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Will Mom-and-Pop eCommerce Shops be Economically Affected if Online Sales Tax Passes?

Guest Blog by Jonathan Barsade

For more than a decade, federal and state lawmakers have attempted to craft legislation to regulate the collection of sales tax on Internet purchases. The Marketplace Fairness Act of 2013 passed the Senate in May with bipartisan support. House bills are now under consideration to achieve the same goals, which are to level the playing field between online retailers and brick-and-mortar competitors and more effectively enforce existing sales tax revenue collection laws.  House Judiciary Committee Chairman Bob Goodlatte recently released a list of principles that should form the basis of the House bill, which is also expected to enjoy bipartisan support.

The question of taxation of online sales stems back to 1992, nearly a decade before eCommerce really began to take off, when the US Supreme Court ruled that retailers did not have to collect and remit local sales taxes unless they have a substantial connection (“nexus”), such as a physical presence, to the state where the customer lives. Where there was no “nexus” and sellers did not collect the tax, the Court ruling left it up to customers to pay the taxes owed in the form of “use” taxes, but most consumers don’t understand that obligation, and very few bother to comply. This created a loophole for the upcoming world of eCommerce.

One of the reasons cited for the 1992 Supreme Court decision was that merchants who sell out of state would potentially have to comply with the tax rules of over 10,000 tax jurisdictions to correctly collect and remit sales taxes. The Court noted that this would be an “undue” burden to place on businesses, that it would too complex and onerous to require a company to track and manage this massive body of rules.

Organizations that oppose the Marketplace Fairness Act and similar legislation cite this same argument today, particularly when it comes to small businesses: They claim that it is unreasonable to expect small retailers – mom-and-pop eCommerce shops – to comply with thousands of tax jurisdictions. They reference those very large online retailers with operations in multiple states that do invest hundreds of thousands of dollars in staff and systems to manage revenue collection and reporting.

But this argument is based on outdated technologies and ignores key developments that have occurred since the 1992 Supreme Court ruling. Technology is now much more advanced and accessible. Affordable software is available that can handle complex tax calculation and collection compliance tasks automatically, without slowing down transactions.

Opponents of closing the online sales tax collection loophole also complain that it’s unfair to expect mom-and-pop eCommerce operations to deploy and maintain the sophisticated software necessary to comply – that they lack the technical sophistication to manage this task. But this ignores the fact that online sales businesses – even small ones – are technologically savvy.

After all, they’re able to create an online store, attract customers on the web, complete online sales, collect complex shipping information, collect and process online credit card payments and much more. The sales tax solutions available for these retailers require only a fraction of the know-how needed to perform these tasks. And depending on their size and transaction volume, small online retail shops can get a plug-and-play solution for under $30 a month.

While closing the online sales tax loophole would represent an additional expense, for the vast majority of online operators, the cost would be nominal, and implementation and ongoing maintenance burdens would be practically non-existent. There are affordable options on the market now that automatically calculate, collect and file taxes. In fact, automating the process has been found to save merchants a significant amount by helping them avoid the fees and penalties they’d have to pay if they forget to file returns.

The Internet began to have a significant influence on culture in the mid-90s, but until 2001, its effect on commerce was much more limited: Websites served mainly as electronic marketing brochures until the infrastructure to support secure payments was developed. Since then, online retailers have enjoyed huge advantages over their brick-and-mortar counterparts – low overhead and access to a global market of potential buyers being the largest competitive edge.

Enacting legislation like the Marketplace Fairness Act won’t take those advantages away – online merchants will still enjoy lower overhead and greater market exposure. And thanks to sophisticated, easy-to-use and affordable compliance software, if legislation such as the Marketplace Fairness Act passes, complying with local tax collection rules won’t prove an undue burden for mom-and-pop eCommerce shops either.

Jonathan Barsade is Exactor CEO and former tax attorney at Akin Gump.

Keeping in Touch With Seasonal Employees

 

Guest Blog by Jonathan Erwin

As Businesses Experience Influx of Seasonal Hires, Enterprise Quality Communication Software Proves its Worth

With the holiday season creeping up quickly, retailers all over the country are beginning to ramp up for their busiest months of the year. To cope with the inevitable annual influx of business, many retailers will hire hundreds – sometimes even thousands – of seasonal employees.

The problem with hiring all these new employees is that communication can be tough. These companies already have standard procedures when it comes to communicating with their employees. Phasing in a new, often largely temporary workforce, takes a lot of effort and a lot of planning. Whether it’s a new procedure, that week’s sale items, or the most up to date marketing information, seasonal hires need the same access to communication from the top levels of management as any of the more full time employees. Communicating with these seasonal hires is tough largely due to the fact that they don’t have corporate email addresses.

When businesses swell from an administrative staff of 200 to more than 2000 employees at peak times, it can be a logistical nightmare to stay in touch with each new employee. That’s why software that is capable of seamlessly on / off boarding seasonal employees, training them, connecting them with their bosses and with each other – all in real time with no infrastructure to buy, deploy or manage – is absolutely invaluable. For example, a civic organization with a city as its customer base, or a fair and exposition center with hundreds of diverse events, vendors and event workers.

Enterprise communications networks for the non-desk workforce is additionally valuable because it creates workflow efficiencies while supporting remote locations. It improves the communication flow without requiring employers to default to personal email addresses or text messages; allowing field and frontline workers – often related to merchandising, promotion, pricing, delivery and distribution – to stay in the loop. When real time engagement with frontline workers is achieved, it naturally results in a more uniform, and thus better customer experience, which strengthens “same-store” sales revenue.

Another advantage is the increase in operational support efficiencies, accomplished by connecting location and field based management while bypassing busy email inboxes. This also strengthens coordination through the entire company and makes corporate compliance easier than ever – a very good thing over the holiday season especially, when so many new employees who may not be familiar with compliance standards are working and learning on the job.

The holiday season often requires an increase in overtime allotment. Good enterprise software designed around bringing non desk workers into the fold can reduce overtime while increasing service levels through improved team member engagement – with scheduling, coaching, product roll out and promotion, general announcements and coordination.

Another advantage of this type of software during holiday season is that the human resources department now has a private and secure voice channeled directly to team members. This reduces U.S. Mail expenses, strengthens ERISA compliance, and allows for the delivery of critical information related to payroll and benefits.

For all these reasons and more, it is crucial that companies expecting an influx of seasonal employees are prepared with the correct enterprise quality communication software designed to make the transition to the busy season as drama free as possible.

Jonathan Erwin is CEO of the mobile enterprise network Red e App. Jonathan has 20+ years in sales, marketing, and executive roles. As CEO and founder of Red e App, he is focused on helping customers engage employees more effectively through mobile communication.

Using All Your Senses in a Multi-Channel World

Guest Blog By Dani Wanderer

Our five senses are some of our most powerful tools. We use each of them daily. They enable us to process and enjoy the world around us. But our senses don’t exist as separate abilities, nor do they exist in a vacuum.

For example, when investigating an object, you consciously or subconsciously use all of your senses to understand it, right? The combination of sight, touch, smell, sound, and taste provides a better understanding than a singular sense is able to do. This is similar to the approach that some of the most successful modern retailers have adopted in order to improve their business – using all the “senses” they have at their disposal.

Today, organizations of all sizes are actively leveraging multi-channel feedback—much like multi-sensory investigation—to understand their customers better, and to increase competitive advantage, internal efficiencies and profitability. This trend is growing as organizations compete to provide exceptional customer experiences, because unless customers’ needs and wants are well satisfied, customers can and will blast their dissatisfaction on social media and other outlets. This new reality comes with real bottom line impacts.

Retailers are particularly susceptible to this industry shift, and must learn that their businesses, much like their own bodies, must use all of their available senses in order to survive and grow.

One of the biggest ways that companies can improve business is to establish proper platforms and pipelines to accurately collect and analyze all customer feedback. We only have to look at the Neiman Marcus Group’s recently announced plan to invest $100 million to increase its multi-channel presence to see just how important this subject has become to major retailers.

It’s now a necessity for retailers to use all means necessary to better understand their customers and to respond appropriately to their needs and wants.

Establish Customer Listening Posts

It’s absolutely essential to gather Voice of the Customer (VoC) data and to use the insights to implement customer-specific process improvements, but you must be proactive in your efforts to understand your customers.

To do this, gather feedback by establishing “listening posts” (think: senses) including social media, customer councils, employee feedback and surveys to both internal and external customers. By regularly gathering and analyzing VoC and voice of the employee (VoE) insight, your organization will have a bird’s eye view of customer needs so your organization can act accordingly. Remember, employees who regularly connect directly with customers can provide an abundance of insight that your organization may not otherwise have access to, providing you with a broader perspective into just how satisfied your customers are.

Real World Lessons

The international, multi-channel retailer Lands’ End was faced with the issue of having a limited research team to support its growing organization. By evolving its feedback platform from dated phone surveys to a more modern online survey model, Land’s End was able to extend its reach and business without having to invest in additional research staff. Because of this decision, the company saw a 30% increase in its volume of market research and a reduced overall research time by 25%. Lands End is now able to conduct seasonal product testing for 300+ products to aid in buying decisions.

As a result of its research and testing, the retailer developed a new shipping strategy and the launch of an innovative and highly successful new line of women’s swimwear.

Another example is the clothing company Bonobos, which listens to their customers and actually revamps product lines as a result of the feedback it receives. By capturing the voice of its’ customers from a multitude of channels, Bonobos’ designers and merchandisers have the insight they need to improve and adapt their offerings. In fact, after receiving customer feedback, the company recently designed a slimmer-cut dress shirt and amended its sweater and denim offerings. Not to mention the fact that half the stock of the newly designed dress shirt sold out in less than a week!

Consolidate Multi-Channel Feedback on a Single Platform

Imagine that your body has five brains and that each of your senses is linked to a different brain. And that none of these brains can communicate with each other. With that strange picture in mind, how is that much different than an organization that collects data from multiple channels and stores it in disparate, non-integrated systems?

When gathering data from multiple channels, often you can end up with siloed data within and across departments, all in varying formats because each department is likely using a different solution to gather the data. Feedback from one customer could be in 10 or more different places. Unless this information can be readily accessed, shared, and assessed by anyone in the organization who needs it, it loses much of its strategic punch.

The only way to effectively manage the data gathered from multiple channels is to consolidate on a single, organization-wide survey platform (think: one brain). With one platform in use, data is more transparent and actionable, and will provide greater insight into what customers actually want.

We’re approaching an era where no decision will be made without data, a day when organizations can anticipate and instantly respond to the needs and wants of their customers. And in today’s multi-channel, data-driven world, we’re continuing to see a push toward a single survey platform that spans the enterprise, integrates with all existing systems and becomes the engine that drives decisions throughout the entire company.

Dani Wanderer is head of marketing for Qualtrics

Seven Strange and Obscure State Tax Laws

Guest Blog by Mark Faggiano

As every business owner knows, it’s important to comply with local, state and federal tax laws – you’ll soon be in a lot of trouble if you don’t. But compliance can be a challenge. It’s not always easy to figure out what taxes are owed on which items, even if you sell goods in one state only, and if you operate in multiple states, that can complicate matters exponentially.

Tax rates and taxable item categories can vary considerably from state to state. Cities can also impose their own taxes on certain items and services. And sometimes, tax regulations just don’t make much sense, which leads to confusion for business owners who are struggling to accurately collect taxes from customers. Here are seven examples of bizarre taxes found in the states:

1. New York takes a bite out of bagels – but only if they’re sliced or eaten in a bagel shop. In New York, bagels that are sold sliced or eaten at the bagel store (whole or sliced) are taxable. An unsliced bagel that is eaten off premises isn’t taxable, but a sliced bagel is always taxed.

2. Connecticut taxes diapers – but only for children. In Connecticut, adult diapers are not subject to state taxes. But consumers who purchase diapers for their children do have to pay state sales taxes on diapers.

3. New Mexico gives centenarians a free ride. If you live to be 100 and you’re a New Mexico resident, you’re done paying state taxes – people who are age 100 and up do not have to pay state taxes. But that’s only if no one else claims you as a dependent.

4. Florida has a sales tax holiday – but it’s very confusing. Swimsuits are tax-free, but masks and snorkels are not. Sports attire is tax-free, but not helmets. Printer paper is taxable, but not construction paper. The state maintains a list of seemingly random items to guide merchants.

5. Wisconsin has a baffling take on the taxation of ice cream cakes. Due to tax law revisions, ice cream cakes may be taxed, depending on whether they are categorized as a “prepared food.” If ice cream and other food items are mixed and sold as a single item, they’re generally taxable.

6. Iowa taxes candy…unless it contains flour. Many states tax candy, presumably to encourage healthier eating habits as well as to generate revenue. But in Iowa, only flour-free candy is taxed. Milky Ways and Kit Kat bars are tax-exempt.

7. California taxes fruit from vending machines. If you buy a banana from the produce section of a California grocery store, there’s no tax on the fruit. However, a banana dispensed from a vending machine is a taxable item.

These are just a few examples of the many odd taxes and difficult-to-track item categories that business owners have to contend with when selling goods and services and attempting to remain in compliance. The patchwork regulations often result from legislative efforts to encourage or discourage certain behaviors or reward constituent groups (such as wheat farmers), and even if the goals are laudable, the resulting complexity can significantly hamper business operations.

But even if you eliminate the additional layer of complexity imposed by obscure tax laws, complying with ordinary collection regulations is already challenge enough for many business owners. This is especially true for those who sell across multiple tax jurisdictions via ecommerce platforms like eBay, Amazon.com or Etsy – or across a number of channels.

Business owners must find a way to manage and track data and break sales tax information down by states, counties and cities. For multi-channel sellers, efficiency and compliance require the ability to break out sales by channel and buyer location to ensure accurate tax collection, filing and channel management. In addition, states mandate that businesses maintain transaction histories for a number of years and may conduct an audit to ensure compliance.

Luckily for brick-and-mortar business owners and ecommerce merchants alike, there are technology tools available to streamline tax information management, storage and filing. With the right solution, retailers and e-tailers can make sure they stay in compliance with regular sales tax collection and reporting – as well as the odd taxes levied from state to state.

Mark Faggiano is the Founder and CEO of TaxJar – a service built to make post-transaction sales tax compliance easier for multi-channel ecommerce sellers. Mark’s passion is solving complex problems for small businesses. He previously co-founded and led FileLater to become the web’s leading tax extension service for both businesses and individual taxpayers before being acquired in 2010

Retailers Need to Get Connected for Revenue

Guest Blog by Jon Stine

It’s no secret that shoppers increasingly prefer the experience provided by e-commerce retailers. Brick and mortar brands have long excused that preference with references to lower prices and at-home convenience – but the truth of the matter is that best of the e-commerce brands win with data.

Take Amazon, for example. Consider their best-in-class customer experience, complete with personalized recommendations, suggestions of “go-withs” and accessories, ideas from others, and shipping addresses on file.

All working together to positively influence shopper decisions, to create bigger baskets and an emphatic “yes.”   And all created through data acquisition, analysis, and action.

In today’s internet-of-everything world, it’s not just online retailers who can create new value from the realm of data. Brick and mortar retailers can take a page from their playbook and leverage the people, processes and things that increasingly connected to the Internet to better predict when and where consumers will want to buy, and ultimately capture more revenues.

For that last few years, Cisco has been watching the impact of the Internet transform the retail industry. Our research started with the observation that retailers just aren’t taking advantage of data already available. Here is how retailers can better connect and capture the data available to them to increase profits this holiday season and beyond:

1. Connect and Build Customer Trust: When customers freely share data with trusted brands, (via social media, mobile [location-aware] or at the website), retailers have the opportunity to upsell and match offers online and in the physical store – leading to greater revenue.

Example: Amazon shoppers don’t mind the retailer knowing where they live, their browsing history and what their favorite brands are because in exchange for this information, Amazon gives them personalized recommendations tailored directly to their needs.

2. Maximize Your Manpower Through Connectivity: Employees can access and share best practices, operational alerts and develop smart training and development tools from their mobile device, while giving managers new insights into efficient ways to allocate sales personnel to drive profits. In addition, employees can provide real-time feedback on product and promotion performance – leading to improved advertising, marketing and additional revenue.

Example: Imagine if your top sales person could be in all your locations everyday, providing expert advice to shoppers and suggesting additional items to go with their purchases. A workforce connected video collaboration can do just that. And by recording top performers, other employees can watch and learn how to do a successful upsell from anywhere, at anytime.

3. Drive Higher Levels of Stock Availability: In-stock performance is one of the four most critical indicators to overall store performance. With automated intelligent stock management and shelf sensing, stores can keep track of merchandise, order stock when inventory falls below a certain level and service customers – all without employee intervention.

Example: Numerous apparel retailers are now rolling out item-level RFID on their private label assortments. Numerous studies have documented the value of that investment in reducing stock-outs in basics, and lifting turn and revenues. Such an investment also pays dividends in omni-channel management, as it allows retailers to create an “endless aisle” of linked and available inventory.

4. Tap Into Dark Assess In-Store: By connecting dark assets like video surveillance cameras, social media, customer’s Wi-Fi signals to online analytics, retailers can predict new trends and empower employees to respond to drive profitability.

Example: A leading retailer is using sensors in the parking lot to help employees anticipate store traffic, and more efficiently staff checkout lanes.

5. Make Your Supply Chain Transparent: Retailers need to have full visibility across the supply chain process by connecting every component. This includes tracking materials from the source, to the factory, to the delivery truck and ultimately to the store or warehouse. In this model, retailers can anticipate exceptions to business rules and respond before anyone else.

Example: If a retailer has complete visibility in to the supply chain, they will know exactly when a shipment falls behind, and why. They don’t need to wait for a shipment to be late to know there is a problem. This allows them to reallocate inventories and promotional schedules as necessary.

These tips are just the beginning. There are countless ways to take advantage of the data available to your organization. Data comes from everywhere and there are trends starting right in front of you, all you need to do is be on the look out to realize the potential revenue they can provide.

Jon Stine is director, retail industry for Cisco Consulting Services

Reinvigorating Retail Loyalty Engagement through Partner Programs

Guest Blog by Rob MacLean

Just because something is good doesn’t mean it can’t be better.

According to COLLOQUY’s 2013 Loyalty Census, retail loyalty program membership has enjoyed some of the fastest growth compared to other industries. Department stores saw their loyalty program membership surge 70% in the last two years while drug store loyalty grew 45%. Overall, retail loyalty program membership has grown 24% since 2010 and 116% since 2006.

But with engagement levels down 4.3% as a loyalty program average, membership growth is only part of the whole loyalty and customer story.

Today’s retail loyalty programs (despite high membership) struggle with three main challenges:

#1.  Rewards fragmentation: the types of rewards offered to customers in different retail loyalty programs are inconsistent. Such inconsistency undermines consumers’ rewards expectations across the entire retail space. Financial institutions and airlines, by contrast, have designed loyalty program constructs where the rules and rewards between programs are similar.

#2.  Lack of merchant-operated scalability: many merchant-operated programs are too small to become retail profit drivers. Instead they become cost centers, forcing many loyalty programs to shut down before they hit their engagement stride.

#3. Drowning in the data deluge: competition among retailers combined with changes in consumer behaviors has left many businesses scrambling to find new ways to capture customer behavioral insights. And in the rush to acquire this data, retailers have failed to align business goals with the data they need to maximize customer engagement. As a result, many loyalty programs lack focus and, once again, don’t offer customers what they want.

Hubbub Over Loyalty Hubs

Considering how interrelated the above challenges are, solving them requires an overarching and integrated approach. Rather than building individualized small-scale loyalty schemes, coalition loyalty programs that bring together multiple retail loyalty programs in one location make the most sense. Either that, or retailers must do additional homework to discover which third party program providers are offering their competitors amazing loyalty rewards and collecting data that will help tailor future rewards to specific demographics.

In other words, there’s no reason to re-invent the wheel. If successful rewards programs are already engaging customers, why risk further fragmentation?

But after a coalition program or loyalty hub has brought customer reward schemes together, what then? How does brand’s loyalty strategy evolve? Loyalty marketplaces must be more than grand assemblies. They must allow customers to track, trade, exchange and redeem their points/miles (depending on the specific loyalty currency) in a seamless and intuitive manner. Making these transactions easy to perform and execute is the key difference between coalition programs and true marketplaces that continue to be developed.

The latter drives engagement to new heights as consumers are incentivized to perform more loyalty transactions, improving the quality of the reward while reducing redemption time. High activity levels also help merchants discover new customers and the shared customer data between members benefits all parties.

Mobile Wallets and Loyalty – A Partnership with Potential

Of course, a discussion of loyalty marketplaces isn’t complete without addressing mobile wallets and its customer engagement potential. Despite sluggish adoption, this environment will prove the perfect incubators of such digital transactions. With smartphone shipments now outpacing feature phones, (225 million smartphones were shipped in the US second quarter of 2013) it’s clear consumers crave these devices’ functionality and ability to augment in-store and off-site shopping experiences.

Convergence, a marketing term favorite, isn’t a buzz word after all. Uniting great loyalty programs with easy-to-use virtual currencies all within a single smartphone is nothing short of revolutionary. The union of loyalty programs and virtual currency might be the perfect marriage of convenience and the ultimate loyalty strategy.

Even if mobile wallet adoption has yet to hit critical mass and Point of Sale technology uniformity is far from achieved, smart retailers will be the ones envisioning a future where the phrase “paper or plastic” sounds entirely antiquated.

High loyalty program membership is great. But legions of disengaged members are like dead weight on a loyalty program’s enduring success. Joining a coalition loyalty program isn’t cost-free, or without integration challenges. But there’s no doubt that’s where the future of retail loyalty engagement lies.

So consider this article a conversation starter about what’s needed to reinvigorate retail loyalty programs and the steps needed to transform an already good retail loyalty program into one of the best.

Rob MacLean is CEO, Points

Tips to Ensure Your Brand Promotion Weathers the Season

Guest Blog by Jodi Sawyer

In planning your seasonal promotional campaigns, you, as a brand owner, are well aware that creative and implementation planning must begin well before the actual ‘holiday season’ arrives. Your successful Yuletide promotion was probably on your drawing board well before the beginning of July. However, have you considered how environmental conditions may impact the life of the promotional graphic? For example:  Installation temperature, location of the graphics (indoors or outdoors), the end-use application surface (windows, walls, floors, carpets, shelves, counter-tops), and the challenges that the graphic materials will need to endure. By considering these factors, your graphics will stay eye-catching and vibrant through the duration of your campaign.

By collaborating with your print-service provider and media-provider in the initial planning and design phases of your seasonal campaign, it will help ensure that you can handle any application challenges such as proper installation temperatures, heat and humidity variations, local sign ordinances and others.  By incorporating installation specifications during the planning stages, your promotional campaign will shine wintertime, summertime – anytime.

Here are five tips to ensure your brand promotion weathers the season:

  • Take into account the environment. For outdoor advertising and promotions, consider the various climates where your promotion will be implemented and know what environmental conditions your campaign will have to stand up against. This can be extreme heat in the summer or freezing temperatures in the winter. The promotional materials need to withstand certain conditions–which may span all four seasons–or may vary across regions.
  • UV exposure – know where the graphics will be placed, the expected life of the graphic, ink color and saturation – all of these factors can impact the material performance.
  • Removability.  Consider that promotions will likely be changed in a few months’ time. While you want to select the film and adhesive solutions that will last, you also need to consider the removal process. Leverage removable adhesive products that are easily removed without leaving adhesive residue behind. Surfaces vary, so the selection of adhesive is crucial to a graphic application’s success.  For example: A low-tack removable adhesive is ideal for interior wall borders and small- to medium-format decals. It offers initial repositionability and clean removability for a period of six months or less.
  • Consider the space and surface. Think about how you can visually transform an entire store aisle, taking the shopper-engagement experience to a new level. Consider using thin-gauge, full-coverage floor graphic films (clear, white opaque, silver and brushed silver underlaminates). In addition to branding elements, these films can use printed textures to create environmental effects, like grass, wood, rocks and water.
  • Durability.  Consider whether there will be heavy foot traffic in a busy retail area. A durable overlaminate for carpet graphics can resist heel punctures, reduce lifting and deliver improved printing clarity compared to the thinner-gauged overlaminates.

With these tips in mind, brands can be sure to help make their products stand out against the competition whatever challenges the seasons may bring.

Jodi Sawyer is a Market Development Specialist with FLEXcon

How Data-Driven Technologies can Help Brick and Mortar Retailers Step Up their Holiday Game

Guest Blog By Steve Jeffery

Santa gets letters. E-commerce purveyors get clickstream data. What do brick-and mortar retailers want for the holidays? In-store customer behavior intelligence. In store tracking is a hot item this season because understanding behavior in brick and mortar environments will help retailers level the playing field with ecommerce. If last year’s trends are any indication, online channels will continue to compete fiercely for consumer dollars during the holiday shopping rush. With an array of options just a mouse click or screen tap away, it’s more important than ever for brick and mortar retailers to close the deal when customers are in the store—they simply can’t afford to drop the ball when it comes to merchandise in stock, service, selection or price. Here’s how technologies for capturing and analyzing in store behavior data can empower brick and mortar retailers to bring their “A” game this holiday season:

  1. Staff strategically. The span of time between Thanksgiving and Christmas includes many of the busiest brick and mortar shopping days of the year, including the Big Daddy of them all: Black Friday. Making the most of these high value retail opportunities requires consistent service and product on the shelves. Especially when demand is fluctuating, good service depends on real-time adjustments in staffing. Periods of understaffing can mean missed sales: shoppers who want help finding a size or are interested in asking a few questions about a product may simply leave when a salesperson is unavailable or lines are too long. Overstaffing is problematic too, as it wastes money on headcount that is not needed. This is why continuously tracking store traffic and measuring wait times are critical. Historical traffic data is important to planning schedules, but real-time tracking allows staff to be deployed precisely when and where they are needed, consistently matching service levels with demand. Technologies designed to capture and analyze this vital data can help retailers more effectively manage their workforce and deploy staff strategically, so that service levels stay strong even on the highest volume shopping days, and without incurring unnecessary labor costs.
  2. Keep lines moving. Customers hate to wait, especially during the busy holiday season when nerves are frayed and people are rushing around trying to get all their “to dos” done. In addition to traffic metrics, capturing accurate data about individual wait times and customer actions while in line can help stores better manage queues and keep shoppers from getting annoyed, or worse yet, dumping their items and leaving when they think the wait will be too long. Real-time queue data, combined with traffic metrics, can be used to predict wait times so in store staff can be deployed to speed check outs when needed. Estimated wait times can even be communicated directly to customers, who are less likely to get frustrated when they know what to expect.
  3. Identify trouble spots… and recognize success. Retailers can also use traffic data to calculate sales conversions. Analyzed in conjunction with Point-of-Sale (POS) data, people counts help retailers determine the total percentage of store visitors that ended up making a purchase during specific times throughout the day. This is a very important metric, as it provides much more accurate insight into store performance than sales data alone. It’s valuable to understand both how many people came into the store and how many of those people purchased. For example, POS data may show lower than expected sales for a store on Black Friday, but when compared with the traffic figures, a very high conversion percentage is revealed. This means that store staff are doing an excellent job converting shoppers that do come in, and suggests instead that marketing needs to drive more foot traffic to the location. Without the traffic data, a retailer may incorrectly think that store’s service is to blame.
  4. Optimize marketing, pricing, display and service strategies. Brick-and-mortar stores offer the benefit of immediate access to products that online retailers can’t match. Showrooming —the practice by which shoppers look at products in a store and then price shop for a better deal online—were blamed for hurting sales last year but, this year, more and more retailers are embracing showrooming and offering free WiFi in the store. The WiFi allows the retailer to push a special offer to the customer in the store and counter the online price advantage. Price isn’t, of course, always the main factor.  The guy on his way to a party cares more about having the hostess gift in his hand than whether he saved a few dollars. He can even have it beautifully wrapped and ready to go in a matter of a few minutes (so much nicer than those generic colored boxes!) Another shopper may be prompted to buy by a particularly engaging product display or demonstration. Capturing behavior data about how shoppers use and move through the store, what displays they stop at and what items the touch and try can offer a wealth of insight that can be filtered back into more effective marketing, pricing, display and service strategies.

Understanding what makes brick and mortal holiday shoppers inclined to spend demands continuous, real-time analysis of their behavior—analysis that’s just as sophisticated as what’s currently done online. Retailers that take advantage of “behavior intelligence” technologies available for capturing and analyzing this insight will be better prepared to shine this holiday season.

Steve Jeffery is CEO of Brickstream

Is the customer always right?

Guest blog by David Kreitzer

We all know the popular adage, “The customer is always right.” For some companies, this is a great piece of wisdom to live by, but when dealing with customer feedback on social media sites, things are a little more nuanced. Amazon founder and CEO, Jeff Bezos, has said of online customer service, “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000.”

A customer service-related slip up on social media doesn’t mean just one unhappy customer; it could mean a very public social media mishap. This broader audience holds a lot of power over your reputation so it’s important to act authentically. Even though most customer service training has probably taught otherwise, the customer actually is not always right. Don’t be afraid to apologize on social media, but do so graciously and without simply accepting all accusations of fault.

One of the key ingredients of a great social media presence is consistency. In fact, this is one of the reasons why Main Street Hub provides clients with a single point of contact. If you craft a consistent voice, you’ll show that you’re credible. If you check in with your staff members about an incident instead of just throwing them under the bus, both your employees and your customers will see that you’re interested in setting the record straight, while also protecting both groups.

When Bezos apologized for the 2009 Amazon mishap that remotely erased the books “1984” and “Animal Farm” from users’ Kindles, he took a firm stance. He apologized by taking responsibility for the slip up and also promised not to let decisions like this be made in the future. “We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission,” said Bezos. His sincere response elicited even greater customer loyalty from many of those who had been outraged just a few days before.

His apology showed his strength in leadership and restored customers’ faith in the company as a customer-focused business. By making a very humane apology, Bezos erased fears that Amazon was turning into a faceless corporation capable of Big Brother-like decisions.

Of course, not all situations are as clear-cut as this, and on social media it sometimes comes down to “he said, she said” with no obvious correct answer. It’s important not to fall back on the crutch of, “The customer is always right.” Apologize for the inconvenience, but keep it vague. Don’t openly say, “I’m sorry the store employee was rude to you,” if you’re not positive it’s true. A simple, “I’m so sorry you had a bad experience,” will show the customer that you care about their interaction with your store. Be sure to point out that the incident isn’t reflective of your typical service and always promise to do better next time.

Sincerely show that you’ll do everything it takes to prevent similar situations in the future, and you can often regain customers who may have boycotted your business just moments before. And better yet, you can remedy the situation without compromising the reputation of your business or your employees to future potential customers who may read the review. Great customer service requires more than just catering to the customer’s interests. It takes a leader who is willing to seek out the truth and genuinely improve relationships between a local business and its customers.

David Kreitzer, is VP, marketing with Main Street Hub, the “do-it-for-you” marketing platform for local businesses.

Cross Industry Targeting – Leveraging the Connection between Retail and Travel Content Consumption

Guest blog By Noah Tratt

Can the mere act of planning a vacation increase a person’s happiness? A Dutch study released in 2010 revealed that the largest boost in happiness surrounding vacations comes from the simple act of planning the vacation. In fact, the effect of vacation anticipation boosted happiness for a full eight weeks.

Retailers take note: targeting a happy consumer during the vacation booking phase can be an extremely effective marketing strategy because there is a unique tie between retail and travel shopping patterns. A study from Millward Brown Digital and Expedia Media Solutions identified a direct correlation between the frequency of visits to retail and travel sites by consumers during this euphoric phase as they plan and book a vacation package. The Traveler’s Path to Purchase study examines the 45-day period leading up to a vacation package booking on an online travel agency to determine what the US consumer’s path to purchase looks like. It revealed that online content consumption increases during the vacation package planning and booking phases and that the patterns of retail site and travel site visitation are closely aligned. In the 45 days leading up to a package booking, retail sites were visited almost as frequently as travel sites. Vacation bookers visited retail websites 36.6 times in the 45-day path to purchase period, while travel sites were visited 38 times.

The connection between retail and travel site consumption is logical because consumers, in their state of increased happiness, and are often searching for new products that they may need for the vacation they’re booking. A beach vacation may inspire a consumer to look at buying a new bathing suit or sunscreen, the same way a ski trip would inspire the purchase of a new jacket or GoPro video camera. Each destination a consumer looks at serves as motivation to research and potentially purchase new products that will make their vacation that much better.

While the correlation between retail and travel site consumption shows that retailers are already enjoying the effects of a happy traveler, there is also an opportunity to target this group in a new way. Despite the increase in retail site consumption during the entire 45 day period before a booking, during the week of booking, retail site visitation dropped while travel site visitation peaked. As a retail brand, why not remain top of mind for those happy consumers throughout the entire 45-day period?

As consumers are actually booking their vacation package, retailers should be where those consumers are – on travel sites – to ensure consumption increases again as booking is happening (as seen in the graph above).

Marketers across all industries need to look at new places and ways to target their existing and potential customers. Travelers, retail shoppers, bank customers and restaurant goers are all one in the same, so as marketers working across various industries we need to work together to serve consumers in the most relevant places, and in the most interesting ways possible.

Noah Tratt is global vice president of media solutions at Expedia, Inc.