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.  

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.

COME TO HER SENSES

Most brands and retailers sell inanimate objects.  Tusco Display markets no puppies, no goldfish, no hydrangea.  Instead, our displays and fixtures sell tools & tires, sporting goods & spices, cosmetics & calendars, food & flooring, shoes & services, paint & apparel, baseball bats, ballcaps & bathroom fixtures.

   Anecdotally, we know that pet stores that sell kittens find that their “inventory” moves quickly.  Why?  In part it’s because these animate objects create an emotional connection with shoppers.  Meow.

   Those connections most often arrive through a shopper's senses. A sensory connection with a shopper can be tough – but powerful.  This is where physical stores have a massive advantage over their online brethren.  Retailers and brands can appeal to more of a shopper’s senses.  When she touches that towel, a connection happens.  When she smells that fruit, she’s emotionally engaged.  When she tastes a sample, hears the music or sees the HDTV image, she’s drawn into a relationship with the product.  And if she likes what she perceives, she’s more likely to buy.

   When we come to her senses, we’re actually in the relationship business, building connections at the point-of-purchase.  Move over, Dr Phil.

James "Cash Mob" Penney

Poor ol' JC Penney can't buy a break lately.  They hired Ron Johnson from Apple to revitalize their marketing.  They quickly settled on an approach to remake the customer experience with a thoughtful approach to pricing and periodic sales.  But their sales are well below forecast and they have suspended their earnings guidance for investors based on a sizable sales volume drop.

Retraining customers who have grown up only buying on markdown has been neither easy nor swift.  And it's not being done in a vacuum - competitors are gleefully licking their chops at the prospect of carving off JCP shoppers for themselves, especially during the crucial Back-To-School period.  

As their website proclaims, "Over 110 years ago, James Cash Penney founded his company on the principle of treating customers the way he wanted to be treated himself: fair and square. Today, rooted in its rich heritage, J. C. Penney Company, Inc. is re-imagining every aspect of its business in order to reclaim its birthright and become America’s favorite store." 

When was the last time you visited a JCPenney's store?  See for yourself what they are doing.  I think that you'll find the merchandising much improved, their pricing indeed "Fair and Square," and their approach to brand curation - from Sephora to Levi's to Liz Claiborne - a far cry from what JCP has been doing or what most other retailers are currently doing.

If you believe that they are now headed in the right direction, consider being part of a slow-rolling Cash Mob to save James Cash Penney's namesake chain.  Sure, they aren't the typical target for local support but supporting a company that's trying to shake up the retail world with more straight-forward pricing seems a worthy project to me.

THIS IS YOUR BRAIN ON SHOPPING

...and it's not very smart.

Most people who shop know the silliness of some pricing.  From BOGO deals to the .9 cents on every gallon of gasoline we buy, we know that pricing plays many roles: it implies value, it encourages behavior ("Buy me!"), it provides context.

The Atlantic's Derek Thompson shows us some of the ways in which we as shoppers are led - and sometimes misled - by pricing tactics.  http://www.theatlantic.com/business/archive/2012/07/the-11-ways-that-consumers-are-hopeless-at-math/259479/

THE BIGGEST RETAILER

Can you name the most dominant retailer of the 20th Century? Wrong. It was the Great Atlantic & Pacific Tea Company or A&P. From humble beginnings in NYC before the Civil War, A&P grew to 200 stores by 1900, hit $1 billion in sales in 1930 and was the largest retailer in the world from 1915 until 1965. In a Dec 2010 Wall Street Journal editorial, they said that "A&P was as well-known as McDonald's or Google is today" and that A&P was "Wal-Mart before Wal-Mart."

Why bring them up? They emerged from bankruptcy last month as a privately-held – and much smaller company – than they once were. Though still a major food retailer on the East Coast, A&P long ago fell behind newer, bigger and bolder retailers like Walmart, Target and Aldi.
Unlike A&P, successful retailers stay attuned to shopper interests and make investments in their retail environments to meet the needs of shoppers today. We may be fundamentally loyal people but we are not afraid to find better value in the ways we buy our necessities of life. A&P lost that edge to other formats and approaches.

Successful companies like Tusco Display have changed too to remain attuned to our clients’ current needs with broad, modern capabilities, highly-responsive systems and up-to-date knowledge of consumers, shoppers and the way they buy. We don’t plan to dominate retail of the 21st Century but we DO have the means to help our clients dominate their in-store channels and serve their shoppers better than ever.

What Advertising Actually Works?

Advertising Age just published an article entitled Young Consumers Switch Media 27 Times An Hour. In it, the author writes: "It's every advertiser's worst nightmare: consumers so distracted by a dizzying array of media choices that they no longer notice the commercials supporting them. And its time might be closer than you think. A recent study found that consumers in their 20s ('digital natives') switch media venues about 27 times per nonworking hour - the equivalent of more than 13 times during a standard half-hour TV show."

Marketers are flummoxed. If these consumers aren't consuming their ad messages, if they surf away, avoid or - horrors! - ignore the messages, how can they be reached by marketers? Here's a thought: reach them when they want to be reached. Reach them when they are in search-and-buy mode. Reach them in-store.

Marketers who invest in the only space where the money, the motivation and the products co-exist tend to sell more product. Duh.

Shopnocentrism

I'm guilty. Are you? When I think about "at-retail marketing," I think about North American retail environments like Target or Toys'R'Us or Kohls. By contrast, for much of the world, the photo to the left is retail reality.

The photo came this morning from a friend living in Accra, Ghana where he visited the famous Makola Market on a slow, post-holiday shopping day. Normally, people jam every square inch of the area selling or buying products.

What common elements of in-store advertising do you see? People stake out there real estate - literally - like we do here. They present their wares in an attractive, user-friendly way. Some of the stalls offer umbrellas to make it easier for shoppers to tarry on a sunny day. Another guy takes "mobile" to a new level with a four-wheel cart for getting his wares up closer to the shopper. There are few POP displays per se but, then again, each stall is manned by a seller who can capture the shopper's attention, answer questions and suggest purchases, something that must often be accomplished without a shopkeeper in the Western world. This difference aside, color, product variety and depth, signage, presentation - it's all here.

Wherever people buy and sell products, those of us who work in this broader world can learn. Be aware of your own shopnocentrism. Whether an outdoor market or the indoor bazaar of Herald Square, the precepts of effective point-of-purchase advertising are universal.

The Evolution of Shopping

Remember when “making a phone call” meant using a landline to call another landline? Today, many people don’t even have a landline and finding a payphone is almost impossible.

Shopping is going through a similar and profound transformation, too. Though 91%+ of all consumer purchases are still done in a bricks-and-mortar store, increasingly people are using new devices (e.g., smartphones) to “shop” even when they eventually go to a store to actually “buy.” Some stores are using mobile technology in their stores to bring the Internet to the aisle. Don’t find your size on the rack? Let’s find it on a virtual rack elsewhere and have it shipped to your home before you leave the store.

Back in the 1990s, some predicted that stores would soon be obsolete as our gifts, clothing, even groceries would be magically selected and delivered to our homes, closets and pantries. Such predictions persist today. Instead, I believe that we’re seeing successful stores become more and more vital, technologically-enabled and capable of delivery great VALUE in multiple ways, including: lower distribution cost; entertaining, exciting, even alluring environments; exceptional customer service; convenience; instant gratification; and unique products.

Great stores provide great value. Part of that value proposition is the displays, fixtures, graphics and layout of the store, things at which display and fixture companies excel.

AMERICAN RETAIL

One of America’s hallmarks as a society is the vibrant, constantly-evolving retail landscape. Consumer retail spending rings up about two-thirds of our gross domestic product (GDP). Five of the world’s largest retailers (by revenue) are US-based companies (#1 Walmart, #6 Kroger, #7 Home Depot, #8 Costco and #10 Target).

According to the 2007 Economic Census, there were 1,122,703 retail establishments with a total of 14.2 billion square feet of retail space in the US. That’s one store for every 250 or so people and a whopping 46.6 square feet for every man, woman and child in America.

Have we become over-stored? Undoubtedly. Back in 1980, there were 8.5 square feet for every US citizen. Even today, the UK has only 23 square feet of retail space for each of its people; Canada 13 square feet; India two square feet; and Mexico only 1.5 square feet. No wonder we see closing malls, vacant store fronts and wobbly chains. This year alone, we’ve seen 600+ Borders, 400+ Blockbusters, 200+ GameStops, 160 f.y.e stores, 117 Foot Lockers and thousands of mom’n’pop restaurants, drycleaners and cupcake makers close.

In spite of all of this, new stores, restaurants and dress shops open every day in America. We’re a nation in search of new, different and better. And this search drives our economy, stokes our competitive fires and makes us what we are as a nation. In some ways, we are what we buy. At Tusco Display, we thrill to serve this demanding, brutal, creative marketplace.

Clicks v Bricks

Do "clicks" now get the same level of respect that "bricks" do among retailers who have both traditional and online retail assets? That's a question posed by Allison Enright in her Sept 21, 2011 column in InternetRetailer. Frankly, I think that she asks the wrong question.

Whether it's a catalog or a kiosk, a website or a store aisle, a phone app or a direct-response mailer, they are all THE point of purchase. When a retailer starts parsing sales between channels, their brand and their message can get lost.

Worry less about how shoppers access you. Instead focus more on being the same responsive, enabling purveyor of what shoppers want when and where they want it. That's point-of-purchase marketing. As shoppers click away in the aisle, the difference between clicks and bricks grows smaller and more irrelevant with each passing day.

Tasteless Tomatoes

Marketing guru Seth Godin posted something today that rang true with me (as his posts often do). Just as in the case where his local supermarket "stocks waxy, tasteless tomatoes from Chile and Mexico and Florida" when local produce is truly amazing this time of the year, too many marketers today deliver "good enough." They've abandoned delivering truly memorable, valuable and inspirational products and services. This isn't universally true, of course, as patrons of Nordstrom, Zappos, Ritz Carlton and even little guys like Bread Head Bakery can attest.

As a company that helps marketers present wares in hundreds, even thousands of stores, we can fall prey to the same malaise. It's tough to wow when you're using the same tools for the same products in a c-store, supermarket, drug store and mass merchant.

Finding the wow on a budget is the trick. When you do, though, marketing magic happens.

A Facebook friend posted the accompanying photo of a bug display - yep, real (though dead) bugs - that he saw in a grocery store. Though not pictured, in addition to the aforementioned bugs, the display also sells bug books.

You can use displays to sell just about anything. Even dead bugs.

Couponing

It's long been a big business but, according to the National Retail Federation BIGblog, coupons are once again "hot." Mobile apps, billion-dollar babies like Groupon and even the TV show "Extreme Couponing" have made it so.

Coupons primarily influence trial and forward-buying. They are a great tactical tool. And, according to the NRF, they do impact sales.

But not like the point-of-purchase where two-out-of-three purchase decisions are made. If you want to make a lasting impact on purchase decisions, invest where most purchase decisions are made: in-store.

In-store Cacophony

I recently visited Las Vegas on business. It struck me that the town mirrors the at-retail marketing universe.

The hotels and casinos epitomize the cacophonous nature of in-store marketing. We both make noise. Just as surely as ringing bells, clicking wheels, flashing lights and pulsing music wash over a visitor walking across a casino lobby, our industry vies for attention, bombarding a visitor to a store, seeking to draw a gaze, to interrupt a determined pace across a store floor.

There are clear winners and losers in our respective games, too. Get noticed, get purchased and you win in-store. Put your money in the right place at the right time and go home a bit richer from the casino. Put your money in the wrong slot, bet on the wrong horse and you lose in either venue.

The biggest difference between Vegas and in-store marketing? Smart in-store marketing is a sure bet while gaming is just, well, gambling.

Innovation

According to a recent Harvard Business Review, Procter & Gamble is developing a "new-growth factory" to combine the best features of Edison's labs and Ford's assembly lines to deliver fast, far-reaching breakthroughs. That's helped the company's innovations hit their profit-and-revenue targets 50% of the time, up from a 15% a decade ago, and executives say they expect innovation-driven revenue to double again in coming years. "We know from our history that while promotions may win quarters, innovation wins decades," says P&G chairman and CEO Bob McDonald.

The custom display world understands innovation: it's what we do every day. Finding effective ways to cost-effectively attract the attention of shoppers that leads to purchase requires new thinking, new materials, new techniques and new insights on every project. As marketing-at-retail professionals, we embody innovation - or we are out of business.

Extreme Couponer: Friend or Foe?

Today's Ad Age includes a special report about the rise of extreme couponing and posits that those who coupon the most - so-called Enthusiasts - are a marketer's "worst nightmare." REALLY? I don't think so.

According to the excellent statistical presentation in the report, 13% of couponers accounted for 70% of all 2010 coupon redemptions. These folks are tactical masters but far from a nightmare.

If anything, marketers are their OWN worst nightmare. Coupons can be effective tools for generating trial purchases. If the brand lives up to consumers' expectations, couponing can lead to brand switching and eventual loyalty just as surely as sampling does. Brands and retailers that continually rely on coupons to goose their numbers, however, are simply sacrificing margin for top line results as they teach shoppers to only buy "on deal."

Coupons can work when properly executed. Coupons can also work against the interests of the brand and the retailer when abused. Don't blame the crafty shopper; blame the lazy marketer.

Econ 101

The economy continues to improve with some real bright spots worth celebrating. Retail spending and industrial production are two of them.

According to Dr Ken Mayland of ClearView Economics, US retail sales reached an all-time high - surpassing the peak set in Nov 2007 - in December 2010. Annual retail sales rose 7.9% last year. This follows 2009's increase of 5.5% and the drop-like-a-rock year of 2008 when sales fell 11.1%.

Non-store retailers did even better with a year-over-year gain of 15%. On-line sales continue to chip away at the market share - well over 90% - held by brick-and-mortar retailers. Stores continue to benefit from a distribution cost advantage but they cannot rest on their laurels. Retail sales through clicks will keep growing faster than sales through bricks. Retailers must make the shopping experience worth it to shoppers who can do it from their desktops and even mobile devices.

Consumers aren't the only ones driving improved economic conditions. Industrial production ended 2010 still 5.7% below its 2007 peak but enjoyed a very respectable 5.9% rebound in output. Add the fact that many US factories dramatically improved efficiency and thereby profits, setting the stage for record-shattering profits in 2011. This will lead to some serious headway made in reducing unemployment in 2012.

Factories won't earn those profits through price increases. Capacity utilization, according to the Wall Street Journal, climbed from 75.4% in Nov to 76.0% in December, still below the mean average of 80.6% for 1972-2009. Though raw material inflation is gathering steam - steel prices have risen 25% since Nov, cotton's up 91% over the last year, petroleum prices are jumping - relative over-supply will constrain prices even as demand rises.

What's all this mean? Buyers are buying, producers are producing and the economy is on track toward restored health and vitality. We can expect solid growth for 2011-12.

The Ultimate Engagement Vehicle

Not long ago, awareness was king. Eyeballs were all the rage in the early days of Internet marketing. How many impressions could you make with a given ad or promotion and what was the CPM?

Today, engagement rules. Definitions vary but generally revolve around getting some connection between the prospective buyer and your product or service.

No medium creates engagement better than in-store. No other medium puts the person, product and predisposition to purchase in closer proximity. A new study by iVillage/SheSpeaks shows that women are increasingly using online resources to scope out deals, read reviews and preshop before heading to the store. Once informed, they visit stores to more effectively use their time in finding and acquiring exactly what they want.

Want to close the sale? Do a superior job when your prospective buyer is closest to your product and predisposed to buy. Knock their eyeballs out at the point-of-purchase.