It’s always satisfying to look back and enjoy your professional successes. While I see nothing wrong with patting yourself on the back and basking in well-earned personal kudos, I have found that, from time to time, we must also remember where we’ve fallen short. Thinking about past mistakes certainly keeps me humble. More importantly, I’m almost always able to learn something from my missteps. After all, the more insight and information I can gather about why I was wrong about something, the more accurate I will be in the future.
I’ve been thinking a lot lately about retail trends from the past that I misjudged as fleeting fads. While I was right about some, I think it’s a great time to revisit the ones I got wrong:
Probably the single biggest misjudgment I ever made was in the early 1990s when I said that coffee shops were a “fad.” If they are a fad, they’re one of the most successful and longest-lasting fads known to man! Looking back on it, I think I underestimated the impact of two very important factors: first, they sell an addictive product, and second, coffee shops are selling more than just coffee; they are selling an experience. And, while their product offerings have certainly evolved, so too has the real estate for these shops. Almost all of them started out in small in-line locations, but now we’re seeing a number of freestanding, hard corner locations. Some national brands are even successful enough to overpay for prime real estate they just can’t live without.
When tanning salons were taking off in the late 1980s and early 1990s, I didn’t think they had staying power for one big reason: health concerns over long-term UV exposure. I think one of the reasons that tanning is still a relatively strong and enduring concept today is because they have expanded beyond the UV lamps and are offering “healthier” alternatives like spray tanning. And, perhaps because it’s a fragmented industry with lots of independent operators, there’s a considerable amount of real estate available for these salons at bargain prices, particularly in distressed or undervalued locations.
Frozen Yogurt Shops
I admit, it’s delicious, but I didn’t think it would last. Not only are frozen yogurt shops still here; we’re seeing a sudden resurgence as they develop more healthy alternatives for consumers. The fact that yogurt is still pumping out profits is a testament to the adaptability and flexibility of these retailers. TCBY was practically on life support in the early 2000s, but with their focus toward health, they’re experiencing a real renaissance. I also think that the shift by some toward the self-service model lends to smaller store formats and lower operational costs, which helps them stay alive in an otherwise competitive market. Today, the biggest expense for some yogurt shops might just be their rent.
While I’ve obviously been wrong in the past, it won’t stop me from making predictions about the future staying power of some of today’s hottest trends. I may look back in a few years and eat my words once again, but I’m willing to go on-the-record with my skepticism and say that I’m not sure these trends are more than just a flash in the pan:
I think there are too many independent operators getting into this niche, and not enough talented and creative bakers. Cupcake boutiques, like frozen yogurt shops in the early days, run counter to the healthy lifestyle trend that drives so many of today’s consumer choices. It’s not a coincidence that the most successful names in donuts — think Tim Horton’s and Dunkin Donuts — have evolved into more than just donut pushers. Many are better known for their coffee, and continue to adapt their menus toward the healthier lifestyle.
Massage Therapy Clinics
It seems that one of the single biggest retail service concepts growing right now is massage therapy. My skepticism here is based mostly on volume concerns. Massage and wellness concepts are healthier than cupcakes, for sure! But with massage clinics among the nation’s fastest growing franchises, I think this concept is perilously close to becoming over-stored.
What do you think? Have you been wrong about new concepts and trends? Are there any current trends you think may or may not stand the test of time? Why? Email me at [email protected].
Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.
International Payment Services – It’s Easier than You Think
By Merrick Theobald, [email protected]
Virtually every major retailer today is looking for new revenue streams, more cash flow and a faster return on investment. One popular way to achieve this is to equip customer service counters for such payment services as bill payment and mobile phone top-up. Customers who operate on a mainly cash basis have learned to appreciate the convenience of paying bills and topping up phones at retail while shopping, and every retailer involved can appreciate the high margins these simple cash transactions deliver.
Yet many retailers offer only domestic payment services rather than expanding into cross-border payment as well. These retailers may not be aware of the size of the international market or the striking similarities between cross-border and domestic payment services. Or they may be unaware that any distribution partner assisting them with domestic payment services may be fully set up to help them with equivalent cross-border services.
The fact is, retail cross-border payment represents one of the fastest-growing classes of financial services, fueled by wage earners who immigrate from developing countries for higher wages and use the bulk of their earnings to support families back home. It’s also quite easy for retailers who offer domestic payment services to expand to cross-border payment and begin driving additional store traffic – often tapping into new revenues that eclipse revenue from domestic payment services.
A Huge, and Growing, Opportunity
The World Bank estimates that over 215 million people have emigrated from their homelands. The vast majority of them have left developing countries for better opportunities in high-paying labor markets while their families remain behind. According to The World Bank, money sent by these workers to their families in developing countries reached $325 billion in 2010, which represents a 6% increase over 2009. The World Bank expects this number to continue to rise, potentially exceeding $370 billion in 2012.
The top country from which these funds are sent? The United States — meaning U.S. retailers are especially well-positioned to directly claim some of this enormous international cash flow.
Similar to Services You May Already Offer
Cross-border payment services, which include bill payment, mobile phone top-up and in-country gift cards, will have a familiar feel to any retailer offering domestic payment services. The process of handling cross-border payments via a POS system is very nearly identical; it’s a simple matter of collecting cash and relevant information, and submitting data for fulfillment. The data to be collected may vary slightly, but the mechanics are the same. The only real difference is that the billing organization is located in another country rather than in another state, which also turns out to be a minor consideration.
Most retail distribution partners that support domestic payment services also have the ability to support flawless cross-border payment. Most of those who don’t yet offer cross-border payment are moving in that direction.
Tapping into New Revenues with Minimal Effort
For any retailer interested in expanding from domestic payment services into complementary cross-border services, the path is very short, with little effort needed to get started and a great deal to gain. The gains include all-new revenue streams in cash-based transactions with no credit card interchange fees, and a rich opportunity to up-sell and cross-sell to existing customers while attracting new customers.
As with domestic payments, cross-border payments take just seconds to process, so there’s very little impact on staffing. As the transactions use existing POS equipment, there’s little or no capital investment required.
In fact, for most retailers currently offering domestic bill payment, adding cross-border bill payment may require little beyond contacting the distribution partner that assists with domestic payments. Chances are they are also fully set up for cross-border payment and can offer a quick implementation. If not, it’s reasonable to inquire as to their cross-border plans. If those plans aren’t yet firm, it’s worth considering a second distribution partner eager to help drive additional revenue from competitive and attractive offerings for an important and growing customer base.
Merrick Theobald is VP of marketing at iSend, a leading international electronic payment service that provides multiple options for people who support family members in other countries. Customers control the use of the payments they make, and payments can be managed at more than 80,000 retail locations for recipients located in more than 40 countries. For more information, visit isendworldwide.com. Theobald can be reached at [email protected].
Tomra North America names new president
SHELTON, Conn. — Tomra of North America Inc., a wholly owned subsidiary of Tomra Systems ASA and leading global provider of advanced recycling solutions, today announced the appointment of Harald Henriksen as the new president and CEO of Tomra of North America. Henriksen, who joined Tomra ASA in 2004, previously served as SVP technology based in Norway.
As president Henriksen will be focusing on continuing Tomra’s growth in all lines of the business, including sensor-based and sorting solutions such as reverse vending machines, balers, compactors, and processing technologies, all of which aid in resource recovery and resource optimization.
In his previous role as global SVP technology, Henriksen was responsible for the company’s research and development, operations, production and project management. Together with the CEO, he also led the collection technology business unit. In another key role, he established and ran TOMRA’s sales, sourcing and production in China.
Prior to joining Tomra, Henriksen served as a VP BU Tactical Radio at Kongsberg Defence Communications; as a VP product management and VP for research and development at Kongsberg Ericsson Communications; and as a project manager and department manager at NFT-Ericsson. Earlier in his career, he worked in engineering roles at Elektrisk Bureau, Norsk Data and NDRE.
Henriksen, 48, graduated from University of Salford, in Manchester, UK, where he earned a BSc with Honors in Electronics.