Retail ViewPoints

2-D Barcodes Present Path To Get Shoppers To ‘Opt-In’ To In-Store

2009-08-06T05:18:00.000-07:00

By Laura Davis-Taylor, Founder & Principal, Retail Media Consulting

During the course of 2009, we have seen more retailers utilizing shopper path tracking and gaze tracking to better understand how shoppers are responding to in-store promotions (both traditional and digitally-based). As these technology tools become more prevalent, we have seen some retailers use them responsibly and others use them to track age, race and gender with the intent to eventually serve up ‘targeted’ messages to shoppers. This raises potential privacy concern and, until we get in front of them, retailers are looking for new methods to stimulate shopper ‘opt-in’ to their targeted in-store promotions.

One of the technologies of great potential interest for this is the 2-D barcode. 2-D, or 2-dimensional barcodes, are technically a set of graphics, glyph, or ‘symbology’. The have a much higher capacity than the 1-D barcodes. Like their 1-D brethren, they are each as unique as an individual’s fingerprint and provide an instantaneous method to respond to a marketer’s offer or call-to action. They’ve been hot property in Japan, France, Spain and some areas of Germany, and are slowly trickling into the US.

2-D bar codes work via mobile phones. The shopper sees a 2-D code on some kind of marketing vehicle (printed or digital signs, product packaging, floor, etc.) and uses their mobile phone camera to take a photo of it. The camera catches the image and passes it to the 2D Code Reader Application, which then interprets (decodes) the code and takes action to resolve it. Due to different implementations, resolving the code may require interaction with a network server.

Once the 2-D barcode has been resolved, the device will start the appropriate application to activate the function for the campaign’s call-to-action. Just like waving a price tag under a digital price checker, they “wave and receive”.

There are a few ‘flavors’ of 2-D codes, all competing to be the de facto standard. These include Data Matrix, QR (or Quick Reference) codes, shot codes, EZcode (“easy codes” by Scanbuy) and the Microsoft Tag. This has been one of the challenges in all countries and we expect the same as they become more pervasive here. But the CTIA (the American Wireless Association) has a Code Scan activity committee to define the 2-D barcode ecosystem and recommendations for 2-D barcode symbology and code reader application use. Many major brands are involved, leading us to believe that they see great potential in the technology *See http://www.ctia.org/business_resources/wic/index.cfm/AID/10329 if you want to learn more.

Sprint recently announced that the are now pre-loading all of their new phones with Scanbuy’s readers and we may be seeing more wireless companies following suit. We’ve also seen some very unique promotions hit the press, such as Doritos printing a 2-D code on single serve product bags that were scanned by consumers to permit access to an invite-only concert. Retailers have real incentive to better understand them and find creative uses for them to aid in shopper experience.

Key takeaways:

Understand the potential privacy issues for any shopper tracking technology that you are looking to activate.
Until governing parties create guidelines for shopper tracking, stay on the safe side keep an eye out for new methods for shopper ‘opt-in’.
Keep up with the progress of 2-D barcodes, as they will have great in-store potential and ensure 100% shopper permission.

Laura is a 17-year Agency veteran with a diverse background in traditional advertising, brand planning, interactive marketing, digital signage, merchandising and retail/environmental design—all geared towards creating consumer-centric solutions for the business challenges of her clients. She joined Miller Zell as a Vice President and led accounts such as Circuit City, Wal-Mart and H&R Block, working intimately with her clients to help them build strategies around all points of customer experience and communications. Now, with Retail Media Consulting, Laura and her team focus on helping brands strategize and execute digital media experiences within the store as a marketing vehicle. Laura is a Digital Signage Expo Advisory Board member, Chair of the POPAI Digital Signage Advocacy Committee, writes a bi-monthly column for Digital Signage Magazine and is an “expert resource” lecturer, workshop teacher and author in the In-Store Digital Media space. Her firm published their first book, "Lighting up the Aisle: Practices and Principles for In-store Digital Media”, in 2007 (available at http://www.lightinguptheaisle.com).

Laura can be reached at laura@retailmediaconsulting.com

5 Key Strategies to Enhance Customer Loyalty

2009-07-08T19:39:00.000-07:00

By Kim Goff, Author & Communications Director, the United Way of York

We live in a very busy society where time is everything. The three common pet peeves that customers have with any type of business are: waiting for a long period of time, being ignored by employees, and not feeling appreciated. These issues can make or break a retailer. By investing in customer service training, retailers can greatly improve their bottom line, and nothing is more important during tough economic times. Here are five customer service training tips that can be incorporated in your training:

The customer is always number one. This is the best way to train your employees on the importance of customers. “Without customers, there is no profit, without profit, there is no business, without business there is no company, and without the company, there is no you.” When your employees understand importance of customers to the business, they’ll start to understand how important their role is as well.
Never make customers wait. Greet your customers as soon as they walk in the door. If a customer calls, answer the phone by the second ring. If you are busy with another customer, do not make your new customer wait a long period of time. Acknowledge customers as soon as they come in and see if another employee can assist them. If there is no one available, let the customer know you are busy with another customer and ask if they can wait. Be sure to give them an estimated wait time, and if they cannot wait, ask them if they would like to make an appointment. Always ask customers, immediately, how you can help them.
Never ignore a customer. If they walk in, they can walk right out. Even if you greet your customers or seat them at a table, you still have to pay attention to them. Always check back in to make sure they have what they need or offer your assistance. Customers will walk out if they feel ignored.
Show appreciation for customers’ business. This is one of the major factors customers consider when returning to a business. Showing customers how much you appreciate their business can turn them into regular clients. The most obvious way to show this is by verbally telling them, “Thank you for your business, we hope to see you again.” This should always be said, no matter what else you do to show your appreciation. Other ways include, “freebies,” coupons or discounts.
Remember your “regular” customers. Once you learn a customer’s name, always address him or her by it. Personalize their service by learning what they like or prefer. Get to know something personal about them, whether it’s their hobbies, children, or job. The more you can start to personalize service for your regulars, the more appreciated they will feel. There is nothing worse shopping with a retailer on a regular basis, and having the employees there ask who you are, or worse, act like they have never seen you before. Your goal is to make every customer a regular, but personalizing service for your already established customers will make them life-long customers.

Investing in customer service training for your employees can be just as important as perfecting the quality of your products or service. You can have the best product or service out there, but if you do not treat your customers well, they will not come back. However, if you treat every customer with the utmost importance, respect and courtesy, your outstanding service will create positive feedback and a viral impact.

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Kim Goff is a professional speaker and author, who currently works as a communications director for the United Way of York. In addition to being a freelance writer, she also works on the blog, Volunteer Now! for the York Daily Record and is the Philadelphia Special Needs Kids Examiner for Examiner.com. She speaks on overcoming obstacles, life balance and women in the workplace, and is author of “Female Empowerment – A Personal Journey.” To hire her for your next speaking engagement, e-mail: kimgoff@excite.com.

Q&A with James Gregory, CEO, CoreBrand

2009-07-02T08:10:00.000-07:00

Brand equity, the value of the brand name itself, plays an increasingly important role in consumer purchase decisions, brand engagement and in driving stock valuation. Since 1990, CoreBrand has measured changes in 1,200 leading brands in some 40 industries. Now more than ever the strategies to drive growth and increase loyalty are top of mind, and Corebrand emphasizes the importance for retailers to leverage their most valuable asset—their brand. Retail TouchPoints had the chance to catch up with CEO James Gregory for his thoughts on the role of social media for retail brands, the importance of brand monitoring and what retailers can learn from the challenges faced in the specialty retail sector.

Retail TouchPoints: What aspects of brand monitoring are most important for retailers?
James Gregory: Since the retail marketplace is highly dynamic and change can happen overnight, it is critically important for retail brands to monitor the marketplace for threats and opportunities. The specifics of a retail brand will determine what kind of monitoring makes the most sense. For example, a fashion-oriented retailer dependent on current styles and trends would do well to monitor the latest, fastest moving social media for changes in trends. Conversely, a brand that has a well-established aesthetic or value proposition can be more lax in current trend watching but will need to monitor threats (competitive and marketplace) to that aesthetic/value proposition.

RTP: What are some of the other business factors that retailers should be monitoring to ensure the security of their brand identity?

Gregory: Retailers would be wise to monitor larger economic projections to understand likely changes that Bull or Bear markets can bring. The ability to adjust everything from inventory on hand to price structure to messaging in advance of significant market change will enable businesses to weather storms and gain leverage. Far too many retailers focus on week-to-week sales statistics only and fail to pay attention to larger movements.

RTP: What are some of the key struggles for specialty retailers like Tiffany and Nordstrom, and what can other retailers learn from those struggles?

Gregory: Luxury oriented retailers like Tiffany and Nordstrom face struggles in difficult economies due to a decline in disposable income. While this has an obvious effect on business statistics, the effect on the brand may not be so obvious. The retailer must strike a balance between being seen as the exclusive/luxury that it represents in good markets while protecting against the image of ‘unaffordable trinkets’ that can creep in as financial concerns mount. This is not an easy task as managing that balance will be different for each company based on its brand proposition. Each brand must understand what ‘affordable luxury’ means to their customer promise and how to deliver that promise as the economy slows.

RTP: How integral is social media to a product’s brand?

Gregory: Social media should be viewed as a key component of a brand strategy. For many years, savvy retailers have looked to create emotional attachment between the customer and the brand to drive loyalty, grow market share and expand product categories. Social media presents an entirely new opportunity to build this attachment. It also presents a significant challenge as the control of social media lies in the hands of the consumer, not the retailer. This highlights the need to monitor and react to changes in the market in order to gain the leverage that social media can provide.

RTP: What are some of the key strategies retailers can use to make sure their brand is engaged with customers online?

Gregory: Retailers need to get beyond the online store as a digital version of their brick and mortar stores. Many retailers have done fantastic jobs of ‘inviting the customer in’ to a physical location through store design, product presentation and appropriate use of promotional material and then fail to provide the same level of attention to their digital locations. Retailers must give the same considerations to inviting in a customer while recognizing the unique qualities that online shopping provides.

James R. Gregory is founder and CEO of CoreBrand, a global brand strategy and communications firm based in New York City, with offices in Minneapolis, Minnesota, and Los Angeles. With 30 years of experience in advertising and branding, Jim is a leading expert on brand management and is credited with developing strategies for measuring the power of brands and their impact on a corporation's potential financial performance. Most notable of the tools that Jim has developed is the Corporate Branding Index® (CBI), a quantitative research vehicle that has continuously tracked since 1990 the reputations and financial performances of over 1,200 publicly traded companies in 49 industries. CoreBrand uses the CBI to help clients recognize how their brands compare with industry peers and how communications can impact corporate reputation and financial performance, which includes stock price and revenue growth.

Communicating With Workforce Critical During Challenging Times To Maintain Morale

2009-06-25T07:41:00.000-07:00

By Doron Levy, President, Captus Business Consulting

A question I am constantly asked is how do we keep morale up during tough times? I agree it is difficult to keep spirits up especially with all the negative media swirling about. The one strategy that seems to always blow up in people faces is keeping or withholding information from employees.

In my experiences, I have seen a broad spectrum of cultures in retail. I have worked for companies that openly share sensitive operational information with their employees. I have seen cultures where owners and managers remain tight lipped about performance and other indicators. Silence is not golden in these cases. Employees who are constantly exposed to negative media are going to make assumptions about their environment without information. As the rumor mills spin, morale will decay to a level where productivity is affected. Is there a balance as to what can be shared?

The real key to maintaining morale is to keep the lines of communication going. The flow of information must remain constant. Having quick opening and closing meetings will ensure a constant flow of information. Sharing information like daily financial performance and sales targets will give employees a good idea as to where the business stands. You will also have greater chance of your staff taking ownership when sharing vital information.

How do you respond to rumors? Some would say that you should never engage rumors. I say, the truth will set you free as long as there is a policy in place. If you look at the employee handbooks of some of the largest retail chains, you will see sections on ‘disclosure of information’ or ‘internal speculation’ or even ‘rumors”. All of them address the issue of rumors in the workplace. Each chain has it’s own correction method but it is important to note that some will terminate upon investigation. That sends a clear message this kind of behavior will not be tolerated.

Let’s counter a negative with a positive. Sharing information is critical to the success of any retail team. It is important that your staff have a clear picture of what is going on around them. Speculation and rumors can hit a business’s productivity hard and our industry’s margins do not allow error. Morale is a key element to a successful retail operation.

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Doron Levy delivers his retail expertise through Captus Business Consulting. During his 20 years in the industry, he has been successful in increasing revenue and margin, optimizing and streamlining retail operations, reducing shrink, increasing employee morale and, most importantly, driving the bottom line. Doron has created solutions and training workshops for some of the biggest names in retail. He is a published author and has contributed to many retail trade magazines and websites. For more information on Captus services for business, please contact Doron directly at doron@gocaptus.com.

Five Reasons and a Few Steps to Get Started on Twitter

2009-06-18T07:51:00.000-07:00

By Nancy MacGregor Hill, Communications & Social Media Strategist, RealTime Communications

There are several reasons retailers should tap into the nearly 20 million users on Twitter – and here are five of them. First off, it’s free. But more importantly, it has tremendous viral marketing potential. In addition to the ability to communicate sales and promotions to followers (which they can then pass along to their followers), Twitter offers retailers a great way to monitor what people are saying about their brand and respond. Twitter can also be a good tool for addressing customer service issues, as Comcast and Southwest Airlines have done. And finally, when your brand is on Twitter, you can begin to rely on others to do your chest-thumping for you – which helps give you credibility. (Did I mention that it’s free?)

But understanding the value of Twitter is the easy part. The hard part is figuring out how to use Twitter effectively. Unfortunately, many companies don’t understand how to get started, so they don’t. Or they join the Twitterati, but they approach it the wrong way and don’t see much benefit.

From a high-level, Twitter is described as micro-conversing in short, 140-character “tweets.” It’s a vehicle for sharing useful information and participating in conversations. The point of Twitter is to attract followers, but you also want to attract the right followers – so it’s important that your posts, or “tweets,” are relevant to your line of business.

Here are some steps to help you get started or improve your Twitter craft:

1. It’s All About your Brand – Create the same personality on Twitter that you’ve established for your brand. For example, if your company is known for being environmentally-conscious, then you can post tips or links to articles about for how people can be more eco-friendly in their lives. If you’re known for irreverent advertising, then post links to off-the-wall sites or videos on YouTube your audience will relate to.

2. Be Relevant – The best tweets contain information that’s useful. For example, are you a wine retailer? Post something about food & wine pairing, or your favorite summer varietals, or your picks of the best wines under $15. Do you sell women’s fashion? Post something about your newest summer arrivals, or a fashion tip for that long-awaited job interview. Obviously you can’t communicate a lot in 140 characters, but if you write about relevant topics on your company blog, you can tweet a short description and link to it.

3. Keep it Real – If all you do is post links to your site but don’t engage in any real conversations your followers will likely lose interest and un-follow you. This is especially true for retailers. Sure, your customers want information on sales and special deals, but they also want to feel like there’s a real person who’s interested in what they have to say – and who will respond.

4. The 3 Rs: Re-tweet, Reply and Reciprocate – Remember, Twitter is about conversing, so re-tweeting, replying to others and reciprocating is a great way to participate in conversations and get more visibility. Always acknowledge someone with a thank you tweet when they re-tweet your messages, and be sure to respond when someone directs a comment or question at your company, and show them you’re engaged.

5. Follow the Leaders – To get a sense for how other retailers have successfully utilized Twitter, follow them. Some good ones to check out are @WholeFoods, @Zappos, @Lululemon, @traderjoes, @bestbuy.

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Nancy MacGregor Hill is a PR and social media strategist for companies in the retail and technology sectors. She helps companies with media relations and social media activities such as launching corporate blogs, increasing visibility on LinkedIn and starting/managing company Twitter accounts. More information about her clients and services can be found at www.realtime-comm.com. She can be reached by email at nancy@realtime-comm.com or on Twitter at @nmhill.

Q&A with Kate Newlin, Author of “Passion Brands”

2009-05-21T07:09:00.000-07:00

By Amanda Ferrante, Assistant Editor,

Giving consumers something to talk about is an ever present challenge. Give consumers something to be passionate about is even more difficult. Business strategist Kate Newlin calls for nothing less than a renovation of the process through which we develop, market and improve the goods and services of our consumer economy – based upon an unprecedented level of engagement with the consumer. In her new book “Passion Brands,” Newlin advises the forging of brand democracies, marketing states in which consumers have as much of a vote as the manufacturer and marketer in the design, pricing, packaging, marketing and uses of their favorite products. Retail TouchPoints recently caught up with Newlin to find out what retailers can do to cultivate greater engagement with their consumers and work with CPG companies to align their marketing efforts.

Retail TouchPoints: “Passion Brands” is focused primarily on CPG companies, while retailers were not as prevalent. Is this because retailers are not demonstrating the characteristics of a passion brand?

Kate Newlin: Well, I focused on the retail environment in Shopportunity! (Collins, 2006) and came up really dry in terms of great retailers who could keep themselves from what one client terms “the heroin of price promotion.” There are, of course, the exceptions: Nordstrom is one obvious one. This economic environment has not been a good one for retail creativity, clearly.

When I did the research for Passion Brands an element of the research was an omnibus consumer (telephone) survey which was agnostic about what constituted a passion brand – we didn’t ask consumers to name a brand in certain categories. We simply used the definition of a Passion Brand (a brand you feel so strongly about that when you recommend it to a friend and the friend does not love it the way you do, there’s a question mark over the friendship, not the brand) and asked them if there were any brands that met the criteria. We got lots of answers that weren’t classic goods or services (sports teams, cities, restaurants, films) but NOT any retailers.

RTP: What could and should retailers be doing to become a passion brand? What are some of the key takeaways and must-haves for retailers to affirm the passion brand attribute?

Newlin: I wrote the book to be as diagnostic as possible. There are seven key stages to developing brand passion – and they need to be thought through in detail, but a couple spring to mind as particularly relevant to retailers:

Market to a mindset (not classic demographics). Red Bull says that it targets people who are mentally fatigued, physically fatigued or both (who EXACTLY does that leave out?). That need state targeting allows them to appeal to clubbers and truck drivers simultaneously. Prius had a three-part target in-mind: Tree-huggers, the early adopters of technology and the fanatically frugal. I think retailers tend to think about “fashion-conscious women” or “time-starved women 25 to 54 with children” without getting into genuine sense of the pulse points of their most powerful and highest priority consumers
Differentiate on design. And I don’t mean here the design of the products you carry, but definitely that as well. I mean the stuff that badges a consumer to you: The shopping bags, the store credit card, the sales circulars. I’m a big fan, for example of the retailer Pink as it does its sales. Pink Sale bags are a mark of sophistication and savvy. There’s no nasty, desperate advertising. Just cool people walking around with Pink Sale bags – walking advocates and awareness builders for the brand.
Hire Passionistas. This to me is the biggest tragedy of modern American retailing: The presumed belief that working at a department store is on a level playing field with a drug store or a fast food joint. Yet, as we see from the numbers of subscribers to Teen Vogue and all manner of other retail goods-centric publications (sports, entertainment, literature) there is a deep and abiding interest on the part of consumers in a wide group of retail products. Why aren’t we recruiting people who love fashion to work in these boutiques and department stores, training them about the goods (not sending out DVDs about how to upsell consumers who seem to be undecided) and the fit and the fabric and the entire romance of these categories? If Howard Schultz can professionalize counter help into barristas, why are shoppers constantly confronted by gum-chewing kids who’d rather be talking to each other than helping customers figure out the right blouse to go with the skirt?

RTP: How are CPG companies working with retailers to do joint marketing or cross promotion to capitalize on passion brands making it a driver for a retail store, and ultimately, increase sales?

Newlin: CPG companies have learned the hard way that if they just provide “slotting allowances” (which is another way of saying “pay to play”), they don’t get much more than shelf space. If, on the other hand, they work with each retailer to use discretionary funds to create “customer-specific marketing programs,” they gain access to a range of retailer loyalty programs, cause-related marketing themes and a sense of uniqueness the retail setting. When they do the due diligence of aligning the brand personality with the store’s and the promotional setting, you get something that appeals to the consumer on an element other than “okay, available and cheap.”

RTP: Given the economy, pricing and cost pressures are a big concern for retailers. Is it easier for passion brands to avoid cost cutting and/or command a greater price because of their value?

Newlin: Well, that is the $24,000 question, isn’t it? I believe it is. I think if a brand goes to the effort – over a sustained period of time – of creating genuine consumer passion, then it does get into the area of “no substitute will do.” And once you’re there – then it’s no longer about price. It is about the ultimate value of getting something that is mine, something that I own. Think about an iPod or an iPhone. We just had to get our hands on it. There are other brands out there – but the Apple offerings have become the gold standard against which everything else is compared. When we pull out the iPod, we don’t have to explain our decision to anyone. We’re free to talk about the thing itself, its joys, its features, even its frustrations. When we opt for the knock off, we do have to explain and rationalize the decision -- usually in terms of price – and so the communication of the passion doesn’t happen.

RTP: Private label brands have seen growth, likely attributed to the economic crisis. It is possible for this growth to impact passion brands? Conversely, do passion brands create a barrier for private labels to reach their full potential because they invoke such a high emotional value and attachment in consumers?

Newlin: I believe that cutting back on our genuine passion brands is the last thing we do. We’ll give up all sorts of other habits and practices before we’ll trade down from our love of Jack Daniel’s or Starbucks or the Yankees or Nascar or Volvo.

RTP: “Passion Brands” includes a broad variety of brands with an innovative approach that warrants the title, including Red Bull. Can you expand on the thought of marketing by inclusion (rather than the traditional exclusionary approach), how it contributes to creating a passion brand, and other examples of where this strategy could work well?

Newlin: The thing about great brands is that you very often find that they appeal to a pretty wide series of sub-segments of people. What great passion brands do is that they find a way of welcoming diverse groups of people. I came to think about it as developing “dog whistle” marketing. As I mentioned before, Red Bull and Prius identified multiple targets, but they also do something else, which is one of the markers of passion brands: Know they know you need them.

I don’t believe there is an unfocused group person left in the developed world. Everyone knows that marketers reach out to consumers to figure out how to appeal to them. The great brands of the future are going to take that sensibility, that inside-the-tent perspective and own it. Think about the wink we all get in Geico advertising. They are typically running three or more campaigns simultaneously: the gecko, the cavemen, the weird announcer for normal people, as examples. Fabulous willingness to keep us engaged and entertained, multiple pathways into the brand. They meet us at our level of need (on TV, it’s to be entertained) and they have other media, such as the web, to get transactional. And, just think about it: Geico is the old government employees’ insurance company. I always point this out to retailers and manufacturers who start to whine about how difficult it is for them to create a compelling brand personality.

Prior to launching her own consultancy, Kate Newlin Consultants, Newlin was president of Faith Popcorn’s BrainReserve, a trend-based marketing consulting firm. She developed proprietary innovation acceleration techniques on behalf of RJR Tobacco and its core brands (Camel, Winston, Salem and Doral) which she continued to apply with a variety of brands and companies seeking incremental revenue from existing equities. During her career, she’s worked with a broad cross section of the Fortune 500 and entrepreneurial firms, including McDonald’s, Pennzoil/Quaker State, Kraft, Hasbro, Cigna, GE Capital, Guthy-Renker Corporation, Specialized Mountain Bikes, Waldenbooks and LensCrafters.

Key Strategies to Optimize In-Store Sales Service

2009-05-14T09:45:00.000-07:00

By Doron Levy, President, Captus Business Consulting

So here we are, supposedly at the bottom of this economic downturn, but it looks like we may have to keep tightening our belts for a little while longer. We are service driven in retail, so making cuts to the front shop is always tough. Could there be a balance between saving resources and be productive both for image and customer service?

We have only two real priorities in retail: service and image: We display our products so customers can buy them. When optimizing (such a nicer word than slashing) your payroll, it is necessary to completely understand store traffic patterns and individual capabilities. You figure out traffic patterns by reports and observations. You are able to know your team’s individual capabilities by spending time on the floor working with them.

Developing a culture of ownership will dramatically increase productivity and morale. Put things back on the team. If sales are slow, ask them what they think a reasonable target is and work from there. Get them to commit to their own productivity standards and they will own them. Offer special projects to non-management personnel. Challenging them with non-core tasks will keep them interested and motivated

Open the lines of communication. Sharing good and bad news is critical to maintaining forward momentum with your team. Lack of information causes speculation which causes the rumor mill to fly. You can work for years improving your morale and all it will take is one rumor and you will be back to square one. Encourage open communication and exchange of ideas. Ask your staff what they think and ask them what information they would like shared.

We can’t take our service levels and image levels for granted. It’s how we are successful in retail. We also can’t ignore the need to save resources during slow times. Challenging and motivating your human assets will ensure productivity levels are maintained in the face of shrinking labor.

Doron Levy delivers his retail expertise through Captus Business Consulting. During his 20 years in the industry, he has been successful in increasing revenue and margin, optimizing and streamlining retail operations, reducing shrink, increasing employee morale and, most importantly, driving the bottom line. Doron has created solutions and training workshops for some of the biggest names in retail. He is a published author and has contributed to many retail trade magazines and websites. For more information on Captus services for business, please contact Doron directly at doron@gocaptus.com

Q&A with Eric Olafson, CEO, Tomax

2009-04-30T12:10:00.001-07:00

While most technology companies are pushing efficiencies and solutions that take costs out of the retail business, Tomax is reinforcing that retail is ultimately won and lost on the selling floor and advising its retail customers to focus on metrics around average ticket sizes and conversion rates.

Retail TouchPoints recently connected with Tomax CEO Eric Olafson to learn more about the concept of Customer Experience Architecture, and also to get his insights on how traditional retailers can learn from the service retail sector.

An early proponent of thin-client solution delivery in retail, Olafson also offered a unique spin on how hosted models have helped deliver bottom-line benefits to the company’s roster of more than 100 retail chains.

Retail TouchPoints: There is a lot of emphasis on execution management and workforce optimization as retailers look to increase efficiency during this challenging business climate. Are you seeing more demand for those kinds of solutions? What are some of the paybacks you’ve seen from retailers implementing workforce applications?

Eric Olafson: You don’t need precise measuring equipment to appreciate retailers are significantly affected by this economy. What’s very interesting to us is the rising demand in workforce products. I can’t really calibrate this to other periods in any real accurate way, but I think that people are acutely aware there are a finite number of customers visiting their stores. Consider the specialty segment, which has been so ravaged in terms of top line. If you look at the ShopperTrak data from December, depending on the area of the country, retail mall traffic declined about 20-25%, but sales only decreased approximately 8%. Clearly specialty retail is the most affected in these economic conditions -- they’re getting to the point of ‘what moves the needle’ is what happens when a customer comes into our store.

A lot of these retailers are gathering their managers together in varying forms of pep talks about what to do to get through these times, because anxiety runs rampant through all levels of these organizations. Every retailer is facilitating some sort of psychological support process with its workforce. But CEOs know that they are wrong to assume that they are powerless to control the outcome of their stores, operating results, top line and profit.

In a mall store, data shows 66% of the people that come into the store don’t buy. In comparison, in a standalone store, the percentage is more like 50%. Given these numbers, average ticket sizes and conversion rates are at the forefront of the minds of every specialty retailer. Advanced software is not necessary to reduce work costs in retail: retailers have reached a point where so much staff has been cut that they are now cutting into the actual bone of the organization. We can cite retailers who are adding staff back into their stores and payroll back into their business as a very deliberate effort to improve service and sales – with significant results. In the midst of a very bad economy, people are generally interested in doing everything they do better, but here in particular, controlling that average transaction and looking at that selling opportunity with the customer and conversion rates are just critical factors.
RTP: Because expansion is kind of nonexistent in this environment, it speaks to the need for customer centricity. What are some of the steps you’ve seen your clients take to become more customer centric?

Olafson: Specialty retail has been deeply affected. Interestingly, I think the average person looks at retail and thinks about specialty retail and the mall stores. To a lesser degree they might consider mass merchants and supermarkets. But there’s another realm of retail out there that is vast in comparison, the service retail sector. During this time of economic concern, people are actually getting their hair cut, they are going to the gym (maybe not all together as regularly as they might but they are looking after their health), on diets, renting movies, and changing the oil in their cars, putting new tires on their cars. If you think about the various software companies that are out there doing their thing, primarily we think about software in retail as serving the cash and carry retail economy. But there’s another economy out there—hair salons, automotive quick service (oil change, tire), health clubs, you name it, that is representative of this other economy, so we just call it service retail. It’s kind of given us an idea of how to approach customer service.

In service retail, everything they do is characterized by high touch customer interaction. These types of retailers typically have a greet process, followed by a determination of specific services/offerings. Services/offerings are delivered with checkpoints at which the customer would be involved in some type of an acceptance process, then there is the finalization of the transaction. We’ve described this as mapping a customer experience very specifically to that customer for that retailer along the subtleties and nuances that they would want to have in order to maximize the benefit of the experience.

We’ve come up with CXA: Customer Experience Architecture. If you took a traditional cash register product (POS application) and divided it into two parts, one being the settlement, security and integrity of the core transaction, which is something that is a durable, iconic fundamental need of a POS application and then you had also separately an area of application content that’s defined around the selling experience and how you want to interact with the customer, how that experience will occur on devices (e.g., mobile phone PDA, in-store kiosk, POS workstation) and where you provide an unfettered flexibility allowing retailer to determine the exact customer experience and associated support (e.g., with questions, upselling, other information from other sources).

It is sort of the antithesis of current POS software. People talk about POS remarkably as the ‘moment of truth,’ and yet most POS software fundamentally does the same thing. Customers put stuff on the checkout area, someone scans it, it is tendered and the customer is on his/her way. What some people call the ‘moment of truth’ is the moment some customers just want to get over and out the door. It’s hard to call typical POS software something that’s even remotely involved with an upsell process. I think we can get past the notion of buy a shirt, recommend a tie.

There’s some feeble stuff happening even in POS software that might be alleged to be contributing to upselling, but it’s not at all in the realm of this idea of an engineered sales process with the various support. That’s just an example of what we’re doing to help retail chains adapt to their customer requirement in a much more specific way, which various remarkably, for a health club to a fitness salon, etc. It turns out that this is not so unique just to the service retail economy. Everyone cares about the customer experience.

RTP: Best Buy’s Geek Squad being the most visible example, more retailers are trying to develop service businesses, is that relevant to what you’re speaking of? Or are you thinking more of the point of service where there is true selling opportunity?

Olafson: Geek Squad is indicative of what retailers try to do, which is realizing there is a service element that comes into the equation at the very same time that pricing is paramount. I don’t know whether most traditional retailers can remake themselves into service businesses, but if you consider a tire store, there’s a process involved in working with the counter and determining what your tires might be, and there’s multiple points within that conversation where the tire guy can make recommendations that typically take the form of good/better/best.

I think retailers are shopping for the analog in their business that gives them a more methodical way to get in front of their customer at the right time, before the sale, with either good/better/best logic, or other forms of upselling, like making sure they’re aware of promotions that are happening in the store right now. Some retailers are limited in what they can do because they don’t have interactions with the customers.

Believe it or not, one of the examples I gave you of a retailer adding staff to their store, adding to payroll in an effort to improve service and sales, was a supermarket retailer. People don’t think about supermarket retailers as being customer service-oriented. It’s a fairly anonymous transaction. You walk in, do what you do, go to the checkout, and you go. I was quite surprised at this one retailer’s effort. But when you get into the details, it turned out to be simple things, like maybe it’s good to have sufficient staff in the floral department on Valentine’s Day. This type of logic applies to situations, areas of the store and times of day, over the course of a week, in view of events and holidays, which starts to add up to something that can be revealed to the customer as a meaningful indication of improved customer service.

RTP: There’s more about SaaS models and hosted delivery of software, which is something that you have been advocating for years. Are you seeing any retailers catching up with the paybacks of that model?

Olafson: SaaS models and hosted delivery provides significant payback – most retailers interested in our offering seek Tomax out for that very reason. Our customers have reported to the market having significant advantages in terms of total cost of ownership, driven by our ability to provide full product hosting services.

SaaS matters but it is more important the retailer can abstract costs holistically. Outsourcing payroll or a piece of time collection may be a good thing, but what ‘moves the needle’ is if I can make a wholesale transformation to managing a distributed computing environment and multiple applications. If I can migrate from multiple solution systems and distributed architecture to a centralized architecture like the Retail.net solution run by Tomax, that’s where there’s big bang for the buck. Part of it is offering the solution in a SaaS model, but part of it is making sure that the outsourcing covers enough of the retailer’s plumbing and infrastructure that it actually is financially a genuine paradigm shift.

Why Your Retail Brand Needs To Connect With Customers On Facebook

2009-04-22T10:58:00.000-07:00

By Bob Phibbs, The Retail Doctor

In a piece entitled The Last of the Facebook Holdouts, ABC News spotlights the people gloating they aren’t on Facebook. It said in part, “the Web 2.0 teetotalers just don’t understand what the fuss is all about and couldn’t be happier on their own. ‘Some of the great joys in life are meeting new people in person and people watching and spending time with my kids and writing,” said David Vicker, a 37-year-old freelance media producer.’”

Such comments miss the point entirely. It isn’t an either, social media is an AND. You can do that AND be part of various social networks. According to a March report from research firm Nielsen, two-thirds of the planet’s Internet population visit social networking or blogging sites. Across the world, activity in “member communities” accounts for one in every 11 minutes spent online, the report said. Chances are good those are your customers as well.

A recent poll by the Gift and Home Channel found:
36% don’t think their customer base is on Facebook
31% don’t know how to get started on Facebook
18% don’t see the value in having a profile for their store on Facebook

Facebook is sort of a party where you invite people to attend.
A Facebook Fan page is a group for people already interested in you. It shares a component of Twitter - the update feature that allows you to tell people what’s going on in your store in real time.

Facebook is used to hold onto your customers who know you. You share collected experiences. You can grow fans until a point when you stop trying or doing anything to draw people who know you to your site.

When I was first becoming established as a retail consultant, I met a little coffee roaster; he had more debt than he had in sales. He had resigned himself to the thought, “It can’t go any lower.” But it wasn’t always that way. He had opened a coffee house in Long Beach, California in 1976 and made it stand out by roasting the green coffee right there in his pecky-cedar clad storefront. Being too far ahead of the curve on gourmet coffee, he could have failed but gradually he thrived.

A Starbucks opened ten blocks from him in 1994 and he said, “I know my customers, they’ll be loyal.” And for awhile they were. Then they started to drift away and sales went down 10% over the previous month for each month. This kept up for years. Mike kept thinking something would change, maybe somehow Starbucks would trip, customers would try them and return eventually but when it really came down to it, his back was against the wall. He could go nowhere else.

When I asked him about his assumptions that he knew his customers, he had to admit, he had been wrong. Mike already had his leverage to force the issue and change how he looked at customers. He was faced with a hemorrhaging P&L statement and saw the consequences of his assumptions.

That’s why I encourage you to let go of all your preconceptions about marketing, sales and how “it used to work.” We are in a new arena these days and it is “change or die.” You can’t proudly cling to the past and be successful in a recession/recovery. It is dangerous when you say you know your customers – especially when you may be wrong. Mike Sheldrake would be the first to tell you that.

Facebook works for businesses that potentially have fans of the business. Usually businesses with events as well but not necessarily.

The Pros: Keep in touch with your very best customers and fans.
Immediate updates for new merchandise, sales, events
The Cons: People who don’t know you probably won’t see you.
Must be reciprocal, people have to accept your invitation to join them.
Doesn’t show up on any search other than Facebook

I like my FaceBook fan page because people are pulling my information rather than me pushing it out to them. Same with LinkedIn, Twitter, and YouTube. With all the open rates going down on emailed newsletters it is one more way to get to customers who like you to remember you.

The beauty is that you can set up a fan page quickly and for free. One thing is important to know though right now, you need to setup an individual account first to link to the business page. Also easy.

After using it awhile, you might find Facebook may not be right for you but another social media site is (see my post on Twitter.) But shouldn’t you at least try it before deciding your customers aren’t on there, you don’t need it or whatever lame excuse your lazy butt is comfortable repeating?

Bob Phibbs, the Retail Doctor, has helped thousands of independent businesses compete by using his approach to business and not discounting. He speaks to groups large and small how to grow sales in a friendly, engaging and entertaining manner. His Book, You Can Compete: Double Sales Without Discounting is the backbone of several companies training programs and teaches his methods for making over a business. Download more free tips at http://www.retaildoc.com/ or buy the recording of How To Generate Thousands in Free Publicity. Become a fan on Facebook and follow Bob on Twitter at http://twitter.com/TheRetailDoctor

4 No-Cost Actions to Keep Associates Motivated During Tough Times on the Salesfloor

2009-04-16T11:52:00.000-07:00

By Doron Levy, President, Captus Business Consulting

Life in retail is tough these days. Shrinking resources are putting huge strains on our human assets. Managers have fewer hours and less people to work with. True merchants know that customer service is what will drive the bottom line. Retailers cannot afford to lose productivity or customers in this environment. How can we continually motivate our people to perform at their very best in this negative economic and social environment?

In the retail industry, there is no denying that our people are our most important asset. Coincidentally, our people are humans, and humans have a need for self worth. It doesn’t matter who what or where, self worth is a basic human need. Showing appreciation and validation to your employees on an individual basis can go a long way to creating an upbeat and positive environment. Here are four no-cost actions management can take to keep spirits high and sales humming:

1. Create an environment of open communication. The quickest way to destroy morale is when people don’t know what’s going on. The rumor and speculation mill go into afterburner mode and things can get out of hand very fast. Share and share alike!

2. Promote ownership within the store. Give out special projects that frontline associates wouldn’t normally undertake. A great example is to assign endcaps and displays to associates and then have them track sales and turns. Finishing the display doesn’t end the job; they ‘own’ the section until it’s sold.

3. Continue improving your people. Killing training programs and workshops will ultimately create a stale and zombie-like team.

4. Do personnel tours daily. Even if you can’t hit everyone, walk around to say hello and find out what’s going on in their world.

These are simple, no-cost actions that the management team can implement immediately. Another key aspect within the store is the manager’s presence. Nobody wants to work for someone in an ivory tower. Leadership in retail begins and ends on the selling floor. When your team knows that they can count on you, the less they will rely on you and you will begin to see independence and creativity.

Imagine an independent, self sufficient team that takes ownership in the store they work in. Imagine a team that actually wants to come to work and give their very best every day. Imagine actually looking forward to getting your P&L’s at the end of the month.

Doron Levy delivers his retail expertise through Captus Business Consulting. During his 20 years in the industry, he has been successful in increasing revenue and margin, optimizing and streamlining retail operations, reducing shrink, increasing employee morale and, most importantly, driving the bottom line. Doron has created solutions and training workshops for some of the biggest names in retail. He is a published author and has contributed to many retail trade magazines and websites. For more information on Captus services for business, please contact Doron directly at doron@gocaptus.com

Is eBay’s Emphasis on Fixed-Priced Sales Doing More Harm than Good?

2009-03-26T11:49:00.000-07:00

By Matt Pace, Director of Retail & Consumer Products, Compete
After trying in vain to cast itself as an online “retailer” to rival the likes of Amazon.com, eBay recently announced it was again shifting its focus, this time to the secondary markets for used goods and overstocks. What precipitated the change?

In order to compete in the fixed-price marketplace, eBay has enacted a series of policies and site changes that have favored power sellers over smaller sellers. As casual sellers have abandoned the site, eBay’s traditional customer base has migrated elsewhere in search of the hard-to-find products upon which eBay built its business. Traffic to Craigslist, for example, has risen 40% over the past year to 45 million unique visitors in February. In contrast, eBay’s traffic was down 5% to 72 million visitors last month over the previous year, while Amazon’s traffic surged 19%.

Not only are fewer shoppers returning eBay, but average order values have stagnated. Since eBay’s marketplace revenues are driven by fees charged to sellers, declining traffic and flat transaction values have led eBay to raise its fees in hopes of meeting Wall Street’s expectations.

The more eBay has tried to be a retailer, the more its users are shopping at sites offering better overall shopping experiences. The percentage of eBay’s visitors who shopped at Amazon jumped from 41% in February 2008 to 53% last month. Over the same period, Amazon visitors’ cross-shopping of eBay has remained unchanged at 58%, suggesting eBay’s fixed-price strategy has failed to attract significant numbers of new shoppers to the site.

With its fixed-price emphasis, eBay has seen a steady increase in the number of shoppers making “Buy-It-Now” purchases over the past year. In February, 11% of eBay’s visitors, or 7.8 million customers, made a Buy-it-Now purchase (up 20% from the previous year). However gains in fixed-priced activity have been eclipsed by declines in eBay’s traditional auction business. The percentage of eBay’s traffic that made a bid on an auction-style listing dropped from 13.5% in February 2008 to 12.2% last month. In total, 1.5 million fewer shoppers placed a bid on eBay last month than did last February.

By focusing on fixed-priced items sold by large sellers, eBay has blurred the distinction between it and the litany of shopping comparison sites and tools on the web. In so doing, eBay has traded away much of the brand equity that once set it apart from the rest of the online retailing universe.

While consumers are ever in search of a bargain, they increasingly expect a level of service seemingly beyond eBay’s ability, or willingness, to deliver. It remains to be seen whether eBay’s new focus will help it acquire new customers, let alone win back users who have long since given up on the site. What is clear, however, is that eBay now finds itself in a fight to remain relevant at a time when rivals in both the classified and retail space show no signs of pulling on the reins.

Matt Pace heads the Retail and Consumer Products practice at Compete, Inc., a TNS Media company and leading provider of web analytics and digital intelligence. For the past five years, Matt has helped companies develop and optimize their online marketing strategies. Matt is a frequent speaker at retail events and is often quoted in industry publications. Prior to joining Compete, he worked in Deloitte's high-tech practice. Matt holds an MBA from the University of Maryland and a BS from Brigham Young University, and can be contacted at mpace@compete.com.

Q&A With Patrick Wright, CEO, U.S. Operations, Wincor Nixdorf

2009-03-20T09:00:00.000-07:00

Patrick Wright took the helm of the U.S. operations for Wincor Nixdorf a little more than six months ago and he has been quick to tap into his vast experience in the financial services industry to provide retail clients with strategies to improve their cash management at the store level. With nearly 20 years of experience as a senior executive with JP Morgan Chase & Co., Wright is responsible for directing the aggressive growth of Wincor Nixdorf's U.S. banking, retail and service organizations. Retail TouchPoints caught up with Wright earlier this month to discuss his perception of global retail trends, and the opportunity to increase profits by reducing cash balances.

Retail TouchPoints: Given your background in the financial industry, can you share some of the experience and key takeaways from your experience that you are planning to bring to Wincor and the retail industry?
Patrick Wright: Many of the financial services companies in the U.S. refer to their branches as stores and they call their tellers cashiers, so there are obvious similarities. One of the key things that is obvious to me, having been at Wincor for six months is that a lot of the problems that retailers and banks are facing are very similar. They have widely disparate networks of branches with people all over the U.S. They have large sums of money that need to be logistically managed, moved and properly managed to as low levels as they possibly can get. They all have theft, robbery and burglary issues with money walking out the door—and frankly, they are all trying to get as much productivity and value out of their employees as they possibly can, because running such a far-flung network is extraordinarily expensive. So there really are a lot of similarities.

I joke with some of my banking colleagues the only difference between some of their branches is there are a couple of extra zeros in extra money in them, versus a typical retail store. A typical retail store might have $20,000 or $30,000 in cash and a bank will have $300,000 or $3 million in a bigger branch, but they’re all trying to deal with and manage money. So where we’ve tried to focus this year is on how to help retailers and banks better manage and control the money they have in their far flung network, help them lower the labor associated with dealing with that money, help them drive the balances to the lowest level they can possibly get without creating outages, and help to streamline the operation of cash management business in their stores.

RTP: What are some of the tools and strategies that you’re recommending to improve and be as efficient as possible around cash management?
Wright: We sell some hardware products that fit nicely into a cash back office, so where either the small store’s assistant manager or the lead cashier in a grocery store would be handing out cash drawers and balancing records on everybody’s money—what I call high capacity automated safes that both take in money at very high speeds and dispense money at very high speeds, and significantly improve and automate the balancing process. We also have in-lane cash and coin recycling products that eliminate, in some cases, the need for a back office all together.

If you could imagine putting a cash and coin recycler under a POS terminal and when a cashier comes into a shift, instead of going into a cash office to get their till, they just walk up to their assigned lane and sign in, because the money is already there, already secure and in balance. As soon as they’re finished with their shift, they sign out, the next shift cashier comes in and signs in the same work station, without any balancing ever needing to take place. We also have software tools that help everybody manage their software balances and intelligently predict how much money they are going to need at which points, and therefore, drive down the total amount of money in the system.

What we’ve found historically is that operations who have less than perfect information about how much money they need, tend to overcompensate, and maybe order a couple extra straps of 50s or 20s or 10s. If you can take cash balances down by, we’ve seen on average 20-30%, extrapolate that across thousands of stores and there’s a tremendous amount of capital you can put back to work for yourself.

RTP: Wincor is a dominant player in the European market, having exposure to that side of the world, are there innovations you’re seeing in the retail side that you are recommending to your U.S. clients?
Wright: Culturally, the customers in Europe tend to be a little more comfortable with an invasive checkout processes. In some stores we’ve done, there are literally gates that don’t open until you pay. I’m not sure U.S. consumers would tolerate that intrusive of an environment. What it’s telling us is that customers are very open to self service and we’ve actually taken some of these cash related devices I’ve just described—if you can imagine at a soft goods store, while the cashier is scanning and bagging and folding your clothes, you’re literally paying by dropping the money into the opening for the cash and coin recycling device and change is made for you automatically.

We’re deploying this right now in a couple of retailers in Europe and the customer response is fantastic. They are very open and the retailers love it because it literally gets their people completely out of the business of handling money, and it automates the experiences completely. We’d really like to bring more of that to the U.S. We’ve had a lot of discussions with U.S. retailers and there is a lot of interest in going there with certain segments of the retail industry. I wouldn’t say it works everywhere. I don’t think it would work, for example, at Neiman Marcus, but there certainly are a lot of places where it does and will work.

RTP: There’s been such a boom of plastic in this country, but with the economic changes, do you see cash becoming more of a business reality for retailers?
Wright: I think it’s just a continued reality. The information we’ve seen is that cash users tend to be fairly consistent. In some industries it’s gone up; in other industries it’s gone down. Across the board, if you look at Federal Reserve data, I think the amount of cash in circulation is higher. The amount that’s actually being used in circulation has been relatively constant the last several years. I don’t see that changing significantly. There are a lot of people who continue to use cash, and I think in this economic environment, in certain segments, we’re actually seeing increased cash use. In convenience stores and fast food restaurants, although they’ve seen an explosion in debit and credit card usage, there’s still a significant amount of cash in some of those businesses.

RTP: You talked a little bit about self service, can you expand on the potential of self checkout and how that could continue to change point of sale?
Wright: Self service is a great business. Just as we saw in the financial services business, adoption will be at moderate to steady growth. I still see a lot of consumers that really don’t want to self serve. That will change over time and I also believe fundamentally that customers want help. Relaying back to my financial services background, when we really started pushing deposit automation in the banking business, we really believed that having somebody there to help customers through their first experiences significantly drove higher adoption rates than just putting the technology out there leaving the customers to figure it out by themselves. As long as you couple self service with the right amount of assistance, it’s a great technology.

Prior to joining Wincor Nixdorf, Patrick Wright held a variety of senior management positions with Chase. Within the retail banking division, he served as senior vice president and head of complex business deals, senior vice president and director of technology sourcing, senior vice president and e-performance officer with the corporate internet group. Wright holds a Bachelor's degree in Information System Management, Cum Laude, from University of Texas at Arlington; and a Master's degree from the Darden Graduate School of Business.

5 Steps To Reduce Inventory, Trim Out-of-Stocks Through Computer Generated Ordering

2009-03-12T14:55:00.000-07:00

By Kevin Stadler, VP of Sales and Marketing, SAF USA
In the drive toward customer-centricity, retailers are implementing Computer generated ordering (CGO) CGO solutions to ensure the right products will always be available for customers in the right quantity, at the right time.

In fact, a survey from the IDC Global Retail Insights 2008 Supermarket Benchmark study reports that more than 50%t of the retailers examined have or will activate CGO tests and pilots in the next 12 months. By initiating a CGO plan to perfect the ordering process and optimize inventory, retailers expect to achieve a return on investment and gain a substantial competitive advantage. Those that have successfully deployed CGO solutions have achieved benefits including a 60% to 80% reduction in out-of-stocks and a 25% to 40% reduction in store inventory. Further, these retailers automatically process more than 98% of their store orders.

However, many retailers are lagging behind and do not know where to begin or are apprehensive to implement an IT project that will change business processes. For those who would like to start catching up to the leaders, below are tips to initiate a CGO project and begin achieving significant business benefits.

Begin a CGO. project today. Start by establishing a cross-functional team to identify and address the impact of migrating to store order automation. Since the store operations department will bear the brunt of the change, ensure that it will be provided with adequate support from the IT department.
Take incremental steps. There are a number of ways to begin improving the store ordering process. However, automating the existing manual process is a useful first step. Retailers will benefit from computer assisted ordering (CAO), which provides store order writers with the historical product data to help them make better, more educated order quantity decisions. Forecast-assisted ordering is the logical next step that compliments CAO data by providing predictive information. These programs will enable retailers to begin perfecting the store order within the organization as they continue to move to full CGO.
Designate full order automation as the end goal. While CAO and forecast-assisted ordering provide significant improvements, these practices should not be viewed as a final destination. Retail trend setters practice full automation, responding manually only to exception conditions. Full order automation should remain the end goal as it offers the optimal payoff and value cycle. Labor hours previously spent writing orders will now be spent ensuring inventory accuracy which will translate into better orders and fewer exceptions that need to be addressed.
Select the right technology partner. As with many application areas, there are a number of solution providers that merit consideration when moving to CGO. However, many providers emphasize forecasting capabilities that were designed to solve different business challenges than automating store orders. Buyers need to remain focused on finding a tool that will produce high quality orders that users/management will allow to be placed automatically. Further, retailers should request that each vendor provide customer references that testify what percentage of order lines are processed with no manual intervention. Nothing will cause a CGO project to stumble quicker than implementing a new process or tool that adds labor requirements in the store.
Deploy to stores quickly. CGO projects require significant change. Full teams could spend months attempting to identify the impact and prepare response to the implementation, but will still be surprised when they finally deploy to their first store. Instead, retailers should consider deploying more quickly in stores that are known to have good inventory practices and are enthusiastic about the prospects of CGO. Even if only a few departments are “turned on” at the start, the team as a whole will learn more about the value potential and requirements than they would otherwise have learned in a conference room. With this understanding, the team can fine tune their solution configuration, promote actual achievements, and build an effective rollout model built on first-hand experience.

While the thought of moving towards CGO may seem overwhelming for some organizations, retailers should consider these tips to ensure that the proper methodology and solution are selected. Doing so will yield substantial benefits in the move toward full automation.

Kevin Stadler is Vice President of Sales and Marketing for SAF USA, Inc. For more information, please visit www.saf-usa.com.

Keeping Up With Ever-Changing Customer Behavior Patterns

2009-02-26T14:53:00.000-08:00

By Brian Kelley, CEO, Quantivo
Open today’s newspaper and try to find one story that doesn’t make you think, “I should watch my spending.” Layoffs, bankruptcies, the mortgage crisis – it makes you want to put your paycheck directly under your mattress. That sentiment is shared by nearly all consumers, who put purchases on hold and account for December’s 10% drop in retail sales.

These days, consumer spending habits are a constantly changing whirlwind of cutbacks and delays. But consumers still need clothing, food, and other items. So how are consumers spending? Retailers are seeing less revenue, but the smart ones are minimizing the impact of this weak economy by changing how they target customers. These retailers understand the latest buying trends, which purchases customers are postponing and for how long, and which items they are still buying and at what price.

Most retail marketers and merchandisers get the standard Monday morning reports, which tell them what sold, how much of it (or, these days, how much less of it). But without a focus on the customer behavior aspect, their data simply states what happened instead of giving them a view into what to do next, and more importantly, what their customers will do next.

A new area of business intelligence, customer behavior analytics, focuses on the customer dimension, giving retailers a profile of customers who purchased an item, what brought them into the store, what else they purchased, what they purchased before, and what they are likely to purchase next – all commonly referred to as market basket, loyalty analysis, segmentation, and lifetime value. Since that information is contained in point-of-sale transactions, it is easy to access and analyze.

The difference is that customer behavior analytics are actionable. That powerful insight allows retailers – from big-box home improvement stores to online specialty shops – to better market products, target customer segments, increase loyalty, create store layouts, stock stores, and promote follow-on purchases. Customer behavior analytics helps retailers discover new aspects of customer buying patterns, challenge previously-held marketing and merchandising beliefs, and show quick and impressive returns on investment.

Who knows how tomorrow’s economic news will hit consumers’ pocketbooks. Retailers need every bit of insight, and customer behavior analytics is giving smart retailers the edge that they need to stay competitive in this challenging market.

Brian Kelly has 20 years of experience in enterprise software development and marketing. Before joining Quantivo, he was Executive Vice President of Products at Kana, where he oversaw worldwide marketing, product management and industry solutions delivery. Brian also served as Director of Business Intelligence Applications at Peoplesoft. He was Founder and CEO of Kelly Information Systems (acquired by Peoplesoft), which pioneered business intelligence applications for the retail industry. Brian also designed and developed large-scale data warehouses and BI applications for some of the largest retailers in the US while working at Teradata. Brian holds a BS degree in Computer Science from the University of Cincinnati.

FTC’s New Rule Changes The Game for Customer Communication Strategies

2009-02-19T11:16:00.000-08:00

By Mark Friedman, CMO, SoundBite Communications
The “do not call” laws get a lot tougher later this year. If your company uses the phone to communicate with current or prospective customers it needs to be ready for a very important date: September 1, 2009.

Here’s why. In 2008, the Federal Trade Commission (FTC) adopted an amended Telemarketer Sales Rule (TSR) citing consumer protection against unwanted marketing communications. As of December 1, 2008, prerecorded sales calls must provide an easy opt-out feature. More significantly, beginning September 1, 2009, automated sales communications can be delivered only to those recipients who have provided their “express written consent” to receive them. Having an existing business relationship (EBR) will no longer suffice as sufficient approval for organizations to attempt to sell a good or service via an automated, prerecorded message.

The FTC Telemarketing amendment is a unique opportunity for organizations because it combines both critical and strategic issues. First, it carries the urgency of a time deadline (i.e. they must obtain permission by September 1, 2009) and a strategic opportunity that can impact long term success by enabling more targeted, effective marketing. The FTC’s amended TSR rule is a game changer. Organizations need to act quickly to maximize the percentage of consumers that they will be able to cost-effectively reach via automated calls to sell their goods and services.

Customer Communications and Brand Loyalty
Companies establish a brand impression with their customers. The better and stronger the brand impression, generally the more profitable the relationship for the organization. Yet how many organizations really know how each of its customers prefers to be communicated with? And under what circumstances?

For example, if you are running a special sale on an item they might be interested in purchasing – would they prefer to find out via an email? Voice message? Text message? Direct mail? Some combination? What if you wanted to make a special offer to members of your loyalty/reward program – how would your customers want to hear about this offer?

Each consumer has his/her own communication preferences. Some want to receive emails, others voice messages, others text messages, and others would prefer to be called on their cell phones. And many would prefer to receive communications through a combination of channels. It is important to ask consumers directly how they want to be communicated with so that you can develop a communication strategy that encompasses their preferences.

Communications are all about getting consumers to act. And here’s the point: if you know in advance what their preferences are, you will be in a much better position to have your communications “breakthrough” and be acted upon. This will mean more market share, more revenue, more profit.

As an organization determines the individual communication preferences of its consumers, it can then secure express written consent from these consumers (i.e. their permission.) As a result, organizations will be well positioned to deliver relevant information to consumers who have expressed an interest in their goods or services.

The Opportunity Is Now
Seize this opportunity and create a formal Consumer Communication Preference & Opt-in Program. The requirement to gain permission by September 1, 2009 creates an urgency to do so. The value of understanding consumer preferences should create a strategic drive to do so.

Here are some questions organizations should be asking:

Do you have contact information for your customers and prospects?
Is this contact information complete and updated – for Mobile phones? Emails? Landlines?
How do you keep contact information updated?
Do you understand your consumers’ communications preferences?
Text Messages? Email? Voice Messages? Direct Mail? Live Agents?
Do your consumers’ communications preferences vary by the situation? Service Reminder vs. Special Sale Offering vs. Loyalty Program Update vs. Fraud Notification?
How do you track and update your consumers’ evolving communications preferences?
Can your entire organization access your consumers’ communications preferences?
What’s your organization’s plan to handle the September 1, 2009 Telemarketing rule changes?

Those that act swiftly and with purpose in creating a formal Customer Communication Preference & Opt-In Program will have a head start in building a targeted, qualified list of customers who want to hear from you and will welcome your communications. After all, it’s all about customer choice, so why not deliver your communications to those who want to receive them- how they want to receive them.

Mark Friedman is the Chief Marketing and Business Development Officer for SoundBite Communications. SoundBite Communications provides proactive, integrated multi-channel communications solutions. Mark can be contacted at mfriedman@soundbite.com.

Solving the Post-Holiday Revenue Shortfall By Turning Returns Into Sales

2009-01-15T10:28:00.000-08:00

By Tom Rittman, vice president of marketing, The Retail Equation
It’s no secret that the slumping economy is having an affect on consumer spending – a trend that will undoubtedly continue through the post-holiday shopping season. And what sales boosts a retailer does get may be overshadowed by the challenge of managing returns after the holidays. Now is the time for retailers to maximize the revenue potential from every customer transaction, and there is a light at the end of the seasonal shopping tunnel: Customer returns may hold the key to reducing retail revenue shortfall.

Some companies have embraced the attitude of “If a customer is already here in the store and has return money in hand, waiting to be spent, why shouldn’t it be spent here?” Retailers have a unique opportunity to reinvent the return desk by utilizing “return optimization,” turning the point of return into a profitable sale and boosting customer loyalty in the process by creating a positive return experience and incentive to continue shopping.

Retailers who have optimized their return transactions have achieved revenue lift by issuing intelligent incentives following legitimate returns and exchanges – and increased customer conversions while reducing fraud and abuse, resulting in incremental sales increases of more than 1%. Implementing incentives could spell about a $4 million increase for, say, a $1 billion retailer.

Dos and Don’ts to successfully maximize post-holiday revenues:

Don’t underestimate the importance of proper staffing – Make sure employees know company return policies and clearly communicate them to customers. In addition, printing policies on store receipts and well-placed signage will prevent misunderstandings.
Do supply return customers with a reason to keep shopping – Programs the incentive customers with returns can facilitate significant incremental sales at the point of return and build customer loyalty by using a customer’s return information to instantly customize a coupon for that particular person and keep them shopping.
Don’t ignore the impact of return policies on consumers – Be aware of how the processing of returns can impact relationships with customers. Long lines and cumbersome return policies do little to assuage crowd tensions, voiding out any positive first impressions made at the initial sale.
Do prevent customer return fraud as it occurs – Return authorization software can use a customer’s driver’s license to identify their unique return behavior, tracking how frequently they return items and the dollar amounts of past returns. Since less than 2%of consumers are responsible for fraudulent or abusive returns, the software protects honest customers with more flexible return policies.

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Tom Rittman is vice president of marketing of The Retail Equation, a leader in retail transaction optimization solutions. The company’s applications use statistical modeling and analytics to predict consumer behavior, and its SaaS delivery enables retailers to achieve measurable ROI. Its solutions are operating in over 12,000 stores in North America, supporting a diverse retail base of specialty, department, sporting goods, auto parts and more.

Insight-Driven Retailing Key To Positioning For The Post-Recovery Consumer Market

2008-11-20T15:18:00.000-08:00

By Dave Boyce, Vice President of Product Strategy, Oracle Retail
Economists may quibble over whether the U.S. economy is technically in a “recession” or not, but as today’s retailers are well aware, times are tough. The rising costs of basic necessities and a shaky job market have left consumers understandably reluctant to part with their hard-earned dollars unless they feel it is absolutely necessary.

How does a retailer compete in such a difficult environment? The traditional means of boosting lagging sales and saturating the market with new stores, will not work in this climate. There are not enough new customers to go around these days, and cannibalization is not a viable long-term strategy.

Instead, retailers need to ensure short- and long-term success by maximizing their return from existing customers. Advances in business intelligence technology have enabled retailers to embed valuable intelligence, such as consumer preference data, within the business processes that enable merchants to make better decisions, from the supply chain all the way to the stores. We call this strategy insight-driven retailing.

We believe Insight-Driven Retailing will help retailers maintain optimal performance and satisfy customers while focusing on same-store sales, rather than saturation and dilution of a tight marketplace. In addition, you can survive and build strong customer relationships during a period where competitors who lack insight will lose customers and possibly go out of business. When the economy recovers (as it inevitably will), insight-driven retailers will be primed to take advantage of new opportunities for growth, both through increased basket sizes of existing customers and a positive image to attract new ones.

Retailers who practice insight-driven retailing make better decisions across the enterprise thanks to integrated, end-to-end business processes, including consumer-driven supply chain management, localized merchandising and assortment planning, and space optimization. Quarterly performance hinges upon the day-to-day decisions, both large and small, that merchants make in areas such as pricing, allocation and buying, and promotions. These decisions swing the all-important same-store sales percentages up or down by as much as one point.

Let’s take a quick look at how insight-driven retailing bolsters retailers’ performance in key business operations such as supply chain management, merchandising/assortment planning, and space optimization.
Pull, Don’t Push
By now, most retailers realize that a “pull” supply chain driven by actual consumer demand is preferable to a “push” supply chain driven by manufacturer and retailer promotion. Customers who are used to literally having the world at their fingertips, thanks to the Internet and personal electronic devices, are no longer interested in being told what products to buy.

But how do you determine what consumers actually want to buy? Last month’s sales numbers are obsolete by the time you look at them. Insight-driven retailers know that all players in the supply chain must have timely access to daily store-level data that will inform them of what consumers want today, not last week or last month.

Using tools such as secure Web portals, insight-driven retailers propagate current consumer demand data throughout the supply chain, enabling maximum responsiveness and agility. This, in turn, increases customer satisfaction levels and market basket sizes, as well as decreases the amount of unsold inventory in the supply chain and even levels of “safety stock.”
Retailing, like Politics, is Local
There is no way to offer the same kind of personally tailored customer experience in a physical store that you can on an e-commerce site, but by localizing your merchandising and assortment plans at the individual store level, you will reap significant intangible benefits, such as improved customer satisfaction levels, as well as tangible benefits, such as higher margins and increased basket sizes.

In recent years, breakthrough innovations have enabled retailers to capture new intelligence regarding trends and customer behaviors at the store level and embed it into their pricing and markdown systems. As a result, I believe retailers can achieve 5 to 15 percent improvements in gross margin dollars by integrating pricing and markdowns down to the point of sale.

In addition, retailers who embed customer SKU preferences into their profiling, forecasting and optimization practices can improve the accuracy of buying and allocating merchandise, creating 5 to 10 percent improvements in gross margin dollars and improved inventory turn. Furthermore, I believe retailers can increase sales 1 to 3 percent by gaining real-time visibility to inventory across channels, improving both the customer experience and store inventory management.

The Last Mile
Space Optimization is a natural complement to consumer-driven supply chain management and localized assortment planning. What’s the point of creating a lean, mean supply chain targeted to local consumer preferences if customers cannot find the products they want due to lack of space or poor store layout?

Space Optimization allows retailers to use every square inch of selling space to its maximum profit potential. Optimization systems take in information such as store sales, customer preferences and product sizes to produce space plans based on business rules, forecasted demand, and profit potential. Assortment plans can thus be executed in a manner that maximizes the sales potential of floor selling space.

Insight Is The Key
Pull-based supply chain strategies, localized product assortments, and optimized space planning are critical consumer-centric strategies retailers must consider in today’s hypercompetitive retail environment. The key common capabilities for deploying them means getting inside the heads of consumers and driving these insights across seamlessly connected planning and execution functions – from the merchandising organization, through the supply chain, and down to the individual store level. With an insight-driven approach to retailing, retailers will deliver the value customers are looking for, while delivering growth and bottom-line improvements.

Dave Boyce is Vice President of Product Strategy for Oracle Retail. He joined Oracle in 2005 through the acquisition of ProfitLogic where he served as Vice President of Marketing & Business Development. Dave holds a BA in German Literature and Philosophy from Brigham Young University and an MBA from Harvard Business School.

Real-Time Transaction Monitoring Gains Cross-Channel Traction

2008-11-06T07:47:00.000-08:00

By Stacy Gorkoff, Director of Strategic Marketing, INETCO

Would you give away nine percent of your business? You might have done it yesterday. Retailers and financial institutions can lose up to 9% of their overall revenues due to issues with application performance, according to estimates by the Aberdeen Group. This potential revenue loss, combined with the growing retail focus on e-commerce, customer experience and streamlined operational processes, indicate that transaction intelligence should be playing an increasingly critical role in the support of best-in-class enterprise practices.

Transaction monitoring has been common practice within financial institutions for close to a decade. Original deployments stemmed mainly from the tactical need to combat existing and emerging application threats, to significantly reduce fraud losses, or to reduce the risk of service disruption that would ultimately affect the end user experience. It did not take long for the financial industry to realize that transaction monitoring also made a significant strategic impact on operational efficiency, speeding up approval and remediation cycles for customers, providing useful information for infrastructure consolidation and SLA management, and minimizing disruptions of the real-time capabilities for online banking, POS terminals and ATMs.

Although it has taken longer for retailers to embrace real-time transaction monitoring, the strategic importance is definitely gaining momentum. There are obvious parallels between retail and financial service transaction environments. Basically, both are driven by transaction volume. But three compelling business drivers that are pushing real-time transaction monitoring into the strategic spotlight for retailers:

Business Driver #1: Retailers are losing visibility into how applications are performing within critical business processes, both online and in-store

Several factors are making it difficult to determine if business-critical applications are performing for retailers, as expected, highlighting the growing need for transaction analysis. Most retailers have increased third-party hosted services. Network complexities have been caused by multi-channel integration efforts. SOA and virtualization can cloud transaction visibility. And the deployment of real-time applications such as advanced POS terminals, web-based supply chain/inventory management software, and e-commerce applications add yet another layer.

“For the first time, infrastructure concerns, over the investment expense of store systems, topped the list as a barrier to improving the customer experience,” according to Nikki Baird, managing partner of RSR in a recent article (Sometime’s IT for IT’s Sake can be a Good Thing, June 7, 2008).

If something goes wrong with your real-time applications or back-end systems, it is almost impossible to identify the failure point without end-to-end transaction analysis. If you are not monitoring critical processes as the customer interacts with them, you risk missing issues that would affect their overall experience. Your company’s ability to quickly respond, identify and isolate these performance issues will have a huge positive impact on your customer’s experience and behavior, both online and in-store.

Business Driver #2: Shifting IT responsibilities are driving the need for more sophisticated, real-time intelligence tools
Key performance indicators are shifting out of the data center and being redefined with the goal of ensuring a best-in-class customer experience. Transaction monitoring supports this shift by empowering IT and store operations personnel with the transaction intelligence they need to optimize real-time application performance and efficiently manage this critical area of responsibility.

Today’s transaction monitoring technologies will automatically capture and correlate every message, request and call related to each critical transaction, enabling IT teams to efficiently (and transparently) monitor end-to-end network and application performance from the datacenter through to the customer-facing application. Real-time monitoring and alerting capabilities enable a proactive response to events occurring at the checkout process such as transaction slowdowns, failures and high-risk activity patterns (large purchases, repeated failed transactions, repeated declines and high gift card redemptions) in order to reduce fraud-related losses and customer service disruptions. Graphical consoles provide consolidated overviews of transaction traffic and real-time application performance for 24X7 help desk response. These real-time transaction monitoring tools make life easier for the IT department by supporting customer-oriented objectives. By experiencing faster, more efficient remediation of critical issues, the IT department is freed up to spend more time completing projects aimed at improving key business processes.

Business Driver #3: Economic downturn is forcing retailers to focus on balancing exceptional service delivery with operational efficiency

In today’s recessionary environment, optimization is all about cost reduction, operating efficiencies, and getting the most out of your existing staff and infrastructure. This is true for both the retail and financial industries. Exceptional service delivery and operational efficiency are part of a delicate balancing act that can be stabilized with an affordable transaction monitoring technology (yes, they do exist!). In the words of Robert Fort, VP of Technology and CIO of Virgin Entertainment Group: “Our out-of-the-box transaction monitoring solution took us less than a day to deploy. We have essentially added an invaluable resource that does 24/7 monitoring and consistently reports on a level of detail that no human would be able to give…all this for one third the price of a full time headcount.”

Transaction monitoring technologies help provide the in-depth intelligence and analytics retailers need to help optimize real-time application performance, consolidate network infrastructure, and streamline processes related to troubleshooting, while minimizing the risk of service impacts on revenue, customer retention and IT productivity. Operations staff will spend less time staring at multiple screens, digging through log files, and consolidating information to remediate issues. Businesses will be able to eliminate wasted time (and expensive resources) previously spent finger-pointing to third-party vendors and will be able to focus on revenue-generating projects.

Tapping the intelligence vault with transaction monitoring
As retailers strive for end-to-end visibility into critical business processes, and the role of IT continues to be redefined by customer-centric objectives, and as the optimization pressures sprouted from economic uncertainty persist, the true, strategic, ROI for end-to-end transaction monitoring technologies will continue to mature and become more transparent. “Transaction monitoring, something once relegated to the data center, is becoming a critical part of ensuring a quality customer experience, especially at the point of payment,” says RSR’s Baird.

Five Ways Retailers Are Digging out of a Slow Economy

2008-10-01T06:09:00.000-07:00

By Doug Kern, Product Marketing Manager, Inovis

It seems that retailers are getting hit from all sides today— an unlikely punching bag getting beaten up by both suppliers and consumers.

Rising fuel costs result in higher supplier prices and transportation expenses. Luke-warm consumer demand is forcing retailers to take a closer look at forecasts and trends. And the continuing credit crunch in financial markets has tightened capital expense investments.

If retailers and suppliers aren’t quick to adjust, the results can be devastating -- just look at the flurry of Chapter 11 notices over the past year.

But like the boxer down on the mat, retailers continue to be resilient in finding ways to get back up and fight again.

And for many retailers, the supply chain is the first and last place to look.

Here are a few ways that retailers are adjusting their supply chains to “get off the mat:”
1. A Dose of Demand-Driven:
In the past, retailers managed a “push” approach to inventory and fulfillment, staging goods at regional warehouses and pushing to stores as needed. But as inventory costs sky-rocket, both retailers and suppliers are taking a “hot potato” approach to inventory management, holding as little as possible to reduce costs, as long as they don’t impact out-of-stocks. To pull off a demand-driven approach, retailers have sharpened their overall time-to-market cycle times, improving visibility to inbound shipments, expanding cross-docking programs and launching vendor-direct delivery.

2. Going Global:
Today, nine out of every 10 retailers source from China, saving costs and gaining access to a wider range of merchandise. But going global brings an increased need for visibility throughout the supply chain, to pinpoint trouble spots and fix them before they disrupt shipments. Going global brings new data requirements, such as “10+2 rule” container data and C-TPAT security data. And global supply chains also bring “more cooks to the kitchen,” as customs brokers, freight forwarders and contract manufacturers play a role in touching shipments and data. To manage global partners, retailers are implementing lifecycle services and tools to automate vendor setup and vendor master data management.

Going global also brings an added dose of risk, requiring supply chains to be more flexible in dealing with added disruptions, delays and disasters. According to AT Kearney, natural disasters across the global have increased 3X since 1960, at 10X the cost.
3. Automating the Supplier Long-Tail:
In rolling economies, it’s easy for retailers to focus only on their largest suppliers -- their core 20% of partners that make up 80% of sales – and ignore the efficiencies of dealing with the bulk of smaller suppliers that make up the long-tail. But in a sluggish economy, every ounce of improvement and cost-cutting counts, and chronic data problems and logistics errors from small suppliers can lead to “death-by-papercuts” as small costs and delays accumulate. The challenge for retailers is how to do-more-with-less, given most have only 4-5 staff members to deal with thousands of suppliers. To solve this “do-more-with-less” challenge, many retailers are automating core supplier management processes, implementing web portals for self-service on-boarding and certification and tying remediation workflow processes to error notifications to get suppliers on track to fix problems.

4. Rethinking Transportation Networks:
With rising fuels costs, retailers are taking a fresh look at how they move goods across their supply chain. Three tactics rise to the top. First, retailers are rationalizing how goods flow overseas from suppliers, trading off speed for lower costs by switching from air freight to ocean freight. Second, distribution network design is getting active again, as retailers optimize where to locate distribution centers in relation to ports, stores and consumers. And third, retailers are taking a closer look at how they combine freight to get the best rates. Logistics managers are consolidating multiple shipments before they reach the port to avoid port congestion issues, and then deconsolidate shipments as they get delivered. Linked with this is an increase in freight audits, making sure freight bills for small orders go to the correct payee, whether that is the retailer or supplier.
5. SaaS, OPEX and CAPEX:
In down economies, it’s normal and necessary for budgets to tighten and projects to be delayed. To continue to achieve their goals, retail supply chain execs are getting creative in how they invest in projects. Lucky for them, software-as-a-service (SaaS) is now a great alternative for deploying supply chain projects, compared to on-site systems. And since SaaS projects are billed as a monthly service and don’t require up-front investments in hardware and software, they draw from operating expense (OPEX) accounts instead of capital expense (CAPEX) accounts that may have dried up in rounds of budget cutting.
The Bottom Line
As economic cycles shift, retailers are making some smart moves and being resilient in using their supply chains to improve performance. And doing so now, in a down economy, means they’ll be ready to rock when the economy rebounds. As a retailer, how are you adjusting to a down economy, and “pulling yourself off the mat” to fight again?

Doug Kern is product marketing manager at Inovis and focuses on retail supply chain solutions. Inovis creates B2B ecommerce software and services, and helps companies around the world do business with their trading partners. Doug frequently haunts blogs.inovis.com and can be reached at doug.kern@inovis.com.

Tips To Maximize Holiday Sales By Targeting, Measuring Outbound Email Messages

2008-09-05T09:50:00.000-07:00

By Huw Griffiths, Director of Marketing, Campaigner

Holiday sales can account for up to 20% of a retailer’s revenue – all the more reason not to wait until October and to begin your holiday marketing planning. The good news is that email is still a retailer’s best tool for turning up sales volume. Let’s look at a few tips to make this year’s holiday season shine.

Timing is everything
Start early - not with ‘blast’ emails but with a strategic plan to engage your customers in a dialogue about topics, and products, that are relevant to their needs. Just as you plan your buying six months in advance, plan your promotional campaigns six months ahead.

Build a solid list
Collect new names, and refine data about existing customers, now - don’t wait until October. Entering the holiday season with a strong ‘house’ list will create a foundation on which to build your holiday promotions

Stay relevant
Relevance creates respect, fosters dialogue and builds interest that leads to sales. Three components of relevance are segmentation, tailoring offers, and creating dynamic content that takes advantage of segmentation efforts and supports tailored offers.

Set goals - then implement and measure
The holiday season is no time to ignore the basics of marketing. Set goals for your holiday email programs with clear expectations, objectives and measurement criteria. Even if you don’t normally test emails, consider A/B split testing now, and be prepared to test offer, subject lines, content and creative variables. This will tell you if you’re on target or if you need to make adjustments early, before the season is lost.

Plan now for a strong holiday season and you will reap the rewards. Target for results, segment offers, stay relevant, maintain best practices and be respectful of your customers needs and wants. You’ll have a happy holiday!