“Virtual” Toy Store

We continue to see retailers creating experiences outside the 4 walls of the store using QR codes to reach customers, enable engagement and make shopping easy. Read more here.

See my last year’s entry on the topic.

JCP Button Promotion: Another Step Closer

JCP launched a holiday promotion post black Friday where customers pick out a holiday pin at the store. When they get home go to the website and enter a code on the back to see if they’ve won a prize. In order to enter a code you have to first supply an email address. If you win (which I did) you then need to provide your entire mailing address (which I did). Clever way to bring back the abolished “coupons” for a period of time and enable the company to collect email and address information.

Box of Buttons

A bit of history helps to understand why this is really a very clever idea for JCP. JCP is working on building on a new brand experience. They are trying to change customer’s behaviors from looking for coupons and discounts to engage with them differently moving forward. They want to become a brand that brings enjoyment and value to their customer’s lives. They want to transform from being JCPenney to being JCP.

Ron Johnson (CEO of Apple and Target fame) wants JCP to be America’s favorite store by helping people live better through offering of brand name products and in store services like haircuts, dry cleaning and family photos. All of course delivered as a great experience that is simple and delightful. This sounds like a great strategy in a world where we’re inundated with content and information and where our lives are very busy. We enjoy shopping but we don’t want to think too hard about making the right purchase and we don’t want to work hard to figure out the “value” of an item.

One of the steps taken early on was to change the JCP pricing strategy to make it more simple. Rather than coupons and constant rounds of markdowns JCP would offer everyday low prices at a fair and square deal. However in doing there was an unintended consequence. Customer’s were used to a loyalty programs where they would earn $10 for every $100 spent and then combine that with coupons to get a great deal. While Ron explained to them in the brochures that they are getting things at the same price, it didn’t replace the feedback loop that kept them coming back. He took away the “game” for the customer – the great feeling of satisfaction they got that they were working the system and getting a deal. While this is impacting sales in the short run there is research to support that Ron is on the right track. It is a question of whether or not he will run out of time.

There is a lot of criticism around the JCP strategy. Let’s face it the old paradigm was only creating a race to the bottom and it doesn’t make sense to go back to it to get back sales in the short-term. JCP was seen as a place to bargain shop – not a brand that had an emotional connection for the customer. Not a brand that drove the kind of loyalty and sales seen at Apple. It was time to change the game: reinvent the brand and attract a new customer base. Additionally the old pricing strategy was creating a lot of work for JCP to manage making it very complex all around.

I totally believe in Ron Johnson and what he is trying to achieve. I applaud his courage to pursue a vision that is about something bigger. We shall see how the buttons work for them this holiday season. Hopefully customers will come back to the store to use them. I know I will.

Accenture Interactive Mobile Shopping Report

Report: For mobile shopping, personalization outweighs privacy concerns

Check out this report on Mobile shopping. Interesting data. I agree with the perspective of the Accenture Exec:
“The showrooming trend can pose a threat to retailers, given that nearly a third of our respondents make their final online purchases with other stores,” said Baiju Shah, managing director of strategy and innovation for Accenture Interactive. “But consumers don’t want to shop online exclusively and our work with retailers shows that physical stores don’t have to compete on price alone but rather focus on the whole experience. Retailers need to create a seamless, multi-channel experience that blends the digital and physical, and delivers convenience, price and relevance.”

Big-Box Retail Needs To Be Reinvented…

Are we really seeing the end of big box and department stores for certain product categories? Will we miss them? We are watching places like Best Buy and Office Depot struggling to get foot traffic as more and more shoppers research and purchase goods online. Is the same happening to big box department stores? I have suggested it in the past and it seems like it is actually happening already. With the exception of Norstrom with their couture lines, the big box luxury trend seems to be over. The days of going to Bloomingdales or Saks Fifth Avenue for high-end items seem to be a thing of the past. Luxury shoppers who do go to stores prefer a cluster of high end stores that give them a unique experience.

Like most shoppers, Luxury shoppers have changed their buying behaviors driven by the ever expanding options for getting luxury goods. They will buy their diamonds at Costco, go to Target for the “cheap designs” by name designers, and are more included to go to the “not full price” outlet stores like Saks Off Fifth or Last Call by Neiman Marcus. Additionally, younger shoppers have everything they need at their fingertips online and they buy there: bookmarking their favorite sites, storing their credit cards and getting free shipping and returns.

It’s time for retailers have the courage to rethink their business model and reimagine how they might deliver the experience to customers. What they can do to drive value for customers, embrace technologies to help create new experiences and explore new labor models as the old models are no longer working?

Status quo is a powerful thing but the time is now to embrace innovation methods and encourage creativity across the business and look to reinvent!

Get more facts in this US News and World Report Article “The Dying Discount Department Store”

C-Wonder executes on the Internet of Things, Cloud and Mobile POS!

cwonderstore C. Wonder came to us with a bold strategy of delivering exceptional customer service with unique and remarkable products and great value. Typically retailers deliver successfully in one or two areas, but C. Wonder wanted to aim higher and deliver it all. They said it’s what their customers would want. They believed a critical element of successful execution would be to leverage technology in new ways. We worked together to design a truly innovative experience…

The store has:
– Mobile POS without a POS system – they have integrated to their ERP backend. This allows them to analyze real-time sales data and give sourcing immediate feedback on what is selling and what is not.
– Fully RFID-enabled supply chain
– Video from store to the corporate offices.
– Smart Shelves reacting to RFID tags on products. Check out the images of the C-Wonder RFID “hotspots.”

This blog entry sums it up fairly well. Here is an excerpt.

“I remember in the good old days (well at least a couple of weeks ago..) when opening a new store required a large hardware investment and was a major store systems project.  Servers to be installed.  POS terminals to be installed.  Checkout Counters shipped. Network cabling run to the counters.  Electrical to the Counter.  Holes drilled in the counter for wiring and power. Make sure you have all the right connector cables…and enough electric outlets at the front end.   Install and mount the payment terminal,  pole displays. Connect the scanner. Hook up the printer. (Anyone see the printer cable?) Don’t forget to install an extra register to be used only on Black Friday and the week before Christmas. Load the software and test.  Train cashiers on the POS system.  Train them again.  Open the store.  You know the drill. We all do. That’s all changing.  What does the future look like? Imagine, if you will — no store servers in the back room, no fixed registers taking up valuable selling space.  (and get rid of all those connector cables!)The future is a retail world where cloud computing powers the store.  Web interfaces provide configuration and reporting.  Goodbye registers and hello mobile.

Tablets, iPads and iTouch’s for management and sales clerks.  Scanner and payment peripherals installed before shipment to the store. Software seamlessly distributed from the cloud to every device.  Management reports available on the tablets.  Intuitive mobile POS on the devices requiring limited to no training.  The retail systems for the store of the future will be as simple as sending the iPad’s and iTouch’s to the store, syncing with the cloud POS system, and opening the doors.Yes, I think I saw the future of retail store systems at C-Wonder and it is here now powered by VeriFone – leading the mobile retail revolution.