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Tennis Express Aces Customer Segmentation

BY Dan Berthiaume

Tennis is an individual game, and tennis players have individual tastes when it comes to buying gear and apparel. For Houston-based Tennis Express, a specialty retailer of tennis equipment, apparel, footwear and accessories, segmenting customers in order to better meet their individual needs and tastes is shaping up to be a winning effort.

“Our customers are not interested in a general approach,” said Brad Blume, CEO of Tennis Express, which operates a 15,000-sq.-ft. flagship store at its Houston headquarters as well as an e-commerce site. “They want to hear about specific brands. We had been throwing everything we have at them.”

Segmentation for Success
Tennis Express had already begun searching for ways to segment its customer base to provide more customized offers when Capillary Technologies, provider of the retailer’s POS and ERP technology, reached out about customer segmentation in the late spring/early summer time period of this year.

“They know we’re always trying to find the latest, greatest technology to generate market share and offer something our competitors don’t,” said Blume.

Say it With Email
Tennis Express decided to initially focus on improving email blasts it sent to its customer base. The retailer manually provided Capillary with its customer data and after several rounds of analysis the vendor segmented customers into five categories: high loyal customers who often shopped and spent large sums, potential high loyal, explorers who shopped at Tennis Express and its competitors, fence sitters who hadn’t purchased in some time, and lapsed customers who hadn’t made a purchase in more than 11 months.

“We created campaigns with different offers and promotions for each group,” said Blume. “What would attract a fence-sitter compared to what would attract a lapsed shopper.”

Moving Forward
Running test and control groups with its email blasts, Blume said Tennis Express found a sales lift in every customer segment. Since the initial segmented blasts, the retailer has collaborated with Capillary to segment customers even further by product category.

“For example, what’s the next likely product category somebody who has made a shoe purchase will buy?” said Blume. “People don’t purchase rackets often, but they purchase shoes more often.”

Looking ahead, Tennis Express hopes to replace its manual data transfer process to an FTP-based process where Capillary will collect customer data on a daily or weekly basis. The retailer also plans to use customer segmenting data in its store so associates can identify top customers and their individual preferences.


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REAL ESTATE

Mall Properties is now Olshan Properties

BY Michael Fickes

New York — MPI — Mall Properties, Inc., a private owner, developer and operator of commercial real estate — has changed its name to Olshan Properties.

Founded in 1959 by Mort Olshan, the 55-year-old family-run real estate enterprise maintains a portfolio with 11 million sq. ft. of retail properties, 19,000 multifamily units, 865 hotel rooms and five million sq. ft. of office buildings. The company intends to continue expanding and further diversifying its portfolio through strategic acquisitions and developments across the country. The new name reflects that objective.

The Olshan portfolio spans 11 states and includes properties such as 575 Lexington Avenue in midtown Manhattan, the Hilton Marco Island Beach Resort and Spa in Florida and the Parkchester residential complex in New York City.

The company’s retail holdings include:

Akers Mill Square Shopping Center, Atlanta
Zona Rosa Town Center, Kansas City, Mo.
Bayshore Town Center, Milwaukee
The Greene Town Center, Dayton, Ohio
Coliseum Square, Mercury Plaza, Hampton, Va.
Peninsual Town Center, Hampton, Va.
Fair Oaks Mall, Fairfax, Va.
Cottman & Bastleton Center, Philadelphia
Great Northeast Plaza, Philadelphia
Cottman & Castor Shopping Center, Philadelphia
Atrium @ Fashion Center, Paramus, N.J.
Great South Bay, West Babylon, N.Y.
The Gate at Manhasset, Long Island, NY
The Westchester, White Plains, NY
Savoy Shops, New York City

Olshan is also General Partner of the Longview and RCG Longview series of debt and equity funds as well as Normandy Venture Partners, a series of opportunistic equity funds.

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News

Secure M-Commerce and E-Commerce Systems

BY CSA STAFF

By Carole Murphy

Retailers know that e-commerce is driving revenue growth by extending the reach of business to buyers anytime and anywhere. Initially, retailers thought that mobile smartphones and tablet – a subset of e-commerce – would only have a negative impact on in-store sales with behaviors such as “showrooming,” where people go to a local business, find the merchandise they want and then use their smartphone to find the same items somewhere else for a lower price. However, the most recent studies turn this idea upside down. They quantify not only purchases made directly on mobile devices, but the purchase behaviors influencing sales in-store.

A report on “How In-Store Shoppers are Using Mobile Devices” features the results of a study that was performed in 2013 in conjunction with The Google Shopper Marketing Agency Council and M/A/R/C Research. Examining consumer buying behavior has revealed that “smartphone users buy more in brick and mortar stores than shoppers who don’t use mobile devices.” Furthermore, over the next three to four years, direct mobile purchases are projected to double the CAGR of e-commerce sales. eMarketer estimates that “by 2017 m-commerce sales are expected to…reach over $113 billion which would be a CAGR of 28%.”

The bottom line is that, with growth of both the mobile influence factor and mobile payments, m-commerce and e-commerce are imperatives for retailers.

E-commerce and m-commerce are critical channels to revenue just as they are ways to enhance brand and gain greater customer loyalty. For IT, that means effectively maintaining security and compliance or the very same channels could lead to the immediate and even catastrophic undoing of brand value and consumer trust. Top IT challenges are to secure consumer data, maintain compliance to security and privacy regulations and provide buyer behavior data back to the business.

Cybercriminals have become highly adept at thwarting existing IT security defenses as well as exploiting any weak links in the payments ecosystem. Advanced Persistent Threats (APTs) are increasing, and recent breaches have focused a spotlight on growth in Card Not Present (CNP) fraud and hacking. Conventional data protection solutions protect sensitive corporate and customer data at rest in databases but not in transit or as it is consumed and analyzed. Conventional “container-based” data protection solutions tend to proliferate as point solutions – exacerbating IT management and maintenance challenges and costs.

With trends like m-commerce, Big Data and cloud computing, the traditional walls of the IT environment are falling. Data moves inside and outside the business, which needs increased access to data for analytics and customer insights. Point solutions are problematic in that they can become very short-term. IT needs ways to protect sensitive data that can be consumed and not just stored in a container; that is, protection that is data-centric and travels with the data.

Security technologies like SSL only protect consumer data while it is “in the pipe,” but leave credit card numbers in the clear as data transits from the browser through web and application tiers and upstream IT systems and networks. With the increased sophistication of cybercriminals, IT must find ways to close these security gaps.

Tokenization, which is used as a way to replace credit card numbers with substitute values or tokens, is one of the data protection and audit scope reduction methods recommended by the Payment Card Industry Digital Security Standard (PCI DSS) guidelines. However, companies that have implemented first-generation or conventional tokenization solutions are finding they don’t scale well and can’t support business growth – primarily because conventional tokenization solutions have a token database central to their architecture. Tokenization databases grow over time, become increasingly costly to manage, introduce data integrity issues, and become a high-value target for data breach. There are new approaches available to enhance data security and reduce PCI audit scope while still maintaining control over payment processes.

Maintaining compliance with data security and privacy regulations is an ongoing effort, with ever-increasing costs. Applications and systems may be in compliance with PCI guidelines, but as long as they hold customer credit card numbers in the clear, they are in scope for PCI audit. The more of these applications and databases there are, the greater the complexity and cost to maintain compliance and to undergo PCI audit and remediation.

Moreover, compliance doesn’t necessarily equate to security. There are many examples of data breaches in businesses that actually were in compliance at the time of the breach. In that case, it’s critical, for Safe Harbor protection of the business, for IT to be able to show published security proofs of standards-based protection techniques, supplied by the data security vendor, along with published independent third-party validation of the strength of the security solution. Finding technology that will mitigate risk and raise the overall security profile of the company is a major, but not insurmountable, challenge for IT.

Planning for retail business peaks is difficult and expensive. One of the great advantages of cloud Infrastructure as a Service is that IT could instantly order more web server capability to handle business peak times – and forego the expense of maintaining that infrastructure in-house throughout the year. But cloud services don’t offer effective security for highly sensitive and valuable customer data, so many businesses hesitate to use the Cloud in spite of the cost-savings potential and added flexibility. In fact, data-centric protection solutions can solve that dilemma too.

M-commerce and e-commerce are critical to enabling retail businesses to thrive now and in the future. With the proper data protection solutions in place, IT and the Security and Risk professionals in the organization can rapidly enable the business to embrace the technological shifts already underway in consumer buying behavior, while simultaneously securing the business and protecting its brand and reputation.


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