Warby Parker: Taking the lead in Online to Offline

May 13, 2013

by Kate Enright

www.vonbismark.com

Things are looking great for fashion and tech forward startup Warby Parker as they open a new flagship store in SoHo. The store is a design and customer experience masterpiece. From it’s  old-world libraries, to it’s 1950s furniture and vintage looking equipment, they have planned out and splashed out, on every detail.

Warby-Parker-Store-Eye-Exam

The company began as an online store which proved very popular with younger Gen Y (aka hipster…kind of) audiences, and then expanded by opening small stores  within other larger retail locations. These small Warby Parker showrooms were opticians with a difference, where customers could try on glasses in 3D and have a unique experience unlike any other on the high-street. By combining the latest in technology with the latest in fashion and design they simply blew people away. The little stores soon began sprouting up all across the US and their cult popularity grew along with their capital (Warby Parker closed a $41.5 million investment at the end of February this year)! They now have their very own, full-size retail location and we have no doubt about its impending success. They simply understand their target market, they understand Gen Y consumers and they know how to bring them in.

warby11f-9-web

WP are an example of the latest trend in e-commerce companies moving offline and building their own brick-and-mortar retail outlets. We have discussed this trend inrecent posts and so many of the online giants are now onboard with the idea, that there must be value in it.   Amazon, Google, Ebay PayPal and more have all either expressed interest in moving to offline or already made the move. PayPal for example are now making physical hardware for the high-street and working with retailers globally.

 

“We wanted to create a much different experience here: have a lot of room for people to bring friends, get opinions from other people,” says co-founder Dave Gilboa. “A pair of glasses is one of the only thing you wear on your face, and it says a lot about how you want to express yourself.”  (NY Daily News)

Hear hear Dave! It’s all about getting that personal opinion, that physical data that online just doesn’t offer.

The bright and beautiful showroom is the perfect example of ensuring customer satisfaction through layout and design we spoke about last month. This space is irresistible to passers by and is modelled the New York Public Library, with brass lamps, rolling ladders and old books. Awesome is not the word.

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And WP have big plans for bringing more tech into the offline world. They are leading the charge in collecting data by wiring the stores with sensors to get a better understanding of how people shop with them in terms of flow, store design, gender, age group, preferences and more. Very clever and forward thinking!

We are well and truely on the Warby Parker bandwagon. Here’s hoping a store opens in Dublin!

Founders Neil Blumethal and David Gilboa

Founders Neil Blumethal and David Gilboa… because they’re just the coolest.

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Mass marketing vs personalisation (infographic)

May 9, 2013

85 percent of us know that websites track their online shopping behavior, a new report from ecommerce optimization company Monetate says, and 75 percent of us want retailers to use our personal information to customize our shopping experiences.

That’s going back to the future, according to Monetate: going back to a time when all commerce was personal.

But there is a yin and a yang here.

While we may want personalized experiences, and we want websites to be smart — to know us, essentially, and act as an intelligent, solicitous person might — privacy is part of the picture. A good third of us don’t want our website activity tracked, and a quarter of us don’t want the websites we shop to personalize our experience at all.

Monetate has four tips for online retailers:

  1. Use marketing automation technology and big data to assist with personalization
  2. Target segments with relevant content based on what you know about them
  3. Don’t think of channels, think of customers first
  4. Be in it for the long haul, not the quick win

All the data, in visual form:

Personal-Mass-Marketing-Infographic_FINAL
Read more at 
http://venturebeat.com/2013/05/07/mass-marketing-vs-personalization-infographic/#qItF8VoBijgGBY1R.99

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Black Friday E-Commerce Sales Set $1 Billion Record

November 27, 2012

E-commerce sales on Black Friday, traditionally the kickoff to the holiday season for brick and mortar retailers, surpassed $1 billion for the first time in history. Fifty-seven million Americans chose to shop online on Black Friday, resulting in a 26 percent increase in e-commerce spend over the same day in 2011, according to comScore.

Total online sales of $1.042 billion made Black Friday 2012 the heaviest online spending day to date in 2012. Thanksgiving Day also saw strong gains on the e-commerce front, with a 32 percent YoY increase in online spending bringing the total for that holiday to $633 million.

black-friday-billion-comscore

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Adidas: Interactive Window Shopping

November 2, 2012

There have been some pretty cool window shopping examples over the last year, but this easily takes the cake, with a completely interactive in-window experience that lets customers flick through clothing racks, individual garments and play with a model (getting them to try on every item) to see exactly how the clothes look, no matter the position/stance of the model…

Perhaps the best feature, is being able to connect your phone to the installation and drag everything play with into a shopping bag that transfers the items to your phone with no app required!

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Shifts in Retail Demand New Analytics

October 15, 2012

Our benchmark research into retail analytics says that only 34 percent of retail companies are satisfied with the process they currently use to create analytics. That’s a 10 percent lower satisfaction score than we found for all industries combined. The dissatisfaction is being driven by underperforming technology that cannot keep up with the dramatic changes that are occurring in the retail industry. Retail analytics lag those in the broader business world, with 71 percent still using spreadsheets as their primary analysis tool. This is significantly higher than other industries and shows the immaturity in the field of retail analytics.

While in the past retailers did not need to be on the cutting edge of analytics, dramatic changes occurring in retail are driving a new analytics imperative:

Manufacturers are forming direct relationships with consumers through communities and e-commerce. These relationships can extend into the store and influence buyers at the point of purchase.  This “pull-through” strategy increases the power and brand equity of the supplier while decreasing the position strength of the retailer. This dynamic is evidenced by JC Penney, which positions itself as a storefront for an entire portfolio of supplier brands. Whereas before the retailer owned the relationship with the consumer, the relationship is now shared between the retailer and its suppliers.

What this means for retail analytics: Our benchmark research shows retail has lagged behind other businesses with respect to analytics. Given the new co-opitition environment with suppliers, retailers must use analytics to compete. Their decreasing brand equity means that they need analytics not just for brand strategy and planning, but also in tactical areas such as merchandising and promotional management. At the same time, retailers are working with ever-increasing amounts of data that is often shared throughout the supply chain to build business cases and to enrich customer experience, and that data is ripe for analysis in service to business goals.

E-commerce is driving a convergence of offline and online retail consumer behavior, forcing change to a historically inert retail analytics culture. As we’ve all heard by now, online retailers such as Amazon threaten the business models of showroom retailers. Some old-line companies are dealing with the change by taking an “if you can’t beat ’em, join ’em” approach. Traditional brick-and-mortar company Walgreens, for instance, acquired Drugstore.com and put kiosks in its stores to let customers order out-of-stock items immediately at the same price. However, online retailers, instead of looking to move into a brick-and-mortar environment, are driving their business model back into the data center and forward onto mobile devices. Amazon, for instance, offers Amazon Web Services and Kindle tablet.

What this means for retail analytics: There has historically been a wall between the .com area of a company and the rest of the organization. Companies did mystery shopping to do price checks in physical trade areas and bots to do the same thing over the Internet. Now companies such as Sears are investing heavily to gain full digital transparency into the supply chain so that they can change pricing on the fly – that is, it may choose to undercut a competitor on a specific SKU, then when its system finds a lack of inventory among competitors for the item, it can automatically increase its price and its margin. Eventually the entire industry, including midtier retailers, will have to focus on how analytics can improve their business.

Retailers are moving the focus of their strategy away from customer acquisition and toward customer retention. We see this change of focus both on the brick-and-mortar side, where loyalty card programs are becoming ubiquitous, and online via key technology enablers such as Google, whose I/O 2012 conference focused on the shift from online customer acquisition to online customer retention.

What this means for retail analytics: As data proliferates, businesses gain the ability to look more closely at how individuals contribute to a company’s revenue and profit. Traditional RFM and attribution approaches are becoming more precise as we move away from aggregate models and begin to look at particular consumer behavior. Analytics can help pinpoint changes in behavior that matter, and more importantly, indicate what organizations can do to retain desired customers or expand share-of-wallet. In addition, software to improve the customer experience within the context of a site visit is becoming more important. This sort of analytics, which might be called a type of online ethnography, is a powerful tool for improving the customer experience and increasing the stickiness of a retailer’s site.

In sum, our research on retail analytics shows that outdated technological and analytical approaches still dominate the retail industry. At the same time, changes in the industry are forcing companies to rethink their strategies, and many companies are addressing these challenges by leveraging analytics to attract and retain the most valued customers. For large firms, the stakes are extremely high, and the decisions around how to implement this strategy can determine not just profitability but potentially their future existence. Retail organizations need to consider investments into new approaches for getting access to analytics. For example, analytics provided via cloud computing and software as a service are becoming more pervasive help ensure they meet the capabilities and needs of business roles. Such approaches are a step function above the excel based environments that many retailers are living in today.

thanks to 
http://tonycosentino.ventanaresearch.com/2012/10/12/shifts-in-retail-demand-new-analytics/

 

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Data point: Global shoppers looking for more types of goods online

September 27, 2012

As shopping steadily shifts online, consumers around the globe are expanding their purchases into more categories. Research from Nielsen shows that the category with the most significant growth in digital purchase intent between 2010 and early 2012 is computer/game software (the global gaming market is forecast to grow at a compound annual rate of nearly 14 percent through 2015, reaching $118 billion). Consumers have also become much more interested in buying entertainment tickets using their connected devices, according to the survey of more than 28,000 online consumers in 56 countries.

Notably, digital is starting to reshape the grocery sector. Intent to purchase food or beverage products rose 44 percent since 2010, to just over a quarter of respondents. Around half of respondents—and more than 6 in 10 Asian consumers—had bought a grocery product online, and 6 in 10 had gone online to do grocery shopping research. Nielsen notes that shoppers in CPG categories will likely become “omni-channel,” with online supplementing brick-and-mortar. With the rise of new ideas like “click and collect,” we’re starting to see retailers adjust their operations accordingly

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Your App’s Location Awareness: Micro or Macro?

April 17, 2012

There is little disagreement among those involved with mobile at major retailers that making their apps location-aware represents a huge opportunity. Because mobile phones travel everywhere with their owners and are always on, location is one of the most powerful pieces of context by which to understand a shopper’s intent and to engage with her in a way that highlights her environment.

However, within the location discussion it’s been interesting to observe different natural starting points for location awareness. Some start with “Macrolocation” and others with “Microlocation.” Macrolocation is the idea of being able to understand when and where a device is at a high level – within a particular neighborhood, a particular store, or a particular public venue (like a park, sports arena, or golf course). Microlocation is the idea of focusing on the inside of the store and understanding in which department or even in which aisle a shopper is standing. Naturally, these two types of location involve very different technologies and can be used (ideally) in complementary fashion.

But most large-format retailers start by focusing on one or the other, and I think it’s useful to talk about the benefits of these two contexts and when one or the other might make more sense for a particular retailer. A bit of important disclosure, we at Digby made the choice to focus our technology on macrolocation – so I promise to be as objective as I can be. I’ll surface some of differences here and ask you to contribute and keep me honest in the comments.

What’s the Goal?

The obvious difference is one of marketing objective. Both approaches will tell you when a store visit happens and how long it lasts. A Macrolocation focus optimizes around the store and the world outside of it, and is more powerful for understanding and driving store traffic. Microlocation focuses on enhancing a shopping experience for someone already inside of the store down to the aisle or department level, and can be more powerful in maximizing the size of the purchase they might make. Macrolocation can lead a shopper to a store, microlocation to an item.

Focus on Shopper Marketing: Advantage Micro

The biggest advantage of Microlocation is, in my mind, how well it aligns with the Loyalist, who is the most likely person to download a retailer’s app. These 50,000, or 500,000, or 5 million people are the people who visit the store most often. As such, a retailer might not need to focus on driving additional store visits as much – but will and can focus on driving up the size of purchases during a store visit by enhancing in-store service and delivering timely offers.

Meaningful Segmentation and Analytics: Advantage Macro

The biggest advantage of Macrolocation is how location at the macro level is much more meaningful than at a micro-level. For instance, interacting with a shopper based on whether they are in-store, in a region of a city, at a local sports event, or in a local park is more meaningful than whether they are in aisle 3 or aisle 7. Location suffers from a signal vs. noise problem in terms of how useful it is when you get to a small enough scale. For instance, if you followed me as I walk all over a store looking for that cleverly hidden peanut butter (is it a vegetable? a baking item? a snack?), you might get all the wrong cues about what I’m interested in. Inside of the store, personalizing on what I scanned, on what’s on my app shopping list, or what I’ve bought in the past is probably more valuable than where I’m standing.

I know I’ve positioned this as a battle between two ways of looking at location, but honestly there are ways to do both very well and make them highly effective for a retailer. Knowing the right situations to focus on one over the other and understanding the pitfalls of each and how to overcome them is the key to effectively bringing location to your mobile app.

What other considerations might I be missing? Micro or Macro?


http://www.themobileretailblog.com/in-store-mobile-tools/your-apps-location-awareness-micro-or-macro/

 

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Mobile shoppers spur rise of ‘showrooming’

April 12, 2012

Posted by: in North America

One of the initial barriers to online shopping was consumers’ reluctance to buy something without seeing it. Shoppers tended to research products online, then go to a physical store to examine them and make purchases. But as people have become more comfortable with e-commerce, and with smartphones enabling research and shopping on the go, a reversal in behavior is under way: Shoppers are going into physical stores to examine products, then using their mobile device to price-compare, frequently completing the purchase online.

It’s called “showrooming,” and more than a few shoppers are doing it. A 2011 Codex Group survey found that almost a quarter of respondents who bought a book online first saw it in a physical store. The Pew Research Center estimates that 5 percent of mobile phone owners who bought online in the 2011 holiday period did so from a physical store after comparing prices. In the U.K., almost a fifth of in-store shoppers check competitors’ websites on their mobile, with 30 percent of that cohort saying they’ve purchased from a rival while inside a store, according to Intersperience. And a ClickIQ study found that nearly half of participants who shopped online in the past six months had first seen the product in a store; some of them patronized that retailer’s e-commerce site, but almost half ended up buying from Amazon.

Amazon is eager to encourage showrooming. Its Price Check mobile app lets shoppers scan in-store products to easily look up Amazon’s prices. A one-day holiday promotion, offering up to $5 off for shoppers who used the app in a physical store, had brick-and-mortar retailers crying foul last year. They’re starting to fight back. In January, Target asked its suppliers to create products exclusive to the retailer, thwarting shoppers ready to compare prices online. Nordstrom, already known for its customer service, now offers free shipping for in-store shoppers.

The rules of retailing have changed. Showrooming already appears to be partly responsible for Best Buy’s current woes. For the most cost-conscious consumers, physical retailers will need to add more incentives (e.g., bonus products with in-store purchase). But while online retailers have the advantage of low overhead, brick-and-mortar offers immediate gratification, hands-on customer service and, in some cases, memorable experiences. Retailing as a Third Space, one of our 10 Trends for 2011, emphasized the need for retailers to create unique experiences and environments that are only partly about shopping. Ultimately, these could make the difference between a loyal customer and one with a wandering Web browser.

Image credit: Amazon

Thanks to jwtintelligence.com

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Creating a magical in-store experience that is different from your online store

January 24, 2012

In early December, Amazon announced a new promotion where it would incentivize consumers to competitively price-check in retailers’ stores by providing up to $15 in Amazon.com credit. Retailers were floored, leading to many organizations speaking out against the online retailer and providing resources for retailers to boycott Amazon and its app.

The fact of the matter is many retailers simply cannot compete against the low-prices and broad inventory of online retailers. To be successful, independent retail business owners must differentiate their offering beyond price and convenience. Instead, they must focus on offering a remarkable in-store experience, provide the inventory that really matters at appropriate price points, and arm the store with sales associates that are likable and can offer expert advice to inquiring customers.

To executive on recreating a magical in-store experience that is differentiated from online retailer, retailers must focus on three main strategies.

1. Offer more than products. Retailers have to move beyond the belief that a store just needs to stock the shelves low-priced products. Instead, the store should be a place where customers come to experience the products (and brand), interact with the items and others, learn how to better use the products, and be able to inquire about the products.

2. Rethink the store inventory. It is no longer necessary to pack as much inventory as possible within the store. Customers that want a large selection at the lowest price will turn to online retailer. Instead, retailers should focus on carrying only the right mix of products at various price points. Additionally, the appropriate use of signage and a clear store layout can help customers quickly come in and out of the store to find the products they need fast.

3. Hire likable experts. This one is one of the most difficult, because it’s maybe the most intangible. Instead of training a staff of commissions-focused sales associates, retailers should replace and encourage their staff to be likable product consultants and brand ambassadors. These associates should be more focused on problem-solving than making a sale.

There are a number of point-of-sale software features that can assist retailers hoping to differentiate their stores. Here are a few features to be on the lookout for when evaluating new systems:

As with all technology, retailers must be dedicated to ensuring that their store experience is remarkable. They must offer an environment where customers will be excited to enter for the first time, as well as return.

Michael Koploy is an ERP Analyst for Software Advice (retail website here). He reports on news and trends in point of sale and supply chain management software. He can be reached directly at michael@softwareadvice.com.

C24 would like to thank Michael for this blog.

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What’s a Store Anyway? The Rise of the Mobile Shopper

November 25, 2011

Posted by John Squire in Benchmarking on November 4th, 2011

Around this time last year, Susan Etlinger, an analyst with Altimeter Group said something that stopped me in my tracks. In the context of discussing ecommerce, Susan asked, “what’s a store, anyway?”

Not that long ago, it would have been clear that a store is where you go when you want to buy something. Obviously it had to be a physical place. But starting in the 90s, people began shopping online using their PCs and a web browser. We had to come up with the terms “brick-and-mortar” and “ecommerce” to distinguish a physical store from one on the Internet. Now with the rise of mobile commerce, stores have become entirely portable; since most people never leave the house without a phone, a store can go wherever you go.

That conversation with Susan came back to me as I started thinking about what this year’s online retail trends were likely to be. It doesn’t take a crystal ball to say that this is going to be a breakout year for mobile shopping. IBM data suggests that an unprecedented 15 percent of people will shift their shopping from the PC to a mobile device this holiday season. This prediction is based on October 2011 figures which show that nearly 11 percent of people who logged onto a retailer’s site used a mobile device, up from the 4.2 percent recorded on October 2010. Furthermore, if current consumer trends stay true to form, we expect that 15 percent of all online sales—not just traffic—will come from mobile devices. That means people are using their mobile devices not just to browse for or research products and services, but to buy them.

What we’re watching is the rise of the post-PC consumer (by the way, here’s a detailed read on IBM’s strategic decision to sell its PC division to Lenovo, by Mark Dean, one of the original engineers who created the PC) and that’s where Susan’s observation about the changing nature of stores gets really interesting.

Global brands need to think about their consumers in an entirely different way. IBM data shows that mobile shoppers are even more laser focused than their PC-using counterparts: 44 percent of mobile users will abandon a site if they don’t find what they want on the very first page, versus an overall online rate of just over 37 percent. Mobile users, it would seem, don’t have the patience or the inclination to sift through a site for what they want. And why should they? With a simple flick of a finger across a screen, they can obliterate one brand in favor of another.
Over the long haul, this trend is only going to get bigger.

Right now, we’re experiencing the voracious adoption of mobile phones across the globe. Relatively tech-savvy people with some amount of money to spend are driving the spike in mobile commerce. But in the future, mobile shopping will spread everywhere. Think about the many millions of people who don’t have broadband access in their homes and who don’t own a laptop (and perhaps never will). We can anticipate that one day, when these people shop online, they’re going to do so using a mobile device.

The onus is on retailers to remember that their brands have become entirely portable. The empowered consumer quite literally has retailers, their brands, and their stores right where he wants them: in the palm of his hand. That means that relevance—a tailored, personalized, wow-they-really-know-what-I-like approach to marketing—is more important than ever.

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