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Luggage check at NRF

Personalization fuels Tumi’s customer experience renaissance

Charlie Cole is an e-commerce and digital marketing veteran who’s now running digital for Tumi, makers of the kind of high-end luggage that draws envious stares as it’s slipped into the overhead bin.

For the past year and half, Cole, Tumi’s chief digital officer, has been part of a team that has turned the brand around and dramatically increased sales. It took eliminating some corporate-culture baggage (sorry) and a renewed focus on the brand’s customer experience.

We caught up with Cole in advance of his appearance at BloomReach Connect New York, where he’ll talk about how the executive team turned Tumi’s shrinking business into a high-growth brand and where Tumi goes from here. This interview has been edited for length and clarity.

Charlie Cole, chief digital officer, Tumi

Q: Retailers for years have been getting crushed by the tyranny of promotions. Tumi has been able to reduce its reliance on promotions and still show improved financials. Can you talk about the perils of becoming over-reliant on sale pricing and the strategies for weaning a brand or retail operation from that reliance?

A: We think about this really simply, which is, if you are trying to differentiate on price you cannot beat Amazon. You can’t do it. And Jeff Bezos has actually gone out and said as much in his shareholder notes from a couple of years ago: ‘Our partners’ margin is our opportunity.’ When you spell it out like that, we’re surprised more people aren’t as nervous about it as we are. The other piece about it is, a promotion is, by definition, something with a limit. You only have so many days you can be promotional.

The idea of weaning them off is really quite simple. When you over simplify an e-commerce business into what is your revenue based on, it’s three things: traffic, average order value and conversion rate.

That means if you’re going to get off promotions, it’s a fair assumption to say, you’re probably going to hurt your conversion rate a little bit.  People love sales. People buy at a higher trajectory on sales. Which means, you have to come up with creative ways to drive traffic and average order value. For us, average-order-value increase is going to happen somewhat naturally, because things are going to cost more, because you’re not on a promotion. We really want to attack the question of, ‘How can we attract more people to Tumi that are ready to buy, that are interested in the brand and that can offset some of that traffic that isn’t going to convert because they’re deal hunting?’

Q: So how do you do that?

A: We did a multitude of things. We focused on on-site personalization. We focused on messaging personalization. But we also just sort of went back to the drawing board on what our traffic-generation strategy was going to be.

Q: Personalization is a term that’s thrown around a lot. What do you mean by personalization?

A: It’s definitely a nebulous definition. We talk about it as how do you serve the right message to the right person at the right time. That means in email, for example, if all you ever do is open emails about backpacks, we probably shouldn’t shove luggage down your face. That’s messaging personalization.

That’s applicable, also to advertising. And it’s certainly relevant on-site. So on-site personalization, meaning we know you’re logged into your account. Same example. You just bought a backpack. We probably shouldn’t show you a backpack home page. Or it’s Mother’s Day and we know that you just received a Mother’s Day gift. Maybe we should move certain things up, such as, ‘Hey, here’s how to register for the warranty repair.’

We actually started moving that into the store as well, where we want to have our store associates in brick-and-mortar stores have access to a clienteling application so they can have much more visibility into understanding what customers have and have not done, or what they’re interested in.

Give customers information on their terms

Let me give you another example of something that I’ve learned, that I’m kind of directly responsible for. Thirty percent of our inbound calls to our call center are based on people asking where their packages are. That is embarrassing, because to me, that means that we, as a digital team, are not doing our job of getting customers access to information on their terms.

So, the personalization option may be, after you buy something, you get a little thing that says, ‘Click here to receive your shipping notifications via text message as opposed to email.’ Something as simple as that is going to decrease our call volume by 20 percent among a chunk of people.

Q: It sounds like you see personalization as going well beyond selling products.

A: Personalization is far more than just product recommendations to drive conversion rates.  Personalization is after-sale service. Personalization is warranty-repair support. It’s just really more about making sure you’re doing business on your customers’ terms.

Q: You’ve talked about taking time to step back from big strategy to think about customers, to “optimize for the customer.” Can you talk about that?

A: I’ve got to give one of my bosses, Rob Cooper, a lot of credit for that. When I got to Tumi, we were so freaking tactical about fixing the business. And I think, when you say those words, if we just blindly asked 10 VPs of e-commerce, what does “optimize for the customer” mean, they’re going to go off on a diatribe about optimization, usability, digital marketing, CRM, analytics. And they’re going to say 100 words before they say ‘customer service’ and I was just as guilty about that.

We drove the business in a way where it was turned around and we got to see some great things. Then Rob kind of sat me down and said, ‘OK, good. Now how do we make our customers’ lives better?’ And I kind of stopped and said, ‘I don’t think I’ve thought about that in a year.’

Three things about Charlie Cole

  • He’s color blind. It’s an unexpected strength in his role, Cole says. He tells his creative team that the condition means he’ll generally remain neutral on design issues, which means they need to pay that much more attention to the analytical feedback and insights he provides.
  • He plays volleyball. Well. Both Cole and his wife, Elissa, played in college, though Cole says he didn’t approach his wife’s caliber of play. He’d like to find more time for his favorite sport, which he’ll engage in indoors or on the beach. The beach, he acknowledges, is a little gentler on the body, even though he’s a much better player on the hardwood than on the sand.
  • He’s an auditory learner. Cole says he finds it difficult to fully absorb information through reading. In college, he would record lectures and listen to them one extra time to better retain the information. Now, when he reads, he eliminates distractions and slips on headphones to listen to music without lyrics. Classical, hip-hop, techno. It doesn’t matter, as long as there are no words.

Q: So how do you get to the place where you’re thinking about customers?

A: Step one is make it a priority. I know that sounds stupid, but if you want to make a business case for it, that reduction in phone calls (at Tumi”s call center) has a significant EBITA savings. You’re printing money. So customer-centricity and customer service in general, is really the perfect symbiosis between customer desires and company desires. Done properly, you’re increasing lifetime value; you’re decreasing customer support cost; you’re increasing Net Promoter Score. Nobody loses here. It’s just a matter of making it a priority. And we’re starting to talk about some really fun stuff.

Q: Such as?

A: We’re going to select half of our orders over a certain period of time and write handwritten thank-you notes to each one of them with a relevant tidbit about that customer. ‘Considering this is the third Alpha piece that you’ve bought from us, we just really appreciate the loyalty.’ And we’re going to do that and then we’re going to shut it off. We’re going to wait six months and see if it has any sort of effect on interaction with emails, post-purchase behavior, lifetime value, return rates.

It might not matter. And then we go back and we say, ‘Hey, but we got a lot of feedback that customers really like that. Do we just want to front this expense?’ And it’s OK to not have every test work. It’s just not OK, in my opinion, to just do something for the sake of doing it.

Q: You’ve said businesses need to try things that are outlandish and exceed customer expectations. I don’t know if thank you cards are outlandish, though I can’t remember when I’ve gotten one after buying something. What do you mean by being outlandish?

A: I think there’s sort of a lot of industry edict around this idea of surprise and delight. I’m not a big fan of the phrase, because I don’t want to shock anyone. Surprising a customer doesn’t have a positive connotation to me, but delighting them does.

One of my mentors, this guy named Tarang Amin, he used to say, one of the things we always can do is strive for a breakthrough. You have to really strive for something that makes the company different. So, I was talking to you before about  how there are a lot of people calling and asking where their packages are now. We basically leveraged the systems we were given. So UPS, FedEx, they send you a notification. But if you’ve ever bought something online at 8 a.m. and you got a tracking notification at 2 p.m., you and I both know that if you click on it, it won’t work until the next day.

We looked the problem and said, ‘Well there are technologies out there that basically will give you an algorithmically based answer. It’s another thing that’s a little silly. An algorithm to save you eight hours of waiting, but it exceeds any customer expectation. And at the same time, it decreases our phone calls and makes life a little better for all our customers

Keeping up with rising customer expectations

Q: But it seems like consumer expectations are constantly rising. You’ve used the example of Amazon Prime and the breakthrough of two-day delivery. Two-day delivery is no longer a wonder. Now it’s expected. How do you keep up with increasing expectations?

A: There is something very Sisyphus about it, I’ll give you that. What can we do as retailers? It’s another one of those things that I’m almost hesitant to say, because it sounds so obvious. But when you’re within a brand, you know exactly what’s going on, because you live within the brand all the time. The best thing you can do is just remove yourself from the equation and talk to your customers about what they think.

One of the first things we did as a team, is we created this program that was called Brand Ambassadors. We found a group of 18,000 Tumi email list participants — some were buyers, some hadn’t bought, but they were willing to talk to us about very specific things. You can talk yourself into anything. So I think it’s important to keep up with customers and don’t let yourself have tunnel vision within your corporation.

Hear more from Charlie Cole at BloomReach Connect

  • Tumi chief digital officer Charlie Cole will be a featured speaker at BloomReach Connect in New York on May 4. Cole intends to get past “digital transformation” as a buzz phrase and talk about how he and his team actually changed the digital culture at Tumi and helped spark impressive revenue growth.
  • Connect banner

Q: How do you fend off tunnel vision? How do you keep things fresh?

A: Retail is such a microcosmic-timing business. It’s month-over-month comps. It’s day-over-day comps. It’s week-over-week comps, which I really think injects a certain attitude of incrementality. I also believe that incrementality is the biggest enemy to that aforementioned breakthrough. So how do we try to adopt the culture internally that does not preclude the dynamic thinking? And the short answer is, we respect and crave failure.We have a culture where we screw up so much, but we do it in a risk-averse way. We mitigate the cost implications. And we’re constantly testing and iterating at a rate that I don’t think most retailers our size do.

There’s this old adage of measure twice, cut once. We’re like, ‘Just cut the damn thing. Just don’t cut it too deeply that we can’t repair it if we screw it up.’ And I think that’s the attitude that you have to have to be great at digital. You have to make a lot of tiny bets, mitigate the risk around them. And then, the ones that work for you, you have to not double down — you have to octuple down on them immediately.

Charlie Cole portrait courtesy of Charlie Cole.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Man on a Dutch Railways platform

Listening to customers molds Dutch Railways’ digital experience

A Dutch Railways train passing a house

When your company has been around longer than the internet, building a digital customer experience can require a bit of a transformation of the way you do business.

The Dutch Railways (formally Nederlandse Spoorwegen) has faced this transition head on — taking an 180-year-old company and infusing it with digital initiatives that makes the lives of its 1.2 million daily passengers a little easier every day.

I sat down with Fokko van der Schans, product owner online at the Dutch Railways, for a Q&A about the recent digital push it has been making — and how travelers across the Netherlands have responded.

Q: The Dutch Railways has a customer journey where the online and offline experiences are very interwoven, how do you bridge the two to create a 360-degree view of your customer?

A: We’re not the only company tackling this problem, and also not the only one to run into the challenge of combining the online and offline while being very mindful of users’ privacy. So the way we get the data to make that well-rounded view of our customer is by asking them and motivating them to share by offering handy services in return.

For example, through our loyalty program, NS Extra. All our travelers check-in and check-out of our train stations with a personal card, which generates enormous amounts of useful data. Unfortunately, we are only allowed to use these data on an aggregate level. Through NS Extra we incentivize our customers to share their travel data with us, so we can service them back in return.

For example, if we notice they forgot to check-out we’ll send an email that makes it easy to remedy this and avoid any unnecessary journey fees. The more benefits like this that we can offer our users, the more they understand how sharing the right data is a win-win. Especially through our journey planner app where we can deliver very personalized services.

Q: You’ve had great user feedback on the Dutch Railway digital experience this past year. Are there key initiatives or aspects that your customers have responded to?

Fokko van der Schans at BloomReach Connect

  • Dutch Railways’ Fokko van der Schans will be among a line up of experts in artificial intelligence, e-commerce, content, venture capital and technology speaking at BloomReach Connect in New York on May 4.
  • Connect banner

A: Yes, a lot of response and a lot we’ve learned from the feedback. In December 2015, we went live with the redesign of our new website, which also included a redesign of our online journey planner. We had put that journey planner through many focus groups and we’re excited to put it out in the world, but when users got their hands on it — they just didn’t like it. It wasn’t as intuitive as they needed, and the new horizontal interface was simply not the way our travelers wanted to use it while on-the-go.

So we listened, we learned and we improved. And we had to do this quickly. We redesigned the journey planner in eight weeks, incorporating the feedback of our users — including returning to a vertical interface. And over the past year we’ve seen very positive results in our feedback score. It was a very successful turnaround of a critical user service.

Q: What advice would you give to more traditional industries who want to focus on creating an exceptional digital experience?

A: Keep it small. Or at least, start small. I think this applies to everyone looking to focus on new digital projects, but especially in more traditional industries which tend to be larger.

One of the main pitfalls of big companies is the rush to do it all at once, with everyone wanting a piece of the cake. On one end, this is great, because everyone is positive about digitization but with everyone wanting to add in their opinions … it gets muddled.

So start small, with one focus at a time. And finding the first step to focus on is usually pretty easy. It is what urgently needs to change. For us, this was our website. It wasn’t responsive and, honestly, we just couldn’t get away with that anymore. The world around had changed and we had to change with it.

Q: What’s next for the Dutch Railways? What upcoming innovations and projects are you excited about?

A: A pretty cool thing about the Dutch Railways is that one of our biggest targets, and a main driver as a whole, is our customer satisfaction score. We use Usabilla to ask our customers how each of our online channels is performing and the feedback they give is the motivator for our digital initiatives.

It’s great because we can see where our score is, gather the comments, identify the pain point, and improve. We’re currently finishing up a pilot of a new initiative that makes it easier for our passengers to give feedback via an app and helps improve and close the feedback loop by contacting them once a week with the improvements we made based on their feedback.

We also just went live with our new personal account program, “MyNS” — a completely renewed account program that includes features such as a new dashboard to track your progress in a gamification project we launched.

Train photo by Rob Dammers published under Creative Commons license. Photo of man on platform with train courtesy of Dutch Railways.

To hear more about the digital transformation of the Dutch Railways, join us May 4th in NYC to see Fokko van der Schans and other innovators take the stage at BloomReach Connect.  

 

Wooden Crate

Where is the digital experience headed next?

Wooden content crate

On the first day, the internet was created. Later on that first day, people put every bit of content they could online.

Publishing content has been an integral part of the web experience ever since, and managing how that content is added, shared, and stored has been a critical part – and occasional a thorn in the side – of enterprises ever since. Of course, as the web has rapidly evolved beyond simple static sites, and the number of digital touchpoints has risen, content management has had to evolve as well to solve the needs of the moment.

The first generation of content management systems (CMS), in the days of static HTML websites, was all about empowering businesses to instantly communicate the freshest content to their customers. This was the 90’s. Suddenly your customers had personal email accounts. You could talk to them in their living rooms and give them information instantly — and businesses were craving a way to do this efficiently. Enter CMS, which broke the traditional bottleneck that was occurring between creating new content and getting it out to your customers. This was when the core aspects of CMS became commonplace in the enterprise; workflow, audit trails, core versioning and library services emerged and the systems enabled individuals to quickly publish new content onto their sites.

See the future of the digital experience

But of course, digital business exploded — online shopping became the preferred method for many consumers and with the rise of the smartphone, your customer base was suddenly social, mobile and always connected. You weren’t talking to people simply sitting in front of a computer anymore — and companies needed solutions that wouldn’t just push content, but drive engagement. Next, second generation CMS emerged. New tools were designed to empower subject-matter experts to take control of the presentation layer and create a dynamic, multichannel web experience. The goal: Engage with customers on a far more personal level than the static websites of the past allowed.

Again, the digital experience has grown and, again, tools need to evolve to meet the needs of the next phase of digital. In the content space, this means we are in the third generation of content solutions — one that is focused on offering many relevant experiences to your visitors in a connected conversation that spans the entire customer lifecycle.

So how do we get there? By leveraging big data and intelligent algorithms to show the self-progressive paths real people are taking — beyond a prescribed customer journey. These constantly learning systems help your marketers deliver the most helpful content at the right point in each path. This backbone of AI-driven personalization enables the real people behind your business to understand the intent of your customers and deliver, at scale, a personal content experience across channels, devices, and business teams.

It’s time for the enterprise to move beyond prescriptive journeys and to help visitors in a way that’s just as flexible as their real lives are. On May 4th, at BloomReach Connect in NYC, we are pleased to debut what we believe is the platform to do just that. BloomReach Experience takes the heart of Hippo’s open CMS, and infuses it with BloomReach’s leading machine learning intelligence, leveraging data to enable you to understand and connect with your customers, ultimately driving acquisitions, loyalty, and building digital empathy.

Join us May 4th in NYC for more about this exciting new phase of digital experience. Can’t wait to see you there.

Photo of content crate by cursedthing published under Creative Commons license

Katie Lawson is a content marketer at BloomReach.

 

 

Abstract image of the digital future

Analyst: The future of digital experience requires honest self-assessement

 

Digital Future abstract reprsentatioino

As the future of digital experiences approaches and washes over businesses with alarming speed, one thing seems clear: The new reality calls for a new way of thinking.

Those at the center of the transformation of content management systems (CMS) gathered virtually last week for a webinar that sketched out strategies that will allow content management practitioners to keep up with the demands of an ever-more sophisticated audience.

The “Future of Digital Experience” webinar, featuring Forrester Analyst Mark Grannan and BloomReach Chief Marketing Officer Kevin Cochrane, emphasized the need for content management professionals to consider their organization’s place on a maturity continuum before charting their content management course.

“We can’t seem to get out of our own way sometimes,” Grannan said during the webinar. “We sit in our functional silos. We’re merchandisers or marketers or content managers. Maybe we sit a little higher in the organization. We’re a chief digital officer or CIO. But even still, we’ve got some blinders on when it comes to digital experience.”

During his presentation, Grannan offered a good first step, which is framing the challenges and solutions in terms of a “digital experience platform.” He suggested that companies can be sorted into four categories — skeptics, adopters, collaborators and disrupters — based on their investment in and development of content management strategies.

Developing a strategy and deploying a CMS is not a one-size-fits-all affair.  An honest appraisal of a business’ maturity will help enterprises find the answer to the question: What’s our next move?

Moving into the future of the digital experience is best looked at as an exercise in building better customer experiences coupled with creating better operational effectiveness, Grannan explained in his talk. The two pieces work together and feed off each other.

Take an enterprise that is “young” when placed on the maturity continuum, for example, he said during the webinar. It might want to start with a better customer experience by expanding beyond its desktop website to offer a mobile-friendly site. Its next step could be handing off the maintenance and management of its software to an outside vendor, freeing up IT experts to focus on further improving the customer experience, through better personalization, for instance. It’s a virtuous cycle.

A more mature business might be ready to move to a new CMS platform — perhaps a platform as a service model, complete with robust A/B testing capabilities and the ability to provide continuous integration and delivery with the help of automation.

Automation is a way, Grannan stressed in the webinar, to free up time for higher value work; not a way to give up control of key projects and priorities.

“It’s not handing the keys to the robots and saying, ‘You drive,’” he said.

A more advanced step would be embracing a headless CMS that provides a repository of content ready for deployment across channels and devices. Marry that with a level of personalization that delivers that content to the right person at the right time on the right device and the virtuous cycle continues.

While the right CMS answer is not one-size-fits all, one thing appeared to be nearly universal among those who attended the webinar: CMS is a challenge and practitioners are hungry for change.

In a quick survey, attendees were asked to name their greatest pain point when it comes to CMS:

  1. The inability to track and analyze content performance.
  2. Time-consuming web publishing practices that are siloed, limiting agility and speed.
  3. Friction with IT to enhance and scale website functionality and delivery.
  4. Proliferation of tools to manage discrete moments of interaction with online customers.

The winner? You might have guessed: all of the above.

Photo by Steve Johnson published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

Lauren Freedman

Video: Tips on putting content in its place

You’ve heard a lot about how important content is in driving commerce.

But it turns out not all content is created equal and not all content serves the same purpose. We caught up at Shop.org with Astound Commerce’s Lauren Freedman, who had some ideas about how to get the right content in front of the right customer.

Content is a big job, acknowledges Freedman, senior vice president & chief merchandiser, given its importance in high-quality SEO, educating customers and building communities. But it isn’t something that retailers can afford to give short shrift.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

stephen-mello-ibm-at-shop-org

Video: Wrangling content at scale is a key to successful commerce

It’s no secret that content has become a key to successful commerce online.

Stephen Mello, vice president of strategy & offering management at IBM e-commerce, says the rise of content is no surprise. Within a few years, he said, 85 percent of customers’ interactions with brands won’t involve another person.

Content will be your ambassador and sales associate. Getting content right is increasingly becoming a key way to separate yourself from your competition.

We caught up with Mello at the Shop.org Digital Retail’s Summit, where he talked about the importance of simplifying for marketers and merchandisers the process of finding the right content. He also shared thoughts about the role of machine learning in building a content operation that can personalize content at scale.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at mike.cassidy@bloomreach.

searchsign

RealDecoy’s seven steps to better site search

Search sign

In life, there are so many things that we all know are important and yet we blithely pretend they’re no big deal, because taking care of them is inconvenient or complicated or difficult.

Flossing. Contributing to a 401K. Cleaning gutters. And site search.

Yes, site search. OK, maybe not important in everyone’s life, but critically important in the life of anyone who’s involved in online commerce.

Site search is the way you welcome customers into the world of your products and services. It’s how you hear your customers’ voices. It’s often what determines whether a customer sticks around or even whether a customer ever comes back for a visit.

I got to thinking about all this during a webinar that Richard Isaac, CEO of business technology services firm RealDecoy, teamed up with BloomReach to present this week. Called “7 Insider Tips about Site Search Guaranteed to Boost Conversion,” the presentation made a strong case for paying close attention to the quality of your site search.

Seven insider tips about site search

  • Turn your unsung hero into a superhero.
  • Don’t spend more. Reallocate
  • Get relevant and get personalized
  • Structure your search experience from your customers point of view.
  • Innovate, innovate, innovate.
  • Let your business needs guide your level of control.
  • (Gold) mine search your analytics for conversion insights.
  • The entire webinar is available for download.

There is a lot at stake — a lot of money. Isaac told of a RealDecoy client that was struggling with site search. The company, which he didn’t name, focused on its site search woes, invested about $25,000 in optimizing the site and realized a $13 million return within six months.

It sounds great, though I don’t want to think about the opportunities that client had been missing out on if there was that much room for improvement. And as impressive as that single story is, Isaac warned that it was something of an outlier.

Fixing site search is not trivial. Some companies are saddled with legacy systems and must decide whether to replace the old model with something new or commit more resources in an attempt to improve the performance of what they have.

Executives need to decide whether they want a site search system that is highly automated, handling the bulk of optimization work and leaving the highest-value problems for the humans to solve. Or do they want a system with very little automation, keeping maximum control, but also requiring intense manual labor to continually optimize a site.

Whatever those conversations look like, Isaac says, there is one important lesson to keep in mind.

Richard Isaac

Richard Isaac

“Usually website visitors are on your site for a specific reason. Generally speaking, if your search is not good, they stop using, not just your search box, but they leave your site and don’t come back to your site, period.”

So what to do? Isaac had answers. In fact, he had seven answers, as the webinar title implied. Issac’s list and thinking:

  1. Turn your unsung hero into a superhero:
    Yes, site search is a superhero. Isaac pointed out that retailers and others are spending more and more on attracting customers and yet the pace at which those customers actually buy has barely budged in 10 years.

    “When we look where companies are spending money, most goes to visitor acquisition,” Isaac said. “I’m challenging our thinking on the ratio of dollars we spend on acquiring website visitors as opposed to the ratio of dollars we spend in converting those customers.”

    Isaac did the quick math: Take a million new annual visitors. Thirty percent of them will use the search box the first time they visit a site. Eighty percent of those will bounce because of a bad search experience. That means you’re losing 240,000 visitors because of bad search.

    Now, say you spend the average $1.65 to attract each visitor, if you’re a business-to-business site, or $3.33 if you’re a business-to-consumer site. That means you’re wasting from $396,000 to $799,200 in advertising spending.

    And that doesn’t even consider all the lost sales, which Issac puts at $2 million, using more math. (Say, 240,000 visitors with an average order value of $158 for business-to-consumer and a 5 percent conversion rate = $1.9 million.)

    So, yeah, give site search the superhero treatment.

  2. Don’t spend more. Reallocate: Now you know the math. Isaac said the math doesn’t say spend more. It says spend more on site search and less on acquiring customers (especially if you’re attracting customers who are not converting).

    “There are significant advertising dollars being wasted, in addition to the lost revenue potential due to poor site search experience,” he says. “It’s measurable. It’s real.”

  3. Get relevant and get personalized: Not all site search systems are created equal. Some solutions come with no automation to handle relevancy and personalization. The work needs to be done manually and it needs to be done at least every sixth months. Every three months is better.

    “The truth is, if you’re using a platform that does not offer a lot of automation, search is hard work,” Isaac said. “Relevant and accurate search results require hard work. There are no shortcuts.”

    Or enterprises can choose a site search solution that harnesses algorithms to handle the heavy lifting of personalization and relevance at scale, leaving the high-priority and more creative work for humans.

    “On the other end, there is a high level of automation,” he said. “Search relevancy is handled automatically with machine learning. The technology usually still offers control for manual search relevancy when you need it. When you introduce a high level of automation for personalization, that’s where we find the magic happens.”

  4. Structure your search experience for your customers point of view: Too often, Isaac said, retailers build a taxonomy and deploy a search system that meets the retailer’s need, but doesn’t consider the way customers think, talk and search.

    “Unfortunately, your website visitors will use search terms that are different from the product descriptions in your catalog. This is one of the reasons that you can’t just rely on search technologies that have great keyword search.”

    Isaac told of a client who sold “20,000 varieties of chicken,” but nowhere on the site was their a product described as “chicken breast.” And guess what? That’s what shoppers search for, not “CHKN BRST,” which was the way the retailer described it.

    And when people type “Sawzall” into a search box, they might want to see Sawzalls, but they want to see reciprocating saws from other brands, too. But that’s not necessarily the way another brand is described on a site.

    “You need to seriously ask yourself: Does your taxonomy make sense to your shoppers? I know that’s a scary question to many retailers.”

    The good news? If your site search is smart and able to constantly learn from shoppers’ behavior, it will help shoppers find what they’re looking for, no matter how it’s described on the site.

    “The right search technology can help you fake it until you make it,” Isaac said. “Choosing the right technology is key in helping you hide those problems from your shopper.”

    And isn’t it better to hide your problems from shoppers than to hide your products from them?

  5. Innovate, innovate, innovate: Isaac says the retailers that he sees doing well are innovating rapidly. Not necessarily massively, but rapidly.

    “Innovation in retail isn’t about that one big idea that transforms,” he said. “It’s about making small, incremental improvements that can be measured over time and add up to something great.”

    Those improvements can yield big dividends — improvements like adding faceted navigation, deploying type-ahead features for those who begin typing in the search box, adopting natural language processing and semantic understanding.

    “You’ve already started failing if you don’t have these three of many features,” Isaac said.

    If you do have them, Isaac said, adequate and relevant facets can increase on-site conversion by 26 percent. Type-ahead features lead to consumers who are six times more likely to convert. And the feature produces average order values that are 3 percent higher and order volumes that are 5 percent higher.

    Being innovative is about being fearless and learning from failure, Isaac said.

    “Those who aren’t doing this,” he said of retailers who are not innovating, “are quickly losing hard-earned market share to companies like Amazon and companies like Walmart.”

  6. Let your business needs guide your level of control: When you consider ways to improve your site search, figure out just how much automation your organization requires. Some might want complete control over site search performance, Isaac said.

    “The higher level of automation, obviously, the more time you’ll save,” he said. “A high level of automation simply means the automation can handle most of your heavy lifting, but merchandisers can still customize it.”

  7. (Gold) mine search your analytics for conversion insights: Analytics are a key consideration with site search, Isaac said, because “every time a user searches your site, they’re telling you in their own words exactly what they’re looking for.”

    Are you taking advantage of those insights? Isaac mentioned tools like Google Analytics and BloomReach Compass, which, of course, made us happy.

    “I’ve been in the industry a long time, and BloomReach Compass really surprised me. Most important, it helps you understand the customer journey for any given query.”

And so, improving site search might still seem inconvenient and complicated and hard, even after you’ve heard from Isaac. But hopefully, you’re seven steps closer to understanding just what you need to do to get the job done.

Photo of search sign by Pleuntje published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

REI CEO Jerry Stritzke gets outside

REI’s #OptOutside campaign is part of a larger customer experience effort

REI CEO Jerry Stritzke gets outside

It started as a little rumble, this REI idea of closing on Black Friday.

Sure, it was retail sacrilege, closing stores on what was once the busiest shopping day of the year. But the idea was also pure gold. The move, which REI initiated on the day after Thanksgiving last year, looks like a brilliant strategy.

In the midst of the ongoing debate over whether or not stores should open on Thanksgiving (it appears most do), the REI move garnered a huge amount of publicity  — almost entirely positive, which is so strange in this era of Twitter wars.

But armed with the #OptOutside hashtag, members of the Twittersphere are embracing the idea of telling stores to take a hike, while planning to take a hike of their own.


Nearly 2 million people have endorsed the Black Friday closing by clicking a button on the REI site, a site which prominently hosts a feature that lets people find outdoor activities near them.

“Fundamentally, we believe that being outside makes us our best selves – healthier and happier, physically and mentally,” REI CEO Jerry Stritzke said, according to the company’s news release. “But as a nation, we’re still spending over 90 percent of our lives indoors and it’s a trend we need to tackle. I love that there is a community of people in this country who dedicate their lives to that mission, so together, we are asking America, ‘Will you go out with us?’”

It’s not just the Twittersphere and REI itself that are embracing the idea, either. The state of California, which is offering free admission to many of its state parks on Black Friday, is too. The idea is to build a Green Friday movement. (I for one am not anxious to have another color-coded holiday-related day. But I digress.)

California ran the free park thing last year, as did Colorado, Arizona, Oregon, Minnesota, Missouri and Delaware, according to the Mercury News of San Jose, Calif.

Oh, and about that brilliant strategy by REI? I’m not saying it was a publicity stunt, though you’ve got to figure PR considerations came into play. Instead, I’d argue it’s more of a reflection of REI’s overall strategy.

(Full disclosure: REI is a BloomReach/Hippo customer.)

It’s also a reminder that as the retail field becomes increasingly competitive, retailers need to up their customer experience game. Yes, it’s a broad — and possibly overused — term, but constant chatter is hardly without reason.

Consumers expect a lot more from whomever they are dealing with in the era of Uber, same-day delivery, endless aisle and, yes, Amazon. And so, customer experience can mean everything from offering expertise, ensuring faster delivery, easing returns, providing relevant and personalized recommendations and site experiences and learning what customers want from how they behave.

The outdoor-gear shop has been a leader in creating a whole customer experience, a vibe even, that says REI is more than a store. It’s a movement, a happening, a way of life. It didn’t start with going dark on Black Friday.

For its part, REI has been working on customer experience for years. It aggressively jumped into not just “omnichannel,” but digital-first: The idea that shopping should be organized around mobile devices, because shoppers organize their lives around their mobile phones.

When REI Senior Vice President of Digital Retail Brad Brown presented the philosophy at Shop.org in 2014, he explained that the No. 1 website visited by shoppers in REI stores was rei.com, a sign the retailer had nailed the multichannel shopping experience. It’s the sort of thing that elevates the relationship between shopper and retailer beyond a transaction.

Closing its doors on Black Friday is just an extension of that strategy. REI is a store that has built an image that is all about the outdoor experience — not all about buying the stuff you need to have an outdoor experience.

To paraphrase a coworker of mine, REI has decided it doesn’t want to be the best place to sell you a six-person tent. It wants to be the place that gives you the best camping experience with your kids.

As if to confirm my hunch that REI has been surprised by what its year-old, one-day decision has grown into, Stritzke said the #OptOutside campaign is something bigger than what REI had in mind a year ago.

“It took on a life of its own and became about much more than REI. #OptOutside should be a platform for the nonprofits and public servants who are on the front lines of the outdoor community,” he said in the statement. “They’re the ones who make the outdoors accessible for everyone.”

Stritzke said more than 275 agencies, organizations and companies have formally joined the #OptOutside movement. And, he says, REI is promoting those people, many of whom help make outdoor activities possible, to the role of official spokespeople of the movement. The retailer intends to publish some of their reflections on the company blog.

And so, in the end, REI is pushing the boundaries of what it started. It is taking ownership of the movement by giving the movement away.

Photo of Jerry Stritzke courtesy of REI

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

UncommonGoods products

How to take on Amazon with better customer experience — third in a series

UncommonGoods products

David Bolotsky has been working in e-commerce since the field’s early days and there is one thing he knows without a doubt:

Everyone competes with Amazon.

“The question,” Bolotsky, the CEO of UcommonGoods, tells me, “is where can you compete against them where, as you put it, you have a fighting chance. We want to minimize the areas where they beat us, so it’s not so painful. At the same time, if you get a box from Amazon for your anniversary, we want it to feel more special if if comes from UncommonGoods. We really want to differentiate on the emotional aspect of commerce.”

And so, a gift in a box from UcommonGoods, a Brooklyn-based retailer specializing in unusual products, arrives with a card that tells the story behind the product and the artist who made it.

“We’re investing more and more in storytelling, in video and in photography,” Bolotsky says of the customer experience that the Brooklyn-based retailer is building.

Bolotsky, who co-founded UcommonGoods in 1999, is not the only retail executive with Amazon on his mind, though me might be among the more philosophical about it. (Full disclosure: UncommonGoods is a BloomReach customer.)

Retail execs fear Amazon annihilation

A BloomReach-sponsored survey of marketing and sales professionals at large retailers found that one in three thought their top competitor could put them out of business. Of those who named Amazon as their top competitor, more than two in three saw the competition as an existential threat, according to the survey conducted by Survata.

In fact, the Seattle giant even had retail professionals worried about losing their jobs. Survata found that 40 percent of respondents worried about getting canned because of their top competitor. Those who saw Amazon as their No. 1 threat were almost twice as likely to fear losing their jobs.

But the picture doesn’t have to be so bleak.

“I don’t think it’s a lost game and everyone should surrender today, says Harish Abbott, CEO of Symphony Commerce, a San Francisco-based commerce and fulfillment platform. “Every retailer has the unique promise of the products they carry, the service attached to the products and user experience, including post purchase. Find the niche and what is unique.”

tent-in-the-snow

What the demise of Mel Cotton’s teaches us about customer experience

tent in the snow

OK, so it’s not exactly an unfamiliar story: a 70-year-old single-store retailer closes down to make way for a so-called better-and-higher use of the chunk of urban property it’s been located on for decades.

But as I read in my hometown newspaper about the demise of Mel Cotton’s Sporting Goods on West San Carlos Street in San Jose, Calif., I couldn’t help but spot a lesson in the tale.

Teachable moment and all that.

First, a little bit about Mel Cotton’s, which Sal Pizarro of the Mercury News described as a 25,000-square-foot emporium stocking tents, camping gear, ski equipment, fishing gear, hunting needs — you know, sporting goods.

The place is an institution. There was a real Mel Cotton, the guy who founded the store in 1946 and died in 2008. It’s been the kind of place that generations of the same family would visit. It’s been a hot spot for Scouts, boys and girls who were learning to live by their wits in the woods.

It is a place that stocks more than products. The sales people roaming the aisles are experts and more than willing to share the expertise that they have. Yeah, this is the lesson part.

Mel Cotton’s success didn’t come from the fact that it could sell you the same tent, camping lantern and sleeping bag that you could buy on Amazon, maybe for less. No, Mel Cotton’s success came from the fact that it could also supply the confidence you’d need to use your tent, camping lantern and sleeping bag.

Mel Cotton’s provides a memorable customer experience. It gives people a reason to go there — and to go back when it’s time for a new sleeping bag, or maybe a cooler or cook stove.

Where sales associates are like family

Pizarro talked to customer Al Sousa, a San Jose guy who was at Mel Cotton’s buying kayaks (which you can indeed buy on Amazon). Sousa talked about how sad the closing was. His dad used to bring him to Mel Cotton’s for camping, hunting and fishing stuff. It’s a memory.

But what will he miss the most about the old place? The knowledge that the store associates have — and their personal touch, Pizarro wrote.

“The people here have always been like family to the customers,” Sousa told Pizarro.

Family. That’s the kind of customer experience that’s hard to beat.

And, OK, I was a beneficiary of the Mel Cotton’s experience, which is maybe why this particular closing caught my eye. When my wife and I were ready for our first camping trip — and not entirely sure it wouldn’t be our last — we turned to Mel Cotton’s to rent equipment, including some equipment that we didn’t know we needed. And we did need it. Kind of hard to see at night in the woods without a lantern, for instance.

When we came through our first trip unscathed, we went back to Mel Cotton’s to invest in some equipment of our own. As the sales guy patiently took me through the world of sleeping bags, I wondered why a camper in California would want a sleeping bag that kept you warm down to zero degrees.

Months later, as the autumn snowfall dusted our tent at the White Wolf campground above the Yosemite Valley, I was glad, snug and warm in my sleeping bag, that the sales guy was there to explain it.

You might argue that providing a great customer experience wasn’t enough to save Mel Cotton’s, but you’d be wrong. The store’s news release announcing the closure said the store remained profitable, according to the Mercury.

Why the store experience is important online

You might argue that with commerce moving online, the Mel Cotton’s model is obsolete. Not to pick on you, but you’d be wrong again. Not only are in-store experiences going to be a big reason brick-and-mortar stores survive, but the same customer experience principles apply online.

Sure, you have to deliver the experience differently — by offering rich written and video content, by delivering relevant and personalized recommendations, by maintaining site performance and by simplifying checkout and delivering on service, including delivering on time.

In the video below, IBM’s Patricia V. Waldron talks with BloomReach about some of the steps retailers can take to provide a memorable experience.

And so, I’ll cop to being a bit of a soft sentimentalist when it comes to the passing of a community institution. But the story of Mel Cotton’s is not a story only about looking back.

For 70 years, the retailer was definitely on to something. And what it was on to, it turns out, is the way of the future.

Photo of the tent in the snow by Kikuko Nakayama published under Creative Commons license

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

danchesterforesee

Video: Don’t underwhelm digital shoppers with a lousy customer experience

Everybody knows that delivering a memorable customer experience has gotten a lot harder in the era of the alway-on, mobile consumer.

Customers move from device to device, creating a customer journey that looks more like a plate of spaghetti than a straight path to purchase.

Dan Chester, vice president of retail sales at Foresee, a customer experience analytics company, says every contact between a customer and a retailer needs to be measured and assessed. Chester took time out from his schedule at the Shop.org Retail’s Digital Summit to talk to us about the danger of “underwhelming” your customers.

This is the third of our three-part video series on customer experience, but there are more videos on more subjects still to come.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Ann Ruckstuhl

Video: Website performance — where seconds turn into millions

There is no faster way to drive a customer crazy than to offer up a website that runs slower than the security line at your favorite airport.

Video: How to stand out with customer experience

But do you know who a slow website should really drive crazy? Enterprises that count on a creaky digital platform to deliver sales. Ann Ruckstuhl, of SOASTA, says that seconds mean dollars — big bucks, in fact — in the digital world.

Site performance isn’t the sexiest aspect of the customer experience. But Ruckstuhl, CMO of the Silicon Valley company that measures and improves digital performance, can drop some numbers on you that are bound to get your attention.

We caught up with Ruckstuhl at Shop.org, where she ran down some specific stats, including the math on Walmart’s $250 million site-speed revelation.

This is the second in a series of videos with thought leaders who attended the Shop.org Retail’s Digital Summit in Dallas. Stayed tuned for more in the series.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

reporter's notebooks in a trash can

e.l.f. unicorn; Macy’s freshens up; Amazon hot seat: The BloomReach Relevance Report

The BRRR goes semi-three-dot this week: Three meaty morsels, so rich you’ll want to eat them with a fork. But use a spoon, so you don’t miss a drop.

What color is your unicorn?

makeup

It’s not every day that you get a unicorn story in retail. In fact the financial news in retail  has been a bit dour these days.

But here comes e.l.f. Beauty pulling off a fabulous initial stock offering, its stock rocketing up 56 percent in its first day of trading, according to Fox Business.  e.l.f., which stands for eyes, lips and face, has been around for a dozen years, but the BRRR must admit it only recently became familiar with the company.

Perhaps, it’s because we just rely on our natural beauty, though, admittedly, a little face powder would do us a world of good.

At any rate, e.l.f.’s IPO and its first-day closing price of $26.50, values the company $1.18 billion, according to The Wall Street Journal, putting the cosmetic company in official unicorn territory.

The company, with nearly $100 million in sales during the first half of the year, has an intriguing business model that could certainly be a chapter in the omnichannel playbook. It offers most of its products — lipstick, eyeliner, face-care potions etc. — for less than $6 each, the WSJ says.

It’s a big hit with millennials, Fox says, the millennials who are leading the charge of reshaping consumer behavior. e.l.f. sells online and in 19,000 retail stores, including Target, Walmart, Ulta, Old Navy, CVS and the Gap.

The company also runs nine of its own stores in New York City and its surroundings. Company executives say they intend to expand their brick-and-mortar operation to high-traffic areas across the nation.

When you think of Sephora, Birchbox, Ulta and all the old-school cosmetics companies, it seems like a pretty crowded field, but e.l.f.’s revenues have been on a healthy trajectory. Fox notes that the company’s $96.8 million in first-half revenue this year is up from $75.2 in the same period of 2015.

So maybe this unicorn isn’t so mythical.

Sure, Amazon helps you find stuff, but … 

amazonbox

Amazon is taking some grief after ProPublica conducted a huge experiment to figure out whether Amazon’s search results favored, well, Amazon.

The watchdog publication concluded that Amazon’s algorithms did indeed tilt the playing field to the starship in Seattle. In particular, ProPublica concluded, Amazon’s algos present shoppers with products it is selling, even when other Amazon-based vendors offered the same thing at a lower price. Here’s a condensed version of the story, produced by The Mercury News.

ProPublica monitored 250 frequently purchased products on Amazon for weeks, the Merc said, to see what showed up in the “buy box,” Amazon’s suggestion to searchers. About 75 percent of the time, products Amazon was selling directly or products being sold by vendors who were paying Amazon for services, showed up  in better positions than product offered by third-party sellers — even when the third-party price was lower.

Scandalous, right? Well, this is where things get tricky. It seems shipping costs played a significant role in pricing differences — and as Amazon pointed out, shipping costs are irrelevant to a large bucket of its customers. Amazon Prime members can order a staggering number of items that come with free shipping.

Still, there are some larger points here. First, it’s wise to keep an eye on how Amazon steers consumers to products for the simple reason that a plurality of online shoppers turn to Amazon first when shopping online. A year ago, Survata, in a survey commissioned by BloomReach, found that 44 percent of shoppers head to Amazon first, when looking for or researching a product.

That compares to 34 percent who use search engines first and 21 percent who initially go to a retailer’s site.

The other point the ProPublica story brings up is that consumers love Amazon. If you read the reader comments that follow the reports on ProPublica and the Merc’s site, you’ll see a portion that appear to argue that the headline of the story should have been, “Duh.”

They’ve got no problem with a company pushing its own interests. And they point out that there are ways to broadly compare prices no matter the suggestions Amazon makes. Consider this comment from cosmicunity on the Merc’s story (edited for clarity):

“I know sometimes I can get a product I see on Amazon locally for cheaper. But unless we’re talking 20 to 30 percent cheaper, for a fairly costly item, I usually don’t anyway. I am a Prime member and that $100 a year is well worth it. Usually always buy a Prime item, even if it’s a little costlier. Free two/three day shipping. Also, their return policy is the best I have ever seen. Many times I have told them I am dissatisfied with a product and they refund me, while also telling me to keep it. That doesn’t happen at any big box or mom and pop place that I know of.

Not that the Amazon love is unanimous. This, from GSGregory on the ProPublica piece — and in response to a post arguing that consumers can do the math to figure out how shipping costs affect the total they will have to pay. Again, edited for clarity:

“So showing customers a list labeled as price+ shipping, but showing certain items as only price, is not lying? If you went to Walmart and all non-Walmart brands were shown with the tax included and all Walmart brands were shown on the shelf at a non-taxed price, would you consider that fair business?

The people have spoken.

Macy’s pretties itself up to boost customer experience

macys-union-square

Speaking of beauty, which we were in item No. 1, get this: Macy’s is turning to the Uber of beauty to diversify its business and boost its customer experience.

Reuters reports that the iconic retailer is partnering with beGlammed, which offers house calls for makeup and grooming services. It’s part of a strategy to focus on beauty products to slow the slide in sales.

The wire service points out that JCPenney has had success placing Sephora counters within its stores. The Macy’s deal means customers can go online and order up a bridal makeup job or other beautification project, ranging in cost from $25 to $185.

Macy’s is moving big-time into the beauty sector, Reuters reports, having purchased Bluemercury in 2015. The beauty move comes in addition to store-in-store plays with Best Buy and the announcement that Macy’s will open an Apple store within its iconic 34th Street Macy’s in Manhattan.

Quote of the week

“Results showed that customers want a shopping experience that is easier and more personal and products within the stores to match, including more in-store assistance and customized services.” — Marc Ehle, Office Depot senior vice president of North America retail sales, to the Reno Gazette-Journal, on the occasion of the opening of the “store of the future.”

Photo of mascara by Jenn Durfey published under Creative Commons license. Other photos by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Walgreens

Amid chaotic e-commerce, Walgreens digital director embraces the joy of missing out

walgreensStop me if you’ve heard this one, but there is a cure for FOMO — or fear of missing out. It’s JOMO — the joy of missing out.

An e-commerce executive that I talked with recently offered the JOMO prescription. It was a memorable nugget in a longer conversation about the challenges of running a digital commerce operation in an era of exploding technology and rapidly changing habits among consumers.

As we talked, Wayne Duan, Director of Digital Commerce for Walgreens, was making the point that e-commerce or digital commerce is not one-size-fits-all, and that while it’s incredibly tempting to adopt strategies, approaches and tools that competitors have taken on, it isn’t necessarily the best course of action for you and your business.

See, it’s like your parents taught you: Everybody is different. Or more to the point, every retailer is different. Before you can figure out the steps you have to take to survive and thrive in a digital retail world, you have to think about what you sell, what kind of stores you sell from and, most of all, what it is your customers want from you.

Focus on solving your customers’ problems

“You have to focus on what digital does and what it’s solving and providing for your customer,” Duan says. “You need to know your digital state and have the confidence to say, ‘You know, the current incarnation of Snapchat or Postmates, or whatever, doesn’t apply to my customer or my business model.’”

My conversation with Duan was a clear reminder that as nice as it would be, there is no cookie-cutter playbook that will lead you to e-commerce success. Consider, for instance, the extremes that exist in the retail industry.

You might be a multi-channel retailer with a very large regional store or two and a thriving national e-commerce business. Or you might be a national retailer, with outlets on seemingly every corner that relies on e-commerce as a secondary channel.

Increasing e-commerce revenue is a big deal in the first case. It’s where the company can grow. In the second case, though, the way digital assets influence in-store sales might be more important, given the likelihood that customers will pop into the physical store for what they need.

Or take mobile apps — please. They’ve pretty much become a must-have for major retailers, but many retailers wonder about their value, given studies that show consumers focus on a very few apps and are not likely to regularly use a retail app unless it includes a compelling convenience factor.

If you’re a giant big box store that can provide in-store navigation or a store that sees frequent visits and repeat purchases by core customers (Starbucks anyone?), maybe an app makes sense.

If you’re not, you might argue for an app based on the notion that shoppers frequently use mobile devices while shopping in stores. But, Duan says those shoppers are most likely turning to search engines to hunt for price comparisons and product information. In the end, he says, it might be better to build a great mobile website that will be found by shoppers hunting on their mobile devices while in your store aisles.

There’s what makes sense, and then there’s FOMO

So on one hand, there is what makes sense. And on the other, there is FOMO —  and when you’re working in a large organization, that FOMO can come from the top down. Maybe a big boss’s kid went to Coachella or Lollapalooza and stumbled upon a new social app that all the kids were using. The call goes out to integrate the hot app into your digital arsenal.

Remember, data wins arguments. When you can, turn to the data and build your case on it.

That said, there will be those who argue that an idea is worth a try, that gut should prevail over data, that the organization can try many things, “fail fast” at some and keep at the winners. But in a big company, Duan warns, failing fast can be difficult.

“You hear that all the time,” he says. “I think at a large organization, it is hard to fail fast, because you’re going to have these vested interests. Or you’re always going to have this reason of, ‘This group and or that group didn’t execute it completely,’ and all that type of stuff.”

To avoid that trap and the one-size-fits-all trap, Duan says he applies a six-point test to ideas and proposals. He has woven it into the way his team approaches digital strategy. He calls the test The Six S’s:

  • Solving: Are you solving an actual problem that your customers and potential customers face? Sometimes a technology product, tool or solution is practically irresistible. But if deploying it won’t do anything to make consumers’ experience better, go with JOMO.
  • Status quo: Is the idea so much better than current practice or technology that customers will change their behavior to take advantage of your bright idea? If not, revel in JOMO.
  • Strategic: OK, you can solve a customer problem with an idea that is clearly better than the status quo. Does the move reflect your overall business strategy? If you’ve built a brand, for instance, that says you sell luxury products and your new idea helps customers buy discounted products, maybe it’s time to get in touch with your inner-JOMO.
  • Success metrics: If you don’t establish a way to measure whether the big idea is working, you risk launching pilot programs that, whether successful or not, never die. JOMO helps stamp out zombie pilots.
  • Scale: All right, you can see how your big idea will work flawlessly — in one store. But if there isn’t a clear path to scaling the innovation throughout the business, you’ll be better off embracing JOMO.
  • Sustain: You’ve got your big idea. You’ve checked off most of the S’s, but when you get down to it, you know you’ll be able to pull off the initiative for a week or a month, tops. Being good while it lasted, isn’t good enough for key digital initiatives. If the idea isn’t one that’s built to last, file it under JOMO.

No, digital retail is never as easy as simply adhering to a few acronyms or an alliterative checklist. It’s hard work that relies on experience, intelligence and analysis.

But amid the daily chaos that running a digital commerce operation can be, it is helpful to have a set of core principles to turn to. Just remember, no one can offer one answer that applies in all cases.

In fact, that might be the most important principle of all.

Photo by Mike Cassidy

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

 

newspapers

American Girl; pumpkin spice latte; Wal-Mart toys: The BloomReach Relevance Report

OK, the long-awaited, long weekend is here. Plenty of time to read the BloomReach Relevance Report. But why wait?

She’s an American girl

American Girl Dolls

If you’ve been the parent of an American girl at any point in the last 40 years, then you know the American Girl doll.

We have been; and we do.

We’ve lived the joy of unwrapping Kit Kittridge’s rolltop desk on Christmas morning and the stress of sending Molly McIntire off to the doll hospital for head-replacement surgery. Today the little dolls’ footprint has grown larger.

Starting this month, Toys R Us will be a place where you can buy certain American Girl dolls and soon 100 or so stores will be home to shop-in-shop American Girl outlets, the Associated Press reports.

The move is huge in toy circles. It’s the first time American Girl dolls will be available outside of the 20 American Girl Stores and the Mattel-owned franchise’s website, according to Marketplace, which you can hear below.

The expansion is part of a strategy to encourage the pricey dolls to pull their weight. AG doll sales have been slipping, down 8 percent last year, and down 19 percent in the latest quarter, The Wall Street Journal says.

You could say, then, that when it comes to American Girl, Mattel is taking baby steps. Though that would be a horrible pun. See, American Girl is not moving its entire line into Toys R Us. Instead, it will start out selling WellieWishers there. No, we don’t know what that is either.

The Chicago Tribune, though, tells us WellieWishers are smaller than the OG AG dolls and come with smaller price tags than their American Girl doll relatives. The idea is to target a younger demographic. American Girl aims for the 8-and-up crowd. WWs are for the 5- to 7-year-old set.

In October, and in time for holiday shoppers, the store-within-a-store concept will roll out and Toys R Us will begin selling the $115 Truly Me dolls, Fortune and others report. The idea behind the Truly Me dolls is to apparently end up with a doll that looks like you.

While some have warned that American Girl might be diluting its brand by moving distribution beyond its carefully controlled and choreographed stores, the BRRR believes the company has shrewdly insulated itself from that problem.

Many of the dolls with real star power will still be available only online and at AG stores, typically located in high-end malls and shopping districts. The stores are a temple to customer experience, some including features like American Girl doll restaurants, theaters for plays, styling salons, museum-like displays and the like. Going to the American Girl Store is an outing as much as it is a shopping stop.

It’s safe to say, even with the Toys R Us expansion, there will be plenty of reasons to visit the old-school American Girl Stores.

Ho-ho hoo-boy

Yes, the holiday season has pretty much started for the nation’s retailers. Wal-Mart Stores, for instance, has come up with its list of the top 25 hottest toys this holiday, according to the Pittsburgh Post-Gazette.

Yes parents, you can start stressing. And non-parents? You can start wondering, “Who names this stuff anyway?”

Wal-Mart creates its list by letting kids play with stuff. Then they ask the kids which toys are the best toys.

via GIPHY
 

Topping the list, according to USA Today, is My Life as a Food Truck, which doesn’t sound like an aspirational play thing. There is Doc McStuffins Hospital Care Cart for kids who have a little more ambition, career-wise. And the list includes FurReal Friends Torch — My Blazin’ Dragon, Hatchimals, Sky Viper Streaming Drone and on and on.

Anyway, the point here is that retailers take the holiday season very seriously, as a disproportionate amount of retail sales occur in the last two months of the year. It can also be a time that helps retailers look into the future.

Trends that have been building tend to be amplified during the year-end shopping frenzy. For instance, the move to mobile and post-Christmas shopping were magnified during the 2015 holiday season.

The season also gives retailers a chance to stress test their year-round strategies and an opportunity to latch onto newly acquired customers and keep them. So yes, the preparation in store and online starts early.

The National Retail Federation says the work could pay off. The NRF is predicting that retail sales will be up 3.4 percent this holiday season over last. That’s a slight uptick from the organization’s earlier 3.1 percent prediction. The portion of spending that includes online shopping will be up in the 7- to 10-percent range, the federation said. That’s also an increase, which is based on improving housing and job markets and better wages, the NRF’s CEO said.

Some are also pointing to a robust back-to-school season as a good sign for the holiday, though drawing conclusions from one season to the next can be tricky.

Sometimes you just have to wait and see.

Fall is officially here, well Pumpkin Spice Latte is, anyway

Starbucks Pumpkin Latte

It’s here. The day the world stops — and sits down for a long-awaited Pumpkin Spiced Latte at the local Starbucks. (And let’s face it, no matter where you are, you’re no more than 500 feet from a Starbucks.)

We couldn’t help notice that PSL comes with some other crazy nonsense this year: The Chile Mocha, which is, well, we have no clue. It does come in a chocolate version, though, and apparently combines warmth, spice, apple pie and cinnamon — or things that conjure up those flavors, according to a Starbucks person quoted by CNBC.

The truth is, the BRRR is not a fan. We like to be contrarian. But for those of you who are fans? We’re happy for you.

That said, doesn’t it seem, like many things winter-holiday related, that pumpkin spice is foisting itself upon us earlier and earlier in the year? In fact, yes, says Fortune, which also has a nifty graphic showing the “PSL creep” of recent years. But as Fortune points out, Starbucks and others wouldn’t be serving it if people weren’t drinking it. So, cheers.

Oh, and before we forget: Go ahead Twittersphere: Lose your mind.

 

 

#A little help here

Instagram_AppIcon

As our lives continue to move from the real world into the tiny computers we hold in our hands, more retailers are figuring out more ways to be where their customers are — to sell stuff, sure, but that’s not all.

Luxury Daily reports that Lord & Taylor and Anthropologie have joined retailers that let customers get ahold of them through Instagram. Both retailers have placed “contact” buttons on their Instagram profile pages so customers with issues can get in touch while scrolling through filtered photos. (We’re partial to Crema.)

LD spoke to an e-commerce expert who noted that with the holidays coming up, it’s time for retailers to up their customer service game. Marci Troutman, of SiteMinis, figures that online shoppers are also probably heavy social media users, so retailers should use the big social networks as communication channels. Two-way communication channels.

And she suggested that setting up a social media contact button, but failing to adequately staff the operation, would be a big mistake, which makes sense.

Of course, customers have been using social media to complain about and question companies for years. In fact, I was kind of surprised to see my old buddy and New York Times reporter Vindu Goel chastised for using Twitter as a customer complaint line.

The point is, customers are going to make it known when they feel they’ve gotten lousy service, have been misled or unduly inconvenienced by a retailer or anyone else with whom they do business. So why not create a channel specifically for that and see to it that you can effectively and efficiently deal with problems that arise.

The Forbes story linked above points out a number of big advantages for retailers who formalize Twitter as a customer service channel:

  • First, companies that have done so are showing a 19 percent increase in customer satisfaction.
  • They are saving money. A Twitter response costs $1. The average cost of solving a problem through a call center is $6.
  • Companies with a separate customer help handle (Forbes cites @HiltonHelps) get 10 times better response than those that don’t.

It’s hard to argue with the results. Though, if you have a dedicated customer service button on your social media accounts, somebody just might try.

Color me: Looking for an edge

Sears store

It’s no secret that Sears has been having a tough time of it lately. A lot of department stores have been.

In an effort to get its edge back, Sears is bringing back Easy Living, which hasn’t been its recent experience. Easy Living, of course, is paint and it will be among the brands that Sears’ is bringing back into its stores.

The iconic retailer will also be returning the Weatherbeater brand to its shelves. Sears stopped selling paint in 2014, USA Today says. But it’s now trying to take advantage of a housing boom and a related surge in home improvement.

The BRRR is pleased, given that almost every interior wall in our house is coated in Sears paint. (OK, sure, maybe it’s time to repaint.)

And while the BRRR is celebrating the news, other pundits are wondering whether Sears is trying to paint over some serious problems. Sorry, that was just too easy.

The Street points out that the paint gambit might be too little, too late. It says that consumers have become quite the penny-pinchers since the Great Recession. And it reminds us that when people do shop, they tend to shop online.

We understand The Street’s argument, but we’re not sure the analysis applies in any large way to the paint market. While not exactly a necessity, there comes a time when a home could use a fresh coat. It’s the sort of thing that is going to get done at some point.

And while it’s quite possible to buy paint online, it seems like the sort of thing that most consumers would make a trip to the store for — all the better to see the actual color, plan out the tools that will be needed and maybe get a little advice.

Who knows? Maybe paint is the thing that will bring shoppers back to Sears.

Food for retail thought

Barnes and Noble

As brick-and-mortar stores continue their rapid evolution, a school of thought is emerging that the way to a consumer’s wallet runs through his or her stomach. Barnes & Noble, once known for selling dead-tree-version books is now in the bar and grill business.

The Dallas Morning News reports that B&N will open one of its five bookstore-bar-and-grill combo stores in Plano in March. The move is in keeping with the notion that shopping has become all about the experience.

OK, well, maybe not all about the experience. Retailers are still interested in getting people to buy things. But the developer of the Plano mall that will house B&N said the store will give consumers the opportunity to stop in, browse some books, meet some friends and have a glass of wine, which sounds pleasant enough.

And then there is Ikea, which has always been known as much for its meatballs as for causing Saturday afternoons to devolve into a fury of curse words and fruitless searches for the Allen wrench.

Ikea is upping both its culinary and DIY game, according to Time. The build-your-own home goods store will launch a pop-up restaurant in London, where shoppers can cook their own meals. (Wait. Doesn’t that sort of defeat the purpose of going to a restaurant?)

You do get a sous chef and a maitre de working for you, which is probably a little different from cooking at home.

Ikea says the idea is to celebrate the joy of cooking and eating together, since no one eats or cooks together anymore. So there is that.

Maybe the most interesting thing in the whole Time account of this latest Ikea initiative is this little tidbit: When it comes to Swedish meatballs, Ikea is the bomb. The retailer “sells a billion balls a year,” the story says.

Roll on Ikea. Roll on.

Quote of the week

“Retailers always have robust contingency plans, but this degree of uncertainty is making it challenging to put those plans in place.” — Jessica Dankert, of the trade group, Retail Industry Leaders Association, told the Associated Press, regarding shipments stranded by the Hanjin shipping line bankruptcy.

Starbucks pumpkin photo by Chris Breeze, Barnes & Noble photo by Mike Kalasnik and newspapers by Jon S. published under Creative Commons license. Photo of Sears store courtesy of Sears, Instagram logo courtesy of Instagram. Photo of American Girl dolls by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

in the blender

“Customer experience”: What does that even mean?

 

We stand at a pivotal moment in history. Starting now, we have the opportunity to shape a vision for generations. The moment is fleeting.

Soon, the phrase “customer experience” will tumble into the smothering morass that has consumed “customer journey,” “omnichannel retail” and “mobile first” and turned the words into quivering masses of meaninglessness.

OK, so maybe we’re not exactly facing armageddon. I mean, this is shopping we’re talking about. But a lot of people have a lot riding on getting shopping right — not the least of whom are consumers.

If you’re in retail or follow the industry, “customer experience” is everywhere. My in-box — and I bet yours — has been bombarded with reports, studies and news stories about the embrace of achieving the ultimate customer experience.

eMarketer recently released research that found that nearly 90 percent of e-commerce executives believe that improving customer experience is fundamental to the future success of their businesses. The survey, conducted by consultants The Storytellers, also found that 82 percent of the executives said a better experience would increase returns on investment, while two-thirds said improving the customer experience would lead to “greatly increased profits.”

The barrage has all the earmarks of the buzzword syndrome. Well-meaning marketers come up with phrases that sound good and are vaguely descriptive. But soon, like barnacles, the phrases become attached to anything that moves. The words pretty quickly lose any specific meaning and become a sort of “the dog ate my homework” response to retail’s challenges.

Foot traffic down? Not to worry. We’re working on an omnichannel strategy. Desktop traffic skidding? We’re on it. It’s all part of the changing customer journey. Smartphone traffic is spiking wildly, but sales on mobile phones are lagging? Chill. It’s step one of our mobile-first strategy.

Customer experience is often pureed in the Vague-O-Matic

Let’s not throw “customer experience” into that same Vague-O-Matic. The way to save customer experience as a concept is by defining it. Or more accurately, by understanding that customer experience is a lot of different things and when we talk about it, we should be clear about which parts we’re talking about.

The way I see it, customer experience is about data, emotion, economics, visual cues, nostalgia, supply, demand, fashion, pop culture, aspiration, personal finance, self-image, desire and restraint. It’s a classic mix of art and science.

But underneath all that, customer experience comes down to three broad categories. (I admit that I fought the urge to write, “customer experience falls into three buckets.” This buzz word syndrome is powerful, my friends.)

Here’s a framework for thinking about customer experience

And yes, the boundaries among the three categories blur in places. They sometimes work in tandem and sometimes sequentially to form a marketing funnel. That said, I’m going with:

The aesthetic customer experience: This is the art, and very much the world of merchandisers, though everyone needs to play a part. This is right-brain stuff, the poetry the soul of retailing. The aesthetic customer experience is all about understanding your customers and showing them you know them through the story your brand tells. It’s about relating to those who visit your sites through text and video and photographs — and by grouping and arranging products in an eye-catching and mind-pleasing way. It’s about building online pages that help consumers understand what they’re getting and how it will affect their lives. It’s about building a site that is pretty, with well-crafted writing and gorgeous photographs. The aesthetic experience is understanding what your customers mean to you and what you mean to your customers. It’s anticipating what the cool kids will be wearing or using and how products intersect with pop culture, social sets and world events. It’s about inspiration and communication. It’s about being authentic.

The logistic customer experience: This is the science. This is where data and technology come in most prominently. Combining data and technology allows retailers to achieve another buzz phrase: “getting the right product in front of the right customer at the right time.” In short, it’s about relevance and personalization. It’s about presenting each individual shopper with a visual array of products, sorted in a way that shows the site understands that particular customer’s style, tastes and preferences. The logistic customer experience makes a customer’s visit worthwhile and not a waste of time. It’s about getting digital checkout right and making sure pages featuring your products and non-product content load quickly. It’s about relying on systems that constantly learn and take the manual work out of presenting your best store to each individual online visitor. It’s about using technology that helps you spot places where what you’ve built and how consumers shop don’t match. It’s about telling a shopper you understand them, what they like and what they’re after. It’s about being able to tell the customer what’s in-stock and how to get what’s not in stock. It’s providing a way to pickup online orders at a store or have an in-store purchase delivered to a home. And if something is not right, it’s about offering an easy way to return an item by mail, delivery service or in a store. It’s being able to tell digital shoppers when they’ll get what they’ve ordered — and the ability to deliver on that promise.

The transactional customer experience: This is the most crass and brutal branch of the experience. The transactional customer experience is all about pricing, promotions and literally delivering the goods. It’s the slice of experience that acknowledges that while customer experience can’t be only about the transaction, in the end, both the consumer and the retailer see a transaction as the goal. And, so yeah, it’s important. This is where the art of the deal lives. Consumers expect to be treated fairly. They want to trust the retailer they’re doing business with. If they see a price online, they expect to be able get that price in the store. In fact, consumers want a good value. Shoppers have come to expect low, low prices. Parents in a recent survey indicated that price was even more important that quality when it comes to back-to-school items. But the discount game is a dangerous one for retailers. Constantly slashing prices obviously cuts into profit margins. It’s also hard to beat Amazon on price, which brings us back to experience. No question, retailers need to pay attention to the transactional customer experience. But the way to win against Amazon is to pick the right spots in which to excel in the arenas of aesthetic and logistic customer experience.

There is no doubt that “customer experience,” as a phrase and an imperative, is with us for the long-haul. That’s a good thing. It’s a clear sign that e-commerce has reached a tipping point. Consumers can go online and, to varying degrees, find what they’re looking for and buy those things.

The backstage machinery to handle the basics is up and running. The stakes are higher now. Consumers expect much more than the basics.

Now comes the time to make digital shopping more than a transaction. Now comes the time to make e-commerce an experience, a remarkable and memorable experience — the kind of experience, most importantly, that consumers can barely resist repeating.

Blender photo by Paul Bailey, published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

Logan Square

Are retailers ready to hang with the cool kids?

Big retailers that are wondering where their customers are going might want to start looking on the “cool streets” emerging in cities across the country.

You know, cool streets. The up-and-coming or already established hipster neighborhoods identified by Cushman & Wakefield as the once-on-the-fringe commercial districts that have the potential to power brick-and-mortar retail’s future.

The “Cool Streets” report by the global commercial real estate giant is fun, in the same way any list of the best this or that is fun. But it’s deeper than that. Once you’ve looked to see whether the hood that’s home to your favorite taqueria is on the list, consider the bigger picture.

Retail is changing at an ever-increasing clip. Brick-and-mortar department stores are looking for answers. Big chains are closing stores and reshuffling their real estate line-ups to take advantage of their most prosperous locations. Everybody is working on ways to make the most of shifting consumer habits that mean shoppers move fluidly among devices and between devices and physical stores.

Cool streets, according to Cushman & Wakefield, are a piece of the puzzle. The report identifies 100 in all and conducts a deep dive on the top 15. These neighborhoods — Sunset Park in Brooklyn, Logan Square in Chicago, Roosevelt Row in Phoenix, Silver Lake in Los Angeles, Los Gatos, near San Jose, Calif. — are populated by millennials and by independent retailers, or trend-setters or small chains that are focused on customer experience as much as customer transactions.

So, what do the storefronts in this trendy-for-not-being-trendy neighborhoods look like? The report points to examples like Warby Parker, Shinola and Whole Foods 365 stores.Shinola StoreWarby Parker, of course, is an online-first company that started experimenting with physical stores and found customers developed an almost-Apple-Store-like affection for the look and feel of the stores. Whole Foods 365 is all about smaller footprints, lower prices (lower than its full-on Whole Foods stores) and appealing to urban millennials.

That said, 365s will be big on experience, Cushman & Wakefield points out, featuring frequently changing in-store pop-ups selling everything from vinyl records to tattoos.

And Shinola? Well, it’s a place that sells watches, leather goods, journals and, uh, bikes. Yeah, bikes. Totally about the experience, the report says.

“But Shinola is definitely not just a watch or a bicycle or a leather goods store. Shinola is a lifestyle store for millennials,” the report says.

It goes on to explain that millennials are big experiencers, spending 15 percent more of their disposable income on experiences than did the generations that came before them.

Experiences, such as?

Well, eating stuff, apparently. It seems the way to a millennial’s wallet is through his or her stomach. Cushman & Wakefield says that restaurants outnumbered other retailers by a 2-1 ratio in the 100 neighborhoods upon which it bestowed the cool label.

And while millennials are all the rage, in some ways they just reflect the population at large. (Sorry, millennials.) Consumers, overall, appear to be shifting their spending toward experiences. The Cool Streets report says that restaurant spending now accounts for 12 percent of retail spending, the highest it’s been since the U.S. Commerce Department started keeping track 30 years ago. That’s up from an average just below 10 percent from 1992 to 2010, the report says.

The Cushman & Wakefield findings present something of a corollary to a study by Deloitte Digital analyst Kasey Lobaugh that I wrote about in May. Lobaugh’s Retail Volatility Index found that since a 12-month period Deloitte studied in 2009-2010, the nation’s biggest 25 retailers lost .9 percent of their market share — a figure representing $41 billion in 2015.

And no, Lobaugh explained, that was not spending that necessarily moved online from brick-and-mortar stores. That was money that moved to smaller competitors, he said, startups and upstarts, some moving to the U.S. after success elsewhere.

The Deloitte report did not include an exhaustive list of the start-ups, mid-market players and previously foreign retailers that are doing the disrupting, it did describe some of the features attributed to stores like Warby Parker and Shinola. The Retail Volatility Index refers to the assault as “death by a thousand cuts.” It continues:

“These ‘cuts’ include a variety of challenges including those from smaller players with different business models to single-category players who offer a greater depth of offerings when compared to more horizontal players….”

If you think of Shinola as having a different business model (eclectic inventory, assembled in Detroit) and Warby Parker as a single-category player (eyeglasses), it’s not a giant leap to assume that at least some of those putting a dent in the big players’ sales are lining the cool streets that Cushman & Wakefield has identified. And Lobaugh’s observations align with Cushman & Wakefield in another way, too.

Logan Square

In his May presentation, Lobaugh noted that the retailers most vulnerable to losing share to upstarts are those that provide commodity goods or a lackluster customer experience. Those providing a ho-hum experience with goods anyone can buy anywhere are in the most trouble, of course.

Cushman & Wakefield reached a similar conclusion while looking at big legacy chains that feel constrained by the pressures of being publicly traded and that can be slow to embrace change:

“Too often, the result of these limitations is retailers with shelves full of homogenous goods in increasingly empty homogenous stores situated in dying homogenous malls. The irony in all of this is that by being too conservative while navigating this new challenging landscape of omnichannel retail, brick-and-mortar retailers may actually inadvertently drive their customers online by simply being boring.”

So, what’s next? “Cool Streets” lays out a future in which some struggling apparel retailers could make the move from the mall to a cool street near you (or near your cool friends, if you’re not yourself cool). Cushman & Wakefield’s scenario goes like this:

Investors pressure big mall retailers to close low-revenue locations in second- and third-tier malls and “right size” for an e-commerce world. First-tier mall owners see the trend and jack up rents for retailers who are keeping their best performing stores open.

“This situation may force many traditional mall tenants to rethink their real estate strategies and begin looking for creative alternatives. Cool streets will be one of them,” the report concludes.

It’s hard to imagine that big department stores leaving malls for hipster neighborhoods will become a big trend, but maybe I’m not cool enough to see it.

Either way, another consequence of the cool street phenomenon covered by Cushman & Wakefield seems inevitable. Neighborhoods will become too cool for their own good. This, of course, has already happened (think Williamsburg in Brooklyn, among others), as the report points out.

Cushman & Wakefield describes it as a cycle. Somewhat sketchy neighborhood sees real estate prices fall, which attracts dreamers, speculators and under-capitalized businesses. Momentum builds. Hipsters and adventurous residents move in. Restaurants flourish. Retail follows. Rents rise. Neighborhood goes mainstream. Gentrification complicates life for the pioneers.

In the end, it might be what progress looks like. It might also be what sustainable urban revitalization looks like, which is a good thing.

Photo of Shinola’s Tribeca story by Design Milk and Logan Square by get directly down published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

newspapers

Betting on mobile; Walmart’s food stamps; bye buy button: The BloomReach Relevance Report

As we head into a three-day weekend during which reflection on the sacrifice so many have made will be center stage, we’d be pleased if you’d take a few minutes to read the BloomReach Relevance Report.

Casinos are betting big on omnichannel

PlanetHollywood

Who knew? Omnichannel is now a hot topic in the gambling world. Well, somebody knew, but now you know, because the Associated Press recently reported that marrying the brick-and-mortar and digital worlds of gambling was in the conversation at the East Coast Gaming Congress & iGaming Institute in Atlantic City.

In fact, wouldn’t “The Omnichannel” be a great name for a hotel & casino? We digress.

Casinos, the story explained, are discovering what a number of retailers have found: The real story isn’t brick-and-mortar (and a little gold leaf, in this case) vs. online, but brick-and-mortar plus online. The way the AP put it, casinos are realizing that online play is not “cannibalizing their existing brick-and-mortar casinos, but rather bringing in new customers.”

There’s a lot at stake. The AP said internet gambling brought in $160.7 million dollars in the three states (New Jersey, Delaware and Nevada) that allow it. Which is both interesting and confusing, because isn’t the whole idea of the internet that we don’t have to be in any particular place to get done what we want to get done?

Anyway, the AP story went on to quote a casino executive:

“We’re seeing huge growth in mobile phone and tablet play,” said Luisa Woods, executive director of Internet marketing for Atlantic City’s Tropicana casino. “And we’re seeing huge cross-flows between players who visit the casino and then go home and continue to play online.”

Now we can debate whether that’s a good thing or a bad thing. The BRRR doesn’t judge, but we will say we often believed that the only way to win at a casino is to have someone forcibly drag you out of the building when you’re ahead at the Blackjack table. Just saying.

The timing is interesting in that the discussion might be moving (mercifully) from the importance of omnichannel to the importance of customer experience (omnichannel being a part of that.)

Now that we think of it, though, casinos are on it when it comes to customer experience. Think of all those free drinks (OK, maybe nothing is really free) and the posh penthouses that the high-rollers experience on the Jersey shore and the Las Vegas strip.

Who says brick-and-mortar is dead?

Kasey Lobaugh copy

Hey, guess what? Retail stores are not going away.

Always good to know that the place where more than 90 percent of retail sales happen is not about to vanish overnight. It’s something you hear a lot. Jerry Storch, CEO of Lord & Taylor and Saks Fifth Avenue parent Hudson’s Bay Co., made the point at Shoptalk 2016 last week.

“For most people going to the mall and going shopping, remains our national pastime,” he said during a presentation that included a strong argument that fulfilling online orders was not necessarily cheaper than selling to customers in brick-and-mortar stores.

But Storch’s main point was that the choice is not brick-and-mortar or online. Retailers need to do both. The fairly well-accepted idea is a variation of another intriguing point made at Shoptalk 2016.

Deloitte Digital’s Kasey Lobaugh, who’s devised a Retail Volatility Index, explained to attendees that in-store declines reported by big retailers can’t be framed as a brick-and-mortar vs. e-commerce story. Instead, he demonstrated, the loss of market share experienced by some of the country’s biggest retailers was actually being redistributed to upstart retailers.

The trend calls for new ways of thinking for established retailers in particular. Lobaugh talked about differentiation, which was another hot topic at Shoptalk. The buzz phrase was “customer experience.”

Lobaugh’s version of differentiation looked at two characteristics  — differentiation of product and differentiation of customer experience. Successful retailers, he argued, will be those that offer products of type or quality that you won’t find elsewhere and/or customer experiences that are unique — in a good way.

It all seems reasonable, right? Brick-and-mortar retail isn’t going away, though some brick-and-mortar retailers surely are. It’s just that brick-and-mortar will become something different from what it is today.

Public assistance puts its stamp on Wal-Mart Stores’ success

Walmart

We think we’re pretty smart here at the BRRR. Perhaps you’ve noticed our self-satisfied strut.

But it turns out there is stuff we never thought of. Shocking, we know. Anyway, Shelly Banjo (one of our favorite retailer writer names), has a fascinating piece that looks at how food stamps have been a key arrow in the quiver for Wal-Mart Stores as it battles Amazon. (Today’s tip: When it comes to Amazon, don’t bring an arrow to a howitzer fight.)

The Bloomberg story explains that the feds pretty much require that food stamps be used in person, something highly impractical when it comes to ordering groceries on Amazon.

Banjo does a nice job of laying out the stakes: Last year, nearly 50 million people spent $70 billion in food stamps. More than half of Wal-Mart’s revenue (56 percent) comes from groceries. Nearly half (47 percent) of food-stamp spending last year was at big-box stores, which includes Wal-Mart. (The government doesn’t break the spending down by specific retailer.)

Anyway, all this has come up because there is a movement afoot to allow food stamps to be used online. Put another way: There is a movement afoot to allow food stamps to be used on Amazon.com. Wal-Mart has lobbyists and Amazon has lobbyists, so this could go on for a while.

Meantime, the Twittersphere via Gawker points out the company store nature of Wal-Mart by referencing a political advocacy group’s report  that says many of the food stamps are redeemed by Wal-Mart workers.

We haven’t seen a lot of coverage of this issue, so it may be some time before the fur starts flying publicly, but if it does, you can be pretty sure it will get ugly fast, as the Restoring Liberty blog demonstrates. Those who divide the country into “makers” and “takers” aren’t going cotton to the idea of delivering food to those who buy it with taxpayer money.

Button, button: Who’s got the button?

Facebook's Feller

Facebook’s Feller

Twitter’s buy-button social commerce experiment appears to be winding down. Buzzfeed and others report that Twitter has dismantled its commerce team and suspended work on its buy button.  

Remember when buy buttons were all the rage? Those were the days.

Like so many things in the ever-evolving world of retail, it would be a mistake to draw a big conclusion for a little move. What we mean is: Twitter turning it’s back on buy buttons is hardly the death knell for shopping on social sites.

It could be that a buy button in mid-Twitter-stream just isn’t the way to do it. You might remember that Facebook was a button fan, too, before it wasn’t. But it’s not as if Facebook, for instance, has given up on e-commerce. In fact, it’s making some intriguing moves.

It’s quite possible that Facebook has figured out that selling stuff in users’ news feeds isn’t the way to go. People hit Facebook to touch base with or even get into deep conversations with friends and acquaintances. Pushing a product with a buy button in that forum is the equivalent to having some barker pushing 30 percent off Crocs striding up to you and a buddy as you’re sharing a cup of coffee.

Instead, Facebook is working on more intriguing e-commerce plays that are separate from the news feed. There’s the Shop addition to Pages, which allows business to sell directly from their Facebook pages. It’s developing a shopping platform on its Messenger service, using chatbots to help consumers with purchases. And it is offering retailers the chance to create rich digital commerce experiences within the messaging format, as Frerk-Malte Feller recently demonstrated at Shoptalk.  

It’s good to remember that it’s early days in the marriage of social network platforms and e-commerce. The more they take aim at making it easier to buy on mobile devices, the more traction these early initiatives will get.

So even if we’re saying goodbye to Twitter buttons, it’s highly unlikely we’re saying goodbye to the notion of mixing shopping and social media.

Quote of the week

“Our iconic KCD brands are beloved by the American consumer and we believe that we can realize significant growth by further expanding the presence of these brands outside of Sears and Kmart,” the Sears statement regarding Kenmore, Craftsman and Diehard brands that sparked rumors the brands might be sold or at least licensed to others.

Photo of newspapers on blog main page by Jon S published under Creative Commons license. Other photos by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

 

Frerk-Malte Feller

Three hot topics from Shoptalk that point to retail’s future

Here’s the only rock-solid prediction you’ll read in this whole piece: After any big retail show, like last week’s Shoptalk 2016, a spate of stories predicting the future of retail will appear.

There. Got one right.

Seriously, retail is in the midst of dramatic disruption, fueled by technology, data and competition from entrepreneurs who are turning to lean startup ideas to launch companies that appeal to an ever-more-diverse and demanding customer base.

When thinking about what retail will look like in the coming years, it helps to think about how quickly the industry has changed in the years just passed.

“It’s only been 20 years ago, that the only way that you could actually buy a product, is that you walked into a store, talked to one of the shop representatives, and picked it up,” Facebook’s Frerk-Malte Feller said during a Shoptalk presentation of Messenger’s latest e-commerce capabilities.

Frerk-Malte Feller

Frerk-Malte Feller

With that in mind, here are three trends, much discussed at Shoptalk, that are very likely to change the way retailers sell and consumers buy in the relatively near future.

Obsession with customer experience: While not exactly new, the idea of building a fantastic customer experience came up again and again at Shoptalk’s inaugural show in Las Vegas.

Magento CEO Mark Lavelle said it would be difficult to overestimate the importance of experience.

“If you’re a retailer or brand, or manufacturer, or any kind of service business and you’re not really thinking about how you differentiate your experience, using all the available things you have, you’re not going to survive,” Lavelle said during a panel talking about the future of e-commerce.

The talk about experiences comes with a new urgency and new tools.

One key for retailers will be achieving genuine personalization — providing individual shoppers with the sense that you know him or her and that you know what it is that he or she wants at any given moment.

Rebuilding consumers’ experience on smartphones will also be huge.

Shoppers are rapidly turning to phones as a key way to look for and research products, but actually buying items on phones is still lagging behind. Look for experiments — retailers throwing things against the wall to see what works — and a willingness to build in features that don’t lead directly to conversions, but might instead inspire return visits and loyalty.

HotelTonight’s Amanda Richardson talked about the success that the room-finding app has had with a concierge-like texting service. And Home Depot’s Paul Gaffney reported on a paint-color finder that the home improvement store has added to its mobile arsenal.

He said the retailer hadn’t yet determined how to tie paint sales back to the app, but that he knows that customers genuinely enjoy the feature, which allows customers to see on their phones how a room would look in a given color.

And retailers are not working strictly on online experiences. Whole Foods Market’sGabrielle Rosi decried the way modern life has eliminated the places and rituals that bring communities together. She said Whole Foods has opened a number of cafes and taverns in its stores, looking to create spaces where people can hang out together.

“In San Jose, California, we did our own brewery,” she said. “We hired a really amazing guy, named Guy, from the Russian River Brewing Company, to produce some really amazing beers for us. You sit in this bar on the second floor of this amazing LEED certified building and you can look over the train tracks and see the SAP Center, where all the big stars and the (NHL) Sharks play.”

Mobile commerce shake-up: The growth of smartphones as a shopping tool has been nothing short of staggering. The problem for retailers has been that the growth has been largely about shopping — and not so much about buying.

Demandware’s Rick Kenney gave me a preview of the company’s upcoming quarterly Shopping Index. He said that by the end of next year, 60 percent of the world’s e-commerce traffic will be coming from smartphones. And by March 2017, 40 percent of purchases will happen on a smartphone.

In short, something has to give. Feller, Facebook’s director of product management for Messenger, gave a peek at what that something might look like. He demonstrated an API that is creating a fledgling commerce platform on Messenger. It’s slick, providing retailers with the ability to provide carousels of products that users can scroll through.

The system handles the entire shopping excursion, from hunting for a product, to purchasing, to customer service, to receiving a receipt, all in the chat environment of Messenger. And most importantly, the purchase can be done with one-touch, presumably after a credit card or other payment method has been linked to the shopper’s Messenger account.

The demo had me thinking about China and how far ahead of the U.S. China is when it comes to mobile commerce. eMarketer recently cited research that said mobile commerce makes up almost two-thirds of all e-commerce in China and that by 2019, nearly three-quarters of e-commerce sales in China would be conducted on mobile devices.

The reason? E-commerce in China is dominated by two massive retailers and the mobile-first population relies primarily on chat services, similar to Messenger, as the platform for buying.

“We’re very excited about this journey, where we are heading,” Feller told the retailers gathered at Shoptalk. “We feel this arc, starting with the conversations that are so crucial for an ongoing customer relationship, can offer a great platform that, in our view, has a chance to really be the next paradigm of how your customers interact with you day to day.”

That’s not to say Messenger is going to be the product to transform mobile commerce, but you can bet big change is coming. If it’s not a new platform that will make buying on smartphones easier, then it will be new, or wider, deployment of existing products — such as mobile wallets and similar payment systems.

The rate of conversion on mobile has been increasing, Kenney says, and he expects that trajectory to continue.

“If we see Apple Pay actually become part of the mobile web, instead of just mobile applications, if we see higher adoption of other wallet-type technologies, PayPal included, certainly in that, too, that can actually accelerate and drive that order share higher on phone.”

Various delivery speeds for different products and customers: Amazon’s worldwide vice president of Prime Now scared the hell out of her e-commerce competitors with a brief talk about how the Seattle behemoth designed a service that promises one-hour delivery of online orders.

Her key anecdote? A YouTube video chronicling the story of a guy who woke up one morning hungry for waffles. He ordered a waffle maker, waffle mix and syrup on Prime Now. It arrived in 24 minutes — and 39 minutes after he ordered, he was sitting down to a hot waffle with syrup.

“The stuff that people want fast, is the stuff of everyday life,” Amazon’s Stephenie Landry explained. “Bottled water, household paper, tissues, orange juice, ice cream, eggs.”

Oh, and in Portland they want organic carrots, Amazon data shows. It’s vegan pizza in Seattle; paper towels in New York. And in San Francisco? Cottonelle Ultra-Comfort Care Toilet Paper.

And certainly the Amazon story is a window into the expectations and impatience that consumers today have. But maybe not everyone needs his or her vegan pizza in an hour, or even two. Or maybe there are products other than, say, toilet paper, that someone could wait a few days for.

Bonobos founder Andy Dunn made the latter point in a morning presentation with Re/code’s Jason Del Ray. Dunn explained that Bonobos had branched out from its original mission as an online-only retailer. It’s now opened stores, which it calls Guideshops.

The shops are places where customers can stop in and try on clothes and find out what items actually look and feel like. If they like what they look at and feel, they place an order, which is later delivered to their homes.

“Everything I’ve ever been told in the industry about instant gratification is not necessarily true,” Dunn said. “The insight was that they didn’t necessarily care if we sent them home with the product they purchased.”

Yes, food or a personal hygiene item, that might be something a customer wants, or needs, right away. But a shirt? You don’t eat a shirt, Dunn said.

Today the market for speedy delivery sorts itself out. If you want fast delivery, even of a shirt, you join Amazon Prime. If you can wait for your clothes, you shop at Bonobos. Or maybe you order your waffles from Amazon and your pants from Bonobos.

But no doubt in the future, it will be much more common for individual retailers to offer more tiers of delivery, for a price. Consumers will simply expect it.

Photo of  Frerk-Malte Feller by Mike Cassidy.

This piece originally appeared on Huffington Post. Mike Cassidy is BloomReach’s storyteller. Reach him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

Lobaugh with chart

A reason for retail sales declines that you hadn’t thought of

It was one of those headlines that caused me to do a double take: “Bay Area Shopping Malls Enjoy Low Vacancy Rates.”

Granted, the story looked at only one region, one buoyed by the tech economy, but after a week of reading about the miserable earnings of big retailers, the last thing I expected to see was a news story about malls that are full to the brim and raising rents.

Kasey Lobaugh

And then at Shoptalk today, I ran into Kasey Lobaugh who was giving a presentation on his Retail Volatility Index, which is as scary as it sounds. Lobaugh has a different — and data-driven — way of looking at the disruption that is rocking the retail industry.

Lobaugh and his co-workers at Deloitte Digital have devised an index that, in a sense, measures retail disruption. (Page 5 of this Deloitte report talks about the index.) He doesn’t talk about how much retail revenue is going away or how much is moving online. Instead, his Retail Volatility Index looks at how much of the market share held by the top 25 retailers is being snatched by start-up and upstarts in the retail business.

Short story: Between 2009 and 2014, the top 25 retailers in the United States have lost 1.3 percent of their market share — or  $48 billion — to a growing number of smaller competitors, Lobaugh said. Not only that, but he said, the pace at which that disruption is occurring has increased every year since 2009. (He said he’ll release an updated report in June.)

“We are now on a path that is fundamentally different than what we’ve seen in the last 100 years,” Lobaugh said during his presentation in Las Vegas.

That different path might go a ways toward explaining why some retailers seem baffled at the decline in same store sales that they are seeing.

Kohl’s CEO Kevin Mansell said on an analyst call last week that he didn’t know whether Kohl’s 3.9-percent drop in same-store sales was due to operational issues that the retailer could address or due to large economic or consumer behavior issues, The Wall Street Journal reported.

“I think we’re still grappling a little bit with that,” the Journal quoted Mansell as saying. “We’re definitely not in a position that we’re putting a stake in the ground and saying, hey, this is the one big driver.”

Lobaugh’s answer to the question, “what the hell is going on,” as he puts it, isn’t about Amazon. (He noted Amazon is in that group of 25 that is losing share.) His story isn’t about e-commerce in general killing brick and mortar.

“There is actually a whole crop of retailers that are brick-and-mortar, as well,” he said, “who have come into the market and are also stealing share.”

The story Lobaugh tells isn’t about the warm winter slowing clothing sales. It’s not about the decline in tourist dollars spent in U.S. stores. It’s not just about consumers shifting spending from stuff to experiences, though that’s playing a role, he says.

Lobaugh’s story is about technology, but even there he adds a twist. It’s not just the old story about how everything is changing because consumers who tote smartphones everywhere and shop online at will are newly empowered. Technology is disruptive in other, less-talked-about ways, Lobaugh says.

Today an entrepreneur can get an online store “up and running within an hour with nothing more than a credit card.”

In large part because of the cloud, the store founder can hire out his or her call center, fulfillment services and digital infrastructure.

“The barriers to entry are down,” he said. Competition is coming at established retailers from all sides — fast-fashion, European retailers opening U.S. stores, online, offline. The battle, he said, has changed from one between the behemoths to “death by a thousand paper cuts.”

“Your competitor is no longer the big guy, who was across the street, who you focused on for the past 50 years,” Lobaugh said. “You don’t know who your competitor is.”

But there is a hope, or at least a way forward. Crunch the data a bit and another trend peeks through. Lobaugh and his team plotted retailers along two continua, which analysts tend to do. The vertical scale accounts for the degree of product differentiation a retailer offered. The horizontal axis represented the degree of experience differentiation a retailer offered.

Retail volatility

Not surprisingly, retailers that ranked high both on providing a differentiated product line — think products you can’t get anywhere else  — and a differentiated experience — think the Apple Store — were faring the best in this era of disruption. Those on the opposite ends of the scales were most vulnerable.

Specifically, Lobaugh said, the high performers were seeing comparable store sales rise 6.5 percent (based on 2014 data), while those on the low end were suffering through a comparable store sales decline of .5 percent.

“If you want to compete in that bottom quadrant (low product and experience differentiation), fine,” he said. “That means you have to compete cheapest, fastest, easiest. Alternatively, you have to think about how you shift your strategy and think about how you win in this kind of environment.”

So, back to that San Jose Mercury News story. It went on to quote a commercial broker explaining that the high mall occupancy wasn’t due to the expansion of major retailers. Instead, the space was being gobbled up by restaurants and “personal service retailers,” which plays to the point made by Lobaugh and others that consumers are shifting toward experiences.

The story also quoted mall operators talking about new and coming tenants, such as Lululemon and Pink — two outlets that attract die-hard fans and could reasonably be placed in Lobaugh’s quadrant of the high on experience and product differentiation.

All of which is a reminder that it is sometimes it’s not enough to talk about whether retail is growing or shrinking. It is often just as important to talk about what kind of retail is shrinking or growing — and even more important to talk about why.

Photos of Kasey Lobaugh and his graphic by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

Shoptalk sign

Why customer experience has dethroned omnichannel at Shoptalk

I’m just going to call it: This is the year and Shoptalk 2016 is the place where omnichannel dies.

Oh, there will be plenty of talk about “omnichannel” during the three-day retail conference that kicked off Monday in Las Vegas. And the concept, maybe mantra, of “getting the customer what he or she wants, when he or she wants it, where he or she wants it,”  isn’t going away. And it shouldn’t.

But what retail is all about in 2016 is “customer experience,” in particular, bringing all aspects of a retailer’s organization together to build and manage that experience in the digital world we live in.

In an information era, in which it is increasingly difficult to beat the competition on price; and in a time when e-commerce sites are approaching the limit on how fast they can get a package to a consumer’s home, experience is one of the few places where a retailer can standout.

“It’s funny that you mention the word experience, because that’s exactly how we envision building Dollar Shave Club over the next four years,” Michael Dubin, CEO of the men’s grooming products provider, said in response to a question at a Shoptalk fireside chat Monday. “Now you have to build an experience. You have to evoke emotion.”

IMG_8530

In fact, at times it seemed you could nearly hear the word “experience” echoing through the sprawling Aria Hotel & Casino convention center. Ron Johnson, who’s credited with leading the Apple Store effort and who stumbled at JCPenney, said in a presentation that his newest venture, Enjoy, is all about creating personal commerce through “the magic of experience.”

Customers who order electronics through Enjoy have their products delivered by an expert who spends an hour helping the buyer get acquainted with his or her new gadget.

“They’ll spend an hour with you, not just setting it up, but creating an experience that will make you fall in love with that product,” Johnson said.

Kevin Ertell, Sur La Table’s senior vice president of digital, was asked during a different panel discussion whether it would make sense to limit the products the retailer shows on its mobile site to make the site more user friendly. Not really, he said. The vast majority of customers don’t buy on a given visit. They come to the site to research kitchen and dining tools.

“The issue with mobile or the web site, or anything,” he said, “is much more about the experience, and how do you make it easier for the customer to shop or to do whatever they’re doing.”

And so it went from session to session; “experience” was on many lips. Admittedly, making sure customers have a memorable experience does sound a little fluffy. But the reason retailers are embracing experience has as much to do with dollars and cents as it does with warm and fuzzy.

Consumers, armed with smartphones and a market that the web has made more transparent than ever before, hold more power than they ever have. If retailers want to survive and grow, they have to come up with something that sets them apart from the competition.

“Experience is the thing you have to pick,” Ben Lerer, chairman of men’s clothing e-tailer JackThreads, told me in an interview Monday. “It’s certainly what we picked for a new kind of customer who decides for themselves what brand they want to spend time with.”

JackThreads recently decided to give up a flash-sale discount model for a model that allows free and easy returns and doesn’t charge a customer until he’s settled on what he will keep.

A different kind of experience, if you will.

Now, we can argue about whether trading one buzz word, “omnichannel,” for another, “experience,” is really progress. Let’s save that for later. The point is, the world of buying stuff has gotten so complicated and has begun shifting so quickly and so wildly that even the idea of being all things to all consumers all the time, isn’t big enough to capture what’s happening.

The notion of “experience” isn’t new, but the empowered mobile consumer means it needs to be thought about in a deeper way. For instance, the idea of providing a better experience sounds great. So, why isn’t everybody doing it?

It turns out that, despite all the talk about putting the customer first, some retailers are not organized in a way that makes that easy to do, especially across channels and platforms.

Banana Republic

When Aimee Lapic, who is chief marketing officer and online general manager at Banana Republic, arrived at the company about a year and a half ago, she said she was faced with three separate teams, all working on customer experience. There was marketing, which worked on marketing for brick-and-mortar stores. There was an e-commerce team that worked on the web sites and there was a second marketing team that worked on digital marketing, online marketing email and site marketing.

She went to work to bring them all together into “one organization, really focused on customer segment, regardless of channel, regardless of geography and changed all the creative processes, so they would be one process.”

While there is still work to be done, the change has resulted in better sales when it comes to Banana Republic’s best customers, Lapic said during a panel, “Creating and Managing Omnichannel Customer Experiences.”

A similar idea has been put forth by others, including Joelle Kaufman, BloomReach’s head of marketing and partnerships, who has called for establishing “digital experience managers” or teams.

The manager or team would oversee and understand all the buckets of data from marketing, from merchandising, from e-commerce sites and physical stores. The role would serve as a key linchpin in building a sense and feeling for consumers that sets a retailer apart.

Most importantly, a digital experience manager could patch the short-circuits that a recent Forrester survey commissioned by BloomReach uncovered. In particular, only 37 percent of onsite merchandisers believe they have access to the data they need to improve their customers’ shopping excursions.

On the digital marketing side of things, only 36 percent of marketers think that the deep knowledge that site merchandisers have about products should be combined with what the marketers know about consumers, Forrester found. The marketers simply don’t believe that merchandisers have the data that can help them gain new customers or encourage repeat visits.

In other words, marketers don’t think merchandisers can help build the sort of customer experience that 2016 demands.

It may in fact be that omnichannel is dead. (Though don’t count on it. It’s a hard word to slay.) But, in any case, as we move into the era of customer experience, don’t think that means that things are going to get any easier.

Photo of Shoptalk stage and Ron Johnson talking with Courtney Reagan by Mike Cassidy. Photo of Banana Republic by Mike Mozart published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

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Domo arigato, Facebook; apartment stores; chow tech: The BloomReach Relevance Report

Another week ripped off the 2016 calendar. Whether you see that as good news or bad news, you can celebrate, or drown your sorrows, with a quick read of the BloomReach Relevance Report.

Embrace your Facebook overlords

In its march to world domination, Facebook continues to shake up e-commerce, this time by unleashing Messenger bots that, among other things, could make it easier to shop online.

Like many new technologies and systems, it’s apparently in a bit of a shakedown period, according to TechCrunch. Let’s just say the bots are still getting their footing. Once the digital butlers are up and running at full speed, it might not only be easier to check the traffic and weather, but it could also be easier to find just the right dress for that upcoming party.

The Menlo Park, California-based social network is opening up its platform to retailers and other brands that want to connect with customers using chatbots. For example, if you’re looking for a pair of running shoes, you might start a conversation with a shopping bot.

The bot could eventually ask you what sort of distances you run, on what terrain and in what sort of weather, and then offer you some selections. Over time you would train the bot to know your preferences, making each subsequent shopping excursion better.  

It’s the sort of personalization that successful retailers have been working toward for years. The ultimate chatbot experience sounds like what The North Face is trying to do with IBM’s Watson. For now, on The North Face site, you can run through a few simple requirements for the jacket you want, for instance, and Watson will help narrow down your choices.

As with the Facebook initiative, all involved with Watson’s gig at The North Face acknowledge that it’s relatively early days for a work in progress. Naturally, tech bloggers and others are going to have a field day taking shots at the technology. It’s a bit of a blood sport, as Gizmodo’s take illustrates: “Chatbots are frustrating and useless.”

The BRRR, of course, appreciates bloggers and other tech reviewers keeping those who would overhype technology in check, but we’d also suggest everyone simmer down a little bit. As amazing as it is, artificial intelligence is still in its infancy. Some fantastic applications are available now, but some very big things are coming.

For those in retail, it’s going to mean some major shifts in the way consumers seek and discover products, buy products and think about shopping. Facebook, which has already shown itself to be ready to step into e-commerce in a big way, is likely to be right in the middle of things. It does, after all, claim 900 million regular Messenger users.

One particularly interesting thing about the Facebook Messenger move is the way it intertwines e-commerce and chat. The Times quotes FB’s VP of messaging as saying that chat is a natural thing, making it a natural way to shop. (Little side note: We first read the title as vice president of massaging and thought: Wow. Guy’s got a hands-on job.) The chat/shopping combo has proved very powerful in places like China, which had historic roots in a robust digital chat culture.

We’re not trying to say that U.S. enthusiasm for buying on mobile devices will necessarily hit China levels, but a move to a chat-based shopping culture might certainly accelerate U.S. consumers’ comfort with mobile buying.

Whatever the case, it’s going to be interesting to watch  — and quite likely crucial that retailers act on the coming change.

It’s comparing apples and oranges

produce stand

 

A nifty bit of research highlighted by eMarketer shows that online grocery shopping is growing in the United States, but that it also faces one high hurdle: People really do like to squeeze the Charmin — or the cantaloupe and the red, (maybe ripe/maybe not) tomatoes.

The research conducted by Bricks Meets Clicks found that almost two-thirds of online grocery shoppers surveyed said the reason they don’t do it more often is that they like to pick out their own fruit and vegetables.

The BRRR has some experience in this regard. We like calling on Instacart to save us from blowing a soul-crushing hole in our otherwise delightful Saturday, but this product-thing is an issue. We once ordered a “one-inch” piece of fresh ginger. When the order arrived, we were presented with a piece of ginger the size of a small tree limb.

Anybody have some recipes?

Would you like an apartment with that?

Marshall Fields

For generations, downtown Chicago’s Marshall Field’s store was known as the place where you could find just about anything. The dozen-story building stocked everything from lawn mowers to wedding rings.

Now, reincarnated as one of Macy’s urban flagships, the store is a place where you can buy an apartment — more or less.

The Chicago Tribune reports that Macy’s has teamed up with the apartment complex known as Marquee at Block 37 to create a studio and one-bedroom apartment, furnished with Macy’s stuff, inside the State Street store. Lookie-loos and serious rent material can even get an idea of what an apartment view would be via a monitor at the display that shows building shots and sample views.

Macy’s plans to eventually furnish a model apartment in the nearby complex, which is scheduled to open in June, the Trib reports.

And, of course, Macy’s shoppers are welcome to use a tablet at the store to set up a meeting with the Block 37 rental folks.

No prospective renter has bought the whole furnishing kit and kaboodle from Macy’s, the Trib says, but somebody could. And Macy’s, no doubt, hopes somebody will.

We love technology — please pass the popcorn

Dunkin Donuts

Finally, some major tech breakthroughs that the BRRR can really get behind: a way to more efficiently get movie theater popcorn and an upgrade in one chain’s doughnut-buying process.

Say, do these pants make us look fat?

Seriously, the move by Landmark to allow movie-goers to order popcorn on an app and then pick it up at a lobby kiosk, as reported by The Globe and Mail, is a great leap forward. And Dunkin Donuts, possibly feeling the heat from Starbuck’s new loyalty program, is joining the fun, according to the Nation’s Restaurant News, by letting customers use Apple Pay to grab their coffee and doughnuts. The chain is moving toward a system through which customers can skip the line altogether.

There is a bigger picture here. I know: Bigger than popcorn and doughnuts? What could possibly be bigger than popcorn and doughnuts?

The two moves by seemingly unrelated businesses — movies and breakfast addictions — are a sign of a bigger trend that will no doubt continue to grow. The Globe and Mail’s story about Landmark quotes an NPD analyst saying that outfits that don’t adopt order-ahead apps are going to be at a disadvantage within 36 months.

He appeared to be talking about movie theaters, but the statement might well apply to restaurants and even some retailers. Think of the power of a buy-online-pickup-in-store model with a do-it-yourself twist. Yes, BOPISDIY.

Sounds fun already.

Getting customers is half the battle; maybe not even half

AmazonBox

This interview with Amit Sharma, founder of Narvar, resonated with us here at the BRRR. Sharma, whose company helps e-commerce operations with customer relations after a purchase is made, talked to Women’s Wear Daily about the gap in service many retailers have created.  

He said that only 16 percent of companies are focused on customer retention. He didn’t elaborate, but consider all the energy that goes into making a sale. There is getting your site and the products on it discovered. There’s offering a high-quality site search, so shoppers can find what they’re looking for — and find items they might not have been looking for, but that are relevant to them. There’s having an easy-to-use check out system.

But then what? Sure, a number of retailers do a good job on follow up. But Narvar focuses on those who don’t. And the fact is, not following up just won’t cut it anymore. As online transactions grow and digital shopping and buying become more dominant, consumers are holding retailers to a higher standard.

Consumers want to know when their order is going to arrive. They want updates as their goods make their way across country or across town. They want it to be easy to return things they bought online.

If you’re looking for someone to blame, which of course you aren’t, look to Amazon. Amazon Prime offers two-day and same-day delivery. The packages are easily tracked. Returns are generally smooth — and Amazon will send you a replacement product on an exchange before they even receive the product you’re returning.

Sure Amazon has room for improvement, which might be the good news for competitors. If competitors can find a way to fill the service gap better, they might also find a way to survive in the era of Amazon.

Be forewarned: Golfsmith wants to hook you on golf

Golfer

It’s cruel, what Golfsmith is doing. Golf has been called a good walk spoiled. It’s prompted prudes to curse, yogis to scream, otherwise sensible people to wrap clubs around trees and toss them into ponds.

And now Golfsmith wants to lure Gen Yers into golf, MediaPost reports. Then again, why should they be so happy? Turns out, the idea of spending seven, eight, 10 hours of a Saturday standing around for the foursome in front of you to 12 putt a green just doesn’t appeal to the younger set.

But Golfsmith is coming out with ads that say it’s really OK to stink at golf and still play — which should be evident to anyone who’s been on a golf course lately.

Do we sound bitter? We’re not bitter.

Anyway, according to MediaPost, there is reason for Golfsmith to be optimistic. It turns out that as millennials get richer, they are more likely to golf. (Maybe another reason to work on this whole income-inequality thing we hear so much about this election season.)

The Golfsmith ad campaign appears to be a part of a shift in the way the retailer is positioning itself. A marketing VP told MediaPost that the chain had focused on establishing its own brand. Now it is shifting to highlighting the golf equipment brands it carries.

It’s not our business: Golf if you like. Just don’t say we didn’t warn you.

Quote of the week

“This turnaround has been driven by sales. We have seen strong sales across all routes to market and the key has been house brands which deliver higher profit margin.” — Nigel Oddy, CEO House of Fraser, to The Guardian, regarding the store’s return to profitability.

Photos of produce stand, Marshall Field’s, Amazon box and golf logo by Mike Cassidy. Photo of Dunkin Donuts by Mike Mozart and newspapers by Jon S. published under Creative Commons license.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy

 

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April Fools, Failing Fast, Scarcity and demand: The BloomReach Relevance Report

April 1, another one of those “holidays” that nobody really knows what to do with. How about staying in bed with the covers over your head? The perfect place to read the BloomReach Relevance Report.

Spoiler alert: It’s April Fools’ Day

Zuckerberg Jeans

There is no shame in wearing the same ensemble every day. The BRRR would do it if we could remember what we wore yesterday. Yet, certain tech-genius-mogul-types insist on making excuses for why they show up in the same, say, grey T-shirt and jeans, day after day.

Yes. We’re looking at you, Zuck.

All of which opens up a delicious opportunity for a devilish prankster looking to get his or her full April Fools’ Day on. We give you the Mark Zuckerberg/H&M collaboration, a faux marketing campaign offering shoppers the option of buying the Mark x H&M collection pack. The pack includes seven grey T-shirts and a pair of jeans, of the sorts that Zuckerberg appears to wear every, single day.

H&M gag

The prank is good. It looks like the real H&M deal. And Silicon Valley is known for its pranks, so hey, maybe Facebook went with a little humor. OK, not a chance. Too much downside for a company wading into e-commerce to start playing favorites. And given the typical high-profile exec’s carefully managed image, a goof starring Zuckerberg seems unlikely.

We emailed the site’s contact and the UK-based email address under which the site is registered on Friday to try to find out who’s behind the gag. We got a polite, but unhelpful, reply from “Margareta Persson” (Hmmm. Probably not the deceased Swedish politician.) who said, “We’re not ready to disclose ourselves.”

For those not in on the joke, part of Zuckerberg’s schtick is that he doesn’t mix it up a lot in the wardrobe department. It’s kind of a badge of honor in Silicon Valley, which reached its height in the Steve-Jobs-black-mock- turtleneck-blue-jeans-and-New-Balance-sneakers era.

Jobs told biographer Walter Isaacson that he wore the same thing for daily convenience and to show off his commitment to simplicity. The convenience we’re buying. The whole simplicity deal sounds a little like a smooth rationalization.

A Rationalization of the sort Zuckerberg displayed in a 2014 Q&A when he explained his sartorial selections thusly:  “I really want to clear my life to make it so that I have to make as few decisions as possible about anything except how to best serve the community.”

Come on man. Just own it. You like T-shirts and jeans and look good in gray.

How hard is that?

What’s Apple got in store?

Apple Store

Apple is showing off a new version of the Apple store, says Apple Insider, which we mention because, well it’s Apple and it’s a store.

You may recall that the Apple store more or less set the gold standard for brick-and-mortar retail when they started popping up all over in 2001. The physical store was the brainchild of then-Apple CEO Steve Jobs, who set up an experimental store mock-up in a Cupertino, California, warehouse. The company apparently went back to the well recently to design and test its latest concept, which features a ginormous, nearly floor-to-ceiling video monitor (that apparently cost $1.5 million).

The Cupertino-pretend-warehouse-store is still up and running, which we know, because “60 Minutes” correspondent Charlie Rose visited it with Apple retail head Angela Ahrendts for a T.V. piece that ran in December.

Even the pre-gigantic-screen Apple Stores were something to behold. The light wood and glass palaces, complete with genius bar and awesome Wi-Fi have become a hot place to hang out, pick up some personal tech skills and drop some big bucks on high-end electronics.

And, man, did people drop the big bucks. Apple soon because the store with the highest revenue per square foot, by a lot. It’s now approaching $5,000 in sales for every square foot, a figure that blows away even luxury jewelry store Tiffany.

It will be interesting to see what happens in the new place, which is the creation of Apple veteran design guru Jony Ive and the newish Ahrendts, who came to Apple from Burberry (in case you were wondering whether being fashionable matters to Apple).

The new store in Memphis sticks with the wooden tables with the clean lines, the Genius Bar etc., but it also features a 37-inch video screen, which Apple Insider says is patented. And it’s swapped out the standard-issue shelves with wooden shelves — a move that includes some really creepy looking wooden heads sporting headphones.

No denying a wooden head is going to think different.

Daddy, what’s brick-and-mortar?

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By 2025, you won’t recognize the brick-and-mortar store. OK, hardly a shocking prediction, but ABI research is coming on strong with the idea, according to Apparel magazine. Patrick Connolly, of the marketing intelligence firm, says the construct of online vs. in-store is dead. Every retailer needs to accept that it’s a multi-channel world, especially with millennials and Gen Y consumers calling the shots.

They grew up in a mobile world and see their devices as an extension of themselves, including when they are shopping in-store while reading reviews, comparing prices and possibly even buying items on their smartphones. Connolly says retailers have yet to catch up with their world.

“Installing an iBeacon network is not enough,” Connolly told Apparel. “Retailers must upgrade and aggregate all data across their brick-and-mortar, online, and mobile outlets. It is otherwise impossible to understand the customer enough to personalize offerings, streamline processes, and create new services.”

It’s not that brick-and-mortar stores are going away, it’s that they are in for radical change.

Connolly says the answer is for retailers to embrace a culture of innovation, something the BRRR has long been on board with.

“CEOs should view early adoption as a huge opportunity to rejuvenate their brand, while establishing themselves as industry disruptors,” Connolly says in the Apparel piece. “By 2025, we will be exposed to a new shopping world in which the value of a physical store will no longer be measured in sales, queuing will not exist, any surface will be a storefront, customers will be able to find and buy any item at any time, and clothing will be shared, tried on virtually, and printed at home. The path to the future should start today for smart retailers.”

Connolly sees a future when retailers will weave a seamless web of technology that allows point of sale, inventory systems and customer data from desktops, smartphones and store visits to all inform each other. Retailers will then be able to build much better customer experiences, which in turn will mean higher sales.

Sounds pretty cool — even if the traditional notion of a store is a natural casualty.

Dave Fraser, CEO of Popwifi’s parent company, Devicescape, laid it out plainly in the company’s news release announcing the findings

“Today’s consumer wants to get good Wi-Fi wherever they go, so it’s great to be able to name some of the brands providing their customers with the best quality, free connectivity. But the bigger picture revealed by our study shows an abundance of great Wi-Fi at all sorts of locations. Keeping customers connected has become an essential element of the customer experience for retail and service brands from all sectors.”

Welcome to Revolve; Now go away

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Online fashion seller Revolve might have finally come up with a way to bring shoppers back to stores: Tell them they’re not invited.

Yep. Women’s Wear Daily reports that the retailer has been kicking around ideas about a pop-up-store strategy and came up with the idea of opening an exclusive club. And so: Club Resolve, a joint headed for Melrose Avenue in Los Angeles.

The club is invitation-only for Resolve high-rollers, celebrities and other players, who can make a shopping appointment to spend a few hours browsing and noshing without having to jostle shoulders with the hoi polloi. Or wait. Maybe hoi polloi was an appetizer on the Revolve Club’s menu. We can’t remember.

The store, as we used to call them, will also be a spot for performances, parties, small styling sessions and other LAish things, according to WWD.

Anyway, there is no doubt that the pop-up movement is taking off. The New York Times even says that the temporary emporiums are eating into traditional retailers’ bottom lines as they lumber along while pop-ups keep popping up all over the place.

Once the “It” thing, the new shiny object, pop-ups could be reaching the saturation point. So why not find a twist; a twist like saying you can only come in if we say so?

Not only that, but the club apparently is going to be a pop-up filled with pop-ups, stores within the store that highlight some of Revolve’s brands

All that variety is good — taking the store as experience to an extreme. But the BRRR can’t help but wonder whether Revolve is trying to get customers into the store by not allowing them into the store.

After all, there is nothing better than scarcity to make something more desirable.

What are friends for?

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Facebook looks like the latest entrant into the mobile wallet game, according to Engadget (no subscription required) and The Information. There is Apple Pay, Google Wallet and some Facebook code that The Information has apparently gotten a look at.

It’s both a sign of how broad Facebook’s ambitions are and how popular those in the know believe mobile payment will become. Retail Dive reports that the number of consumers using mobile phones to pay for stuff at stores will increase 64 percent this year over last, reaching a total of 148 million. Sure, 148 million is peanuts when you consider all the people with smartphones in the world, but think about that growth rate instead.

It’s big.

Facebook, of course, wants to become the site/app that consumers are on 24 hours of every day of their lives. The Menlo Park, California, company has been establishing itself in retail for sometime. In October, it became a serious e-commerce player when it announced the its Shop section. Some experts noted that Facebook holds a huge cache of data that it can use to fine-tune e-commerce personalization for its one billion or so users.

It will be interesting to see how this all plays out. Sometimes it seems the number of mobile payment apps and tools is exploding. It’s hard to imagine that they will all take hold or survive. And an argument can be made — oh wait, it has been made — that as mobile payments mature, major banks will take over the plumbing and consumers will rely on the same institutions they turn to for banking.

Then again, maybe the next big thing is Facebook Federal Savings & Loan.

Fail fast

We’re from the BRRR and we’re here to help. We thought we’d pass along some advice via the CMO magazine, primarily because we think it’s excellent advice. CMO recently chatted with IBM’s Patricia Waldron, who at a high level said retailers should embrace change and go for it when it comes to new technology.

It’s something perhaps we’ve mentioned. To peel back the onion, unpack her thoughts and throw the onion peel in her empty suitcase, Waldron laid out four tips for retailers looking to charge into the future (and we added some commentary):

  • Embrace cognitive computing —Turning more boldly to machines certainly provides an advantage over retailers who are more timid about amplifying their workers’ talents with machine learning.
  • Understand how devices steer behavior — Smartphones, smart glasses, smart watches etc., change the way consumers shop. Tailor the shopping experience you provide to accommodate those habits.
  • Personalize — Really personalize, down to the one-to-one level. Customers have come to expect you to know them, whether they arrive at your website via a mobile device, a desktop or whether they show up in your store. They’re the same person; treat them like they are.
  • Differentiate yourself — In the era of Amazon and the empowered consumer you can stand out. In fact, you must stand out. Make sure you have excellent customer service. Make sure your digital sites offer up relevant results and a flawless consumer experience.
  • Unload legacy systems — Legacy is so yesterday. Hmm. Guess so. Anyway, innovate aggressively and understand that in an era of the cloud, massive computing power and ingenious tools that increase your chances of success, some of your old systems and practices just aren’t cutting it anymore.  

So, there you have it: Embrace, understand, personalize, differentiate, unload. EUPDU. The new secret to success.

Keep in touch with customers

To the list of nice-to-have that have become must-have for retailers, add free, robust Wi-Fi. Yep, Luxury Daily points out that not only have customers come to expect connected stores, but stores themselves can seriously benefit from having a building full of connected consumers.

The LD took a look at a study from a Popwifi, a company that helps retailers and restaurants build customer relationships through Wi-Fi networks. Popwifi found that restaurants are the leaders in providing high-quality Wi-Fi, which is why no one ever talks to you over dinner anymore.

BJ’s Restaurant and Brewhouse led the pack and the BRRR is wondering whether the fact that they have an outlet practically on the Apple campus in Silicon Valley has anything to do with that. Next comes Olive Garden, for which the BRRR has no witty explanation.

In all, 11 of Popwifi’s Top 20 in the Wi-Fi world were restaurants, including Taco Bell, Perkins Restaurant & Bakery, Burger King, Arby’s, Buffalo Wild Wings, Wendy’s, Hardee’s, Pizza Hut, and Applebee’s. Which conjures up a slogan like, “Fast Food. Fast Wi-Fi.”

Which isn’t to say retailers don’t have something to crow about. Macy’s, Michael’s and Lowe’s were all in the top five for high-quality connections.

The Popwifi report also looked at where diners/shoppers consumed the most data. (You can see Popwifi’s general methodology here.) Starbucks led the pack there. No surprise if you’ve ever tried to find a place to sit midday at one of the ubiquitous coffee shops. Next came Sheetz, Apple stores, McDonald’s and Whole Food Markets.

The facts and figures are fun, but probably the big thing to remember from the report is what it says about shoppers, retailers and what the latter needs to do to keep the former happy.

Quote of the week

“Growth and change comes from challenging our own ideas and preconceptions. We need to challenge our thinking and create opportunities for female leaders. The retail industry is no different from any industry in its need for diversity at the top, and without it, we aren’t realizing the potential of the evolution that needs to take place.” — Birchbox CEO Katia Beauchamp to Retail Dive, regarding the paucity of women in retail leadership positions.

Photo of Mark Zuckerberg by Kevin Krejci, Apple store by Dru Bloomfield, brick-and-mortar store by Counselman Collection, velvet rope line by the The Lilywhite Collection , BJ’s by David  and newspapers by Jon S. published under Creative Commons license. Facebook sign courtesy of Facebook.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

 

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Video: Have you considered the different timeframes for measurement?

Shelley Kohan, of in-store analytics company RetailNext, says it’s important for retailers to consider three approaches to measurement and to match the right approach with the question that they’re trying to answer.

In our latest installment of BloomReach University, Video Campus, Kohan defines “quick action,” “test and measure” and “long-term” testing windows and provides some examples of when each makes sense.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.

newspapers

Small data, hate-filled robot, ModCloth hits the bricks (and mortar) — BloomReach Relevance Report

You deserve to live a little. Read the BloomReach Relevance Report. It’s like a cup of sweet nectar. Kind of.

It’s not the size of the data

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Let’s face it: There has been some big data fatigue for some time now. (No, we don’t have the big data to back that up, weisenheimer.) But academics have been weighing in on the importance of the emotion behind the numbers for the past couple of years. Remember thick data?

Now, from Martin Lindstrom via a book and Knowledge@Wharton, comes “small data,” which we guess is thick data after months of dieting. Whatever you want to call it, the BRRR is into the thinking behind it. Numbers are just that. What Lindstrom and others find interesting are the people behind the numbers and more importantly the emotions of the people behind the numbers.

Think empathy or a mix of empathy and what Daniel Pink calls perspective-taking. (Again with the Knowledge@Wharton.)  It turns out actually spending time with customers, or those you’d like to be customers, can tell you a lot about what they want and how it relates to what you’re selling.

Some retail superstars embrace small data, Lindstrom explains in the Wharton piece. He talks about when he went to meet IKEA founder Ingvar Kamprad at one of his stores. Where did he find him? Working the register.

“This is the cheapest and the most efficient research ever,” Lindstrom reports the retail icon told him.

It’s work like Kamprad’s checkout stints that can provide retailers with the sort of in-the-flesh data that informs the experience they offer customers. And experience, maybe we’ve mentioned, is becoming crucial in the era of Amazon.

What kind of experience? Well, Lindstrom offers what is now the BRRR’s favorite example. We’ve never been to a Lowes Foods store, but the next time we see one, we’re hitting the brakes. Lindstrom says Lowes actually lived with consumers. (Wasn’t clear whether he meant in their neighborhoods or their homes, which would be useful and weird.)

Anyway, based on getting to know customers, workers at Lowes now do things like doing a little dance when the roasted chicken is ready. OK, we’re guessing grocery workers in North Carolina aren’t unionized. Either way, we like it. Seriously.

About that experience

In a smart piece written for Co.Design, a Fast Company property, Alex Berg points to building interesting experiences as a key to survival for brick-and-mortar stores in the era of Amazon.

Berg starts out by explaining that about one-third of Internet shoppers start their product searches on Amazon. Berg cites a Motley Fool story, but, in fact, BloomReach found the percentage to be even higher.

Whatever the figure — 33 percent or 44 percent — retailers are going to need to be fabulously nimble to prosper in Amazon’s world. Berg says the winners will achieve that in three ways:

  1. Moving toward running only large brick-and-mortar stores in major cities. He calls them “fortress” stores and says shoppers will travel to them for shopping experiences. The BRRR gets the thinking here, but we’re not convinced that outlying physical stores are going to disappear. Instead, we see suburban stores that serve as showrooms and fulfillment centers for buy-online-pickup-in-store replacing full department stores.
  2. Adopting the notion of “service design,” the thinking that online and in-store are truly one experience and having someone or someones who is/are dedicated to seeing that that is reflected in the in-store design.
  3. Joining forces with competitors in areas where it makes sense, for instance in building or buying software solutions and in fulfillment and delivery.

It’s a vision that makes a lot of sense and if you look carefully you can see the beginnings of some of these strategies already.

ModCloth popping up in new locations

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In another sign that brick-and-mortar is here to stay, ModCloth this week announced a continuation of its pop-up store strategy. (OK, so the mortar is a little loose.) Chain Store Age reports that the once online-only retailer will open five new pop-ups.

The first store, called ModCloth IRl, for “in real life,” will open in Austin, Texas, on April 8, a couple of weeks after its experimental physical store in San Francisco closes. The others will open between then and the end of September, according to CSA.

It’s not clear where all this is headed for ModCloth, which sells clothing inspired by vintage styles. Neither CSA nor California Apparel News, which reported on the move, say whether this is a step toward a full-on move into brick-and-mortar, though both point out that the San Francisco-based retailer recently hired three new executives to help it move into physical retail.

And there is certainly a trend toward online stores getting physical — Warby Parker, Birchbox, Bonobos, Amazon, Rent the Runway and others have turned to some sort of brick-and-mortar strategy.

No sign, in other words, that the pop-up bubble is ready to pop.

When you absolutely, positively need that hoodie now

Tell us this hasn’t happened to you: You’re in downtown Chicago when you realize, “Holy cow! I need a hoodie, like now!”

You’re worries are over. American Apparel, it seems, is teaming with delivery company Postmates to rush you new clothes within an hour. Yep, the Chicago Tribune reports, hoodies, socks, t-shirts and 47 other “basic items” will be eligible for the one-hour delivery service. The Trib explains that Postmates already has a track record of delivering food for outlets including Gino’s East, Kuma’s Too and Portillo’s.

Here’s a tip from the BRRR: If you’ve never had a Portillo’s Chicago Dog, forget the hoodie and have Postmates bring you a wiener, stat.

(Quick note: Nice video, but the relish is all wrong. It should be neon green.)

The American Apparel experiment is just another sign of how heated the delivery wars are getting. Two day isn’t fast enough. One day doesn’t quite do it. One hour? Now you’re talking. It’s fair to say, like so much in retail, the urgency is being driven by Amazon, which is killing it with their Prime membership and its variations, which include one-hour delivery in some markets.

The latest from the Seattle retailer (and much, much more): One-hour grocery delivery for eight bucks from more stores in its hometown. Two-hour delivery is free for Prime members, The Seattle Times reports. One commenter on the story noted that Kozmo.com tried the same thing in the dotcom bubble. But actually, Amazon’s latest foray is much more like Instacart, which requires a minimum order, dollar-wise, than Kozmo, which did not — and which found that delivering a pack of gum or a six pack to a San Francisco hipster wasn’t a viable business model.

That said, from the outside looking in, it’s hard to imagine that AA’s one-hour delivery is going to be a money maker without a steep fee or markup. L.A. Biz says the delivery charge will start at $1.99 and be adjusted later. We’re guessing that fee is going up.

Let’s get personal

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Luxury retailers are aggressively adding people to their personalization efforts, Internet Retailer reports. Saks Fifth Avenue, Nordstrom and Neiman Marcus have all armed their sales staffs with digital tools to determine and keep track of customers’ preferences.

Saks is using software from SalesFloor, Internet Retailer reports, to build personalized Web pages for customers. Nordstrom uses Text Style, which allows shoppers to opt into a service that lets customers exchange private text messages with an associate. Salespeople can send customers a photo of a product that the shopper is looking for and the shopper can buy it right from the text message.

Neiman Marcus, which is seen as an industry leader in e-commerce and personalization, lets shoppers connect with a particular sales associate through online chat or email, IR says. The retailer has said that e-commerce makes up nearly 26 percent of its revenue.

Better equipping salespeople makes a lot of sense in a time when customers give store staffs low marks and say they’d rather have do-it-yourself options when it comes to learning about products in stores. In fact, 69 percent of those surveyed recently told InReality that they’d be more likely to buy from a store that offers “self-help technologies, like kiosks or interactive displays.”

The finding, reported by Retailing Today and others, could be taken as a sign that stores need to install more interactive technology. Or you could see it as a sign that stores need to better train and equip sales staff, so that consumers find sales associates more helpful than machines.

Yet another way, in short, to have people personalize.

Sorry Dave, I’m afraid I can’t do that

One of the key ways that retailers and other businesses are going to achieve real personalization is with the help of artificial intelligence. Learning machines are already hard at work helping consumers find relevant results when they search for products and suggesting other products that they might want to consider (among other tasks).

As sophisticated as some of today’s machine learning technology is, we’re still in the very early days, as we’re reminded every now and then by experiments that don’t always go as planned. Take Microsoft’s Tay — please.

Microsoft launched Tay this week on Twitter. The idea was to experiment with a chatbot that would approximate millennial speech by learning from Twitter chatter. Within 24 hours, Tay was spewing anti-semitic and anti-female tweets among other objectionable and hateful messages. Yes, Microsoft had considered the experiment might attract mischief-makers. It just didn’t anticipate the depth of hate and determination out in the big old world.

Hey, what could go wrong?


In fact, Tay was hijacked and trained to become a vile, hateful being that spewed racist and hateful speech — a telling and sorry reflection on the state of our country. Microsoft, by the way, shut Tay down when the malicious scheme became apparent.

There’s no telling how much hurt and possibly trauma resulted from the human-inspired, machine-generated hate speech, but one beyond-unfortunate experience is no reason to stop trying.

The key with early technology stumbles, is to learn, iterate and try again. And Microsoft appears to have learned a number of lessons. Not only that, but it took steps to explain what went wrong and to point out what it did learn, which is the way to go.

A number of experts and pundits have weighed in to say the hijacking was practically inevitable. Here’s TechRepublic’s talk with experts. As TechRepublic points out, this is hardly the end of AI or AI experiments. There will no doubt be future unpleasant surprises.

MediaPost’s Laurie Sullivan wrote a thoughtful piece of how a similar scenario could take its toll on a brand. It is a good point, but it doesn’t mean that brands won’t continue to experiment with and deploy artificial intelligence to make their enterprises more profitable and to make their customers more loyal.

No one can afford to slow down now.

Quote of the week

“I don’t think there’s any doubt that the retail landscape is changing. Retailers are upping their Internet game and pulling back brick-and-mortar (stores) … especially the stores that are not performing up to snuff.” — marketing and branding expert Peter Schaub to the Sacramento Bee.

Photo of joy-filled woman by dz roman, brick-and-mortar store by Counselman Collection and newspapers by Jon S. published under Creative Commons License. Photo of Neiman Marcus by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.