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SpendingPulse: Apparel and luxury big winners in October

BY CSA STAFF

Purchase, N.Y. A report released Wednesday by MasterCard Advisors found that sales in most retail sectors posted positive year-over-year growth in October compared with last year, and the apparel and luxury categories posted the biggest gains.

According to SpendingPulse, which bases its results on a combination of surveys and aggregate sales activity in the MasterCard payments network, year-over-year overall apparel sales in October were up a sharp 8.2%, building on the 3.8% gain in September. October saw the year’s largest year-over-year increase for the sector, which has experienced seven out of 10 months of year-over-year gains so far in 2010.

“Overall, October showed a noticeable improvement compared to the same month last year,” said Michael McNamara, VP research and analysis for MasterCard Advisors SpendingPulse. “E-commerce continued to post solid year-over-year growth, similar to the strong performance in September, while positive financial market performance seemed to help higher-end sectors such as Luxury and some sub-sectors of Jewelry.”

Within the sector, women’s apparel saw a 5.3% year-over-year gain, while the children’s and family segments saw solid gains, as they did in September, posting increases respectively of 8.7% and 11.6%.

Footwear was up 5.9%, with men’s apparel the only category to lose ground, down 0.3%, nonetheless milder than September’s 3.4% year-over-year decline.

Following four straight months of year-over-year gains, the consumer electronics and appliances segment declined by 3.1% in October. The decline can be accounted for by the significant fall in total ticket prices for this category.

The SpendingPulse Luxury ex-Jewelry Index — which reports on sales at high-end restaurant, food stores, department stores and general apparel categories — posted positive results in October, growing 4.2% year-over-year. This performance is further underscored by the fact that September marked the end of the easy year-over-year comparison environment that persisted through the first eight months of 2010.

In the e-commerce sector, sales posted a year-over-year growth rate on par with those of August and September. With an increase of 7.9%, the overall sector is up slightly higher than September’s year-over-year gain of 7.8%, and August’s 7.2% increase.

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Bridging the online/offline divide: Five ways to bring online presence into your store

BY CSA STAFF

By Mark Sambrooke, [email protected]

If you are like most retail brands, you put a significant amount of ongoing effort into managing your online presence. Social media for businesses is all about maintaining a healthy and open dialogue with your customers in the channels they frequent. Social media also requires substantial resources, so it is critical that you are strategic in your approach to maximize this investment and get results.

Today, many companies have mastered the art of online engagement, whether it is via engaging viral videos or a responsive Twitter handle. But what happens when your customer leaves their computer and walks into your store for the first time?

The irony is that the confines of your own store could be the weakest link of your carefully crafted campaign. The hyper focused marketing efforts that brought the customer to your doorstep need to continue inside your venue, from in-store media that is coordinated with online campaigns to educated employees.

There are several strategies that retailers can adopt to convert a successful social media or online marketing initiative into a real world sale.

Five steps to bridging the online/offline divide include:

1. Connect your signage
The first step is to get your in-store signage plugged into the same source as your customers — the Internet. Traditional forms of media have become increasingly marginalized in the eyes of consumers, who now turn to the Internet as their main source of information and recommendations.

Digital signage has recently undergone a revolution not too different from one that took us from the mainframe computer into the age of the Internet. Internet-based digital signage systems now allow for targeted, timely and cost-effective distribution of the latest forms of digital media.

Digital signage has also become very cost effective, and should cost you only dollars per month, not hundreds of dollars. Choose a digital signage provider that does not lock you into years of service, nor require specialized hardware. Find a system with a “self serve” component for your marketing department, which will give you a measure of direct control over your screens. Make sure the system can handle all the modern must-haves — including syndicated news feeds, YouTube video, online management, usability and integration with new services like foursquare.

2. Combine your online and offline initiatives
If you are wondering where to get all the content to put on your new digital screens, the good news is you are probably already creating much of it. Your website is full of digital assets that can be re-purposed or re-formatted for your digital screens. Twitter feeds, blog entries, viral YouTube videos, Flash ads, digital images from your web site — all these are content sources that can quickly be uploaded onto your in-store digital displays.

Online campaigns are often carefully crafted to target their message by geography and demography as well as individual customer preferences and habits. With the right tools, the targeting techniques used in the online world can also be employed offline.

Re-using these digital assets and techniques is the best (and easiest) method for keeping your online and offline campaigns coordinated.

3. Engage your customers
The same principles that apply to good online engagement with your customers apply when engaging in-store:

* Build a community
* Create engaging content
* Share the passions of your customers
* Be authentic

For example, if you are a chain of sporting goods stores, make sure there is room in your content list for local sports. That is where your customers’ hearts (and dollars) are found. Highlight the local pro sports franchise — or even better, the local little league. Build some leeway into your marketing guidelines. Allow the local store operator to make limited decisions that align with his local clientele’s passions. Playing that half minute YouTube clip of the triumphant local heroes is a surefire way to gain customer loyalty, one community at a time.

A modern digital-signage system will allow you to meet these hyper-local goals and still satisfy your mandate to control your brand and stay on message.

4. Keep it fresh
The ultimate goal of all your in-store efforts is to grab your customers’ attention and hold it long enough to truly engage them. That means creating not only compelling content, but fresh and timely content. The day-to-day effort of keeping everything up to date is often where conventional digital-signage efforts break down.

Steps two and three should help mitigate this problem, but remember that successful online to offline marketing requires a considerable time commitment. Invest time and resources into understanding your new capabilities and recognize that the ROI outweighs the added costs. Give yourself and your team the bandwidth and the budget to get it done right.

5. Connect the dots with mobile
The world is going mobile. “Location aware” smart phones, which allow mobile applications and services to take into account the user’s location, are already being widely used.

This is important because mobile phones are the missing link in the chain that makes online to offline a reality. Your customers are always online, because their phones are always online. When your customers bring their phones into your store, they bring the potential to directly connect with your online to offline marketing campaign.

How this revolution will change the retail experience is a chapter still being written. Your customers’ phones are giving them unprecedented access to information such as tips, product reviews and competitive pricing. On the other side of the coin, their phones are giving you unprecedented information that can be leveraged for in-store marketing efforts. Your customers’ phones are telling you not only when they have arrived, but their interests, their history and even their friends. These are monumental shifts in the consumer environment. We all recognize that marketing efforts will need to adapt. The best advice for responding to these shifts is “be prepared.” A few simple and practical steps today will keep you primed to take advantage of tomorrow.

It is easier than you think
Combining your efforts in the online world with in-store digital signage and mobile technology is a great way to test the waters in the new online to offline space. It is not difficult to get started; here are three quick things you can do:

1. Claim your foursquare venue by visiting http://foursquare.com/businesses/;
2. Register your venue with Google Places and Facebook Places; and
3. Try out a modern, Internet-based digital-signage system.

Once your store’s presence is felt in these three online/mobile resources, you will have an immediate mobile presence for your offline store. From here, you are ready to follow the five steps to bridging the online/offline divide and bring all your marketing efforts to life right inside your store.

Mark Sambrooke is VP product management for ScreenScape (screenscape.net ), the first community-based digital signage network, where he leads all product management functions. Businesses use ScreenScape for digital signage, media distribution and advertising. He can be reached at [email protected].

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Bringing the color back into retail

BY CSA STAFF

By Derek Buchanan, [email protected]

It’s fair to say that the current state of retail is one of transition and flux. In the current climate, many retailers are going through a period of introspection; they’ve had to focus on cutting costs and risk by reassessing their stores, supply chain and sourcing. The focus is on efficiency and standardization, introducing processes that are easy to replicate, quickly.

The by-product of this situation is that it has almost become retailers’ entire focus. Therefore creativity, innovation and excitement have been sacrificed because of it. This means that from a customer’s point of view, while there’s a plethora of items to choose from, there is very little to differentiate between similar products on offer from different suppliers. As retailers have to be so conscious of efficiency and cost reduction, the ability to showcase and to put light and shade into presentation has been lost, and with that, it’s difficult for the customer to tell the difference between similar products.

In the most basic terms — what makes one brand of tinned soup different to another? So how can retailers get creative and make sure their products and goods are impossible for consumers to miss? The answer is to combine great signage, great ticketing and showcasing the product in such a way that consumers can’t avoid seeing the product. This is the way to get straight through to customers — they see, they note, they buy. But it’s done in such a way that it seduces the customer into wanting to buy the product. And that’s creativity.

Now the problem with some organisations is the cost impact in working this way. They need to free up time to be able to do this. They have to put other activities to one side, to say ‘we need to focus on this, because unless we can seduce the customer to spend their money, we’re not going to realise the sort of growth that we’re targeting.’ And the other issue is that customers are suffering from fatigue. They’ve bought everything they’re going to buy in volume purely because of price. They have enough shoes as far as need is concerned. They have enough food. Now it’s about want. And this is where retailers really need to get smart to showcasing and seduction! Companies need to bring color and passion into retail.

As it’s often said in retail, the last three metres are the most important. Research by Procter & Gamble has shown that in the last 20 years, more than 72% of purchase decisions are made at the last possible minute, when the customer is actually forced to make a decision, because if they don’t, they’ll have to walk out of the store empty handed and that’s the opportunity at the point of sale to actually change their decision. And what’s making this even worse today is that the lack of time is making consumers even more impulsive, so for the retailer the counter to that is that it gives the consumer even more opportunity. A lot of retailers however, are wasting that opportunity, by simply saying here it is, here’s the shelf facing, here’s the ticketing, that’s it. There’s no light and shade, there’s no ability to be able to see from the customer’s point of view, wow — this item looks even more exciting that that one over there.

So with such a large task ahead of them, what can retailers do? They should embrace technology in the form of an integrated customer communication system that allows retailers to quickly create quality, accurate and consistent information for all their channels whether they are in-store paper shelf edge labels and promotional signs, digital signage, such as electronic labels, signs, kiosks and TV displays or external channels such as web site, catalogue, coupons and newspaper adverts. Moreover, the technology available is such that it will scale from the smallest to the largest retailers worldwide. Small and speciality stores can take advantage of a web-hosted version of the technology to gain an immediate impact to improve customer communication, without the need to invest in a costly information technology infrastructure. Larger retailers can install the technology in-house using current infrastructure, enabling them to communicate to their customers in hundreds or thousands of stores across different countries in the appropriate languages.

The technology behind customer communication systems is proven. Companies using it have reduced costs, improved operational efficiency, enhanced the customers’ shopping experience and in many cases gained sales uplift across all categories of retail including supermarkets, department stores, electricals, fashion, home improvement and speciality stores.

Derek Buchanan, is CEO of Episys, a global information technology solutions and services company to the retail, manufacturing, logistics, chemical, healthcare and public service sector industries. It provides expertise, products, services and support for signage, labeling and mobile systems. He can be reached at [email protected].

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