5 NEW YEAR'S RESOLUTIONS FOR THE RETAIL MARKETER

   EMBRACE THE OMNICHANNEL SHOPPER.  People gather information from more sources than ever and want to survey the virtual landscape from their phone, tablet, laptop, desktop – and through the unalloyed advice of others.  It’s a brave, multi-dimensional world, retailers and brands.  Stop obsessing over showrooming and start obsessing over connecting with your shopper.

   IMPROVE YOUR ANTENNAE.  Consumers aren’t the only ones employing technology; so are your competitors.  Big Data is a big competitive advantage to more than the NSA.  Are you winning at understanding the big picture?  If you’re unsure, you’re losing.

   DON’T FEAR CHANGE.  The Ron Johnson and JCP debacle notwithstanding, marketing at retail is an inherently experimental, experiential realm.  If you’re not moving forward, you’re falling behind.  Test.  Analyze.  Repeat. 

   BE AUTHENTIC.  Don’t stuff the ballot box and use black hat techniques to influence purchase decisions based on trumped up input.  Instead, find ways to genuinely engage shoppers, understand their needs beyond a survey or focus group.  You’ll be rewarded with greater loyalty – and results.

   SHOP.  I’m continually amazed at marketers who spend so little time in the marketplace.  Are you in stores every week?  If you’re not, no matter what your job is, you’re not doing your job.  There’s no substitute for spending time in stores, soaking up the experience, seeing what works and what doesn’t, observing behaviors firsthand.

   Do these things and 2014 can be your best year yet.

MORE EVOLUTION THAN REVOLUTION

   As the year draws to a close, many of us focus on family, festive gatherings and food.  As we wrap up Christmas shopping and the presents we buy, retailers and manufacturers are wrapping up 2013 and looking to the future.

   Amazon recently announced plans to use drones to swiftly deliver some goods to their metropolitan clients within the next five years and are expanding their reach into grocery delivery too.  Carrefour, the world’s second-largest retailer, announced the purchase of 127 European malls.  Many of North America’s larger retailers have only modest plans for growth in 2014.  Consumer packaged goods companies, retailers and those that serve them continue to evolve as they seek profitable means of delivering value.

   Drones notwithstanding, selling through store environments continues to be the primary means of moving products from manufacturers to consumers.   Stores engage consumers’ senses, meet their desires for immediacy, provide social stimulation and represent the most economical means of delivering products to homes.  

   Not too many years ago, cellphones and overnight package delivery were the things of science fiction.  Today, 80% of 18-to-34-year-old Americans own a smartphone.  There are more cellphones than toothbrushes in the world.  Technology keeps getting better, faster and cheaper; retailers and consumer goods manufacturers are using it all to serve their customers.  Technologies may change quickly but human nature won’t change so radically in our lifetimes.  

   So, calm down, Jane and George Jetson: groceries and most Christmas gifts are still coming home in your trunk for the foreseeable future.  

AMAZON MEETS THE JETSONS

On 60 Minutes last night, Amazon's tireless founder, Jeff Bezos, introduced an R&D project that could reshape the delivery of their products:  Amazon Prime Air.  Though some years off and still in early-stage development, Amazon is clearly trying to attack one of their challenges: how to get products to shoppers sooner and cheaper.

Using "octocopters" - I suppose "drones" sounds too militaristic and menacing - Amazon envisions moving products to shoppers within a ten-mile radius of an Amazon fulfillment center within 30 minutes of order placement.  Here's their video promoting the idea:  http://www.youtube.com/watch?v=98BIu9dpwHU.  Pretty cool idea, eh?

Such a solution would theoretically allow Amazon to dramatically reduce logistical costs, one of their largest cost drivers.  It's visionary and just a little bit crazy.  Of course, people said the same thing of Fred Smith when he birthed Federal Express.  And, like FedEx that had government contracts moving checks for the banking system to underwrite the cost of rolling out a delivery system to business and individual customers, Amazon has their existing book of business that they can use to support this move.

One of my consistent beliefs has been that Amazon won't kill retail in part because their logistics model requires someone bearing the last-mile cost of delivery.  Today, YOU the shopper are the final mile delivery agent and you largely ignore your cost of cartage.  If Amazon overcomes that hurdle, they become even more formidable.  It still doesn't eliminate some of the other advantages that retailers have, e.g., touch/smell/taste before committing to a purchase, social aspect of shopping, selection curation, but it's a fascinating move.

Amazon has prided itself on experimenting and disrupting markets in the service of superior customer value.  Octocopters may or may not "fly" at the end of the day but you have to love their chutzpah and envelope-pushing behavior.  George Jetson would be right at home at Amazon.

SHOPPING AS NONSTOP BALLET

   The heart of holiday shopping season arrived Black Friday yesterday.  Stores busy, shelves overflowing with products, advertising wherever you turn, even videos of shoppers run amok.  If you spend time in stores throughout the year as we do and see the activity through the eyes of a retail environment designer, you might marvel as the complexity and synchronicity of selling products at retail.

   Display companies are part choreographers, part set designers, part stagehands.  We set the tone, we manage the stage, we present the world of the store for the audience: shoppers.

   Increasingly, that dance occurs both in stores and the virtual stores of the Internet.  Probably 50% of American shoppers will have made a purchase online this past weekend.  Does this spell the death of retail stores?

  Of course not.  People still love the intimacy, immediacy and interactivity of the store.  Plus, many stores are doing an excellent job of catering to the wishes of omnichannel shoppers: people who wish to shop and buy whenever and wherever they choose.  That means using a tablet in the kitchen in the morning, a PC at the office midday, a smartphone on the street after work, ordering by phone in the evening or the wandering the aisles of Target, Toys’R’Us or your local mom-n-pop store on the weekend.

   Shoppers want to shop when they want to shop.  That’s why you had stores open 24 hours a day and now on Thanksgiving.  That’s why “blue laws” that once shuttered stores on Sundays exist few places today.  Consumers – and consuming – drive our economy and the decisions of retailers to meet shoppers wherever they are.  It’s a 24/7/364 dance of our own creation, America.  Don't look now but that 365^th day – Christmas – is now at risk, too.

AMERICAN MANUFACTURING 2013

   I had someone recently ask me what I see as the biggest stories in American manufacturing for 2013.  Four things sprang to mind:

   1.  OBAMACARE.  Anxiety among businesses large and small has been rampant since the Supreme Court gave the go-ahead in mid-2012.  Manufacturers have seen rapidly-rising health insurance costs as insurance providers girded their loins for this brave new world.  With health care a large and growing line item for most of us and our associates, ObamaCare has been a big story.

   2.  SHALE.  North America's oil & gas boom, driven by technological improvements, has entire industries rethinking how they operate.  Our energy assumptions are being reset - largely for the better.

   3.  AUTOMOTIVE.  This leaner sector still casts a long shadow through the supply chain.  The robust rebound to meet pent up demand has many manufacturers smiling.

   4.  RESHORING.  Though some industries will never return to N America, some at the margin are moving away from the rising labor and transportation costs in Asia and toward the shorter lead-times and greater flexibility of being closer to their markets.  The total cost of ownership (TCO) has swung more in our favor.

   In contrast to much of what has occurred over the past two decades, it's energizing to recognize that more of the big stories of this year are actually POSITIVE for N American manufacturing.

  What do YOU see as the Big Story for American manufacturing this year?   

E-COM WON'T KILL IN-STORE

   The U S Department of Commerce tracks online buying as closely as in-store buying.  Online grew 18.4% in the second quarter of 2013 over the same period in 2012.  Impressive.  But in gross volume, online remains pretty minor: $64.8 billion out of $1.126 trillion.  In other words, only 5.8% of all US retail sales occurred online.

   The growth trajectory of online over the past decade has been steady but it won’t end in-store retailing.  In fact, there are 1.1 million retailers in the US today; there were 1.027 million in 2003.  Online isn’t killing in-store; online is making in-store better as shoppers have better access to more information so they can make better purchase decisions.

   We are seeing the rise of the omnichannel shopper as people use more and better resources to research, find, comparison shop and purchase goods from diapers and detergent to diamonds and Dodges.  

   The retail environments industry remains strong because (a) people still like shopping in stores and (b) retailers compete more ferociously than ever to win business from savvy customers.  The strong get stronger while the weak cease to exist.  Just as with online resources, the best retailers make use of all of the tools at their disposal: in-store, online, catalog, advertising, couponing, promotion, sampling, etc.  Oh, and products their customers want to buy at prices they’re willing to pay.  

RETAIL EVOLUTION

   How has shopping changed in your lifetime?  Have you seen stores come and go?  Have you come to rely on online reviews, e.g., Yelp, before making purchases?  Do you “shop” online?  How have your shopping patterns changed?  How are they different from the way your parents or grandparents shopped?  When you think about it, I’m betting that much has changed for you.  And you will see accelerated changes ahead.

   Retail is one of the most dynamic sectors of our economy.  Consumers drive ~70% of our economy.  And we’re tough customers!  Stores pop up while others go away.  Stores succeed or fail on the value they deliver for shoppers.  As shoppers, we vote with our feet (and fingers). 

   We also shop with our senses, seeing intriguing things on display, smelling the coffee or baked goods, feeling the fabric, hearing the advice of knowledgeable sales associates.  We like to interact with our prospective purchases; both online and traditional retailers know this.

   Retailers will continue to evolve to meet our changing wants as shoppers or cease to exist.  The marketplace determines retail winners and losers. 

   Like the gazelle and the lioness, both arise to face a new day.  The gazelle knows, “Either I run fast today or I become someone’s dinner.”  Likewise, the lioness knows, “Either I run fast today or I have no dinner for me, my mate and my brood.”  Whether we’re the hunter or the hunted, we must run fast each day to survive.

   Display and fixture companies must run fast each day too to serve the dynamic world of at-retail marketing.  Retail never stands still!

LEADERSHIP

   The Pro Football HOF game ushers in the return of football season this weekend.  OSU head coach Urban Meyer looks forward to the new season and the chance to vie for a national championship, too.  From Maine to Hawaii and Florida to Alaska, high school kids are gearing up for the fall campaign. 

   Meyer believes that, though talent, coaching, training and tactics matter, the key to success is leadership.  That’s why he teaches a class on the subject for a select group of his Buckeyes.  Part of the class centers on this simple equation:  E (event) + R (response) = O (outcome).

   “You can’t control the event,” Meyer explains in the Columbus Dispatch.  “You can’t control the outcome.  But what you can control as the leader is your response.  Your response as a leader is the other people’s ‘E’.” 

   We each have an opportunity to lead in our work, in our relationships and in our hobbies.  When we live and act purposefully, not impulsively, we set an example for others, create a culture of accountability and improve our chances of building a consistent winner.

SHOWROOMING: BOON FOR RETAIL

Showrooming isn't so bad after all?  http://hbr.org/2013/07/how-pinterest-puts-people-in-stores/ar/1

BETTER INTERACTIVITY

In-store marketing is rooted in bringing the consumer and product together in one place.  Improving that interactive experience remains a focus of in-store marketing professionals.  This technology shows the direction in which we are all moving as we bring the power of connectivity and the point of purchase together.

MOVE OVER, MALL OF AMERICA

China has just opened the largest building in the world - and it's primarily a mall.  Check out the amenities of this enormity here.  MOA has 4.2 million square feet of gross space; the New Century Global Center has roughly 18.3 million square feet.  Wow!

WEBROOMING

   Many observers and participants in the retail realm wring their hands and burn up brain cells wondering if online will make in-store obsolete.  I’ve expressed my judgment many times and can sum it up in one word:  poppycock.

   In reality, those with eyes to see understand that the difference between online and in-store is dissolving as the two become one.  Amazon builds retail lockers for customer pickup.  Toys’R’Us has long offered order-online-pickup-in-store services.  Best Buy develops ship-from-store capabilities.  People use online resources to make the in-store shopping experience better!

   An emerging term for the convergence of in-store and online is webrooming: researching online before purchasing in a store.  This builds off of the concept of showrooming whereby people go to a physical store, examine their product options but then buy online.  Bricks-and-mortar retailers like Best Buy have felt harmed by the practice because they provide the showroom without the benefit of selling the product.

   Shoppers are inventive.  They will find the best way to get the best deal.  In-store can deliver the best value (i.e., price, convenience, instant gratification, tactile interaction, expert advice, etc) shoppers seek.  Retailers – and the store fixture companies who love them – are up to the challenge of evolving to meet shoppers’ needs.

HOME SWEET...MALL?

   As a child in the ‘60’s, a big shopping excursion on Saturday with my mom was going to downtown Canton or Wooster.  By the ‘70’s, the model changed as suburban malls sprang up with ample parking, the best stores and comfortable, convenient environments.  Westfield Belden Village in Canton was the largest indoor mall in the world when it opened in July 1969.  The Mall of America – still the largest US mall – opened in 1992, perhaps the apex of the traditional mall.

   Twenty-plus years later, many US malls struggle.  Occupancy rates average only 92%, some malls have been shuttered altogether and rents are around 2006 levels.  Coincidentally, the last time a new one opened in the US was also in 2006.  Instead, we’ve seen the rise of “lifestyle centers,” e.g., Easton in Columbus, OH, which combine shopping with fine dining, entertainment and high-end apartments.

   As online retail grows exponentially, we have also seen dollar stores, “power centers”, outlet malls and other formats arise and thrive.

   Retail remains a rapidly-evolving, exciting and inviting world for shoppers and brands alike.  Meeting the timeless needs of people to (1) physically interact with products for potential purchase, (2) gain insights from knowledgeable sales staff, (3) interact with friends as they weigh their options and (4) enjoy the instant gratification of finding, buying and taking purchases home on the spot makes the world of displays, fixtures and retail planning a great challenge worth doing well.

TELL 'EM WHERE TO GO

   I cannot resist referring to Herb Sorenson again.  If you want to understand the science of shopping, there’s no better place to start.  In his books and his blogs, Herb shows where so many retailers and consumer packaged goods companies go astray.  Common sense isn’t so common.

   In this 2010 blog post, Herb points out that shoppers want to know what to buy.  They want to be told where to go!  Think of it: the average shopper enters a store seeking three-to-seven items.  They may be attracted to the store by the massive array of products – maybe 20,000 up to 100,000 items – but must then try to find the needles they want in the retail haystack.  ATTRACTING is very different from SELLING. 

   Great store design helps people quickly find and buy what they want with a minimum of hassle.  Frankly, common wisdom among retailers runs counter to this idea.  Instead, they look for ways to keep shoppers in their stores longer.  The most successful retailers today, e.g., Costco, Trader Joe’s, Aldi, understand how the science of shopping works. 

   Tusco Display does, too.  As display and fixture producers, we advise our clients on how to put these same lessons to work as we encourage CPGs and retailers to think about ITEM management more than CATEGORY management.  When we all help shoppers spend their money faster, everybody – marketer, retailer, shopper and consumer – benefits.

THE FATHER OF SHOPPER MARKETING

   One of the delights of GlobalShop, North America’s largest trade show for the in-store marketing industry, is hearing from some of the world’s premier experts on what works in stores.  Herb Sorenson PhD was one of those delights for me in mid-April this year.

   Herb is arguably the father of shopper marketing.  Though retired, he still actively preaches the art and science of in-store marketing through his blog: www.shopperscientist.com.  I’m a big fan of his excellent books, too.

   One of the many meaty tidbits he shared is the concept of visual width.  Studies prove that people instinctively move toward open space in a store.  It’s a simple, sensible concept.  Yet, store planners often ignore this and try to funnel/drive shoppers, focusing solely on the floor plan and not the sight plan.  They fight human nature and frustrate shoppers who in turn shop less, buy less and return less frequently.  Nobody wins.

   In-store marketing is indeed both art and science.  Some store planners over-emphasize the art part; don’t miss the science, folks.  If you don’t balance the yin with the yang, you risk losing shoppers and sales.  Science may not be sexy but it is essential to understanding how shopper marketing works.  Learning from and working with experts helps make retail environments better.  Thanks for the reminder, Herb!

QUESTIONS OR ANSWERS?

   Asking great questions is both an art and a science.  Done well, it leads to truth, trust and value.  At Tusco Display, there’s no greater compliment from a client or supply chain partner than to have them say, “You ask the best questions!”

   People often make a mistake about questions.  They feel that asking them shows weakness, uncertainty and ignorance.  Perhaps it goes back to our school days when raising our hands meant opening ourselves to potential ridicule by classmates or showing our teachers that we hadn’t understood something.  Yes, technically, questions indicate that you don’t have all of the answers.  Do you really think that others believe that you already know everything?  Ask your spouse, child, parent or true friend for that answer.

   We so often focus on developing great answers that we miss that it’s time spent developing the great questions that lead to great answers.  Ask the right questions, get the right answers.  Ask the wrong questions and…well, you know that answer.

   Effective in-store marketing isn't so much about answering every question that a shopper may have as they cruise down an aisle.  More often, it's about getting them to stop and wonder about what they see, feel, smell, hear, sense.  It's about letting THEM supply an answer to the question your product display presents.  "Hey, I could use that product when I..."

   Worry less about how you’ll answer questions and focus instead on asking great ones - in-store and in life.  From great questions spring great answers.

IN-STORE WINS - BY A MILE

   At a recent industry meeting, another producer of displays lamented the dire prospects for retail and, thereby, our industry because of the Internet.  My response: "Poppycock!"

   Consider two indisputable facts:

1.    People still buy most goods from stores.  Whether it’s toothpaste or Teflon pans, sausage links or kitchen sinks, food or Fords, shoppers shop and buy in retail environments.  They want to interact with products and they want what they want now.  Though in some categories (e.g., music, electronics) the percentage is quite high, still only about 8% of all dollars are spent online.  Bricks swamp clicks.

2.    Stores are the most economical delivery method.  Moving most products by the truckload to central locations where shoppers come to pick out, pay for and carry home the goods costs less than shipping to individual homes.  If the USPS went to a similar strategy, i.e., eliminate home delivery and require pick up at the post office, how much less would it cost them to handle the mail?  

   Online and direct-to-home delivery will continue to grow but, as transportation costs climb, low-cost, bulky and heavy products may never leave the store environment – except in your trunk or truck bed.  "FedEx me some kitty litter!" said no one ever.  UPS won't become your new milkman.  And people will still appreciate the chance to see, smell, touch and buy what they want on the spot.  

   In-store is the last three feet of the marketing plan; the shopper is the last three miles of the distribution plan.  

VISUAL LOAD

   I recently spoke with a long-time industry friend who does consulting for retailers.  She chatted about the challenge of managing “visual load” in stores.  As anyone with eyes to see can attest, walking into most stores is an assault especially on our visual senses.

   Our job in display design and fixture execution is to better organize, even tame, the visual onslaught so shoppers can be put at ease, more easily make sense of what they encounter and find what they need without confusion or distrust.  This is tough as every brand vies for the attention of that shopper and every store tries to sell her everything they can.

   At Tusco Display, we do more than make racks.  We create spaces where our clients’ products are found and can flourish.  We choose colors, materials, fasteners, angles, dimensions and graphics to complement the products.  We improve the in-store experience for those searching, overwhelmed shoppers.  We lead clients to put their best feet forward on their most important stage: the store.  We make a true difference for shoppers, brands and retailers alike.

   It’s easy for people to overlook what we do in creating environments, in presenting products, in uniting consumers and products in the marketplace.  It’s honorable, vital work about which every one of us can feel pride.

FRIENDS

   Each adult American knows, on average, 600 people, Andrew Gelman of Columbia University writes in The New York Times. The estimate is based on an ingenious method: Asking a sample of individuals how many people they know with a variety of memorable names such as Brenda and Keith (because people with such names are easily recalled), then factoring in the prevalence of those names in U.S. society. Despite the large number of acquaintances, Gelman says, most Americans know just 10 to 25 people well enough to trust them. Source: The Average American Knows How Many People?

   How many BRANDS do you count as friends?  Jeep?  Nike?  Fruit of the Loom?  Ford?  Starbucks?  LL Bean?  Kelloggs?  Zappos?  You may be familiar with dozens – even hundreds – of brands.  How many do you really trust?

   One of the ways we develop brand trust is similar to the way in which we develop trust in friends: we put them to the test.  How do they wear?  How do they hold up under duress?  How much can I rely on them?  How do they make me feel?

   Whether we’re going with a tried-and-true product or something completely new, the point of purchase interaction is a key one for shoppers.  It’s often a key first step toward establishing brand trust.

SENSELESS SHOPPING?

   In honor of Valentine’s Day 2013, Americans will spend $815 million on gifts and treats... for their pets.  Crazy?

   Not really.  We often buy out of “need” but there are many forms of need.  You need food to live; you buy food.  You feel tired but not thirsty so you grab some Starbucks.  “My friends and I NEED some retail therapy!” 

   Stores help shoppers both explore and satisfy their various needs.  Online shopping’s growth notwithstanding, most shopping remains a richly sensual experience.  We employ our sight, smell, taste, hearing and touch as we troll aisles and try products.  And we often do it automatically, sometimes without being fully aware that we’re doing it.

   So here’s a challenge for you.  Next time you’re in a store, shop with your hands in your pockets.  Touch nothing until you’ve decided to buy it.  Do not feel those sheets you’re considering or the blouse you covet or heft the cantaloupe.  Do not squeeze the Charmin.

   Then do something similar by writing down what you smell as you shop.  Is that fresh bread in the bakery?  “Boy, that roasted chicken smells good?” What do good leather gloves or ripe bananas smell like?  The perfume bar at Macy’s isn’t the only place that you’re being led around by your nose.

   Or ears.  What do you hear while shopping?  To hear it, you almost have to stop, sit and listen.  In-store radio?  Muted conversations?  The rustle of packages or the squeak of wheels and the harsh tones bouncing off linoleum?

   For this Valentine’s Day weekend, recognize shopping for the sensual experience that it is.  And indulge.

OWN OR RENT?

   “Who owns those shelves?”  Seth Godin writes one of the most widely-read and influential marketing blogs in the world.  He recently hit close to home with a post on owning vs renting.  

   Retailers and brand marketers alike tussle over who owns a customer.  If you go to Lowes to buy a Therma-Tru door, are you a Lowes customer or are you a Therma-Tru customer?  I suggest that the answer is that you are both – and neither.

   You could buy another brand of door at Lowes or you could go to Home Depot or Menards to buy a Therma-Tru door.  If neither the consumer goods company nor the retailer serves you well, you will be captured by neither.  You can “fire” them at any time.

   Doing a great job at the point of purchase – the only place where the customer, product and desire to buy intersect – is critical to both retailer and CPG.  But it’s also crucial to the shopper looking to fulfill a need, like a new front door for their home.

   Marketers may own their brands and retailers may own the shelves off of which you buy goods but the shopper owns both CPG and retailer – lock, stock and barrel.  YOU own the shelves.