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A Personalized Brand Experience Across Digital Channels is Imperative

Consumers now start and stop their shopping journey in different channels, including online marketplaces and social media, and frequently shop for the same product across different retailers, both online and in the store. Consumers don’t think in terms of channels, they think in terms of brands and experiences.

According to the 2018 Digital Commerce Survey, 51% of consumers feel it is important to get a personalized experience across all digital channels within a brand.

The good news is that retailers recognize the importance of the cross-channel, personalized customer experience, as their top digital customer experience priorities are creating a consistent brand experience across channels (57%) and improving personalization (38%).

The challenge for retailers is to “keep up” with continually evolving customer expectations. The growth of mobile is driving demand for increased digital capabilities bundled with personalization in the store. The gap between consumer demand for digital experiences and retailers’ current capabilities is what we call the “great digital divide,” and is driving additional changes in the industry.

The new retail model requires retailers to transform their business and reinvent themselves to create a successful blend of the physical and digital worlds to maintain their customers’ loyalty. New and innovative methods of shopping – driven by mobile technology, artificial intelligence and rapidly changing fulfillment methods – are elevating customer expectations. The speed of these changes requires organizational agility to quickly and easily react to increasing customer expectations and changing consumer behavior.

I encourage you to download and read the 2018 Digital Commerce Survey for more insights on the cross channel digital experience:

Download Now

As always, I appreciate your insights on this topic.  Please share your feedback and opinions below.

 

Jeffrey

What’s on the Menu?

Frozen and Refrigerated Buyer – Industry observers say consumers’ appetite for frozen foods will only grow in 2019. Key ingredients include e-commerce, premium private label, meal kits, small formats and targeted promotions.

2018 is shaping up to be a banner year for the frozen department. During the 52 weeks ended Aug. 12, reports Chicago-based market research firm IRI (iriworldwide.com), sales of frozen foods shot up 2.8% to more than $54.95 billion across channels, while volume rose 2.2%, as consumers gravitated to a slew of new offerings in categories like meals, pizza and veggies that better meet their needs.

Comments from Ken Morris:

Page 43-44:
Ken Morris, principal at BRP, retail consulting firm, tends to agree, calling Walmart “a much bigger threat” to traditional grocers because its stores can act as distribution centers for 90% of Americans who live within 10 miles of one. In addition, “Walmart continues to make it easier for busy consumers to buy online and pick up at the store or at free-standing kiosks or have items delivered to their homes. As these options become accepted and expected, most grocers are going to have to offer these same services to protect their sales — even for frozen and refrigerated items.”

Page 46:
“Consumers continue to spend more of their food dollars at restaurants,” explains Morris. “As more restaurants offer convenient pick-up and delivery options, they’ll pose an additional threat to retailers.” And then there are restaurants like Chick-fil-A that are dipping their toes into the meal kits business as well. In response, says Morris, grocers will likely need to add more prepared food options and continue to blur the lines between super- markets and restaurants.

Page 48:
Morris adds increased supply chain efficiency and technology enhancements to the list of margin enhancers. Topping Morris’ list of technologies (outside of e-commerce) most likely to gain traction in 2019 are those designed to minimize out of stocks by identifying potential problems in real-time so retailers can react before a bad customer moment occurs. Other technologies likely to take hold in the coming year include port- able self-checkout (not quite Amazon Go but a step in that direction), more European-style kiosks, and AI for difficult and/or labor-intensive activities like building ads or setting prices and offers.

Morris says the Amazon Prime program at Whole Foods is a great example of grocery promotion done right. “Promotions exist, but they’re truly invisible,” he says, citing the dawn of the customer-based pricing era. “Pricing used to by chain, then division, then zone, then store, and now it’s moving to the individual customer.”

Read Full Article: What’s on the Menu? (pages 42-48)

Retail’s Superpower: Leveraging Digital to Reinvent the Enterprise

Incisiv – Recent research from Incisiv and Windstream/BRP show that retailers are actively investing in digital initiatives across the enterprise, yet they still face challenges across many areas. We sat down with two key executives to understand where retailers should prioritize and focus to ensure success.

Dave Weinand, Chief Customer Officer, Incisiv:

The increasing influence of digital is driving retailers to experiment with new store experiences and formats to deliver on customer expectations. In your opinion, what are the most compelling new in-store applications and/or formats you are seeing in the market?

Jeffrey Neville, Senior Vice President and Practice Lead, BRP Retail Consulting Firm:

One of the more compelling store formats is the “new retail” concept, called Hema, run by China’s e-commerce giant, Alibaba. The Hema stores simultaneously act as marketplaces, commerce platforms, fulfillment centers and innovation hubs where they allow customers to experience new brands and products. The 25 Hema stores are a unique and entertaining experience that act as a destination.

The in-store shopping experience is centered around the Hema mobile app and shoppers must use the app to fully optimize the services. These include:

Scan barcodes on products for information on sourcing, branding, pricing and nutritional value.
Pay for products by scanning them at a self-checkout counter and pay using the app, which is integrated with the Alibaba mobile payment service, Alipay.
Request products delivered to their home free of charge within 30 minutes. Hema associates collect the products, bag them and place them on an in-house transportation network that spans the store’s ceiling.

The mandatory use of the Hema app allows the store to leverage big data to optimize the store’s offerings.

Ken Feyder, Senior Director, IT Business Solutions, Tapestry (Coach):

With so many applications available on the marketplace, it is difficult for me to pinpoint a particular app or concept that I would rate dramatically more innovative than others. That being said, I think we are experiencing a significant shift in customer behavior. We’re seeing this globally and I’ll use as a example a scenario we experienced with the world’s foremost luxury shoppers – Chinese consumers.

About 6 or 7 years ago, I remember seeing a Chinese tourists’ group schedule for visiting Paris. It allocated more time to visiting Galleries Lafayette Department Store for shopping than it did for visiting The Louvre! Over the last decade, this notable group of customers has shaped the retail experience of many brands. The retail-centric behavior of Chinese shoppers continued to drive a more focused response from many retailers. That, in turn, created a market place for countless point-solutions related to improving a particular aspect of the shopping experience.

However, I have recently observed a shift in this group’s behavior. When traveling to tourist destinations like Paris, New York, or London, today’s Chinese tourists are less inclined to adhere to a shopping-centric itineraries in lieu of cultural experiences. Less time is being spent on shopping. To me it signifies the beginning of the evolution where a retail experience becomes a logical bi-product of tourism, as opposed to its former position “at the center” of travel. Hence, digital technology that focuses strictly on retail (i.e. improvements in payment, seamless omni-channel, ease of returns etc.) while remaining important, will only deliver marginal results. In my opinion, better focus on digital technology that is NOT dedicated to purely commerce (such as partnerships with Chinese travel service CTrip, or integrations with hospitality technology providers etc.) would ultimately deliver better results as it relates to delivering a more logical and cohesive retail experience many brands desire.

Read full article: Retail’s Superpower: Leveraging Digital to Reinvent the Enterprise

Amazon’s New 4-star Store Concept – Thoughts from BRP

Today, Amazon extended its physical store presence with a totally new concept. Amazon 4-star is a new physical store where everything for sale is rated 4 stars and above, is a top seller, or is new and trend

Photo: Jordan Stead, Amazon

ing on Amazon.com. The first store is located in one of New York’s most vibrant neighborhoods—SoHo—on Spring Street between Crosby and Lafayette Streets.

Here is my take on this new venture from Amazon…

First and foremost, the physical store is not dead! It is great to see the renewed interest in brick-and-mortar stores and Amazon is making a full court press. As Amazon continues to expand its store presence from book, to grocery and convenience and now to stores focus on trending/hot products from its online commerce nearly all retail segments should be on high alert.

I believe they will rollout this concept across all metro areas. It isn’t a gimmick, but a sustainable concept based on localized assortment. The question is how localized will Amazon make the assortments? Will they add these to their Whole Foods locations?

For a few years, there have been rumors of Amazon expanding into gas stations and they have been focused on expanding their presence in apparel, furniture, pharmacy, which might evolve into physical stores in these categories. With more than 100 million Amazon Prime members, Amazon already has a loyal customer base for virtually any category they enter. That’s 40 percent of the adult population in the U.S.

Nothing is off limits for Amazon and they continue to surprise us with new ventures.

What do you think of Amazon’s new concept store – 4-Star? Please share your opinions on this topic below.

Ken

Will Nike kick up sales on Jet.com?

RetailDive – Nike has garnered much attention over the last few months, for better or for worse. The brand earlier this month announced it would begin selling apparel, accessories and shoes on Jet.com — the Walmart-owned e-commerce marketplace that caters to wealthier, urban millennials.

The partnership isn’t the first of its kind for Nike. Last year, the company shocked many when it began selling directly on Amazon. At the time, some industry experts warned the move may blow back on Nike. But at the end of last year, CEO Mark Parker told analysts the partnership was “going well” and that the company would expand its pilot sales on the channel.

Now, it seems to be expanding its marketplace sales strategy to include selling one of Amazon’s biggest rivals. On the topic, the discussion forum RetailWire asked its BrainTrust panel of retail experts the following questions:

  • Do you see any issues with Nike selling directly on Jet.com’s revamped website with the platform’s connection to Walmart?
  • How would you assess the benefits versus risks for Nike in partnering with Jet.com versus Amazon?

The inevitable

Ken Morris, Principal, BRP, retail consulting firm: Selling Nike products on these marketplaces does nothing to tarnish the Nike brand, as Nike products are widely available today on Amazon and Walmart.com through other retailers and distributors. The move for Nike to sell directly on these platforms is probably inevitable. If Nike is concerned about protecting its retail channels by not cannibalizing their sales, they could limit the products they sell directly on the marketplaces to product models that are exclusive to Nike branded store or Nike’s online.

Read Full Article: Will Nike kick up sales on Jet.com?

2019 E-Commerce Outlook Guide

Retail Touch Points – 16 experts share their insights into top digital retail trends for 2019.

The saying goes that “What happens in Vegas, stays in Vegas.” By contrast, what happens in e-Commerce doesn’t stay within the digital sphere; increasingly, it affects virtually all segments of the retail industry.

The new world of retail is an intersection of digital and physical. An increasing number of e-Commerce pure play companies are seeing the real benefits of moving into the brick-and-mortar realm. But physical retail is getting a much needed update from the next frontiers of technology, featuring AI, voice commerce and visual recognition solutions.

Retailers and solution providers are working to adapt the store shopping experience to the reality that consumers are entering store aisles led by their smartphones. But when it’s time to expand operations beyond U.S. boundaries, companies are embracing e-Commerce, which has broken down borders, making global retailing a practical reality for retailers of all segments and sizes. And even though stores are still where the vast majority of transactions take place, it’s the rare shopper journey that doesn’t include at least one digital touch point.

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BACK TO BASICS: HOW TO GET CUSTOMERS TO PURCHASE AGAIN
Jeffrey Neville, Senior Vice President and Practice Lead, BRP

It’s no secret that returning customers are better for your business than new customers. Studies have shown that a returning customer is less expensive to convert and has a higher average order value than a new customer.

However, the e-Commerce industry continues to focus mainly on the acquisition of new customers by adopting the latest technologies and marketing strategies. While this is necessary to remain competitive, there is simply no substitute for having loyal patrons.

Enhancing The Post-Purchase Experience

By crafting a post-purchase experience to minimize stress and maximize convenience, retailers make an investment in a sustained relationship with their customer. After a customer clicks “buy,” they enter a phase of uncertainty, where they are unsure whether their product will arrive on time or whether it will appear in one piece. Retailers who provide the right clues and reassurances can turn this period into a powerful moment of trust for the brand. Customers who shop without a sense of risk will feel more comfortable making repeat purchases in the future.

Read to full article to see Jeffrey’s suggested 8 best practices for optimizing the post-purchase experience.

Read Full Article: 2019 E-Commerce Outlook Guide

How Jet is targeting fashion brands to gain an edge over Amazon

Glossy – Walmart-owned e-commerce platform Jet.com is looking to stand up tall against stiff competition in the online retail world. As part of its larger rebrand, Jet has launched a new fashion and beauty experience aimed at giving customers a more focused look at apparel than they might receive at other multi-brand e-commerce platforms.

Jet will now offer customers a rotating curated collection of trends, with carefully chosen pieces from a variety of brands inspired by a particular theme. For instance, one of the first collections available is called For the Record and features clothes from Versace, Guess, Dr. Marten’s and more inspired by the grungy, punky aesthetic of the ’90s indie music scene. Another section contains editors’ picks of striking pieces all in the color red from brands like Michael Kors and Calvin Klein.

“Specializing in a niche audience or product segment and outperforming the online giants is a smart strategy for Jet.com. However, outperforming Amazon, even in a narrow segment, is a daunting endeavor,” said David Naumann, vp of marketing at BRP Consulting.

Daunting as it may be, the narrowed focus has allowed Jet to create something with more personality and more character than its competitors. This approach allows the brand to simplify the path to purchase for consumers by removing the need to sort through pages and pages of products and allowing them see entire outfits and complementary pieces in one place.

For Jet, trying to compete with Amazon at its own game is a fool’s errand. Amazon has far too much of an advantage for Jet to overcome it as a general online retailer of choice. But Jet is not trying to compete with Amazon on its own terms.

“Most customers think of Amazon as the first place to start their product search, and changing these entrenched habits is very difficult,” Naumann said. “Awareness is the biggest challenge, as Jet.com is not top of mind for consumers. It will take a significant investment in advertising and promotions to increase the awareness of Jet.com. Once they gain traction on awareness, they need to impress shoppers with a personalized and frictionless shopping experience so they are inspired to buy on Jet.com instead of Amazon.”

Read Full Article: How Jet is targeting fashion brands to gain an edge over Amazon

How will Google bust into brick and mortar?

RetailDive – It’s reportedly only a matter of time before the tech giant signs the lease on its first permanent store — and just what its physical strategy will look like remains to be seen.

It’s reportedly only a matter of time before Google signs the lease on its first permanent brick-and-mortar store. Last week, unnamed sources told The Chicago Tribune that the tech giant was mulling a two-level 14,000 square foot space in the city’s meatpacking district.

While Google hasn’t responded to Retail Dive’s request for information, nor has it spoken publicly to other publications, retail insiders aren’t holding back speculation over what a move into physical retail could mean for Google. In the past, the company has experimented with pop-up shops and other store-in-store concepts, but a commitment to a physical store of its own will make a brick-and-mortar strategy critical. Just what exactly that will look like has yet to be seen.

On the topic, the discussion forum RetailWire asked its BrainTrust panel of retail experts the following questions:

What kind of brick-and-mortar strategy, if any, makes the most sense for Google to support its hardware lineup? What lessons should Google take from pushes by Apple and Amazon into physical retail?

Do what Amazon did: Buy your physical footprint

Ken Morris, Principal, Boston Retail Partners: Physical stores make perfect sense to showcase Amazon’s current portfolio of tech products. It seems like a smaller footprint than 14,000 sq ft would make more sense, however, maybe they will lease some of the space to brands that are selling innovative products on Google Marketplace. Eventually, I expect Google to follow the lead of Amazon and expand its product portfolio significantly by adding private label brands of multiple product categories beyond technology.

I saw the barge idea in Portland and that was an ill-fated idea. Maybe acquiring a retailer with stores in key markets as a way to accelerate its physical presence — just like Amazon acquiring Whole Foods would be a better approach.

Read Full Article: How will Google bust into brick and mortar?

Can Conversational Commerce Fulfill Its Potential In Retail?

Retail TouchPoints – The remarkable growth of voice-assisted devices over the past year has expanded what “conversational commerce” truly means for retailers. While the term had largely been used to describe chatbot activity just a few years ago, voice now gives retailers yet another shiny toy to fulfill consumer needs — and hopefully create a new shopping channel. As such, there are high expectations around the technology: voice shopping is expected to account for $40 billion in U.S. consumer spending by 2022, according to a study from OC&C Strategy Consultants. However, for such a figure to be achieved, retailers must still surmount some high barriers.

It’s true that enthusiasm for the technology itself is high— voice-activated devices are set for 50% U.S. sales growth from the 2016-2017 period to the 2018-2019 span, according to NPD Group. Yet despite this popularity, interest in — or even awareness of — their commerce functionalities remains low.

“As much as retailers have made great strides over the past couple of years in being nimbler and more agile, this is such a unique technology that they will still struggle with,” said Jeffrey Neville, Senior VP and Practice Lead at BRP Consulting in an interview with Retail TouchPoints. “The thought of doing a pilot of a customer service/voice commerce program is going to be difficult because it’s so different. There’s a tendency to overthink the impact of something like this on their customers. As far as the base technology goes, you can get partners or cloud-based third-party applications to do a lot of the groundwork, but from a data integration standpoint and from an understanding of how you build and manage these tools — that’s going to be a struggle.”

“A big discussion in this space is: ‘Do we want the customer to think they’re speaking with a real human being or do we want the customer to realize that this is convenience with Watson or some other AI technology?’” said BRP’s Neville. “That’s a decision retailers have to make right now. Any AI using voice is probably going to mess up the conversation at some point, and the customer is going to realize that they’re talking to a computer.”

“If you look at apparel or luxury, you’re seeing companies like Burberry and Tommy Hilfiger use chatbots to be able to play the role of a stylist and provide fashion advice,” said Neville. “That’s where you may start seeing that relationship building through a chatbot, versus the stylist you’re used to going to at Polo Ralph Lauren. Not to bring this back to Amazon, but the Echo Look can take a picture of you in an outfit, and the long-term theory is to be able to combine this conversational commerce and voice shopping with image recognition. As you start to mix the concepts of being able to have a conversation with a computer-based stylist, and then having that computer-based stylist also be able to recognize patterns and colors, and making recommendations out of the existing retailer’s catalog, there’s some cool opportunities that retailers can tap into.”

Read Full Article: Can Conversational Commerce Fulfill Its Potential In Retail?  

New Report from BRP Offers Best Practices for Enhancing the Post-Purchase Customer Experience in Preparation for Holiday 2018

95% of Customers that are Satisfied with the Returns Process will Purchase from a Retailer Again

Boston, MA – August 15, 2018– According to a new report from BRP, the post-purchase experience is not getting the attention it deserves as retailers focus more on customer acquisition than loyalty. BRP published the Best Practices for Enhancing the Post-Purchase Experience report to address the importance of the time between the customer clicking the buy button and the customer receiving and using the product. This is your customers’ most recent experience with your company and impacts the feelings they share with friends and family and the relationship they have with your brand. The satisfaction level during the post purchase experience has a direct correlation on a customer’s decision to buy again, or not.

Retailers that meet or exceed post-purchase customer experience expectations create a unique brand experience that customers will “share” with others personally and on social media. Exceptional post-purchase customer experiences also inspire customers to build long-term relationship with brands.

“Retailers who communicate regular updates and reassurances on order and delivery status to customers create a moment of trust with the brand,” said Jeffrey Neville, senior vice president and practice lead, BRP. “Customers who shop without a sense of risk will feel more comfortable making repeat purchases in the future.”

By crafting a post-purchase experience to minimize friction and maximize convenience, retailers make an investment in a sustained relationship with their customer. Enhancing your post-purchase customer experience doesn’t necessarily mean investing heavily in the latest technologies – it’s all about making the experience easy and transparent. Best practices that create a welcome and trusting experience for your customers to return time after time include:

  1. Set customer expectations before the click “Buy”
  2. Communicate tirelessly
  3. Set a fair and competitive return policy
  4. Simplify the return process
  5. Deliver your products in professional packaging
  6. Turn a digital experience into an omni-channel experience
  7. Use your stores for something more
  8. Gather customer feedback

To download Best Practices for Enhancing the Post-Purchase Experience, visit: https://brpconsulting.com/download/2018-post-purchase-experience-white-paper/

About BRP

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)
Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM
Unified Commerce | Customer Experience | Order Management | Networks
Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.