Sport Chalet swings to loss in Q1
Los Angeles — Sporting goods retailer Sport Chalet generated a loss of $2.8 million in the first quarter, compared with a profit of $100,000 in the year-ago period.
Sales slipped 2.8% to $81.5 million from $83.8 million, and same-store sales fell 0.7%.
The company has publicized its turnaround efforts, including the opening of its next-generation store concept (at shopping center FIGat7th in downtown Los Angeles) that cuts the standard 42,000-sq.-ft. footprint to a trim 27,000 sq. ft. and showcases mobile technology for in-store shopping, data-driven customization of product mix to reflect local customers’ needs, and improved inventory management.
The retailer has also closed under-performing stores and reduced staff.
"We are making solid headway in implementing our recently announced strategic initiatives,” said Craig Levra, CEO. “We have added new drop ship vendors to our online store and are adding mobile devices in stores to give customers access to the broadest selection of merchandise and the most seamless shopping experience across all of our channels. With our expanded, five-year $75.0 million credit facility, we have ample resources to execute our plan.”
Crazy 8 signs into Alameda South Shore Center
Alameda, Calif. — Crazy 8 has signed a 10-year lease for a 3,117-sq.-ft. space at the Alameda South Shore Center in Alameda, Calif. The deal will bring the 594,000 open-air lifestyle center up to an occupancy rate of 92%. The new store is slated to open this fall.
SRS Real Estate Partners represented Crazy 8 in the transaction. Cornish & Carey Commercial Newmark Knight Frank represented Jamestown, the shopping center’s owner.
One of Gymboree’s brands, Crazy 8 stores number more than 300.
Staying ahead of the rewired customer
What a difference 30, 20 or even 10 years make when it comes to consumer behavior. Thirty years ago, “24×7 shopping” meant mail-order catalogs. Smartphones, tablets and social media were barely part of the discussion 10 years ago. While observers attribute the rapid pace of change to technological advances, biology may play an equally important role. Scientists have observed that the human brain is incredibly plastic, even in adulthood, constantly adapting to trauma and environmental shifts. This phenomenon — called “neuroplasticity” — describes the capacity of the human brain to constantly rewire itself and is part of the reason that consumers so continuously and fluidly adapt their behaviors.
In our examination of changing consumer behavior throughout a number of years, we’ve seen three long-term behavioral adaptations in response to new technologies, demographic shifts and economic inflections. Looking at these behavioral adaptations can help retailers anticipate what’s next when it comes to meeting the needs of their customers.
Do it yourself
The Internet and smartphones have been critical enablers of the DIY consumer. Initially, DIY in the retail environment meant allowing consumers to perform relatively simple tasks without having to involve sales associates. Over time, the complexity of DIY tasks has increased to include checking product price and availability across a number of retailers and geographies, allowing the DIY consumer to perform tasks far more efficiently than might be done by an associate.
One consequence of this shift toward DIY is that consumers who now contact associates are often:
• The have-nots who have no Internet or smartphone access
• The exasperated who give up on self-service options
• The perplexed who have incredibly complex challenges that don’t lend themselves to DIY
As a result, expectations for associates are increasingly high; they now help the least competent, the most frustrated and the most demanding consumers. Deloitte’s 2012 Annual Holiday Survey found that 56% of respondents are more likely to complete an in-store purchase from a retailer that offers knowledgeable store associates. In a DIY world, selecting, training and retaining highly skilled associates is increasingly important.
Consumers are often referred to as multichannel or omnichannel customers, but it may be more appropriate to think of them as anywhere-anytime consumers. Today’s consumers can make purchases via laptops, tablets and smartphones at any time of day from almost any location.
To some shoppers, however, physical location is still important. It provides immediacy for many aspects of the shopping experience — the opportunity to browse, examine, compare, select, purchase and take physical possession of the purchase. And with major retailers now offering same-day home delivery for online purchases in select markets, they’re discovering that a few hours’ worth of delay is proving to be sufficiently immediate for eager buyers.
The challenge for retailers is to make the physical shopping experience relevant and conducive to the way consumers want to shop. Whether it is exclusive products, an enhanced in-store experience, or site-to-store delivery capabilities, engaging Anywhere-Anytime consumers requires supporting the cross-channel experiences that consumers have come to expect.
The wisdom of my tribe
Consumers have long asked for the advice of their tribes — family, friends and colleagues — when it comes to making purchases. They’ve also relied on third parties that specialize in evaluating and rating products and services.
But, social media and smartphones allowed consumers to develop a much larger trusted tribe than ever before.
The 2011 Deloitte Shift Index found that younger consumers generally rely less on brand names as an indicator of product reliability, turning instead to the Internet for product and service information, user reviews and feedback, as well as substitutes. Meanwhile, Deloitte’s annual Media and Democracy survey indicates increasingly larger numbers of consumers using smartphones to access this tribal wisdom.
The challenge for retailers, consequently, is to incorporate tribes into social media and more traditional marketing and outreach efforts, without compromising their authenticity.
Companies can capitalize on the consumer rewiring trend in two ways. First, they can proactively deliver new experiences that help shape rewired behaviors. Second, they can react to new customer behaviors by providing experiences that take advantage of the latest behavioral adaptations. Innovators will likely do both.
Whether a company chooses to shape rewired behaviors by experimenting with innovative concepts or react to changing trends by sensing how consumers are rewiring, new and deeper capabilities may be needed, including:
• Active, rather than static, marketing planning
• Delivery of smooth customer experiences across all customer touch points
• Enhanced partnerships to deliver the experiences aligned with consumer rewiring
• Flexible engagement processes
• Sensing and insights analytics
Additionally, companies should consider the following when it comes to anticipating the next generation of consumer rewiring:
• National same-day shipping may allow companies to address the desire of DIY and anywhere-anytime consumers for immediate fulfillment. Amazon.com has offered same-day delivery since 2009 and now provides it in 10 cities. eBay recently launched a trial of eBay Now, which hires couriers to deliver goods directly to customers’ doorsteps within an hour of an online order. Other companies, including Google, are racing to offer same-day delivery of online orders. Startups such as Shutl, Instacart and Postmates are also tackling same-day delivery. Instantaneous fulfillment via 3-D printers may soon trump same-day shipping by allowing customers to fabricate a wide range of products from the comfort of their own homes.
• Augmented reality may drive additional customer rewiring. As augmented reality technology matures, customers can expect visually immersive, interactive and real-time engagement with companies, their products and their services.
• Social shopping will likely increasingly tap into the wisdom-of-my-tribe phenomenon. Consumers may increasingly seek to create trusted social networks and targeting influencers in these mediums could become even more important for marketers.
Despite the challenges of predicting how and when consumers will rewire their behaviors, companies should focus in three areas. First, strong sensing capabilities are important when it comes to detecting and interpreting the impact of new technologies, changing demographics and shifting economics. Second, memorable and compelling customer experiences often trump whiz-bang technologies that may look dated by the time they are fully implemented. And third, given the unpredictable speed of customer rewiring, agility and nimbleness will likely be important competitive differentiators.
Jonathan Copulsky is a principal at Deloitte Consulting LLP. For more than 30 years, Copulsky’s career has been dedicated to developing and growing profitable customer relationships. In addition to his client work, Copulsky serves as Deloitte’s chief brand, eminence and digital officer. He is the author of the critically acclaimed Brand Resilience: Managing Risk and Recovery in a High-Speed World (2011). Click here for more information on the rewired customer.