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Retail Data Conversions; Part Art, Part Science. Which is more important?
June 28th, 2009 by Rick

Right Brain, Left Brain  credit to: vaXzine

Right Brain, Left Brain credit to: vaXzine

Data conversions must be exact, precise, methodical….WAIT, this all sounds very scientific and not creative at all. So what part of a data conversion can possibly have anything to do with ‘ART’? Let me explain…

Retail data conversions can be complex. I am sure this is true for most industries, but as retail is my industry domain, that is what I am focusing on. Converting critical data like UPCs, prices, customers, etc, can have a huge impact on your organization, if not done correctly! I have worked on numerous data conversions for retailers over the years, and I feel like I have encountered every problem imagineable. Yet, new problems are encountered each and every time. Each conversion is different. No matter the methodology followed, the testing prepared for, unique situations arise. In so doing, we must adapt to the situation and this is where the creativity, the ‘art’ (and fun) begins. Here are a few prime examples:

  1. When a default is not a simple default - by definition a default should be simple. Not necessarily so. Providing data for all fields in a new system is not always possible and therefore we set defaults. But simple defaults will not always provide the best results. Maybe the default can be based on other important data or dates and provide a more meaningful ‘complex’ default. In order to have a better result, it is preferable to use as precise a default as possible.
  2. Using complex data maps - how creative can you be in building data maps that result in better and more meaningful output. A data map can be a simple one-one to map (replace the old value with this new value) or it can be fairly creative and complex. I recently had to map an old GL code structure with multiple parts to a new GL code with a differnet set of parts, where each part had a diffent series of rules and data masks to build the new G/L code from the old to the new - now, that was fun!!
  3. Finding a home for old data - Sometimes the residing system just does not have a place to store a piece of information from the old system. When that old information is valuable and you want to carry it forward, you must find a place for it to live, where it can be accessed and continue to be meaningful. A couple of options may be; to use a user-defined field, or put in another field that is not being used and give that field a new meaning, or merge the information into another field while keeping its meaning. All viable and creative solutions to a common data conversion problem.
  4. Resolving errors - and this is where the most creative part of the process occurs. Integrity is king! You have built a complex set of data conversions and business rules that are all inter-connected and must work in concert to get a complete result with full integrity. Sure, you can say if you built the conversions correctly to begin with there will be no errors and no discrepancies, but my experience tells me otherwise. Rejects, errors, and discrepancies are a natural part of data conversions, but how you deal with it is what becomes the differentiating factor. Some rejects or discrepancies can be fine, if they are expected or can be explained/justified. In other cases, the source of an error needs to be identified and then corrected. Once the source of the problem is found a correction is needed - corrections can be as simple as a small business rule change or as complicated as requiring a conversion re-write or additional data/conversions that might not have been anticipated. The goal is to ‘create’ a resolution that will get the desired result without disrupting the entire flow and integrity of the entire conversion process.

So there you have it, data conversions are not simply scientific, and a creative component is almost always needed, sometimes equally, if not more important. This just highlights a few examples of this and I am sure there are others you may have experienced that are also relevant? So which do you think is more important? Art or science? What have your experiences showed?

12 Ways Google Wave Can Help Retailers
June 7th, 2009 by Rick

If you haven’t seen this yet, take a glimpse at this presentation of the recently unveiled Google Wave at the Google I/O 2009 Conference (it’s long at 1h 20m, but watch a few minutes starting at the 4:30m mark, and you’ll get the idea).

It is the latest Google creation that may transform how we all work. In it’s simplest definition, it is the next generation of e-mail. But take a closer look, and you will quickly understand it’s way more than that - it’s the collision of email, instant messaging, wikis, blogging, video (youtube), photo albums (flickr), twitter, and much more into one single powerful collaborative tool. And ALL of this is done in a simple browser.

I expect this to be transformational, and I immediately began to think of how retailers might benefit from such a tool. Of course there are already lots of collaboration tools available in the market, but keep in mind that Google Wave is way more than that, it is:

  • Free - anyone from any computer can simply open their browser and have access to all of this.
  • Real-time - and when I say real-time, I mean real-time. Character by character, it is instantly displayed on the receiver(s)’ computer.
  • Everything all in one - no separate components for email, instant messaging, blogging, tweeting, etc.
  • All about a conversation - track every comment or reply in its appropriate place within the thread and specify who can or cannot see the reply. Also provides complete playback capability that allows you to step through a conversation from the beginning, one comment/reply at a time.
  • Open Source - anyone can add more services/features to this, making it increasingly powerful. In typical Google fashion - they have created the foundation and will let the rest of the world improve on it!

Retailers with locations, employees, and customers across states, the country, and possibly the world, have a lot to benefit from all this. This tool is really about having conversations. Conversations that others can participate in and build upon. Conversations can consist of 2 participants or an entire organization, where everyone can participate in the conversation and follow along in a very flexible and powerful way. So with that in mind, here is my list of 12 ways that I can see retailers benefiting from Google Wave:

  1. Education - Companies have always been good at delivering big binders/documents of policies, procedures, rules, etc. What if they can tailor those online documents to certain groups of employees? What if employees can post comments/questions right in the appropriate point of a document, where HR or other employees can respond? This is sort of like an FAQ, but organized in an ongoing conversation.
  2. Product information - Buyers have stories to tell about their collections and products. Everyone in the organization can benefit from this information and then add their own comments/feedback. All of this information can be shared with everyone and buyers can learn from others.
  3. Training materials - provide all training materials online that can be viewed and shared by all staff. Documents, videos, online conferencing, and employee feedback. Others can learn from what has worked best or not for others.
  4. Product warnings - Inform your customers quickly with warnings of any product defects or potential hazards.
  5. Customer invitations - Invite your customers to special events and upcoming promotions.
  6. Customer feedback - Request customer feedback and let employees and other customers to respond. This information will be totally transparent and shared by all.
  7. Customer polls/surveys - Conduct quick polls or surveys with your employees and customers. This will give you quick and instantaneous feedback on how things are going or testing out a new idea or strategy.
  8. Share selling tips/techniques - Store employees can share their own tips on product benefits or selling techniques.
  9. Store competitions - District or store managers can start competitions for employees or stores at a whim, and track the results.
  10. Collaborative charity events - Start/promote charity events, locally or nationally, where employees and customers can easily participate.
  11. Employee blogging/tweeting - Provides a platform for employees to express themselves through blogging and tweeting. Employees can share their personal stories and experiences with other employees and customers.
  12. Suggestion box - How about an online transparent suggestion box, where employees or customers can make recommendations, and then HR or other managers can provide their feedback.

These are just a few ideas that came to mind. Any of these or other components/widgets can be added to Google Wave. What would you suggest? How would you like to see retailers use a tool like this?

10 Myths About Selecting a Retail System
May 18th, 2009 by Rick

It’s easy to select a new system. It’s HARD to select the RIGHT system. Over the years, I have heard retailers say such things as, ‘all systems basically function the same’, ‘they all have their issues’, and ‘if it works for ‘X’ it will work for me’. It is this kind of attitude that is likely to get you into trouble. Over time, I have developed a list of 10 myths about selecting a new retail system:

Choices - by fotobicchio

Choices - by fotobicchi

Myth #1 - If it works for other retailers, it will work for me.
This is absolutely not true. The exact same system could be a great fit for one retailer and a disaster for another.  Even if you believe the retailer is very similar to you, there are always differences; merchandise mix, number or size of stores, distribution methods, employee skill/sophistication, personalities, etc.  These differentiations can all impact on how a system will work for one retailer vs. another.

Myth #2 - All systems basically do the same thing.
On the surface Retail systems all have to provide a certain level of basic functionality in order to operate in a retail environment. But it goes beyond this. Is the system easy to use, intuitive? How is the system going to help you improve? Does it have the required level of sophistication that is going to enable your company to grow and thrive, or will it’s rigidity be a hindrance? Yes, most systems have the basic functionality, but whether it is in-depth , forward-thinking, and intuitive can be a very different story.

Myth #3 - Underlying technology is not important 
If it works and runs on a Windows PC then it must be OK. Not true! The underlying technology is very important. Is it current? Is it open or proprietary? Can it inter-operate and play well with others? Purchasing a system that is an aging or dying technology or completely closed and requiring special or proprietary knowledge can be very limiting.

Myth #4 - System must be PCI compliant
With the number of credit card security breaches we have experienced recently, certainly all solutions MUST be PCI compliant by now. That is simply not true. Some may be fully compliant, some may only be partially compliant, and others may not be at all. This needs to be reviewed, questioned, and challenged. Being PCI compliant is more than simply about software. This is your data and you are at risk, not the vendor. Do your homework.

Myth #5 - Architecture is not important
Not all architectures are the same. Is it centralized or distributed? Is it client server or thin client? Is it web-based? How easy is it to deploy the software? Are software updates automatic? These can have an effect on your operations and your total cost of ownership, and ultimately your bottom line.

Myth #6 -  If they don’t have what I need, it can always be customized
While this may be true, it is really not recommended. Customizations can be expensive and risky. There is more cost than just the initial development; documentation needs to be customized, specialized training may be needed, support team needs to be educated, and upgrades are more costly as customizations need to be re-incorporated. In addition, customizations can cause the software to become unstable.

Myth #7 - Store activity does not have to communicate in real-time 
Yes for some, seeing their store sales the following day is acceptable, but how the data is communicated can be very important. Whether real-time, near real-time, or nightly, it is extremely important that data is communicated accurately, consistently, is easily verifiable, and has proper failover should connections be lost. Also, not all data is created equal, maybe seeing some data in real-time is critical while some is not, All this must be considered when evaluating store communications.

Myth #8 - If they don’t have what I need, I can always ‘plug-in’ another module
This can be a viable approach, but not all systems/architecture easily support this. Some vendors may support 3rd party modules/applications right out of the box, others may require some integration effort, while some may not support this at all. Integration can be painful and expensive if not working with the right solution. 

Myth #9 - As long as it has the data, I can get what I need
Be extremely careful here. I hear vendors say that ALL the time. We have the data you need, so you surely can report on it. This is not necessarily true. How is this data accessed? Most vendors will have a set of base (canned) reports (but not all!), and then typically you can modify or add reports of your own. How easily is this done? Can data be summarized, filtered, organized? Is the database complex or proprietary? Do they have their own end-user tool? Can you use 3rd party tools (such as Crystal Reports or JasperSoft)? Do you require any special knowledge/skills to access the data? Be very careful to make sure  that you will truly be able to access the data, in the format you need it, and with the skillset you have.

Myth #10 - It costs less and does the same thing
Similar to myth #2, not all systems are alike, and therefore, you cannot simply go with the lowest cost solution. You get what you pay for definitely applies here. Now, that being said, there are less expensive solutions that may work for you, but you need to evaluate all of the above and see where a solution fits within your budget. Just as you would not consider a system that exceeds your budget, you should probably not be considering a solution that falls below the lower range of your budget either.

Bonus Myth - We can do this on our own. Who needs consultants?
While you can use this list to arm yourself with valuable knowledge, having outside expertise is still recommended. Consultants bring expertise, an outside point of view/perspective, and in-depth industry knowledge of best business practices, technology, and software vendors. In the long run, a consultant can save you time, money, frustration and costly delays.


I’m sure I’ve missed a few, what myths would you add? What words of warning or advice can you share that will help others?

 

 

Why Aren’t There More Grocery Stores On-line?
May 4th, 2009 by Rick

I predict one day soon shopping for groceries online will be as common downloading songs. It just makes sense. Read my recent encounter with Grocery Gateway and you will understand why I see it this way.

I recently had the opportunity to meet with John Charleson, IT Director of Longo’s. Since 1956, Longo’s has been serving the Greater Toronto Area (GTA) with high service, high quality grocery stores. Longo’s has participated in the online grocery business since 1999. At first, they were merely the supplier to Grocery Gateway, where their shoppers would come into the store on a daily business and pick orders for their online customers. After Grocery Gateway made a brief departure using their own central distribution, Longo’s purchased the near bankrupt Grocery Gateway in 2004, and brought personal shopping back to their stores. The rest, as they say, is history. The online business was profitable within 6-9 months and has seen phenomonal growth at a pace of 15-25% per year.

A few more stats about their online business:

  • Fills 4,000-8,000 orders per week in the GTA from about 6 stores.
  • Regular customers order every 2nd week (supplemented by a few visits to the store in the interim)
  • 8,000 SKUs available online
  • Average online order is $140 vs $30 in-store
  • Online sales account for about 5-10% of total sales.

Sales continue to grow as they add more stores for Grocery Gateway shoppers, expanding their customer reach, while increasing the number of SKUs available online.

What a great service. I remember my mom calling the local grocer placing an order over the phone, and having a delivery man show up later that same day with fresh goods, well packed, and carried right into our kitchen with a warm smile. Longo’s has been long on customer service and now has the ability to provide this kind of service to its customers once again, en masse, through the use of technology. While technology plays a significant role in this service, the personal and human touch is what makes it such a huge success.

 

Online Order Process:

Orders are placed online, and then picked at a nearby location by real people. Using handheld devices, the ’shoppers’ walk the aisles picking out the best produce and fresh products with a caring and discerning eye, as if they were buying groceries for their own family. If a product is not available, then the shopper will pick an appropriate substitution. Orders are packed in re-usable cartons and then picked up by the delivery trucks first thing in the morning. Longo’s uses their own well-trained delivery personnel, as this ultimately becomes the only ‘face’ to the customer. Delivery personnel provide friendly, high level service, carrying all cartons right into the customer’s kitchen for convenient unpacking.

Longo’s prides themselves on customer service and they are pleased with the satisfaction their customers get with this service. Many have said they could no longer live without it. Longo’s is always trying to improve upon this.

Even with their great service and an award-winning e-commerce site, they have plans (vision) for numerous improvements:

  • Improve fill rates by showing available inventory by region and making more intelligent automated substitiutions, when the item is not found.
  • Give customers the option of picking up their order at the store (with attendant putting packed groceries right into vehicle) or receiving it at home.
  • Add more SKUs and specialized SKUs, depending on region of purchase.
  • Offer promotions and specials while shopping online.
  • Offer product suggestions based on purchase history.

This shows Longo’s desire to continually improve the overall online shopping experience. I think they can take this even further with more social interaction by adding such features as online product reviews, ’shopper’ feedback, and online discussions.

 

Why Aren’t More Grocers Providing This Service?

I think this is the ideal online business for for brick & mortar retailers. Tesco has been doing this for years with continued and growing success. It’s a time-saver, it’s ecologically friendly (less travel, re-usable cartons), and is a huge convenience for your customers. I understand that this is not a simple service to add and will be difficult to make it profitable, but nonetheless it is a great service to your customer and can give you an edge over your competition. Yes, it will eat into already tight margins, but as we have seen with other industries - adjust to the online world and make it work (profitable) or potentially lose altogether.

I am curious to hear what others think? Do you know of any grocers that are already providing this kind of service? Do you think you would use this type of service if it was available in your area? What other improvements would you recommend for online grocery shopping?

E-Commerce 2.0
April 19th, 2009 by Rick

A recent EConsultancy blog reviews UK shoe retailer Clark’s new e-commerce site. While I think the review itself is very insightful and informative, this post actually does a better job describing some of the key features required in a 2nd generation e-commerce site. Personally, I think Clark’s has done a fairly decent job at putting together a very capable and competitive e-commerce site, rich with information and features.  First generation e-commerce sites were very static, with little information, few pictures, difficult to navigate, search and use. It is now a web 2.0 world, and retailers and e-tailers have been moving towards E-commerce 2.0 sites, an environment that provides a rich, easy to use, and social shopping environment. Wikipedia describes E-commerce 2.0 as a more social, personalized shopping experience.

Shopping by definition is ’social’. As quoted by Doc Searls in Cluetrain Manifesto:

“Markets are conversations.  The first markets were filled with people, filled with talk. Some of it was about goods and products. Some of it was news, opinion, and gossip…all of it engaged someone.”

In less technical terms, these are the features of an e-commerce 2.0 site that I think are important:

  • Tell a story - every retailer or merchandiser has a story to tell about a particular collection, model, design or color.  Create a brief video or blog and share this with the consumer. You bought these products and assortments for a reason, now explain this to me, the consumer, so that I will understand why I should want to buy this too. Allow place for questions and discussions among customers.
  • Multi-angle shots - provide lots of clear crisp photos from many angles. When I am in a store, I will pick-up a product and look at it from every angle. I should be able to do the same online.
  • Great search capabilities - I should be able to search by category, collection, model, color, size, with multiple groupings and drill-downs. If I am only interested in high-top black running shoes in size 12, don’t waste my time navigating through other products. I should be able to select and de-select multiple tags and multiple search criteria at any time, until I get the specific product or group of products that interest me.
  • Simple and timely registration - do not make me register until I absolutely have to. If I am forced to register earlier than I need to, I’m gone. Make registration simple and quick with the least amount of information required possible. If I miss a field or enter incorrect information, take me right to that field with a  clear explanation of what I need to do to correct it. I hate having to re-submit a registration 6 times, before getting it ‘right’!

    Credit to: Dan Eriksson

  • Quick check-out - checkout has to be quick, simple and well-guided. Provide clear indication of where I am, what I am doing, what is next, and what I may have missed every step of the way. I do not want any surprises where I have to go back a few steps or even worse start all over again! I should be able to add/remove items from my shopping cart at anytime.
  • Customer reviews - allow customers to post reviews and rate products. These should be easily entered and reviewed.
  • Social & intercactive - overall the site needs to have plenty of place for discussion and social interaction. Questions and answers with buyers and other company employees, open discussion threads, comments on product reviews, customer feedback on site, product collections, service/delivery, etc.

This is now a web 2.0 world and customers expect a different experience. Aside from being able to shop with ease there is a need to provide a social experience. People will still go shop in stores for this experience, but providing a social experience when shopping or learning on-line,  will attract more customers and provide them a better overall on-line experience.

What do you think is important in the next generation of e-commerce sites? What would make the overall experience better and easier? What are some of your favorite places to shop or browse online? Please share your thoughts.

Social Media Marketing; Where’s the ROI for Retailers?
April 13th, 2009 by Rick

I get asked this question all the time. I read numerous blogs, articles, emails, newsletters, and hear casual conversations where this  question is raised.  While a straightforward answer may be hard to come by, I don’t think social media should be dismissed.  Retailers should start exploring this medium as soon as possible. There are two questions a retailer needs to consider:

  1. What’s the cost in using social media?
  2. How do you measure the results?

The goal of any marketing effort/campaign must have results that are measurable. Otherwise, how do you know if you are spending your time & money wisely? How do you know if you are doing well? Let me be clear, these questions will not be easily answered but here are a few suggestions to think about. 

Let’s take a closer look at each of these questions:

 

I. What’s the cost in using social media?

This is the easier question to answer. Social media is known for it’s very low cost of entry. While there are no significant development or production costs, time is needed and the more areas of social media entered and the more frequent postings made, the more time that will be needed. Nonetheless, costs for the amount of time and effort spent in this area can be easily measured.

 

II. How do you measure the results (ROI)?

credit to: Bob Troia

credit to: Bob Troia

This is not as easy a question to answer. First you have to state your goals/ojectives. Obviously the main goals will be to increase sales, traffic, and brand awareness. Why else spend time and energy in this area? The problem with these traditional goals, is that it will be difficult to measure. It will be difficult, if not impossible, to associate the impact on these goals as a direct result of what you are doing with social media. This is why, I believe that secondary goals must be set, so that you can measure the effectiveness of your social media campaign.  

 

For example, set goals of actual numbers or percentage increases for the following:

  • The number of visitors to your blog
  • The number of comments/conversations on your blog
  • The number of Facebook fans
  • The number of Twitter followers.
  • The number of online references to your brand or company name.

 

These results will at least indicate whether you are headed in the right direction. The thought is that as you increase your social media presence you will attract more loyal customers that will spend more money. Maybe you will be able to see such a correlation. Please take a look at this article (How to Measure Social Media ROI for Business) which offers further ideas/examples in this area.

While ROI may be difficult to measure at this very early stage, I believe the cost of NOT using social media is greater than the actual cost of using it. Social media is growing at an increasingly rapid rate. It takes time to build content, followers, and attention through this media. It can have a rapid and viral rate of increase, but does not simply happen overnight. If you are not starting to use social media, your competitors will, and eventually you will be playing catch up. Why not take the lead?

What do you think? How can retailers measure success with social media? What factors and costs should be considered?

Connecting Data, Connecting Systems, Connecting People
April 6th, 2009 by Rick

I recently launched my new company web-site for RIBA Retail with its overriding theme of connecting data, connecting systems, connecting people.

At RIBA Retail, we specialize in retail technology consulting, services, and development. We have been performing data conversions and data integration for retailers for a long time! It still amazes me how many difficulties retailers run into when trying to convert data or integrate systems. I don’t know about other industries, but having worked with retail systems for over 25 years, I know that retail systems can be very complex. There are many applications/systems to deal with - POS, merchandising, replenishment, warehouse, planning & forecasting, assortment planning, allocation, price optimization, business intelligence, financials, order fulfilment, just to name a few. Things get even more complex for those retailers that also operate a wholesale business like Tory Burch, Quiksilver, and Skechers. Retail is a dynamic business, with new channels and new business applications being developed all the time. 

Retailers have come to understand the importance of offering a complete cross-channel shopping experience, which is no longer simply a competitve differentiator, but a retailing necessity.

According to a recent RSR study, “a satisfied multi-channel shopper can be a retailer’s most profitable customer’”.

Yet, even still, retailers struggle with data consistency and a seamless multi-channel business.

According to this same RSR study; “Retail business process disconnects continue to keep them from becoming more effective cross-channel retailers.”

For the retailer, it is becoming increasingly important that they accomplish the following in order to offer a cross-channel experience:

  • Share product information across all channels for brand consistency. Descriptions, prices, and images in one channel must match other channels. Consumers are becoming savvier and expect to connect with your brand the same way in all channels.
  • Inventory availability must be immediate and accurate in all channels. Customers expect to get product when they want regardless of which channel it is coming from.
  • Customers must be recognized and consistent across all channels. A customer that shops in the store, is the same customer that may shop online, or on her iPhone. And the retailer better recognize and reward that customer regardless of channel.   
  • Lastly, retailers need to add the human side. Its not only about systems, but with the advent of social media, it is very much about people too. Retailers need to engage, inform, and ‘connect’ with their customers in all channels in a consistent manner.

 

credit to Core Media Images

credit to Core Media Images

So, why is this so diffcult to accomplish? Why do retail operations and channels appear to be so disconnected? First of all, retail systems are many and often disparate. While there has been a recent consolidation of retail systems and more vendors offering a full ERP solution, there are still many disconnects. Even some leading ERP vendors have difficutly connecting their own systems (but I’ll deal with that topic on another post). Inherently, retail systems can be complex. There are ERP systems, best of breed applications, homegrown systems, and retailers may have a variety of these. With all these different systems, how can retailers possibly connect all their data and all their systems in a seamless way?

Based on my experience, I would like to offer a few tips that retailers should think about when connecting data and integrating systems:

  1. Data must flow between systems automatically and on a timely basis. Manually entering some information from one system to another maybe acceptable in some cases, but most data should flow automatically.
  2. Even though systems will have different types and lengths of fields/descriptors, they must be setup in a manner that will be acceptable and consistent across all systems (finding that lowest common denominator).
  3. Data must be mapped appropriately. Certain entitites may have different codes or names from one system to another. If product is called ‘x’ in one system and ‘y’ in another, there must be the proper and accurate mapping mechanism in place to communicate information between systems.
  4. New/updated customers and inventory updates must be fed to all appropriate systems, so that all channels reflect customers and available inventory in a timely and accurate manner.
  5. Validate, validate, validate. All data converted or integrated must be validated and verified for completeness and accuracy.
  6. Efficient method for identifying and handling errors via system alerts and error logs, so that problems can be quickly identified, corrected and re-processed.

Keeping these few suggestions in mind will help significantly reduce problems and disconnects for any data conversion or integration project. Please feel free to add your own tips/suggestions based on your own experiences.

Music Store Fades Away….What’s Next?
March 24th, 2009 by Rick

The recent announcement of Virgin Megastores closing got me thinking.
credit: Digiart2001
credit: Digiart2001

Is this the end of music (CD) stores as we know it? Will every music store eventually fade away? What about bookstores? Will those eventually go dark too?

There are a number of retailers that are defintely affected by digitization - music, books, and videos. Will there simply no longer be a need for brick & mortar stores of these products? Certainly appears to be a dying breed.
 
What about other retailers? Will other industries eventually suffer a similar fate? What about shoes, computers, socks, power equipment, appliances, etc. Certainly all of this is already being sold online today, but how will this affect brick & mortar retailers? I am sure Zappos wants to take away even more business from shoe retailers. Or take the recent success of blacksocks.com - they certainly don’t think you need to go to a physical store to buy black socks anymore. Threadless continues to sell more and more t-shirts through its creative and collaborative web-site.
 
Retailers are going to start feeling the pinch from all directions. So what should traditional brick & mortar retailers be doing? Here are a few suggestions (IMO):
  • Blog. Engage your consumers through a blog. The more consumers know about your philosphy, your personality, your raison d’etre, the more likely they are to shop with you. Today’s Gen Y consumer (and all of us older folk that are catching up) not only crave this (if its interesting and engaging), but will actually respond and comment back to you, especially if we believe you’re listening.
  • Tweet, tweet, tweet. Whether through twitter, facebook, myspace, or others; micro-blogging is growing like crazy (1382% growth rate). It is an easy way to connect with all of your customers to inform, build brand, promote, and quickly solicit feedback.
  • Collaborate. Open up channels (e.g. facebook fanclubs) to your consumers that enable them to collaborate. Let them create a new design or logo, develop a new product line, offer new services. Who knows what your customers will come up with? But guaranteed, they will come up with some great ideas. They are after all your consumer and they know what they want or what to fix.
  • Offer alternatives. Brick & mortar retailers have an edge by allowing your customers more convenient ways to shop. Make sure all of these avenues are open to them and done so flexibly and with the utmost of service.

Today’s consumer is moved by engagement, collaboration, and transparency. It’s not a one size fits all type of thing, but things are moving in this general direction. Don’t compete with Zappos or Threadless, learn from them, join them! Look at what UK’s Mothercare is doing. They engage their captive consumers with tons of social interaction and useful information on their social networking site Gurgle.com. In another example, a small California retailer Trends in Two has done something similar for its specialty store of twin parents (or soon to be parents) with their own social network devoted to twin pregancies - Twin Pregnancy And Beyond.

In the case of Apple, they actually moved away from internet-only sales to B&M stores, in order to further engage their customers and improve the overall customer experience. Now, Microsoft is setting out do the same. Here we see a trend with companies that see a need for B&M stores to further engage and connect with their customers. So maybe brick & mortar stores aren’t quite dead yet :) 

As always, your thoughts, experiences and comments are appreciated.

Channel Consistency
March 16th, 2009 by Rick

I was recently shopping at Chapters.Indigo, Canada’s largest retail bookstore, and was eager to pick up a couple of books on my reading list, when I noticed that the prices were about 20% higher in-store. Prices are cheaper on-line, shipping is free with purchases of more than $40, and books typically ship within 1-3 days.  This pricing policy does not make sense to me. How important is it for brick & mortar retailers to have consistent pricing across channels? Should your on-line store have the same prices as your brick & mortar stores? Does it matter if you could buy on-line but not pick-up or return at one of their stores? Many retailers still operate their on-line and physical locations as two separate entities that just happen to have the same name. 

Does Chapters even want me in their store? Chapters sells a lot more stuff than books, like gifts, candies, CDs, games, etc. I would NEVER buy one of those items on-line, but if I’m browsing through the store I am a lot more likely to pick something up on my way to the cash.

credit: Steve Brandon

If you read through this thread, where consumers discuss Chapter’s pricing practice (http://www.redflagdeals.com/forums/archive/index.php/t-502505.html), you quickly understand how this simply frustrates the consumer.

To be fair, I understand that Chapters has stiff price competition on-line, with the likes of Amazon, and there is a cost to operating large format bookstores, where users can browse, touch, read, and enjoy that in-store experience. Nonetheless, this pricing policy is frustrating and it cannot continue forever. So what can they do? I think brick & mortar retailers, like Chapters, actually have an advantage over their e-commerce-only counterparts. They can offer consumers more ways to shop. Give them options:

  • Shop on-line and ship to you (with appropriate shipping fees)
  • Shop on-line and ship to a location near you (at no additional cost, since item might already be there or deliveries are made to your store all the time anyway).
  • Browse on-line, reserve item at a location near you, and go to store to complete the purchase.
  • Return any item in any store or by shipping (even if bought at a store).

Brick & mortar retailers need to figure out how to operate as one entity to the consumer, without confusion. If retailers do this right and have channel consistency, I think brick & mortar retailers would gain an advantage over their e-commerce counterparts. Am I missing something here? Have you had similar frustrating experiences? What do you think brick & mortar retailers can do better to improve their on-line/in-store shopping experience?

Where in the World are Brick & Mortar Retailers?
March 4th, 2009 by Rick

ricardo / zone41.net

ricardo / zone41.net

While on vacation, I got to read (and  thoroughly enjoy), What Would Google Do? Author Jeff Jarvis takes a fascinating look at the world through Google glasses.  He looks at many industries and suggests how these companies may do business differently, if they were to think, act, and behave as Google would. Google and web 2.0 have paved the way for doing things differently and treating customers differently too. Create platforms and environments for your customers to add content, collaborate, and engage in an open, transparent and honest manner. As Jeff says ‘your worst customer is your best friend’, if you give them the platform to communicate.

Craigslist, Flickr, Wordpress, Salesforce.com are all great examples of companies that are doing things differently. Craig Newmark has singlehandedly taken a huge chunk out of the national classified ads business, we’re talking billions of dollars. Craig has done this by providing a platform where customers can do this at virtually no cost. Do you think Craig has a successful business model?

To give one quick personal example - after reading this book, I sent out a simple 140-character message on twitter about how I enjoyed reading it. In less than 15 minutes, I got a ‘thank-you’ back from Jeff Jarvis. Now, what do you think my impression of Jeff is? Do you think he cares about his customers/fans? Do you think I will recommend his book to others? Do you think I will be more inclined to buy another book he wrote? Well, Jeff gives numerous and way more powerful examples of such strategies in his book.

But what struck me the most was the the void of retailer examples.

Where are the brick & mortar retailers?

Where is cool & hip Abercrombie & Fitch? Where is Ann Taylor, Eddie Bauer, The Gap, The Limited and many other mega national retail brands? Most of these companies have not opened their internet door, they do not even have twitter accounts. They do not communicate, engage and collaborate with their customers. There are exceptions that I have come across - Starbucks, American Apparel, Build-a-bear, and Lululemon to name a few, who seem to be moving in this direction, but where are the others?

I have a theory on this. Brick & mortar retailers think that this approach, this way of doing things, is excusively for internet and e-commerce companies - the Amazons, E-Bays, Threadless, and Zappos of the world. These retailers do not even think they have a role to play in this space. While most of these retailers have growing e-commerce businesses, it is still only a small percentage of their overall business, and therefore, they do not see the purpose in spending time, money, and energy in this area. Their mistake is confusing e-commerce with social media. Even if a brick & mortar retailer does not have an e-commerce site, they should still be spending time building their social platforms and engaging their customers. This is what will bring increased brand awareness, increased trust, increased loyalty, and get their customers into the stores where they should be, spending money and telling all their friends.

In the future, I will test out this theory further and take a closer look at a number of leading national retailers and see who is really doing what in these areas. If you are aware of retailers that are doing more in this area, then please share.

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