Insights

Tech Bytes: Three Ways to Keep Stores Relevant

BY CSA STAFF

By now, everyone has heard the adage “the store is the center of omnichannel” and seen the statistics showing that physical stores account for about 90% of retail sales. So clearly brick-and-mortar stores are as relevant as ever.

Well, yes and no. Brick-and-mortar stores can be relevant as ever, but only if they offer modern technological amenities expected by today’s customers. Here are three ways to make sure consumers see your stores as central to their omnichannel shopping activities.

Fulfilling experiences
One of the most important roles a modern brick-and-mortar store can play is as a fulfillment center for digital purchases. By seamlessly connecting physical stores to mobile and online customer activity, retailers can use them to offer popular omnichannel services such as reserve or buy online pick up in store, digitally checking in-store inventory, in-store returns of online purchases, and targeted in-store promotions based on online purchase and browsing behavior.

To truly offer a “fulfilling” seamless in-store experience, retailers will also have to invest in real-time order management and inventory visibility systems, as well as reconsider how stores are physically designed. Shelf space may need to be reduced to make way for larger stockrooms, picking and packing areas, and designated locations for picking up and returning online purchases.

Virtual viewpoints
Thanks to virtual and augmented reality technology, stores can provide spaces for consumers to view and interact with lifelike, interactive holograms. A variety of wearable and mobile devices are available to let shoppers either add digital objects to an existing environment, or engage with entirely virtual surroundings.

As a result, retailers can display a virtually expanded product assortment, let customers “try on” images of apparel and accessory items, or see how items would look in their home.

For example, Lowe’s has taken a leading position in offering in-store virtual and augmented reality shopping services. The home improvement chain lets shoppers view digital representations of home improvement projects that can be altered, refreshed and shared online.

Extra information
Retailers are surely familiar with the opportunity beacons provide to deliver targeted promotions, product data, demonstrations, wayfinding information, and other content to shopper smartphones. However, beacons are only one of many means retailers have at their disposal to digitally enhance the information shoppers have access to in the store.

For example, using live two-way communications technologies such as Skype or FaceTime, retailers can allow shoppers to consult product experts using links on in-store terminals and kiosks. The in-store experience can also be integrated with social media in a variety of ways.

These include offering screens or even walls that display live social commentary, images and video from customers (automated filtering recommended!), interactive links in dressing rooms that let customers obtain real-time opinions on apparel selections from friends or even strangers, and monitoring of in-store social commentary for real-time response from store staff.

The store remains the center of retail. That fact hasn’t changed in the 21st century. What is changing is how the store fits into the modern customer experience and meets the expectations of today’s shoppers.

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C-SUITE

Walmart online marketing head returns to his roots

BY CSA STAFF

Brian Monahan, VP of marketing for Walmart.com, has left the chain (as of April 1) to go back to a startup he helped found in 2012.

Monahan, who joined Walmart in May 2013, is now serving as chief evangelist of San Francisco-based NewCo Festivals, a media and events platform he co-founded with John Battelle in 2012. NewCo hosts global events it calls “festivals” for start-ups and also publishes editorial content aimed at start-ups. In his new (or old) role, he will oversee brand strategy, sales and marketing, and product development.

While serving as VP of marketing at Walmart.com’s San Bruno, California offices, Monahan was responsible for brand strategy, customer acquisition and retention, and building audience monetization via advertising sales.

"We're thankful for the great contributions Brian made to the business and wish him the best with NewCo,” Walmart spokesperson Dan Toporek told Reuters. “We're in the process of identifying a successor.”

Walmart named a new chief marketing officer and also brought in Target veteran Michael Francis as a marketing consultant in December 2014. Online sales at the discount giant had steadily declined during fiscal 2014, though the retailer publicly attributed the decrease to overseas performance.

Monahan has held a variety of executive-level marketing positions, many at media companies, in a career stretching back to 1992. His role at Walmart.com was his first at a retailer.

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DESIGN/CONSTRUCTION

Duluth Trading expanding its store base

BY Mike Troy

Brand awareness and sales growth are accelerating at Duluth Holdings where the company’s rapidly expanding store base is so young it won’t be able to report same-store sale growth until 2017.

Belleville, Wisconsin-based Duluth Holdings, known to customers as Duluth Trading Company, grew sales 27.5% to $140.4 million and net income increased 25.8% to $17.5 million, or 58 cents a share, during the quarter ended Jan. 31. For the full year, total sales rose 31.2% to $304 billion. Net income grew 16.1% to $27.4 million, or $1.06 a share.

The seller of men’s and women’s casual wear, work wear and accessories opened three new stores to end the year with nine locations.

“Fiscal 2015 was a milestone year for Duluth Trading. We became a publicly traded company, made great strides in increasing our brand awareness through highly successful marketing campaigns and opened three new stores bringing our total store count to nine,” said CEO Stephanie Pugliese. “We are especially proud of our financial performance despite the unusually warm weather and a highly promotional retail environment during the fourth quarter.”

Through clever and aggressive marketing, Duluth has built awareness among consumers while insights into purchase behaviors inform the company’s real estate strategy so that new stores quickly become profitable.

“Building brand awareness and acquiring customers is an important growth strategy for us, and we are pleased to report that our marketing efforts drove an increase of 28.1% in website visits year-over-year and more sales through our call center,” said Duluth CFO Mark DeOrio. “In 2015, our direct business, which includes catalog and online sales, accounted for 87.6% of total sales.”

Going forward, the direct contribution can be expected to account for a declining percentage of sales as expansion of the physical footprint accelerates. For example, the direct business grew 24.6% in the fourth quarter, while sales in the retail business increased 57%.

The company expects to open four to five new stores this year and seven to eight locations in 2017.

“Opening new retail stores is a key growth strategy for Duluth,” DeOrio said. “We are very pleased with the performance of the new retail locations. The average payback on our stores continues to be less than 24 months, and we are refining our store-opening process with each new location.”

In 2016, the company’s four to five new locations will be opening in the second half of the year in the Midwest while the seven to eight openings planned for 2017 push the company closer to the East coast where online spending activity reveals Duluth’s largest concentrations of customers are located.

Duluth describes itself as a lifestyle brand for the modern, self-reliant American, offering high-quality, solution-based apparel for men and women who lead a hands-on lifestyle and value a job well-done. The company strives to offer customers an engaging and entertaining experience, which is evident in marketing that incorporates humor and storytelling. The company bills its retail locations as a “store like no other” and its products are backed by a “No Bull Guarantee.”

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