Bryan Pearson's Blog, page 5

Social Media Is Taking The Store: 3 Surprising Reasons Facebook, Snapchat, Spotify Are Into Retail

Likes are nice, but buys are better business.

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This is what several social media networks seem to think. Platforms from Snapchat to Facebook have been investing in retail to capture broader consumer interest and, apparently, boost revenue and followers.

Here’s what some social platforms are trying, and why it matters to shoppers.

The Sound of Brew-sic

Starbucks in 2015 integrated the Spotify mobile app with the Starbucks My Rewards program, making the platform the default music source in all 7,000 Starbucks-owned stores in the U.S.

Through the partnership, 15.3 million reward members can listen to Starbucks music on Spotify, influence store playlists and earn reward stars. Also, and importantly, the agreement specifies that Starbucks promote Spotify Premium.

At the time of the deal, Spotify was battling competition from rivals such as Apple Music and facing criticism from influential artists, like Taylor Swift, who said it didn’t fairly compensate music creators. But those Starbucks Rewards apparently encouraged Premium purchases: From the end of 2015 to the end of 2017, Premium Spotify subscribers rose to 71 million from 28 million, according to public records.

Friends On 34th Street

Yes, there is a Facebook clause, but this one is more about clothes than contracts. Facebook recently opened popup shops in nine Macy’s department store locations.

The shops, which will operate through Feb. 2 in stores from New York to San Francisco, showcase nearly 100 small-businesses and digital-native brands that advertise on Facebook. For Macy’s, the shops are an opportunity to attract customers with fresh brands that set it apart from online and brick stores.

Facebook, meanwhile, could be collecting intel to build a cohesive digital retail platform after several less-than-stellar attempts. Its Marketplace platform, operating now, is essentially digital classified ads. If Facebook could find a way to succeed online, its advertising and revenue per user could climb — even if active user numbers plateau, The Motley Fool reports.

Bought In A Snap

Snapchat found a shopping option true to its role — a channel that offers limited-time deals.

The feature, called Shop and Cop, sells goods from within the app, so users aren’t redirected to a retailer’s website. It operates through Shopify, the e-commerce shopping platform, but is curated by Snapchat and includes social influencer posts.

This isn’t Snapchat’s first retail rodeo. In October, Levi Strauss used its augmented reality lens so shoppers could virtually try on and buy Disney-themed apparel. In September, parent company Snap began testing  a function that enables users to point their Snapchat cameras at products or bar codes and search for them on Amazon.

The Shopify partnership expands the number of retailers from which Snapchat can offer deals, and in doing so widens the lens on its advertising opportunities and other collaborations.

That Perk Is So Instagrammable

Instagram in November added features to make it easier for users to shop the many products posted by brands and influencers on its platform, and in doing so keeping them from leaving the app.

Instagrammers now can shop from brand videos in their feeds, save eye-catching items to a “shopping collection” and grab a quick view of products in a brand’s posts. These functions follow the expansion of shopping options across the Instagram Stories feature.

Combined, these elements further bridge the narrowing gap between product discovery and purchase. They also expand the sales opportunities among sponsoring retailers because shoppers don’t have to leave the app and cull through a retailer’s website. That makes Instagram very, well, Instagrammable to merchants.

Shopping, Shop-pinned

Pinterest in the fall improved its on-platform shopping to include up-to-date pricing and stock information, a shopping recommendation section and the ability to shop right from the feed.

These enhancements equally improve Pinterest’s ability to understand its users, as they help the platform maintain real-time connections with retailer databases. And its retail partners stand to gain sales, which is likely enough encouragement for them to share. In the quarter it began testing these features, Pinterest said click-throughs to retail sites rose by 40%.

3 Reasons Shoppers Should Care

These efforts make it easy (and fast) for social media users to own the items they long for on posts. But there’s something in it for the media platforms as well. Here are three benefits shoppers might not think about.

Brand integrity. Social platforms have transformed influencer marketing into an industry, and now they want a share of it. It’s like when the most popular kid in school befriends you, and suddenly everyone thinks you’re popular. Spotify, for example, became cool to millions of new members by hanging out in Starbucks.

Location, loyalty, location. Many of these partnerships involve app downloads, which help all parties track member footprints. But Spotify’s relationship with Starbucks goes a step further because it’s rooted in the coffee chain’s popular rewards program. This enables Spotify to better understand its users in different environments so it can better curate its playlists — and get renewed memberships.

Market research. When it comes to social media’s currency, data represents the big bucks, and shopper purchase behavior is close to gold. Pinterest, with it updates, is reinforcing its connection with merchant databases. And while Facebook’s partnership with Macy’s may have an old-school feel, it could help it gauge the kinds of environments and experiences that encourage purchases.

As many platforms will confirm, a billion followers won’t guarantee financial success. Selling actual products, rather than a follower’s status, may be a sensible option. But as any retailer will confirm, there’s a lot of room for missteps. Social networks would be smart to follow the proven brands.

This article originally appeared in  Forbes . Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.

9 Off-The-Radar Retail Predictions For 2019

So much of retail is a gimmick. Just ask 2018.

© 2018 BLOOMBERG FINANCE LP

Massive sums are invested in immersive experiences that quickly lose their spark and in digital features that fail to

Massive sums are invested in immersive experiences that quickly lose their spark and in digital features that fail to make the experience easier. So more than 5,000 stores closed in 2018. In their valid bids to wow shoppers, many retailers just added complexity.

Shoppers, however, want simplicity, and the unexpected efforts that will likely make a difference are those rooted in simply understanding the shopper’s path.

Ah, but what a crooked path, and how frequently the shopper expects the retailer to lay some of the groundwork. To get a better sense of what retailers have up their sleeves for 2019, I invited retailers, advisors and suppliers to share their off-the-radar predictions for 2019.

Shelves will become storybooks. More retailers will shift focus from limited, storewide experiential concepts and instead engage shoppers directly at the shelf, with stories generated by category and brand, predicts Wendy Liebmann, CEO of WSL Strategic Retail in New York. “Retailers are investing in stores of the future and expensive digital technologies, yet the shelf, where 91% of purchase decisions for consumer-packaged goods are made, remains an emotional hinterland,” Liebmann said. “Those mazes of boxes and bottles will change into communication sources. They won’t just stand out, they’ll stand for something, capturing the shopper with messaging that correlates with the moment and knocks her out of purchasing autopilot.”
Warehousing the store. At least one top grocery company will convert its stores into click-and-collect/delivery warehouse spaces, predicts Sean Cheyney, vice president of global business development for Triad Retail Media, a retail media agency and consultancy in St. Petersburg, Florida. “Grocery stores are huge,” he wrote in an email. “As adoption grows for click-and-collect and delivery formats, and grocery chains make significant financial and operational investments, foot traffic will eventually decrease.” Cheyney expects roughly 25% of U.S. square footage will be converted into warehouse space for click-and-collect and delivery purposes. “The initial test will be in high-traffic suburban stores and a few affluent urban locations.”
More will earn points by partnering for payment. Retailers will allow their customers to pay for purchases using reward points from third-party credit cards and reward programs. Amazon.com does this through a partnership with American Express. When members save their American Express Membership Rewards card information on Amazon.com, the online retailer has access to their points balances and accepts them to pay for purchases. A number of merchants, from Kohl’s to Nordstrom, have adopted currency-neutral reward program models that do not require a store’s credit card. Accepting another card’s points for payment is a natural progression; it provides a platform for co-marketing opportunities that motivate the customer, potentially adding value to both the card company and the retailer.
Recycled fashion. More major brands, from REI to Burberry, are following the lead of consignment shops and offering secondhand (or recycled) apparel as they pursue sustainability as well as more affordable fashion. Aldo Bensadoun, executive chairman and founder of the international shoe brand The Aldo Group Inc., expects retailers to next entrench the practices of a circular economy across operations. “The transformation of our industry presents opportunities for future leaders to reinvent how they do business to ensure the viability and, more importantly, the sustainability of retail. Tomorrow’s retailers should endeavor to operate with positive intent, while remembering that the consumer is queen and king, at the heart of everything they do.”
Brands will move beyond email. Consumers are increasingly ignoring email as a marketing channel, and that includes a retailer’s emailed coupons and other communications. Retailers will respond by reaching out to consumers through their preferred messaging channels, said Michael Cohen, general manager of Zero Gravity Labs, a Toronto-based innovation and experimentation group. “Facebook Messenger, WhatsApp, WeChat, iMessage Business Chat and Google Business Chat will all become the channels that help retailers engage in a meaningful dialogue — or assist consumers while email starts to take a back seat,” he claimed. “That being said, it is more intimate and usually reserved for friends, so businesses will need to adjust their approach and tone accordingly.”
Checking out handily. A new technology must bridge the mainstream checkout experience that exists between present self-checkout stations and the full-blown automated checkout technology being tested at Amazon Go. My team’s money is on store-branded self-checkout apps that enable shoppers to scan and buy items as they shop. The Canadian supermarket chain Loblaw is testing the technology at a handful of stores, and even outfitting the stores with digital scales for produce that is charged by weight. We expect more retailers to explore solutions similar to the Amazon Go experience but require a less tech-heavy approach.
Taxing propositions. In June, the Supreme Court gave states the authority to make online retailers collect sales tax. In 2019, e-tailers will incorporate those taxes into the cost of items to avoid sticker shock, predicts Natalie Kotlyar, who leads the retail and consumer products practice at BDO, a global accounting and advisory firm. “According to the (BDO) 2018 Holiday Consumer Beat Survey, nearly one in five consumers shops online specifically to avoid paying sales taxes,” she wrote in an email. “Roughly half of millennial shoppers would change their habits if all e-tailers began collecting sales taxes.” Mark Aselstine, founder of UncorkedVentures.com wine clubs and gift baskets, agrees: “As the economy erodes, (states will see) taxes of online sales as an easy way to make up lost revenue.”
Sheltering sales. “There will be more demand for indestructible homes and backyard storm shelters,” suggests David Pressler, president of DRD Enterprises Inc. of Davie, a maker of concrete and steel structures, as well as tornado shelters, in Florida. “The next evolution in home construction is today.” Pressler is on to something. The rash of natural disasters in 2018 will likely fuel the rise of a prevention industry, the offshoot of which will be an influx of new DIY products designed to stave off storm damage, from storage items like fire boxes to catastrophe-proof home materials.
Experience does an about face. Retailers will rely on artificial intelligence to mesh in-store and online experience in what one expert calls proximity marketing. “Customers will opt-in to premium in-store services through face recognition while artificial intelligence analyzes their online and offline preferences to make accurate recommendations,” said Peter Trepp, CEO of FaceFirst, a face recognition firm. He said the movement will be fueled by efforts to make reward programs stickier. Another area AI will change the retail experience: Product replenishment. “Brands and retailers will automate key merchandising decisions to react quickly to, and predict, demand changes,” said Joaquin Villalba, co-founder and CEO of Nextail, which specializes in merchandising and inventory.

Some of these predictions do go out on a limb, but retailers have to. As time marches on, shoppers have less patience for gimmicks.

This article originally appeared in  Forbes . Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.

Resale In Vogue: Burberry, Banana Republic, The North Face Find Treasure In Recycled Fashion

Image: Getty

When it comes to today’s serious fashion shopper, a secondhand Banana is becoming preferable to a first-hand fad. And that’s increasingly a good thing.

Banana Republic, Burberry and REI are among a lengthening list of mainstream retailers that are finding a receptive market in re-used apparel. They join a number of secondhand- and consignment-focused startups, many of which are “re-commerce” only, including ThredUp, Reformation, PoshMark and The RealReal. The mainstreaming of secondhand clothing is in fact among the 2019 retail predictions by Global Retail Alliance.

Their motivation to follow Goodwill and consignment shop customers — as well as customers of rental retailers such as Rent the Runway — is driven in part by revenue growth. The size of the apparel resale market is estimated at $20 billion, according to the online fashion reseller ThredUp.

However, the consumer values that trigger that spending extend beyond cost. Retailers are tapping into stigma-erasing factors such as offering alternatives to wasteful fast-fashion with affordable style options that can’t easily be duplicated yet don’t scrimp on quality.

Circular Fashion Helps the World Go ‘Round

For many merchants, the chief motivation for refurbishing and reselling used clothing is waste reduction. But it’s also good business: 62% of shoppers said they are attracted to companies that want to improve the environment and reduce plastics, according to recently released research by Accenture Strategy.

If everyone bought used instead of new clothing for one year, it would save the equivalent of 165 billion pounds of carbon dioxide emissions, according to ThredUp, which cites GlobalData research as well as its own 2018 consumer survey results. That’s what all the cars in Los Angeles produce in four years.

In response, many brands appear to be making long-term commitments:

The North Face, in its bid to change what it calls the “linear model” of use into a “circular model,” refurbishes and resells clothing that has been worn, returned, damaged or is defective. The goal is to prevent good clothing from ending up in landfills, and The North Face is backing up the effort with a guarantee: The lower-priced refurbished items in The North Face Collection are covered by a one-year warranty.

Women’s apparel designer Eileen Fisher, through its Renew line, gives customers who return their used clothing a $5 gift card for each item. If the piece is too threadbare to be worn, Eileen Fisher will remake it into a one-of-a-kind design and save the scraps for future use. About 800 items of clothing are donated to its recycling centers daily, and a portion of the profits from the sales support programs for women, girls and the environment.

On the very upscale end, Banana Republic offers lightly used luxury vintage accessories, including watches, jewelry and handbags, on its online Luxe Finds page. Brands include Hermes, Louis Vuitton, and Chanel, and the prices run way north of the thrift-store range, proving that resale is not limited to price-conscious shoppers. A Chanel medium camera bag, for example, recently listed for $2,950.

The retail co-op REI has recently expanded its year-old Used Gear site to include additional brands and categories of apparel, shoes and equipment. It’s goal, like that of other brands, is to reduce waste but also to get people to spend more time outdoors. All returned pieces are inspected for quality and prices are frequently about half of what each item would cost new.

And in September, the designer brand Burberry announced it would immediately end the practice of destroying “unsaleable” products and expand on a year-old goal of reusing, repairing, donating and/or recycling the pieces. This include turning leather offcuts into new products through a partnership with the sustainable luxury brand Elvis & Kresse. Burberry also has banned the use of real fur.

Something Old, Something New

Sustainable secondhand clothing cannot exist, however, without firsthand production. Retailers feeding an eco-friendly merchandise stream for conscientious shoppers must still make product. Here are a few ways to keep old and new shoppers.

Farm the service out. Many apparel brands may be interested in reselling their returned goods, but do not want to invest in the back-end systems. In 2019, ThredUp will begin offering its technology and infrastructure to brands that want to offer their own apparel recycling programs. Others can do the same.
Blend firsts with seconds. Brands can appeal to the secondhand curious, while maintaining sales of firsthand clothing, by combining pieces of new and repurposed items on their websites and in marketing. An image of a refurbished jacket with a first-run cocktail dress could appeal to those seeking one-of-a-kind looks on a budget.
Promote future value. A resold item could be resold again, either to the original merchant or to others. Brands that recycle their clothing can implement systems that encourage shoppers to pay it forward by donating or reselling the secondhand items they buy. Merchants can look into partnering with third parties, such as Goodwill or charities that work with women’s shelters to help women get ahead in their new lives, to generate enthusiasm.
Reward shoppers. Eileen Fisher thanks those who turn in used clothing with gift cards. Other brands can formalize such efforts with rewards programs that give customers points or other rewards that accumulate as they return (and buy) recycled clothing. A program can, for example, offer a set number of points for every returned item, to use toward future purchases or to donate to a favored charity.

Lastly, and importantly, retailers should be as serious about sustainability as their customers. Fashion is a fad industry, but sustainability is not.

 

This article originally appeared in Forbes. Follow me on Facebook, Twitter and my blog for more on retail, loyalty and the customer experience.

Cash, Interrupted: What Shoppers Can Expect From Retail-Hungry ATMs

At ATMs, the PIN is being replaced by preferences. And reward points and even coffee cups.

(AP Photo/Mark Lennihan) ASSOCIATED PRESS

As the number of ATMs in the U.S. nears half a million, and the demand for cash diminishes in favor of credit cards and contactless payments, the makers of money-dispensing devices are seeking alternate uses for their technologies. Increasingly, they are finding opportunities in the store.

And retailers, which are innovating brick formats to hold up against digital shopping, are ripe for it. Online (and therefore cash-free) purchases are predicted to account for 12.4% of all U.S. retail sales by 2020, according to Statista. But regardless of where the purchase is made, just 12% of shoppers prefer to use cash. So more retailers, from CVS to Walmart to Whole Foods, are adopting cash-free shopping options that rely on mobile wallets, click-and-collect and similar technologies.

In short, the retail buying process has become, for payments providers, an opportunity to add value — using ATM technology to integrate online and offline interactions for “in-line” experiences that complement sales clerks with kiosks, cash with reward points and layaways with automated lockers.

Learning from Asia and Europe

To get a sense of what to expect, look to Asia and Europe, where the adoption of mobile payment systems is far more accepted.

More than half (53%) of connected consumers in the Asian Pacific use mobile devices to pay for goods. In the UK, 41% of credit cards have contactless functionality.

And in Sweden, 59% of consumer purchases are made without cash. This may be why one Ikea store has gone completely cash free, while in China several merchants are testing staff-free stores that rely on mobile apps for payment. And in the UK, coffee mugs are replacing wallets. More on that last one soon.

The result is thousands of defunct ATMs. In the U.K. alone, nearly 4,800 ATMs closed from July 2017 to June 2018, or about 400 a month, according to Paymentsense, a merchant services provider.

10-Inches to Checkout

To protect market share in the U.S., ATM manufacturers are exploring ways to reach consumers directly where they spend, such as with retailers. In the simplest sense, this plan can manifest in the form of small ATMs at marijuana dispensaries, where people are required to pay with cash due to the patchwork of laws across states that legalize it. More complex innovations include smart lockers, and in between are card-free ATMs that offer special services.

Diebold Nixdorf, one of the world’s largest ATM makers, has developed a miniature mobile-enabled terminal, less than 10 inches wide, that can serve as an ATM, a point-of-sale terminal and a self-checkout unit. The concept connects with the participating retailer’s app, so customers can build lists and plan their trips in advance. Once in store, shoppers receive location-based product recommendations and suggestions on how to navigate the store faster, while scanning the items they want using their smartphones, bypassing checkout. At the same time, the terminals allow shoppers to collect cash, deposit checks or pay bills.

Diebold Nixdorf also develops in-store smart lockers, like those used for retail click-and-collect, that securely hold digitally purchased items until shoppers retrieve them using an app, biometrics (such as facial recognition), cash or card.

Rewarding ATMs and Coffee Cash

In less merchandise-heavy areas, banks are outfitting ATMs to dispense retail loyalty rewards and exploring other “handheld” technologies.

Payment Alliant International uses beacon technology to direct in-store shoppers to its nearby ATMs, where they can redeem loyalty program reward points for cash. Cardtronics, another leading ATM maker, also offers loyalty program integration, as well as coupon dispensing and full-motion video advertising for targeting by time of day and the ATM card.

U.S. shoppers may even find cups replacing their wallets, as in the case of UK’s Costa Coffee, Europe’s largest coffee chain. It is introducing “Clever Cups,” outfitted with contactless payment chips by Barclaycard, so customers can pay with a wave of a mug. Users also can add to their credit balances and track spending. Why might this matter in the U.S.? Because Costa’s parent is U.S.-based Coca-Cola.

Protecting Cash

Cash lovers shouldn’t fear, however. These ATM efforts might spill out across retail in 2019, but they won’t likely replace cash in the near term.

Indeed, lawmakers are trying to protect cash, or at least consumers without credit cards. The Cashless Retailers Prohibition Act, introduced in July, would make it illegal for retailers and restaurants to reject cash or charge a different price based on the payment type used.

The law is designed to do what all retailers, and ATM designers, should do as well: Design around the customer. If ATM technology replaces PINs with other features, then it should be to remove pain points, with common-sense options that align with shopper needs. And those needs often, above all, include ease.

Banks can develop the technology, but they need retailers, and shoppers, to inform it.

 

This article originally appeared in Forbes. Follow me on Facebook, Twitter and my blog for more on retail, loyalty and the customer experience.

Points For The Holidays: Will Regifting Rewards Help Nordstrom, Sally And Others In 2019?

If retailers are especially good this year, they might be rewarded with more shoppers in 2019. Many, it appears, have decided the best way to collect is by offering extra-nice reward program options.

Image credit: Josh Trujillo, Starbucks

The hitch will be keeping those new members engaged after the tinsel is down. A number of retailers, from Sally Beauty to Starbucks, have relaunched or dressed up their loyalty initiatives in advance of the holidays, when more people are out shopping and therefore more receptive to enrolling in and using loyalty programs.

Nearly four in 10 holiday shoppers (39%) said they are much more likely to shop at stores where they are enrolled in loyalty programs, a 26% increase over 2017, according to research by Epsilon. But what about after? Engagement is a major challenge for loyalty program operators: 54% of memberships in the U.S. are inactive, according to the COLLOQUY Loyalty Census. Worse, 28% of shoppers have abandoned a program before ever redeeming so much as a point or mile.

A key reason for the breakdown is a reward program’s value proposition fails to hit the relevancy button after the signup offer is used. Either the rewards aren’t appealing, they take too long to earn or they’re just too complex.

Cash to Gravy: New Perks From Kohl’s, Sally and Nordstrom

More retailers are trying to remedy their own shortcomings when it comes to shopper understanding. Here’s what a few merchants are doing.

Kohl’s added sparkle to its Yes2You Rewards program by giving all shoppers $15 in Kohl’s Cash for every $50 they spent during Black Friday week and Cyber Monday. (The Yes2You program regularly gives members one point for every $1 spent and a $5 reward for every 100 points.) Additionally, elite members of the Kohl’s Rewards program, which is being tested in several U.S. markets, were given early access to Black Friday deals.

Sally Beauty relaunched its Beauty Club loyalty program as Sally Beauty Rewards just in time for the holiday season. Existing members were automatically re-enrolled and given $5 in reward points to entice spending, while new members received a $5 reward certificate for joining. The program awards 10 points for each $1 spent and a $5 reward certificate for every $50 spent. Sally also launched a dedicated “Holiday Glam” page to its website to encourage repeat visits.

Image credit: Sally Beauty

Nordstrom in October introduced its new Nordy Club currency-neutral program; members can now pay for purchases however they want, meaning a Nordstrom credit card isn’t required. Members gain higher status the more they spend, and with higher status comes greater rewards, including entry to invitation-only shopping events, free alterations and access to style workshops.

Starbucks is enticing its reward program members by sending limited-time promotions directly to their apps. In November, it began using its new happy hour feature to do so, sending alerts for half-priced holiday drinks. This helps raise awareness of its seasonal lineup, while those waiting for their gingerbread lattes are free to browse its selection of holiday gifts.

Swagbucks, the digital loyalty program that rewards members for online purchases across brands, is giving extra cash back to those who shop more than 200 retailers during designated periods throughout the holiday season. Participating merchants include Macy’s, J.C. Penney, Old Navy and Best Buy.

Some merchants are using the rewards to encourage members to help others. The Texas restaurant chain JumBurrito, for example, is fighting hunger through its JumBurrito Revolutionary Rewards Card. During the “No Hunger for the Holidays” fundraiser, JumBurrito is donating 50 cents for each rewards program visit to the West Texas Food Bank. In 2017, the effort raised $11,563, enough for 46,252 meals.

Though Sears Holdings is in Chapter 11 bankruptcy reorganization, it still offered special holiday perks to members who used its Shop Your Way loyalty program over Black Friday weekend. Members received $50 cash back in points on in-store purchases of at least $50, and earned additional points by texting the words “gravy” and “turkey” to a special number.

3 Ways to Engage in 2019

These efforts may encourage new memberships and shopping in the final weeks of 2018, but whether members return to these programs in 2019, or exchange them for others, depends on how well the proposition fits the shopper. Here are three loyalty guidelines.

1. Wrap the app into everything. New reward programs should include app features, which are more likely to keep members close to the brand. Shoppers were projected to spend more than 130 million hours in shopping apps during the weeks of Black Friday and Cyber Monday on Androids alone, according to research by global data provider App Annie. That would represent a 25% increase over 2017.

2. Take tabs of most-used perks. The holidays present a great opportunity to gauge which features shoppers most use and which are likely to keep them coming back. Those perks should be offered year-round, and if they already are, strongly promoted and enhanced. Further, shoppers will likely feel more invested in retailers that tell them they played a role in a decision to extend a special feature (“We heard you over the holidays, so we’re offering free gift wrap all the time!”).

3. Use the data to engage, ASAP. A merchant will gain just a limited view of its new rewards members during the holiday shopping season, so it should use that time to extend special thank-you offers for 2019. New members will likely only take advantage of these offers, however, if they are immediate and meaningful enough to leave an impression — no strings attached.

The greatest gift anyone could receive for the holidays is the knowledge that they made someone’s life better. This extends to retailers that are serious about customer loyalty. If a retail rewards program has the wherewithal to do so, then it should try.

This article originally appeared in  Forbes . Follow me on  Facebook  and  Twitter  for more on retail, loyalty and the customer experience.

Putting A Price On Trust: 4 Ways Data Can Enforce Brand Believability

What a retailer knows about its customers improves its ability to build a shelter of trust. With data-enabled customer understanding, that shelter should be big enough to hold billions of dollars in sales.

Image: Getty Images

This much is reinforced in the findings of new research by Accenture Strategy, which assigns a dollar value to trust among organizations. The research estimates that companies that experience a material decline in trust could miss 6% in potential sales, on average. In dollars, that translated to $180 billion among the roughly 3,800 companies in Accenture’s analysis that suffered a material drop in trust.

The findings back up what many retailers should already know: That transactions are largely driven by brand confidence. But that confidence, or trust, often derives from data.

More than three quarters of consumers, 78%, said they are more likely to trust companies that use their data to fully personalize their brand experiences, according to research by Salesforce.com. A similar percentage said they would share more relevant information about themselves in exchange for personalized product recommendations.

How that data is gathered and used is essential to developing that trust.

In Basics We Trust

Accenture calculates its trust-sales correlation by scoring 7,030 companies, across industry sectors, based on growth, profitability and sustainability/trust. This “Competitive Agility Index” revealed 54% of companies experienced a decline in trust, which caused their index scores to drop by two points, on average. Each point equates to a 3% decline in revenue growth.

Based on these calculations, Accenture estimates that trust-losing retailers could risk a 13% decline in revenue. For a $30 billion retailer, that would translate to an unrealized $4 billion.

A look at retailers that rank high in trust supports the Accenture theory. Among the top-rated publicly traded retailers listed in the 2018 Temkin Trust Ratings are Kroger Co. and Amazon, which tied at 22 among 318 entries. Kroger posted fiscal 2017 revenue of nearly $122.7 billion, compared with $115.3 billion in fiscal 2016, a 6% increase. In fiscal 2015, it reported annual sales of nearly $110 billion.

Amazon posted North American sales of $106 billion in 2017, compared with nearly $80 billion in 2016 — a roughly 33% increase — and $63.7 billion in 2015.

(The overall top-rated retailers on the Temkin Trust Ratings are supermarket chains Wegmans Food Markets, second, and H-E-B, third. Both are private and therefore are not required to publish financial information, but H-E-B lists revenue of $25 billion, compared with $23 billion in fiscal 2016-17, according to Supermarket News. Wegmans reports 2017 sales of $8.7 billion, from $7.9 billion in 2015.)

The high presence of supermarkets among most-trusted brands is worth noting because supermarkets tend to be high-frequency destinations, meaning they have more opportunities to gather customer data and parlay it into personalized communications and offers.

Retailers that lost trust — and market share — encouraged less-frequent visits. Among those that fell at least 15 points below industry average on the Temkin is 289th -ranked Sears Holdings, which filed for Chapter 11 bankruptcy protection in October. Revenue at Sears declined to $16.7 billion, from $22.1 billion in 2016. Toys R Us, which also filed for bankruptcy protection and plans to liquidate in 2019, ranked 273rd.

Data Builds Believability

Shopper trust is so tightly linked to data analysis that even shoppers are cognizant of it. They expect offers and communications that make sense to them at the right time, and increasingly they are unwilling to suffer brands that misfire. There simply are too many other options available.

Pretty much all retailers gather data, through a loyalty program, credit card data and/or digital transactions. Transforming that information into a shelter of trust, however, takes expertise. Here are some guidelines.

1. Be collaborative. Because consumers know their data is collected, how it is collected and used matters dramatically. When given a choice to choose what and how much information they share, shoppers are more likely to feel valued and believe in the brand.

2. Be clear. All communications, from explaining how the retailer uses its data to the special offers available through that data, should be interpreted in a few words. A rule of thumb: Communications should translate seamlessly from online to small handheld devices. Nordstrom is a good example of a retailer that clearly explains how it uses customer data.

3. Be as relevant as budget permits. Ideally, a retailer could break down its data into hundreds of unique messages, so each customer sees she is getting an offer special to her (and she actually wants). Tight margins might not allow this in all cases, so merchants should pick their most high-value customers and categories for such intensive communications — and abandon sending risky offers.

4. Don’t take advantage. When customers opt in to share specific kinds of data, they expect benefits that reflect it, specifically. If the brand experience is incongruous or indifferent to their needs, they’ll lose trust, and that could be worse than never having been trusted at all. By continuously sending me offers for drinks I never purchase, Starbucks is not persuading me to try something new; it is convincing me it isn’t paying attention to me.

To tie that back to the Accenture findings: Starbucks ranked 195th on the Temkin trust ratings of 318 companies. Its same-store sales in fiscal 2018 rose by 2% in North America, though it saw a 1% decline in transactions. Both figures indicate there’s opportunity for improvement.

If the Accenture theory is sound, then even blockbuster brands have the ability to improve performance through emotional connections, and specifically the insights that enable them.

This article originally appeared in  Forbes . Follow me on  Facebook  and  Twitter  for more on retail, loyalty and the customer experience.

Anatomy Of A Black Friday Shopper: 10 Defining Characteristics

Photo by Mike Kemp/In Pictures via Getty Images

The three wise men invented the concept of gift giving, but retailers invented door-busting sales. If the two were to cross paths today, the camels would need reinforcement.

As the traditional kickoff of the holiday spending period, Black Friday has become not only a cornerstone of commercialism, but of retail one-upmanship. Sometimes, that comes at the risk of the shopper experience.

Indeed, research shows that more holiday spending is moving to before and after Black Friday weekend. Nearly 30% of all holiday spending occurs in the four weeks before Black Friday, according to the 2018 Holiday Spend report by data marketing technology firm Cardlytics.

As a result, retail marketers are kicking off their promotional campaigns earlier, in hopes of adding incremental sales throughout the season. They might succeed, but more retailers would better benefit from understanding the preferences and motivations that guide the behaviors of their Black Friday shoppers. Based on the surveys released so far, here is a sampling of 10 characteristics that define this year’s Black Friday customer.

1. They spend billions. In 2017, Black Friday shoppers generated $7.9 billion in online retail sales alone, nearly an 18% increase over 2016, according to research by Adobe Analytics. Of that, $1.2 billion was projected to be spent via mobile devices. In 2018, Black Friday shoppers are expected to spend an average of $472 per shopper, online and in-store, among those surveyed by BlackFriday.com.

2. They can reproduce little shoppers. Among women, 71% plan to hunt for deals on Black Friday, reports Finder.com. That compares with 77% of men. Many of these men and women will likely be joined by family members, as the post-Thanksgiving sales day has become a family event, particularly because so many people travel from out of town and are apt to plan a full day of events, including shopping.

3. They’ll be a little more generous this year. Those who shop during Black Friday weekend plan to spend $60 more in 2018 than they spent in 2017 — $803 from $743, according to RetailMeNot. More than a quarter of shoppers, 27%, will start their holiday shopping on Black Friday or later.

4. But many are less frequently in stores. Six in 10 shoppers think Black Friday is overwhelming, and 59% plan to skip it, according to holiday research by the Harris Poll and OpenX, an advertising technology provider. Instead, 6% have shifted their holiday spending online to take advantage of digital deals, Cardlytics states in its 2018 Holiday Spend report. Six in 10 shoppers plan to hit the stores before Black Friday, reports RetailMeNot.

5. Instead, they’re mobile. In 2018, up to 46% of all Black Friday online orders are expected to take place via mobile, up from 42% on Black Friday 2017, reports Salesforce.com. Mobile orders also are projected to dominate online orders for the entire season, at 46%.

6. The hardcore shoppers will be in store. The shrinking segment of shoppers who do most of their shopping on Black Friday, called “Black Friday Warriors” by Cardlytics, spend an average of $1,596 throughout the season, and 80% of that is in store. Traditional retailers can capture those dollars by promoting deals both in-store and online.

7. They all buy a lot of electronics and clothes. Black Friday is the highest-trafficked shopping day for 16 of 20 reviewed product categories, including TVs, computers and video game consoles, Bazaarvoice reveals in its 2018 holiday report. Separately, apparel sellers in 2017 saw a jump in new customers the week of Black Friday, according to Cardlytics.

8. They experiment. Black Friday shoppers are more likely to try new brands than many others, spending an average of $499 at 4.3 new merchants during the holidays, Cardlytics reports. Steady shoppers may visit more new brands — 4.8 on average — but spend just $401, while harried procrastinators visit fewer new brands (4.1) but spend more — $500.

9. Most prioritize quality, for now. Price still takes a back seat to superiority among Black Friday shoppers, but not as much as in 2017. Nearly 45% of shoppers told BlackFriday.com they are most interested in quality while deal hunting, compared with 36% who place a priority on low prices. However, in 2017, 46% placed an emphasis on quality, and just 30% on price.

10. Many are in their 20s and 30s. The lion’s share of Black Friday and Cyber Monday spenders in 2017 were millennials, with 61.9% saying they would shop on those days, per 2017 research from Finder.com. They were followed by Gen Xers, at 49.5%, and then by Baby Boomers, 27%. In 2018, however, 79% of Gen Xers and 55% of boomers plan to spend, Finder.com reports. (It does not predict a millennial figure.)

Regardless of age, income and gender, all Black Friday shoppers will have one characteristic in common: They want to enjoy the experience. As retailers prepare their displays, promotions and seasonal staff, they should ensure that all shoppers leave their stores, physical and online, feeling a little lighter in step, as well as wallet.

This article originally appeared in  Forbes . Follow me on  Facebook  and  Twitter  for more on retail, loyalty and the customer experience.

Redefining Impulse Buys: Where Nestlé, P&G And Walmart Find Opportunity In An Amazon World

Ride-shares are from Mars, videos from Venus?

Increasingly so, when Mars and Venus represent two major supermarket brands. With more groceries being purchased online, largely thanks to Amazon, items that often don’t make the digital shopping list are being forced to find new ways to capture the customer. Makers of candy, razors and lipstick are therefore turning to Uber, Instagram and Spotify — as well as to product innovation — to resonate with online-distracted shoppers.

An estimated 30% of the U.S. online grocery budget is spent at Amazon, according to a survey by advisory firm Bricks Meets Clicks. That’s equal to the U.S. online grocery market of all supermarkets combined. And missing from many of these online orders are the unplanned purchases shoppers make while waiting in the checkout lane, encountering in-store promotions or acquiescing to demanding children.

Even services such as click-and-collect, which still require the shopper to come to the store, could result in fewer impulse buys, causing grocery sellers to seek unorthodox ways of intercepting shoppers and getting into their shopping baskets.

The timing of these efforts is important if grocery sellers want to be a part of the expanding online grocery cart. By 2025, online grocery is expected to generate $100 billion; 20% of total grocery spending, according to a story on Forbes.com, citing the Food Marketing Institute. That compares with 2% to 4.3% now.

Here’s how seven major brands are getting in front of the shopper in new ways.

1. Mars Wrigley Confectionery: The world’s largest candy company is doing what most retailers should — following the shopper. It’s offering its candies, which include Skittles, M&Ms and Snickers, in places where people are captive, are potentially restless or simply are more open to a snack, such as in a Lyft or Uber, according to a story in AdAge. Mars also is issuing online certificates people can buy and send to friends to redeem for bags of Skittles and other treats, entering itself into the gifting category.

2. Pat McGrath Labs, the New York-based namesake shop of the well-known makeup artist, in 2017 chose to sell its new cosmetic collection through Spotify, the streaming music service. This is despite McGrath’s retail partnership with Sephora. McGrath said she chose Spotify — specifically the Spotify shop of teen pop star Maggie Lindemann — because she wanted to keep her merchandising fresh. “I have always believed in finding new ways to disrupt the marketplace and engage with my fellow beauty junkies where they live,” she told The New York Times.

3. Mondelez International, the owner of Nabisco, is going abroad to boost sales of its Oreo cookie brand. It’s creating new flavors, such as wasabi and hot chicken wings, to appeal to shoppers in emerging markets including China, where snacking is on the rise. Meanwhile, in the states, Oreo continues to roll out limited-edition flavors such as apple pie, Peeps and Mickey Mouse birthday cake. These creative concoctions generate buzz (and lots of blog reviews) that stimulate a steady stream of trial sales, even through Amazon.

4. Venus, the women’s shaver brand under Gillette, is working with 10 on-the-rise female directors, plus actor and director Regina King (The Good Doctor and Shameless), to create video content showcasing the world through a woman’s point of view. King’s piece will provide tips and advice to other directors, including aspiring ones, resulting in messages that focus more on professional advice than on selling. Fans can view content on the Gillette Venus Instagram page.

5. Walmart is using a laboratory to create impulse products. At its Culinary and Innovation Center, Walmart has developed a cantaloupe that remains sweet in the winter, fruit-punch-flavored pickles (called Tropickles) and a flavorful yellow-skinned watermelon. With these products, Walmart is using technology to compete the old-fashioned way: by offering products the competition just doesn’t have.

6. Energizer and Duracell could recapture market share by joining the competition. Both reportedly will bid to manufacture Amazon’s private-label batteries when its contract with its current battery maker expires. Online battery sales represent only about 5% of total battery sales now, but that figure is expected to rise to 17% by 2025. Amazon makes up roughly 90% of online battery sales, aided by its in-house brand AmazonBasics.

7. Dove and Dunkin’ combined the daily coffee fix with the less-planned hair spritz at a co-hosted pop-up shop in New York, where they gave away dry shampoo and free coffee, according to Vox. The #DoveXDunkin Style Café, which was tied to a broad social media campaign, also offered access to giveaways of branded merchandise. The brands also sponsored a sweepstakes (through November 8) for a year’s worth of product based on the best photos of consumers and their stories of why they run on coffee and dry shampoo.

The industry is buzzing with other efforts. Some food makers are talking about sending notifications to online shoppers, through their GPS-enabled grocery-pickup apps, that suggest adding items while waiting for employees to carry out their orders. Consumer goods makers could partner with Airbnb operators to place their toiletries, cleaning products and paper goods into their homes.

What each effort has in common is it veers from traditional retail paths and instead follows shoppers and then gets in front of them. One doesn’t have to go to Mars to get there, but an Uber ride could do it.

This article originally appeared in  Forbes . Follow me on  Facebook  and  Twitter  for more on retail, loyalty and the customer experience.

Food Waste Is The New Sales Driver: 4 Ways Kroger, Walmart Are Changing Shopper Thinking

There’s a new food pyramid on the minds of supermarket operators these days: It’s about the size of a great Egyptian pyramid, and there are six of them.

That’s about the amount of food, 72 billion pounds, that ends up in landfills and incinerators each year, and more food sellers are trying to find ways to stop it. It’s a matter of good business as much as good citizenry: nearly 40% of the food wasted in the U.S. is thrown out by consumers, according to the U.N. Food and Agriculture Organization, and when it goes to waste so does the water, soil and fertilizer — not to speak of labor — that went into producing it.

There’s a legitimate profit potential for reducing food waste. ReFED, a collaboration of 50 retailers, government leaders and organizations, estimates the cost of food waste is more than double its original profit potential, calculating it as an $18.2 billion opportunity for grocers. Further, 92% of surveyed shoppers feel supermarkets could do more to eliminate waste.

So more supermarkets are doing that — seeking ways to reduce food loss resulting from expiration date confusion, overbuying and “ugly” produce that never makes it to the store. For some, doing so presents an opportunity to address the crisis of poverty-related hunger. Some are focused on reducing the costs and pollution resulting from food disposal, as well as unnecessary production.

For all, it’s an effort to get closer to shoppers by sharing facts about a critical issue and inviting them to become important contributors to positive change. Using simple approaches, major food retailers are pointing out the relevance of food waste at local levels, in terms of cost and sustainability, and turning shoppers’ concerns over food expiration into hope for a more sustainable future.

Basically, food sellers are introducing responsibility as an element of the customer experience — and boosting their brand images as well.

Swedes Apply the Smell Test, Kroger Aims for Zero

If the amount of unnecessarily disposed food adds up to six great pyramids, you can say individual supermarkets each represent one block in that range of waste. As each store addresses food excess and loss, those pyramids shrink.

Shoppers can contribute by seeking out merchants actively working to reduce their own lost-food footprint. Here are four examples.

Move the food around. A lot of food waste occurs, frustratingly, far from areas where people are hungry. So Kroger Co. is using its size, influence and distribution might to divert otherwise wasted food to communities in need. Its Zero Hunger, Zero Waste initiative, launched in September 2018, aims to eliminate food waste by 2025 while also reducing hunger. The 2,800-store chain established a $10 million innovation fund to assist in part by accelerating food donations and advocating for public policy solutions. Kroger is partnering with the food bank network Feeding America and the World Wildlife Fund, among other groups, to identify opportunities. The move follows Kroger’s commitment, in 2016, to meet or beat the EPA’s “zero waste” threshold of 90% diversion from landfills by 2020.

Milking opportunity. Often there’s no good reason to spill milk, yet a series of numbers convinces many people to so regularly. So the European grocery chain Coop Sweden, aware people often toss food based on the expiration dates alone, launched a campaign that urges shoppers to instead trust their sense of smell. Coop created a fragrance based on the odor of old milk and is inviting its customers to order samples of the fragrance online (coop.se). The campaign, called “Old Milk,” aims to familiarize consumers with the real smell of spoiled milk so they resist the urge to pour it down the drain on expiration day. Its slogan: “A fragrance for the planet.”

Cracking the use code. Also tackling the issue of food-expiration confusion, Walmart is reducing waste by clarifying food expiration labels. In 2016 it began requiring all of its food suppliers to adopt standardized expiration date labels that divide food in two categories: “Best if Used By” for nonperishable products, and “Use By” for food that can spoil. In the store, Walmart found a way to replace individual cracked eggs in cartons so it can still sell the pack, preventing millions of eggs from being thrown out every year. Many other merchants will toss the entire carton of eggs.

Imperfect solutions. In a bid to reduce food waste at the source, the online subscription service Imperfect Produce delivers customized orders of “ugly” or imperfect produce directly from the farm to the shopper’s door. Its seasonal menu changes weekly and is marketed to be priced at 30% to 50% less than grocery store prices. Shoppers can pick organic or conventional produce, all vegetables, all fruit or a mix of both. Distribution is still limited to 10 metro areas, including Los Angeles; San Francisco; Seattle, Chicago; Portland, Oregon; and San Antonio, Texas.

None of these efforts will work without acceptance, meaning some shoppers will have to change fundamental beliefs about food expiration and how their food should look. This will require awareness. Ending food waste is a monumental undertaking, but so was building the great pyramids. Food sellers can make a difference, but they’ll need to engage their shoppers.

This article originally appeared in  Forbes .  Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.

Owning The Future Of Retail Loyalty: How Amazon, Ralph Lauren Use Insights To Engage

More memberships, more problems.

That’s among the takeaways of a new report that explores six events that are reinventing loyalty, especially for retailers. Among the surprising stats in the report, by LoyaltyOne Global Solutions: Retail loyalty memberships represent 42% of all loyalty memberships in the U.S. — about 1.6 billion. That’s about five retail reward programs for every man, woman and child in the country.

Image from Getty Images/Royalty Free

Needless to say, those numbers don’t make practical sense, which is why more than half — 54% — of all reward programs are inactive.

Retail programs likely suffer the same odds. Often, members enroll for a special signup offer and then never use the program again. Such practices extend beyond loss-leader territory and into potentially serious problems, in terms of justifying the expense of the program and the root causes of the shoppers’ failure to engage.

But the flip side of every challenge is opportunity, and the report makes a good case for retailers. Using examples from Amazon, Ralph Lauren, Alibaba and others, it illustrates how merchants are meeting shoppers’ raised expectations through data insights that help them understand their customers better.

These brands reach their shoppers through personalization, but how do retailers get it right? Artificial intelligence and machine learning are producing shiny new ways to interact with shoppers, but if those communications fail to hit their mark, or are creepy, the shopper will write them off as a retail fail, and likely move on.

Getting Interactive, Trusting Insights

Put another way, shoppers have the controls, regardless of the technologies available to retailers. Among the report’s data points:

• More than 50% of North American consumers said they are likely to purchase if stores offer interactive technologies.
• Only a third of retailers are confident in their ability to consistently leverage customer insights to develop strategies and decisions across the organization.
• Nearly two-thirds of North American retail loyalty program members like having the option to earn with one program and redeem with another as part of a loyalty program.

 

Act Like a Valued Friend 

As the report puts it, customers expect brands to be quiet when they don’t need them and present when they do. Kind of like a spouse, or valued friend.

Retail presence, like many relationships, can exist in many forms. Here’s how a variety of retailers use shopper insights, either from traditional loyalty programs or other interactive features, to shape the technologies and communications they use to engage.

Amazon Prime Wardrobe addresses shopper concerns about ordering clothes online by enabling members to order up to eight items of clothing and accessories, try them on, and keep those they want. Shipping is free all around, so items they do not want can be returned at no cost, eliminating a key barrier to online apparel shopping. This Warby Parker approach to apparel shopping generates important insights regarding shopper preferences, which Amazon can use in its future recommendations and to entice shoppers back.

Fashion designer and retailer Ralph Lauren entices shoppers by acting like a digital personal assistant in the dressing room. At its flagship shop in Manhattan, smart mirrors use RFID technology to recognize the items shoppers carry in and suggest other available colors as well as complementary items. Lighting can be adjusted to the shopper’s liking and salespeople can be called in with the push of a button. In the dressing room, these mirrors add a “wow” factor and incorporate ease while behind the scenes they help Ralph Lauren make more relevant merchandising decisions.

At Alibaba’s Hema cashier-free grocery store in China, the shopping trip is the customer’s choice as it combines in-store and web shopping. Its shoppers can order their groceries from home or work using a mobile app, or they can hand-select their food at the supermarket and have it cooked right there for carryout. If the shopper is hungry in the store, she can “graze and pay” using Alipay, Alibaba’s digital payment system. Hema puts the shopper in control, and in doing so gives her free reign to teach it what it needs to know, in real time, about her preferences.

Each of these examples has one feature in common: They encourage more shopper collaboration, which should build understanding and trust. Based on these principles, the report offers these takeaways for loyalty program operators:

Look beyond retail. Merchants can learn and borrow from loyalty practices in compatible industries, including hospitality, entertainment and even financial institutions. A retailer could, for example, get pointers on payment-streamlining practices.
Know your value. Retailers that make a point to know why their loyalty members choose their brands, and regularly check in with customers to ensure they are beating expectations on those fronts and others, are more likely to retain loyalty members. Also, while reinforcing good practices, they should identify and address weak spots.
Remember the data is shared. Shopper data is a currency and when shoppers trust a brand enough to share it they expect an experience of equal value in return. If the retailer fails to send relevant promotions or communications, the member will stop participating. Dead stop.

 

Lastly, the report suggests that the most visionary retailers are competing not just with rivals but with themselves as they are today. This requires constant experimentation, self-challenge and testing. And it will likely involve a few missteps. Overcoming challenges isn’t easy, but if success involves retaining members, it’s a good problem to have.

 

This article originally appeared in  Forbes .  Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.