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The Pressure Is on for Retailers to Go Omnichannel

eMarketer – Omnichannel retail is getting a lot of attention in 2017, due to a growing focus on the discipline by top players like Amazon and Walmart. But for many other retailers, the challenge of balancing and streamlining their physical and digital commerce operations continues to be a challenge.

Yet retailers hoping to meet consumer expectations related to these priorities often face a complicated logistical path. A survey by Boston Retail Partners, which examined the implementation of various omnichannel commerce capabilities, indicated that no more than 25% of retail executives felt that their omnichannel capabilities in areas like product assortment, consistent pricing or inventory visibility were “implemented and working well.”

Indeed, much of the work related to these areas remains incomplete, they’re either in the early phases of rollout or plan to be incorporated in the next few years. Even as the omnichannel revolution moves ahead for big retail firms, other retail players are finding that the challenge of meeting omnichannel expectations is easier said than done.

Read Full Article: The Pressure Is on for Retailers to Go Omnichannel

Dollar disruptors: How discount stores are shaking up the grocery world

Food Dive – Not so long ago, dollar stores were the oddballs of the retail world, home to an assortment of discontinued groceries, party supplies, inexpensive toys and other low-priority goods. They were so non-threatening to traditional retailers that some, like Wal-Mart, co-located with them.

What a difference a few years and an economic downturn makes. Beginning with the recession in 2008, value-focused consumers began turning their attention to the dollar stores in their communities. Companies like Dollar General and Family Dollar capitalized by tightening up their operations and increasing their assortment of groceries, household goods and other consumables.

Not only did dollar stores manage to seize the moment — they retained many of these customers for the long run and continued to make gains. According to research firm GlobalData Retail, sales at dollar stores grew from $30 billion to $45 billion between 2010 and 2015, a 50% growth clip that far outpaced the 17% growth seen by retail overall.

Dollar stores also caught on to what other retail formats long ago realized: Food drives traffic. Customers visiting a dollar store today can grab frozen meals, prepared sandwiches and salads, and even fruits and vegetables. On its website, 99 Cents Only advertises daily deliveries of “farm fresh produce.”

Ken Morris, principal at consulting firm Boston Retail Partners, said customers aren’t the only ones taking dollar stores more seriously. Manufacturers are, too.

“CPG manufacturers are paying more attention to dollar stores, and are offering dollar-sized packaging and more brand-name merchandise beyond the traditional secondary brands and discontinued products they sold in the past,” he told Food Dive.

At the same time, dollar stores have retained what numerous sources called their “treasure hunt” appeal by offering a limited assortment of home décor, clothing, and various knickknacks.

Dollar stores have a product mix that appeals to the core demographic of low- and middle-income consumers. What’s surprising many in the industry — including dollar stores themselves — is that it appeals to millennials and high-income shoppers, too. According to checkout data gathered by the NPD Group, 25% of customers at the three biggest dollar chains are millennials from households earning $100,000 or more.

This makes perfect sense to Morris, who says millennials adjust their spending by category.

“Many affluent millennials are choosing to save money on consumable products and splurging on experiences and big-ticket items,” he said.

Read Full Article: Dollar disruptors: How discount stores are shaking up the grocery world

Retailers Move Toward Mobile to Help Consumers Avoid Lines

Response Magazine – Retailers are moving toward mobile point-of-sale (POS) systems and putting mobile capabilities in the hands of sales associates to help consumers avoid checkout lines, says a new study by Boston Retail Partners.

Almost half (49 percent) of retailers now use mobile solutions for sales staff, up from 31 percent last year.

The study adds that mobile POS systems are not yet a substitute for traditional fixed checkout systems, with mobile devices acting as supplements. But retailers are adding customer-facing mobile services, such as product information, shopping list capabilities, and personalized recommendations. Yet, there still are issues with how well those processes work.

For example, while 57 percent of retailers offer product information by mobile, 34 percent say the approach needs improvement.

The study adds that 27 percent of retailers plan to add mobile wallet capabilities within the next 12 months.

More than half (58 percent) of retailers will be able to accept Apple Pay during the next 12 months. Payments by PayPal are close behind at 55 percent, followed by Android Pay (42 percent) and MasterCard PayPass (39 percent).

The study surveyed 500 North American retailers, 76 percent of which have revenue of $100 million or more, and 50 percent with revenue of $500 million or more.

Read Full Article: Retailers Move Toward Mobile to Help Consumers Avoid Lines

EarthLink: SD-WAN Critical for 'True Unified Commerce'

Channel Partners – Retailers need channel partners’ help as they attempt to implement and maintain unified commerce platforms.

That encouragement comes from EarthLink, which has teamed up with Boston Retail Partners (BRP) to launch “a true unified commerce platform.” EarthLink will provide its voice, network and hosting services – including SD-WAN – and BRP will provide consulting and implementation.

Greg Griffiths, EarthLink’s vice president of enterprise and midmarket marketing, says retailers face challenges in attaining unified commerce, due to the hybrid cloud environments they tend to operate.

“They’ve got some applications still in their corporate data centers, but they’re also moving a lot of the new emerging applications to the cloud,” he told Channel Partners. “That creates a real challenge for the wide area network, because the [WAN] – the legacy technology that’s been in place for 20-some years – is MPLS, which sends the traffic from a remote location back to the corporate data center and then out to the Internet or out to the cloud, and that introduces a lot of latency.”

BRP released a survey last month revealing the demand for unified commerce.

The survey found that omni-channel integration is a top priority for more than half (52 percent) of businesses. The majority surveyed – 71 percent – plan to have a unified commerce platform within the next three years; however, only 9 percent have one now.

David Naumann, vice president of marketing for BRP, says most retailers are struggling to achieve a unified commerce platform. That’s because they’re trying to patch together various channels.

“They have legacy systems that were built, in many cases, several years ago on technology that wasn’t designed to integrate different channels into the one system,” he said.

Read Full Article: EarthLink: SD-WAN Critical for ‘True Unified Commerce’

Is Brick-And-Mortar Obsolete?

Forbes – Do we really need physical storefronts anymore? At a time when it’s so much easier to head online to place an order for everything from pizza to pens to shoes, shirts, and sofas, under what circumstances do we absolutely have to leave home and stand in line at a store to make a purchase?

Now that technology has progressed enough to show us what we would look like in clothes based on body measurements we provide, a la Levi’s Made to Order jeans, and we can arrange entire rooms in our homes on-screen, what, exactly, do we need physical storefronts for? Amazon and its Prime delivery service has spoiled us with the convenience of placing an order online and receiving it at no additional shipping cost two days later. No longer just for books, you can set up an ongoing pantry subscription so that paper towels, diapers, and potato chips arrive on your doorstep just as you’re about to run out.

So are declining sales at some of the nation’s leading retailers a sign that physical storefronts have run their course?

No, says Ken Morris, principal, and Perry Kramer, vice president and practice lead at Boston Retail Partners.

“[Brick-and-mortar] isn’t dead, it’s evolving,” says Kramer.

During the 2016 holiday season, overall sales were up, but for many companies, sales shifted online – where margins are smaller – from the traditional brick-and-mortar environment, where margins are healthier, he explains. Retailers right now are trying to figure out how to adapt; the ones that have adapted are thriving.

“Stores are no longer stores, they are distribution points for products,” says Morris. And retailers like Restoration Hardware (RH) understand that. RH has showroom stores to provide inspiration and style guidance but “they’re not really selling anything there,” he says. “It’s like a giant 3-D real-time catalogue.”

The trick to surviving in the new convenience economy is competing on the service experience, says Kramer, citing Apple stores as an example of a retailer that has done a good job of providing customers with an experience. They can try new products, ask questions of knowledgeable sales associates, and learn how best to use them. “Apple stores are full in any mall,” he points out.

Meijer is another savvy retailer that understands the importance of the experience for shoppers. Its annual back-to-school Meijer Mania nights for college students is an in-store party that gets local students excited about shopping there. In addition to providing bus transportation from campus to the store, Meijer entertains the students who participate. In years past, stores have had mechanical bulls, rock climbing walls, and oversized photo booths set up in addition to a live DJ. The memorable night is designed to forge a shopping relationship that endures until graduation and beyond.

Morris describes another success story in Mario Batali’s Eataly, the “theatre of shopping” in Boston’s Prudential Center. At Eataly, you can eat at one of three restaurants, shop for groceries, and learn how to cook all under one roof.

It’s going to be critical for retailers to offer their customers more than just a shopping opportunity, but an experience.

At the heart of the current retail challenge is the disconnect between e-commerce and storefront operations. Companies are selling things at lower margins online, explains Kramer, which only serves to incentivize shoppers to go there, rather than visit a store. “Retailers need to revisit the supply chain and rework stores to ship and pack at lower cost,” he says. “There’s a lot of growing going on,” as stores try to figure out how to make the two platforms co-exist profitably.

It’s still a work-in-progress, as Q4 results show.

While news that Macy’s will shutter at least 100 of its 728 stores in 2017 sent shock waves through the retail community, Morris and Kramer took the consolidation as a good sign – a sign that Macy’s has a plan to get its costs under control.

Read Full Article: Is Brick-And-Mortar Obsolete?

Mobile Devices are Accelerating the move to Unified Commerce

According to the 2017 POS/Customer Engagement Benchmarking Survey, retailers understand that the always-connected consumer expects a personalized, seamless experience wherever, whenever and however she shops and they are focused on delivering a unified customer experience.

“Unified commerce goes beyond omni-channel, putting the customer experience first, breaking down the walls between internal channel silos and leveraging a common commerce platform,” said Brian Brunk, principal at BRP. “Retailers are moving in this direction with 71% planning to have a unified commerce platform within three years.”

Critical to unified commerce are the four key pillars that define the required customer experience: personal, mobile, seamless and secure. Personalization of the customer experience is key and offering more mobile options and real-time retail are necessary to make the experience seamless across channels. To ensure the trust and loyalty of the customer, data security is also critical.

BRP’s 2017 POS/Customer Engagement Survey of top North American retailers offers insights into retailers’ current priorities and initiatives as the digital and physical worlds converge to facilitate a seamless experience across channels.

The key customer experience trends driving today’s initiatives are:

I encourage you to read the full report.  Download the free report here:

2017 POS/Customer Engagement Survey

A special thanks goes out to the 2017 POS/Customer Engagement Survey sponsors: platinum sponsor is Manhattan Associates and the gold sponsors are Aptos, Diebold Nixdorf, EarthLink, Experian Data Quality, Fujitsu, PCMS, Salesforce Commerce Cloud and Tata Consultancy Services.

I hope you enjoy the report.

As always, I appreciate you insights and feedback. Please share your comments below.

David

58% Of Retailers To Accept Apple Pay, 55% PayPal, 42% Android Pay

MediaPost Communications – A key pillar of the customer experience is mobile commerce. Retailers are aiming to deal with that by moving to mobile point of sale systems and putting mobile capabilities in the hands of sales associates, based on a new study focused on overall customer engagement.

Thanks to smartphones, consumers have a constant and unlimited amount of information at their fingertips. Consumers tap into their phones to research products, compare prices, make online purchases and, to some degree, pay in stores.

One of the more significant trends is for retailers to arm sales associates with mobile point-of-sale devices that allow consumers to pay on-the-spot rather than heading to a checkout line.

Almost half (49%) of retailers already are using mobile solutions for sales staff, up from fewer than a third (31%) last year, according to the study by Boston Retail Partners.

The study comprised a survey of 500 top North American retailers, 76% of which have revenue of $100 million or more and 50% with revenue of $500 million or more.

Mobile POS systems are not yet a substitute for traditional fixed checkout systems, with mobile devices acting as supplements.

On the positive side, retailers are increasingly adding customer-facing mobile services, such as product information, shopping list capabilities and personalized recommendations. On the other side, there still are issues with how well those processes work.

Read Full Article: 58% Of Retailers To Accept Apple Pay, 55% PayPal, 42% Android Pay

Merchandise Planning for Unified Commerce

HFN – The traditional planning process is pretty straightforward, but omnichannel retailing makes it exponentially more challenging to plan and manage merchandise effectively.

Boston Retail Partner’s 2016 Merchandise Planning Benchmark Survey recently uncovered some of the most pressing issues facing retailers. Many have allocated budgets to implement a single commerce platform and upgrade customer touch points such as point of sale, e-commerce, mobile and catalog. However, most planning applications have not received the same attention and are not ready for unified commerce.

Trying to get budget allocated for back-end applications and processes can be difficult because customer touch points typically garner more budget attention due to the perceived immediate impact. That said, the cost of doing nothing with the current planning organization or trying to leverage less than effective options, comes with its own cost in missed expectations, disappointed customers and lost sales.

Organizations are unhappy with their current planning application, which leads to major application upgrades/replacements planned for the next two years.

A combination of appropriate processes, tools and systems are necessary to fully support a seamless environment. Absent the right technology—with the processes and organization to support it—a unified commerce strategy fails to achieve maximum efficiency and benefits for retailers. Best practices dictate the use of a full suite of planning tools working as an integrated system. The survey results, however, reveal that while retailers realize their current systems are inadequate and there is a need for better tools, the situation cannot be remedied overnight.

This brings us to the big question: How do planning organizations get the necessary budget to upgrade their applications and offer a true unified commerce customer experience? The issue is that most retailers operate in a cost-centric world, where IT budgets are based on a “hard savings,” a shortsighted approach that doesn’t allow retailers to consider innovative projects and investments in the future. Savvy retailers know they have a problem with their current planning tools. New technology is only part of the answer. Harnessing the data and championing change takes time. The first step is to recognize the challenge and develop a long-term approach to integrate planning across channels.

WHAT RETAILERS MUST DO

  • Develop a balanced strategy to justify costs.
  • Identify a list of profit growth opportunities to create savings to fund future investment.
  • Do it the right way—not a quick fix approach. Develop an implementation timeline that is realistic, thoughtful and customer centric.
  • Avoid reliance on “hard savings” to justify IT investments. Sales and margin growth related to “soft savings” are just as critical to cost justify the infrastructure required.

Read Full Article: Merchandise Planning for Unified Commerce

Retailers Accelerate Toward ‘Unified Commerce’

HFN – The growing importance of mobile devices to retailing, along with customer centricity is accelerating retailers’ move to “unified commerce,” according to a research report by Boston Retail Partners.

Unified commerce breaks down the barriers between a retailer’s internal channel platforms (brick-and-mortar stores, e-commerce and mobile commerce) to create a common commerce platform, as defined by the retail consulting firm. “Unified commerce goes beyond omnichannel, putting the customer experience first,” said Brian Bunk, principal at BRP. “Retailers are moving in this direction, with 71 percent planning to have a unified commerce platform within three years.” Sixty percent plan to have centralized POS within two years.

Based on a survey of North American retailers, the report identified “four key pillars” that are critical to unified commerce: personal, mobile, seamless and secure. Regarding the personal aspect, consumers research products and shop anywhere and anytime, and thus expect a personalized experience wherever they shop. Seventy-five percent of the responding retailers said they plan to use Wi-Fi to identify customers with their mobile devices in the store by the end of 2019, and 80 percent said that within three years they will suggest products for customers to buy based on previous purchases.

BRP noted that mobile devices have given consumers a constant and virtually unlimited supply of information, which has changed the shopping experience and elevated shoppers’ expectations for customer service. Eighty-nine percent of the surveyed retailers said they will offer mobile solutions to store associates within three years, and 84 percent will use mobile point-of-sale within that same time frame.
Security is another pillar of the shopper experience, and this goes beyond providing security for payments and networks. Ninety-six percent of respondents said they will have end-to-end encryption (in which data is encrypted so that only the message’s recipient can open it and read it) by the end of 2019. Also, 73 percent said that within three years they will offer a single-token solution (which uses tokens containing biometric data in place of passwords to verify one’s identity).

“A unified commerce platform is not simply the future in-store or web platform, but combines in-store POS, mobile, web, order management, call center and clienteling into one integrated platform,” according to the report. “It has become the new retail imperative.”

Read Full Article: Retailers Accelerate Toward ‘Unified Commerce’

Why holiday marketing sparkled a little less brightly in 2016

Marketing DIVE – Marketing efforts were mostly unremarkable during the recent holiday season as brands resorted to tried-and-true discounts to attract shoppers and few succeeded at making an emotional connection. Overall, marketers enjoyed a good holiday season, with sales up 4.7%, according to First Data. However, this figure obscures the significant struggles some retailers are facing as shopping behaviors continue to evolve and crafting a winning marketing push gets more complicated.

Making a connection

With store traffic expected to continue to decline, another way for retailers to build customer loyalty is to focus on inspirational messages that span across all channels, rather than relying so heavily on markdowns, according to Jeffrey Neville, VP at Boston Retail Partners.

“REI’s #optoutside campaign was a clever strategy for a retailer that exists to get its customer outdoors,” Boston Retail Partner’s Neville said. “Why make them be inside to shop? REI closed stores and fulfillment centers on Black Friday, even paying its employees to get outdoors.

“The REI campaign generated 2.7 million PR impressions in 24 hours,” he said. “Mobile specific push notifications and landing pages inspired an estimated 1.4 million people to spend Black Friday outdoors.”

Staying on point

“It is important that digital marketers develop strategies to make meaningful and aspirational connections with their customers,” Boston Retail Partners’ Neville said. “Curating brand enthusiasts not only helps boost holiday sales, but it is ‘a gift that keeps on giving,’ with more loyal customers all year long. Brand enthusiasts also ‘share’ their brand passion with their social media friends, which magnifies the brand influence on consumers’ decision on where to shop.

“The objective is to make personal factors more important than discounts and promotions,” he said.

Read Full Article: Why holiday marketing sparkled a little less brightly in 2016