Biggest week in Online Shopping ever

by Deepak Sharma on Tuesday, December 20, 2011

Heaviest Week in U.S. Online Holiday Shopping History Pushes Season-to-Date Total to $32 Billion, Up 15 Percent vs. Year Ago

For the holiday season-to-date, nearly $32 billion has been spent online, marking a 15-percent increase versus the corresponding days last year. The most recent week (week ending Dec. 18), led by four individual days surpassing $1 billion in sales, reached an all-time record of $6.3 billion in online retail spending, up 14 percent from the corresponding week last year. The final shopping weekend before Christmas reached $1.04 billion to rank as the second heaviest weekend of online spending on record.

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Electronics products returns to cost $17B to US retailers & manufacturers

by Deepak Sharma on Wednesday, December 14, 2011

Customers returning electronic devices will cost U.S. electronics retailers and manufacturers about $17 billion this year, an increase of about 21% from 2007, consulting company Accenture said in a new report. These costs include receiving, assessing, repairing, reboxing, restocking and reselling returned products.

U.S. Consumer Electronics Industry Faces a Projected $17 Billion Product Returns Bill This Year, Accenture Research Finds

The research is based in part on a survey of executives from communications carriers, consumer electronics retailing and consumer electronics manufacturing companies, which revealed that product return rates over the past three to five years have increased for more than half of the retailers (57 percent) and nearly half (43 percent) of the manufacturers surveyed. Only 13 percent of the retailers and 12 percent of the manufacturers surveyed indicated that return rates are trending downward.

However, the Accenture research also revealed a significant opportunity for the industry to cut costs and reduce the level of product returns, given that only 5 percent of returns are related to actual product defects. While 27 percent reflect “buyer’s remorse,” 68 percent of returned products ultimately are characterized as “No Trouble Found.” This means that, despite the customer perceiving a fault, no problem was detected when the item was tested against specifications set by retailers or manufacturers, according to Accenture’s new published report, titled “A Returning Problem: Reducing the Quantity and Cost of Product Returns in Consumer Electronics,” which captures key findings and insights based on the survey (www.accenture.com/product-returns-electronics).

The report also concludes that solving this No Trouble Found problem – or even reducing it slightly – could have a significant impact on the cost of returns. Accenture has calculated that a 1 percent reduction in the number of No Trouble Found cases could translate to annual savings of 4 percent in return and repair costs, or $21 million for a typical large consumer electronics manufacturer and $16 million for the average consumer electronics retailer.

Science of Lines

by Deepak Sharma on Thursday, December 08, 2011

Dynamics and Science behind the long queues you see at the registers.

Find the Best Checkout Line

Much of the work grows from more nuanced understandings of how people perceive waiting in line. Shoppers tend to become impatient quickly and fail to take into account key indicators of what may slow down a line. They experience remorse when they feel they've chosen the wrong (i.e. slower) line. And they prefer to choose their own line rather than wait in a single-file line for the next available register—even though that set-up has proven to be faster, research on queuing shows.

The Science of Lines

Retail e-Commerce Spending sets new weekly record propelled by free shipping

by Deepak Sharma on Sunday, December 04, 2011

$6 Billion in 'Cyber Week' U.S. Online Spending Sets New Weekly Record as Three Individual Days Surpass $1 Billion Threshold.
comScore a leader in measuring the digital world, today reported holiday season retail e-commerce spending for the first 32 days of the November – December 2011 holiday season. For the holiday season-to-date, $18.7 billion has been spent online, marking a 15-percent increase versus the corresponding days last year. The most recent week saw three individual days eclipse $1 billion in spending, led by Cyber Monday, which became the heaviest online spending day on record at $1.25 billion. Tuesday, November 29 reached $1.12 billion, while Wednesday, November 30 reached $1.03 billion. These three billion dollar spending days currently rank as three of the four heaviest online spending days in history (with Cyber Monday 2010 being the other).

2011 Holiday Season To Date vs. Corresponding Days* in 2010
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home & Work Locations
Source: comScore, Inc.
Millions ($)
2010
2011
Percent
Change
November 1 – December 2
$16,257
$18,697
15%
Thanksgiving Day (Nov. 24)
$407
$479
18%
Black Friday (Nov. 25)
$648
$816
26%
Thanksgiving Weekend (Nov. 26-27)
$886
$1,031
16%
Cyber Monday (Nov. 28)
$1,028
$1,251
22%
Week Ending Dec. 2
$5,164
$5,959
15%

*Corresponding days based on corresponding shopping days (November 2 thru December 3, 2010)
Free shiping is a big factor in this surge in e-commerce spending.

comScore's analysis of the incidence of free shipping used for online retail transactions shows that this incentive is being used at record levels over the first few weeks of the holiday season. Throughout the 2011 holiday season, more than half of all transactions have included free shipping with rates increasing later into the season. The week of Thanksgiving (week ending Nov. 27) saw free shipping occur on 64.4 percent of transactions, while Cyber Week has maintained a similar level at 63.2 percent.

Infographic - World of seasonal employment

by Deepak Sharma on Saturday, November 26, 2011

Mindflash has released a great infographic which examines the world of seasonal employment, what other companies are doing and how you can successfully hire employees for your business.

Infographic: ‘Tis The Seasonal Worker: A Glimpse At The Temporary Employee Workforce This Holiday Season

(click image to enlarge)

Infographic: ‘Tis The Seasonal Worker: A Glimpse At The Temporary Employee Workforce This Holiday Season

Online Sales Jumped 24% on Black Friday, 39% on Thanksgiving day

by Deepak Sharma

IBM’s data unit Coremetrics has released its real time online retail benchmark study which shows online sales jumped 24.3% this Black Friday. This follows the growth of 39.3% increase in online sales on Thanksgiving day. Mobile traffic increased to 14.3 percent on Black Friday 2011 compared to 5.6 percent in 2010. The sales on mobile devices surged to 9.8 percent from 3.2 percent year over year.

Record Online Thanksgiving Day Shopping Paves Way for Strong Black Friday Retail Sales, Reports IBM

U.S. shoppers took advantage of early sales this holiday driving a 39.3 percent increase in online Thanksgiving day spending while setting the stage for 24.3 percent online growth on Black Friday compared to the same period last year, according to cloud-based analytics findings by IBM.

IBM

As part of IBM's Smarter Commerce initiative, IBM's online retail benchmark study reveals the following trends as of 12:00 am PST:

  • Consumer Spending Increases: Strong Thanksgiving shopping carried over into Black Friday with online sales increasing 24.3 percent annually.
  • The Mobile Bargain Hunter: Black Friday witnessed the arrival of the mobile deal seeker who embraced their devices as a research tool for in-store and online bargains. Mobile traffic increased to 14.3 percent on Black Friday 2011 compared to 5.6 percent in 2010.
  • Mobile Sales: Sales on mobile devices surged to 9.8 percent from 3.2 percent year over year.
  • The Apple Shopper: Mobile shopping was led by Apple, with the iPhone and iPad ranking one and two for consumers shopping on mobile devices (5.4 percent and 4.8 percent respectively). Android came in third at 4.1 percent. Collectively iPhone and iPad accounted for 10.2 percent of all online retail traffic on Black Friday.
  • The iPad Factor: Shoppers using the iPad led to more retail purchases more often per visit than other mobile devices with conversion rates reaching 4.6 percent compared to 2.8 percent for overall mobile devices.
  • Surgical Shopping Goes Mobile: Mobile shoppers demonstrated a laser focus that surpassed that of other online shoppers with a 41.3 percent bounce rate on mobile devices versus online shopping rates of 33.1 percent.
  • The Social Influence: Shoppers referred from Social Networks generated 0.53 percent of all online sales on Black Friday. Facebook led the pack, accounting for 75 percent of all traffic from social networks.
  • Social Media Chatter: Boosted by a 110 percent increase in discussion volume compared to 2010, top discussion topics on social media sites immediately before Friday showed a focus on the part of consumers to share tips on how to avoid the rush. Topics included out-of-stock concerns, waiting times and parking, and a spike in positive sentiment around Cyber-Monday sales.

"This year marked Thanksgiving's emergence as the first big spending day of the 2011 holiday season with a record number of consumers shifting their focus from turkey to tablets and the search for the best deals," said John Squire, Chief Strategy Officer, IBM Smarter Commerce. "This momentum continued into Black Friday where the big winners were those retailers that delivered a smarter commerce experience with compelling, relevant deals that people could easily access from their channel of choice."

Online Retail Categories

  • Department stores once again offered a vast array of compelling deals and promotions that caught the attention of consumers. As a result, department stores sales were up 59.0 percent from this time last year.
  • Home goods also reported a 48.8 percent increase in sales from Black Friday 2010, an indication that many consumers are shifting their attention toward the home this holiday season.
  • Apparel sales were also strong this holiday with Black Friday numbers showing an increase of 47.2 percent over 2010.
  • Health and Beauty sales were strong as consumers showed a desire to pamper themselves this year. On Black Friday, online sales were up 34.2 percent year over year.

Today's news is based on finding from the IBM Coremetrics fourth annual Black Friday Benchmark which tracks more than a million transactions a day, analyzing terabytes of raw data from 500 retailers nationwide. With this data IBM helps retailers better understand and respond to their customers – across the organization – improving sourcing, inventory management, marketing, sales, and services programs.

Get the detailed report here.

US holiday season online retail sales to grow 15% year over year

by Deepak Sharma on Friday, November 11, 2011

Won’t you like this retailers? But are you ready?

U.S. Online Holiday Spending Will Grow 15 Percent To Nearly $60 Billion

After Q3 2011 brought a 13 percent increase in e-commerce sales, Forrester is estimating that U.S. online holiday sales will grow 15 percent this year to nearly $60 billion. The study reports that this increase will take place because of the increase in consumer-use of tablet computers for shopping combined with a growth in online holiday deals.

The report shows that 58 percent of Americans say they are more price-conscious today than they were a year ago and nearly half believe they find better values online. And 50 percent of Americans who own a tablet use the device to research products for purchase with 30 percent of smartphone owners using their mobile device to research products for purchase at least monthly (which is a 30 percent increase in just the past year). And more and more online retailers will be offering better shopping experiences on mobile and tablet devices t take advantage of these trends.forrester[1]

World's largest study of online behavior

by Deepak Sharma

TNS has launched the world’s largest study of digital behavior Digital Life based on responses from 72,000 consumers in 60 countries. The study’s size, scale and detail makes it the most comprehensive view of how consumers behave online and why they do what they do.

Key findings:

  • Many brands are wasting time and money trying to reach people online even though many resent big brands invading their social networks
  • 57% of people in developed markets don’t want to engage with brands online
  • Misguided digital strategies are generating mountains of costly ‘digital waste’, from friendless Facebook accounts to blogs no one reads, because companies are acting without understanding consumer attitudes

You can explore the data and generate your own data visualizations at www.tnsdigitallife.com.

Walmart.com opens Test Stores

by Deepak Sharma on Wednesday, November 09, 2011

Wal-Mart has opened two shops in California malls which will test the concept of showcasing online merchandize. When shoppers visit these stores, they can Shoppers sit down with a laptop and shop a vast array of products on the chain's website.

Walmart.com test stores hint at Web shopping fight

Two tiny Walmart.com stores are making Southern California malls their home for the holidays, launching the latest salvo in the war for online retail dominance.

The temporary stores are a first for Wal-Mart Stores Inc, which experiments with store concepts in various markets hoping they will drive shoppers to its website.

The world's biggest retailer already operates stores within miles of the temporary Walmart.com locations, where shoppers can purchase items from the shelves or sit down with a laptop and shop a vast array of products on the chain's website.

Daily Deal Sites Popular for Young, Affluent But Not for Everyone

by Deepak Sharma on Tuesday, October 25, 2011

A new survey by Accenture shows that many more people are using tricks to save money, but that the young and wealthier are most likely to use daily deal sites such as GroupOn or Living Social to save money on purchases. 

Interestingly, in spite of the amount of attention that these sites receive, most Americans (56 percent) do not subscribe to a deal site, and a full 43 percent of Americans say they do not like "anything" about them.

That said, for those who use the sites, there are some interesting findings:

  • Nearly four in 10 daily deal site subscribers say they are using the sites more often now than a year ago
  • One in four (26 percent) say the deals entice them to purchase things they ordinarily wouldn’t
  • Most members don’t redeem purchases right away with 25 percent redeeming in one to three months, and more than one third (36 percent) in one to four weeks
  • The chief complaint with daily deal sites for respondents is the lack of items or services they want to use or try (37 percent) and lack of localized offers (24 percent).

Read more: As Consumers Balk at Higher Prices, Retailers Must Determine How to Retain Customers While Dealing with Rising Costs, Accenture Survey Shows

Cloud and Warehouse Theft

by Deepak Sharma on Thursday, October 20, 2011

Who knew Cloud computing can combat Warehouse Theft.

How Amazon uses big data to prevent warehouse theft

According to Henry, Amazon has more than 1.5 billion items in its retail catalog and more than 200 fulfillment centers around the world. That’s a lot of objects in a lot of places for the online retailer to keep track of. Keeping the most valuable items protected isn’t as easy as just putting the highest-priced products under lock and key. As Henry said, sometimes, due to limited availability or other factors, a lower-priced product might actually be more highly sought-after by criminals. There’s also the question of how big the cage is, how big the item is, how many items can be fit in each cage, and so on.

To determine which items are most likely to be stolen, Amazon stores the product catalog data in S3, which ends up having more than 50 million updates a week. The team spins up Amazon compute clusters every 30 minutes, crunch the data, and the data is fed back to the warehouse and website. At the center of the service is the new Elastic Map Reduce, a new hosted Hadoop framework running on AWS that lets customers spin up the equivalent of a supercomputer for processing big data.

Tablet Commerce Evaluation of Top Online Retailers

by Deepak Sharma on Wednesday, October 12, 2011

Alexander Interactive, a leading New York-based e-commerce consultancy has released  a new report on Tablet-commerce which provides best practices for tablet-based UX design and t-commerce review of the ten largest retailers on the web.

The report goes into depth on how the top-selling sites on the internet (including Amazon, Staples, Apple, Dell, Wall Mart and Sears, among others) are adapting to a tablet-based future.  The analysis found that all of the top e-retailers suffered from usability problems and offered limited tablet shopping experiences in comparison to those retailers with dedicated tablet site experiences, such as Nike. Accordingly, the authors suggest that retailers seriously evaluate their investments for T-commerce web infrastructure, due to the explosion of tablet computer usage forecast in the coming years.

You can download the comprehensive report here.

10 steps to retail success

by Deepak Sharma on Saturday, October 01, 2011

Keep an eye on Clare Rayner’s blog as she introduces the 10 steps to retail success over the next few weeks. The 10 steps are as below:

10-steps to retail success…

    1. Your personal and business goals, your business mission
    2. Your business positioning
    3. Your ideal customer
    4. Your product strategy and range planning
    5. Your pricing and promotional strategy
    6. Your channel and location strategy
    7. Your customer engagement strategy
    8. Your sourcing and supply chain strategy
    9. How you plan and control your business
    10. Your back office functions – taking care of HR, Legal, Finance and IT

Grocery Tweets

by Deepak Sharma on Thursday, September 29, 2011

Chris Brogan takes a look at grocery shelf products and their presence on Twitter and has some great advice.

Help! My Groceries Are Tweeting And They’re TERRIBLE!

  1. Don’t let your account die. Delete it, if you’ve abandoned the project.
  2. Make it about your audience.
  3. Engagement is not the same as bragging about yourself.
  4. The brands that act like humans get the most engagement.
  5. Spam people at your peril (the non-meat kind, Hormel. Simmer down).

There’s no reason to just throw up a Twitter account if you’re not going to make it about connecting on a different level than an ad campaign. There can’t possibly be enough clicks and activity to justify doing the job poorly. Perhaps it’s a matter of the advice you’ve been given. Maybe it’s just some checkbox on the systematized approach you’ve been told equals social engagement. That’s not how most folks will see it on the receiving end.

Wal-Mart Loses Two Top Executives

by Deepak Sharma on Wednesday, September 28, 2011

Change in E-Commerce Strategy for Wal-Mart??

Wal-Mart Loses Two Top Executives

Two top executives announced today that they are leaving Walmart (WMT).

Eduardo Castro-Wright, the CEO of Global E-Commerce and Global Sourcing and the former CEO of Walmart Mexico, said he is retiring on July 1, 2012. Wan Ling Martello, EVP of Global E-Commerce for Emerging Markets, he will also be leaving on April 1, 2012.

Retail “Brand Ambassadors”

by Deepak Sharma on Sunday, September 11, 2011

Retailers are hiring college students to represent brands on campuses across the nation.

On Campus, It’s One Big Commercial

IT’S move-in day here at the University of North Carolina, and Leila Ismail, stuffed animals in tow, is feeling some freshman angst.

A few friendly upperclassmen spring into action.

But wait: there is something odd, or at least oddly corporate, about this welcome wagon. These U.N.C. students are all wearing identical T-shirts from American Eagle Outfitters.

Turns out three of them are working for that youth clothing chain on this late August morning, as what are known in the trade as “brand ambassadors” or “campus evangelists” — and they have recruited several dozen friends as a volunteer move-in crew. Even before Ms. Ismail can find her dorm or meet her roommate, they cheerily unload her family’s car. Then they lug her belongings to her dorm. Along the way, they dole out American Eagle coupons, American Eagle water canisters and American Eagle pens.

Lowes adds 42000 iPhones

by Deepak Sharma

Lowes equips workers with 42000 iPhones which will be enabled for mobile calling, e-emailing and text-messaging as well as processing credit and debit card purchases. In the current fiscal Lowes will be spending $1.6 billion on technology which is 20 percent more than last year.

Lowe’s Upgrades Website, Adds 42,000 IPhones to Spur Sales

Lowe’s will spend a record amount on technology in the fiscal year through January, Brown said, while declining to say how much. The company has said it will boost overall capital spending 20 percent to $1.6 billion this year.

The retailer is replacing 72,000 computer screens with flat panels in more than 1,700 stores, increasing bandwidth for transmitting data and adding Wifi for shoppers’ smartphones, Brown said. It’s adding thousands of items for sale online and last month introduced a Spanish-language version of lowes.com and an app for the iPhone and the iPod Touch.

“Forget about the competition, we are playing catch-up with the customer psyche,” Brown, 48, said in an interview last week at a store in Mooresville, North Carolina, where Lowe’s tested the iPhone.

UK online conversion rates drop 55% in 5 years

by Deepak Sharma on Friday, September 09, 2011

Consumers are more and more researching and comparing products online and buying from physical stores by carefully evaluating the same.

Online Conversion Rates Drop by 55% in 5 Years as Purchasers Become Shoppers

Online conversion rates in the UK have fallen by 55% over the past five years as consumers have taken to browsing, researching and comparing products on more engaging retailer sites, rather than just viewing the internet as another purchasing channel.

In 2006, the average online conversion rate for retailers in the IMRG Capgemini e-Retail Sales Index was 8.4%, but that figure has steadily declined and the latest results reveal the rate to be 3.8% now.

A Case for Mobile BI

by Deepak Sharma on Wednesday, September 07, 2011

Retailer Guess tailors business intelligence applications for the mobile devices they run on and the employees who use them.

Taking the Guesswork Out of Mobile BI

The clothing maker and retailer has three categories of enterprise mobile applications: marketing and branding apps aimed at consumers; productivity tools for the operations staff; and applications that help managers make decisions faster. This last group, mobile business intelligence (BI), is where Guess has focused most, Relich says, “because that is what will make you money.” Guess revenues were up 16 percent for fiscal 2011, to $2.5 billion, while profits increased 13 percent.

Now, iPad Shopping carts

by Deepak Sharma on Tuesday, August 30, 2011

Sainsbury, the UK retailer is testing a shopping trolley with an inbuilt iPad dock.

iPad shopping trolley launches

The trolleys come complete with a tilting iPad holder and speakers. Their front bumpers are fitted with a sensor which lets off a warning beep if an engrossed shopper gets too close to another customer, while an onboard battery with a self-charging solar panel ensures that the iPads never run out of power.

The trolleys have been developed by broadcaster Sky to highlight its Sky Go service, which allows iPad users to watch live sport or news on their portable devices. The iPads themselves are not included.

Abercrombie and Fitch “Situation”

by Deepak Sharma on Tuesday, August 16, 2011

Abercrombie and Fitch has offered “substantial payment” to Jersey Shore’s Mike “The Situation” Sorrentino to stop wearing brand in “Jersey Shore”. Now, in my view, this is the first time a brand pays someone to stop wearing their clothes.

Abercrombie to 'Jersey Shore': Ditch our brand

"We are deeply concerned that Mr. Sorrentino's association with our brand could cause significant damage to our image. We understand that the show is for entertainment purposes, but believe this association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans," an Abercrombie & Fitch spokesperson said in a statement. "We have also extended this offer to other members of the cast, and are urgently waiting a response."

Tesco signs eight year agreement with Microsoft

by Deepak Sharma on Thursday, August 04, 2011

In personal relationships, seven-year itches can be destructive; in the world of information technology, eight-year agreements between a leading software vendor and a global retailer indicates a serious commitment to serious competitive advantage spanning multiple continents.

Tesco signs eight year agreement with Microsoft

Tesco has committed to the Microsoft platform in an eight year, world-wide agreement.
This global deal is aimed to enable Tesco to improve productivity, decision-making, knowledge sharing and operational excellence across the 14 countries in which it currently operates.
The agreement will underpin Tesco’s strategic objectives of growing its international presence; expanding its non-food business; and offering a broad selection of retail services such as banking, online and mobile. Putting innovative technology in the hands of its customers, staff and suppliers will allow Tesco to get closer to its goals of multi-channel retailing and meeting people’s needs as they change.
During the course of this agreement, Tesco and its affiliates will have access to the latest versions of Microsoft products and services in their head offices, stores, distribution and data centres, including Windows, Office, SharePoint, Exchange, Lync, System Center, BizTalk and SQL Server.
Tesco is expecting to see value immediately through the deployment of SharePoint, Exchange and Lync to create a new global collaboration platform. This will allow all employees to find specialist skills and share and access knowledge whenever and wherever they need. Collaboration is seen as enabling the distribution of retail skills and other best practices to its international subsidiaries; facilitating product innovation with internal experts and suppliers; and building communities of expertise.
“We have lots of colleagues in Tesco, doing lots of jobs all over the world,” says Mike McNamara, Group CIO at Tesco. “These technologies can help bring us together to share learning and expertise, views and opinions, thoughts and ideas.”
The deal also includes Microsoft Services’ Enterprise Strategy programme. The Consulting expertise this Programme provides is helping Tesco set strategy and prioritise and deliver projects so risks are minimised and time-to-value is accelerated.
“We are very excited about what this means for both Tesco’s employees and customers as it will change the way Tesco connects internally and with its customers,” says Bill Gonzalez, General Manager, Worldwide Distribution and Services Sector, Microsoft. “Tesco is one of the most innovative global retailers and this commitment confirms their position in the industry as a company that is focused on its customers, as well as driven by forward-thinking leaders.”

On the heels of fake Apple stores, now you have fake Ikea store

by Deepak Sharma on Monday, August 01, 2011

Scale of counterfeiting in China just keeps getting bigger. After fake Apple stores, now you have fake Ikea stores.

Chinese retailers hijack the Ikea experience

Nestled in a sleepy southern district of Kunming city in southwest China, is a 10,000 square meter, four-story building that could make Swedish furniture giant Ikea uneasy.

11 Furniture, as the store is known, copies Ikea's blue and yellow color scheme, mock-up rooms, miniature pencils, signage and even its rocking chair designs. Its cafeteria-style restaurant, complete with minimalist wooden tables, has a familiar look, although the menu features Chinese-style braised minced pork and eggs instead of Ikea's Swedish meatballs and salmon.

Main Image

Microsoft Speak

by Deepak Sharma

The Fall 2011 issue of Speak, Microsoft's customer publication for the retail industry, is out.

Speak, Microsoft's customer publication for the retail industry, provides retail technology and business executives with a digest of the key challenges in the industry, and the technology solutions that can address them. Formerly known as Retailspeak, the magazine includes comment from Microsoft and Microsoft partners and customers in the retail industry.

Download PDF or view it online.

Amazon sets eye on India

by Deepak Sharma on Tuesday, July 26, 2011

Amazon set to launch services in India next year

World's largest online retailer, Amazon.com is set to enter India, riding on the second wave of ecommerce boom in India. Amazon is in discussions with leading Indian e-commerce players like Flipkart.com, LetsBuy.com and Exclusively.in, among others and may enter the market as early as the first quarter of next year.

Why Tablet Commerce May Trump Mobile Commerce

by Deepak Sharma on Monday, July 25, 2011

Why Tablet Commerce May Trump Mobile Commerce

While all eyes in the online retail space seem to be on social networks and smartphones these days, we’re seeing an emerging trend with tablets that could be the most interesting of all. Only 9% of web shoppers now have tablet devices, but here’s the big deal — most of those people already own smartphones (as well as PCs, of course), and they are saying that they actually prefer to use their tablets for shopping. Not only that, but the ownership of the tablet device itself actually increases the amount of time that people spend online. And we’re anticipating a hockey stick in tablet adoption in the next five years on top of all that.

Google’s Zero Moment of Truth.

by Deepak Sharma

Google’s Zero Moment of Truth

The way we shop is changing and marketing strategies are simply not keeping pace. Whether we're shopping for corn flakes, concert tickets or a honeymoon in Paris, the Internet has changed how we decide what to buy. Today we're all digital explorers, seeking out online ratings, social media-based peer reviews, videos, and in-depth product details as we move down the path to purchase. Marketing has evolved and modern marketing strategies have to evolve with the changing shape of shopping.

At Google, we call this online decision-making moment the Zero Moment of Truth -- or simply ZMOT.

Download eBook

Retailers embrace text appeal with txt2buy

by Deepak Sharma on Saturday, July 23, 2011

A revolutionary new service which can provide retailers with a much needed boost has just hit the high street, allowing every customer in the UK to purchase items instantly and securely from any advert, simply by sending a text message.

The marketplace is saturated with news of new mobile phone Apps, fragmented m-commerce solutions and the latest smartphone technology, but the reality is that the ‘tried and tested’ SMS is all any retailer needs to reach over 50 million consumers in the UK.

The first service of its kind to hit the UK market, txt2buy offers retailers the chance to gain incremental sales from their existing marketing and to improve their upselling and cross selling opportunities, regardless of whether their customers have the latest smart phone and without having to download an App or waiting for web pages to load.

Retailers simply add a txt2buy call-to-action to their advertising and consumers can order instantly by sending the required keyword  to the number displayed on the advert. Following a simple one-time registration process with txt2buy (similar to setting up a Paypal account) consumers can order items of their choice in as little as  45 seconds, making txt2buy one of the quickest ways to close a sale.

Not only is this breakthrough technology a faster, simpler way for customers to order products they want, retailers can also generate more sales by closing impulse purchases at the moment of engagement with the advertising exposure. This ensures the value of their advertising results in sales with their brand directly and not their competitors.

txt2buy is already in early stage trials with some of the most established UK retail brands and is due to appear in mainstream advertising campaigns from as early as July 2011.

Marketing & Brand Director at txt2buy, Gordon Ellis-Brown, said: “txt2buy is a compelling new service that has the potential to revolutionize how retailers engage with a larger customer base, more than ever before. It is quickest way to close a sale, as consumers don’t need internet access to purchase – all they have to do is send a simple text”.

“The fact that the service works with current technology means that there is no upfront investment, expensive software or training required. As well as measuring offline marketing spend, txt2buy is able to capture that data and offer massive opportunities for up-selling and cross selling” adds Ellis-Brown.

And when it comes to integrating txt2buy into their marketing material it’s as simple as adding an additional call-to-action – one where consumers can instantly respond and buy, anytime, anywhere, 24/7...and no queuing!

Retailers are constantly looking for ways to measure return on advertising spend and strategies to successfully capture more customers and drive more sales without investing large sums of money. With txt2buy making all offline marketing instantly measurable, it seems txt2buy could well be the answer that the embattled high street has been waiting for.

Bing gaining grounds with Retailers

by Deepak Sharma on Friday, July 22, 2011

Retailers are ready to increase their Bing spending

Bing is making inroads into retailers’ search marketing budgets as 41% of merchants plan to divert at least some of their spending from Google Inc. to the two-year-old search engine operated by Microsoft Corp., according to the newest Internet Retailer survey.

Think Big, Sell More

by Deepak Sharma on Monday, July 18, 2011

At Stores, Making 5 for $5 a Bigger Draw Than 1 for $1

Three 12-packs of Pepsi are selling for $12.99 at Stop & Shop grocery stores. Ten cans of tuna, or 10 bags of marshmallows, are going for $10. Six ears of corn for $2. Ten containers of Meow Mix cat food for $5.50.

Want just one each of those items? Well, yes, you get the same discount in most cases. But grocers would prefer that you think bigger. Like most retailers, they are feeling the pinch as people spend less these days. So they are playing a multiples game to entice shoppers to buy more than their shopping lists dictate.

“We look at the customer buying behavior, and that’s how we land on multiples — to get customers a little higher than their typical purchase rate,” said Tom O’Boyle, executive vice president for merchandising and marketing at the Great Atlantic and Pacific Tea Company, which owns grocery stores including Pathmark, A.&P. and Food Emporium.

Mobile sites more favored over Apps

by Deepak Sharma

Big players in e-commerce have gotten the mobile message, study finds

The mobile message seems to be getting through to the heavy hitters in retail: Of 25 well-known brands and e-commerce sales leaders, all have mobile commerce sites, a new study finds. However, only 12% offer an iPhone or Android mobile app.

Features present on all 25 m-commerce sites or apps include product name, product description, price and the ability to complete a purchase, the study finds. From there content and features vary. 88% enable consumers to share product information via social media, 100% provide a store locator, but only 52% integrate GPS satellite technology within the locator. 88% allow consumers to set up an account, 80% enable customers to track orders after a purchase, 80% allow shoppers to create a wish list, 56% enable customers to access their loyalty program accounts, and 40% display estimated shipping charges before adding a product to a shopping cart.

Virtual Assistant at Duane Reade

by Deepak Sharma on Sunday, July 17, 2011

Virtual Assistant' technology makes retail debut at Duane Reade

Next-generation digital signage that uses the latest in holographic imaging and audio-visual technology to create the illusion of a real person is making its U.S. debut at Duane Reade’s new flagship in downtown Manhattan.

The technology, the Tensator Virtual Assistant, is provided by Lawrence, a Tensator Group Co. Completely customized for Duane Reade, it takes the form of a female greeter who welcomes entering customers and provides information on everything store-related. Currently, the greeter has seven different scripts, each of which speaks to a different store element.

Amazon’s just around the corner ‘Showrooms’

by Deepak Sharma on Friday, July 15, 2011

Retailers Fear Becoming Amazon’s ‘Showroom’

A growing number of consumers had taken to going to Best Buy to test consumer electronics and then going online to get them at a cheaper price. As Greg Melich of ISI Group and others have pointed out before and since then, Best Buy appears to be in danger of turning into Amazon’s “showroom.”

50K Retail Pro Merchants can now instantly publish their product data to Facebook, Google & More--directly from their Point of Sale system

by Deepak Sharma on Thursday, July 14, 2011

Over 90% of consumers make purchase decisions based on online research. For retailers, surfacing their inventory in search, mobile and social is just as important as having a website. But this is quite challenging for merchants, since their product data is usually stuck in their point of sale system--with no easy way out. With a new partnership being announced between Retail Pro & Wishpond on Tue, 7/12, over 50,000 merchants will be able to instantly publish their product data online--with a few clicks and at a very low cost.
Retailers can install Wishpond's RetailConnect Import plugin (takes a few minutes). As soon as they do, the Point of Sale system will automatically "push" product inventory data to Wishpond and keep it synchronized with no additional effort. Retailers can use Wishpond's merchant center to view, manage and publish their inventory online to Facebook (as a Facebook Storefront), push it to Google Product Search or to mobile applications.

RetailConnect infographic


More information about Wishpond can be found here:
Web: http://www.wishpond.com
Video: http://youtu.be/UKP3-FIHtmU
RetailConnect Announcement: http://www.wishpond.com/retailconnect
RetailConnect Infographic: http://www.wishpond.com/images/rconnect/retailconnect_infographic.pdf
More information about Retail Pro can be found here:
Web: http://www.retailpro.com

Mobile E-Commerce Infographic

by Deepak Sharma on Wednesday, June 01, 2011

By 2015, it's predicted that mobile purchases will total $119 billion globally.

Mobile E-Commerce Infographic

mobile ecommerce shopper revolution
Learn More about 2D Barcodes at Microsoft Tag.

86% of Top 500 Retailers now have presence on Facebook

by Deepak Sharma

Top 500 retailers take a liking to social networks

Facebook is in the news almost daily and the social network continues to grow, with more than 500 million members at last count. And Top 500 retailers want to be right there with them. 432 of the companies listed in Internet Retailer’s 2011 Top 500 Guide —86%—have a presence on Facebook. That’s 16% more than the 371 that had pages on Facebook last year and a 52% increase from 284 in the 2009 edition.

Twitter, the network that enables users to “follow” the daily doings of other participants via 140-character message bursts, continues to grow in web retailers’ social media strategy. Of the current Top 500 online retailers, 347, or 69%, have a presence on Twitter and feeds are up by 37% (254 companies) from the 2010 edition and 221% (108) from the 2009 guide.

Retailers Top 10 Risks

by Deepak Sharma

Risks for Retailers: A New Top 10

Retailers are less worried about consumer spending these days, suggesting that their confidence level has risen from the doldrums, according to a recent review of regulatory filings by BDO USA.

The accounting firm found that concern over consumer confidence and spending has fallen out of retailers' 10 most-cited risks, from 5th in 2010 to 11th this year. But concern about the state of the economy still tops the list, as it has for the past two years. BDO ranked top risk factors after looking at the most recent 10-Ks of the 100 largest (by revenue) publicly traded retailers.

Top 10 Retail Risks

Retailers Offer Apps With a Catalog Feel

by Deepak Sharma on Tuesday, May 31, 2011

Retailers see a lucrative future in apps for tablet devices that resemble magazines.

NYTimes - Retailers Offer Apps With a Catalog Feel

Retailers like Net-a-Porter think they have found a way to give online shopping more of the feel of an outing at the mall or an hour with a catalog — by creating apps that resemble magazines for tablet computers. Just as magazine publishers are producing iPad apps that mimic print in a way they never could on ordinary Web sites, retailers are making iPad catalogs, with big, stylized photographs that users can flip through on the couch or in bed. And also like magazine publishers, they are adding rich features like video, sound and 3-D views.

My Store Is Too Big – What Do I Do With The Extra Space?

by Deepak Sharma on Monday, May 30, 2011

Willard Bishop’s latest Competitive Edge provides insight into some existing and potential ways retailers can maximize their store space to drive efficiency and differentiation and increase sales and shopper satisfaction.

My Store Is Too Big – What Do I Do With The Extra Space?

With the evolution of Supercenters, Dollar, Specialty, and Limited Assortment stores, grocery retailers have added space to accommodate a plethora of services, enhanced the perimeter of their stores, and increased assortment in order to drive differentiation and fend off competitive pressures. Unfortunately, despite these efforts, grocery’s overall market share (of dollars) has declined by 49% (1988 – 90% to 2010 – 41%). Based on these trends, retailers now have too much square footage to support their businesses and are unsure what to do with the excess space. 

Weis Markets deploys Retalix's Demand-Driven Replenishment solution

by Deepak Sharma on Monday, May 23, 2011

building_imageWeis Markets, a 164-store grocery chain based in Sunbury, Penn., plans to optimize its overall in-stock position and reduce excess inventory and out-of-stocks in its stores, using Retalix's Demand-Driven Replenishment solution.

Weis Markets to Reduce Out-of-Stocks, Optimize In-Stock Position With Retalix Solution

"We wanted a system that could provide demand-based forecasting and replenishment and assist us in optimizing our inventory. Retalix's Demand-Driven Replenishment solution was the ideal fit," said Bob Mawyer, vice president of information technology at Weis Markets. "In addition, we expect it to help us drive sales and improve our customer experience by reducing out-of-stocks, while making our operations more efficient and reducing overall costs."

Retalix's Demand-Driven Replenishment solution is part of the Retalix Merchandising Solution Suite. It is a demand forecasting and store replenishment system designed specifically for fast-moving consumer goods retailers, to optimize inventory management and positions, reduce out-of-stocks, streamline the order process, improve cashflow, and help retailers use resources more efficiently.

The Demand-Driven Replenishment solution is based on Microsoft technologies, and is comprised of four core modules: Demand Forecasting, Inventory Management, Order Optimization, and Analytics, and it contains advanced proprietary algorithms to interpret demand and optimize replenishment orders. Retailers using Demand-Driven Replenishment have reported significant out-of-stock reductions, decreased inventory levels and inventory costs, and lower spoilage of perishable products.

Nordstrom Deploys 6,000 Mobile POS Devices

by Deepak Sharma

RIS News - Nordstrom Deploys 6,000 Mobile POS Devices

Nordstrom

Technology is a major focus for Nordstrom this year according to Blake Nordstrom, president of Nordstrom. After installing Wi-Fi in all full line stores in November 2010, the retailer plans to deploy 6,000 handheld computers in these stores by July as well as make enhancements to its mobile and e-commerce channels.

"We should have roughly 5,000 to 6,000 handhelds in our full line stores by July," explains Nordstrom. "We will learn from these efforts and quickly add to this functionality with plans to have significantly more of these devices in our stores by year-end."

The retailer will also launch a mobile-optimized version of its e-commerce website in June that will allow customers to shop and make purchases from their smartphones.

Amazon edges out Walmart as the most-valuable retail brand

by Deepak Sharma on Sunday, May 08, 2011

Amazon is now the most-valuable retail brand in the world, according to Millward Brown's 2011 BrandZ study of the most-valuable global brands. Amazon edged out Walmart to attain this feat.

Amazon edged out Walmart as the most-valuable retail brand by Millward Brown's accounting, with its brand value rising 37% to $37.6 billion as Walmart's fell 5% to $37.3 billion. Walmart parent Wal-Mart Stores still has more than 10 times the sales and more than five times the market capitalization of Amazon. But BrandZ's calculation subtracts tangible assets from market value to help estimate brand value. Amazon, with no physical stores, fares well in that process. The Walmart brand value also doesn't include Sam's Club or other overseas affiliates with different brand names owned by Wal-Mart Stores.

Even so, Amazon's rise, combined with declines in brand value not only for Walmart but also for other top global retailers Tesco and Carrefour last year, marks the shift toward e-commerce.

"Amazon benefits incredibly by having user reviews integrated into its site," said Eileen Campbell, global CEO of Millward Brown. "Everybody does that now, but Amazon was the first, so it's done an incredibly good job of building trust."

Struggles of Indian Grocers

by Deepak Sharma on Friday, May 06, 2011

Stark Reality check for Indian Mom & Pop (called Kirana) stores.

Why Indian grocers' biggest worry isn't the Walmarts

The problem of traditional retail is not competition. The challenges lie at home, within their business model. Though footfalls and phone calls haven't lessened much, profitability of mom-and-pop stores is hit by rising operating costs. They pay higher rent and wages but profit margins on various products have either shrunk or remain stable.
Hoping for a surge in sales is unrealistic. Mom-and-pops target customers close to their location. This number is largely stable over five to ten years. Limited by capital, few can offer an exclusive deal or inventory that compels customers to drive long distances to shop at their store.

Crystal Ball 2.0: The State of Retail Demand Forecasting, Benchmark 2011

by Deepak Sharma on Thursday, May 05, 2011

RSR Research's latest report, "Crystal Ball 2.0: The State of Retail Demand Forecasting, Benchmark 2011," RSR’s first annual benchmark on the topic, finds that retailers believe demand forecasting capabilities to be critical to their operations but struggle to incorporate demand forecasting insights deeper into their businesses.

These findings are based on a survey of 83 retailers between January-April 2011.

"Retailers have made significant investments in optimization technologies, particularly around price and labor, and demand forecasts come hand-in-hand with those capabilities,” said Brian Kilcourse, Managing Partner at RSR and a co-author of the report. “But the forecasting engines that create those inputs into optimization tools can often be completely different in terms of assumptions, time horizons, models. It adds sophistication to retailers’ capabilities, but also creates some challenging complications - building up internal siloes instead of knocking them down.”

"With more channels to manage and more leading indicators to demand, such as social media and consumer intent, retailers need all the help they can get in forecasting and managing demand," adds Nikki Baird, the report’s co-author. "The challenge isn’t that the crystal ball is cloudy but retailers just have too many forecast engines, each with a slightly different prediction than the next. Companies have yet to figure out how to reconcile them all."

"Crystal Ball 2.0: The State of Retail Demand Forecasting, Benchmark 2011" contains analysis of the business drivers, opportunities, and organizational constraints surrounding demand forecasts, as well as recommendations for creating successful demand forecasting capabilities. The report is part of RSR Research's ongoing efforts to provide market intelligence on retail technology trends, and can be downloaded here:

http://www.retailsystemsresearch.com/_document/summary/1280

Cha---ching! -- Why retailers are loving Facebook

by Deepak Sharma on Thursday, April 28, 2011

On April 9, 2011, the 5th fastest growing Facebook page in the world was the page for "Kissing." On its heels, in the number 6 spot, was the Kirkland's Facebook page from redpepper.

Just two days earlier, agency redpepper launched Kirkland's Cha---ching! promotion. This promo included a $25,000 cash prize and a chance to win Kirkand's merchandise in a swap game where people force other players to trade merchandise they have in their virtual possession. 

Everyone who plays the game gets a coupon for a future purchase at Kirkland's. (Kirkland's customers LOVE their coupons. The more they play, the more they can save. The number of fans nearly doubled from 73,000 fans at launch to over 140,000 four days in. 40,154 people were entered to win. 36,709 people were playing the swap game.

image

The Holy Grail of any social media effort is to engage the audience versus simply getting them to click a "like" button. Much to our delight, new fans showed their enthusiasm and passion for the brand through telling posts on the Kirkland's Facebook wall like"Kirkland's and I are BFFs."

This group of consumers is predominantly comprised of 25-55 year old Females.

Not only are they the fastest growing segment on Facebook, games like Farmville & Cityville are the kinds of online social activities they engage in the most. And, what's more, this consumer group is identical in make-up to the average Kirkland's customer.

When players engage in the promo, a wall post appears on their profile and in their friends' news feed. This post announces their participation in the game and invites other players to do the same. 11 days into the promotion, 54,875 people have entered the sweepstakes, 50,021 are playing the swap game and the number of total Facebook Fans has grown to 165,229, and is on-track to hit the 200K goal.

And, while a million Facebook "likes" is certainly noteworthy, redpepper believes that 200K impassioned brand advocates is a much truer measure of social media success.

Abercrombie PowerPoint

by Deepak Sharma on Friday, April 08, 2011

I love reading Footnoted and I knew I had to share this post, the moment I read it.

Lots of eye candy in Abercrombie PowerPoint…

We counted no fewer than 13 slides that featured shirtless dudes baring their pecs. That’s nearly 20% of the slides in the 67-slide deck. The PowerPoint was part of the company’s Investors Day earlier this week. The presentation seems to have gone well, judging by this brief WSJ article that notes that Abercrombie stock climbed over 8% on Tuesday, in part, it seems, based on the bullish projections made during the presentation. So there was some substance in between the eye-candy slides.

we’re not sure that cutting and pasting a bunch of shirtless guys into a PowerPoint is the best way to go about this. Even if it does cause the stock to climb 8% in one day.

Wal-Mart piloting selling large GE Appliances in store

by Deepak Sharma on Tuesday, April 05, 2011

WSJ is reporting that Wal-Mart is planning to sell large appliances as a part of a pilot program in its stores in Texas this year. Long time ago, well in 2000, I was part of a program where we developed Interactive Kiosk based solution for GE appliances to be sold in Wal-Mart. This looks like exact same thing, maybe this time without a kiosk.

Wal-Mart Explores Selling Large Appliances

Wal-Mart Stores Inc. may begin adding large appliances such as stoves and dishwashers to stores in Texas this year as part of a pilot program that could lead to a nationwide launch.

The retailer is looking at a program selling appliances from General Electric Co. and could roll out to more than 100 stores initially, according to analysts and consultants familiar with the retailer's plans.

Last month, Wal-Mart's U.S. chief Bill Simon, speaking at an industry conference, said the company is "looking at everything including appliances right now." Mr. Simon didn't provide specifics about the scope other than saying: "If it's something that we believe there is customer demand for and an opportunity to make some money, we're going to get into it in a big way."

A Wal-Mart spokesperson declined to provide details. A GE spokesman didn't respond to a request for comment.

Nordstrom Interactive Window experience using Kinect

by Deepak Sharma on Monday, April 04, 2011

In a unique and first of it’s kind. Nordstrom flagship store in Seattle has put Microsoft Kinect in their windows and created an unique experience where people can come and write/paint with just the motion of their hands. Cool stuff.

Please DO Touch the Glass: Our Interactive Window

Our brilliant Interactive Development, Visual Merchandising and Operations Teams put their heads together and brought light writing with light to life. With the help of Kinect’s infrared technology and their technical genius, our teams created a seamlessly interactive display that anyone can “paint” on with using just the motion of their hands in front of the glass.

We’ve loved watching the curiosity and delight of people engaging with our windows. So, if you’re in the neighborhood now through April 11, be sure to drop by—and please do touch the glass.

Cloud Scenarios for Retailers

by Deepak Sharma

Retailers who are thinking of moving to Cloud computing should read the latest whitepaper from Microsoft, Driving Revenue and Innovation in Retail with Windows Azure. The Whitepaper provides solution scenarios along with workload patterns for these scenarios and examples from the industry.

Momentum is building around cloud scenarios applicable to retailing by enabling business agility at lower cost.  Microsoft has made a strong commitment to cloud computing to help retailers connect with consumers whenever and wherever they choose.  Windows Azure provides a platform and a set of services that can be used individually or together.  It is a flexible and interoperable platform that is use to build new applications to run from the cloud or enhance existing applications with cloud-based service-oriented capabilities.

There are business-enabling benefits for retail enterprises, including the ability to extend services related to products and retail offerings directly to consumers. The global reach that can be achieved will enable retailers to deliver products through vastly extended supply chains and product-sourcing approaches. A cloud computing strategy that is integrated with existing business plans will have the effect of reducing cost and increasing services to customers throughout the world.

Solution Scenario

Workload
Patterns

Description

Industry
Examples

Retail Demand Forecasting On/Off

Sales forecasting, based on raw POS data, delivered as
a service for mass scale.

Lokad
Smart Client - Store System Broad usage

Full store system application which provides a rich user interface and offline capability.  Allows retailers to quickly deploy a store system solution with no
application software to manage on the client.

Bedin Systems

Supply Chain Trading Partner Collaboration

Broad usage

B2B e-commerce collaboration that enables visibility to electronic data interchange (EDI) transactions.  This system allows for insight into the trading partner
relationship.

GXS

Consumer Promotions at
Internet Scale

Growing fast

Promotional engine built to accept request and deliver email coupon promotions to consumers.

Outback
Steakhouse

Connecting Stores with
Distributed Collaboration

N/A

Microsoft cloud based productivity suite solution to connect distributed users in stores with the enterprise for collaboration features delivered as a service.

McDonald’s
using Office
365

Scalable E-Commerce

Predictable
Bursting

On-premise application augmented with cloud computing for tremendous scale without the cost. 
Ease of application portability using Windows server interoperability features of Windows Azure.

Dominos

Download Whitepaper.

Simply Tap

by Deepak Sharma on Saturday, April 02, 2011

UK Retailers come together to form Mobile Money Network and launch Simply Tap which is an Mobile app- and SMS-based mobile payments tool.

UK retailers launch mobile payments scheme

The Mobile Money Network (MMN) – a four-month old UK retail alliance – has announced its first service offering, an app- and SMS-based mobile payments tool called ‘Simply Tap.’ Described as a “common sense approach to buying products and services via a mobile phone,” Simply Tap allows users to send a product code (either via app or SMS) to buy goods at participating retailers. Users must first go through a one-off registration process to register personal details, debit or credit card numbers, and delivery addresses. MMN says that the service will work with “any mobile phone, on any mobile network and with any bank.”

MMN is a joint venture between Monitise, Best Buy Europe and Carphone Warehouse founder Charles Dunstone. It says it is in discussions with 17 of the top 20 UK high street retailers and many leading financial institutions regarding the forthcoming rollout.

Read more about Mobile Money Network.

Product Affinity & Market Basket Analysis (Merchandising)

by Deepak Sharma on Friday, April 01, 2011

Turning the Kaleidoscope of Data to Discover Value

Editor’s Note: This is a guest post by Manthan Systems. Read more about Manthan Systems at the end of this article or visit www.manthansystems.com.

Access to point-of-sale data has transformed the retail businesses by suddenly throwing open new insights from data that were hitherto not captured. This knowledge has empowered the retailers with an ability to understand their business better and use these insights for accurate decision-making.

Various statistical techniques can be used in the right combination to analyze data and arrive at trends and patterns that lead to increased sales and thereby directly impact the bottom-line and result in profitability. Using these techniques, retailers can categorize customers by the products and services they choose, identify patterns to plan cross-selling campaigns, analyze and target customers based on product-centric purchase histories and patterns, plan multi-product promotions based on customer response, arrive at customer probability to buy additional products, measure shifts in customer… behavior and locations, compare segments – the possibilities are endless.

Realize the connection

Retailers are aware of the fact that shoppers who buy one product frequently, (for example, hamburger patties) are more likely to buy a couple of other related products (for example, hamburger buns and fries). This probability is due to the amount of affinity that exists between the products.

While some product affinities, such as the one above, are obvious to observers and can be arrived at by using common sense, others can be less apparent without the appropriate data mining techniques; for example, Wal-Mart customers who purchase Barbie dolls have a 60% likelihood of also purchasing one of three types of candy bars (Forbes, September 8, 1997). This paired purchasing pattern can be attributed to the obscure correlation between the two products.

Every shopper’s basket has a story to tell

The items a shopper purchases during one shopping trip makes up the ‘market basket’. The various items in a market basket are correlated to each other with varying frequencies, presenting a picture of what may have driven the shopping trip: running short of a couple of essential ingredients for cooking, assembling all necessary items for an exotic meal or a birthday party, preparing to have guests over, stocking up groceries for the month

The selection also reveals the shopper’s profile to a certain accuracy and provides a glimpse of socio-economic attributes of the shopper: is the shopper a family person? Is there a child in the shopper’s family? Are there elders in the family? What age-bracket does the shopper fall into? Is the shopper an impulsive buyer? What economic section does the shopper belong to? The overall level or value of the selection is another factor that can be of significance for retailers. Such information when viewed on the time parameter reveals stronger correlations: among products, between shopper profiles and their product preferences, between the kind of shopping trips and the product preferences, between the time of the year and product preferences of a particular shopper profile, to name a few.

How business analytics can help

Applying these seemingly simple statistical principles of great practical use to the humungous amount of data in any large format retail is a Herculean task. Sifting through this data and reaching any valuable conclusion is quite like looking for a needle in a haystack.

Business intelligence (BI) systems are often looked at as a solution to this challenge. However, the piece that separates a generic BI system from the one that facilitates retail decision making is advanced analytics. BI systems designed specifically for the retail industry and powered by advanced analytics can help drive the functional theories of mathematics in retail decision making. The analytics angle brings in a scientific base for choices that were made randomly or based on observation and experience earlier, guaranteeing a considerably higher success rate. The prescriptive and guided nature of retail-centric BI systems, along with their out-of-the-box functionalities, makes it possible for unskilled personnel in the retail chain as well to use these statistical techniques in their area of operations to arrive at benefit-driven decisions. An attempt to assemble a BI tool-kit for such analytical requirements can prove hazardous leading to uncertainties and perils involved in the never-ending process of adding blocks to map newer business demands and analytical needs.

Retail BI applies the principles of product affinity and market basket analysis to point-of-sale data to reveal concealed relationships between products and discover customer behaviour patterns. Such analysis provides insights into the types of products customers usually buy together, the time of year when the sales for a combination of products increase, destination items that attract customers to the store, and reasons for a sudden boost in the sales of a specific product. The analytical abilities of retail BI can identify correlations between customer profiles and product purchases and store visits.

With the help of retail BI, product affinity and market basket analysis can be used by the marketing and merchandizing teams at various levels in a large format retail scenario. Market baskets can be profiled and classified into categories such as grocery basket, special occasion basket, weekly shopping basket based on the objective of the shopping trip as revealed by the analysis. This information can be used for planning daily promotions to drive more trips to the store by offering a discount voucher for a week or to increase the basket size during each trip by reducing prices of certain products or offering special discounts/gifts. Similarly, product affinity data can lead the store manager to identify the products that most shoppers look for in the store and place them in an easily accessible area or identify the products that are bought together most often and display them in close vicinity or arrange the products identified as impulse purchases in an attractive manner to make the impulse irresistible.

Decisions related to the selection of products on discount, special offers to a particular segment of customers, gift vouchers on certain products must be based on scientific data in order to derive maximum value from such initiatives. The trends and patterns that are revealed by retail BI can be used for:

  • Improving the effectiveness of marketing, sales and merchandising strategies
  • Planning strategic initiatives such as periodic promotions, campaigns, special offers, price changes, cross-selling, product-pairing
  • Correlating store performance with overall market performance
  • Planning the store layout for more effective product placement and shelf presentation with appropriate prominence for impulse purchases, seasonal purchases, destination/anchor products

Retail BI can turn the kaleidoscope of data in infinite angles leading to endless possibilities that help analyze and use the data to arrive at trends and combinations in retail decision making.

Manthan Systems produces cutting edge analytic solutions for global retail and CPG organizations. Manthan's breakthrough solutions, under the brand name ARC, transform the way retailers use analytics driven decision making for strategic advantage. The ARC product portfolio spans the entire spectrum of retail decision making with role-based, pre-built applications, and includes products for merchandising analytics, financial analytics, customer analytics, supplier collaboration analytics and enterprise retail BI. These award winning products provide a significant edge to an organization’s analytical capability and maturity, and are proven to deliver unmatched business benefits in a remarkably short timeframe. Manthan’s experience spans a wide range of retail segments and formats, having transformed decision making for some of the biggest names in retail across the globe. For more information, visit www.manthansystems.com .

Mood Media Announces it Will Acquire Muzak for $345 Million

by Deepak Sharma on Friday, March 25, 2011

LATEST NEWSMood Media Corp., a global, leading in-store media specialist that uses a mix of music, visual and scent media to help its clients communicate with consumers with a view to driving incremental sales at the point-of-purchase is acquiring Muzak Holdings LLC, best known for providing piped music in elevators, for $305 million in cash.

With the acquisition of Muzak, Mood Media extends its global footprint, creating the largest in-store media provider globally, nearly five times the size of its next largest competitor. It will service a staggering 470,000 commercial locations in over 39 countries after this acquisition is completed.

Mood Media to Acquire Muzak for $305 Million

Founded in 2004, Mood has a market capitalization of about $380 million. It has a large presence in Europe, where it provides background music and digital signage services to around 117,000 locations, from Nike to Hermes stores.

Muzak provides background music to about 300,000 U.S. locations, such as restaurants, malls and hotels. It makes most of its money through multi-year contracts and reported 2010 revenue of $195 million. The company traces its roots back to the 1930s when it distributed recorded music to theaters and stores. Today, it also provides on-hold messaging and video programming, although piped music is its forte.

Mood hopes to use Muzak's U.S. footprint to introduce more digital services, such as screens that allow customers to check merchandise in stores, Mr. Abony said.

Walgreens to buy Drugstore.com

by Deepak Sharma on Thursday, March 24, 2011

Walgreens will strengthen its multichannel presence with this purchase and gets immediate access to more than 3 millions Drugstore.com customers. It will also block other customers like Rite Aid which has had a partnership with Drugstore.com for many years now.

Walgreens to buy Drugstore.com

One of the biggest names in the online retail category for prescription drugs and health and beauty supplies is being acquired by one of nation’s largest drugstore chains.

This morning Walgreen Co., No. 68 in the Internet Retailer Top 500 Guide, announced plans to buy Drugstore.com, No. 46, in a deal valued at $429 million. Under the terms of the deal, Walgreens will pay $3.80 per share for Drugstore.com’s common stock. Walgreens expects the deal to close by the end of June.

“Our acquisition of Drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores,” says Walgreens CEO Greg Wasson. “This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering.”

Bring your store to Facebook using Beetailer

by Deepak Sharma on Sunday, March 20, 2011

TechCrunch today covered Beetailer whose software allows online retailers to import their web store onto Facebook while providing tools for promoting the store and detailed analytics about how well it is doing. Beetailer claims that it has over a thousand stores, reaching millions of fans are already using their system.

Beetailer Helps Online Retailers Set Up Shop On Facebook

Beetailer’s software connects with existing e-commerce platform, such as Magento and Shopify, and will import and sync online catalogs including, prices, images, sizes, colors and even whether products are in stock. The online storefront will populate on the retailer’s Facebook page and will essentially allow Facebook users to browse and add products to a shopping cart within the social network. When a user clicks to checkout and actually purchase the products, Beetailer will lead the user to the e-retailer’s website so the shopper will checkout via the retailer’s preferred payment process.

But in addition to accessing the social network’s vast userbase, retailers can also leverage Facebook’s social graph to engage consumers. Beetailer allows retailers to launch time-limited, Facebook-specific promotions, including prizes and discounts for fans who like, comment, and bring other friends to the store.

Additionally, Beetailer provides retailers with analytics to measure the results of each
promotion. Beetailer’s data will include traffic, demographic data, most visited products, most visited categories, number of checkout and more.

Home_dashboard

Maslow’s Theory and Indian Retail

by Deepak Sharma on Friday, March 18, 2011

Interesting parallel drawn between Maslow’s Theory and maturing Indian Retail industry.

Indian retail evolution is mirroring Maslow's Theory of need hierarchy

Maslow's theory maintains that a person does not feel a higher need until the needs of the current level have been satisfied. This is exactly what happened in the Indian retail scenario. All of us were so used to our local dingy kirana [Local Mom and Pop stores] shops that we didn't feel a higher need, until Indians started travelling abroad and saw the high end retail environment. That, accompanied by our liberalising economy, was the harbinger of modern trade in the Indian retail industry.

Once the lower need of safety & security was met, particularly for the urban consumer, just like Maslow's theory says, the consumer in India was ready to move to the next need. That of "Love & Belonging". To fulfill this need, the retail trade responded quickly. There was this phase where almost every retailer had a "loyalty programme" of some sort or the other. Lifestyle, Shopper's Stop, Westside, Pantaloons, you name them and they had it.

Case of sour grapes?

by Deepak Sharma on Thursday, March 17, 2011

Wal-Mart, Target, Sears et al are lobbying legislators to change sales-tax laws in more than a dozen states including Texas and California that will force Internet Retailers to collect Sales Taxes from companies like Amazon. 

Retailers Push Amazon on Taxes

The big-box stores are backing a coalition called the Alliance for Main Street Fairness, which is leading efforts to change sales-tax laws in more than a dozen states including Texas and California.

Until now, the group has been largely associated with mom-and-pop stores, spotlighting stories of small toy shops and booksellers who argue Internet merchants that aren't legally required to collect sales taxes enjoy an unfair advantage with shoppers.

Amazon has feverishly fought efforts to compel it to collect sales taxes. The Seattle-based online retailer says it complies with the law. Under a 1992 U.S. Supreme Court ruling, only merchants who have a physical presence, such as stores, in a state have to collect sales taxes. Amazon currently gathers those taxes in just five states: Kansas, Kentucky, North Dakota, its home base of Washington, and New York.

But retailers pushed for passage of a new law in Illinois last week that forces Amazon to collect sales taxes if it employs marketing affiliates in the state—a measure similar to a New York law that retailers want to replicate nationally—and their drumbeat may soon spur federal action.

Chico’s FAS Inc. Selects PTC Windchill® FlexPLM® for Enterprise PLM

by Deepak Sharma on Tuesday, March 15, 2011

Chico’s FAS Inc, a women's specialty retailer has has selected PTC’s FlexPLM for all its brands: Chicos, White House|Black Market and Soma Intimates. Establishing a single PLM platform will enable Chico’s to reduce material costs, cycle times and product development costs. FlexPLM will manage Chico’s brands’ suppliers, materials and a fast-paced global apparel calendar so that Chico’s can make better sourcing decisions and achieve greater efficiency in its costs and inventory.

Chico’s FAS Inc. Selects PTC Windchill® FlexPLM® for Enterprise PLM

“When evaluating PLM vendors, we wanted software that was not only going to help us drive productivity and reduce costs, but we wanted a solution that was going to be easy to use,” said Krissy Blakeway, senior vice president of Chico’s design and product development.  “As the technology leader, PTC was the unanimous choice of our user community. We believe that as we move forward and standardize on Windchill FlexPLM, our ability to be first to market with the latest fashion will be enhanced.”

“PTC fully understands the retail industry pain points and we work closely with our customers to not only help them overcome those existing challenges, but to look ahead, anticipate needs and innovate,” said Kathleen Mitford, vice president, market strategy, PTC. “Chico’s FAS Inc. is already a leader and by standardizing on Windchill, the company will be able to continue to expand its position by realizing the benefits of margin improvement, cycle reduction time and personal productivity gains.”

Quantum Retail’s Secret Sauce

by Deepak Sharma on Thursday, March 10, 2011

Interview of Chris Allan, Quantum Retail Technology’s Chief Strategy Officer with P.J. Jakovljevic in Technology Evaluation Centers where he talks about Quantum’s Q Platform, competitive landscape and what wakes them up at night.

Quantum Retail: Challenging the “Enterprise Apps Establishment” and Retailers’ Mindset – Part 2

PJ: What is your killer value proposition that other retail software “usual suspects” (e.g., Oracle, SAP, SAS, JDA, etc.) fail to provide? In other words, what are the pain points that only you can cure for your customers (and with what typical benefits)?

CA: The Q Platform (explained in Part 1) actually solves the problems that these other vendors mainly talk about solving–and delivers on the business case every time, with proven, measurable results. Quantum has developed the concept of managing by Merchandising Strategy–determining the role of the product within the customer offering, such as being an image item, loss leader, traffic driver, etc. (see Part 1 for more details).

Users are not asked to select from an overwhelming number of forecasting algorithms and replenishment algorithms, and to set a slew of tricky parameters up around each of those algorithms for every stock-keeping unit (SKU) in every store. Q takes the chosen Merchandising Strategy and understands the objectives of the product from both a financial and a merchandising perspective and ensures that every inventory decision that is made is aligned with achieving those objectives.

The way that customers buy product changes over time and Q adjusts automatically to react to those changes, ensuring that alignment is maintained throughout the products’ lifecycle. This is very different from having to actively maintain the ordering, allocation, and replenishment configurations for every SKU in every store and manually ensure that the system is set up correctly (which is the value prop of our aforementioned competitors).

In the process of understanding items Q considers over 30 dimensions of product behavior including average sales, maximum sales, demand, days between sales, lost sales, days between stock-outs, current inventory, last stock-out, weeks of supply, percent in stock, etc. Beyond these typical sales and inventory metrics, Q also understands the following:

  • When the issues happened, e.g. an out-of-stock on Monday has different gravity than out-of-stock on Saturday
  • Variations in contributing factors such as lead times, lifecycle, and customer service level
  • Variability and uniqueness in sales such as volatility, lumpiness, lost sales, demand vs. sales
  • Finally, and perhaps most importantly, profitability metrics such as gross margin return on inventory investment (GMROI)

These capabilities have led to retailers being able to have a high degree of automation with Q using exception management to highlight only those areas where users should be spending time in the system. Typical results achieved and verified (by Quantum’s customers that were mentioned in Part 1) are as follows:

  • A 2.2 percent full-price sales increase (in fast fashion)
  • A 5.6 percent sales increase (in general merchandise)
  • A 4 percent increase in gross margin
  • An 11 percent inventory reduction
  • A 40 percent reduction in overstocks