Archive for retail

Toys R Us sell figurines of meth-lab master

Posted in Uncategorized with tags , on October 22, 2014 by marketingheart

If you’ve watched the series Breaking Bad, you’d no doubt agree that the main character, good guy turned bad Walter White, makes a questionable pinup for little kids.

Toys R Us begged to differ, choosing to make a few bucks by ranging plastic figurines from the show, including Walter  holding a handgun and his accomplice, Jesse Pinkman, wearing a protective suit used in the manufacture of crystallised methamphetamine.141021-breaking-bad-toys-01_bb21ff57924a5a437ebba9592949a049.nbcnews-ux-920-520

Or at least they did until pressured to remove the products. The petition – mounted by a ‘Florida Mom’ on the website Change.org, called “Remove Breaking Bad dolls from their shelves”, attracted over 8,000 signatures.

A Toys R Us spokesman initially defended the product: “The product packaging clearly notes that the items are intended for ages 15 and up. The toys are located in the adult action figure area of our stores.”

Lending some humour to the situation Bryan Cranston, the actor who plays White, responded to the controversy, tweeting, “I’m so mad. I am burning my Florida mom action figure in protest.”

Personally I think the kiddies should have been offered matching tattoos…R Us!

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Putting humanity back into retail stores – then adding technology

Posted in business, Uncategorized with tags , , on December 12, 2011 by marketingheart

I had an extraordinary shopping experience the other day. First I went to the Telstra shop to ask about my contract and get some advice on buying my next phone; I was intercepted by a fellow brandishing a tablet into which he logged the nature of my query and added me to the virtual customer queue. All very smart so far, but then he blew it by telling me they would see me in 40 minutes! That would surely break mall world records for slow customer service in a retail setting. It seems Telstra have employed technology to come up with a system that delivers worse customer service. Not so smart after all.

During my enforced wait, I shopped around for better phone deals – why wouldn’t I? I also dropped into Harvey Norman to buy a small item. I self selected it and took it to the register…where I stood in line for 15 minutes while an inexperienced check out clerk struggled with every purchase ahead of me.

Retail is faltering against the convenience of ecommerce and it’s not hard to see why,  judging by this experience.  The signs of stress are common – empty retail spaces abound and the forums . Customer service has been one of the hot spots in the debate about what retailers can do to maintain relevance in the connected world.

There is an aspect that I think has been left out of this debate: traditional high street strip retailers often had a more personal relationship with their customers, there was a human scale to the whole setup which encouraged distinctiveness and loyalty. My feeling is that all that went out with the Mall-induced commoditisation of retailing precincts. Personal service was lost and when the store staff were moved into the boxlike tenancies inside Westfiled, they lost their incentive to reach out on an individual level to customers, and vice-versa. So when ecommerce came along and offered even more convenience than the Mall,  the dramatically reduced levels of personal service and connection that the consumer was already experiencing inside the echoing artificial voids of Westfield meant they were going to lose little by moving their custom across to the new channel. That which COULD have provided the reason to stay with conventional retail, had already been considered unimportant by the mall-fuelled behemoths such as Harvey Norman who suddenly, in the face of brilliant new cross-channel retailers like Apple, look frighteningly clumsy and outmoded. . .  whilst focussing so hard on supply-chain improvements and cookie cutter store ops, the big chains seem to have forgotten so much of what drives human behaviour.

Is it any coincidence that Apple stores are popping up on the high street and not in the Mall? My prediction is that new (bricks and mortar) retail might look much more like old retail, with personal shopping experience back at the fore and even small strip-based specialists seeing a revival….the big difference being that in-store technologies will be helping to provide that personally tailored interactive (and fun!!) shopping experience…and in many cases ecommerce will be integrated into the process – yes, in the store itself.

post-script: should retailers invest more in customer service staff? Sure they should, but they can’t afford to. Australian retail  rents remain unsustainably high – one recent report found that it’s more expensive to rent a shop in prime Sydney CBD than on Paris’ Champs Elysees. The irony is that by raising rents too high, retail landlords are destroying the goose that lays to golden egg.

The third place – clues to the future of physical retail?

Posted in Marketing, advertising, ethics, Uncategorized with tags , , on December 6, 2011 by marketingheart

A really great interview with Ray Oldenburg who talks about retail as the “third place”. He defines the third place as a public place where people can gather to put aside the concerns of home (the first place) and work (the second place)—a place to connect with others and exchange ideas. This is an idea I’m very interested in – the potential of the retail space to go beyond just commercial transactions and instead to provide real societal value. I think turning places of transaction into places of meaning and value contains the key to the future of physical store shopping….ironically enough. Going back to the traditional idea of the community marketplace, if you will.  This is a powerful ideal, even if I don’t think Ray’s examples below are particularly illustrative or exciting. (Thanks to JWT Intelligence for this interview).

traditional marketday social

Former sociology professor Ray Oldenburg is the author of two books about the “third place,” The Great Good Place (Marlowe & Company, 1989) and Celebrating the Third Place (2001). Oldenburg spoke with us about what he sees happening in the retail sector as it works to create third place experiences. We learned why virtual connections don’t count as third place experiences, the potential value of third place connections and what makes his local Publix supermarket a great good place.

You first wrote about the idea of the third place 20 years ago. Has your definition of what a third place is changed since then?

Not really. I have objected to the common idea these days that there can be virtual third places, that you can do it electronically. There is no comparison, in my mind, between the joys of getting together, of the face-to-face enjoyment and banter. You can’t really compare that with electronic [social networking].

We have evolved to a place where people are interacting with screens as much as with other people. So does this make the idea of a physical third place even more necessary?

In public places, you get a mix built right in, because people with different mind-sets, different politics and so on share that space, and they discover one another, and they get along. The problem with so-called virtual third places is that you get like-minded people attracting each other.

So even with the growth of social networking, people are still looking for reasons to come together in physical spaces?

Yes. The problem is, we have a high rate of mobility. We move from one locale to another, and for most people it’s from one suburban development to another, and there’s no gathering place, no place to welcome you into and get to know all your neighbors in a suburb. As I once said, if we left urban planning to General Motors, by gosh, we’d have pretty much what we have right now. It’s a lot of consumption and a lot of loneliness.

Have there been retail spaces that worked as third places?

We had the general store, which was also a gathering place. In the center of it you typically had the potbellied stove, and there’d be seats around that and people would come in and visit there. The best combination of retail and third place that we ever had was the soda fountain. In 1900 there were about 110,000 of them in the United States, and by 1980 we were down to 150, because the bean counters figured out you can make more money selling greeting cards in that space. The great thing about the soda fountain was that it maximized what I call the mix, which is sort of what’s missing in our society these days—the mixing of different kinds of people, all ages, both sexes. Everybody enjoyed that soda fountain.

You’re talking about smaller, independent shops. Today we’re seeing mass retailers creating spaces where people can gather, places where people go to not necessarily buy something but to interact. It’s a more deliberate attempt to create something that used to happen more naturally. Does this make it any less authentic of an experience?

Well, Barnes & Noble always has a goodly number of customers. By definition, it may not be a real third place. I mean, you don’t have a lot of people talking to one another. They are sitting in comfortable chairs, eating their treats. But it is a place to go. It’s a place a lot of people go. I see familiar faces in there. I think there are people that make it a hangout.

Is it less authentic? Maybe not. What’s attractive about a place is vitality. And how do you get that? Well, you get people to come. So that becomes the first challenge. The second is to ask: What about a place, other than the goods you’re selling, might make it attractive? In one of Ron Sher ’s retail developments, called Crossroads , there was a concourse that didn’t get a lot of traffic. He paid $12,000 for a miniature merry-go-round. He put chairs around it so the mothers of small children could sit there, and it nets $16,000 a year from the quarters the mothers put in.

He went so far as to get a mini police station at Crossroads and a branch of the library, and so there’s many reasons now to go to that shopping development, quite apart from shopping.

So it’s less about buying and more about just coming for the experience?

Yes. I think the typical American consumer is always looking for a friendly place. You know, we’re deprived.

How?

There are places where the town square is created or improved or whatever and remains vacant, because the big shift in American society was the home became the center of entertainment. When I was a kid, the home was not a center of entertainment. You got out of the house to be entertained. Now, families got smaller and their houses got bigger, and you’ve brought in everything you could think of. People have little theaters in their home with giant TV screens, and they’re used to being entertained in the home.

Are there any retailing experiences you particularly enjoy?

Well, I enjoy going to my local Publix supermarket. They have a chef, and I’ve met the chef, and I enjoy talking to her. And everybody’s very helpful. They have real meat. They have men who cut meat. It’s wonderful. You can speak to them. For example, they will have beef shanks displayed, but they’re too short. I’ve spoken with the butcher to ask about cutting some longer ones, and they will cut them and bring them to me.

Pittsburg market

So this is a place where you go to get quality merchandise but also get personalized service?

It’s kind of a weird feeling. It’s like being in the old small-town butcher shop, you know. It’s charming, I must say.

You’ve written that what attracts the regular visitor is supplied not by management but by other customers. Have retailers co-opted this? They’re supplying the interaction in many cases, and just like your experience at Publix, it seems like the retailer has replaced the friend. Does this make it any less of a third place?

Ideally, of course, the third place has regulars. But short of that—take this example: Suppose I go to another city and I don’t know anyone, and I want to have a drink. I can walk into a bar, as I have, and the bartender might be down at the end of the bar talking to a couple buddies and paying no attention to me. What I do is spin around, get out of there and find a place where the guy behind the bar is friendly, and then I have my beer. So, while not achieving the ideal typical model of the third place, it’s certainly preferable to the one where the help or the host just doesn’t seem to care.

Is there something retailers should be doing to create a better third-place experience for shoppers?

One thing that increasingly they’re doing is being very accommodating to customers. This business of “Let me drop what I’m doing and help you,” that hasn’t always been there in our stores. But it is now.

Is there one thing happening in retailing that is a positive way in which retailers are becoming a third place?

Well, as we’ve discussed, your general treatment when you go in is much better than it was, say, 20 years ago. Beyond that, I think the trick for retailers is to find some reason for a customer to come in other than the goods they have to offer for sale.

Daily deals day is done?

Posted in Marketing, advertising, ethics, Uncategorized with tags , , , , on September 5, 2011 by marketingheart

The rate at which flash sale and daily deal sites, which offer retailers new ways to sell goods at even deeper discounts than they’ve always done through their own stores are being launched and later the eye-watering valuations they are achieving resembles nothing less than the old internet bubble of the late 90’s.

The daily deals segment is abuzz with new entrants. Groupon and the other early entrants have been joined now mushroomed into what Inside Retailing’s Michael Baker called “a retail Wild West, where new players ride into town in posse’s and wave their deals like six-guns”.

The phenomenal growth that’s fuelled this gold rush will be sustained only so long as the retailers get something out of the deals. But cracks are showing and stories of dissatisfied retailers and customers abound.

When a restauranteur offers 50 per cent off a meal he’d better hope the deal-takers brings some full price friends or revisits. What some have done in order to make the price reduction work is delivered such a cut-price product or else used such aggressive add-on price gouging to recover margin  that the customer experience suffers to the extent that business is actually damaged.

Flash sales sites are similarly proliferating,  most recently supplemented by Amazon’s Myhabit.com. What the breathless ‘bricks and mortar is dead’ headlines rarely point out is that these flash sale sites are pretty much new-model factory outlets simply unloading excess stock. Their role can be overestimated; HauteLook.com, recently bought by department store retailer Nordstrom, is believed to generate just US$100 million a year in sales after 3+ years of operation whereas  Nordstrom had sales of US$9.3 billion last fiscal year.

My view is that the top has been reached already. Consumers love novelty but get quickly jaded. They’ve been habituated for years by store-based retailers constantly pushing promotions and sales at them – the main difference with these sites is the impulse-orientation they offer, but this will be undermined by the fact that the product is in many cases inferior.

Discounting-as-retailing is one of the fundamental problems the retail industry has struggled with for years. These sites elevate this problem to new levels: “You will never ever have to pay full price if you wait long enough.” The process of chasing prices ever downwards is ultimately cannibalistic, builds a bottom-feeding consumer mentality and must delivers inferior products resulting in once-bitten, twice-shy consumers. At that point the influence of this sector will wane.

 

Consumers bite back as retail giant cops an online beating.

Posted in Marketing, advertising, ethics, Uncategorized with tags , , , , , , , on January 19, 2011 by marketingheart

Darn that crazy internet thing, eh Gerry, it’s really making life tough.

I find Harvey Norman’s oh-so-ubiquitous ear-bashing style of advertising offensive, condescending and crass. (Harvey Norman is Australia’s leading electrical retailer). However, the public seems to accept the ads and has supported the retail giant mightily with their wallets for years. But clearly the subject of Santa is more sensitive than our poor ears…recently Harvey Norman (fondly known as Hardly Normal) ran a Christmas radio spot which talked about Santa getting a lap dance. Not so much Ho Ho as Tut tut, at least as far as blogger Melinda Tankard Reist was concerned.

You see Ms TR twittered her outrage about the offending ad and the support she received forced the retailer to pull the ad.You can read her self-congraluatory blog post here.

Clearly, Hardly Normal’s people were clearly monitoring social media coverage. So they must be upset indeed by the phenomenally vehement response to their boss’s disastrous proclamations about online purchases below $1000 being unfairly tax free. Years ago Gerry Harvey rejected the need for a decent website let alone a proper multi-channel retailing strategy and he must be ruing his short-sightedness as he watches millions of dollars move online (where lower prices are now even lower thanks to the strength of the Australian dollar). His response, along with other (old school) retail big wigs Solly Lew and Bernie Brooks essentially informed the last few remaining punters who weren’t buying on line that they should be; and furthermore was read by the public as being the whinging of a few billionaires who’d been ripping them off for years.

Typical of this: Solomon Lew pointed out that approximately a billion dollars a month is going offshore via online sales, adding
“Now, that billion dollars a month is doing nothing for Australia. There is no Australian suppliers that are involved, there is no Australian labour that’s involved”. Instant and universal response: a dishonest nationalist call rendered utterly hypocritical by the fact that he’s pretty much exclusively selling imported goods himself.

In my view, the extent of this backlash is newsworthy in its own right. This is about the strongest consumer reaction I’ve ever seen. Just scan the comments at the bottom of this story from the SMH – one of many such examples. The net always promised to level the balance of power between corporations and their customers, and this is one of the best examples. (The rejection of Gap’s new logo is another).
Gerry Harvey STFU
Having made a fortune from cutting out the middle man, Gerry is belatedly discovering that he’s a middle man too. And that his folksy man-of-the-people image is utterly without credibility. And that his store experience is detested. And, yes, his ads have come in for a few hits (surprisingly few I reckon). Leading retail business Inside Retailing site pulled no punches in critiquing Harvey et al’s misjudged campaign.

Lastly, outside of the retail billionaires club, the retail industry has rightly turned on him…Fair Imports Alliance spokesperson Brad Kitschke said the campaign had proven “a public relations nightmare” for the broader retail community. “We have been working on this issue for a long time. Where was Gerry Harvey or Solomon Lew when we were fighting to have this issue addressed in July 2010 or for the five years before that? They have jumped on board at the last minute and have royally stuffed things up,” he said. (Fair Import Alliance represents the Australian Retailers Association, Australian Sporting Goods Association, Bicycle Industries Australia, Australian Toy Association, Photo Marketing Association, Australian Fishing Trade Association, Australian Booksellers Association, Australian Music Association and the Retail Cycle Traders Australian).

As one post put it: Go, Harvey, Go!
Go.
consumer rebellion

7 ways smart retailers can benefit from digital media technology in a downturn

Posted in Marketing, advertising, ethics with tags , , , , , on May 7, 2010 by marketingheart

It was refreshing to read this advice by McKinsey’s, “Retailers should bear in mind that the least effective thing to do during a downturn is to simply ‘hunker down’ and ‘weather the storm.’” (The McKinsey Quarterly, September 2008).

Taking decisive action to improve store performance is surely even more a necessity in times of turmoil. Whilst many retailers’ first reaction is simply to cut spending, periods during which consumers are actively reviewing their purchasing behaviours provide opportunities for savvy retailers to influence new decisions they’re making about what to buy and when.

This is the time not to run for cover but to identify investments that can deliver business improvements by retaining customers, acquiring customers or maximizing basket size. If cost reduction can be achieved in addition to these aims, even better.

With so much amazing technology now at our disposal, it’s an almost universal truth that there is always a better way to do things, so technology-based efficiencies is a fruitful place to look for performance-enhancing investments, specifically technology that’s been proven ROI effective for other retailers….in other words find out what works and then apply it.

The example of this I’ll look at is in-store digital shopper media; offering the magic combination of increasing revenue and reducing operating expenses, this is a classic case of a new technology maturing to the point where it becomes indispensable. This suite of solutions has the potential to transform your marketing activities at point of sale and improvements in content management and distribution technology, as well as reductions in hardware costs make the case for digital signage more compelling daily.

Yes, there are capital requirements in deploying a digital signage network but the upsides are many: let’s have a look at seven bebefits which hit home the hardest in these hard times:

1. Increasing basket size. There’s mountains of data now which shows the effectiveness of in-store signage. This shouldn’t come as a surprise, after all think of the billions that have been spent on point-of-sale material over the last century…well this is just better PoS with the added benefit that customers like it and respond to it. In a Nielsen survey of 1,000 shoppers, amongst those who had digital signage at retail, 42% said they would rather shop at a store with video displays, 68% of respondents said in-store messages would sway their purchasing decisions and 77% said it was a useful way to learn about products. Another report by Arbitron Research found that of those shoppers who have seen in-store TV, almost 30% made an unplanned purchase as a result. The latest aggregated retail industry data indicates an average sales uplift of 10% on promoted products with a resulting 2.4% increase in revenue. Major deployments have recorded average sales increases as high as 25% across advertised products (eg Sainsbury’s Convenience Stores, UK).

2. Maximizing average transaction. Retailers, now more than ever, are seeking ways to up-sell and cross-sell using targeted messaging in-store. Especially in retail environments where customers are less likely to engage a sales-person, in-store digital media provides a dynamic way to highlight product stories, pairings and accessories.

3. More efficient PoS at reduced cost. It seems crazy in this age to be cutting down trees, shipping the paper around the world, printing toxic inks onto it, road freighting it to all the stores, hoping the staff displays it correctly, then hoping they remove it at the appropriate time, paying them for their time to do both and finally throwing it in the bin! The potential for cost savings and increases in efficiency over traditional point-of-sale marketing materials is clear. Digital provides real-time control of in-store marketing on a site-by-site or hour-by-hour basis if required. It allows retailers to react to market conditions, changing campaigns on a dime without waiting for printed material to be produced and delivered or worrying about store compliance. It makes localised offers, information and pricing easy.

4. Improved yield from major media campaigns. So you spent millions getting into people’s homes via TVCs, online banners and video… only to have them arrive at the store with – and this is well established through research – no purchase preferences in mind! In order to maximize your marketing spend it’s critical that you support it in-store, and what better way to drive those dynamic video-based media campaigns right through to point-of-purchase than by using…a dynamic video-based medium. No, you shouldn’t simply play yourt TVC in store, but you should most certainly repurpose the same key images and concepts to re-inforce them and drive them home…to the cash register.

5. Communicating value propositions. With customers looking to save money without sacrificing quality, many retailers have developed a compelling value story. They’re communicating the attributes of private label products or reinforcing value messaging and are seeking to measure the effectiveness of their in-store messaging in real time to ensure the message is resonating with the right customers. Intersecting these messages with the shopping process of course is the most important way to tell the story. Similarly digital in-store media is great way to communicate the benefit of loyalty programs right where it counts – where the shoppers are.

6. Increasing ROI from ‘soft’ marketing initiatives. Sponsorships, Corporate Social Responsibility programs, community support initiatives – these are all great to strengthen the bond with customers but in times when few can afford to promote such initiatives in the broader media, how do customers get to hear about them? A few might read up on your website, but how relevant is that at the cash register? In-store digital media provides an engaging platform to convey this sort of information especially where dwell time is longer.

7. Revenue from 3rd parties. It’s said that WalMart has the USA’s 4th biggest TV audience through its digital signage network! And if you want to reach all those millions of eyees, you’re going to pay for the privilege – up to US$250,000 per week. Prior to installing their network, what was WalMart’s yield in the asset that is it’s customer base? Zero. Most retailers have an unrealized asset in their customer numbers. Even if you prefer not to open up your environment to third party messages of questionable relevance to your own offering, you may still be prepared to display messaging by the brands you carry, and to maintain relevance to your own brand the medium could be used for joint promotions.

Now is the time for retailers to act. Hardware costs are down and compelling leasing options make monthly expenses a small fraction of incremental revenue generated, guaranteeing a measurable ROI. For as little as a few hundred dollars per store per month, retailers can deploy in-store digital media to more effectively engage with customers at the point of decision and take decisive action to combat the challenges of decreasing footfall and more frugal consumers.

Look out for my next paper Measure Twice, Cut Once – a structured approach to getting started in digital signage
instore tv