute management made available via Web services. As a result, the product itself is managed and traced across all channels to ensure it is being properly returned, reducing unwarranted returns anywhere from 10% to 50%.

— Dan Berthiaume

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Digital Gift Card Options Abound

BY Dan Berthiaume

Stored value gift cards have become a staple item in many retailers’ holiday assortments. Last year the NRF estimated U.S. consumers would spend close to $29 billion on gift cards during the holiday shopping season, and there is no reason to think the trend is slowing down.

In addition to growing, the gift card trend is evolving as the rest of consumer-facing commerce evolves to become more of a virtualized environment. Digital gift cards are still a relatively new phenomenon, but are becoming more important and offer several important benefits to retailers and consumers, such as:

• Ease of use: Granted, pulling a traditional gift card out of a wallet and swiping it at the register is not terribly difficult, but digital gift cards offer ease-of-use benefits not provided by physical cards.

"You can have access to and manage your gift cards without losing them in the clutter of a purse," said Denee Carrington, senior analyst for Forrester Research, during a telephone interview. "Digital gift cards are easy to remember. You have tools like Passbook that digital cards can live in, and Passbook can notify you whenever you’re near a merchant’s store and give you access to the card."

• Interactivity: Digital gift cards are by their very nature much more interactive than physical gift cards. For example, Carrington said some digital gift cards provide visuals of a "gift" being unwrapped and opened when a user first activates it. In addition to aesthetically pleasing interactive features with soft benefits of customer engagement, there are also some interactive options that offer hard, business-focused benefits.

"You can provide additional gift cards through online promotions and emails," said Carrington. "You can also provide links to additional gift cards through SMS text messages."

This type of quick digital upsell also plays into the fact that for many consumers, gift cards can serve as personal stored value cards. A digital gift card recipient impressed with the convenience may respond to a text promotion linking to a new card for their own further use, as well as for a gift for someone else.

• Shopping companionship: Digital gift cards fit perfectly into the broader evolution of mobile devices into what Carrington termed consumers’ "personal shopping companions." Consumers already routinely use mobile devices in stores to compare prices, obtain product information, check item availability, receive targeted promotions and in some cases even to execute transactions. Having a digital gift card loaded on a mobile device further emphasizes this role it plays in the life of a consumer.

In addition, retailers could tie other mobile promotions into their branded digital cards. For example, digital gift card holders could receive real-time personalized incentives, such as extra gift card credit to purchase an item they are scanning for more information or a two-for-one purchase on a cross-sell product when a digital gift card is used.

None of this is to suggest that digital gift cards should replace traditional gift cards in retailers’ plans for this holiday season, but only that digital gift cards can help boost profitability and customer engagement both during and after the all-important holiday rush. Now that’s a gift that keeps on giving!

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Instant Neighborhoods

BY Michael Fickes

Generations after people deserted cities for the suburbs, young millennial-generation adults and older baby-boomer adults are moving back downtown.

Retailers aren’t far behind, and new, seemingly instant neighborhoods — complete with housing, retail, offices and other forms of real estate — are springing up in redevelopment areas of cities across the country.

"You always want to chase population growth," said Robert Volosin, a partner in Mahwah, N.J.-based Supermarket Consulting Group. "Now growth has shifted back into urban neighborhoods, and that is where retailers are going."

Going to town in Durham

Jacksonville, Fla.-based Regency Centers Corp., in partnership with Raleigh, N.C.-based Chartwell Property Group, is currently developing the 89,901-sq.-ft. Shops at Erwin Mill, which is anchored by Harris Teeter.

Located at Ninth Street and Hillsborough Road in Durham, N.C., the Shops are the retail component of a mixed-use development spanning two city blocks near Duke University.

The entire area is roaring with construction. The retail development at Erwin Mill includes components running from Hillsborough around the corner onto Ninth Street. The 53,000-sq.-ft. Harris Teeter is going up on Hillsborough, a cluster of shops is rising at the corner, and several streetfronts have appeared on Ninth.

Chartwell is also renovating the four-story Erwin Mill building, a historic textile mill, which will include apartments and offices. Two multifamily buildings are underway, as is a 125-room Hilton Garden Inn, and a 26-story high-rise has been completed.

"The $100-million multifamily, office, hospitality and retail development testifies to the interest in downtown living today," said Chris Widmayer, VP investments with Regency Centers. "We’ve seen this kind of interest in densely co-located retail, residential and office in a lot of properties. It is a trend that we’re seeing everywhere."

While the project is still under construction, a number of retailers have signed on. Regency is combining national, regional and local names to play to the market.

Now the suburbs want in on the urban trend

Several years ago, Fairfax County, Va., released a zoning overlay of a 27-acre site in Merrifield, Va. The site included an old movie theater and auto repair shop. The overlay caught the attention of EDENS, the Washington, D.C.-based community-oriented retail developer.

"We saw tremendous possibilities," said Steve Boyle, managing director, EDENS. "Fairfax is one of the wealthiest counties in the country, and the site was adjacent to a 100,000 car-per-day intersection near the Washington Beltway and Tysons Corner, which has 27 million sq. ft. of office space."

The overlay aimed to test a solution to a big problem. Every day, the population of Tysons Corner exploded from 19,000 to 100,000 as commuters drove to work, clogging the roads all day long.

Fairfax County’s solution: urbanize Tysons Corner with retail and, crucially, affordable residential to complement the offices. If more people lived in Tysons Corner and walked or took transit to work, traffic congestion would abate.

The overlay site in Merrifield would test the concept.

The county plan envisioned an urban landscape with vertical integration, parking decks, upper-floor retail, office, residential and a pedestrian-friendly environment.

"We planned a curated mix of interesting retail — locals, regionals and nationals — and architecture that created an urban neighborhood," continued Boyle.

EDENS brought partners into the project. Target would participate in the retail development. LodgeWorks Partners would lead the hospitality effort. Avalon Bay and Mill Creek would develop apartments, and EYA would build townhomes.

The partners wove together a community and named it Mosaic. With more than 1.9 million sq. ft., Mosaic is a LEED Silver certified urban neighborhood.

It has 500,000 sq. ft. of national, regional and local retail and restaurants. Angelika Film Center & Café, two parks and additional open space for neighborhood festivals, performances and gatherings add entertainment value.

Residential includes 1,000 units, 112 LEED-certified townhomes and a 148-room boutique hotel. The office side features 73,000 sq. ft. of Class-A office space and 4,000 parking spaces.

Voila: instant neighborhood.

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