On Target: Planet Retail’s Take on Target’s Q4 and full-year results
By Sandy Skrovan, U.S. research director, Planet Retail
Target closed the books on its weakest holiday season performance since 2008, recording a paltry 0.4% same-store sales gain in the fourth quarter. Dragging down Target’s fourth quarter results were weaker-than-planned sales during the critical November/December time-frame, with 1.0% comps in November 2012 followed by a flat December compared with the same year-ago periods.
Walmart proved the victor over Target for the 2012 holiday season, logging a 1.0% increase in its fourth quarter. But Target won the year overall since, unlike Walmart, its affluent shopper base tends to be more insulated from economic swings. For the year, Target’s retail sales were up 5.1% with comparable-store sales up 2.7%.
Fortunately for Target, it ended its fiscal year on a high note, as shoppers sought post-holiday deals in January as well as a glimpse of upcoming spring fashions. Solid January comps helped prop up fourth quarter performance – ever so slightly – giving Target momentum entering fiscal 2013. The biggest initiative, by far, in the coming year will be the long-awaited launch in Canada. It’s been a long time coming, but the groundwork has now been laid and Target is set for its March 2013 debut in Canada.
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New creative appointments named at Coach
NEW YORK — Coach announced that Zach Augustine will join the company as EVP, global environments, effective March 11, reporting to Reed Krakoff.
Augustine will lead initiatives across visual merchandising, architecture and creative cevelopment partnering with the other leaders to create a consistent and cohesive brand story.
Augustine joins Coach from Nike, where he held the role of global creative director – direct-to-consumer experience. Prior to Nike, he was co-founder of Winston, a consulting firm that worked with clients on projects ranging from brand identity design to retail and showroom design, development and production. He started his career in visual merchandising at Giorgio Armani and worked in creative leadership positions of increasing responsibility at Diesel, Polo Jeans, Nautica and Levi Strauss before launching Winston.
Additionally, Erin Thompson will join Coach this spring as VP artistic director, global environments.
In this role, Thompson will oversee all creative development for windows, in-store, showrooms and events, reporting to Augustine. Thompson comes to Coach from Selfridges & Co., in London, where she most recently held the position of head of visual, having initially joined the company in 2002. Prior to Selfridges, Thompson spent twelve years at Mulberry in progressively senior visual merchandising roles.
Lew Frankfort, chairman and CEO of Coach, said, “The appointments of Zach Augustine and Erin Thompson to these newly created roles are the latest steps we’ve taken to broaden our capabilities to enhance the Coach experience through product, retail environments and integrated marketing communications. This comprehensive approach to our transformation to a lifestyle brand will add excitement and cachet to Coach.”
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The Self-Service Shopper of the Future
By Oren Betzaleli, EVP, head of product and marketing, Retalix
As smartphones and tablets continue to infiltrate the market, they are increasingly changing the way people interact with each other, receive information, and expect to be served by retailers and service providers. As a result, more and more retailers are starting to offer self-service mobile applications as a popular means to manage customer interaction and relationships.
Retailer-Owned vs. Consumer-Owned Self-Service
Self-service is not a novel concept – and retail-owned self-service devices have been around long before tablets and smartphones.
- Self-service scales were introduced to the market in the 1980s, and implemented primarily in Europe, allowing consumers to weigh fruits and vegetables on their own.
- Self-service kiosks are widely used for public transportation, flight check-ins, movie theaters and more.
- Self-scan hand held devices are used in many stores, especially in Western Europe where they are used for allowing shoppers to check prices, review running totals of their spending and upload their shopping basket to the point-of-sale for quick checkout.
- Self-checkout or “Do-It-Yourself POS,” provides customers the freedom to check out on their own.
The list goes on, and as time goes by, more self-service devices are introduced into the retail industry. Retailers implementing these self-service devices are driven by the desire to grant shoppers increased satisfaction by significantly speeding up both shopping and checkout cycles, and improving store employees’ efficiency by freeing them from mundane tasks. This enables retailers to demonstrate greater attentiveness towards customers where most needed.
And yet, all of the above self-service devices – each with its own capabilities and benefits – are confined to the store. The emergence of consumer-owned smartphone-based applications such as Mobile Scanning and Mobile Shopping, now blur the boundaries between what consumers can do both in and outside of the store, which opens up a whole new world of customer interaction. Once shoppers become accustomed to using the retailer-branded mobile application outside the store – to create shopping lists, review shopping history and download coupons – it strengthens brand identity and increases shoppers’ likelihood to return to the same chain for their next shopping trip.
Mobile self-service applications can be highly customizable and agile to fit each retailer’s requirement. The same consumer-owned device can be used for mobile scanning, self-checkout, mobile payments as well as viewing rich supplementary product information. This approach helps retailers cater to customers’ specific preferences, leveraging the rapid adoption of smartphones to eliminate the need to invest in costly retail-owned hardware and labor.
The Limitations of Self-Service, and How to Rise Above Them
That being said, self-service – whether on retail-owned devices, or on consumer-owned mobile devices – has its downsides and limitations. Handing over the power to the consumer to some retailers means giving up a certain element of control – which can be a scary notion. Allowing consumers to operate in-store devices themselves opens up all kinds of concerns such as theft (intentional or not) or self-scale abuse by punching in a cheaper type of fruit or vegetable at the scales.
To overcome these security issues, some retailers have implemented security scales at their self-checkout lane, to ensure the item scanned is indeed the item placed in the bag, according to pre-defined weight. In order to reduce the risk in the case of self-scanning, store representatives also pick out random shoppers at checkout for re-scanning of their shopping basket, to ensure it matches their own scanning list and invoice. Still, some retailers choose not to implement any security measure, claiming that a person who wants to conduct fraudulent activity will do so with or without a self-service machine, and that most thefts are not performed by the customers, but by employees.
So what motivates retailers to implement self-service options despite these downsides? The answer is simple: if the customer wants it, then you must provide it. Shoppers want the freedom to choose how, when and where to be served. It is part of an emerging ‘connected’ lifestyle which defines a new spectrum of consumers’ desires and preferences.
Furthermore, in a Harvard Business Review blog post, “Why Your Customers Don’t Want to Talk to You”, the authors Matt Dixon and Lara Ponomareff suggest consumers do not necessarily want human interaction when performing their shopping. Reasons can vary from psychological desire to feel in control, or the enjoyment of using new gadgets and mobile applications, to the fact that consumers perceive self-service as being faster, regardless of the time it actually takes.
Retailers who wish to maintain a competitive advantage must adapt to shopper demand and adopt new applications and service options.
What Does the Future of Retailer and Consumer Owned Self Service Hold?
While we expect both retailer- and consumer-owned self-service devices to be a big part of the future store, these applications will not entirely substitute the need for human assistance and therefore, we do not anticipate traditional point-of-sale operations going away anytime soon. Interpersonal relationships are important when providing any kind of customer service. But it needs to occur when and where the customer wants it. Customers prefer whichever method of interaction that reduces their efforts and time spent – be it retailer or consumer owned self-service devices, traditional point-of-sale, or a combination of their choice.
And that is what it’s all about at the end, choice. In order to be ready for the future, retailers must provide their customers with the option to “Bring their own Point-of-Sale” embedded in their mobile device, or if they prefer – switch while in store to a traditional point-of-sale.
The notion of self-service via a consumer-owned device is gradually becoming more popular in today’s retail industry. It is a trend that is reshaping the retail landscape, and to effectively capitalize on this opportunity, retailers must offer branded mobile applications of their own that provide true value and produce an intimate, two-way shopper engagement. A new breed of shoppers is here – and they are connected, knowledgeable, and demanding. Retailers must cater to this new generation of shoppers’ wants and needs by offering a superior experience via whichever self-service modality they choose. The world is the customer’s oyster and it is a retailer’s job to make sure that both the old and new generation of shoppers have the choice to shop not only when they want, but the exact way they want to interact with the retailer at every touch point.
Oren Betzaleli is EVP, head of product and marketing at Retalix, a leading global provider of software and services serving leading retailers. He can be reached at [email protected].
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