A blog for all things retail and licensing.

Go Green – Get a REAL Christmas Tree

I have to admit it – I’ve always thought artificial Christmas trees were stupid. But I’m a man of the 21st century, and I wondered what kind of environmental impact came about through all that chopping. Well, thank you to Trucost for at least slightly absolving me of whatever guilt I feel for buying a real Christmas tree every year.

According to Trucost research, artificial Christmas trees are six to ten times more environmentally costly than real Christmas trees. But as with all statistics, there is more to the story.

One fact is that most of us real tree people end up purchasing many natural trees over our lifetimes of Christmas revelry. If someone buys an attractive, durable artificial tree, they may use the same tree over many years.

In addition, according to the research, some artificial trees come from highly efficient and better managed production plants that use recycled materials and good practices in emission and waste management. Meanwhile, tree farm operations may include harvesting with helicopters, cold storage and use of other energy consuming equipment, and they may use aggressive pest removal techniques and artificial irrigation practices depending on local weather. The species, geography, farming and cultivation methods, soil type and other variables have to be taken into account.

For me, environmental awareness isn’t enough to sacrifice the joy of picking out a real tree, and occasionally cutting one down myself. So what are our options? Well, there is the re-plantable Christmas tree, purchasing from local suppliers and buying domestic trees that come from a reputable tree farm with environmentally sound practices – these should all be high on the list.

Sorry, fake plastic trees – you’ll never get my love. And now that I know that the methods I can use to purchase my trees can actually make me greener than my know-it-all neighbor and his obsession with artificial crap, I can feel even better about buying a real tree.

8 Things You Need to Know about Mobile in Asia

8 Things You Need to Know about Mobile in Asia
(An arcane glimpse at the future for everywhere else)

Guest Blog by Claire Mula

This festive quarter, Comscore estimates 13% of all e-commerce transactions will be made via a mobile device in the US, up from 8% in Q4 2011. Globally, AIBI Research expects 1 in every 4 e-commerce dollars will be spent via mobile in five years.

How does this compare with today’s “mobile-first” markets in Asia? What should retailers and brands seeking to engage Asian consumers in the world’s fastest growing economies be aware of when it comes to developing multi-channel strategies for Asian markets?

Here are the 8 facts you should know about mobile internet in Asia Pacific:

1: The present (not future) is mobile in Asia

Asia as a region accounts for over half of the world’s mobile devices. By 2016, Asia Pacific will account for 57.7% of all mobile phone users—nearly ten times the North American share.

2: China is now the largest smartphone market in the world

China, which surpassed the US as the largest smartphone market in the world, represented 22% of global smartphone shipments, while the US (formerly the largest market) accounted for 16%, according to estimates by Canalys.

3: Asians have ‘skipped’ desktop – gone straight to mobile internet

For many populations in markets in Asia, the first time they experience the web will be via a mobile device. In 2012, mobile replaced desktop as the predominant way to access the web in Asia’s most populated markets: China and India.

4: Asia-Pacific has the highest number of mobile payments users in the world

According to Gartner, Asia has the highest number of mobile payment users in the world. This is largely dominated by SMS payment methods born from a need to transfer money via ubiquitous methods across a fragmented payment marketplace. In contrast, in Asia’s most sophisticated mobile service market, Japan, more than 10% of mobile subscribers have used a m-wallet to buy goods and services.

5: Cash is still ‘King’ in Asia

Asia is a two-level mall when it comes to payments, and the region is very fragmented in terms of providers. Markets like India, Indonesia and China are largely “unbanked”- and cash is still king. There is a movement towards mobile as a payment channel for low-transaction value goods and services (<US$10). NFC is an opportunity to make the experience more user-friendly for everyone at a store level.

6: Mobile = “extended shopping hours”

Like their Western counterparts, mobile users in Asia continue shopping after hours. Among Sprooki’s Asian-based retail clients, 15% of purchases occur outside of mall operating hours. During holiday periods such as pre-Christmas, this can be as high as 34% in some markets.

7: Mall Culture a ‘hot-bed’ for location-based marketing

Location-targeted advertising in and around malls can increase response rates of untargeted or demographically targeted ads. Among retailers and malls who use Sprooki’s location-based marketing platform, between 60% and 85% of all shopper purchases or coupon downloads are made within 500 meters radius of the mall or store, in response to a location-targeted message. Around 10%-20% buy via their mobile device from a physical store while in the mall in order to benefit from a discount or value-added offer.

8: There is no common market – but similarities exist

Like Europe, Asia is culturally, economically and socially diverse. A market-by-market approach is best. However, in terms of mobile shopping “readiness”, Asian markets can be grouped based on a few important characteristics:

  • Tier 1: “mobile shopping” markets of Singapore, Korea, Japan, Hong Kong and Taiwan, where both smartphone penetration and debit/credit card penetration is upward of 50%. In Singapore and Hong Kong, mobile comprises 23% and 41% of online commerce already.
  • Tier 2: markets such as Indonesia, the Philippines, Thailand and Vietnam, where smartphone penetration is below 50% and SMS and cash remain the predominant remittance or payment methods.
  • Asia’s largest market, China, experiences 42% smartphone penetration (and growing) -and is one of the world’s largest online commerce economies. China warrants a strategy all to itself.
  • India remains very much a feature phone market, with only 4% of total mobile users having smartphones. Irrespective, this still positions India as the fifth largest smartphone market globally – with 44 million internet-enabled mobile users.

Most markets in Asia require a “mobile-first” approach to effectively engage, win and retain local, internet-enabled consumers. For retailers, getting to market quickly and cost effectively across multiple markets at different stages of mobile evolution can be challenging and costly. Partnering with platform providers like Sprooki (www.sprooki.com) who offer customizable solutions, integrated local payment options and insights on how to engage local shoppers – when and where they shop – can help retailers reach their success metrics sooner and without the risk of over-investing.

Claire Mula is Co-founder & Managing Director of Sprooki

Mobile Analytics: The Key to Higher ROI and Engagement with Holiday Shoppers

Guest Blog by Brendan O’Kane

Could a holiday shopping season in which big retailers stay open around the clock be somewhere in our near future?

It may seem farfetched until we consider that Thanksgiving, once a day when almost all stores were closed and people stayed home with family, is in the process of becoming Black Thursday. Macy’s recently announced that, during the weekend before Christmas, it will stay open for 48 hours straight. It probably won’t be long before other leading large retailers follow suit, hoping for an even bigger slice of the year-end profit pie.

These trends line up perfectly with growing consumer spending during the holidays. During the 2010 and 2011 seasons, even with all the recession-driven belt-tightening, retail sales rose 5.5% and 4.1%, respectively. This year, they’re expected to reach a record $568.1 billion, perhaps a reflection of the fact that, as research from Experian shows, consumer optimism is at an all-time high.

With device-toting consumers already visiting both brick-and-mortar and online stores in record numbers to score the top gifts, gadgets, toys and appliances, retail marketers are scrambling to launch mobile campaigns. By December 31, 2012, they’re expected to have allocated twice as much in their budgets this year as they did last year to connect with holiday shoppers on their ubiquitous “third screens.”

Action Analytics as a Force for Greater Holiday Revenues

However, when it comes to marketing through feature phones, smartphones and tablets, some messaging campaigns aren’t having their intended effect. Why? Too often the messages are irrelevant, ill-timed or excessive – or all three. And an overload of messages that add no value to their lives simply turns most consumers off.

During the holidays and beyond, brands and retailers have the tools to boost engagement with consumers – as well as ROI – by measuring the effectiveness of their messaging.

For example: a top discount retailer with a mobile app is offering 15% off on a new line of tablets. The retailer deploys two versions of the same message to app users who fit the profile of a likely tablet buyer to see which delivers higher value:

  1. “Holiday Special 15% off on Mega Tablet 3!”

Message A had a 40% open rate and a 20% coupon click rate. For every 100,000 messages sent, 8,000 coupons were clicked.

  1. “Mega Tablet 3 Now 15% Off. Hurry, Deal Ends Soon!”

Message B had 30% open rate and a 30% coupon click rate. For every 100,000 messages sent, 9,000 coupons were clicked.

Message B yields better ROI even though it had a lower open rate, because it had a higher coupon redemption, or conversion rate (9% vs.8%). This type of message analysis, which has been used in print, television and Web campaigns for decades, is known as A/B split testing.

The process doesn’t end there, however. The retailer wants to rework its push notifications to reach particular customer segments, including those who didn’t open the push notification, SMS or mobile email message and those who did open it but failed to click on the coupon.

That’s retargeting. The retailer renews its focus on those consumers by using gathered data to make follow-on messages even more relevant and increase conversions even further. By testing message content for optimal relevance and sending only when the data says it should, the retailer can sidestep the major pitfall for companies marketing on mobile: being perceived as intrusive or spammers.

To Engage Rather than Annoy, Measure, Then Measure Again

Mobile phone spam is such an annoyance to consumers that some companies have elected to skip mobile marketing altogether. I know of one major retailer that has resisted the pressure to market on mobile. An executive told me the company’s fear of having customers see it as a spammer has kept it from taking the plunge. Luckily for this company, it still does a great business.

However, not all marketers can say that. In less than two years, mobile is expected to overtake desktop as the primary Internet access point for most consumers and to channel over half of all online revenues.

Regular measurement of mobile messaging can help brands and retailers gain actionable business intelligence by taking the pulse of their audiences. That information can be used to design thoughtful, intelligent and timely push, SMS and mobile email campaigns.

This also applies to all other times of year when retail shopping spikes, such as Mother’s Day and the late-summer “back to school” sales blitz.

The slow recovery isn’t slowing down determined mobile consumers looking for great deals. Through action analytics, retailers can find the right moment and the right messaging to drive higher ROI and customer engagement no matter what holiday it is.

Brendan O’Kane is CEO of OtherLevels, which helps mobile game developers, brands and publishers using Push Notification, SMS and Mobile Email Messaging engage, retain and maximize the value of their audiences through mobile messaging analytics and retargeting.

There is no Silver Bullet to Guarantee Online Merchandizing Success – but There are Ways to Improve Your Chances (Part One)

Guest Blog by Steven Kramer, North America President of hybris, www.hybris.com 

Matching your business’ interests with those of your online customers’ is a delicate balancing act.  On the one hand, you want the customer to find the product that they are looking for, but on the other you also want to influence their purchasing decisions based on your preferences (e.g. if a certain product has a higher margin, there are too many of a particular product in stock, it’s the end of a product line, etc.).

Successful online merchandizing is not enabled by just one tool. It is a mixture of various techniques, the data you have and, last but not least, your own gut feel.  Following are five key considerations to keep in mind when you are evaluating merchandizing tools and your efforts:

1. How good is your data?

The old saying of “garbage in equals garbage out” is as true in merchandizing as anywhere else. Does the tool you are evaluating give you the ability to:

– Effectively administrate, govern and steward the data you want to use?

– Help you to improve the overall quality of your data?

– Ensure consistency across various data outlets and not just your merchandizing tool?

– Give you the ability to define and manage the facets you will later show to your customers?

Ultimately, good data management means good navigation and effective search.

2. Do you think about going global?

Support for multi-language on the front end, as well as in the back end, will be key for a successful global roll-out.  Often tools struggle due to the additional amount of data that’s required for multi-language support.  Keep in mind that, while tools often provide the additional language packs, they come at a significant extra cost and often synonym dictionaries are not available.  Languages such as Chinese or Arabic are a no-go.

3. How complex is your pricing model?

Do you really have only one price per product, as often assumed by merchandizing tools?  If not, because of the approach that merchandizing tools take to index your data, by flattening the data structure, billions of data rows are not uncommon.  Can your tool deal with this Big Data-style situation?

4. Can you create association between products?

Certainly guided navigation and a great search can do a lot, but what’s also really powerful is establishing cross, up or accessory relations.  The set-up, management and handling of bundles is also a very powerful merchandizing mechanism that requires more than a powerful search.

5. Can you create landing pages dynamically?

Your customer searched for a specific brand.  Wouldn’t it be great to have them land on a page dedicated just to that one brand?  Alternatively, they may search for a category, for example, running shoes.  Why not have them land on a page dedicated to running, presenting shoes and additional running gear along with promotions relevant to their search?

The above are guidelines to help you in your merchandizing tool evaluation and overall online efforts.  In a follow-up post, I’ll provide five additional points to consider, focusing on relevancy, promotions, information access, cross-channel and tool integration, to help you drive success with your merchandizing initiatives.

Steven Kramer is North America President of hybris, www.hybris.com. Today’s guest blog is part one in a two part series. Part two will run in January 2013. 

It is Good to Give Gift Cards

If you haven’t seen this yet, you may want to take notice. According to GiftCard.com, not everyone sees gift cards as a lazy and thoughtless approach to gift giving. In fact, the GiftCard.com Holiday Gift Card Spending Report reveals that giving of gift cards during the holiday season is becoming more accepted and prevalent, and spending on gift cards is expected to go up this year.

Among the report’s findings:

  • 49.6% of consumers plan to purchase at least one gift card this season
  • More than 40% say they always or almost always pre-plan gift card purchases
  • Only 15.6% purchase gift cards as a last-minute option
  • Average consumer spending on gift cards is $26.40
  • Selection and personalization ranked as “very important” factors when looking for a gift card
  • 14.2% of consumers rank personalization as the most important feature for a gift card
  • 21% of consumers plan to spend more than last year on gift cards
  • Most consumers typically purchase gift cards at grocery store displays or specific stores and restaurants
  • 13.1% of consumers purchase gift cards online; 4.7% purchase from their mobile device
  • 38.5% rank gift cards as their favorite or usually favorite gift to receive

“Gift cards, for most, are an essential part of the holiday shopping season,” said David Jones, CEO of GiftCard.com. “Not only do they make excellent gifts for everyone, from the hard-to-shop-for relative to a holiday party hostess, but they save time and effort in an already busy season.”

Sure, GiftCard.com is biased when it comes to gift cards. After all, it prides itself on being the “one stop shop for everything gift card.” But that doesn’t mean GiftCard.com is wrong. Seems to us that gift cards really can be the perfect gift around the holidays.

When you can’t decide on the perfect gift for someone, one of those prepaid gift credit cards, or a gift card to a favorite store or a nice restaurant, is something that says, “Go treat yourself to something special on me.” Don’t be afraid to pull the trigger on those gift card purchases this holiday season.

Thanksgiving and Black Friday Spending Strong As Shoppers Sought Early Promotions

Guest Blog By Rikard Bandebo

Black Friday kicked off the holiday shopping season with a bang, providing many retailers with an important consumer spending boost – despite the challenges faced in the wake of Hurricane Sandy. Many merchants attracted more customers by opening their doors on Thanksgiving and expanding their shipping and layaway options to simplify shopping.

The First Data SpendTrend report is proprietary research that tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.  The 2012 Black Friday SpendTrend report compared Black Friday 2012 spending against 2011 numbers. Findings showed that sales were strong, with the following overall same-store retail growth rates:

  • Dollar Volume: +5.6 percent
  • Transaction: +3.6 percent
  • Average Ticket: +1.9 percent

Retailers experienced a healthy dollar volume growth (DVG) of 5.6 percent during Thanksgiving and Black Friday, compared to 6.3 percent in 2011. Seasonal merchandise discounts lured shoppers into clothing and clothing accessory merchants, who saw a DVG of more than 10 percent. General merchandise stores saw similarly positive results, with a DVG of more than 9 percent; we attribute this to the fact that many of these stores expanded their layaway options and also offered price matching.

Building materials, garden equipment and supply dealing retailers were the leading categories, with a 14 percent DVG (compared to about 8 percent in 2011). Our research shows that this channel’s strong performance results from an overall improvement in the housing market, rebuilding efforts following Hurricane Sandy, and shoppers purchasing holiday decorations.

Retailers’ healthy DVG can be traced back to the fact that consumers increased how much they were spending during each shopping trip – there was nearly a 2 percent increase in average tickets. Merchants helped drive sales and spending by decreasing their focus on clearing out inventory through lower margins. While the reduced discounting did not affect general merchandise stores’ DVG, it did result in a lower figure for furniture and home furnishing stores.

From a geographic perspective, most regions in the U.S. saw a boost in DVG. Much of the weather across the nation was crisp and clear, helping drive consumer foot traffic. The West and the Southwest led all other regions with DVGs of 7.2 percent and 6.7 percent, respectively. Spending was healthy in New England and the Middle Atlantic, with DVG of 1 percent and 4.3 percent, but they were the slowest growth regions since many consumers had reassessed their holiday budgets after having purchased generators and building supplies in the aftermath of Hurricane Sandy.

Overall, this year’s Thanksgiving and Black Friday showed impressive growth considering tough 2011 comps and that the retail DVG has been around the 3 percent range for the past few months. The holiday spending rush seems to have started off well and merchants will monitor shoppers in an effort to sustain the growth throughout the season.

Rikard Bandebo is vice president and economist at First Data. First Data SpendTrend, a macro-economic indicator, is based on aggregate same-store sales activity in the First Data Point of Sale Network. First Data SpendTrend does not represent First Data’s financial performance.