Got through that week by the skin of our teeth. You, too? Sit back and enjoy the BloomReach Relevance Report.
Walmart Pay: It’s everywhere
Wal-Mart has rolled its mobile payment system out to all its stores, which is a little like instituting a policy across a small country. Bloomberg reports that you’re now free to blow your paycheck through Walmart Pay at all 4,600 Wal-Marts in the land.
We report on all this because mobile payments are kind of fascinating when you think about it. We mean, how hard is it to swipe a credit card? Probably not as hard as fumbling with a mobile phone at check out and lining up your bar code with a bar code reader etc.
Then again, think of all the ways retailers could make mobile payment systems worthwhile. What if you could travel through the store, scanning items you put in your cart and check yourself out? Nice.
Or think about the possibility of combining promotions, automatically downloaded coupons and loyalty programs all in one spot. Scan the products you want to buy, the machine factors in discounts, coupons, accrued loyalty points and bingo — it checks you out when you’re ready.
As Bloomberg points out, Starbucks already has integrated its loyalty program into its app. And it allows customers to order ahead and pick up their drinks at the barista bar, which is close to our self-checkout ideal.
And you know what? Starbucks is on to something. Mobile Payment Week and others report that 24 percent of Starbucks sales in the second quarter came through mobile payments, making it a mobile payment champ.
Mobile payments, of course, is a big win for retailers, even if it’s catching on slowly. It provides retailers with another big bucket of consumer behavior data — and consumer behavior data in stores, which has been much harder to capture than online data.
Chances are, then, that we are at the very beginning of what will become a big deal. Stay alert.
Will Macy’s CEO-to-be Jeff Gennette find he’s in the real estate business?
Yes, Jeff Gennette, we realize you haven’t been officially sworn in as CEO of Macy’s, but what have you done for us lately? Veteran retail-watcher Shelly Banjo has a to-do list for the future leader, most of it having to do with real estate moves.
Now, the BRRR has always seen struggling enterprises selling off their real estate as the equivalent of the down-and-out family burning the living room furniture to stay warm in winter. When it’s gone; it’s gone.
Gennette might want to listen to Banjo’s tune. Some of the smart money is already counting him out, based on the notion that it’s going to take bold moves to save Macy’s and bold moves tend not to come from people who’ve been with a company for 33 years.
But Banjo has the numbers to back up her advice. She cites arguments from shareholders who say Macy’s property is worth $21 billion, while its business is worth only $17 billion.
Brick-and-mortar sales, meanwhile, are not pulling their weight. Those sales are down, while e-commerce sales are growing. And surprisingly, she reports on Bloomberg’s website, Macy’s has more stores today than it did in 2005, despite a series of plans to close stores.
Beyond all that, Banjo rightly points out that Macy’s doesn’t need to completely sell off stores — or even a portion of stores. Instead, it can form partnerships with mall operators, pull in some cash for the value its partners get and continue to partially own its stores, or select stores.
Makes a lot of sense. Now it’s a question if long-time-Macy’s-guy Gennette is a sentimental softy, like the BRRR, or whether he can pull the trigger.
At least unlike newspapers, Macy’s has a reasonable path to come out on the other side, if it can nail its e-commerce business.
But with augmented reality, why fix up the room at all?
Want to talk about augmented and virtual reality and retail? Didn’t think so. Sure, the topic has that feel of something the cool kids want to talk about just to be cool.
But you can start to see where the idea might get off the ground when you look at what home-improvement giant Lowe’s is doing with the technology.
Fast Company reports that the retailer is coming out with a system that will let shoppers see what rooms would look like with new floors, new appliances and other new doohickies. Better than all of that, the application will actually measure a room or a counter space or that impossible little corner where you have to put your new fridge.
Do you know how hard it is to get those measurements right — and how easy it is to order a fridge that will never, ever fit in that space? Of course you do. Lowe’s is promising that they won’t even show you online appliances that won’t fit in the space you identified.
What’s key to all this is that Lowe’s has come up with something that is immediately and understandably useful to consumers. That’s when retail innovation gets exciting.
One undercurrent of the Fast Company story is the idea of: Who would expect Lowe’s to come up with such cutting-edge stuff? And it’s a clever and understandable approach — seeing as it’s fair to think of Lowe’s as a store packed with old school tools and materials.
But Lowe’s has been out there on retail innovation for years. A couple of years ago, Ad Age took a look at the earlier days of Lowe’s augmented reality initiative. The story traced how Lowe’s was working with science fiction writers to come up with scenarios in which consumers could peer into the future of their home remodels.
From the outside looking in, Lowe’s lab in San Francisco looks like one of the more intriguing of the many retail innovation labs that have cropped up in and around Silicon Valley. It’s going to take leaders who are neither afraid to fail nor call on science-fiction writers to move retail forward.
Otherwise, all the breathless talk about the future of retail will be just that.
Amazon is opening hundreds of stores, or some, or a few, OK, at least two
Hey Amazon is apparently opening a bookstore in New York, which would be the online super store’s first physical book store. Well, first physical bookstore on the East Coast, as reported by the New York Post.
OK, well, actually, it’s Amazon’s second physical store in New York City, except its first store in New York City never opened. Oh, it’s so confusing when worlds — online and brick-and-mortar — collide.
But one thing is for sure: When Amazon is involved, the world is interested. Remember the hubbub when news broke that Amazon was opening that Manhattan store near the Empire State Building? It was to be Amazon’s own “Miracle on 34th Street.”
And then, of course, there was last fall’s announcement that Amazon was opening an honest-to-goodness bookstore in a Seattle mall. The store’s name? Amazon Books.
And the news three months later, based on what appeared to be a mall executive’s slip-up, that the company would be opening hundreds of more stores across the country.
We get it. We do. Amazon, the online giant, opening brick-and-mortar stores has a certain “Man Bites Dog” quality to it. And whenever Amazon does anything, it sends ripples through retail and sometimes the economy. The place is like its own country and what it does affects people’s lives.
Amazon, for its part, still hasn’t said exactly what it’s up to. But we’ll no doubt hear about every twist and turn.
So, stay tuned.
No experience beats a doughnut experience
Given the small number of data points involved, there might be a hole in our theory, but we’re thinking the San Francisco Bay Area doughnut wars might come down consumers’ craving for a memorable experience when they engage in retail.
Maybe you think we obsess about this customer experience thing — and OK, maybe we do. But it’s big. Marketing Daily reports that two-thirds of chief marketing officers are now responsible for customer experience, elevating it to the C-suite. And face it: Customer experience is a way forward for brick-and-mortar stores worried about falling foot traffic and wondering about the future.
Not the only way forward, of course, and not always the No. 1 priority. Customers still want convenience, selection, low prices, free delivery, ample parking. You know, everything. But providing a special feel or product or both is definitely a way to get customers to keep showing up.
So back to the doughnuts. (Don’t mind if we do.) The Mercury News story explores the ground war over doughnut shops in the Bay Area. Dunkin Donuts, a rarity in the region, is apparently making a push into the territory. Krispy Kreme, which moved in years ago, has apparently had its ups and downs.
Why the KK struggle? Possibly because of a thriving culture of family-owned, decades-old corner doughnut shops. (They’re not all on the corner, but we kind of like the imagery.) The old doughnut shops are places where everybody knows your name; where the same folks serve up your doughnuts day after day; where owners and employees watch over the years as children grow up and bring their children in.
Dunkin Donuts, Krispy Kreme and the like are cookie-cutter, if you’ll pardon the mixed sweet-treat metaphor. Tasty and convenient (and many swear by Dunkin’s coffee — see fourth item), but corporate.
To further our argument, that experience matters, we turn to Julie Clark, of Stan’s Donut Shop in Santa Clara, Calif.
“Finding old-school businesses — mom-and-pop shops — people like discovering that,” she told the Mercury News. “I think at times people want something a little less cookie-cutter … that has a little more character.”
And that’s the hole truth.
Do we get Prime Day off?
If this keeps up, pretty soon we’ll be buying each other Prime Day Hallmark cards — on Amazon, of course.
Yeah, Prime Day is nearly upon us and with its approach comes some surprising news from CNBC. it turns out that Prime Day is a big day not only for Amazon, which launched it a year ago to honor itself on its birthday. CNBC reports that the top 25 U.S. retailers saw a bump on the big day in 2015.
In fact, Prime Day 2015 was the fourth biggest online sales day of the year, right behind Black Friday, Cyber Monday and Thanksgiving. In all 179 million visitors shopped on the sites of the country’s top 25 retailers, CNBC says.
Prime Day was engineered to build Amazon’s already huge Prime membership. Amazon offers deals, huge deals, on all kinds of stuff (including some that apparently nobody wants) in rapid-fire succession all day — but only to Prime members. A sort of feeding frenzy develops, complete with game plans, ala Black Friday.
And it works. Amazon had its biggest day in history, up until that point last Prime Day. Shoppers ordered nearly 400 items per second, Amazon reported. And it’s hard to image the promotion didn’t attract some new Prime members. (Amazon is not real chatty about the number of Prime members it adds, subtracts or has.)
What can we say? We’ll start with happy Prime Day.
Quote of the week
“Nothing can kill a brand faster than ill-conceived discounting. It’s problematic on a number of fronts. You either train your loyal customers to cherry-pick products on sale or, worse, lead them to believe that you’re not competitively priced day-to-day, leaving the door open to competitors.” — retail futurist Doug Stephens to Retail Drive, regarding the dangers of competing only on price.
Photo of Walmart and Amazon box by Mike Cassidy. Photo ofJeff Gennette courtesy of Macy’s. Photo of Lowe’s store courtesy of Lowe’s. Amazon Prime logo courtesy of Amazon. Photo of Randy’s Donuts by John Mueller and newspapers by Jon S. published under Creative Commons license.
Mike Cassidy is BloomReach’s storyteller. Contact him at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.