Upcoming WEBINAR: Delivering Results: Clarity and Sustainability in Retail
In a week I will participate in NRF’s STORES webinar on the above topic. Chris Puglise and Russ Hill will join me to address how retailers can gain traction with their sustainability strategy and turning insights into action. I would like in this blog to give you my view on retail, key trends, and opportunities facing retailers in what I am calling ‘consumer-centric retailing in the age of social media.’
In any given year, you can say that operating a chain of retail stores and/or an eCommerce site is full of challenges and complexities. The economic conditions of the past year have caused pain at the consumer level and at many retail and other companies that are dependent on consumer spending. This has magnified the significance of each investment decision: be that the amount of inventory to carry, pricing, new product introductions, store labor, or when to introduce more aggressive promotions. The macro trends I hear from retail executives around the globe revolve around a trifecta of issues: continued challenging market conditions, powerful customers, and delivering sustainable operations.
Key Business Imperatives:
We have found that a focus on four key business imperatives will go a long way to ensure that your business is heading in the right direction. The consumer should be front and center in your thinking. Gaining consumer insight is important to truly understand your specific shoppers, plan centrally and execute locally by banner, region, district or some other grouping. You probably have a wealth of information about your customers, but you may not necessarily be leveraging those to make better informed decisions about your business at the right levels. One set of decisions falls in the execution category – from sourcing through delivery to store shelf and the in-store or online experience. Such execution needs to be flawless, after all you have raised awareness about your product and services, attracted the shopper to your store or web site and you have a moment of truth to positively influence the consumer with flawless delivery of value. Lastly we see the future of organizations moving from company-centric, command and control, linear thinking to a Business Network Model in which business partner-centric, connect and collaborate, holistic approach to creating value reigns.
Consumers and Social Networks:
Focusing on the consumer, we see the rise of social networks offering retailers a new engagement model with the consumer. Today’s consumers are connected with the Internet and with each other in many communities of interests. If we look at one of the defining phenomenon of the social web of the last few years, we find Facebook boasting well over 300 million active users – half of which are active on a daily basis updating their status or connecting with friends, and increasingly checking out companies on the site (you can even visit SAP Retail is on Facebook. Many people have swapped the former evenings around the Television set to contributing to the more than eight billion minutes spent on Facebook each day, or the 20 hours of video uploaded every minute on YouTube . And did you know that the fastest growing demographic on Facebook is that of 35 years of age and older! A fast growing category of users on Facebook is the 65 million strong members accessing the site via their mobile devices; these are 50% more active than non-mobile users (see Facebook statistics).
Panda Express and Target have begun to tap into the power of social media. Panda Express offered its Facebook fans to print online coupons to coincide with a new product launch; higher store traffic and 25,000 coupons were redeemed that day. Target asked its Facebook fans for feedback on its men’s clothing and is using this information to adjust its assortment. Kohl’s is another retailer that is executing its social media strategy. It ranks third among retailers in the number of fans on Facebook, after Starbucks, with 4.6 million fans, and Best Buy with 843,000 fans. According to Shop.org’s eHoliday study more than half of retailers said they have added or improved their Facebook and Twitter pages this year, while two-thirds have added or enhanced blogs and RSS feeds.
Consumers and Mobility:
Adding to the mobile story, at a recent Web 2.0 event, Morgan Stanley projected growth to 10+ Billion mobile consumer units in the coming years (think of devices in cars, GPS, cell phones/PDA, Smartphones, MP3, etc.). Compare that to PCs reaching 100 million units by 1993, cell phones and Internet users reaching the 1 billion mark by 2002 and 2005, respectively. Google sees the mobile Internet as key to its future growth having just announced the acquisition of the mobile ad company AdMob. This in itself is significant, but even more so for a retailer, consider that from a technology perspective this suggests greater integration of data/ devices/ platforms, which in turn demands greater integration to gain a true 360 view of the consumer, as well as the integration necessary to the enterprise backend systems that support, among other things, the buying, pricing, promotions, merchandising and supply chain decisions.
The mobile Internet will increase the power of the consumer (think of at-shelf product discovery, price comparison, real-time sharing of information, etc.). Given consumers’ adoption of smart mobile devices, being constantly connected to the net and to each other in social networks and communities, retailers have a unique opportunity to leverage these trends in ways that re-establish or strengthen their relevance in the lives of the consumers.
In the upcoming November 17th STORES webinar, set against the above background, you will see how retailers can embrace these trends, take advantage of them, transform insights into actions, and design sustainable strategies while profitably engaging with empowered consumers.