Retail Loco @ SXSW: Retailers Talk Location Solutions
By Anne Marie Stephen
Brands, retailers and technologists convened at Retail Loco at South by Southwest Interactive, Sunday, March 15, 2015 hosted by Location Based Marketing Association. The event focused on how companies are leveraging location solutions and data for better business. The LBMA is a global not-for-profit association with over 1,000 member companies including media, retail, brands, agencies and technology companies.
The day was filled with informative content throughout the day. Founder and president of the LBMA, Asif Khan, shared that 80% of mobile devices in North America use GPS and location should be thought of as the “new cookie” in understanding consumer behavior through location. He also informed the audience that 85% of all data generated on planet has a geo-location element.
Companies like Target and Redbox spoke about how location is being used in their respective businesses. Mike DiMiele, senior manager web and mobile analytics, Redbox, noted that 60% of Redbox traffic is coming from a mobile device. Alan Wizemann, VP of product, Target, shared how the retailer has successfully leveraged proximity detection via the Target app for customer curbside fulfillment.
While Target is not divulging the results of the California based test, Wizemann did share that the company was “remarkably surprised” by the positive results. He also suggested that retailers must think about solving the problem before integrating technology stating the “benefit has to be there” for both consumers and retailers.
In other highlights:
• Ryan Craver, L’Amour, digital strategy emerging brands, formerly senior VP strategy with Hudson’s Bay Company who led the HBC beacon deployment, observed that retail is getting to the point that there is no longer an “offline world.” Consumers and retailers and living in a fluid shopping environment that blends channel boundaries.
• Location data, such as the behavioral data collected from mapping technologies of consumer travel to and from destinations helps brands and retailers gain context about their customer according to Elise Neel, head of sales for Mapquest.
• Simon Venture group managing director, Sky Fernandes, indicated one third of the U.S. population works or walks through a Simon Property mall daily. With those numbers, indoor location solutions are good tools to measure shopper behavior. He also suggested that tying these analytics platforms to marketing platforms is more impactful to the experience and bottom line.
• Tamara Weinman, managing director of T3, San Francisco said in their work with UPS they were able to save seven dollars per delivery simply by re-routing packages to the real-time customer location rather than delivery address improving both the customer experience and ROI through use of location.
Retail Loco speakers also communicated best practices in deploying these new technologies in their businesses. Jeff Donaldson, senior VP of the Gamestop Technology Institute, indicated that it is critical to operate with high integrity and transparency with shoppers. And InMarket CEO, Todd DiPaolo advised “technology should not make consumers jump through hoops.”
Creative engagement with location
The event also highlighted creative, successful uses for engagement with location. Blue Bite CEO, Mikhail Damiani, shared how the company have partnered with Adidas embedding NFC chips in shoes to engage with digital signage.
Westfield Malls and Sephora were cited by Manolo Almagro, managing director digital and retail technologies, TPN Retail, as two companies “doing it better.” Westfield has innovation labs in a live mall environment where they have implemented shoppable windows that are giant touch-screens. In this environment, it was discovered that shoppers were reluctant to purchase directly from the window because their credit card number was visible to all passersby. Changes were made and final transaction point moved to the shopper’s mobile device to facilitate purchasing.
Emily Shannon, director of digital from the Mall of America, said in just two years, they have initiated and implemented a digital program to connect and shape the guest experience because mobile is an important tool in the shopping visit.
Throughout the day companies shared how mobility has shifted how they are thinking about serving customers. Burberry and Whole Foods bring payment mobility utilizing Square in-store to serve customers where they are experiencing the brands, explained Gillian Wee, operations lead at Square.
As the traditional methods of payment via hardware and POS systems at the front of stores shift to mobile, impulse buys are being challenged. The Hershey Company is looking to find new ways to deliver the “impulse chocolate purchase” according to Sara Abernathy, Front End Evolution.
Location solutions continue to evolve and be incorporated into the retail environment. Brands, retailers and technology solutions are working together to discover best practices for leveraging location for their businesses. The LBMA will be hosting another Retail Loco event in Chicago October 22-23, 2015.
Tech Bytes: Three Lessons from Oracle Industry Connect
Last week, Oracle hosted its second annual Oracle Industry Connect conference in Washington, D.C. This seat of world power was an appropriate setting for a two-day summit explaining how retailers can use technology to obtain better control of every aspect of their enterprises.
Here are three key lessons attendees gleaned from Oracle Industry Connect:
Customers are the Best Salespeople
Beauty products inspire passion and loyalty among customers like few other categories. The fast-growing specialty retailer Ulta Beauty takes full advantage of the strong emotional appeal its offerings create by turning customers into online salespeople.
In a Wednesday afternoon session, Ulta executives explained how the retailer posts shoppable “haul videos” customers create on its e-commerce site. The haul videos show customers displaying items they bought at Ulta, explaining why they like them so much, and giving tutorials on how to use and apply them properly.
Customers can rewind to a specific product and click on it to be brought to its listing on the Ulta site. This organic form of promotion provides an authenticity and sense of community no formal marketing program could ever deliver. Average order value of online purchases has risen since Ulta began running shoppable haul videos.
Creators of haul videos may receive incentives such as gift cards or free items, but are not monetarily compensated. Also Ulta may occasionally recommend an item for video review, but never provide a script or tell the video creators what to say.
The Cloud is About Process
The cloud is generally seen as an enabler of technology. Running applications on virtual servers makes them easier to integrate, deploy and manage with less overhead. While all this is true, the deeper truth is that the cloud is fundamentally an enabler of process.
“We don’t want you to be an IT shop, we want you to be a retailer,” Jill Puleri, senior VP and general manager of Oracle’s Retail Business Unit, told attendees. “The cloud is about time to value, not just a change from capital expense to operating expense.”
As Puleri explained, cloud technology allows retailers to easily fit solutions to their specific business purposes and spend more time on integrating and modifying internal business processes, which is often a bigger challenge than IT implementation.
Thus Oracle is using the cloud to extend its Commerce Anywhere connected omnichannel retail approach from financial through store execution solutions. By making implementing and integrating applications as easy as possible with a cloud platform, Oracle is enabling retailers to let business process drive technology decisions, rather than vice versa.
Omnichannel is about Process
Process was a recurring theme of Oracle Industry Connect. In a session, specialty athletic apparel retailer Lids described how it keeps store processes in mind when using the Micros Locate solution to provide an omnichannel shopping experience.
Lids has gone live with Locate at 800 stores, letting customers order at the POS to have out-of-stock goods shipped to their homes and also giving associates “endless aisle” capabilities with tablets. While sales have increased 1.5% at stores with omnichannel capability and e-commerce sales have risen more drastically, Lids evaluates how Locate works on a store-by-store basis and will remove it from stores where it does not fit well with operations.
In addition, Lids protects store inventory levels by limiting quantities of in-store merchandise used to fulfill online orders, and will not ship fragile items from stores.
“It’s a complex task and integrates lots of systems,” explained Kevin Thompson, director of application development, Lids. “Your stores will have fulfillment centers all of a sudden, when they have never done that before.”
Holiday, online sales boost Belk Q4 profits; opening two stores
Charlotte, N.C. – Belk Inc. credited strong holiday sales for helping to boost net income in the fourth quarter of fiscal 2014 8% to $104.4 million from $96.3 million the same period a year earlier.
Net sales rose 5% to $1.39 billion from $1.32 billion, driven by a 2.4% increase in same-store sales and 42% surge in online sales.
In 2015, Belk will open new stores in Bristol, Tennessee (The Pinnacle) and Jacksonville, Florida (Atlantic North Shopping Center) to be completed in March. The retailer will also undertake a major expansion and remodel of its flagship stores in Columbia, South Carolina (Columbiana Centre) and Franklin, Tennessee (CoolSprings Galleria, includes the opening of a men’s and kids store in the mall).
In addition, Belk will invest an additional $27.5 million to continue to build out capabilities in its e-commerce fulfillment center in Union County, South Carolina.
For the full year, Belk’s net income for fiscal 2015 dropped 8% to $146.1 million from $158.5 million the prior fiscal year, with the decrease credited primarily to higher expenses associated with the company’s investments in strategic initiatives.
Net sales totaled $4.11 billion, an increase of 2% compared with net sales of $4.04 billion in fiscal 2014. Same-store sales rose 1.5%. Online sales increased 43% for fiscal 2015 and positively affected the company’s comparable store sales by 2.1% for the period.
“Despite challenges early in the year, we ended fiscal 2015 with strong holiday sales and are pleased to report our fifth consecutive year of positive comparable store sales,” said Tim Belk, chairman and CEO. “Although our annual earnings continue to be impacted by additional expense associated with key strategic initiatives, we are encouraged by the recent trends and believe we are well positioned for the year ahead.”