In a sneaker market dominated by resale, Foot Locker is aiming to stay relevant

Glossy – Last week, Foot Locker invested $100 million into sneaker resale platform GOAT, which merged with boutique brick-and-mortar sneaker reseller Flight Club last year. The investment is reportedly the largest-ever single investment into a sneaker resale platform, dwarfing similar investments like the $44 million investment StockX got from Google’s investment arm GV and Battery Ventures last year. (Stadium Goods received an undisclosed amount from LVMH in February 2018.)

This news is proof that sneaker resale is a huge market. The major platforms like GOAT, StockX and Stadium Goods are all worth well over $100 million each. Stadium Goods was acquired by Farfetch earlier this year for $250 million. While Foot Locker is by no means a bit player in the sneaker world, it is clear that resellers have a lot of buzz and dollars floating around them. By investing heavily into GOAT, Foot Locker seems to be planning for the future by making itself more visible to lucrative sneakerheads.

“The greatest benefit to Foot Locker in investing in GOAT is the potential to elevate its brand among sneakerheads,” said David Naumann, vp of marketing at BRP, retail consulting firm. “Sneakerheads are extremely passionate. Associating Foot Locker with GOAT and making their stores a location to order or pick up their cool shoes will make sneakerheads think more highly of Foot Locker. They may even pick up another standard shoe or T-shirt or something while they’re in the store.”

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Satisfying Return Policies Can Lead to Loyalty

eMarketer – Return policies used to be viewed as a necessary evil. Behind the scenes, logistics can create a lot of headaches for retailers, but consumers expect a seamless process. Flexible returns have also become a differentiating factor that can make or break customer loyalty.

More online buyers means there are also likely to be more returns and exchanges. Plus, “bracketing,” the practice of buying multiple versions of an item to determine the one a shopper likes best and returning the rest, is becoming a common practice.

According to a September survey of digital buyers who had returned an item in the past six months by Narvar, 41% of digital buyers say they use bracketing some of the time; luxury shoppers do this at an even higher rate (51%).

According to the study, 96% said they would give a retailer repeat business based on a good returns experience. The biggest turn-offs are having to pay for return shipping (69%), restocking fees (67%) and difficulty finding the return policy (33%).

Retailers can be slow to meet consumers’ needs, creating a contentious relationship. In a BRP (retail consulting firm) study, 68% of US shoppers said they would be more inclined to shop on a merchant’s site that offered automated returns capability, i.e., being provided with return labels or having refunds triggered when a shipper scans the returned package. But only 8% of retailers said they offer this feature.

Read full article: Satisfying Return Policies Can Lead to Loyalty

Outdoor retailers put down roots in used goods

Retail Dive – As with many trends, used goods and refurbishment programs lend themselves to certain retailers more than others. Outdoors retailers are one space where they’re growing, but electronics retailers are also well-known for having robust refurbishment and repair programs, mainly because so many of those products are both expensive to make and difficult to recycle, not to mention that they’re often made from valuable resources that must be mined and manufactured first.

While some retailers may have better margins than others when it comes to refurbishing goods and selling them to someone new, the financials are not often the biggest benefit retailers can derive from keeping products in circulation. According to David Naumann, vice president of marketing at Boston Retail Partners, retail consulting firm, the appeal for outdoor retailers, in particular, comes from a customer base that’s less interested in saving money and more interested in saving the environment.

“People are more often spending their retail dollars with companies that make them feel good about spending their money,” Naumann told Retail Dive in an interview. “Especially in the outdoors space: these people enjoy the outdoors and they want to protect the outdoors so those people are probably inclined to be more socially or environmentally conscious and look more positively on the retailers that are also embracing those environmental responsibilities.”

Read full article: Outdoor retailers put down roots in used goods

Why are you Ignoring Current Customers to go after New Ones?

It’s not a 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. Yet, many retailers are focused on utilizing total sales and comp sales to measure company performance instead of measuring customer loyalty and retention.

According to BRP’s soon-to-be-released Digital Commerce Survey, most online retailers have key performance indicators (KPIs) for sales, average order value, comparative sales and conversion rates; however, less than 50% of retailers measure customer loyalty through customer satisfaction (net promoter score), customer retention and post-purchase customer survey results.

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 communicate regular updates and reassurances on the order and delivery status to customers 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. This breeds customer loyalty.

According to the recent Best Practices for Enhancing the Post-Purchase Experience report your customers’ most recent experience with your company 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 inspire customers to build long-term relationship with brands.

Understanding the value of loyal customers and repeat purchases is critical to fostering higher lifetime customer values. Focus on making your current customers happy with your brand and see how that benefits your business.

As always, I am interested in your opinions on this topic.  Please share your comments below.


This is why online retailers need to improve the post-purchase experience

Chain Store Age – Retailers say customer loyalty is critical to their business, yet few actually measure retention.

This was according to “Best Practices for Enhancing the Post-Purchase Experience,” a study from Boston Retail Partners, retail consulting firm. While it is no secret that a returning customer is less expensive to convert and has a higher average order value than a new shopper, the e-commerce industry continues to be mainly focused on the acquisition of new customers — a strategy that requires adopting the latest technologies and marketing strategies.

“By crafting a post-purchase experience to minimize stress and maximize convenience, retailers make an investment in a sustained relationship with their customer,” the study revealed. “Enhancing your post-purchase customer experience doesn’t necessarily mean investing heavily in the latest technologies. We believe [our best practices] can create a welcome and trusting experience for your customers to return time after time.”

Read Full Article: This is why online retailers need to improve the post-purchase experience

How to retain digital shoppers: BRP

Luxury Daily – Retailers are too focused on overall sales and figures rather than harnessing the potential of returning customers, who are proven to have lower costs for conversion and have a higher average order value.

A new study from Boston Retail Partners shows that only 40 percent of retailers measure customer retention to their detriment, especially for luxury brands who rely on loyal consumers. There are a variety of steps that retailers can take after a customer makes a purchase to build a strong connection of trust.

“Improving the post-purchase experience can have as much, if not more, impact on a retailer’s bottom line than just focusing on driving visits and customer conversion. Many improvements to the post-purchase experience, like professional packaging and enhanced communications do not require technical support or investment,” said Jeffrey Neville, SVP and practice lead at BRP, retail consulting firm. “These improvements can be made in small, iterative sprints and have a dramatic effect on the overall customer experience.”

Read Full Article: How to retain digital shoppers: BRP

Less than Half of Retailers Measure Customer Retention

Convenience Store Decisions – Studies have shown that a returning customer is less expensive to convert and has a higher average order value than a new shopper. However, many retailers are focused on measuring total sales and comparative sales, while customer loyalty strategies and customer retention are not getting the attention they deserve.

“Retailers are focusing more attention on customer acquisition than loyalty. While acquiring new customers and driving top-line sales are important, building long-term relationships with customers is imperative for healthy long-term performance,” said Jeffrey Neville, senior vice president and practice lead at BRP. “Paying more attention to the post-purchase experience and measuring its impact on sales, will increase the lifetime value of customers and maximize total revenues and profits.”

Read Full Article: Less than Half of Retailers Measure Customer Retention

Retail Expert Says Kaepernick Ad Won’t ‘Negatively Affect’ Nike

WBZ4 – CBS Boston – The selection of former NFL player Colin Kaepernick as Nike’s new spokesperson has some praising the athletic-wear company and others threatening to boycott it.

On Labor Day, Colin Kaepernick tweeted a picture of a new ad for the 30th anniversary of Nike’s “Just Do It” campaign. It shows a tight shot of the athlete’s face and reads “Believe in something. Even if it means sacrificing everything.”

Retail Expert Says Kaepernick Ad Won't 'Negatively Affect' Nike

Comments from Ken Morris, Principal, BRP:

“It is always true that negative press is good press.”

“They’re picking a side and I don’t think that’s going to negatively affect them over the long run.”

Boston retail consultant, Ken Morris, said that “despite the backlash, the ad will only do good things for Nike, given the company’s younger demographics.”

“It’s a calculated risk. For every 25 people wo aren’t going to buy Nike products, 50 are going to buy Nike products.”

Watch Video Clip: Retail Expert Says Kaepernick Ad Won’t ‘Negatively Affect’ Nike

2018 Holiday Guide – Putting Personalization into Practice

Retail TouchPoints – Integrating personalization into retail marketing and communications strategies is becoming more important every day. Especially during the highly competitive holiday shopping season, consumers are looking for relevant promotions, messaging and interactions from the brands they visit online, in-store and via every other touch point.

The 9th annual Retail TouchPoints Holiday Guide offers strategic insights, tips and real-world case studies that drive home the value of delivering a more personalized retail experience.

Perry Kramer, senior vice president and practice lead at BRP, shared these comments:

“The key to success in meeting consumers’ last mile expectations is having the right product in the right place, so that you are buying it once and touching it once.”  Putting product in the distribution centers or stores that are geographically close to their final destinations makes the last mile both shorter and speedier.

“You don’t necessarily have to offer two-hour delivery, but if you offer two-day delivery, you have to meet that expectation 99.9% of the time,” said Kramer. “Customers may be buying something they need for the weekend or as they are heading out on vacation.”

The growth of BORIS (buy online/return in-store) has meant increased convenience for consumers, but has created a new set of issues for retailers — particularly when the items purchased online are not carried in the brick-and-mortar store. “Some retailers are limiting the impact of BORIS by offering customers who are returning products a coupon for X percentage off anything they purchase in the store on the same day,” said Kramer. “This is a great way for retailers to garner some additional sales from customers returning merchandise.”

Read Full Article: 2018 Holiday Guide – Putting Personalization into Practice

Retailers Take Stock of the Winners & Losers Post Bon-Ton

Sourcing Journal – Though the press has had a lot of fun with the retail apocalypse storyline, former Macy’s CEO Terry Lundgren said the reality is a lot less dramatic.

Speaking to CNBC, Lundgren said rumors of the demise of department stores circulated throughout his 40-year career, but even with the recent turmoil, it’s not going to happen. “There will be a shake out,” he said. “There’s going to be winners and losers.”

On one end of that spectrum is Amazon and on the other, he said, there’s The Bon-Ton Stores, which recently began liquidation sales following the company’s February bankruptcy filing.

“Amazon has done a great job of attracting this loyalty customer through their Prime program but they’re the only pureplay—if you can still call them that—online retailer in the top 100 retailers,” he said. Further, he said those who are putting too much stock into e-commerce at the expense of brick-and-mortar, are missing the fact that it still only accounts for 10 percent of retail.

As for Bon-Ton, he said the company, which had a mountain of debt, made a fatal mistake that’s all too common these days. “The key is don’t be a highly leveraged retail business because you cannot survive the ups and downs of consumer changes.”

With Bon-Ton out of business, Perry Kramer, senior vice president and practice lead at Boston Retail Partners, a retail management consulting firm, told Sourcing Journal the effects will be felt across the landscape, resulting in a boon for some and a misfortune for others.

Given that Bon-Ton’s travails were well documented, Kramer said it’s likely the retailer’s competitors were already laying out plans to capitalize on the vacancy.

“The biggest winners will be the regional competitors who already have a strong understanding of the merchandise mix and customer experience that resonated best with Bon-Ton’s customer base,” he said, listing Boxcov’s and Belk as possible benefactors. “The most opportunistic competitors have already been working to negotiate discounted merchandise for the next few seasons to take advantage of the procurement gap that will be created by the Bon-Ton closure.”

Beyond snapping up stock, he also sees opportunity for these stores to tap into Bon-Ton’s credit cardholders, who could be wooed with favorable perks.

Ultimately though, Kramer sees a dim future for some of the company’s landlords. “In many cases, the closing of these stores, which are most often an anchor store in malls, may be the straw that breaks the back of several malls impacted by the store closures across 26 states,” he said, adding the smaller stores in those centers may be hurt as well.

Read Full Article: Retailers Take Stock of the Winners & Losers Post Bon-Ton