TECHNOLOGY

Specialty apparel retailer sells subscription boxes filled with baby clothes

BY Deena M. Amato-McCoy

Gap Inc. is carving out a niche in the increasingly popular monthly subscription box segment.

The specialty retailer’s Baby Gap brand has introduced the “Baby Gap OutfitBox,” a quarterly subscription box focused on baby merchandise for sizes 0- 2T. Each box is customized with six Baby Gap mix-and-match pieces, based on customers’ selected style preferences. Gap plans to expand the program with additional sizes, 3T and 4T, in the near future, according to the company’s website.

Each year, members are entitled to four boxes, each worth worth more than $100, and each shipment will be packed with seasonally relevant pieces.

Here’s how the program works: Shoppers are required to create a new account online, separate from any accounts they use to shop online at Gap banners. Once their profile is created, customers are asked a few questions about their baby, including gender, sizes and style preferences, and Baby Gap uses these details to curate boxes.

Shoppers have 21 days to try each piece, and can keep the items they like. Unwanted merchandise can be returned for a refund. Customers are charged when the box ships. Shoppers can also postpone or skip boxes, and cancel their subscription anytime, according to the website.

The service is $70, but there are no additional membership, shipping or styling fees. Gap’s website also warned customers that there are only limited quantities available.

The service was initially introduced to a limited number of shoppers, and has been quietly expanding the program to a wider audience. In addition to a quiet ramp up, marketing has also been sequestered to social media, according to CNBC.

Gap is the latest retailer to jump into the subscription box game. Its offering is also helping the brand to carve a unique niche among more established wardrobe subscription services, such as Le Tote, Stitch Fix and Trunk Club that are already disrupting the apparel segment.

The “try-before-you-buy” element of BabyGap’s OutfitBox also takes a swipe at a similar service from Amazon, called Prime Wardrobe. The online giant’s service enables Amazon Prime members to order (and try on) from three to 15 items of clothing before they actually buy any of the items. Shoppers can keep the merchandise for seven days, returning unwanted pieces and paying only for the items they keep.

Where OutfitBox has an edge over the online giant however, is that Prime Wardrobe has a shorter try-on grace period — and does not focus on children’s apparel.

“This is a brilliant move as Baby Gap is serving a significant portion of the millennial, as well as Gen X, Y and Z audiences, and has created a connection in their preferable media channels and delivery options,” said Jim Fosina, CEO of Fosina Marketing Group. “Baby Gap could establish a foothold in this business, and eventually extend the subscriptions beyond clothing to other baby related products as the program moves forward.”

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TECHNOLOGY

Brick-and-Mortar Stores Can Thrive by Letting Customers Drive Their Experience

BY Vinod Kashyap

Brick-and-mortar and online retail channels facing an inevitable and inexorable convergence. In their quest to stay relevant and avoid obsolescence, the new retailer mantra is personalized customer experiences.

One of the smartest personalization strategies around is giving the customer the information and tools to determine their own journey – in essence, creating their own experience. Online retailers have mastered this customer-driven experience by leveraging technology to allow consumers to search, compare, buy and receive products with unprecedented ease.

Thanks to analytics, online retailers continually get smarter about the experience each of their shoppers want. They can track, click-by-click, every search, view, comparison, purchase, and even click-off that the shopper makes. Each of these data points helps build a clear shopper profile that enables the retailer to serve up new product suggestions that are truly relevant to the shopper. Given this advantage, it’s not surprising to see online retail continually encroaching on brick-and-mortar sales.

In spite of trailing their online counterparts in personalization and customer-driven engagement, physical retail is by no means headed for extinction. It’s simply evolving. What will emerge from this evolutionary shift is a new breed of omnichannel retailers that we call “O-tailers.” These businesses are able to engage with customers across every channel including online, mobile, social and in-store.

Of course, there will be casualties as retail channels align and merge. We see evidence of this today as veteran retail brands are disappearing or enduring massive numbers of store closings. Common failure points for these businesses have been the inability to adapt to shifting consumer shopping behaviors and to create truly distinctive, customer-driven shopping experiences.

Tech Solutions
Technology offers a remedy for these brick-and-mortar retail deficits. In-store positioning and pathing technologies – and the data they produce – are enabling retailers to create customer-driven engagement in their physical stores. Armed with real-time and historical data on the customer’s in-store journey, retailers can leverage all of the experiential advantages of the physical store (see, feel, sample and have now), while offering the ease, convenience and self-direction of online shopping.

Indoor positioning and pathing technologies aren’t new. The first Bluetooth Low Energy (BLE) – based proximity beacons were introduced in 2011. Early beacon technology has shown promise in improving customer engagement. When tied to mobile customer loyalty apps, have allowed retailers to deliver promotions, exclusive offers, stock checks and other value-laden offerings that engage the customers as they enter and roam through the store.

While these early beacons have helped B&M retailers gain parity with their online counterparts, they fall short of achieving the same level of engagement online shopping delivers. One big reason why this is so is that while the technology can help retailers see and engage with the consumer, it fails to solve a universal, experience-defining question: “Where can I find this product in your store?”

Why is this such a seminal question? It’s because online retail has all but appropriated the discovery aspect of shopping, and so many consumers today visit physical stores with inherent purchase intent. They are on a mission to sample and purchase a specific item. In making that purchase-based journey, the shopper has already done most of the heavy lifting for the retailer. All the store has to do is make it easy to find and buy the product.

This sounds simple, but in spite of the fact that shoppers come to stores with true purchase intent, store operators often never know what that intent is. They have no practical way of surveying each and every shopper, and relying on the shopper to articulate their purchase intent proactively is, at best, a hit or miss strategy. More often than not, if a shopper knows what they want, but can’t find it, they leave; sale lost; and the retailer has no way of knowing that a sellable product was “hidden” from the shopper. To make matters worse, the shopper may also be frustrated that they took the time to travel to a store and could not find what they wanted.

The inability to connect the shopper to their desired product at the time of highest purchase intent is not only a revenue killer, it’s an experience destroyer.

Digital Lighting Fixtures
Physical retailers can take heart, however, because a new generation of indoor positioning and pathing technology, which uses densely installed digital lighting fixtures as beacons, enables positioning and location within a store with an unprecedented accuracy. Pairing this technology with digitized store maps rendered through a shopper’s mobile loyalty app, retailers can offer blue-dot directions straight to the aisle and shelf where a product is located. Sale made.

There are other ways retailers can use indoor positioning and pathing to gauge customer’s intent to purchase and improve their in-store experience. For example, the technology can see when a customer dwells in front of a product for a certain amount of time. The retailer can also see this, and respond in real time with a promotion to close the sale.

Customer assistance is also vastly improved. A shopper in need of assistance can make a request through the mobile app and the sales associate can use their mobile device to find the shopper’s precise location in the store. Further, minimizing the time it takes a shopper to find a product or get help means the shopper has more time to roam the aisles and continue filling their cart.

Next generation indoor positioning and pathing technology can level the playing field between brick-and-mortar and online retailers, and potentially tip the scale in favor of the physical store. More importantly, it helps the converged “o-tailer” create optimal customer-driven engagement across all of its channels. As such, retailers at every stage of their evolutionary path can benefit from the technology, and employ it to avoid extinction.

Vinod Kashyap is director-product management, IoT and indoor positioning solutions with Acuity Brands.

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Jill Standish
TECHNOLOGY

Retail with purpose: The new digital economy demands an emotional bond with customers

BY Jill Standish

What is the purpose of your business? If you are a retailer and your immediate answer is “to sell more products,” you may find times getting tougher in the months and years ahead.

To survive and prosper in the new digital economy, the leading retailers are thinking more profoundly. In practice, this means identifying their purpose – the role they play in the lives of customers, both practically and emotionally.

An existential threat
The danger of the new economy for traditional retailers is not simply slower sales or declining profitability. Instead, the threat is existential.

Online-only retailers saw their share of Christmas shoppers rise by almost 16% in 2016; department stores, meanwhile, lost more than 6% of sales. Bankruptcies and store closures are increasingly common, and even the biggest names are not immune.

If they have not already done so, retailers should take findings such as these as their cue to start thinking differently – and many are starting by focusing on what they stand for.

What do we mean by this? For some time, retailers have sought to manage their reputations, project a positive brand image and enthuse their employees. These days, however, such strategies may no longer be enough. Now, retailers need to consider their very right to exist: what is it that only your brand can give consumers? Answer this question, and the way forward becomes clearer.

Refocus on what makes your brand unique
So how can retailers differentiate themselves and stand out in today’s crowded marketplace? In our view, it requires a radical shift in approach. Consumers today do not want to merely buy from you, they want to buy into you. This means ensuring that the very essence of your brand is communicated to the consumer every time they experience you – from store employees to social media.

Consumers want to connect with your brand in their communities. Becoming relevant therefore means operating locally and ensuring that the brand promise is well known and understood by local consumers. Those with this kind of relationship with their customers will be able to adapt as consumers’ needs change. We call these brands “living brands” – they evolve according to the behaviours of stakeholders, staying true to their roots to retain authenticity but flexible enough to adapt.

Refocus human capital on what matters
This kind of radical change is likely to lead to a rethink in the way you work – including how your organization is structured and the use of technology. The leading retailers will rethink their use of human capital: roles that are standardized are likely to be automated by artificial intelligence, leaving to employees the strategic roles that matter most to consumers.

In addition, today’s enormity of data demands that retailers use analytics to aid the employee rather than leaving insights to chance. Modern tools and automated processes will not be enough to attract and maintain the right talent; to compete, retailers need to think about what draws employees to their brand. Like consumers, employees are increasingly interested in the purpose of organizations: they want to work for a business with integrity that knows what it is best at and what impact it is having on the lives of others.

Read between the lines of these capabilities, and it becomes clear that most retailers will no longer be able to do everything themselves. Instead, industry leaders are thinking about new partnerships – plugging into networks of digital partners big and small, and using data and analytics to maximize their own agility.

Rising to the challenges of the new economy will not be easy. But the data is showing us that the consequences of being a retail traditionalist could be dire: brands that do not evolve face more than decline; they face extinction.

It does not have to be this way. There is a huge prize for retailers that identify their purpose, organize around experiences, make use of advanced technology, focus on being local and personal, reconsider their structure and reimagine their processes. Get this right, and you can focus on what truly matters to the consumer and make them fall in love with you all over again.

 

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