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Gap Losing the Battle for Relevancy in the Market


By Stephanie Crets
 

Due to low sales, 175 underperforming Gap stores are closing across North America, along with the chain eliminating more than 250 corporate jobs. Store sales have been in decline for the past five quarters and this action is an attempt to save and revive the leftover stores. Once these stores are closed, Gap will be left with 500 regular retail stores and 300 retail outlets. And it projects to be saving $25 million by 2016.

But what Gap really needs to save is its brand.

With the retail industry evolving so quickly, retail stores have to keep up with the changing trends in innovation, relevance and consumer preferences. Shoppers no longer look for brand recognition; they want the latest and greatest. And also the item that gives them the most value in the long run.

“While 10-plus years ago, consumers were satisfied to purchase a gray polo or t-shirt with a brand-name logo, today’s consumer is looking for original designs that set them apart from the person next to them on the sidewalk,” says Andrew Billings, senior retail manager at consulting firm North Highland Company. “As a result, retailers are having to focus more energy on creating truly new and differentiated designs.  Where many brands carry over a significant portion of their product line from year to year, today’s leaders have recognized the importance of presenting the consumer with updated products that capture the latest trends while still building on the brand identity.”

Staying relevant in the industry seems to be Gap’s biggest issue. Stores like H&M, Forever21 and Target all carry jeans and khaki pants these days, which are Gap’s staple in the clothing retail industry. Most of those stores’ merchandise is updated on a constantly revolving basis , while also being extremely low priced. This includes Gap’s sister store, Old Navy, which is succeeding where Gap isn’t. So, how can Gap differentiate itself from the pack?

“As multichannel customer interactions increase, retailers must create seamless customer transactions across those channels,” Billings tells RM. “The fashion consumer now begins her shopping journey on Facebook, Pinterest and other social media sites, first engaging with a product or brand outside of the store. … Many retailers still fall short of creating the seamless cross-channel experience.”

Gap needs to get creative and start utilizing the vast social channels the Internet has to offer. It’s not enough to be known for a specific product anymore; if you’re not updating it and reinventing what you have to offer, consumers will be more likely to find a retailer that has something new and unique on a consistent basis. This lack of innovation could be due to the fact that Gap’s chief creative director left the company this past January and has yet to be replaced.

“The consumer is more demanding than ever, and smarter,” Billings says. “Unlike the high-tech industry, consumers have realized that longevity and history do not necessarily translate into quality and value in apparel. And given the shrinking average closet life of fashion apparel products, style-conscious consumers are prioritizing design creativity and taking more risk with their purchases.”

Perhaps a new creative strategy, including the digital market, can breathe some life into Gap. Otherwise, we might be hearing about some more store closings in the coming years.

 

Why Does a Retailer Need a Mobile App?

Many stores do not have a store-specific app for their customers, which could be detrimental to sales in the long run. People like to pre-shop before getting to the store to see what’s available and if your customers can’t easily access your merchandise via mobile, they may head to a competitor instead. The following infographic illustrates why it’s important for all retail stores to utilize the growing popularity of mobile apps. Nearly every consumer is connected online and most of them via a smartphone, so retailers need to capitalize on this trend because it’s not going away.

 


Infographic by SMS Store Traffic

Think Outside the Bottle


By Stephanie Crets
 

During summer music festivals, the heat is oppressive and dehydration happens easily. So much so that one might get extremely dizzy in the middle of a large crowd. Which is exactly what happened to me a few years ago at Lollapalooza in Chicago. Upon arrival to the first aid tent, I was handed not a bottle of water, but a box of water. Initially, I thought this was a bizarre way to drink water, but I learned that Boxed Water’s design has the environment in mind.

Boxed Water’s packaging is made of BPA-free material, with 76 percent being made from paper. And it’s recyclable. This can make a huge difference when only 13 percent of plastic bottles are recycled every year, according to the NRDC, while the rest end up in landfills, not decomposing for thousands of years.

To get this message out, Boxed Water has teamed up with Banana Republic to reach a new audience and put its product directly in consumers’ hands. It will be featured in 11 flagship stores across the United States and Canada. The campaign will encourage Banana Republic customers to pick up a free 500 mL sample of Boxed Water while they shop.

“Our partnership with Banana Republic demonstrates how fashion and design can help to communicate a positive environmental message,” says Jeremy Adams, vice president of marketing for Boxed Water. “These campaigns aim to engage consumers in helping us improve the environment while spreading word about our water and mission.”

Boxed Water is also becoming more prevalent on retailer shelves, having recently scored national distribution across 400 Target stores.

“You can definitely expect us to continue creating unique partnerships with retail,” Adams tells RM. “With thousands of new grocery, mass and club stores coming online across the country this year, you can expect new partnerships and merchandising in more traditional water retail outlets. “

Aside from getting its environmentally friendly message out, Boxed Water is using social media to have a direct impact through its Retree Campaign. For every fan that shares a photo of his or her Boxed Water with the hashtag #ReTree, the National Forest Foundation will plant two trees in our nation’s forests. So far, Boxed Water fans have planted more than 20,000 trees.

“We believe that the key to unlocking the environmental benefits of ‘everyday change’ is changing culture,” Adams says. “Moving forward, you can expect Boxed Water to continue to take a unique approach to marketing, to develop unexpected partnerships and to continue to be at the forefront of the movement for everyday change. With new distribution at national retailers like Target and thousands of new grocery stores added this year, you can also expect to see Boxed Water partnering in big ways with more traditional water retailers as well.”

The Internet of Things


By Stephanie Crets
 

So, what the heck does “the Internet of things” actually mean? According to Michael Higgins, vice president of marketing of Hussman Corporation FMI Connect, it’s actually “the Internet of your things.”

And your “things” are mainly smartphones. They are connected and embedded not only in our daily lives, but also with all other electronics, software and sensors. Because so many people have a mobile device these days, and more often than not, have it with them while shopping, smartphones offer a multitude of data for retailers.

“There are 5 billion smartphones and only 4 billion toothbrushes in the world. That’s kind of scary,” Higgins says.

Experts from Brookings estimate that the Internet of things will consist of nearly 50 billion objects by 2020, which gives retailers an overwhelming amount of data to analyze. All of this data can seem daunting and noisy, but retailers should just use the data where it makes sense for them.  “If data is important to you, it’s not noise,” Higgins explains. “It’s how you use it.”

Retailers can use data to answer questions such as:

  • How do you engage shoppers?
  • How do I make sure my infrastructure is optimal?
  • Is the supply chain in line with customers?

All retailers will have a different strategy. Higgins suggests that the first step is to get data into the cloud to start analyzing and developing business strategies tailored for your specific industry. It doesn’t always have to mean putting new devices in place, so continue to utilize smartphone analytics.

“Retail is very local and very personal,” Higgins says. But by utilizing the Internet of things through shoppers’ smartphones, we can begin to understand consumers’ habits and preferences, reach them better and give voice to the retail experience.

Digital Gifting


By Stephanie Crets
 

My best friend lives in a different city, so giving him an in-person birthday gift was difficult. But I know that he loves Starbucks. So, that morning, while getting my daily venti iced chai latte, I went to the gift section of my Starbucks app and sent him a digital gift card for $15. After swiping a few screens and scanning my thumbprint for payment, the gift was on its way to his inbox. I even got a notification when he opened the email.

Digital gifting is becoming a much more prevalent way of gift giving and more retailers are jumping on this trend. It enhances retailers’ brand awareness, it’s cost effective and gives them the ability to connect with the customer. Customers need a speedy and convenient way to purchase or interact with their favorite brands or stores, so they turn to their phones, which are almost always in their hands.

Tom Zalewski, general manager at Mozido, a mobile payment platform, recently presented at FMI Connect regarding the trend in digital gifting. “The key to success,” he says, “is the services that bring value to both the consumer and the merchant.”

Mobile loyalty benefits merchants because it can attract new customers, reduce churn and improve brand affiliation. Consumers find it easy to earn and redeem awards, there’s no hassle of carrying around a physical card and they can share rewards with friends.

So, mobile gifting:

  • Is convenient and easy;
  • Drives additional sales and incremental foot traffic from an existing customer base;
  • Converts regular customers to loyal customers by increasing basket size and visit frequency;
  • Builds a new customer base; and
  • Can be viral.

But, as a retailer, how do you get started?

Zalewski explained that you need to give customers the “VIP experience” to make them feel like they’re receiving special treatment. You can reach your customers with mobile offers. These offers can be a wide array of coupons, limited to a user’s favorite location or saved to be redeemed at a future time.

There are two different kinds of offers. A basic offer is a quick and easy way to deliver offers to all customers with minimal data input. A campaign offer, however, has a more selective distribution for those retailers that want more flexibility and control over their delivery.

When a retailer is ready to start utilizing mobile offers and gifting, it should consider the following suggestions from Zalewski to find the mobile path to success:

  1. Define your mobile objectives.
  2. Define your gifting objectives.
  3. Choose your mobile partner.
  4. Implement the mobile and gifting solution.

 

On the Rise: Brand Loyalty Through Mobile


By Stephanie Crets
 

Customers want options when they’re out shopping. They want to check their phone to see if their purchase could be cheaper at a different store, if they can get a better deal by buying it online or if there are any coupons available.

SessionM, the self-described market leader in mobile data management and engagement tools, recently conducted a survey of more than 50,000 randomly selected mobile users. The purpose of the study was to gain a better understanding of how using our mobile devices impacts and influences decision-making while shopping for consumer packaged goods (CPG).

I was surprised to read that 82 percent of people still prefer to shop for CPG in store. Going to the store seems like such a hassle when I can get everything delivered to my home, but there is more of an instant gratification attributed to in-store purchases. Regardless, one-third of those surveyed said they planned to make a purchase via their mobile device this year, so perhaps that percentage will be lower next year.

The study also found that 65 percent of consumers used their mobile devices for a variety of things to enhance their shopping experience, such as searching for coupons, comparing prices and accessing a shopping list. That number seems almost low, considering the prevalence of mobile technology used in our daily lives.

Patrick Reynolds, vice president of marketing at SessionM, tells RM that brand-specific apps and mobile coupons can both be beneficial to driving mobile shopping. “If you have a high frequency of purchase relationship, like Starbucks, where people often visit every day, a brand-specific app is ideal,” he says. “Lower frequency brands might consider banding together ala plenti to reduce app clutter and increase utility.”

SessionM works with clients as part of a coalition, along with standalone apps. “The real differentiator isn’t whether or not the app is brand-specific, it is whether or not it is delivering perceived value,” Reynolds says. “That often comes down to personalization and engagement specificity.”

Loyalty programs have grown in popularity with the expansion of mobile shopping with 65 percent of consumers belonging to at least one brand loyalty program. And most consumers aren’t loyal unless they’re getting something beneficial from it. Seventy percent of consumers said they would be more likely to buy a brand’s product that they don’t currently use in exchange for points that could be redeemed for a reward.

SessionM suggests five ways that brands can use mobile-first loyalty to strengthen their consumer reach:

  1. Connect and familiarize: Customize and tailor the campaign across all channels to better connect with consumers.
  2. Influence: Offer customers coupons, product information and more while they shop and “give them purpose on their path to purchase.”
  3. Reward: Offer rewards and loyalty points for buying brand-specific items.
  4. Build: Mobile allows companies to access data to analyze purchasing trends and understand the kinds of campaigns that work.
  5. Start now!

“Consumer preferences when it comes to receiving deals really runs the gamut, depending on factors like demographic and retail type,” says Reynolds. “The best advice is to give the customer options, or let them self-select based on their individual preference.”

The Power of Reviews: Bringing In New Business

When prospects want to learn more about your company, they typically head directly to your website. If they like what they see, the next stop is online customer review pages to confirm that the claims you make about your offerings are factual.

But what if you don’t have any solid reviews out there for potential customers to view? There’s a possibility they may have doubts and take their business elsewhere.

Unfortunately, obtaining reviews from customers may be quite challenging if you’re crunched for time or don’t know where to start. Here are some ideas worth considering:

Get Active on Review Sites

Although there are tons to choose from, customer feedback from review sites are frequently viewed in the cyber world by curious prospects. Some reputable review sites include Angie’s List, Google Reviews, City Search, Yahoo Listings and Yelp. Also, confirm you haven’t missed any industry-specific review sites. After all, you wouldn’t want to be absent from Zagat if you own a restaurant.

Include Feedback Requests in the Sales Cycle

Once checkout is complete, encourage customers to leave a review in exchange for an incentive. If you’re a brick and mortar establishment, communicate to employees this should be done when handing over the receipt. (You could even print the incentive directly on the document). By contrast, online businesses can include a link to review sites or to a fillable form on their website at the top of the order confirmation page.

Leverage Your Company Website

Along with publishing genuine reviews on your website, you’ll also want to invite customers to share their own thoughts. Create a fillable form or post a direct link to your profiles on outside review sites. The responses received will serve as instant credibility boosters from the moment visitors enter the site.

Companies, like LifeLock, also dedicate a page on its website to customer reviews to demonstrate that its offerings live up to all the hype.

Use Social Media

Social media is an efficient and often effective way to request reviews. You can send out a tweet, ask Facebook followers to leave a detailed recommendation using the built-in tool, or use the option on the LinkedIn products and services page to share feedback.

And once your customers leave reviews, retweet, favorite or share them and respond to their specific comments or concerns if needed. The idea here is to single the customer out for going the extra mile, address any issues, and thank them for doing business with you. And by going the extra mile, chances are they’ll do business with you again and tell their friends about your company. Furthermore, other fans will be inclined to do the same to garner the same attention. (Even if the feedback is negative, fess up to your mistakes and use it as a learning experience to improve).

As the old adage says, closed mouths don’t get fed. And the same principle applies to your business with regards to customer reviews. If you sit back and expect the feedback to come rolling in without exerting any effort, don’t look forward to an overwhelming amount of feedback. But if you put in the work and express your gratitude towards customers for taking time out their busy schedule, the positive feedback will continue to roll in, and so will the sales.

FusionOps Offers New Supply Chain Analytics


By Stephanie Crets
 

Retailers offer so many different means of purchasing, from in-store to online to smartphone apps and more. So much so that retailers are getting bogged down in the complexity this creates throughout the supply chain. Their data and metrics get mixed up and this makes it harder for them to figure out what’s working and what isn’t.

To make retailers’ lives easier, FusionOps has introduced its newest analytics suite, FusionOps Retail, designed specifically for the retail industry. This cloud-based analytics platform is meant to give retailers complete end-to-end visibility of their supply chains, so they can streamline their operations, improve finances and optimize customer fulfillment.

FusionOps is a leading provider of cloud-based supply chain analytics, so offering a retail option was a natural fit. Thanks to the cloud, retailers can deploy their solution in weeks instead of months and they can see the immediate impact.

“Retailers are having to rethink their supply chain strategies to truly benefit from the new multichannel sales and distribution model,” says Gary Meyers, CEO of FusionOps. “FusionOps Retail will be a critical element of their enterprise analytics strategy because it delivers retail-specific analytics out-of-the box to drive improved customer service while maintaining profitable margins in the new multichannel environment.”

FusionOps Retail will provide detailed reports that include:
• Demand fulfillment
• Order status
• OTIF root cause analysis
• Life of an order
• Inventory coverage
• Allocation preview
• Book reporting
• Seasonal product availability
• Inventory coverage
• A/R reporting
• Customer exposure
• Gross margin by channel

FusionOps Retail provides this detailed data through multiple systems, such as SAP ECC (AFS and IS Retail), Oracle and Warehouse Management Systems.

This program is offered through an annual subscription, which is an interesting choice because many cloud-based systems are allocated monthly or hourly due to their scalability. But considering FusionOps is in the business of cloud, they can predict how much is needed per each customer to keep costs low across the board.

Wearable Technologies


By Stephanie Crets
 

Are you ready to use your skin as a touchscreen? To have your brain signals measured by a wearable meditation device?

At FMI Connect this week in Chicago, the Technology Pavilion offered a number of interesting technology-driven topics to give retailers greater insights and hopefully make their lives easier. They also offered a look into the sorts of devices that might become part of our lives in the very near future.

One of those topics was “Wearable Technologies” by Dahlia El Gazzar of The Meeting Pool.

“Wearables” come in a number of different categories:
• Smartphones
• Fitness and health
• Infotainment
• Industrial
• Military

Several examples immediately spring to mind, such as the Apple Watch, FitBit and Google Glass. Some of these devices offer a sort of virtual reality through their immersive experiences, while others offer a glance into the information you want and give you full control over it.

By the year 2020, there will be 24 billion connected devices in the world, says Gazzar. And with the influx of new wearable technologies, it won’t be long before everyone with a smartphone eventually has another piece of wearable technology.

Gazzar says the new technology “makes kids smile and scares old people.” Considering the kinds of wearable devices ready to become available very soon or those already on the market, this seems to be an accurate assumption:

Muse: A health and fitness tool that measures brain signals and guides you through meditation.
Bluesmart: A luggage tracker connected to your mobile device. It can also be used as a battery charger.
Myo: An armband that measures your muscle movement through gestures and motions to control a presentation.
Circret: A bracelet that projects the information from your smartphone onto your arm and turns your skin into a touchscreen.

Some companies are even embracing fashion and fashion accessories, offering chargeable garments. So, if you have your phone in your pocket, it will charge the battery – handy for those of us who must always be connected and drain our mobile devices in hours.

The great thing about wearable technology is that it makes everything accessible “at the moment.” While you might only need a glimpse into something, others might need constant assistance. If you’re traveling to a new country, a wearable device could help you smash language barriers with instant translations. Just ask your device, “How do I say ‘hello’ in Japanese?” And the answer could be literally right before your eyes.

Having information so readily available will likely make us rely on our devices even more. This could be problematic if there’s ever a malfunction, but pretty soon we’ll probably have enough wearable technology on our person that if one fails, we’ll have countless backups.

Walgreens Collaborates with Challenged App for Video Beauty Contest


By Stephanie Crets
 

As viral video and video engagement become standard in our social media lives, more companies are utilizing its potential. Walgreens recently announced that it was partnering with social media competition app Challenged to drive social engagement and boost beauty sales. Walgreens believes mobile and social are important components to connecting with its customers in today’s socially driven marketplace.

The Challenged app delivers a creative experience for people to challenge their friends or compete in challenges from celebrities and companies. This is Walgreens’ first foray into utilizing the app.

Through the app, Walgreens is challenging users to “bring their best summer beauty tip to life” by creating a 12-second video using CIRCA Beauty or Nonie Crème Colour Prevails, brands and products available exclusively at Walgreens. The challenge runs from June 9 to July 8.

All submissions must:

• Use CIRCA and/or Colour Prevails items as primary component of the look;
• Demonstrate clear steps to achieve the look; and
• Create a summer-relevant look.

The competition has a clear target demographic, but Senior Director of Mobile for Walgreens Adam Kimec believes this collaboration will be an “effective and unique approach to reaching a key consumer audience and driving omnichannel conversions.”

Laura Locsmondy of the Walgreens Social and Content creative team and beauty expert will judge the top three viewed Challenged videos and pick the winner. The chosen submission will receive an assortment of best-selling products from CIRCA and Colour Prevails.

“Being focused about who we’re connecting with is a key to what’s made us successful in digital,” Kimec tells Retail Merchandiser. “It’s all about context. The app is one part of many digital touch points we’ll leverage to drive success.”

Although the app is currently only available for iOS customers, Kimec isn’t concerned about losing a specific audience. “This initiative is one of many forward-thinking efforts we’ve looked to engage in the mobile and social space,” he says. “Some will resonate more with iOS users than others who are more Android platform-driven. We feel comfortable that we’re reaching the right audience, on the right device with the right context.”

You can download the Challenged app for free from the iTunes App Store and find the Walgreens challenge available. When you submit your Beauty Challenge videos, make sure to use the official challenge hashtag: #BeautyChallengeContest