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BloomReach Relevance Report: Valentine’s Day shopping data edition

Industrial Mop bucket

 

Listen up, significant others of other significant people: When it comes to Valentine’s Day, you’re falling down on the job.

OK, not completely. The National Retail Federation says you still spent in the neighborhood of $18.2 billion on the day of gift-giving that there is really no way around. But that is down from nearly $20 billion in 2016, according to the NRF, which relies on an annual consumer survey conducted before Valentine’s Day.

“Valentine’s Day continues to be a popular gift-giving occasion even if consumers are being more frugal this year,” NRF CEO Matthew Shay said in a written statement.

Frugal. Sounds so much better than cheap. “I wanted to get you that diamond anniversary ring, honey, but I was being frugal. I’m saving money for both of us, really.”

Anyway, at the BRRR, we’ve always found how we spend money and when to be every bit as interesting as how much. The types of gifts that Valentine’s Day shoppers spent on is hardly a shocker. The NRF says the love-struck shelled out for candy, cards, a night out, flowers, jewelry, clothes and gift cards — in that order.

Greeting cards were No. 2? Really people?

Anyway, the BRRR took a look at BloomReach customer data across our e-commerce customers and found that folks really got serious about Valentine’s Day shopping — about 24 hours before the big day.

Chart of overall conversion on Valentine's Day

Overall digital purchases on Feb. 13, also know as Holy Crap tomorrow is Valentine’s Day Day, were at a high for the month. The day racked up 39.2 percent more conversions that the February day with the fewest conversions. What day was that? Feb. 5, which was Super Bowl Sunday.

Super Bowl Sunday. Think of it as the anti-Valentine’s Day.

But, of course, data-wise, looking at all BloomReach retail customers gives us millions of data points when it comes to conversions, but it also introduces some noise.

You could make the argument that people buy all sorts of things for the ones they love on Valentine’s Day. (The BRRR looks back fondly on the mid-February day some years ago when our love presented us with one of those big mop buckets on wheels. Que romantico!)

But the truth is, some BloomReach customers tend to feature products that would be considered more traditional Valentine’s Day gifts. And so we thought it would make sense to look at a subset of customers that shoppers would be likely to turn to for Valentine’s Day gifts.

Yes, there is a certain subjectivity involved.

That said, looking at the subset presents us with the notion that there might well be two types Valentine’s Day gift buyers: The planners and the panic-ers. We’d thought about calling them the thoughtful and the last-minute grabbers, but it sounds so judgy.

We mean, what’s wrong with being that love-struck Romeo or Juliet standing in the Safeway line at 6 p.m. on Valentine’s Day with a bouquet of $20 roses that looks like it’s been through the spin cycle?

Anyway, a look at traffic to e-commerce sites aligned with Valentine’s Day shows a significant spike on Feb. 7, one week ahead of the holiday. (Thanks Google Calendar notifications!) And it shows another spike on Feb. 13., which is, well, the day before Valentine’s Day.

Chart of Feb. 2017 site visits

In fact, Feb. 13 has just a slight edge in traffic over Feb. 7, but both are well beyond any other day in February.

And while the visits a week before and a day before are quite similar, there is strong evidence that many of those looking on Feb. 7, held off on buying. A comparison of conversion rates, a way to look at web traffic compared to purchases, shows a much lower rate on Feb. 7 — less than half — compared to Feb. 13.

conversion rate in Feb. 2017, graph

Another strong indicator of buyer intent — the browse vs. buy index — also shows that Feb. 13 is the day that buyers get serious. And Feb. 7? Not so much. But it introduces a little encouragement for those who think last-minute shopping indicates a certain lack of sincerity.

The browse vs. buy index considers the average number of products that were viewed for each purchase on a given day. The thinking is that the more products viewed, the weaker the intent to actually purchase.

It turns out that on Feb. 7, shoppers looked at 29 products for every purchase. On the day before Valentine’s Day, the number was less than half that — 14, to be exact. That’s interesting as far as it goes, but the romantic in us would like to offer a defense of the Feb. 7 browsers.

Graph of browse vs. buy behavior in February
Couldn’t it be that they were simply being more thoughtful — considering one gift and then another before pulling the trigger? Hey, we can dream.

Speaking of pulling the trigger, what did buying behavior look like in the two weeks leading up to Valentine’s Day, when we narrow our data down to retailers that seem a good fit for Valentine’s Day shopping?

It turns out that there was a huge spike in purchases on the day before Valentine’s Day. (Stop us if you’ve heard this one before.) In fact, the number of purchases on the day before Valentine’s Day reached 8½ times the number on the day in February (so far) with the lowest number of purchases.

Daily online conversions in February chart

And so Valentine’s Day, it seems, exposes not only the most human of emotions, but perhaps the most human of habits.

You think there’s any chance they’ll rename it Procrastination Day? It’s got a nice ring.

Mop bucket photo by Terry Ross 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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BloomReach Relevance Report: Two bit version

It’s been a long week. How about a short BloomReach Relevance Report? Read it during the commercials.

Who’s buying Macy’s this week?

Macy's and traffic and pedestrians at 34th Street in Manhattan

Last week it was Hudson’s Bay. This week it’s Amazon that’s buying Macy’s.

OK, this week’s Macy’s rumor (or is it this week’s Amazon rumor?) is maybe not even a rumor. It’s more like one analyst’s speculation — intriguing speculation, we’ll grant you, but speculation that doesn’t appear to be attached to any facts on the ground.

In fact, CNN reports that Cowen analyst Oliver Chen laid out the pros and cons of Amazon gobbling up the ailing Macy’s and eventually came out on the side of it not making complete sense.

That assessment was seconded by friend of the BRRR, Carl Boutet, a retail strategist with Canada’s Mega Group.

“Amazon doesn’t take on other retailers’ problems,” Boutet told the BRRR. “When it decides to roll out whatever format of store it chooses, it will do it on its own terms and not look to ‘retrofit’ any existing retailer’s footprint.”

Boutet says Macy’s is the latest star in a series of Amazon-to-the-rescue stories. Radio Shack and Best Buy, among others, have at times been said to be on Amazon’s shopping list.

And it is a little hard to swallow this notion of Amazon swallowing Macy’s. The venerable brick-and-mortar retailer is in a world of hurt, to use the technical term. It’s been pivoting and closing stores and talking about selling real estate, of which it has a lot.

And it’s been laying off thousands and eliminating jobs

The CNN story tries to give the Amazon-buying-Macy’s idea a little shove by pointing out that Amazon is known for making big bets. It started a hugely successful cloud business, Amazon Web Services, and it moved into entertainment with music and video offerings. It also expanded into hardware with the ill-fated Fire phone and the incredibly successful Kindle and Echo.

But that’s just it: Those big bets were in new markets, not a variation on retail, where Amazon has struggled historically to make a profit. Why take on a wheezing brick-and-mortar retailer just when it looks like its retail wing might be on solid (if thin) profit-margin ground?

Then again, Jeff Bezos was crazy enough to buy an old-school newspaper in this era of digital transformation. Why not go for a miracle on 34th Street?

You thought we were going to go a whole Macy’s piece without the MO34thSt. reference, didn’t you? No such luck.

Don’t Dump Ivanka Trump

Nordstrom on Market Street in San Francisco

Let’s set aside the question of whether a plug by someone who dresses like a greeter at Disneyland’s Fourth of July parade is good or bad for a fashion business.

The real question is, when is it OK for the White House to attack a retailer for deciding it was dropping a line that wasn’t performing.

What are we talking about? Half the time we don’t know. But in this case we’re talking about the retail drama gripping the nation. OK, gripping the BRRR. You might recall that Nordstrom announced some time ago that it would no longer sell first daughter Ivanka Trump’s fashion line because the stuff was not a big seller.

This did not go over well with the Tweeter-in-Chief.


That raised some eyebrows — and some questions from ethicists who said President Trump shouldn’t be advocating for his family members’ businesses from the Oval Office or from wherever it is he tweets.

But Trump’s message was far subtler than that of his right-hand woman, Conway. (Wait. Did we just use Trump and subtler in the same sentence?) She basically provided one of those late-night commercials with the screaming car sales guy during an interview on Fox & Friends (and yes, the Trump White House is friends with Fox).

“Go buy Ivanka’s stuff,” Conway, flanked by a U.S. flag and a White House plaque, said into the camera. “I’m going to give a free commercial here. Buy it today everybody. You can find it online.”

What happened next is hard to say. Of course Twitter blew up. It seems President Trump did not. The official word was that Conway had been “counseled.” By whom or for what was not clear.

As for Nordstrom, other than to say that its decision to drop the Ivanka Trump line was based on poor performance, it hasn’t said a lot about how it feels to be attacked by the president of the United States.

Matthew Shay, CEO of the National Retail Federation, was diplomatic in speaking to the Associated Press.

‘‘What we are seeing is that we are living in a world with a different kind of chief executive in the White House,’’ he told the AP. ‘‘He has a strong opinion on issues. We are learning to work in the environment.’’

Maybe if the Seattle-based retailer asked nicely, it could get an administration staffer of its own to give Nordstrom a little plug from the White House.

Quote of the week

“Sales associates are the front-line representatives for retailers, and how they engage with customers can make or break the shopping experience and impact sales.”  — Cheryl Flink, chief strategy officer for Market Force Information, to Women’s Wear Daily regarding the agency’s survey that found Nordstrom to be the most popular retailer in the United States.
Photos by Mike Cassidy

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

Reporters notebooks

Macy’s meet Saks; Super Bowl LI ads; UPS’ bad good news: The BloomReach Relevance Report

Haven’t you worked hard enough? Of course you have. Why not sit back, relax and fill your head with the BloomReach Relevance Report?

Miracle on 34th Street meets Saks Fifth Avenue

Macy's on 34th Street in Manhattan

It’s hard to know what to make of reports that Hudson’s Bay (better known as the Canadian company that owns Saks Fifth Avenue) is looking to buy Macy’s.

OK,  no it’s not. What it says is: The department store business is as bad as everyone thought it was. True, Hudson’s Bay is in the department store biz, too, and it’s had its hard times, but nobody lately has been out-hard-timing Macy’s, which has been the poster child for ailing retailers.

No question it would be a bold move and an example of a little fish eating a big fish. And Macy’s is a very big fish — some 730 stores, Bloomberg says, about half of them in top malls.

What Macy’s really has is real estate — a lot of it and some of it quite valuable. You’ll find Macy’s at prime locations in cities like New York (the iconic Herald Square flagship), Chicago and San Francisco.

Bloomberg points out that Hudson’s Bay is a retailer and a real estate enterprise that has an interest in HBS Global Properties. The Macy’s stores would plump up HBS’s portfolio nicely, the Bloomberg piece says.

The Motley Fool is down with the real estate theory, pointing out that Macy’s real estate is worth many times the market value of the company itself. That fact could even lead to a scenario in which Hudson’s Bay buys Macy’s and then leases its stores back to Macy’s, MF says. What a world.

Macy’s meantime has been doing everything short of chopping up the furniture to burn in the fireplace for warmth. The company has announced that it’s closing 68 stores and laying off more than 10,000 people — or at least eliminating 10,000 jobs.

Bloomberg says the moves would save Macy’s more than half a trillion dollars in 2017, money that could be diverted to e-commerce, China and other retail divisions.

Department stores have had it rough lately, as empowered consumers relentlessly demand bargain prices and stores comply, feeding something of a death spiral. There are also the pressures brought on by e-commerce, eroding loyalty when it comes to brands and the rise of niche players with unique propositions.

It’s not clear yet what fans of Macy’s (or Hudson’s Bay for that matter) think of the rumored relationship, but the stock market is happy. Macy’s shares jumped 12 percent during the trading day Friday.

Alexa? Help me sell stuff

Amazon Echo, aka Alexa

Amazon has taken another step in hearing the voice of the customer — this time literally.

Marketing Land reports that Amazon has created a developer’s hub for advertisers and marketers to build apps for its Echo voice-recognition device. By now you are probably familiar with Echo, aka Alexa, the handy household assistant that will make shopping lists, play radio stations, tell you the news and weather and play Jeopardy with you.

Now Alexa is turning her attention to helping those who sell stuff sell it to you. The Seattle online seller has created an Alexa Skills Kit to help developers come up with apps (Amazon calls them skills) and has provided ways to connect with agencies that are experts at tracking how consumers interact with Alexa.

The move is a sign both of Amazon’s relentless drive to corner every market in every way possible and the coming importance of voice search. The Marketing Land story says several analysts reported that Alexa ordering really took off during the most recent holiday shopping season — “skyrocketed,” is the word ML used.

“Alexa: Make me some money.”

UPS says OOPS on earnings

UPS Tractor Trailer at Brooklyn Army Terminal

You’d think setting a record for package deliveries would be good news for a company like UPS, which is in the package delivery business, but, well, not exactly.

Yes, Internet Retailer says, UPS moved a record volume of packages in the fourth quarter, also known as the holiday shopping season, but it turns out many of them were gifts being shipped to residential addresses. And home is not where the big money is, UPS CEO David Abney explained on a call to tell analysts what Brown could do for investors, Internet Retailer reported.

Residential deliveries tend to be shipped via less expensive services than business-to-business shipments, the IR story says. And, as it turns out, UPS saw a big bump — an 11.5 percent increase — in residential deliveries in the quarter. In all, home delivery accounted for 55 percent of UPS’ delivery volume, the story said.

Overall, UPS volume increased by more than 7 percent in the fourth quarter. It was up 4.6 percent for the entire year, IR said, and residential deliveries accounted for 63 percent of the company’s deliveries.

If you look at the traditional holiday period, from Thanksgiving through New Year’s Eve, UPS moved 712 million packages (a record), which was a 16 percent increase over holiday 2015, Internet Retailer reported.

For fans of e-commerce, there was a bright side to UPS’s good-news-bad-news quarter. (Does that mean it was a good-news-bad-news-good-news quarter?) The surge in deliveries was caused by a surge in e-commerce sales.

The channel continues its torrid growth rate.

For companies like UPS (and FedEx and the United States Postal Service) what that means is buckling down and figuring out how to make money from those home deliveries.

The Super Bowl of commercials is, well, the Super Bowl

old television set

What kind of newsletter would the BRRR be without mention of the Super Bowl, on this, the eve-ish of the Super Bowl?

So hey, Super Bowl LI kicks off (get it) on Sunday and advertisers are lining up to pitch their stuff to biggest television audience of the year.

Remember when people watched TV? We digress.

Anyway, there is good news for Super Bowl advertisers, CNBC reports. CBS is offering advertisers who buy a minute for $10.4 million a discount. Yep. Two free seconds. (Yes, for free, the amount of time it took you to read this sentence!)

The $10 million ads aren’t just for the Super Bowl, of course. As CNBC points out, the ads, which also cost a mint to produce, run on the web for days, if not weeks before the big game. (We dare you start calling it Super Bowl Lee.) And they’ll run for weeks after on both television and the web

Back in the day the content of the ads was shrouded in secrecy — all the better to build suspense and spring surprise on the SB audience. Now the idea is to get the spots out there early and very, very often.

All of which means there is no danger in heading to the fridge during the commercials. They will live on and on in a digital infinity.

Quote of the week

“We’ve said all along we make buying decisions based on performance. In this case, based on the brand’s performance, we’ve decided not to buy it for this season,” — Nordstrom to The New York Times, explaining its decision to drop Ivanka Trump’s brand.

Photo of Macy’s and UPS truck by Mike Cassidy. Photo of Amazon Echo courtesy of Amazon. Photo of television by Everyone Sinks Starco (using album) 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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Target Pay; Sears tires; Ulta experience Robo Macs; Super Bowl LI: The BloomReach Relevance Report

Target takes aim at mobile pay market

Target store

Target is taking a page out of Kohl’s book and simplifying the process of separating shoppers from their money, Recode reports. (Did we really just use that page/book cliche?)

The mobile payment world is a swirl, with Apple Pay, Android Pay, Samsung Pay, CurrentC (is CurrentC still a thing?) and a host of others. But Target, like Kohl’s, is jumping in with its own thing for a particular stratum of customer — holders of Target’s Redcard.

Recode points out that some of the details of the Target scheme remain unknown. Will it be part of the popular Cartwheel app? Will it integrate coupons and Target offers?

One of the big selling points of Kohl’s program, called Kohl’s Pay, is that it tracks all the deals and promotions that a shopper is eligible for and calculates the price a shopper pays in one fell swoop — or swipe.

Kohl’s Ratnakar Lavu talked at the recent NRF Big Show about how Kohl’s is intrigued by Apple Pay, Android Pay and the like, but that there are complications with integrating promotions with third-party systems.

The store’s mobile payment program, which is available only to Kohl’s cardholders, is a raging success as it is, he added.

“The feedback is fantastic,” Lavu told Jason Del Rey, of Recode, from the conference stage. “We make it more seamless, compelling and engaging because we control the end-to-end experience.”

Yes, the program is currently targeted at the retailers’ best customers (those with the Kohl’s card). But Ratnakar is convinced that the enthusiasm will spread.

“I actually think it will turn our average customer into our best customer,” he said. “Our average customer will also learn about the benefits of it and we’re hoping that they will become the best customer.”

The key to this whole space-race-like rush to mobile payments is in something Lavu said — “control the end-to-end experience.” More than at any time before, retailers are turning their attention to the customer experience, both online and in-store. In fact, ideally, it’s all one experience.

While retailers are still interested in attracting new customers, they are gaining a deep appreciation for keeping the customers they have. Retaining customers, of course, is much cheaper than attracting a new one, something a business needs to do over and over if it’s not hanging on to the fans it has.

Sears continues to fight the good fight

Sears Store

Yes, Sears is struggling, but it’s not giving up. The retailer is looking to the future with experiments such as its deployment of artificial intelligence to help shoppers find the right tires and the right time and place to have them installed.

Retail Dive reports that the venerable department store has teamed up with IBM and Watson to offer a script to those shopping for tires. Those who choose to engage with the technology, will be asked a set of programmed questions to help get at which tires are right for them.

While the Sears program is a relatively limited application of the technology, it does point to the growing importance of machine learning in retail. As the Retail Dive piece says:

“AI capabilities such as machine learning and natural language generation and processing have tremendous potential to to bring quicker and more personalized service and response to just about any app that relies on conversation and customer interaction — which of course means just about any retail app you can think of.”

There are less flashy, but more comprehensive uses of artificial intelligence and natural language processing being used by many retailers, of course, though Retail Dive points out that many retailers have a ways to go to reach a point where they are taking full advantage of available technology.

It would seem that it’s only a matter of time before retailers pick up their AI game. After all, it appears that in retail, AI is where the rubber meets the road.

Sorry.

Ulta powers growth with unique experience and unique products

makeup

Ulta Beauty continues to kill it.

Its stock shot up nearly 40 percent in 2016, Bloomberg reports. It’s opening stores as others are closing them and its buzz is off the charts.

The cosmetics seller has taken what many say retailers must do — provide differentiated experiences and differentiated inventory — and executed nearly flawlessly to become the belle of the ball. (Come on. Not only corny, but borderline sexist.)

CEO Mary Dillon has purposefully made the store less “Amazon-able,” as Fortune put it, by stocking items that aren’t available at the online giant.

As important, as Bloomberg points out, Ulta has turned a trip to its stores into a happening. There are selfies (which shoppers can use to “try out” makeup) eyebrow tweezing, consultations and styling. So, why not make a day of it.

The Ulta story would seem to show that customer experience is not simply the latest shiny object for retailers to chase. Creating a memorable experience works.

We’re not making this up.

A real Big Mac attack

McDonald's Big Mac

OK,  we’re not proud of it, but there was a time that rarely a day went by that the BRRR didn’t indulge in a Big Mac. Yes, we lived to tell about it — and, through some effort, weaned ourselves from the fast-food treat.

And now this: McDonald’s is unleashing a Big Mac ATM that will cough up free Big Macs in return for an automated Twitter endorsement from the Big Mac eater, the Boston Globe reports.

We’re safe for now — and we know you’re glad to hear that — because the BM-ATM is all the way across the country from where we are. The cutting-edge, fast-food technology is rolling out in Boston’s Kenmore Square.

It will operate during lunch-time hours and it’s not an experiment to see whether McDonald’s can get rid of all the pesky people it takes to run the world’s largest peddler of hamburgers.

Micky D’s officials say getting the machine out there is a marketing ploy. No! And in fact the Big Macs it will dispense aren’t regular, old Big Macs, but all-new items called Mac Jr. and Grand Mac. (The Mac Jr. sounds suspiciously small. We’d go with the Grand Mac, which sounds suspiciously large.)

Anyway, to stick with our customer experience theme, the technology strikes us as an attempt to create a unique customer experience while also getting rid of some of the pesky people it takes to run a restaurant.

As the Globe points out, other food service outfits have turned to automation — something called Eatsa of San Francisco takes orders on iPads and delivers food to a cubby that a diner picks up without dealing with humans.

And the BRRR has to say it’s been tempted to try a nearby pizza place where the pies are made by robots. Pie in the sky? Maybe

By the way, any idea what to tip a robot?

The cost of Super Sunday just went down

If you’re sitting in front of the TV for Super Bowl LI rather than heading to Houston for the high holy day of U.S. sports, consider yourself lucky.

The SB will cost you only $75, the National Retail Federation says. Going to the game? Well, tickets are selling for an average of nearly $5,000 on the — ahem — secondary market, according to CBS.

Take that extra $4,925 and get yourself something pretty.

The NRF says total SBLI spending will be $14.1 billion, which is a lot of dough, but not as much as last year, when retailers raked in $15.5 billion on the big day.

Chart showing 10 years of Super Bowl spending by consumers. Source: NRF

(Source: The National Retail Federation)

The federation did not speculate on the reason for the decline. About as many people as last year were expected to watch the game — 188.9 million. So, that’s not it. Food prices are likely to be a little higher this year, which of course doesn’t explain a drop in spending.

Maybe it’s the match-up: New England Patriots vs. the Atlanta Falcons this year; Denver Broncos vs. Carolina Panthers in 2016.

Whatever the reason, the NRF had a bunch of cool statistics beyond the spending figures as a result of a survey it conducted with Prosper Insights & Analytics. A sampling:

  • Of the 76 percent of those surveyed who said they’d watch the game, 80 percent said they’d be buying food and drink for it.
  • Based on the survey, 11 percent will be buying team gear and 8 percent will be buying new TVs. Good excuse as any, we guess.
  • Forty-five percent of those polled said they’d host a party, which, when you think about, leaves the other 55 percent available to attend Super Bowl parties.
  • When it comes to why people watch, 43 percent say they like the game itself; 24 percent watch for the commericals; 15 percent just want to hang out with friends; 12 percent want to see the halftime show and 6 percent apparently forgot what the question was.

Quote of the week

“This is just another cog in the supply chain that they’re putting under their control, as well as creating new revenue streams.”John Haber, CEO of Spend Management Experts, to the Wall Street Journal regarding Amazon taking a bigger role in trans-Pacific shipments.

Photo of Target by Mike Cassidy; photo of Sears store courtesy of Sears; photo of makeup by Emily Cox published under Creative Commons license; photo of Big Mac courtesy of McDonald’s. 

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

Reporters notebooks

NRF commiseration; retail predictions; Lowe’s low: The BloomReach Relevance Report

Consider this the just-before-NRF quick version of the BRRR. We’re keeping it short enough that you can read it between the time you get in your airline seat and the time the flight deck tells you to power down your phone.

NRF echo chamber

NRF Javits Convention Center main hall

First, we turn to us, and our advance coverage of NRF’s Big Show, because we really do like sound of our own voice.

It’s definitely an interesting time for everyone who is anyone in retail to be getting together to talk about how they can do what they do better. The retail news has been bleak of late, though admittedly it’s been dominated by department store news and department stores find themselves in a very tough spot.

Amazon, niche players and discount stores have been eating their lunch. At NRF 2016, they had the unseasonably warm winter to blame for sluggish sales. (People don’t buy warm clothes when it’s warm out.) This year, that’s no excuse, as your mother used to say.

A few interesting factoids from that Bloomberg story linked above:

  • Last month, when retail sales overall were up 4.4 percent, department store sales were down 7.2 percent.
  • That monthly decline in the department store sector was the 23d in a row. That’s nearly two years, people.
  • The portion of all retail sales online in the third quarter hit its highest percentage yet: 8.4 percent.
  • Perhaps more striking: The percentage of all retail sales online in 1999 was 0.6 percent. Sure, the internet was just getting started, but it’s amazing to think how far we’ve come in so little time.

With luck, those working to turn their brick-and-mortar retail operations around will find some inspiration at NRF — or at least an understanding shoulder to cry on.

If you’d prefer to think about the old days, here’s a photo essay from NRF 2016.

Speakers predict the retail future

Did we mention that NRF’s Big Show is coming up? We know, enough with NRF. But this is a perfect piece for those few minutes or many minutes you’re sitting on the plane at the gate, hoping that door closes before someone comes for the now-empty middle seat between you and the window passenger. NRF had speakers at the event tell them what 2017 would be all about when it comes to retail.

It turns out it’s going to be a good year for customers, which makes sense, since they spend the money. Most of the answers in the NRF SlideShare have to do with building a better customer experience something that’s alway been important, but which has taken on a greater importance in the era of the empowered consumer.

Have a look.

Lowe’s rejiggers workforce, to use the technical term

So, falling somewhere between item one (department store woes) and item two (emphasis on customer experience), comes news of Lowes’ layoff (less than 1 percent of workforce). It’s a reminder that the retail transformation is far from painless.

But to view the Lowe’s move as only a cost-cutting move would be to short-change the significance of the story. The cuts are part of a rethinking of the way Lowe’s does business, particularly when it comes to dealing with customers.

The idea in shifting employees around, the CNBC story says, is to free up people to spend more face time with customers. The story calls the strategy doubling down on Lowe’s efforts to serve customers both in-store and online.

Lowe’s had already announced that it would spend about $1.6 billion on new stores and technology in the next couple of years to improve its customers’ shopping experience.

The CNBC story also answers a question the BRRR had, which is this: We thought home improvement stores were rocking it, given the way the stronger economy is fueling home purchases and remodels. So, what gives?

It turns out, the story says, Lowe’s has been doing well. Same-store sales have been up for 14 straight quarters. The problem? The growth has not been as strong as competitor Home Depot in six of the last eight quarters, CNBC says.

That fact apparently has contributed to Lowe’s stock price sliding.

Quote of the week

“This generation also has a lot of influence beyond their own wallets. They also have influence on family spending beyond their own wallets.”Jay Henderson, of IBM, telling MediaPost regarding the company’s study that found 67 percent of 13 to 21 year olds do most of their shopping in physical stores.

Photos by Mike Cassidy

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

Reporters notebooks

Department stores blues; happy Gap; flipping junk: The BloomReach Relevance Report

Happy New Year! Resolution: Read more. Start with the BloomReach Relevance Report.

 

Department stores have a serious case of post-holiday blues

Macy's Manhattan flagship

We’d be remiss (whatever that means) if we didn’t participate in the annual post-holiday rite of pointing out how e-commerce sales grew by a double-digit percentage, while department-store sales continued to decline.

In fact, it seems we’re in a sort of department-store-aggedon, with Macy’s and Kohl’s turning in sickly holiday shopping sales reports, Sears selling off the iconic Craftsman brand and closing stores and, Nordstrom parting with its key digital hire less than a year after he arrived.

The Seattle retailer, known for grand pianos and even grander customer service, said it was going to take a long look at its long-term digital leadership as it figures out its next move, GeekWire reported.

It’s not a shocker that department stores are struggling in the face of Amazon, fast-fashion retailers and discounters with fast-changing promotions. They’ve been in decline for years, which isn’t to say that the declines were baked into stock prices. Department stores got clobbered on the news.

Many chains have tried many things: Stores in stores; buy-online-pickup-in-store, smaller footprints, exclusive brands, in-store taverns (this seems to hold the most promise, but maybe that’s just us).

There comes a point when you have to wonder whether there really is an answer. The BRRR has some experience working at newspapers, proud institutions that are facing their own department-store-like decline. After years of chasing the answer to declining revenue, it’s beginning to become apparent that for newspapers maybe there isn’t an answer.

Speaking of newspapers, Scott Herhold, of the Mercury News, of San Jose, California, wrote a Swiftian column in the wake of the recent shopping-mall-food-court riots. Herhold’s target? A California mall that banned unaccompanied minors on the assumption that teens cause riots. (No telling what they’ll do when they get a couple of Orange Juliuses in them.)

Herhold suggested, tongue-in-cheek, that the mall would find many advantages to banning all shoppers from their property. Sadly, given the state of department stores, you have to wonder whether Herhold’s vision of shopper-less malls might just happen on its own.

The bright spot on the retail side is that there is much more to retail than department stores.

Online retail is roaring. If you look at the recently completed holiday season, online sales set a record, according to CNBC, as they probably will next year, the year after that and for years to come. MasterCard Shopping Pulse reported that online spending during the holiday season was up nearly 19 percent over 2015, when it was up 17.5 percent over the previous year.

Of course, unless your name is Amazon, the celebration is slightly muted.

About that Amazon

amazonbox

Um, crushed it. Yep. You might have had a good holiday, but Amazon had a really good holiday. Like 2015, the Seattle behemoth raked in about 40 percent of online holiday retail spending in 2016. That’s after nabbing 60 percent of all e-commerce growth in 2015.

It all kind of reinforces the notion that doing the same thing isn’t working all that well for a lot of digital retail. Or as Ken Cassar, an Amazon watcher with market researcher Slice put it to CNBC in an email:

“2017 is clearly becoming the year [once again] that Amazon’s competitors have no choice but to think differently in order to counter Amazon’s dominance in the e-commerce channel.”

There was plenty of evidence that the Prime thing that Amazon does is catching on. Amazon said a record number of people ordered through Prime this holiday season, which makes sense, though Amazon doesn’t reveal actual numbers. Amazon also said more people signed up for Prime this holiday season than in any past season, according to CNBC.

Some other gaudy Amazon holiday facts, courtesy of Amazon:

  • More than a billion items shipped under the Prime program.
  • The retailer sold enough “Hamilton: The Revolution” books and Hamilton albums to give a copy to everyone who attends a performance of the musical at the Richard Rodgers Theatre in New York — for 96 shows in a row.
  • The fastest Prime Now delivery on Christmas Eve took 13 minutes. It landed at a Redondo Beach, California, home at 9:05 p.m. and it included a couple of Tile item finders.
  • Amazon sold enough “Harry Potter: Complete 8-Film Collection” to play for more than 300 years.

Well, you get the idea.

A different kind of Gap accounting

Gap store off Union Square in San Francisco

Did we mention that it’s not all doom and gloom? Of course we did. Clothing retailer the Gap stunned those who get stunned about such things when it reported a boffo holiday season. At a time when the big department stores were reporting more declines in in-store sales, Gap shows up with a 2 percent year-over-year increase in same-store sales for the holiday period.

If you break out December, things look even juicier: December same-store sales were up 4 percent over 2015. Retail-watchers were expecting a 1.7 percent decline for December, not far off what the department stores saw for the holiday season.

Much of the good news is thanks to strong sales at Old Navy, which saw a 12 percent increase in same-store sales in December. Banana Republic, on the other hand, peeled away some of the sales spike, slipping into a 7 percent same-store sales decline.

The overall black ink had Gap execs punching up their guidance for the full year, saying they now expected earnings to be beyond the high end of their previous guidance of $1.92 a share.

The stock market said, “Yes!” Gap shares rose 10 percent in after-hours trading Thursday, after closing down 4 percent, Business Insider reported.

Retailers turn to tech to turn things around

interior shot of layout of a Staples store

So, if you’re a department store or not Amazon, what are you going to do? Innovate or find someone to innovate for you, Retail Dive says. The industry publication ran through a number of specific examples.

Yes, we’ve been on this soap box before. It so happens we find it comfy.

As for Retail Dive’s examples?

  • Staples turned to artificial intelligence and machine learning to help it scale up, by a staggering amount, the number of stock-keeping units (or SKUs) it’s added to its site. Retail Dive mentions IBM’s Watson. It does not mention BloomReach, but we will. (Hey, what’s the ‘B’ for in BRRR, anyway?) It also started accepting Apple Pay on its websites, a payment form it started accepting in-store in 2014, RD says.
  • Sears is partnering with Uber, so that customers can earn loyalty points for Uber rides, RD says. And it’s integrated its Shop Your Way loyalty program with a service that provides paycheck advances, which does offer a hint of the desperate leading the desperate. What could really be interesting, though, Retail Drive says, is something called WallyHome, a home sensor technology company that Sears bought. RD isn’t sure what Sears will do with WallyHome and nobody knows what’s going to happen to Sears, but it will be interesting to watch.
  • JCPenney is working on its mobile app and has put improving its omnichannel experience at the front of the line. Good ideas, but not ones that scream “innovation.” RD rightly notes that these JCP efforts come after substantial progress in other areas.

One lesson here is that anything is better than standing still while waiting for the anvil of Amazon to drop on you.

One seller’s junk is some buyer’s treasure

rv

When the string runs out on this BRRR thing, we know what we’re going to do: retail arbitrage. The Wall Street Journal had a fascinating story in the “news to us” category that chronicled the exploits of shade-tree entrepreneurs who scour the countryside for goods that are selling well-below their value — or what the entrepreneurs believe the value is.

We know that the WSJ story, “The secret to a career in an RV: Always be selling,” requires a subscription, so we’ll give you a run down. (And here’s an old NPR story on the craft.) By the way, isn’t “always be selling” the secret to SaaS sales? Maybe that’s us again.

Anyway, these retail arbitrageurs, as they’re known, buy stuff like toothpaste for 75 cents a tube and then turn around and sell it on Amazon as two for $7.50, the WSJ says. It’s not necessarily easy money.

Finding the cheap stuff means bargain hunting, brick-and-mortar style, driving from town to town (hence the RV thing). It means keeping tabs on markets and pricing, shipping the goods (usually to an Amazon warehouse, which handles fulfillment).

Like we said, not necessarily an easy life — but certainly an interesting one.

Quote of the week

“As e-commerce grows, returns will become an increasingly glaring challenge for retailers.” — Alan Gershenhorn, UPS chief commercial officer, regarding this year’s record number of e-commerce returns, as reported in the Daily News of Memphis.

Photo of Staples store courtesy of Staples. Photo of RV by Daniel Oines 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.

 

Reporters notebooks

Black Friday is here: The BloomReach Relevance Report

Hey, it’s Friday, black, blue, whatever. No matter the color you designate, take a minute to read the BloomReach Relevance Report — Black Friday edition.

The holiday horse race has begun

Black Friday sale sign

Yep. Just one month of shopping days until Christmas, which means one month of stories about how the holiday shopping season is going. In the world of retail and e-commerce, which are the same thing really, The four-or-so-week stretch between Thanksgiving and Christmas is the Super Bowl, World Cup, World Series etc. rolled into one.

Unless it isn’t.

No question, the holiday shopping season is spreading out, starting earlier, maybe even going later, though that traditional date, Dec. 25, tends to put a hard stop on things. Shoppers, as we know, buy what they want, when they want to, using the device they want to — including their own two feet carrying them into a store.

It’s natural to want an answer right away: Is the holiday season going to be a good one for retailers or not? Are more people going to be shopping online than in years past? Is Amazon going to dominate?

And it’s natural — and part of their job, really — for journalists to pick up every scrap of early evidence and data to try to answer those questions. And so, what we know: Online shopping saw a big bump on Thanksgiving — up 13.6 percent in the last few hours of Thanksgiving (which are the first few hours of Black “Friday”), according to Adobe.

MarketWatch, which was among those reporting the Adobe statistics, also noted that the mobile portion of that $1.15-billion digital shopping spree, was a record $449 million, most of that spent via smartphone.

The general trends have been building, though the numbers are interesting. Thanksgiving emerged as a big shopping day last year, when BloomReach data indicated that the new holiday tradition was to pass the stuffing and the gravy and then whip out the smartphone for some quick shopping before the dishes were done.

And mobile, well, it’s a thing, perhaps you’ve heard.

The danger, of course, is reading too much into the early signs. Let’s face it, it’s pretty easy to find a big line of people on Thanksgiving, relieved to have fled political talk with relatives, waiting to bust the doors at their favorite retailer. The whole story, won’t be known until the season plays itself out.

Speaking of stories, did you ever wonder if the people quoted in those holiday shopping stories get upset that the gifts they’re getting for family members are splashed across readers’ screens? Kind of blows the surprise. Right, Carrie Spicer, of Candler, whose husband is getting a watch, according to USA Today?

Hope he likes it. If not, he better start dropping hints fast.

More than any other, this Black Friday shows changing shopping habits

shopping-apps-on-iphone

Like that “more than any other” headline? Yeah, we’ll pretty much be able to say that every year for years to come. Digital shopping has shaken up everything and as it continues to grow, it will continue to shake things up.

The New York Times will let you live vicariously, if you don’t actually like to go into crowded stores on Black Friday. The NYT has been gathering shopping stories that tell the tale of shopping in 2016.

The very first story reminds retailers of something they already know: There is no more online vs. in-store shopping. Consumers shop whenever they want and however they want to. Exhibit One: Walter Reinoso at Foot Locker. He ordered his new kicks online and then showed up at the store to pick them up.

Order online, pickup-in-store. It’s what some customers want and so retailers need to supply it. Customer experience has never been more important. It’s not easy, but it’s necessary.

We also like how the NYT threw in some shopping tips. There is one we take issue with, however.

“Decide whether you’re going to focus on buying online or offline because it’s difficult to do both,” the tip sheet says.

Whether it’s difficult or not, it’s how people shop. We offer Exhibit One, as Exhibit One. Shoppers bounce back and forth between online and in-store. In fact, they shop online while in the store. They don’t think about it as “online shopping” or “in-store shopping.” To consumers, it’s just shopping.

Trying to beat Amazon at its game is no way to win

Amazon boxes on hotel cart

While we’re taking issue… The Wall Street Journal has a perfectly good story about retailers gearing up and bearing down for Black Friday. OK, nothing is perfect.

The story starts by saying that retailers are offering hefty discounts in stores and earlier deals online to compete with Amazon, among others. And while that might be the case, it’s not the right strategy.

OK, we’re guessing most retailers know what they’re doing and the hefty discounts and earlier deals are not the only thing they’re doing. Just so happens we recently wrote a series that lays out a number of approaches retailers can take to thrive in the era of Amazon.

Because here’s the thing about offering deeper and deeper discounts to score a competitive advantage: Pretty soon, you can’t discount anymore. And, of course, as you discount, you also diminish your profit.

We talked to Deloitte retail expert Kasey Lobaugh recently about this very issue. Lobaugh has presented Deloitte’s work on digital disruption a number of times. His conclusion: The best way retailers can thrive amid rapidly growing competition is to provide a distinctive customer experience and distinctive inventory.

In his conversation with the BRRR, Lobaugh said Amazon is a big threat in three categories: faster, cheaper and easier. Retailers, then, need to look at what they offer through the lens of cost and benefit.

Is the cost of dealing with a particular retailer, for instance driving to location and physically walking into a store, worth the benefit that customer gets from the transaction?

“Those retailers that are winning are retailers that, at least for the time being, still have enough benefit to overcome the cost,” he said.

Maybe that’s offering a product that no one else sells. Or offering a better version of a product that some others sell. Or providing better service after the sale. Or better advice before the sale.

“If you built your whole model around commodity products,” he said, “it’s hard to think of whatever the answer is that makes the store more relevant again.”

Holiday shopping by the numbers

Colorful numbers

Remember how we said earlier that journalists will grab any scrap of information in order to report on the holiday shopping sweepstakes. Well, if you can’t beat them, join them. These are some pretty staggering numbers, provided by Adobe, and covering the holiday shopping season, which Adobe says starts Nov. 1.

Totaling online spending: $29.1 billion

Total online sales growth: 4.7 percent

Total number of days with online spending over $1 billion: 23

Thanksgiving Day online sales increase: 11.5 percent

Share of desktop sales: 60 percent

Smartphone share of sales:  27 percent

Tablet share of sales: 13 percent

Biggest price decrease: Tablets, 25.1 percent

Quote of the week

“This is the largest visual investment of the year, every year.” — Joshua Schulman, president of Bergdorf Goodman, to The New York Times, describing the New York store’s holiday windows, decorated with 7 million Swarovski crystals and dresses that can run five figures.

Photo of Black Friday sale sign, Amazon boxes and Reporter’s Notebook by Mike Cassidy. Photo of iPhone with apps by Jason Howie and numbers by Andy Maguire published under Creative Commons license.

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

Reporters notebooks

Donald Trump’s brand; Singles’ Day: The BloomReach Relevance Report

Take the time to say thank you to a veteran. Then read the BloomReach Relevance Report.

A week that was all that America is about

2016 Presidential ballot

The BRRR has had a week packed with civic duty and patriotic emotion. There was Election Day, which resulted in an unprecedented outcome. And of course there is Veterans Day, which is so much more than a day for retail promotions. And on top if it all was jury duty for the BRRR itself.

All of which is making for a shorter BRRR with this somewhat unconventional opening item.

The phrase “jury duty” is often followed by the sound “ugh.” Yes, it is inconvenient and at times tedious. But it is hard to think of a more vital responsibility for a citizen of our great country. We were especially blessed to sworn in on the same day that voters selected the next president of the United States.

The outcome, of course, was a shocker. Donald Trump, man who had never served in the military or the government was selected to be our next commander-in-chief. It was a phenomenally ugly campaign and an incredible divided vote that left nearly half the electorate happy with the result and a significant larger number disappointed or worse.

If you’re wondering what any of this has to do with retail, remember that many have said the election was likely a drag on retail spending.

Anyway, whichever side one falls on, the election was hardly uplifting. Ask Alec Baldwin and Kate McKinnon. Skip to 2:20 if you’re in a hurry.

But this where jury duty comes in. It wasn’t “ugh.” It was uplifting. The BRRR served with 11 other citizens who were earnest, attentive, intelligent, analytical courteous, open-minded and determined to reach a proper verdict.

We came out of the jury room, after the verdict, feeling better than we had all week.

Trump’s journey from Macy’s to the White House

philadelphia-macys

Now on to the president-elect. Turns out that just because nearly half the country’s voters think you should be the leader of the free world, that doesn’t mean your clothing line is coming back to Macy’s.

Speaking as one chief executive to another, Terry Lundgren, commander-in-chief of Macy’s said the retailer had no plans to relaunch Donald Trump’s clothing line just because he won the election.  (OK, Lundgren wasn’t addressing Trump directly. He was speaking to CNBC.)

Macy’s decided to dump Trump after then-candidate Trump said Mexican immigrants were rapist and criminals.

Macy’s decision apparently has to do with more than just the odious nature of Trump’s comments. Lundgren explained in the CNBC interview that it wouldn’t be all that smart to carry a brand named after a political figure.

“You wouldn’t want to have a product that was held by a prominent Republican or a prominent Democrat because 48% of the population doesn’t think that’s a good idea,” he told CNBC.

As an example he said Macy’s wouldn’t have a Hillary Clinton line, though we could see HRC pantsuits being a big seller. And if Macy’s stocked the pantsuits, they could reintroduce Trumpwear without appearing to favor one major party over the other.

It all seems simple enough, but it never is. Consider this: Although the president-elect’s clothes are out, Macy’s does still sell Ivanka Trump’s clothes and accessories. That’s all the more interesting, because D. Trump urged consumers to boycott Macy’s.

After all she’s done for him.

Retail is seeing a post-election glow

Allentown Kohl's Whitehall Mall

Hey, did you hear there was an election this week? Sure was and retailers think that now that that’s over with, they might start seeing people shopping again, the Wall Street Journal reports.

Macy’s and Kohl’s both said they were seeing sales pink up a bit now that much of the nation isn’t engaged in yelling at each other and worrying about how the world was going to end if the wrong person won the presidency.

The votes are counted. Donald Trump is headed to the White House and Americans are headed to the malls — or their computers, smartphones etc.

Kevin Mansell, who runs Kohl’s, said he’s still worried that consumers will be slow to shop given the uncertainty surrounding what Trump will actually do now that he’s the decider. You’ve got to admit, he wasn’t real clear on that during the campaign.

But Macy’s chief Terry Lundgren says pish (does anyone say pish?). The not-quite-half of the electorate that voted for Trump are going to be on an election high, he figures, ready to spend money like sailors on shore leave.

Which raises a question: What about the even larger number of Hillary Clinton voters. Are they going to be too bummed to spend? Apparently not, according to the St. Louis Post Dispatch, which reported on a National Retail Federation poll that had officials there saying a bi-partisan surge was coming.

That take is shared by ForeSee, an Ann Arbor, Mich., company that analyzes customer experience. In a poll taken between the Friday before Election Day and the Thursday after, two-thirds of shoppers of both parties said they didn’t plan to spend any more or less this holiday season than in the past.

That’s not to say the election, among the most surprising in U.S. history, didn’t affect consumers as they went about their buying business. The ForeSee survey asked Democrats and Republicans about their digital retail experiences on Wednesday, the day after the election. On a scale that tops out at 100, Republicans said their online experience was an 81. Democrats said theirs felt more like a 77.

But for those worried that the vitriolic campaign has torn the country asunder to the point where it will never heal, there is good news. As others have noted, it’s likely we have more in common than we think.

Foresee found that 85 percent of Republicans and 88 percent of Democrats would shop on Amazon this holiday season. When asked whether they would do more than half their shopping on Amazon, 32 percent of Republicans said they would, while 36 percent of Democrats said they would.

Singles’ Day is yuuuge

Man alone on a sand dune at Warren Dunes, Mich.

Yes, it’s Singles’ Day and yes the amount of stuff sold in Asia to commemorate being alone is once again staggering. The BBC reports that Alibaba is reporting $18 billion in sales on Nov. 11, which you might know as Veterans Day, or if you’re really hip as Onyx Friday.

Yeah, it’s turned into a super weird day, complete with opening ceremonies hosted by Kobe Bryant and David and Victoria Beckham. Katy Perry had to bow out for “family reasons.”

But nobody is laughing at the concept, which has even retailers beyond Alibaba laughing all the way to the bank.

And no question the Alibaba revenue figures are staggering. The BBC says the total is more than is spent on retail in the United States over the entire long Thanksgiving weekend.

But one other figure is equally as eye-popping. More than 80 percent of Singles’ Day purchases were made on mobile phones, a sign not only of mobile’s popularity in Asia, but also its potential elsewhere (like in the United States).

Oh, bet you wondered how we were going to keep our post-election-day theme going in this Singles Day item. Wonder no more. Did you know that the president-elect even managed to trump Alibaba’s big day?

Yep. The Wall Street Journal reports that the Alibaba media briefing meant to turn up the publicity machine for Singles’ Day quickly devolved into a discussion of Donald Trump.

Some know-it-all reporter asked the Alibaba exec spouting the company line how he thought a Tump presidency would affect the company. Trump, you may recall is not a big fan of China, though he talks about it a lot.

Anyway, Joe Tsai, the Alibaba guy giving the briefing said not to worry, according to the WSJ. He noted that China is a key source of consumer demand for American goods and a key source of capital investment. So any U.S. president who would have to be nuts to beat up on China.

Quote of the week

“Stores are still vitally important. But the influence of digital touchpoints is huge.” — Fiona Swerdlow, vice president at Forrester Research to The New York Times regarding online influence on in-store shopping.

Photos by Mike Cassidy

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

Starbuck’s holiday cups; big, Big Macs; Cubs buying frenzy: The BloomReach Relevance Report

Last chance before we elect a new president. Read the BloomReach Relevance Report — early and often.

Starbuck’s annual cup of controversy

Starbucks community cup

Ah, autumn. The leaves changing. The bracing chill. The anticipation of holidays yet-to-come. And a nation going bat-s crazy over the design on Starbucks cups.

Yep, the annual tradition is underway: People finding Starbucks paper cups not Christmas-y enough, even though this week’s switch to a green cup with a sketched homage to community wasn’t intended to have anything to do with anyone’s holidays.

No matter. Holiday traditions are hard to shake.

Yes, Starbucks had cup trouble last year when they went with a basic holiday red — no Santa, no reindeer, no Christ child etc. The company said the plain canvass allowed customers to create their own holiday story, which makes a lot of sense to us.

It can be hard to remember, as we are bombarded from mid-October through most of December with commercials, print ads and Internet come-ons for Christmas, that not everyone celebrates Christmas. Not even all coffee drinkers celebrate Christmas. So why not leave a little wiggle room in the cup department?

Anyway, one interesting thing we noticed in the extensive news coverage of the 2016 cup controversy is that some of our favorite angry tweets appear to be tongue-in-cheek. Which is a slight chink in our internet-outrage armor.

Emily Keeler’s Twitter feed, for instance, appears to be the feed of someone who enjoys a good laugh. And Jazmine, whose Tweet lacks any clues that it’s meant as a joke, later tweeted that it was meant as a joke.

That said, they’re good, so we’ll share them here in the spirit of being nonsensical.

 


 


Oh yeah, Starbucks actual holiday cup is due out next week. Brace yourself.

The Cubs are the curse for one e-tailer

Cubs Joe Madden

Let’s just say online orders for Chicago Cubs gear are way up from the last time the major league baseball team won the World Series.

Uber and Fanatics came up with a 2016 solution for those looking to hop on the bandwagon: The on-demand ride service and the sports-team clothing and memorabilia retailer set up a deal where Chicago-area fans could order caps and T-shirts on the Uber app and have them delivered within minutes.

No word on whether the Cubs were involved in a similar scheme, perhaps one using horse and buggy, when they last won the World Series in 1908.

 


Our sources, OK Twitter, indicate that the Uber thing is working out OK.

 


 

In fact, the Cubs long-awaited victory was a bonanza for all kinds of retailers, according to Internet Retailer. Even Crate & Barrel, which does not sell Cubs gear, but which is headquartered in Chicagoland, adorned regional websites with Cubs-related messages, IR says.

Cubs gear sold like crazy this season, Internet Retailer reported in a separate story. If you drill into the data, you’ll note that Cubs fans were not born yesterday. Well over half the merchandise sold was sold in the month of October. Nobody was going to go all-in early on the Cubs, which have a long history of, well, blowing it.

Not this year — and the team’s logowear sold at a pace more than eight times the league average. And those numbers were crunched before the Cubs won the World Series.

But not all was well in Wrigleyville in the wake of hell freezing over. Sports World Chicago provided a case study in the difficulties of scaling an e-commerce business when it got swamped with more orders than it could handle, according to Internet Retailer.

overwhelmed website

Sports World’s owner told IR that the operation simply doesn’t have the staff to handle the number of online orders coming in. He added that the online store brought in six figures in sales in a 24-hour period.

The brick-and-mortar operation, across from Wrigley Field, continues to function.

We’re going to guess that Sports World Chicago will be in a better position to handle the rush by the Cubs next world championship in 2124.

Collard green with envy

Collard Greens

Of course we’ve had our doubts about whether “any publicity is good publicity.”

But then along comes Neiman Marcus and its collard greens. Maybe you’ve heard: Among the really expensive things to buy for people you really like that are featured in the retailer’s annual Christmas Book are $66 collard greens ($81.50 with shipping).

Yep. The veggie side, long associated with Southern cooking and soul food, is now apparently the haute-est of haute cuisine. And if you thought Twitter lost its mind over Starbucks’ cups, you haven’t seen Twitter crazy.

 


Face it: It’s a target rich environment. Some were sure that Neiman was oblivious to the place collards play in African American culture. Nicole Taylor, who wrote “The Up South Cookbook,” told the Washington Post that collard greens were considered poor people’s food when she was growing up. Serving collard greens was nothing to be proud of, she told the news outlet.

The $80 price tag might change all that.

And if you’re wondering who would buy collard greens for $66 when you could get the same amount delivered for about $7 (plus shipping) from Good Eggs, you should note that the Neiman Marcus collards sold out.

Not to worry: You could always serve the Good Eggs collards and just say you got them from Neiman Marcus.

Or, as USA Today points out, you could just go ahead and get the Baked Bean Medley for $80, plus $18 shipping.

Hey, it’s Christmas (or it will be in about two months). Why not?

And this Big Mac is just right

Big Mac

It’s long overdue. Long, long overdue these coming changes to McDonald’s Big Mac. We mean, why serve one Big Mac when you can serve three.

Yep, starting early next year, fast-food fanatics can order a Big Mac, a big Big Mac or a small Big Mac, according to Advertising Age. What a country.

When you think about it, the burger with the middle bun is 50 years old. No, not the Big Mac you had for lunch — the idea of the Big Mac hamburger, which launched in Pittsburgh in 1967. Why not shake things up a little?

Micky D’s head honcho says customers have been clamoring for different ways to enjoy the one-of-a-kind taste of the Big Mac, which weighs in (get it?) at 540 calories, AdAge says. Oh and it also reminds us of McDonald’s last attempt to change it up with Big Mac: The Big Mac wrap. No, not a song.

The Snack Wrap Mac, the news site says, was half a patty, special sauce, lettuce, cheese, pickles and onions wrapped in a flour tortilla. Haven’t seen one in years.

Anyway, no reason was given for going bigger, but no real reason needed. More Big Mac for guys named Big Mac (and others who like to eat). Think of the trouble it would save this guy.

The small size, the company line goes, was launched because diners (and we use the term loosely) wanted a Big Mac that was easier to eat on the run.

Just what we need: More people eating fast food, faster.

Some, OK Brian Sozzi over at The Street, are not impressed. Biggering and smallering the Big Mac simply isn’t innovative enough, he says. Besides, he adds, the Big Mac special sauce has always been blech and remains blech.

Here at the BRRR it looks to us like McDonald’s is flailing around, trying figure out how to give people what they want now that they discovered that not everybody wants exactly the same thing.

Remember this guy, who made the biggest McDonald’s hamburger ever? You saw this coming, didn’t you. And yes, the whole point of this item is to post this video again.

Quote of the week

“It has much higher-end items. I always tell people we don’t want to be a Nordstrom’s, we want to be the Nordstrom’s of thrift.” — Goodwill of Silicon Valley CEO Michael Fox told the Resident newspaper, regarding the agency’s new upscale second-hand store.

Photos: Starbucks cup and Reporter’s Notebooks by Mike Cassidy; Joe Madden by Bailey Cassidy; collard greens by stereogab, published under Creative Commons license; Big Mac courtesy of McDonald’s.

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

Target Toycracker; Amazon’s experiment, Macy’s fire sale: The BloomReach Relevance Report

So, the last Saturday in October. Don’t slide into November without reading the BloomReach Relevance Report. It’s bad luck. Or something.

Target targets holiday shoppers starting, well, about now

Target store

Give us a moment as we sift through Target’s holiday advertising plan. There is a lot to like, we think. Of course, we’re saps and suckers for the holidays.

But let’s start with what we don’t like, just to try to lend the BRRR a little credibility. First there’s this eight-minute musical the retailer is producing. It’s just like “The Nutcracker,” the Target folks say, except instead of Tchaikovsky the music will be hip hop.

Oh, and instead of the Sugar Plum Fairy and toy soldiers, Target will be slipping in Trolls and Teenage Ninja Mutant Turtles. (Hey wait. Isn’t Toys R Us using Trolls in its holiday advertising?)

Oh, and, about those swords used in the battle scene? Those will be microphones. And, one more thing, instead of calling it “The Nutcracker,” Target is calling it “The Toycracker.”

So, it will be just like “The Nutcracker,” except nothing like “The Nutcracker.”

We never liked musicals, anyway. They always seemed like good stories, constantly interrupted by singing. Sort of like good TV, being interrupted by commercials, which actually, the Toycracker is. It will be shown in two four-minute segments during the airing of “Frozen,” which is, well, a musical.

But it gets better. Target is bringing back Ginger Breadington, Target’s spokescookie. Honestly, we don’t remember Mr. Breadington, but he sounds pretty cute. Unlike musicals, we like talking food. Best of all, Mr. B is going to show up on Snapchat as a filter, according to website U.S. campaign. That means, U.S. campaign says, people can send “ginger snaps.”

Oh yeah, but it also gets worse. Target is rolling its campaign out before the Nov. 8 presidential election. As in the first week of November. As in really early.

So, get ready.

Will Amazon ever be a retail-profit powerhouse?

Amazon logo

Enough with the Amazon-taking-over-the-world stuff. Sure, we’ve been beating that drum and we figure it’s time for a respite. Here it is: A smarty-pants The Wall Street Journal columnist notes that more than half of Amazon’s earnings come from pursuits other than retail.

Maybe that’s not stunning news, given Amazon’s well-publicized success in the web-hosting world. But WSJ columnist Steven Russolillo has a furthermore: If AMZN wants to continue its gravity-defying (and, at times, logic-defying) stock-price rise, it needs to prove that it can be a killer retail company.

So far, the jury is out, though it’s spent tons on warehouses and delivery systems and the machines to make them hum. Apparently when a lot of money gets spent, investors like to see that much and a lot more come rolling in. And it might.

In fact, it better, Russolillo says, because as juicy as Amazon’s web services business is, it’s vulnerable to other big-name companies that are unleashing big cloud initiatives. The competition will be intense. There will be pressure on pricing, etc.

Amazon might indeed be giving retailers fits, but, Russolillo says, the big competitors in the cloud are not “dowdy brick-and-mortar merchants.”

Ouch.

We want it here yesterday

FedEx Ground truck

It seems two days is the new three-to-four days. CNBC reports that a recent Deloitte survey says that a dwindling number of customers consider three or four day delivery as “fast.”

Last year well over half (63 percent) said getting the goods within four days felt fast. This year, that number is down to 42 percent.

The culprit? Yeah, Amazon and its two-day Prime service, CNBC supposes. But it’s not just Amazon. Other retailers are also upping their game, the story says. More retailers with a physical presence are shipping orders from their stores, cutting down on delivery times, the story notes.

Oh, and, CNBC also points out that Amazon is rolling out same-day delivery to more markets. So, the number who say within four days is fast, slips from 63 percent last year to 42 percent this year.

Are we looking at 42 to 27 percent next year?

What Amazon has in store with stores

Amazon box marked heavy

Turns out those physical book emporiums that Amazon has opened aren’t stores at all.

They’re laboratories. The head of Amazon Web Services told the crew at the Wall Street Journal’s annual digital conference that the bookstores are a way for the company to noodle around with how it might use online customer data to build better experiences in a brick-and-mortar store.

It so happens that building better experiences in a store is a way to make more money. Combining in-store and online data has also been a big initiative for most retailers with brick-and-mortar outlets, given that shoppers increasingly no longer differentiate between online and in-store shopping. It’s just shopping.

Andy Jassy, the Amazon guy who spoke at Wall Street Journal Live D conference, said the Amazonians are pretty darn pleased with the way the experiment is going.

So you might ask yourself: Why would Amazon open stores to conduct experiments to see how it could sell more stuff in stores when it didn’t have stores to sell stuff in, until it opened the experimental stores?

All right, actually, you’d probably ask yourself a far less-convoluted sentence than that. The BRRR has its own syntax problems.

Anyway, after all that: We don’t know. But we could guess. We love guesses.

For some time there has been talk about major retailers selling their wares through Amazon. (Well, OK, Gap talked about it.) And Amazon has been courting fashion brands.

What if Amazon could offer retailers and brands not only its “storefront,” which consumers rush through constantly, but also deep data from online that could be used in-store?

Or what if Amazon created another business unit, ala Amazon Web Services, that somehow provided just the analytics, based on what it learns with its laboratory stores?

Some look at Amazon’s latest moves and ask: Who knows? We prefer to look at Amazon’s latest moves and ask: What if?

Minneapolis’ Downtown Macy’s may be doomed

Marshall Field's sign

Minneapolis’ iconic Macy’s store could be on thin ice, which is a phrase they rarely get to use in Minnesota. The Minneapolis Star Tribune reports that the retailer is far along in negotiations with a buyer who would convert the historic building mostly into office space, the Star Tribune says.

Macy’s isn’t saying anything. The company has talked for some time about unloading some of its valuable real estate and possibly leasing space back from the new owners. The ST story says it’s possible, but not certain, that Macy’s could keep a small retail presence in the building, through which you could trace the history of Minneapolis retail.

The Star Tribune points out that the Macy’s site is huge, 1 million square feet in three adjacent buildings, built between 1902 and 1929. It once housed the flagship store of the Dayton’s chain, the original parent of Target. In 2001, the building became a Marshall Field’s, the iconic Chicago department store that was purchased by Macy’s in 2005.

Quote of the week

“We got to send an important message that we’d rather invite people to go outside with us rather than be fighting it out in the aisles.” — REI CEO Jerry Stritzke, in an email to the Associated Press explaining the retailer’s decision to double down on last year’s Black Friday closing.

Amazon logo courtesy of Amazon. Photos by Mike Cassidy.

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

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Amazon grows; showrooming rocks; Wayfair’s TV turn: The BloomReach Relevance Report

It’s Friday. Not Black Friday. Not Gray Friday. Just Friday. Enjoy. And take a gander at the BloomReach Relevance Report.

If you can’t beat ‘em at showrooming, join them

att-store

Remember when retailers everywhere were shaking in their boots because of showrooming? OK, so maybe that scare lasted about 15 minutes. The point is the showrooming reign of terror is over.

The San Francisco Chronicle points to a number of newish stores that are actually designed as showrooms, spots that build brands, educate consumers — and yes — sometimes get them to buy stuff. The trend represents the long-game in the battle to fend off Amazon.

Back in the fear-and-loathing-of-showrooming days, the Chron story points out, retailers were beside themselves because shoppers would come in, check out a product they were interested in and then go home and buy it cheaper on Amazon.

It wasn’t long, of course, before consumers realized that there was more than one way to play the game. Enter “webrooming,” the practice of researching online and then going to a store to buy something.

And now it’s omni-rooming, which is a word we just made up to annoy people.

Back to the Chron story. It focuses on shops like Target’s Open House and AT&T’s fancy new showroom, both in San Francisco. The retail hotspots feature exhibits and big touch screens that promote a lifestyle as much as a product.

The change, according to the Chronicle, has a lot to do with retailers keeping a closer eye on Amazon’s pricing (and keeping their own prices in line). It’s also no doubt a manifestation of what the ol’ BRRR has been harping on for a couple of years:

Stores need to provide an experience, something memorable, something more than just a transaction. In the age of Amazon, it’s a key way to differentiate competing retailers and an effective way to give consumers a reason to come into a store and connect with a brand.

Building a bulwark against Amazon is becoming increasingly important. A recent survey commissioned by BloomReach found that 55 percent of consumers start their product searches on Amazon. That’s up from 44 percent the year before.

At the National Retail Federation’s Big Show in January, Joshua Johnson, an AT&T senior marketing manager, shared some of the company’s thinking around the showroom stores, like the one in San Francisco. He said customers thought they had to wait too long to get things done in the store.

So, the company shortened wait times, but also thought about how AT&T and partner technology (like DIRECTV) could be used to entertain people while they waited. And they were very deliberate about how they designed their showroom outlets.

You shouldn’t go digital for digital’s sake,” Johnson said at NRF. “What we go into this with is trying to create a story in each of our retail stores.”

Retail rock star Wayfair branching out into TV

wayfair-catalog

In the latest sign that content in commerce is racing into the future, home goods seller Wayfair is launching a branded television series with A&E Television Networks, Adweek reports.

The show, “The Way Home,” will feature two interior designers talking about how people can save time and money while undertaking renovation projects. Oh yeah, and how to buy stuff from Wayfair that will make your remodel look even better.

Seriously, the show apparently isn’t going to be all Wayfair-in-your-face. For instance, they’re not calling it “The Wayfair Home,” are they?

But all the items on the set will be available on Wayfair and during the show, the screen will include a bug directing viewers to Wayfair’s site, which will feature collections from the program. Interestingly, the show will also have commercials, but Wayfair is not buying any of the spots.

That’s because the show is a Wayfair commercial. We kid because we love.

It makes sense that the initiative would be launched by Wayfair, a company that has long been recognized as a leading e-commerce innovator.

Anyway, the network is calling the 10-episode show the first “fully shoppable” TV series, according to Adweek.

If it is the first, it won’t be the last. Retailers (and other businesses) are working mightily to build meaningful content around their products and brands. Consumers have pretty much had it with traditional advertising.

And the fact is that consumers are usually far into their buying process before they visit a site to purchase. That means retailers need to be where their customers are when their customers are researching, price comparing, conferring with friends on social media and, apparently, when they are seeking inspiration by watching TV.

Retailers, who’ve always known content is a thing, are really picking up their game.

In fact, according to Wayfair’s president of brand marketing, this sort of content is “a whole new kit and kaboodle,” according to the Boston Globe.

Wish she wouldn’t use those technical terms.

This week’s “Amazon is taking over the world” story

amazonboxes2-copy

Gigantic Amazon just got bigger. Well, we could write that every day.

But in this case, USA Today has concluded that “Amazon could be a lot bigger than we think.” And by bigger, they mean twice as big. Here’s the thinking: A look at corporate statements and U.S. Commerce Department stats indicate that Amazon’s sales are about 15 percent of U.S. e-commerce.

But you know how Amazon has that Marketplace end of things? Yeah, well that is good for another 15 percent or so of U.S. e-commerce, USA Today says.

Now it’s true that Amazon doesn’t get all the revenue from those sales. That goes to the third-party sellers. But let’s just say that Amazon isn’t helping those sellers for its health.

The USA Today story notes that the figures are based on assumptions that might not be 100 percent correct. It also includes a little gloom and doom for those keeping score at home.

First it suggests we contemplate a world in which Amazon is the nation’s largest retailer — like biggest of all retail. Like bigger-than-Wal-Mart-Stores big. And it says with that kind of growth, we can contemplate something of a retail armageddon.

(Gary Beourgeault writing on SeekingAlpha, by the way, goes one better. He says Amazon is on a path to become the biggest retailer on the planet. So there’s that.)

But, yeah, armageddon. Just as Wal-Mart Stores took out whole sections of downtown retail districts, the super Amazon could take out big box stores, USA Today says. Once it finishes that, it could take aim at malls, wiping them out as well.

On the bright side. Well, there isn’t a bright side.

How does Gray Friday sound?

macys-holiday

Black Friday is losing its punch, Retail Dive reports.

The traditional start of the holiday shopping season (really, it once was) won’t even crack the top two on the list of busiest shopping days, according to Retail Next data quoted by RD.

One reason is that shoppers are finished with their Christmas shopping by Black Friday. OK, kidding. Sort of. But as we pointed out in our Datacember coverage last year, the holiday shopping season is starting earlier. In fact, we proclaimed Veteran’s Day the new Black Friday.

Retail Dive says the shift is happening in part because shoppers now realize they don’t have to get trampled to get a good deal. Meanwhile, retailers are moving promotions earlier and earlier. Add to that that the empowered consumer is in the habit of shopping whenever and wherever he or she wants to.

Thanksgiving is in the mix now. It turns out it’s a pretty big shopping day, no doubt taking some of the shine off Black Friday. BloomReach data last year indicated that the latest Thanksgiving tradition is buying stuff with our smartphones once dinner is finished. (At least we hope dinner is finished.)

In fact, traffic peaked during halftime of the nationally broadcast, prime time, National Football League game.

The change in shopping habits doesn’t mean that consumers are buying less. In fact, the National Retail Federation is predicting that this holiday season will see sales 3.6 percent higher than last year.

What it does mean is that retailers have to rethink how they deploy people, promotions and campaigns leading up to the holiday shopping season.

Quote of the week

“Looking ahead, we continue to see plenty of opportunity to expand our store base across both new and existing markets, and remain confident that over the long-term, Ross Dress for Less can grow to 2,000 locations.” — Ross Dress for Less President and Chief Development Officer Jim Fassio to AL.com regarding the chain’s expansion plans.

Photo of AT&T store courtesy of AT&T. Photo of Wayfair catalog by BloomReach. Cover photo and photos of Amazon boxes and Macy’s decorations by Mike Cassidy.

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

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Holiday hiring; saving Ronald McDonald; Ulta’s big plans: The BloomReach Relevance Report

The days are growing shorter — or at least the daylight is. Read the BloomReach Relevance Report before it gets dark.

The holiday hiring is boom is about to get underway

amazon-boxes-3

For retailers, the holiday shopping season started weeks ago — at least. In some ways, retailers never stop planning for the fourth quarter, a time that accounts for as much as 40 percent of their revenue.

Amazon this week said it was going to hire 120,000 temporary workers to handle the holiday crush — a 20 percent increase from a year ago, USA Today reports. One hundred and twenty thousand! That’s a small city. (Here’s The Wall Street Journal story, which requires a subscription.)

The announcement is good news for those looking for temporary work. It’s also a sign of what is to come from the country’s dominant online retailer. Amazon no doubt is looking for a killer holiday season.

It’s reasonable to assume that the Seattle behemoth is looking to handle at least 20 percent more orders this year, compared to 2015. And 2015 was not a bad year. The company apparently captured one-quarter of the year’s $94 million in holiday e-commerce growth while adding 3 million Prime members in one December week.

Amazon’s accelerating growth is hardly a surprise, but the numbers sometimes can be mind-numbing. BloomReach recently conducted a survey which showed that 55 percent of consumers start their digital shopping trips on Amazon. The figure was up from 44 percent the year before.

And when it comes to holiday shopping,  94 percent of consumers plan to shop on Amazon during the busy season.

While Amazon casts a huge shadow on the hiring news (OK, casts a huge shadow on everything), the USA Today story also lists a number previously reported hiring plans by other retailers.

According to the news outlet: Target is hiring 77,500; Macy’s is hiring 83,000 holiday workers and FedEx is taking on 50,000 additional employees. That’s a total of 330,500 from just four companies.

Happy holidays, indeed.

Ronald McDonald goes deep undercover

mcdonalds-restaurant

OK people, this has got to stop. This demonizing of clowns has gone too far as evidenced by McDonald’s slipping Ronald McDonald into witness protection, according to the Associated Press.

Yep. The hamburger-peddling jokester is on serious clown lockdown, the company says, in response to the angry anti-clown backlash sweeping the country. You’ve no-doubt heard about the unconfirmed reports of clowns, or people dressed like clowns, trying to lure kids into the woods in South Carolina.

It was the start of “creepy clown” mania. The Associated Press says Michigan authorities arrested “two morons dressed as clowns” who were harassing girls. Wow. Morons and clowns. British authorities have reported clown troubles of their own.

And social media, of course, lost its mind over the clown thing.


But the best part of the Ronald McDonald story, and yeah, the only reason we’re writing about it, is the somber, understated tone of McDonald’s statement on the matter. From The Oregonian’s coverage of Ronald in hiding:

“McDonald’s and franchisees in local markets are mindful of the current climate around clown sightings in communities,” the company said in a statement, “and as such are being thoughtful with respect to Ronald McDonald’s participation in community events for the time being.”

“Current climate around clown sightings”? Priceless.

By the way, how does a clown go undercover? Do you just dress him up like a normal human being? It wouldn’t be the first time that Ronald Mc-D went for a change of clothes. Remember hipster Ronald?

Anyway, Marina Hyde of the Guardian gets at the horror of a great marketing icon being sidelined. Pretty funny stuff, though I have one nit to pick. You know Hyde’s line about a McDonald’s upsell involving a gigantic Coke?

Everybody on this side of the Atlantic knows that the classic McDonald’s upsell is, “Do you want fries with that?”

Another sign that Amazon is taking over the world

This week’s sign that Amazon is taking over the world: grocery stores. Yep, the Seattle giant is fee-fi-fo-fuming its way into the brick-and-mortar grocery biz with outlets that will stock perishable food and plenty of technology to buy everything else, Wired and plenty of other outlets are reporting.

The move is hardly as wacky as it sounds, Wired explained. The stores, which will be part of the Amazon Fresh empire, can serve as a gateway drug to online grocery shopping. It’s a way to ease shoppers into digital food shopping, allowing them to order staples online while they’re in the store buying perishables.

The neighborhood stores also would come in handy as distribution centers. They’re there anyway. Why not use them?

GeekWire traces the new grocery strategy to a guy named Brittain Ladd, who years ago wrote about the advantages of such a brick-and-mortar strategy for Amazon. Amazon turned around and hired him and now he’s in charge of the expansion of Amazon Fresh, which is what this store thing is.

No doubt the move has traditional grocers a little anxious. But retailers in general should be nervous by the way Amazon appears to be able to dominate at will any field it chooses to enter.

Check out this passage from the Wired piece by Davie Alba:

“But this big irony characterizes just about all of Amazon’s grand ambitions. Amazon wants to dominate the length and breadth of e-commerce, and that means it built some serious infrastructure here in the real world.”

Yikes. It strikes us that one advantage Amazon has is the fact that it is starting fresh, if you’ll pardon the pun. What the Wired story — and The Wall Street Journal story before it — describe is an omnichannel approach that takes customers’ different preferences into account.

According to the reports, shoppers will be able to pick up in the store milk, meat, fruit, vegetables and the like. Meanwhile, they can order items like canned soup, peanut butter and such on their phones or from touch screens. And if they prefer, they can order their perishable food in advance and have it delivered to their cars at the curb.

In fact, Wired and the Journal, say, Amazon is working on technology that will read customers’ license plates when they arrive so they know when to rush out with the goods.

Ulta: You can’t makeup this stuff

cosmetics

Beauty retailer Ulta doesn’t seem shaken by Amazon’s designs on world dominance. The Chicago-area multi-channel chain says its same store and online sales are up by a double-digit percentage, according to the Washington Post. Depending on how much of that growth is attributed to each channel — Ulta could be seeing a staggering surge by the standards of the current physical-store world.

At any rate, Utla execs see the growth as strong enough to go all-in on opening new stores in the future. The company originally said its future called for running 1,200 stores, up from its current 928. But this week, executives told investors that it was looking at a company of as many as 1,700 stores in the coming years, the Chicago Tribune reported.

The store’s secret to success in what is becoming a booming branch of retail, is to appeal to a slice of the beauty and cosmetics market, according to the Washington Post. The Post explains that Ulta focuses on “beauty enthusiasts,” women who are serious about their look and enjoy experimenting with new and many products.

The Post says Ulta’s research shows that 67 percent of their customers own at least 11 lipsticks and that 68 percent own three or more curling irons. Not bad data points when you think abou it.

But the real juicy numbers from Ulta’s perspective? Executives say 72 million women fit the many-lipsticks-and-curling-irons profile, but that only 15 million of them shop at Ulta. So there’s plenty of room to grow.

Besides the retailer’s strategic targeting, it is also serious about another move that can inoculate stores from Amazon’s dominance. Ulta provides an experience. It decks out its stores with dry bars and brow bars. (No word on whether it’s a high-brow bar, given the store’s target demographic.)

And not insignificantly, Ulta CEO Mary Dillon, made a deliberate decision to make the store less “Amazon-able,” by seeing to it that Ulta’s inventory overlap with Amazon was reduced, according to a Dillon profile in Fortune.

Given the most recent numbers, the strategy appears to be working. And if the growth projections hold, Ulta won’t be in the position of some other retailers, who, when talking to investors, find themselves looking to put lipstick on a pig.

Good news, meh news, on retail sales

giants-dugout2

So here’s a little good news, emphasis on little. Retail sales in September were better than they’ve been in months, with the Associated Press reporting a 0.6 percent month-over-month increase.

That might not sound like much, but it’s a lot better than August’s 0.2 percent decline, Bloomberg reports. (The AP story says a 0.2 percent gain, but that appears to be an error. Both Bloomberg and the Wall Street Journal report a 0.2 percent decline.)

Still looking for a dark cloud around the silver lining? Experts point out that the September gain was fueled in large part by higher oil prices, which led to higher gas prices. (Get it? Fueled, oil prices, gas prices?)

The Bloomberg story is a bit more optimistic, speculating that the most recent numbers are an indication that lower unemployment and higher wages are spurring on spending. It’s a trend that should continue, says an expert interviewed by Bloomberg and included in its story:

“‘The combination of solid job growth, while slowing, modest pickup in wages, and pretty good measures of household net worth should continue to push consumer spending up over the next year,’ said David Berson, chief economist at Nationwide Insurance in Columbus, Ohio.”

Bloomberg also included a video interview with Barclay economist Michael Gapen who says the latest figures are unlikely to deter the Fed from raising interest rates before the end of the year.

Quote of the week

“We believe that the athleisure trend is plateauing, and we expect more conservative growth going forward,” Jefferies analyst Randal Konik, explaining to CNBC the significance of an uptick in teens’ interest in blue jeans.

Photo of eye shadow by Courtney Rhodes published under Creative Commons license. Photo of McDonald’s restaurant courtesy of McDonald’s. Other photos by Mike Cassidy.

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

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Walmart slows its roll; McDonald’s better burgers: The BloomReach Relevance Report

So, it’s the opening weekend of baseball’s postseason, something that means something to some people and nothing to others. Either way, take a break from the action to read the BloomReach Relevance Report or busy yourself reading it while others around you sit transfixed.

Watch out for falling store openings

walmartbopus-copy

Wal-Mart Stores is pulling a 180 that is more dramatic than the doughnuts hot-rodders spin in the retailer’s ample parking lots at night, USA Today and many others are reporting.

The Bentonville behemoth is going all-in on e-commerce, slowing its new store openings down to next to nothing and pushing to make a big move into Amazon’s territory.

The online emphasis has been a thing now for years for Walmart. But the move away from brick-and-mortar expansion marks a dramatic change. The Wall Street Journal reports that Wal-Mart next year will open only half the number of superstores as it did this year. It’s cutting back on its pint-sized Neighborhood Markets, too.

The BRRR has done the math (with a 50 percent assurance of accuracy): Wal-Mart plans to open 55 stores next year down from 230 this year. One important point: The vast majority of the 230 (161) were Neighborhood Markets, not the gigantic supercenters.

Profits will take a hit, though execs said there still will be profits. The forecast is for a profit flat line next year and bump about about 5 percent the year after that.

The move reflects two big retail trends: The unrelenting online assault by Amazon and the move to marry in-store and online experiences to boost consumer convenience and retailers’ profits.

On point No. 1: Amazon continues to gallop ahead as the place consumers start their online shopping excursions. A recent BloomReach survey, conducted by Survata, found that 55 percent of consumers begin their product searches on Amazon. That’s up 11 percentage points from just a year ago. And this time next year? Well…

And so Wal-Mart is jumping in with both feet, hoping to drive online and in-store sales with a more robust e-commerce offering — including a third-party marketplace.

On point No. 2: Wal-Mart is pairing its ramped up online efforts with a push to improve customer experience both in-store and online. The store is offering a beefed-up employee training program and providing better pay for those who work in its stores.

Turns out, customer experience is a thing and the nation’s biggest retailer is on it.

Opening fewer stores is the answer; unless it’s not

warby-parker

So, Wal-Mart Stores’ move pretty much seals it. Fewer brick-and-mortar stores and a bigger emphasis on online sales is the way forward for stressed out retailers, right?

Well, no. Turns out, online-only plays are now turning to brick-and-mortar expansion. Bonobos and Warby Parker, both of which started as e-commerce operations, are saying they will expand the number of physical stores they operate, The Wall Street Journal reports.

(The Journal story requires a subscription, but this Retail Dive summary does not — and it comes with commentary.)

In fact, a Warby Parker founder told the Journal that he could see a world where the eye-glass seller had 1,000 real stores. And no, he doesn’t need his eyes examined.

It seems that customers actually like to talk to people, at least sometimes. The Retail Dive summary above says that Warby Parker’s co-founder Neil Blumenthal found that out when for a period he was inviting customers to his apartment to try on Warby Ps, if they liked.

Sure, it sounds weird, having strangers plucking specs off your dining table so they can try them on. But Blumenthal found that not only did customers like talking to people, but that Warby Parker could build a better relationship with customers when they dealt with them in person.

That relationship is key, because getting someone to buy a pair of glasses from you once is nice, but getting someone to buy glasses from you over and over again is the goal.

Another sign that smartphones are taking over the world

smartphone-shopping

Yet another study that serves as a reminder to retailers that they need to bring their best game across all channels. Search Marketing Daily reports that nearly half of consumers browsing the web, browse on more than one device.

As important, on any given day, 40 percent of consumers search only on their smartphones, according to the Search Marketing story, which quotes research by Google. The numbers underline the importance in providing a great mobile experience, sure, but they also make the case for retailers being consistent across their various channels.

We are a nation of multitaskers and Marketing Daily says 57 percent of those surveyed said they use multiple devices every day. In fact, 21 percent of those use more than one device at the same time.

One other cool thing: Google looked at the time of day people use different devices. No big surprise: Searches on mobile devices dominate for 15 of a day’s 24 hours. Desktops (which could be laptops, too) hit their peak at 8 p.m. — after the dishes are done and the kids are in bed or getting ready for bed.

The computer use then drops off as the night goes on.

All of which is another sign that there is no reason to believe that the mobile revolution will let up. The trick now is for retailers to figure out how to translate all that mobile browsing into mobile sales.

McDonald’s bad burgers: Do you think fresh beef would help?

Now, you knew the BRRR couldn’t pass this story up, if only for the chance to once again post this video. It’s an all-time favorite — of ours.

Anyway, the Golden Arches are making another move to serve up hamburgers that don’t suck. Turns out consumers are turning to Five Guys, Shake Shack and a place called The Habit, which we’d never heard of, but which apparently has the best burgers going. (Then again, we’re sheltered.)

You can get a deeper dive on McDonald’s hamburger-improvement program in The Wall Street Journal, though it’s available through tiered subscription.

It pretty much lays out the problem in a memo obtained from McDonald’s. Millennials just aren’t that into the Big Mac, which is a big deal for McDonald’s. The memo said the burger is less relevant, which has us almost feeling sorry for the iconic burger.

In fact, next time you see the Hamburgler give him a hug. Anyway, only one in five millennials has even tried the BM. And if you know anything, you know that without millennials there would be no reason to exist.

How bad are McDonald’s burgers? The worst, according to a 2014 Consumer Reports survey that ranked 20 fast-food burgers ahead of McDonald’s.

And so, McDonald’s has convened a panel of experts to come up with a good-tasting burger. They plan to start with fresh beef, which sounds better already. There are likely to be some premium ingredients involved, which couldn’t hurt.

The big worry is that all this goodness will slow things down. It turns out McDonald’s likes to get you your hamburger in 90 seconds and apparently a lot of McDonald’s customers believe they need to get their hamburger in 90 seconds — especially those who use the drive-through and devour the burger while behind the wheel.

The Journal runs down a series of failed McDonald’s attempts to give the public a better burger. There was the Arch Deluxe, there was the Angus beef experiment, there was the premium sirloin burger. Nope. Nope. And nope.

So, we’ll see. In the meantime, you can’t miss with the fries.

Holiday shopping starts when?

macys-holiday-interior

So some experts are saying that this year’s presidential election could slow holiday shopping — at least temporarily.

I’m not sure which is more interesting: that politics might interfere with holiday commerce, or that it’s now a given that holiday shopping will be in full swing by Nov. 8.

No, the BRRR hasn’t had its head buried in the sand. We know holiday shopping has been kicking off earlier and earlier.

It just sounds odd to read a sentence like this one in the MarketWatch report:

“The Nov. 8 presidential election and its outcome will distract consumers, but the retail industry believes that shoppers — well-positioned heading into this holiday season — will quickly get back to purchasing gifts after ballots are cast.”

We mean, it’s not like we’re talking about a few eager beavers getting their shopping going within about a week of Halloween. This story has the holiday shopping season in full swing by the first week of November. In full swing enough that it could actually experience a lull.

And it’s not hyperbole or baseless speculation. The story points out that PwC has released its 2016 holiday forecast, which says that 64 percent of consumers will have started their holiday shopping before Black Friday and that 29 percent will be all but finished shopping by then.

The potential upside? Maybe, given their penchant for getting a start on things, those shoppers will have voted early, by mail. That way their shopping won’t have to be interrupted at all.

Quote of the week

“We’re excited to give this day back to our employees so they can celebrate with their families.” — Mall of America senior VP of marketing Jill Renslow to the Minneapolis Star Tribune, regarding the mall’s decision to close on Thanksgiving.

Smartphone photo by Jason Howie 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.

reporter's notebooks in a trash can

Alexa is buying; Drizly is delivering; Amazon is dominating: The BloomReach Relevance Report

It’s the last Friday of the month. It’s OK. There will be more next month. Celebrate with the BloomReach Relevance Report.

Old-school department stores are getting up to speed

lord-taylor-store

Stodgy department stores are turning to the hipper fast-fashion sector for tips on how to speed up their supply chains and be more responsive to consumers’ quest for the latest and the greatest. Well, the latest anyway.

The Wall Street Journal reports that OG retailers have concluded that they need to be more nimble in order to give consumers what they want. (Here’s a summary that doesn’t require a subscription.)

The Journal says that stores like Lord & Taylor and JCPenney are trimming weeks, or even months, off the process of going from design to hanging clothes on a rack, sometimes by contracting with outside firms.

Lord & Taylor, for instance, reduced the time it takes to restock a sold-out item from as long as nine months to as little as eight weeks, the Journal reported.

Besides keeping customers happy, the move means less need to discount inventory that retailers built up at the beginning of a trend but couldn’t sell when the trend petered out, the WSJ explains.

Traditional department stores have been struggling to remain profitable and the apparel sector has been particularly weak. So, they are turning to firms like Xcel Brands, an outfit that works with them, starting from the design phase, right through to the delivery of clothes to the store.

Cutting out the middle-person is also a cost-savings, the Journal reports.

In the end, accelerating the supply chain is just another example of retail operating at the speed of its customers.

Amazon-dominance story of the week

amazon-boxes-3

Amazon is apparently continuing its march toward taking over the world. Now comes word that the Seattle superstore has widened its lead in the sweepstakes to attract online buyers looking for that certain something.

BloomReach research, conducted by Survata, found that 55 percent of consumers start their product searches on Amazon. That compares to 28 percent who first look for products using search engines and 16 percent who start their digital shopping excursions on a specific retailer’s website.

The bad news for retailers not called Amazon? Oh wait, you thought that was the bad news? No. The bad news is that the 55 percent figure is up from 44 percent just a year ago.

While the Amazon search statistic grabbed headlines, the research, which included a survey of 2,000 consumers and a separate survey of 400 marketing and sales representatives at large retailers, also uncovered some interesting consumer feelings about Amazon.

Yes, they like it, with 53 percent saying Amazon offers the best site experience in digital retail. But to a lesser extent, they also fear it. Nearly one in five of those surveyed said they were concerned about Amazon’s dominance, relative to other retailers.

Other retailers apparently had their own kind of fear of Amazon’s dominance. While 40 percent of the retail professionals surveyed said they worried about losing their jobs because of their top competitor, those who considered Amazon to be their top competitor were nearly twice as worried about getting canned.

Anyway, all this Amazon talk has some looking ahead to the coming holiday shopping season — and not in a good way. Website arc from Applause reasons that Amazon’s big lead in terms of where consumers start shopping will mean it will crush it this holiday season.

That’s probably true, if history is any guide. But other retailers should take note: The survey describes where consumers start shopping. Their mission should be to become the place where consumers finish shopping. And, of course, they should fight mightily for the 45 percent who do not start their searches on Amazon.

Drizly: Making your potent potable portable, one city at a time

cold-pilsner-of-beer

We spotted an old friend on the news wire: Turns out Drizly is expanding the way it will bring your favorite libation to your house, Tech Crunch reports. When we first wrote about the Boston-based “Uber for booze,” it connected one consumer to one liquor store and provided delivery from said store.

But the company recently said that drinkers, er consumers, would be able to compare prices across a number of retailers on Drizly when looking for their favorite alcoholic beverage.

There is one catch: Drizly isn’t available all across the United States, yet. The summary for the session that founder Nick Rellis gave at this week’s Shop.org said that it’s available in 21 major metro markets — not including the BRRR’s neighborhood.

When we wrote about the delivery service in December, Drizly was in 18 markets, so it is expanding. Maybe it won’t be too long before the BRRR will be in the zone.

Target invites startups to give it a leg up

Target is inviting retail-related startups to bug them. OK, not bug them, but to let them know they exist and explain how they could help Target improve its customers experiences, the Minneapolis Star Tribune reports.

The Minneapolis-based retailer has launched a website, www.startups.target.com,  through which startups that want to do business with Target can make their case by answering questions such as, “Who are some of your key competitors? How are you different from them?”

The move creates an intersection of two of the BRRR’s pet topics: The resurgence of customer experience as a differentiator and the need for retailers to act more like Silicon Valley startups.

There is no doubt that retail is changing faster than ever before. Consumers have taken charge and now shop when they want, where they want and how they want. Mobile devices are a key pillar in most consumers shopping excursions. Disruptors are nipping at the heels — and sometimes overtaking — legacy retailers.

The need for speed for retailers is bigger than ever before. And the number of startups engaged in e-commerce-related pursuits has exploded. The category of marketing technology alone includes almost 4,000 companies by Marketing Land’s count — up from 150 five years ago.

How can any retailer know about them all, let alone select the ones that are going to help them reach their goals?

And so, Target is going the “America’s Got Talent” route by letting startups show their stuff. It will be interesting a year from now to see just what the experiment has yielded. We’re betting that Target will be glad they made the move.

Maybe some startup will even get the golden buzzer. Yeah, we didn’t know what that was either until we watched the video.

Alexa: Bottoms up

johnnie-walker-bottles

Thanks to Johnnie Walker you’ll never have to drink alone again. The Scotch whisky-maker has teamed up with Amazon to unleash an Alexa skill that will teach you about the brand and offer cocktail recipes and recommendations, according to Mobile Marketer.

Oh, and shocker, it will direct you to stores where you can buy Johnnie Walker or let you order it along with all the fixin’s for your favorite cocktail. Delivery by Drizly. Where have we heard that name before?

Anyway, at least sitting alone with Alexa now will mean more than having her beat your butt at Jeopardy.

But seriously, the Johnny Walker thing is a look at where commerce is going. Or more accurately, one place where commerce is going. Voice search will no doubt be a growing thing in years to come.

So will experience, as we mentioned earlier. The Johnnie Walker experiment on Alexa is about more than a transaction. It’s building the brand in consumers’ minds. The Scotch is a state of mind — an altered state of mind, perhaps — but nonetheless.

The Alexa Walker experience, if you will, includes recipes and background information. It illustrates the importance of content in commerce. It offers options of how you want to make a purchase, if you want to make a purchase. It provides a way to acquire all you need to make your Johnnie Walker usable — drinkable, in this case.

In short, it’s the way of the future. We could write, “And we’ll drink to that.” But that’s far too cheesy.

Quote of the week

Photos of Lord & Taylor store by Mike Kalasnik and Johnnie Walker bottles by Zach Zupancic published under Creative Commons license. Photos of Amazon boxes, Pilsner of beer and Reporter’s Notebooks by Mike Cassidy

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.

reporter's notebooks in a trash can

Digital holiday; long-haul headaches; Amazon’s new move: The BloomReach Relevance Report

When riding the roller coaster of retail, it’s good to eat a light lunch. Enjoy a snack-sized version of the BloomReach Relevance Report.

Holiday shopping hiring

Holiday shopping moves online and hiring follows

We’ve made the point before that there is nothing like the holiday shopping season to highlight trends that might be barely noticeable during the rest of the year. Traffic and sales volume online and in-store are so big in November and December that it just makes everything pop.

The approaching season isn’t breaking any big news yet, but it is underscoring the continuing rise of e-commerce and consumer’s changing behavior.

Exhibit One: Toys R Us announced that when it gears up for the holiday shopping season, its main focus will be on hiring temps for its e-commerce operation. In particular, a TRU representative told Internet Retailer, the retailer will hire holiday workers for its shipping warehouses and to work on multi-channel efforts that rely on both brick-and-mortar and digital operations.

“We’ve placed a greater focus on hiring for our e-commerce fulfillment centers, as well as back-of-house omnichannel operations at our stores, as we prepare for the busy online selling season,” a Toys R Us spokeswoman told IR.

It’s no wonder, really. In its latest quarter, TRU reported that online sales were up 15 percent year-over-year.

Exhibit Two: Target is hiring about the same number of holiday workers as last year, but the 7,500 it’s hiring for e-commerce is up slightly from last year, Fortune reports.

As we reported last week (second item), holiday hiring is expected to be huge this year, with retailers, including Amazon, and delivery companies, like Federal Express and UPS, scrambling to crank up their workforces in advance of the hyper-hot holiday shopping season.

True, many of the seasonal jobs will be temporary, as the name implies. But the trend that the hiring pattern illustrates is likely to be here to stay.

You can’t get there from here

UPS delivery truck

You’ve heard the talk about how e-commerce is so great for retailers, because they don’t need all those stores and all those salespeople, and man, that must be a great way to lower costs and make more money.

But it’s not that simple, is it? Retailers do need people for their online operations — plenty of people. And warehouses where those people work. And you know what? It can be expensive to get the stuff that people buy to the people who buy it.

The Wall Street Journal story takes an interesting look at the cost of getting online orders to those who live in rural areas, where homes are far apart and often far from distribution hubs. That, along with the fact that rural residents are now turning to e-commerce for everyday essentials, like laundry detergent and paper towels, has made e-commerce a losing proposition in the wide open spaces.

In short, it’s been a boon for rural residents, who, the Journal points out, can buy big-city luxury from home, and a boondoggle for retailers who must pay to get the goods to the rural residents.

From the Journal:

“E-commerce hasn’t just reached rural America, it is transforming it by giving small-town residents an opportunity to buy staples online at a cheaper price than the local supermarket. It also provides remote areas with big-city conveniences and the latest products. Contemporary fashion, such as Victoria Secret bathing suits or Tory Burch ballet flats—items that can’t be found at Dollar General—are easily shipped.”

Now, when WSJ writer Laura Stevens wrote “staples,” she didn’t mean the kind you put in a stapler, but someone could indeed order a box of staples to be delivered to the middle of nowhere.

The Wall Street Journal story comes with a graphic that shows how retailers get clobbered delivering goods to more remote areas, including Mangum, Okla., where a retailer could lose $12.25 on every order of Tide Pods sold to the good people of Mangum.

The bigger story is that retail and digital retail, especially, is complicated. It gives. It takes away. But it continues to evolve.

Ikea is opening smaller stores, but you have to build them yourself

Ikea Store

Kidding.

Actually, Ikea told The Wall Street Journal that last year it opened more BOPIS locations than full-blown Ikea stores. (BOPIS? Buy online, pickup in store.) Oh, and, here’s a free account of the Ikea move, just in case the Journal asks for a subscription.

The BRRR is actually bummed about the whole thing. See, we’ve always thought Ikea was all about the thrill of the hunt — and then properly dressing your quarry once you get it home. OK, or just assembling it in an adventure that was worthy of an “Amazing Race” road block.

No? Who doesn’t love walking through a sprawling Ikea hunting for that perfect oddly named product. (You already know what video is going to accompany this post, don’t you?) And once you find it, the real fun begins: You can build it.

Anyway, by eliminating the need to wander through a gigantic Ikea store and most probably get disoriented, the retailer is eliminating half the battle — or maybe half the fun, depending on how you look at it.

Amazon is firing up its pop-up effort 

Apple pop-up store

Arrrgh. All the good pop-up store puns are taken. So, we’ll just go with telling you that Amazon is now in the pop-up store business, Digiday says.

We think they sit around at Amazon and ask each other: “What business are we not in now that we’d like to dominate eventually?” This week someone apparently chimed in with, “Pop-up stores.” OK, seriously……

The Digiday story said the pop-up idea was a way to give Amazon a chance to showcase its own consumer products, like the Echo and — we might add — the Kindle, Fire tablets and that phone. Is Amazon still selling that phone? No?

Turns out this pop-up thing is no passing fancy. Digiday goes into some detail about the PU wave that is sweeping the nation. It says that Pop-Up Republic, a database of pop-ups — yes a database of pop-ups — reports that pop-ups are a $50-billion industry.

As for Amazon, Business Insider offered a few details. (Amazon itself never offers details, but those Business Insider reporters are go-getters.) Amazon now has 16 pop-ups running, up from six at the end of last year. The Seattle behemoth is shooting for 30 by the end of the year, BI says, and 100 by the following year.

Business Insider also raises a tantalizing theory. The story notes that Amazon’s device team is running the pop-up show, which is a different management team than the one that is overseeing Amazon’s brick-and-mortar book stores.

Given the team in charge, BI concludes that the temporary stores are, and will, remain device focused. In fact, they may be part of a strategy to build a community around Amazon devices.

Hmmm. Devices. Stores. Community. Apple stores, anyone?

We think you can expect these Amazon stores to be popping up all over. (There. We said it.)

Quote of the week

“We’re not a grocer. We’ve been able to drive traffic without having a sushi chef.” — Target CEO Brian Cornell explaining to the Wall Street Journal that the retailer has no intention of becoming a major grocer.

Photo of Apple pop-up store by Josh Hallett and Ikea store by Håkan Dahlström 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.

 

reporter's notebooks in a trash can

Hanjin sinking; hiring spree; burrito drones: The BloomReach Relevance Report

Labor Day is dust. Vacation is over. School is in. Back to work. Take a minute, though, to read the BloomReach Relevance Report.

Hanjin needs to run a tighter ship

hanjin-cargo-ship

It’s never too early to start celebrating the winter holidays — especially for those in retail.

So let’s begin with the fact that there is a lot of stuff that should be in stores for the holiday shopping season that is floating around in Hanjin Shipping Co. containers, Bloomberg News reports.

Hanjin, a world shipping giant, recently filed for bankruptcy, as you might know, and that has ports kind of skittish about providing the sort of services shipping companies need to unload goods. And so, says Bloomberg, about $14-billion worth of products and material to make products is bobbing around out in the ocean.

Some of that is stuff that U.S. stores were hoping to sell during the holiday season, which officially kicks off on Thanksgiving, but which gets rolling a lot earlier.

The immediate problem might end soon, at least for U.S. retailers. A federal judge today granted Hanjin protection from creditors and allowed the company to spend the necessary money to unload its ships. But as USA Today reports, there are still many complications.

Hanjin was seeking the protection, because ports were refusing entry for fear creditors would ball up operations by trying to seize Hanjin stuff as a form of payment, the Bloomberg story says. The wire service reports that there were also worries about whether the shipping company would be able to pay for port services if ports provided them.

The ruling might ease the stress of some retail executives. It will almost certainly ease the stress of the crew members on those gigantic ships that have been unable to find any port in Tianjin’s financial storm. Bloomberg reports that some of the 85 Hanjin ships at sea are running out of food and water, which is never a good thing.

Presumably, relief is on its way.

E-commerce looks like it’s going to deliver a ton of holiday jobs

upstruck-copy

If that’s not enough holiday joy, it looks like delivery companies are going to be pulling their hair out trying to find enough workers to get all the holiday packages where they’re going, the Wall Street Journal reports.

So starts an annual dance for UPS, Federal Express, the United States Postal Service and retailers to attract the right number of seasonal workers for the huge spike in e-commerce orders for Christmas and the winter holidays. As you can see, the WSJ wrote a similar story a year ago.

That’s not to say the holiday hiring story is the same year after year. In fact, the recent WSJ story says, in 2014, shipping and fulfillment companies hired too many workers after finding themselves stretched thin the year before that.

The problem for companies like FedEx and Amazon and other retailers is that it’s hard to get it right. If they hire too many temporary holiday workers, they lose money. If they don’t hire enough temporary holiday workers, they lose money.

The damned-if-you-do, damned-if-you-don’t reality is a symptom of a turbulent time in retail. Commerce is shifting to online rapidly, sometimes more rapidly than experts have expected. Consumers are taking control and shopping how they want and when they want. Skyrocketing mobile traffic and increasing mobile conversions are just two examples.

Those shopping trends are naturally affected by larger economic trends, which in themselves can be hard to predict. This year, for example, the Journal points out that the job of finding seasonal workers is made more difficult by relatively low unemployment and the resulting upward pressure on wages for low-paid workers.

One thing that’s certain: The time to line up those workers is now.

Mobile is the future and guess who’s already killing it? (It starts with A.)

mobile-shopping

Did we say that mobile traffic was skyrocketing and conversions on mobile were increasing? Here’s a hint: We did.

OK, that isn’t exactly fall-out-of-your-chair-worthy. But every now and then, we come across a piece that really drives the obvious home. Or better still, puts in perspective a trend that is huge and growing. A trend like the move to mobile commerce.

Michael Lazar, writing on Huffington Post, dropped a bushel of mobile stats in a piece talking about the viral spread of mobile commerce. Stats like: 55 percent of traffic to top websites comes from mobile; more than 1.2 billion people access the Internet daily from their smartphones; 60 percent of consumers turn to their smartphone first when searching for a product; one-third of e-commerce is driven by mobile; the portion of digital transactions completed on mobile will increase from 19 percent today, to 27 percent by 2018.

You get the idea.

But maybe the biggest takeaway, as the kids say, are the stats about Amazon’s mobile dominance. (I know. Another shocker.) Lazar writes that mobile shoppers spend five times as much time on Amazon as on Target. Walmart is even farther behind. Amazon shoppers return to the site an average of six times a month, again burying Target and Walmart.

During the frenetic holiday shopping season, Amazon commands 70 percent of mobile commerce. More than 60 percent of shoppers who use a smartphone as their primary shopping device shop only at Amazon.

Again, you get the idea.

And while that news isn’t great for retailers not named Amazon, it is a clear indication that they need to get their mobile act together quickly and convincingly. There are still consumers out there who buy on sites other than Amazon and now is the time to attract them as customers.

Oh, that old line

At last, big data making the world a better place. Some guy in New York has run the numbers to come up with a strategy for how to pick the best line at a grocery — or other — store.

We could have saved him the trouble: Just don’t get in the line we’re in. Whatever line we choose immediately screeches to a halt.

Anyway, the New York Times lined up some line experts to gather tips on how to get speed-through checkout every time. Mathematician Dan Meyer offers this counter (get it) intuitive advice: Get behind a shopper with a full cart.

Here’s why, according Meyer, as relayed by the NYT: The big time sink in checkout lines is the infrastructure around checking out — the “hellos,” “did you find everything you needs,” “the do you need help out to your cars.” All of that stuff, which includes the act of paying, takes about 41 seconds. Scanning items takes about three seconds each.

So the NYT calculates (and you can too) that one shopper with 100 items will take six minutes to get through the line. On the other hand, four shoppers with 20 items each will take seven minutes to clear the line.

So don’t let those big baskets scare you off. And more importantly, don’t let your local store allow up to 20 items in the express lanes.

You are now free to shop until you drop.

Quote of the week

“It sounds simple, but it’s not. There are a lot of things to work out from a safety point of view and a policy point of view.” — Virginia Tech University President Timothy Sands told Bloomberg regarding a Chipotle plan to make deliveries by drone to the campus.

Photo of cargo ship by Jon Dawson and iPhone by Jason Howie  published under Creative Commons license. Photo of UPS truck and Reporter’s Notebooks by Mike Cassidy.

Mike Cassidy is BloomReach 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.

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Department store ups and downs; Amazon marches on: The BloomReach Relevance Report

They say the days are getting shorter, but actually they don’t get any shorter at all. You still have plenty of time to read the BloomReach Relevance Report. Dig in.

Department store fortunes are compartmentalized

Macys future

Maybe you’ve been reading about the trouble with department stores. Maybe you’ve been living the trouble with department stores. Foot traffic is down, comparing same-store sales is giving retail execs stomach aches, etc.

But the truth is, not all department stores are created equal. Look at this week’s news from JCPenney vs. this week’s news from Sears, the two stores that competed wildly for share of our parents’ sneaker wallet when we were growing up (while all the cool kids were getting Converse). Remember Jeepers? Of course you don’t.

Anyway, Penney had a good week. In fact, JCPenney is killing it. Bloomberg reports that the chain says that only 10 of its 1,000-plus stores are not profitable. That’s a far cry from Sears, which lost $395 million last quarter and has been closing stores like crazy. (More than 160 in the past 10 years according to a chart accompanying the Bloomberg story.

Closing definitely seems to be the thing to do. Macy’s, you may recall, just announced plans to close 100 stores.  But to paraphrase our dear mother, JCPenney figures that when fate closes a store, it opens a window.

The retailer has been negotiating with mall operators who have lost anchors in the Sears, Macy’s etal bloodbath, Bloomberg says, and landing good deals to move in and start doing business.

The retailer has also taken a good look at its core customers and sharpened its focus on “beauty, home goods and special sizes,” Bloomberg says. It will also up its e-commerce game and improve its customer service, the news service says.

The glowing report seemed unlikely only a few years ago when former Apple stores guru Ron Johnson took the JCPenney helm and did away with discounting among other things. His reign is pretty much recognized as a disaster for the retailer.

That was then. This is now. Stay tuned.

Ikea is the new Comedy Central

Ikea store

Ah, Ikea, you slay us. First, it was the BookBook and now, now it’s stars of the Ikea catalog.

The Swedish retailer just keeps rolling out hilarious advertising campaigns, this one listening in to the hopes and dreams of the people who stand among the hard-to-build furniture pieces for sale in Ikea’s product catalog.

The retailer is definitely an industry leader when it comes to using content to attract customers and encourage shoppers to buy. One key to Ikea’s success is not taking itself too seriously and tapping into cultural touchpoints.

The BookBook schtick is a spoof on Apple’s inclination for self worship when it comes to products.

The stars spot is another laugh-out-loud promotion starring sober and self-absorbed actors celebrating their big break of being in Ikea’s big book. We admit it makes us want to run out and buy a Gronadal rocking chair.

The retailer’s embrace of humor seems to inspire its customers. Sure, it’s an old favorite, but this user-generated video not only gives Ikea’s polished ads a run for their money, it might actually be funnier. Enjoy.

And no, we didn’t write this whole item just so we could get the “Hey Donna” video into the BRRR again. OK, yes we did.

Amazon eyes book-stacker of the world for next brick-and-mortar outlet

Amazon bookstore

Amazon’s brick-and-mortar empire apparently has its eye on Chicago as the next territory it intends to conquer, the Chicago Tribune reports.

You’re no doubt familiar with the Seattle behemoth’s back-to-the-future strategy of selling books out of little shops that you can stroll through and touch stuff. It was a thing back in the day.

Now, there has been some back-and-forth about whether Amazon is really going to open 400 stores and Amazon doesn’t say much about anything it’s doing — anything. It opened its first store in Seattle nearly a year ago.

And even though The Everything Store is opening stores that have books in them, they are not exactly like ye old book stores, as Fortune points out. The physical stores make plenty of use of data, which Amazon has plenty of. The New York Times Nick Wingfield took a tour of the place, if you want a better idea.

Forbes chalked the Amazon idea up to the current thinking around combining online and offline shopping and experiences into one seamless shopping excursion, which a lot of retailers are working on and struggling with.

And the fact is, given Amazon’s vast pile of data on most of America, the e-commerce giant might find some creative answers that are applicable to all sorts of retailers. That’s the good news.

The bad news: Amazon will find them first and scale them up at dizzying speed, potentially leaving the other retailers wheezing and collapsing on the race to the top.

For now, though, Chicago. The newest store, which as with most things Amazon, is a rumor, will open in the city’s Lakeview neighborhood — a very long fly ball from another throwback: Wrigley Field.

Holiday shopping will be more digital than ever

Macy's holiday

Are you ready for the slew of news stories about the holiday shopping season? Spending is up; it’s down; holiday has gone mobile; the store plays a role; the store is irrelevant. Yeah, we’re not ready either.

But here’s an early blast: Marketing Daily reports that Kantar Retail is expecting a 3.8 percent increase in holiday spending this year, which is in line with predictions for last year’s growth.

That’s newsy, as news goes, but the real news is that Kantar, a big consultancy, says that e-commerce will grow 16 percent over last year during the holiday season. A boost in digital commerce is hardly a surprise, but what’s interesting is the rate of growth.

E-commerce is growing fast.

Still not impressed? Bloomberg reports that by some measures, e-commerce now makes up 14 percent of retail spending — breaking the double-digit barrier that e-commerce hovered around but never cleared.

At any rate, there are a lot of signs pointing to a robust holiday season, including Internet Retailer’s report this spring. The only thing with all that? Predicting  holiday spending can be a tricky business and sometimes reality falls short of early hype.

There will be more predictions in the coming months. It will be interesting to see if they are in rough alignment. And then it will be interesting to see if they were right.

Quote of the week

“Now, from one retailer to another, our customer bases are quite different, so when your customers swear at my little old lady customers, who are just trying to come in to buy an album to protect their war time treasures, it’s a bit of a problem.” — Melbourne shop owner Charlotte Knightley on Facebook after traffic to her store was blocked by fans waiting to get into Kanye West’s pop-up store.

Photo of Ikea store by Seth Werkheiser, Amazon book store by Len Edgerly and newspapers by  Jon S published under Creative Commons license. Photo of Macy’s and holiday decorations by Mike Cassidy.

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

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Kanye pops up; tiny Targets; drone home: the BloomReach Relevance Report

Another week is in the books — unless you’re working the weekend. You’re not working the weekend, are you? Either way, take a peek at the BloomReach Relevance Report, guaranteed to make time fly.

Kanye is going to let you finish … shopping

Kanye West

Kanye West is giving his fans and, well, anyone, the chance to live “The Life of Pablo” by popping into a pop-up store to buy gear emblazoned with references to his latest album.

What could be better?

Seems it’s a pretty popular thing, given that fans in London lined up 15 hours early and stood in the rain for a chance to buy stuff.

Kanye’s Pablo pop-ups, which will operate in 21 cities, for this weekend only, provide a great retail laboratory. They show the power of scarcity: Only 21 shops for only 30 hours, or so, each. And the power of mystery. Apparently, nobody provided in advance details regarding the stuff you could  buy at the Pablo places, although hoodies and T-shirts were mentioned ahead of time. And People offered a few ideas.

The pop-ups also feature two elements that are key to retail success today: unique products and a unique customer experience. The pop-ups aren’t stores; they’re a happening, bringing together a community united in a love of Kanye. And they’re apparently selling hoodies and T-shirts imprinted with Kanye-isms and the name of the city where they are sold — items that presumably will be hard to get elsewhere.

As Deloitte Digital has pointed out, unique products and unique experiences are the dynamic duo of fending off competition in the era of Amazon and innovative, upstart competition.

It will be interesting to see how the global experiment comes out. We do have a couple of hints: First, the lines forming half a day before the pop-ups opened. Second, the New York experience. Kanye popped up a similar shop in New York in March. That store reportedly sold more than a cool million in goods, Money says.

Kanye. Ka-ching.

Just one word kid: warehouses

warehouses

You should read this story because it contains the world “do-dad.”

But there is so much more to this Bloomberg story about the closing of brick-and-mortar stores and the need for more warehouse space. For instance, there is a nifty graph that shows how the world of retail is being turned upside down.

You know how analysts and others fluent in business speak like to talk about the “changing landscape” of this or that? Well, the e-commerce boom is literally changing the landscape. And when we say “literally,” we literally mean literally.

Anyway, falling foot traffic in stores is leading plenty of big retailers to close plenty of stores. When these are stores that served as anchors in malls, other stores often close. The hulks of the anchors are sometimes repurposed — for instance as climbing gyms.

Or, as the do-dad-containing Bloomberg story points out, the space is transformed into restaurants, movie theaters and such.

Meantime, as retail spending shifts from in-store to online at an accelerating rate, those providing online commerce need warehouse space for their refocused businesses — lots of warehouse space, as another Bloomberg story explains.

In fact, by one account in the story, online retail requires 17 percent more space for the same amount of sales than does traditional retail. (Lot of individually packaged products and broad assortment.) Another study quoted by the do-dad story says e-commerce requires three times more space than traditional retail, but that one’s a little hard to swallow.

All of which is driving up the value of commercial land and real estate investment trusts (REIT) with commercial property in their portfolios, Bloomberg says.

You’ll be shocked to know the trend is being led by Amazon — equally shocked, we’re sure, to learn that the trend is driving up warehouse rents (up nearly 10 percent in a year).

In addition, for the most part, these aren’t any old warehouses.

E-commerce operations need warehouses that are close to where people live. Customers want their goods now and every mile that goods need to travel pushes delivery farther away from now.

It’s intriguing to think how these shifts will change the look and feel of our cities and suburbs. As big retailers close physical stores, will malls morph into fulfillment farms packed with distribution centers for the retailers that once sold their goods from stores?

Or think about big city shopping districts. Last week, Macy’s announced it was going to close 100 more stores. The announcement had a familiar ring, as other retail chains have also moved to shut down physical stores.

Macy’s has some beautiful, high-profile buildings in places like New York, Chicago and San Francisco. They occupy marquee addresses. Investors have been agitating for selling the stores off, as their real estate value outstrips their value as emporiums.

DCIM100GOPRO

Still, it’s a little hard to imagine such retail palaces reimagined as warehouses — and no one has seriously proposed that. But what’s to become of them? Center city condos? Server farms? Retail museums?

This National Real Estate Investor piece (also linked above) suggests the venerable retailer might take on roommates to squeeze more value out of those key locations. The suggestion is a reference to the store-within-a-store idea that is not foreign to Macy’s. It’s also a more practical idea than our more pedestrian ideas.

The truth is, brick-and-mortar retail is going to survive in some form. And legacy department stores, like Macy’s, might well want to hang on to their landmark stores as a way to provide a rich experience that connects consumers to their brands.

And sure, given the size of the downtown stores, the buildings could pull double duty as distribution centers that are located in congested and highly populated areas.

Meantime, if you’re looking for an investment, we’ve got one word for you: REITs.

That was fast: the ups and downs of American Eagle and Urban Outfitters

It seems only right that fast-fashion teen retailers like American Eagle and Urban Outfitters are facing peer pressure. Isn’t that what being in the teen world is all about?

OK, that was mean-girls mean, but the Wall Street Journal, in a look at the mixed fortunes of the two retailers, says the on-again-off-again nature of teen fashions means that AE and UO should trade at discounted prices compared to their peers.

Both of them are better off than American Apparel, which is facing the business equivalent of being kicked out of the clique. Reuters reports that AA, which emerged from Chapter 11 bankruptcy earlier this year, has hired a firm to explore a sale.

And, OK, you want high-school drama? Some speculate that one of the potential buyers is Dov Charney, the founder and former CEO of American Apparel, who had a colorful (and disturbing) run before being pushed out. Charney tells Reuters he’ll have to see what buying his old job back would cost before he makes a move. In other words, it’s not the case that American Apparel and Charney will never, ever, ever get back together.

As for American Eagle and Urban Outfitters, their mixed stock fortunes are a reminder of the “fast” in fast fashion. What’s hot today is ho-hum tomorrow and that apparently applies to the markets’ embrace of the retailers’ stock. The Journal notes that American Eagle stock rose 3 percent on its positive earnings report, while Urban Outfitters’ upbeat report sparked a 15-percent jump in its stock price.

Nobody ever said life was fair, as any teenager can tell you.

This e-commerce thing is harder than it looks

Fedex truck

Consumers’ dramatic shift to e-commerce is often seen as a savior for brick-and-mortar stores that have for years been suffering declines in foot traffic. Consumers increasingly are buying online. Why not sell to them there?

But there is one thing that often gets lost in the shuffle. Selling online is really expensive — especially when it’s not your core competency and your customers are demanding free shipping.

The latest reminder comes via Wall Street Journal writer Brian Baskin and the time he ordered one carton of yogurt on Jet.com (to add to an order so he could hit the free shipping threshold). The bulk of his order arrived in one big box. His 5.3-ounce yogurt arrived later in a separate box nearly as big as the first.

They had come from different warehouses — one warehouse for most stuff, the other warehouse for stuff that needs to be refrigerated. Yeah, Jet told Baskin, it probably cost more than the $1.69 cost of the yogurt to ship it to him.

But even in cases that aren’t as kooky, fulfillment — the gathering, packing and shipping of packages to your house — is a costly proposition.

It’s tempting to think of the cost-savings potential of e-commerce: No store, no sales force helping and selling to customers. But the costs, particularly for retailers with a brick-and-mortar history that are expanding online operations, are often an afterthought. As an earlier Journal story pointed out, there is sophisticated software, warehouse redesigns, employee training. Not to mention an overhaul of supply chains that weren’t designed get products to the homes of people who order in all manner of ways.

(Here’s a Retail Dive recap that does not require a subscription.)

Some see a happy medium for physical stores in the buy-online-pickup-in-store model. But that comes with its own complications, including training store associates to be pickers and packers.

It’s hard to say where this is all going. It could be that tiered delivery options become more common. Want it fast? Pay up. Willing to wait? Pay less — or nothing at all for — delivery.

However it plays out, it’s hard to imagine that legacy retailers won’t figure out a way to provide delivery and keep costs under control.

Drone home

This Amazon drone thing is starting to look kind of real. GeekWire reports that the Seattle company has filed patent applications that lay out a fleet of diverse aircraft designed to get you your marshmallows, sweat socks, bluetooth speakers etc. within half an hour.

Remember when even Fake Steve Jobs was pretty sure that Jeff Bezos’ drone announcement was nothing more than a publicity stunt, which did land him on “60 Minutes?”

Well, GeekWire says the latest paperwork to surface shows that Amazon is proposing several different designs — quadcopters, octocopters and fixed-wing aircraft — that can recharge themselves at docs attached to street lights and survive the inevitable crash.

The autonomous air force is something that Amazon has been talking about for quite some time, of course, but various regulatory rumblings, tests and news like the patent applications, have us thinking we’ve been a little too flip in our joking around about the plan.

OK, so maybe the regulatory rumblings sound a bit like they could ground Amazon. But notice that wording about “exceptions” to the rules. That’s what big companies do. They milk the exceptions. Not to mention, the FAA rules apply only to the United States and there’s a whole big world out there.

No word on whether you have to speak with a British accent in order to get Amazon Air to work. Joking. Joking.

Aim for a smaller Target

Bullseye the dog

As retail continues to change at warp speed, it’s sometimes wise to adjust your Target. The Minneapolis retailer continues to roll out its tiny Target format, according to the San Francisco Business Times, which says Target will open a San Francisco outlet that is less than one-fifth the size of its biggest stores.

While Target and others have been fiddling with store formats for a long time, one of the key story lines of retailing today is the right-sizing of physical stores. Of course, the key is the right size for the right place.

Earlier this decade, Wal-Mart Stores decided to get small, focusing on modest express and neighborhood stores in addition to its stable of gigantic megacenters. Earlier this year, the Bentonville behemoth concluded that wasn’t such a good idea, Money reports.

As for Target, the Business Times reports it is cautiously moving in the opposite direction. The chain operates 23 small stores nationwide now and expects to more than double that number in the next two years, the BT says.

While opening another 25 stores, or so, sounds less than ambitious, the plan comes at a time when closing stores is the thing to do.

The idea behind Target’s tiny stores is to get outlets into heavily populated urban areas, where big Targets don’t make much sense, the Business Times says. The stores, which feature groceries, personal tech and accessories, makeup and clothes, will apparently aim for the pop-in-for-something-quick sweet spot.

Sure, the idea sounds a lot like Wal-Mart’s failed foray into the big city, but Wal-Mart’s problems might have been due to the retailer’s distribution strategy and misguided merchandising, according to a Money story, also linked above.

Probably best to give Target’s experiment some time before deciding whether it has hit its mark.

Quote of the week

“The U.S. is the most overstored it’s ever been. How overstored is a question we won’t be able to answer until we understand how much business is being transferred online.” — Jan Rogers Kniffen, retail analyst to MoneyWatch.

Photo of Kanye sign by Jennifer Sando, warehouses by Paul Stein and newspapers by Jon S. published under Creative Commons license. Photo of Macy’s, FedEx truck and Bullseye by Mike Cassidy.

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

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Macy’s closings; brighter earnings; Amazon drones: The BloomReach Relevance Report

Summer is fading fast, but that doesn’t mean you have to. Refresh yourself with a quick read of the BloomReach Relevance Report.

Macy’s plans to close another 100 stores

Macy's

At least 100 Macy’s stores will power through their last holiday shopping seasons and then quietly fade away, according to CNN Money and a host of other outlets.

The store-closure announcement this week was one of those surprises that wasn’t exactly a surprise. The iconic retailer has been talking about store closures for years and recently announced that 40 stores would be shuttered.

But these 100 come on top of that move. And the closings create a picture of a business in steady decline — and we happen to know something about that, having toiled in the newspaper business.

The New York Times points to discounting and e-commerce as the culprits. Macy’s itself, according to CNBC, says there is simply too much dang retail in the United States — 7.3 square feet for every man, woman and child, compared, for instance, to 1.3 square feet in the United Kingdom.

It’s a big move by a retailer that has been making big moves — CEO Terry Lundgren is stepping down, they’re talking about selling landmark properties, they’re ramping up a discount operation. Nearly 15 percent of Macy’s 675 full-line stores will close under the new plan. There will be layoffs. Lives will be altered. Mall traffic is likely to drop when a key anchor shuts down.

It’s hard not to feel a sense of doom. Unless you’re an investor; they sent Macy’s stock up 17 percent on the news.

“I felt like we were going to reach a tipping point that would force a vicious, fundamental reset in the physical retail world and that’s what we’re seeing,” the Los Angeles Times quoted retail expert Richard Church, of Discern Group Inc., saying.

Tipping point = not good.

But the simple narrative that e-commerce is killing brick-and-mortar is too easy. What we’re seeing is a major and rapid shift in how consumers shop and what they expect out of retailers.

Apparel spending is down and there are signs that consumers are less interested in buying stuff and more interested in paying for experiences, as the The Washington Post among others have reported.

In the new retail order, the store is just another device — like the laptop, smartphone or tablet. There are times when it works best for shoppers, other times when it will do and times when a different devices is the way to get the job done. And that job could be discovery, seeking inspiration, comparing prices, quality or features.

Layer on top of that the way people shop differently for different things — think electronics vs. apparel — and the complexity of the shifts in retail become even clearer.

It seems that Macy’s is keeping that craving for experience in mind as it revamps itself. Word from the Ohio-based retailer is that it will focus on adding more and better staff to its remaining stores and that it will invest in technology, presumably to improve its online experience and possibly to better integrate online and in-store shopping.

It’s important to note that Macy’s says most of the stores it is closing are making money. The problem: The revenue from, and profitability of, those stores is declining. That’s how you eventually don’t make money. And some of the stores, the company says, are more valuable as real estate to be sold than they are as retail locations.

On the other hand

Kohl's sun-splashed

In better news, well OK, in news that’s not as bad: Four big retailers in the past two days have reported some better-than-expected financial results. Still, you know things are rough when one outlet reported on the story saying that Macy’s and Kohl’s reported “better-than-feared” results.

Be afraid.

And the story, picking through earnings reports from Macy’s, Kohl’s, Nordstrom and JCPenney, is one of low expectations. Take Penney: The retailer lost a nickel a share in the second quarter, when analysts were expecting a 15-cent loss.

Macy’s? Yes, same store sales were down, but only 2 percent, instead of the 7.4-percent drop it experienced in the first quarter of the year.

And so it goes. These are tough times for brick-and-mortar operations and the people who work for them. Outplacement firm Challenger Gray & Christmas reported that nearly 44,000 retail workers have been laid off in 2016 alone.

And then there is Amazon

Amazon Box

Farhad Manjoo says this whole Amazon drone thing isn’t just some whacky idea that seems to be right out of the HBO comedy “Silicon Valley.” Instead, he says, this Amazon drone thing is a serious deal — a serious deal that Amazon says is going to lead to delivery by air within five years.

And Manjoo isn’t the only one taking this seriously. His New York Times story is an interesting look at how far and fast Amazon is moving when it comes to delivery. There are the trucks, the air force and the drone work.

Manjoo notes that bulking up on delivery capabilities is probably not an Amazon effort to squeeze out FedEx, UPS and the post office, but more likely about having as much delivery capability as is humanly possible.

Oh wait. Did we say humanly? That might not be quite right. Manjoo writes that Amazon has a more ambitious plan: It wants to do away with the hassle of roadways and traffic and the messy business of having to deal with human workers.

He sees, or says Amazon sees, a world of robot-run warehouses that dish out products to driverless trucks and pilotless drones.

And while all that sounds dramatic, it’s nothing compared to the conclusion of a Deutsche Bank report that Manjoo quotes. The analysts who wrote the report concluded that if Amazon pulls off its drone-robot-driverless-truck strategy, it could cut the company’s delivery costs in half, meaning it would be game over for brick-and-mortar stores.

Retail stores “would cease to exist,” Manjoo quotes the report as saying.

Macy’s would be closing a lot more than 100 stores. We’ll go out on a limb and say that it isn’t going to happen. Oh, the drone delivery and driverless trucks are coming. Robots are here.

But until robots replace us as consumers, consumers are going to want to go to the store. Not for everything and not every day. But shopping is one of America’s pastimes. That goes for many other countries in the world, too.

It is not always about convenience, speed or even buying something. Shopping, for some, and at times, is an outing; it’s an experience. And it’s become more of an experience as retailers realize they need to provide more than a transaction.

Take me to your greeter

pepper_carrefour_1

Amazon is not the only outfit turning to robots in the interest of retail. Pepper the robot recently landed a job at a shop in Silicon Valley, but like so many jobs these days, it’s a temp gig.

The Mercury News, San Jose, Calif.’s daily, reports that Pepper will be working the floor at B8ta, an electronics shop in Palo Alto. The little white robot, by SoftBank Robotics, is meant to take on a human look. And it’s meant to be helpful to shoppers, which the Palo Alto version isn’t yet.

Turns out the Palo Alto Pepper mostly talks about what it can do, the Mercury reports. The idea is that one day, Pepper will be able to answer questions about products, help customers find what they’re looking for etc.

Mercury writer Troy Wolverton notes that Pepper has the ability to ask consumers questions and observe the products they are looking at. It’s not a stretch, then, to imagine the day when Pepper will be able to make personalized product recommendations to consumers.

That would be a step toward taking the best of shopping online and move it into a brick-and-mortar store. Such online/in-store cross-pollination is inevitable — and it’s one way that physical stores will remain relevant as more and more shopping moves online.

Quote of the week

“You have had two months of very strong job growth. It just seems very odd that spending would be weak. I will wait for the revisions before declaring July retail spending means anything more than random volatility.” — Steve Blitz, chief economist at M Science, talking to Reuters about flat retail sales figures for July.

Photo of Pepper courtesy of SoftBank. Photo of newspapers by Jon S. published under a 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.

RelevanceReport 5.30.14

Saving retail, Walmart vs. Amazon, mobile miss: The BloomReach Relevance Report

A bit of a juicier-than-usual BloomReach Relevance report. You’ll be tempted to eat it with a fork, but use a spoon so you’ll get every drop. 

Macys future

Hints at the future of retail from some old veterans

We were reading our local newspaper the other day and it became clear to us that Nordstrom is the future of retail. Unless Macy’s is, which is the thought we had when we turned the page. (Yes, turned the page, as in a real newspaper.)

And, OK, the truth is that neither of them is literally the future of retail, though their stories represent two paths forward for legacy department store chains that have been scrambling to hold onto shoppers, revenue and even control of their companies.

Reading stories about their efforts, just pages apart in the same business section, got us thinking about the different steps retailers can take or are taking to remain viable in the era of Amazon.

Granted, it sounds odd to be talking about the old school retailers as the future when all you read about is the trouble they — and other department stores — are having.

But if you read about what Nordstrom says it wants to do and experts say it should do, you’ll hear echoes of what some analysts have been saying is the way retail is heading. For instance:

  • Both James Nordstrom and Erik Nordstrom (cousins) were quoted in the Los Angeles Times saying that the retailer had to build a better customer experience if they wanted to keep people coming.
  • James N. said the company’s online business was crucial. (And some see online execution as a reason to be bullish on both Nordstrom and Macy’s.)
  • The company has said that it wants to keep the clothes it sells relevant to customers by stocking the store with apparel that is hard to find.

All three points remind us of Deloitte Digital’s Kasey Lobaugh and his work on the Retail Volatility Index, which looks at the market share that is moving from traditional retailers to upstarts.

The way retailers can inoculate themselves, according to Lobaugh’s research: Either offer the sort of experience that consumers can’t find elsewhere or offer products that consumers can’t find elsewhere. And the best bet? Do both.

That sounds a lot like building a better customer experience and stocking the store with apparel that is hard to find, which sounds a lot like what Nordstrom says it is going to do.

And Macy’s?

OK, they’re going a different route to beef up the customer experience — and in fairness this story is about only part of what Macy’s is doing. But work with us here. Macy’s, the Associated Press story that appeared in our local paper says, is testing a mobile tool powered by artificial intelligence that will help shoppers in the store.

The tool has some muscle behind it. It relies on IBM’s Watson technology to answer questions that shoppers have. Given that it’s an AI product, it continually learns and continually learns about customers so it can provide a more personalized experience as it goes.

On the surface, it sounds like a good way for Macy’s to save money by trimming the number of sales associates it employs. But that’s not the plan, according to the AP. First off, consider that surveys show a majority of shoppers actually prefer the DIY method of getting help in a store.

But more importantly, Macy’s intends to take advantage of the self-help option by freeing up associates to work on the toughest customer cases.

In many ways, it’s not unlike the approach taken online by forward-thinking retailers. With powerful machine learning tools now available, some online operations have turned to machines to curate the bulk of their web pages and to ensure that customers are greeted with relevant recommendations when they search.

That allows humans to focus on the best-performing pages to ensure that the retailer doesn’t miss out on the revenue potential of its most sought-after products.

“Godzilla vs. the Smog Monster” is just like Walmart vs. Amazon

walmart.com

The battle of the bazillion-pound gorillas in e-commerce rages on with Walmart making great strides recently in digital sales, but still overshadowed by Amazon.

Recently, a guy who was a marketing honcho at Walmart told VentureBeat that the key to the Bentonville behemoth’s turnaround was its push for personalization.

Brian Monahan — who was vice president of marketing at Walmart — said that in an era when consumers are constantly connected and can buy in an instant, it’s vital to offer consumers what they want (on an individual basis) when they want it.

“I’ve witnessed first-hand the power of personalized marketing to really drive a business at scale,” Monahan told VentureBeat. “We grew sales by a couple of billion dollars, powered by personalized marketing. It works.”

No question Walmart has spent the last several years stepping up its e-commerce game, buying Kosmix, expanding its technology wing and spending hundreds and hundreds of millions on e-commerce improvements.

The story says that Monahan was instrumental in pushing walmart.com past Amazon to become the “second-most-highly trafficked” site in e-commerce. That’s no doubt good and Walmart is no doubt huge (bringing in $13.7 billion in 2015), according to Internet Retailer), but it’s not really clear what being the “second-most-highly trafficked” site means.

Walmart did surpass Amazon in average monthly unique visitors, 130 million to 115 million, according to Internet Retailer’s Top 500 Guide. But Amazon still reigned supreme in average monthly visits, 725 million to 260 million, and in one other metric that most people pay some attention to: revenue. Amazon’s number was $107 billion last year.

Amazon’s head is in the clouds

Amazon logo

By the way, Amazon just scored its third quarter in a row of record profits. As the New York Times points out, the days of sneering at the Seattle giant’s money-losing ways appear to be evaporating into the clouds — or a cloud-service model anyway.

Here’s CNBC’s Amazon story for those who like video and free access to web content.

While the online retailer gives other stores fits, where Amazon is really killing it, profit-wise, is in its business that provides cloud services to all manner of enterprises that have embraced the new computing model.

Gone, increasingly, are the back rooms of computer servers sucking up electricity and dollars as they hold the corporate jewels in terms of data. Big data has gotten huge and it requires the ability to scale up and down quickly and economically. That’s the cloud and Amazon put itself in a position to capitalize on the new paradigm.

Operating income from Amazon’s web services has more than doubled in a year, the Times reports, soaring to $718 million from $305 million. Oh, and you want a number that is actually off the ridiculous meter? The NYT says Amazon’s most recent quarterly profit of $857 million is up more than 800 percent over the period a year ago.

Zowee, to use the financial term.

All that said, you might think Amazon is letting up on the gas when it comes to e-commerce. No such luck, retailers not named Amazon. In fact, the Times quotes Amazon’s CFO saying that the company would open 18 new delivery warehouses in the third quarter, up three times from the third quarter last year.

As one analyst put it to the Times, Amazon is defying gravity.

Look out below.

Quick hit

Here’s a head-scratcher, or maybe more of a bang-your-head-against-the-waller: Only 20 percent of companies around the world have an established mobile marketing strategy, according to Gavin O’Malley’s column in Mobile Marketing Daily.  
O’Malley cites an Adobe survey that asked whether companies had a mobile strategy that was at least a year old. And he points out that, that reality makes no sense as mobile is taking over the world.

Well, he didn’t say that. He used numbers that say the same thing.

Why would anybody buy on mobile?

Mobile shopping

You’d have to figure that retail is doing much better on mobile strategy than global companies at large. But that raises a question: What is that strategy exactly?

Why do we ask? Well, because it turns out that the average mobile checkout requires shoppers to fill in 13 to 16 fields, according to Chuck Martin of Media Post.

And by “fill in,” most of the time we mean type stuff.

That’s insane.

Martin’s piece, which largely depends on research from L2, points out that consumers now spend 60 percent of their shopping time on mobile and that time on mobile overall increased 78 percent in the last two years.

People live on their mobiles and they will only be living on them more so a year from now.

But you wouldn’t know it from the experience that retailers are providing. The Media Post story says that single-page checkout on mobile is still rare. Martin breaks down the availability of one-page checkout by retail vertical. Spoiler alert: It ranges from 25 percent for beauty to 40 percent for sportswear.

The huge gap between mobile traffic and mobile conversion is sometimes posed as something of a mystery, but in truth, if you read Martin’s story, it’s hardly a mystery at all.

Quote of the week

“They want to make sure they can invest more of the equity in Walgreens.com,” said Brian Owens, a director at the consultancy Kantar Retail. “Drugstore.com and Beauty.com are distractions.” — Brian Owens, of Kantar Retail, told The Wall Street Journal, regarding Walgreens’ decision to shutter the two pure play e-commerce sites.

Photo of iPhone with apps by Jason Howie and newspapers by Jon S. published under Creative Commons license. Amazon logo courtesy of Amazon. Additional photos by Mike Cassidy.

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

RelevanceReport 5.30.14

Dollar Shave Club; Back to school spending; bye-bye VCR: The BloomReach Relevance Report

Take a break from Pokemon Go. Read the BloomReach Relevance Report.

Back to school is back

Back to school

The National Retail Federation says this back-to-school season is going to be a good one for retailers, in part because families have been putting off spending in recent years.

The NRF says families will spend about 11 percent more than last year, or $75.8 billion, to get their kids (including college kids) ready for school. NRF chief economist Jack Kleinhenz said consumers’ general optimism about the economy is another factor in higher spending expectations.

Speaking of optimism, we’ll point out that the CNBC report above notes, the NRF’s figures are more optimistic than some other analyses.

The retail federation says its survey of consumers indicates that families of students in Kindergarten through high school will spend an average of $673.57 on clothes, supplies etc. needed for school. Deloitte’s survey, on the other hand, put the figure at $488.

Phil Wahba at Fortune dug into the NRF numbers and suggested that the $9.54 billion that families told the NRF they’d spend on apparel might bring some good news to a group of retailers that haven’t had any lately: department stores. In particular, Wahba mentioned Kohl’s, Macy’s, J.C. Penney, Gap, Abercrombie & Fitch and American Eagle.

So, yeah, all of them.

Beyond the raw numbers, the NRF survey, conducted by Prosper Analytics revealed some interesting trends, key among them a bigger shift to online shopping among the back-to-school crowd. OK, not shocking but worth watching.

The NRF said that 46 percent of those surveyed said they would buy back-to-school items online, up from 36 percent in 2015. It’s important to note that that 46 percent won’t necessarily shop exclusively online.

Unilever subscribes to Dollar Shave Club model

Every now and then some quirky, money-losing e-commerce startup gets bought for $1 billion by a global giant. OK, rarely. But so it was for Dollar Shave Club this week, which Unilever bought for the magic unicorn number.

Cue various merger and acquisition jokes about taking a haircut and shaving millions off the deal. Or how about something about the razor-blade model? They sold the razor for cheap, but now Unilever has to buy the blades forever?

We digress. The deal was big, the third biggest e-commerce sale ever, according to the Yahoo Beauty story linked to above. And that’s cool, except as Bloomberg points out, some experts insist that the deal didn’t have anything to do with DSC being an e-commerce company.

Whatever the case, the time seemed right. Dollar Shave Club was on fire, eating into the razor blade market controlled by big outfits like Procter & Gamble’s Gillette. The Wall Street Journal reported that Gillette’s share of the blade and razor market fell from 71 percent in 2010, before Dollar Shave Club, to 59 percent last year, after Dollar Shave Club.

Meantime, Dollar Shave Club was rounding up venture capital, customers and sales through high-quality content and clever marketing. Its secret sauce was building a relationship with the men who were and became customers, as the Bloomberg story says.

The company’s revenue was expected to grow to more than $200 million this year from $152 million this year, though it was not yet profitable. Profitability, however, was in sight, according to CEO Michael Dubin, who indicated the company would ride to profitability on the back of what are known in the industry, or the company anyway, as butt wipes. Seriously.

Anyway, Dubin might have tried to throw reporters and others off the M&A trail at Shoptalk in May, when he was interviewed on stage by CNBC’s Courtney Reagan, who asked him whether the company was preparing for an initial stock offering.

“It’s not on our roadmap right now,” Dubin said. “I don’t think I was put on this planet to be a public company CEO.”

TGI Friday is Hamming it up to sell burgers

Hamilton the Musical

OK, we’re big “Hamilton: An American Musical” fans and partial to Fridays (which we just call BRRR day). So what could be better than an ad campaign for TGI Fridays playing off Hamilton the musical?

Well, a lot of things.

Yes, we do have a sense of humor and we suppose the full-length ad and little video snippets have their moments. But somehow selling out a beautiful, transformational, paradigm-shattering Broadway musical seems all wrong. (OK, maybe the show is a little bit about money.)

Anyway, it’s not exactly sacrilege and we’ve got to hand it to TGI Fridays for reaching for something a little loftier than a Pokeman Go cross-promotion.

But one question for TGI etc.: If you really want to cash in on the “Hamilton: An American Musical” vibe, why is Hamilton white?

But does the Starfleet get same-day delivery?

Who knew Amazon’s Jeff Bezos had a thing for dilithium crystals? The folks who made the latest Star Trek movie, that’s who. By the way, has Star Trek reached the 1,000th sequel mark yet?

Yep, the head of The Everything Store scored a cameo in “Star Trek Beyond.” And like so many actors, it appears he’s been type cast. Yep, Bezos plays an alien. (OK, that wasn’t nice.) But thanks GeekWire for pointing out that Bezos is wearing make-up in the photo accompanying the post.

 

It’s not so much of a stretch for Bezos, who besides running Amazon and owning the Washington Post, founded space company Blue Origin.

 

So, we should probably insert some joke here about boldly going where no one, blah, blah, blah, but that’s too easy. We’d rather offer our sympathy to the legion of miserable Amazon employees who now can no longer fly to the moon in order to get away from their famously demanding boss.

Let’s rewind one last time

VCR

So, the show’s over for the video cassette recorder.

What do you mean, what’s that? The VCR, dude, the tape machine, the way people watched TV when they wanted to before DVRs, Netflix, Hulu and Amazon. The New York Times reports that the last company making the machines, Funai of Japan, was ending the line because it can’t get the parts it needs.

Yes, you can still buy a VCR and you’ll be able to for quite awhile from the looks of Amazon. But eventually, you’re going to have to figure out another way to watch that closet full of 99-cent tapes from the Goodwill that you’ve collected.

We’re not going to lie: This item is a little bit outside the lines of our usual fare. The thing is, we have a soft spot for the VCR, as it was developed about 12 miles up Highway 101 from where we’re writing this.

Ampex, which developed the first viable VCR, was a classic Silicon Valley company before people even talked about Silicon Valley. (Check out the size of the machine.) It had a Bing Crosby connection and the sort of can-do attitude that has brought us, well, DVRs, Netflix, Hulu and Amazon, among other more significant technology developments.

Here’s Emmy-award-winning engineer Fred Pfost talking about the first big demo of the VCR. (Yes. Emmy award winner. For the VCR.)

 

It’s a reminder that no generation has a monopoly on innovation and risk-taking and a reminder of what’s possible when smart and determined people work together toward an ambitious goal.

Quick take

OK, all we’re going to say is, if we paid $345 for our kid to wander around Disney World for three days, there is no way he’d be playing Pokemon Go. (See No. 3) You’re welcome.

Quote of the week

“He intuitively understood how to use content and conversation as marketing at a time when legacy brands were still shouting at their customers with TV ads, purchased without actually knowing their customers.” — Venrock’s David Pakman, writing about Michael Dubin and Dollar Shave Club on the occasion of the company’s $1 billion sale.

Photo of school kids and Hamilton marquee by Mike Cassidy. Photo of VCR by DRs Kulturarvsprojekt 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.

 

RelevanceReport 5.30.14

Pokemon Go, Prime Day and mall rock walls: The BloomReach Relevance Report

What do you call the days of summer just before the dog days? The puppy days? Don’t worry about it now, you’ve got time. Read the BloomReach Relevance Report instead.

Prime Day primes shoppers to buy

Amazon Box

Here’s a little something for your post-holiday depression. What do you mean, what holiday? Why, Prime Day, of course, one of the shoppingest days of the year!

By most accounts, and particularly by Amazon’s account, the Seattle-based retail giant knocked it out of the park on its second Prime Day. (By the way, shouldn’t it fall on a date with a prime number? Just saying.)

It was Amazon’s biggest sales day ever, the company said. In fact, sales were up 60 percent worldwide over Prime Day 2015 and up 50 percent in the United States. And chances are the Big A added gobs of Prime members, though it doesn’t discuss that in polite company.

Of course, our culture tends to be all about building something up to tear it down, so we offer this buzz kill Prime Day story from Wired, which rightfully points out that Amazon hasn’t released actual sales figures, making the magnitude of the success hard to quantify.

That said, Prime Day isn’t a big day only for Amazon. On Prime Day 2015, other online retailers benefited from a halo effect, according to a ClickZ story, based on BloomReach data. (Us? Brag?) No doubt shoppers hit other sites to price compare and to pull the trigger on purchases inspired by Amazon’s offers.

That said, some retailers took a head-on approach to cashing in on Prime Day by running competing sales.  

No question Prime Day is getting some serious and widespread traction. If this keeps up, maybe we’ll get Prime Day 2017 off.

Rocky times for malls has retailers climbing the walls

Rock Climbing

Maybe they’re going to have to stop calling them shopping centers. Turns out the shopping part is on the wane as recreational and entertainment options replace anchor stores in some lower-tier malls, Bloomberg reports.

This, of course, comes as no surprise to loyal BRRR readers. (Hi mom!) We’ve been talking about this move toward customer experience for some time. The idea that shoppers need a reason to visit a brick-and-mortar store beyond a simple transaction apparently applies to shopping centers, too.

Adding sit-down restaurants that are a step-up from the food court and movie theaters has been a strategy for years, as CNBC reported in 2012. The idea is to make the mall a place to go and a place to be. With luck, some shopping will break out, too.

No question the mall business, like all of retail, is in a period of dramatic disruption. The rise of dining and entertainment in a mall setting is one symptom. Another less defined, but more intriguing response could be the move of mall-based stores to hipster neighborhoods, a Cushman & Wakefield analysis says.

For its part, Bloomberg’s story looks beyond food and theater. It latches on to the rock climbing craze and notes that vacant anchor stores make a dandy location for rock climbing gyms, like the 24,000-square-foot number in Salt Lake City that’s inhabiting a big space that once housed a Smith’s supermarket.

And it’s not just rock climbing outlets. Urgent-care centers are moving into malls. (Nice synergy with the rock climbing.) Other diversions are popping up, too. (Laser tag, anyone?)

And while focusing on experience is sound business strategy, the Bloomberg story talks about the transformation occurring at strip malls. It’s possible that for some malls, the move to lure rock climbing gyms to abandoned stores is more out of financial necessity than brilliant strategy.

OK, yes, Pokemon Go

Pokemon

The BRRR has a tendency to roll our eyes at the latest everyone-is-talking-about-it-fad. It’s how we burnish our way-too-cool image. But this is Pokemon Go and it will not be denied.

What’s Pokemon Go? What? Have you been living under a rock? And if you have, have you seen Mew there?

Anyway, PG does have some major retail ramifications. Stores are unleashing potions that attract Pokemon to their businesses, luring those hunting Pokemon along with them. And then, of course, there is the Pokestops option, in which stores become places where players can pick up extra Pokemon balls, the source of all power.

It’s a start, but marketing via Pokemon Go is about to get a lot more sophisticated (and probably expensive).  CNBC, in fact, is reporting that the game that is transfixing the nation could transform retail.

The story doesn’t get very specific about transform how, but it mentions the game could draw people into malls suffering from sagging foot traffic, which isn’t a bad thing. The analyst that CNBC talked to also raised the possibility that the real-time, augmented-reality model that Pokemon thrives on could have some potential.

Again, no detailed picture of that, but hey, maybe retailers could pit shoppers against each other in pursuit of that elusive pair of Manolo Blahnik velvet pumps. You bag ‘em; you buy ‘em.

And then there is the prospect of Pokemon Go ads and sponsored locations, AdWeek reports. Apparently, for a price, you can reach out to players and/or become a place where the Pokemon roam free, which would attract consumers looking for said Pokemon.

And, of course, there is yet another option: People might be so sick of Pokemon Go that a week from now nobody will even remember why they liked it in the first place.

Some good news for Macy’s

Macys at Stanford

You could look at the Harris Poll EquiTrend survey as the retail report card or as a consumer survey that you’d rather not put too much stock in. And how you look at the survey, no doubt has to do with where you ended up on the survey.

Macy’s, for instance, is probably embracing its No. 1 ranking. Same for Best Buy, Nordstrom, Home Depot and Kohl’s, all of whom took the top spot in various categories.

The poll gave Macy’s its first good news in some time, placing it at the top of the department store category, according to Marketing Daily. The venerable retailer has been taking a beating on in-store sales, announcing store closing and switching CEOs (first item).

But the Marketing Daily story says the survey of 97,000 consumers found Macy’s to be at the top in the categories of quality, familiarity and purchase consideration, which sounds good.

The poll uses a series of factors to essentially get a handle on how deeply consumers feel connected to brands. Sarah Mahoney’s story points out that it might seem odd for department stores like Macy’s to be scoring high while losing shopping traffic.

One of the pollsters noted that even though e-commerce is on the rise, consumers still like window shopping and visiting a store they hold dear. That said, it’s not clear that e-commerce was somehow excluded from consumers’ responses regarding brand affinity.

The pollster, Joan Sinopoli, a vice president at Nielsen, which owns the Harris Poll, told Marketing Daily that it’s important for retailers to keep an eye on who is winning at e-commerce. That’s where retail is going and it’s not necessarily going to shift from a brick-and-mortar store to that particular brick-and-mortar store’s website.

Retailers then need to be prepared to compete with those who are winning e-commerce (we’re looking at you Amazon) by providing an exceptional or unique experience — either online or in the store.

Oh, and in case you’re wondering: Best Buy was No. 1 in electronics, Home Depot was tops in hardware, Nordstrom was the top luxury retailer and Kohl’s had the best website, according to the survey.

Quote of the week

“There’s a bit more confidence about job security, there’s a bit more confidence about where things are headed in terms of wages and the economy. All of that is combining to give us the rebound we’re seeing in retail sales.” — Omair Sharif, senior U.S. economist at Societe Generale in New York, to Bloomberg, regarding retail sales’ 0.6 percent increase in June.

Photo of rock climbers by Steven Depolo, Pokemon by Dave Monk and newspapers by Jon S. published under Creative Commons license. Amazon box and Macy’s by Mike Cassidy.

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

RelevanceReport 5.30.14

Walmart Pay, Macy’s Jeff Gennette, Amazon Prime Day: the BloomReach Relevance Report

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

Walmart Store front

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.

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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.

(Maybe it just brings back bad memories of our former industry, in which hedge funds and others bought up newspapers, cashed in on prime real estate and ran the journalism into the ground.)

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?

Grand reopening of Lowe's Sanford Store #3608 in Sanford, North Carolina September 8, 2011...Photo by: Patrick Schneider Photo.com

 

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

Amazon Box

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

Randy's Donuts

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?

Prime Day Logo

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 mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.