Click on the link below or scroll down for this month’s top headlines and tekservePOS analysis and tips.
• Online Retailers' Dreams Are Merry
• Best Buy to Test Mall-Based Stores
• CRM: The Key to New Cross-Channel Strategies
Online Retailers' Dreams Are Merry
By Deena M. Amato-McCoy
A volatile economy continues to take its toll on consumerconfidence, and many holiday shoppers are keeping to stricter budgetsthis year -- factors that are expected to contribute to a meager 2.2%increase in holiday retail sales. This is the smallest increase since2002, according to the National Retail Federation (NRF).
However,some multichannel retailers are optimistically expecting their onlineholiday sales to increase at least 15% over last year, according to the2008 eHoliday Study, conducted by Shopzilla for Shop.org, a division ofthe Washington D.C.-based NRF.
The study, which was conducted Oct. 1-20, was released Wednesday. It surveyed pure-play and multichannel retailers.
As more shoppers jump online, 56.1% of online retailers expect theire-commerce holiday sales to increase at least 15% over last year, thestudy said.
Cost-conscious shoppers are making their way onlineand into stores earlier this year in hopes of stretching their holidaydollars. This is making retailers rethink their holiday strategies.
“While online holiday shopping growth remains uncertain, we expectour customers to shop more aggressively for price. They can more easilyand readily price shop online,” Dennis Hernreich, CFO, COO, executiveVP, treasurer and secretary of Casual Male Retail Group, Canton, Mass.,told TechTalk Tuesday.
This is pushing retailers “to be heavily promotional to attractthese shoppers,” said Scott Silverman, executive director of Shop.org.
One online promotion that will continue this year is free shipping.All retailers are impacted by an increase in transportation costs, yet78% of surveyed companies plan to offer free shipping. However, theseprograms will be contingent on new conditions, including new shopperspending thresholds to qualify for the service.
Casual Male plans tooffer free shipping, “but only after a minimum spend,” Hernreich said.“Until we see the seasonal business trends more clearly, we areguarding our margins.”
Customers are also demanding an easier shopping experience onlinethis holiday season. Aware of these demands, almost 43% of participantshave added or improved their site-search tools since last holidayseason. Meanwhile, 42.6% of companies feature product videos, and 32.7%offer customer reviews -- both designed to help shoppers make educatedbuying decisions.
Eager to find the best deal, cost-conscious shoppers will log ontothe Web in search of gift ideas and to research product information.This is also pushing retailers to ensure that promotional efforts andinventories -- both in-store and online -- will match forecasted demand.
“To take advantage of holiday traffic, we plan to offer our shoppersmore aggressive seasonal pricing earlier,” Hernreich said. “This willhelp us to keep our inventories lean and still meet demand.”
Regardless of these efforts, the outcome of the holiday seasonremains to be seen. “When retailers like Amazon.com lower theirfourth-quarter forecasts, you know the outcome of the holiday seasonremains uncertain,” Silverman said.
“I think sales will vary by category. Electronics are always hot,and discounters and warehouse stores are drawing many consumers. Somespecialty and luxury categories will have a tougher time,” he said.“With the election behind us and the stock market hopefullystabilizing, maybe we will see retailers reporting more optimism andhigher holiday sales forecasts.”
-- TechTalk Tuesday, Nov. 11, 2008
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The Gap is a prime example of a retailer who has embraced this trend. According to an article in USA Today,its brands -- Gap, Old Navy and Banana Republic -- posted a 24% loss inSeptember in brick-and-mortar stores but online sales are soaring. Theywere up 50% from 2005 to 2007, more than doubled in the last five yearsand are expected to hit $1 billion in sales this year, accounting forabout 6% of total sales.
So what is the Gap doing differently to drive online sales? Forstarters, this past May the Gap added something called “Universality,”which allows consumers to shop between all of their brands, includingPiperlime. They have also put in place “quick links” for the holidayswhich allows you to move from a Gap product to an Old Navy’s equivalentwith one click.
To strengthen the site's stickiness,” the Gap is leveraging theentertainment industry. They have posted celebrities singing remixedChristmas carols such as the Dixie Chicks doing “Deck the Halls.” Thereis even an interactive option for customers to remix “Jingle Bells”with a combination of celebrities and then send them as online holidaygreetings.
The bottom line: improve functionality and get creative for this holiday online shopping season.
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Best Buy to Test Mall-Based Mobile Stores
Minneapolis -- Best Buy Co. Wednesday announced itis launching stand-alone stores dedicated to mobile technology inmalls. The format, called Best Buy Mobile, is designed to helpcustomers navigate the wireless landscape by offering a full range ofmobile devices including phones, laptops, and other handhelds, serviceplans and accessories, as well as teaching customers how the deviceswork together.
“The new Best Buy Mobile stores are based on onesimple idea: Technology is better when it works together,” said ShawnScore, president of Best Buy Mobile. “Today, life happens on the go. Ongood days, technology helps. On bad days, the gadgets don’t work. Thisstore is designed to help people get more from their mobile life.”
BestBuy Mobile was created as a joint venture with leading U.K. mobileretailer The Carphone Warehouse Group (CPW) in 2006. The CarphoneWarehouse is Europe's largest independent retailer of mobile phones andrelated services, with over 2,400 stores across nine countries.
BestBuy first introduced Best Buy Mobile as an in-store shop in itstraditional stores in select locations. It also opened a freestandingversion in select cities. But this is the first time the chain hasopened the concept in a mall.
The chain said its new stores willaverage 3,000 sq. ft. and target shoppers that don’t traditionally shopat its big-box stores such as women and younger shoppers. The storeswill feature dedicated “kids' zones,” which will give shoppers a placeto drop off the kids while they shop. Also, a “Geek Squad Precinct”will be located within each store for all service needs.
Best Buy will test its new mall-based concept in three locations:Mall of America in Bloomington, Minn., Fair Oaks Mall, in Fairfax, Va.;and Woodfield Mall, in Schaumburg, Ill. All of the stores are scheduledto open in October.
-- ChainStoreAge.com, Oct. 15, 2008
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The interesting thing about this concept is that it is very similarto the move department stores are making with their smaller, off-shootspecialty stores. Neiman Marcus, for example, launched a new conceptstore in 2006. Cusps is a specialty store designed to meet the needs ofa very specific shopper rather than offer all things to all people likethe traditional department store model. The Best Buy issue appears tobe the similar concept from a “mass merchandise” retailer.
And with the economy the way it is, retailers are looking fornew ways to drive shoppers to their stores. “We have a lot of formatsthat are heading to maturity,” according to Mary Brett Whitfield,senior Vice President of Retail Forward. “Growth is the impetus for allof these initiatives.”
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CRM: The Key to New Cross-Channel Strategies
As retailers add new customer touchpoints to enhance theircross-channel strategies, chains have their work cut out for them indefining how important each channel is to different consumer segments.Since there is no way to pre-define a cross-channel shopper’s habits,retail winners are using customer relationship management (CRM)software to understand how consumers are utilizing their traditionaland emerging channels.
This was the theme of the “Consumer-Centricity in a Cross-ChannelWorld” session held at the Multichannel Commerce Breakfast. The event,sponsored by ATG and Sapient, was held in New York City on Oct. 16.
As customers adopt new communications devices, they are demandingthat their favorite retailers find ways to integrate them into theshopping mix. The challenge for retailers is to learn how to create aconsistent shopping strategy across all channels.
“Retailers want to offer more customer touchpoints beyond just theirWeb site, and the key is to keep the experience unified,” Steve Rowen,managing partner, Retail Systems Research, Miami, said during thesession.
Retailers also want to be able to communicate with consumersregardless of the channel they choose. That is why CRM is gaining moreattention from multichannel retailers.
CRM software uses processes that analyze customer behaviors,shopping patterns and other personal metrics. Chains apply thisinformation to deliver better merchandise assortments, promotions andservices that will create loyalty and longevity.
Retail winners are no strangers to using CRM. Retail winners, asdescribed by RSR, are chains that grow sales approximately 3% past therate of inflation. But retail winners are not just selling more thancompetitors.
“They think differently, view challenges differently and createopportunities by overcoming obstacles,” Rowen said. “They often do thisby leveraging technology.”
For retail winners, CRM is a good way to stay connected withshoppers. According to RSR, 36% of retail winners that leverage CRMhave learned to move lower-value shoppers into higher-value shoppers.Meanwhile, 35% of retail winners are using the solution to createmarketing strategies that improve market-basket sizes.
Winners expect CRM to have even more value as they move theircross-channel strategies beyond their stores’ four walls. For example,62% of retail winners are giving their call-center agents access to CRMto help service and upsell shoppers. Similarly, they are determininghow to use CRM to understand the impact of mobile shopping and howtheir shoppers are leveraging the medium, Rowen explained.
“Winners are looking to new geographies to see how new applicationswill work in the cross-channel world,” he said. “These retailers remainfocused on the shopper and their demands, not just the salesthemselves.” -- TechTalk Tuesday, Oct. 28, 2008
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