Shop.org: Holiday online sales to jump 13%-15%
Washington, D.C. – The National Retail Federation’s Shop.org expects holiday sales to grow between 13%-15% from last holiday season to as much as $82 billion.
“Online and mobile continue to be a leading area of growth for retailers. In this economy savvy, cost-conscious consumers go to the web to do their research and get the best bang for their buck,” said NRF president and CEO Matthew Shay.
Shop.org calculates sales based on government data including consumer confidence, consumer credit, disposable personal income, and previous monthly retail sales releases. The U.S. Department of Commerce announced that final fourth quarter 2012 (October – December) e-commerce sales increased 15.5%.
The Price is Right
Doubling your store count is the type of growth most retailers seek. So 38-unit, Louisiana-based grocery retailer Rouses didn’t complain back in 2007 when it upped its store count in Louisiana and Mississippi from 15 to 32 by purchasing the regional Sav-A-Center chain from A&P. However, for a family-owned business that had previously grown organically, this sudden spurt in its number and distribution of stores created a few issues.
“Our homegrown price optimization system was not sophisticated,” said Allison Rouse, managing member of Rouses, Thibodaux, La. “We were going into new areas with a larger amount of stores, higher sales volume and new competitors. It was more than our system would handle.”
Flexible Approach: Rouses began investigating different types of price optimization solutions that could handle its suddenly increased requirements. In 2008, the grocer selected the cloud-based, hosted price optimization system from Revionics to aid center store pricing. The solution’s flexibility as a SaaS-based application was a key draw.
“We didn’t purchase a package, but a subscription service,” Rouse said. “It was pricey, but the biggest value to us was there was no installation. The solution being cloud-based helped us integrate it with our internal systems. We like to do our own pricing and take control of different aspects of the system to make sure it does what we want it to do.”
Implementation of the hosted service was fairly straightforward, but there was a lot of preparatory work involved.
“There was intense data integrity work before implementation,” Rouse recalled. “We had to create a data import/export infrastructure in our IT system, upload item cost and movement information and apply suggested changes to our host platform for signage and tags.”
Optimal Experience: While there were no dramatic changes in any individual prices, Rouse said the retailer went from optimizing prices for 200 to 300 SKUs to optimizing prices for 16,000 SKUs across five big competitors.
“We roll out pricing changes every six weeks and have a lot more good data,” she said. “There were categories we were not looking at as much as we should have, like slow movers and seasonal items, that the system helped us get a handle on.”
Since initially subscribing to the Revionics price optimization service, Rouses has expanded its use beyond center store to departments such as perishables and more fully integrated the solution into its back end operations and management structure.
“We have integrated cost files, price files, tagging and signage solutions, and promotional systems on the back end and given them item cost and movement information,” said Rouse.
“The pricing manager reviews recommendations and makes the final call.”
Rouse added that Revionics’ recommendations are always good but sometimes not applicable to a specific area or product. As proof of the overall quality of the solution’s recommendations, she offered that since the grocery chain started using it, the retailer has sustained growth of both sales and gross margin and also heard fewer customer complaints about prices.
“It’s easier than ever for customers to tell you what you’re doing wrong with the Web and social media, but complaints about prices are low, even compared with the level before all the new technology was available,” Rouse said.
IBM expands digital marketing reach with acquisition
IBM has acquired Xtify Inc.,a leading provider of cloud-based mobile messaging tools that help organizations improve mobile sales, drive in-store traffic and engage customers with personalized offers. Financial terms are not being disclosed.
The acquisition will help extend IBM’s mobile capabilities to digital marketers across all industries ranging from retail to citizen engagement in the public sector through cloud-based services.
Xtify will expand IBM’s Smarter Commerce initiative providing campaign creation, personalized content, dynamic real-time segmentation and analytics for all mobile devices and browsers. The technology is designed to help companies engage, convert and retain mobile application users and site visitors. Xtify’s cloud-based campaign management platform notifies mobile consumers when new content and promotions are available — helping businesses deepen connections with their customers.
Sephora, Disney Stores, the Tribune Group and 20th Century Fox among other clients are using Xtify’s push notifications delivered via mobile apps or sites to increase sales opportunities while fostering brand loyalty.
"The premise is simple: mobile content and promotional offers are far more useful when delivered directly to consumers at the right time. Relevant and actionable offers are key to mobile marketing success," said Xtify CEO Josh Rochlin. "Xtify’s mobile messaging capability combined with IBM’s analytics and cloud infrastructure will provide marketers with global reach and an arsenal of rich content to influence and inform increasingly mobile consumers."
Xtify is among the most recent investments that IBM plans to run on its SoftLayer cloud infrastructure that operates in 140 countries. IBM has invested more than $6 billion in cloud-related acquisitions, including SoftLayer, which provides an easy cloud "on-ramp" to help clients quickly deploy mobile capabilities with the security, privacy and reliability of private clouds and the economy, flexibility and speed of a public cloud.
"With the increase of mobile devices, organizations across all industries are anxious to develop a mobile approach to engage their customers," said Kevin Bishop, IBM vice president for digital marketing. "The acquisition of Xtify provides new ways for our clients to foster a direct, one-to-one communication channel with their customers."