News

This IS the Next Big Thing

BY Cynthia Cohen

Smart phone Mobile Apps! Just like the accessibility of airplane travel for the masses revolutionalized the travel industry, smart phones will revolutionalize the retail industry. Although I may use hyberbole on occasion (but only to make a point), this is not one of those times. They will truly change the industry as we know it. 2011 will be the tipping point — the point where the line on the penetration chart crosses over. More than 50% of cell phones in the United States will be smart phones versus functional phones, according to Nielsen. That means massive penetration of mobile app capability for consumers. 


Oh yes, those iPads are quite nice, and Boomers especially love them. They, along with notebook and netbook computers, are not going away. But can you put them in your pocket? Will you carry them to the movies on date night or to the Red Sox (my Boston roots are showing) game? Consumers want to buy the dress they just saw Sarah Jessica Parker wear in the movie and order the “We’re Number 1” logo shirt after the series-winning run before they leave the venue. The college crowds don’t think they need an iPad if they have a laptop and a smart phone. A netbook doesn’t fit in a fashionista’s little clutch when she is out on the town. Companies can restrict access to outside Web sites on your office PC but not on your personal cell phone. So smart phones are it for portability and usability, as consumers will let their thumbs do the job with mobile apps in a variety of daily activities. 


Whether you are a department, big box, drug, specialty, food, off-price or convenience store, wake up and see the thumbs moving. E-commerce has grown exponentially over store growth in the last few years. Consumers will never stop visiting stores altogether, but they have radically changed their buying habits forever thanks to highly functional Web applications for price checking and shopping. smart phones can now put all that functionality in their hands every minute of the day, wherever they are. It’s in a retailer’s best interest to capitalize on mobile apps to further decrease information processing and advertising costs, as well as find new opportunities for sales growth.


Rather than write 10 or 11 prognostications for 2011, because mobile apps are the next big thing, I give you 11 mobile apps that retailers need to consider implementing to stay competitive in this revolutionary new retail world: 


1. Price checking — Make sure you put your best offer forward when you know consumers are competitive checking. 


2. Shopping — Enable product purchases anywhere using a product code.


3. Advertising — Send an ad based on the time of day or when the consumer hits the mall.


4. Market research — Collect immediate feedback.


5. Payment processing — Verify and process credit and debit cards.


6. Advertising effectiveness measurement — Get immediate feedback on when and where your broadcast, print and outdoor ads are seen. 


7. Coupon and credit redemption — Save the paper; send and process these.


8. Self checkout — In-store app to cut the checkout lines.


9. Product directions and care — Make information and assistance readily available from the product code.


10. Customer service — Give immediate responses and gain customer satisfaction.


11. Pre-order food and drinks — Yes, even at your snack or Starbucks counter, this will increase sales and convenience.


Final words of encouragement to all retailers: Join the mobile app shopping revolution to reduce operating costs and increase sales. 


Final words of doom: If you don’t join the revolution, within the decade see your business crushed by the pounding thumbs finding your competitors’ mobile apps. 


Cynthia Cohen is president of Strategic Mindshare, a retail strategy consulting firm. Follow Cynthia’s consumer trend findings and retail reviews at twitter.com/strategydiva or friend her at facebook.com/cynthiarcohen.

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News

Belk Turns Up the Wattage

BY CSA STAFF

HEADQUARTERS Charlotte, N.C. 

TYPE OF BUSINESS Department store operator

NUMBER OF STORES 305 stores in 16 Southern states


The nation’s largest privately owned department store company is stepping up — and updating — its profile. Belk, founded in 1888, is investing an estimated $70 million during the next year and a half to support a rebranding push that puts a more modern and contemporary spin on its Southern heritage. 


Belk’s new corporate identity is being supported by an extensive branding and advertising campaign that includes market-wide television and print advertising, circulars, direct mail and social media. 


Chain Store Age spoke with Jon Pollack, executive VP sales promotion, marketing and e-commerce for Belk, about the company’s rebranding and other initiatives.


This is the first time Belk has updated its brand identity since 1967. Why now?

The rebranding was a thoughtful process that we’ve been working on for about 16 months. We wanted our brand to communicate who we are and what Belk represents today. Over the past few years, we have put a strong focus on updating merchandise assortments, the look of our stores and the way we buy and present assortments. We’re also continuing to build on our excellent reputation for customer service. We believe now is the time to better align Belk’s external image to reflect what our company is today.


A strong brand image helps any company make strong emotional connections with customers, associates and business partners. We want to hold on to our very loyal customers and attract new ones who don’t know us. We are committed to delivering fashion and value to the modern, Southern woman. We want her to count on Belk first — for her, for her family, for life.


Many of our customers want more modern and updated fashions from Belk. In fact, that’s the fastest-growing segment of our customer base and offers the greatest sales potential.

How does the new tag line and identity, “Modern. Southern. Style.” reflect Belk’s strategy going forward?


Our new logo and branding represent the distinct personality traits of Belk — Southern, friendly, fashionable and colorful. Modern is a growing lifestyle segment that crosses all age groups and covers different price levels. It’s a way people think and live, and Belk is committed to serving our modern customers.


Southern isn’t just a location. It’s an attitude and state of mind — gracious, friendly, passionate and colorful. We know the Southern lifestyle better than anyone else, and customers can always count on us to provide the fashion they desire and the value they deserve.


What are the most important elements of the campaign? 


Belk’s new corporate identity was introduced beginning in early October with an extensive branding and advertising campaign that includes market-wide television and print advertising, circulars, direct mail and social media, all of which incorporate Belk’s new graphic elements and brand messages. The interactive marketing blitz alone is expected to drive over 750 million impressions during the critical retail holiday shopping period.


When customers enter our stores, they’ll find much more than a new logo. We’ve worked hard in recent years to provide customers with more of the brands and styles that they love. We’ve modernized our assortments and focused on making Belk the > destination store for cosmetics, shoes, dresses, denim and jewelry. 


We’re also updating store facilities and merchandise presentation and emphasizing customer service to make shopping easier and more convenient. Our customer satisfaction scores are higher than ever before. 


How important is branding to customers, particularly in today’s climate?


A strong brand image helps any company make critical connections with customers, but branding goes much deeper than a new logo. What the customer really thinks and feels about the brand is what’s most important. We held customer focus groups in key markets and conducted research that included nearly 33,000 Belk customers. 


We also conducted interviews with Belk associates from the board room to the selling floor to get their feedback. What they told us reaffirmed the strengths of our company. Belk is rooted in respected values and a rich heritage, [which] have been the foundation for serving customers for nearly 125 years. 


Our goal is to be the South’s premier fashion department store. We want customers to understand what we have to offer and shop with us first. By understanding what our customer expects and is looking for, we are positioned to gain market share from key competitors while continuing to provide current customers with everything they love about Belk. 


We also continue to be firmly rooted in serving the communities where our stores are located. In addition to the many grassroots activities that take place on the store level, our biannual Charity Sale has raised more than $22 million since fall 2007; the spring 2010 Charity Sale raised more than $4.5 million alone. This September, we also announced a three-year, $3 million commitment to Susan G. Komen for the Cure.


What’s been the most challenging aspect of the project? 


The branding process has required a great deal of careful research, planning and execution over the past year. Coordinating the rollout logistics for more than 300 stores in a 16-state footprint is a massive undertaking. 


Where do you stand with regard to the rollout of the campaign?


The new logo and identity elements are already in place in store displays, signage, shopping bags and other collateral. Newly designed charge cards were issued in October to Belk Elite and Premier customers and will be issued to our Rewards card holders in March. External store signs will be installed in 60 stores before year-end, with the balance expected to be installed by November 2011. A substantial increase in television and interactive advertising is planned for the fourth quarter to support the rebranding initiative.


Besides its new corporate identity, what other areas of its business is Belk investing in? 


Belk is making major investments in the long-term growth and success of the company; in fact, the company plans to invest approximately $500 million over the next three years in strategic initiatives that include branding, merchandising, information technology, e-commerce, store remodelings and expansions of key merchandise departments. 


In addition, we are investing in our associates to maintain what we believe is the most dedicated and talented team in retail. Taking care of customers is a critical measure of success, and our customer satisfaction scores are higher than ever. This demonstrates the tremendous pride and commitment that our associates share in taking care of customers and providing friendly personal service, which is a legacy and hallmark of our company.


What advice do you have for other retailers that may be thinking of embarking on their own rebranding campaign? 


Start with good research that includes listening carefully to customers and employees to find out what they think of your brand and to get their input. Good communication is also critical. People want to have a clear understanding of why you are changing your brand and what differences they can expect to see when they shop with you. People become attached to a brand — our former logo was 43 years old — and some may not like the change. It’s important to engage with customers and to be responsive to their questions and concerns. We communicated using a well-planned advertising and public relations campaign that incorporated a variety of media, including broadcast, print, e-mail and social media. 


The overall department store category is experiencing a revival. How do you explain it?


Traditional department store customers are underserved in boutiques for the most part. Department stores typically offer greater value and an easier, more convenient shopping experience. While many younger customers have not been active department store shoppers, there is tremendous growth potential for this segment at Belk, and they are responding to our assortments and customer service. This is an exciting time for our company and the future is bright.

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FINANCE

Mastercard holiday wrap-up report: Holiday sales up 5.5%, strongest increase in five years

BY CSA STAFF

Purchase, N.Y. — A report released Tuesday by MasterCard Advisors said that increased spending in most categories produced a strong holiday season for retailers, with e-commerce and apparel faring the best. Retail sales from Nov. 5 through Dec. 24 rose 5.5% to $584.3 billion over the same period last year, according to MasterCard Advisors’ SpendingPulse. The figures, which exclude auto sales, are ahead of industrywide projections for a 3.3% to 4% rise for the holiday selling season.

“If last year’s holiday story was about gaining some stability, this year’s is about getting back to growth,” said Michael McNamara, VP research and analysis for SpendingPulse.“The 2010 holiday period is categorized by strong year-over-year growth in Apparel and continued strength in eCommerce. We also saw a noticeable return in spending in the larger ticket items, as exemplified by the solid growth in Jewelry, Luxury and even the Furniture category.”

McNamara also noted that the momentum in 2010 holiday season spending appeared to have started as early as the second week of November, producing a month of solid growth and persisting through the traditional early December lull.

“The cold weather across much of the country in December appeared to be a positive for the Apparel sector,” McNamara noted. “While there was some disruptive weather in the Midwest and the West Coast towards the end of the season, the conditions did not seem to negatively impact the national sales momentum. In some cases the weather may have also benefited the e-commerce channel.”

E-commerce was the big winner this year, with seasonal sales up 15.4%, according to the report. Apparel was a strong performing category, growing 11.2% over the 2009 holiday season. Broken down by segment, menswear reached double digit growth weighing in at 10.5% year-over-year. Women’s apparel grew by 5.6%, making for one of the best periods of growth in this subcategory since the financial market turmoil in 2008.

The electronics category was one of the lagging performers, growing 1.2% season-to-season. Jewelry improved during the 2010 season. After a mild start, Jewelry posted several weekly year-over-year increases and ended the season up 8.4%.

The SpendingPulse survey by MasterCard, which reports on national retail and services sales and is based on aggregate sales activity in the MasterCard payments network, coupled with survey-based estimates for all other payment forms, showed that in the Nov. 5 to Dec. 24 period, sales grew 5.5% overall season-over-season (ex-auto).

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