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.  

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.

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.

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.

HOLIDAY SEASON DASH

   Black Friday has traditionally been the start of major holiday buying but it has crept into what some now call Gray Thursday – Thanksgiving Day.  Did you shop in-person or online on Thanksgiving?  If you did, you joined 28% of all American shoppers who shopped before midnight Thu.  Over the entire weekend, three-quarters of all Americans – men, women & children, young and old - shopped.  Holy Kris Kringle!  Read more about it here. 

   Shopping has become a blood sport in American culture where people vie for the best deals, scramble for the hottest products and scheme to “win” at shopping.  Can you image anyone going to such lengths 30 years ago? 

   Throughout the year, displays and fixtures silently but effectively present products and services that shoppers may consider for purchase.  During the holiday season, though, retailers and brand marketers turn to megaphones – TV & radio ads, print campaigns, email blasts, online pop-up ads – to get our attention and possibly win our wallets in spite of knowing that 70% of all purchase decisions are made in-store.

   Not unlike the recently-ended political season, I hear people wishing for more civility, lower stress and less strident communications.  But, just like politicians, marketers know: noise works.  And, as long as we respond to that noise and vote with our dollars, we’ll keep getting it.   

SHOPPING IS HELL

William Tecumseh Sherman knew war firsthand and famously declared, "War is hell."  Many modern shoppers see Black Friday - the Friday after Thanksgiving in the US - as a hellish ordeal fraught with too little sleep, too many choices and too many people jostling others seeking the best deal.

Shopping this upcoming weekend takes on some of the sophistication of battle strategy and tactics.  Shoppers gearing up must marshal their resources (savings, credit cards, coupons, Christmas lists, troops, transportation), deploy their forces - Aunt Jane camps out at Big Box Mart while Cousin Jim waits in line at Mega DIY World - establish lines of supply, e.g., When will we eat? Who's bringing the coffee?, and even synchronize their watches and calendars to be sure that they can coordinate all activities without missing a beat.

Though I love stores, spend time in them a lot and thoroughly enjoy studying the psychology of shopping behavior, I choose to remain out of the line of fire and away from the trenches this weekend each year.  I leave the field of battle to the more tenacious, determined and battle-hardened professional soldiers of holiday sales.

As you think of me in the rear echelon this weekend, recall the words of Dwight David Eisenhower:  "Leadership is the art of getting someone else to do something you want done because (s)he wants to do it."

CONSUMERS, SHOPPERS OR JUST PLAIN PEOPLE?

Steve Schildwachter's recent piece deserves wider play so I'm posting it here.  As we think about influencing behavior in-store, it's worth recalling that we're dealing with people with varying degrees of Retail IQ, different tools, e.g., smartphone, and a variety of shopping goals.

MORE RETAIL IQ

   Are you curious, observant and persistent in your shopping habits?  If you are, chances are you are adding to your Retail IQ on every shopping trip. 

   Do you like to explore new stores or wander down different aisles in stores you know well?  These are signs of a healthy Retail IQ.  Do you pick a checkout lane at a grocery store based on the length of the line, the skill of the bagger or the number of items in the carts of those ahead of you?  Do you even think of ANY of those factors?  People with higher Retail IQs observe the subtle differences.  And great retailers manage those factors.

   What type of stores do you frequent?  Barbershops or beauty salons?  Hardware stores or Hallmark shops?  Claire’s or Costco?  Quick-service restaurants or self-service gas stations?  Wherever you go, be aware of the messages and methods employed to influence your decisions.  What happens in those stores doesn’t stay in those stores – some of it goes home in your trunk!

   There’s no magic formula to calculating a Retail IQ and it varies from store to store, format to format and shopper to shopper.  It also varies widely between producers of point-of-purchase equipment.  If you buy or sell displays or fixtures, consider the Retail IQ of those with whom you work, too.  They can make the difference between a smart investment and one that pays poor dividends.

RETAIL AS THEATER

   Imagine attending a live performance of some great play or musical.  Many things make it great.  The script must engage the audience.  Actors must know their lines, hit their marks and play their parts well.  The theater surroundings themselves must be comfortable, sight lines clear, lighting and sound right, seats comfortable.  Costumes and props matter, too.

   Stores are like theaters, don’t you agree?  The products are the scripts and actors the staffs.  The store environment is like the theater building itself.  Costumes are the packaging.  And the props?  They are what our industry provides to “set the stage,” to highlight the action and to help make the entire experience compelling.

   Consumer packaged goods (CPG) companies want their products to have a good, long run.  When they bring together the right Product, Price, Promotion and Place – the proverbial Four P’s of the marketing mix – magic happens.

   Display and store fixture designers and producers play a pivotal role in two of the four P’s: Promotion and Place.  If shoppers are drawn to a product, can find it easily and see it attractively presented, the probability of purchase increases dramatically.

   When the show must go on (and we know that it must), great displays play a part in the mix.  Marketers that miss this critical point don’t play well in Peoria and have short runs.

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.

OLYMPIC DREAMS

The Olympics captivate us, don’t they?  We marvel at the feats, strain to see our nation’s athletes compete, hope for success.  None of us may expect to compete at that level but we can still learn from it.  Here are a few ways to apply Olympic lessons to our lives.

1.    Persistence pays.  How many stories did we hear of athletes overcoming tremendous odds to succeed?  Look no farther than the Paralympics which start this weekend for more such inspiring stories.

2.    Set goals.  If you don’t know where you’re going, what you’re trying to achieve, how will you know when you get there?  How many athletes reached London without explicitly making it their goal?

3.    Feed your passion.  Dreams are not enough; passion pushes people to perform.  Just “keepin’ on keepin’ on” doesn’t lift your game to winning heights.  Find your passion then feed it.

4.    Teamwork trumps talent.  Think of the sand volleyball duo of Misty May-Treanor and Kerri Walsh Jennings.  There may have been better, younger, faster athletes across the net but no better team in the history of the game.  Their teamwork was their advantage.

5.    Have some fun.  Performance takes a great deal so you better build in some fun or what you’re doing will become drudgery.  

None of us may be Olympians but we can all be champions.  

At Tusco, we had a client who needed some in-store equipment in their London flagship store.  Their Chinese supplier had failed them.  Our team sprang into action, went to Olympic lengths, worked around the clock and met this emergency need in record time.  We helped our client win in London.  We received no medal but we showed our mettle.

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/

MEASURED v UNMEASURED

POP as a medium has long had a chip on its shoulder.  Marketers, retailers and producers know that it moves product but it's never been considered a "measured medium" by the advertising community.  As brands and retailers strive to connect with shoppers, where better to do so than where 92% of the money is actually spent:  in-store!

The accompanying article today from Ad Age highlights the growth of "unmeasured" media relative to traditionally measured media.  People want a return on their advertising and promotion investments.  We had a client ask about this just last week.  They knew from matched store tests that they got a 29% increase in product sales in stores where they used our custom store fixtures v stores with stock fixtures.  To both our client and us, the measure of any medium is the impact on sales.

THE IKEA MAZE

I got a kick out of this article and thought you might, too.  There's really little that's truly revolutionary about what this Big Box does - grocery stores have used the "racetrack" for years, after all - but recognizing the psychology involved helps us understand both how we shop and how we sell.

NOT JUST METAL BENDERS

   The Tusco Display story started over 60 years ago when we printed advertising signs.  Producing the metal substrates on which the signs were printed came next and we became metal benders.  Along the way, the business morphed into industrial sewing, stadium seating, storage tanks and eventually the production of permanent displays and store fixtures.
   Today, we produce products in fiberglass and various plastics, we work in wood and laminates, and we even dabble in fabrics and graphics.
   We still bend lots of metal, of course, to produce displays and fixtures as well as everything from aluminum fire truck doors to stainless steel control cabinets, tandoori ovens to bingo machines.  But the heart of what we do is far more than cutting, bending, welding and coating metal.
   We are mental benders.  We help consumer packaged goods (CPGs) companies – many famous name-brands – effectively present their wares in retail environments throughout N America.  We help them connect with shoppers.  We influence stores to carry products and shoppers to buy them.  We help shoppers find what they need and want.  We understand, design and produce to meet the needs of the CPGs, their retailer partners and shoppers.
   Understanding how people interact in-store, how they approach purchase decisions, how they are attracted or not attracted to products in stores is far more of what we do today than simply printing signs or building shelves.  Tusco helps create in-store inspiration.

IN-STORE MATTERS

   The Point of Purchase Advertising International trade association has conducted some major new research in at-retail shopping behavior.  In spite of the advent of on-line shopping, smart phones and loyalty programs, one surprising fact emerges:  people still make the majority of their purchase decisions in the store.
   POPAI’s 2012 Shopper Engagement Study hired a respected research firm, supported by major retailers and global brands, to determine how American shoppers actually grocery shop.  Using sophisticated technology and in-depth analysis, the study finds that “today’s in-store decision rate has reached an all-time high of 76%.”
   Does this suggest that we don’t know what we plan to buy when we go shopping?  Of course not.  Instead, it documents that most of us make many decisions while in the store.  Perhaps we switch package size or brand, perhaps we generally plan to buy something but specifically decide when we’re in the aisle.  Whatever the case, what happens in-store matters. 
   The message for marketers and retailers alike?  If you don’t put your brand on ‘display,’ you’re less likely to put your brand in the shopper’s basket.  It’s the “point of purchase” for a reason – and we have proof.

RETAIL EVOLUTION

   When we think about how retail continues to evolve, many people fixate on e-tail vs retail, clicks vs bricks, digital vs analog.  Though Amazon no doubt gets a lot of attention in places like Bentonville AR, more than nine out of ten dollars are still spent in stores.  Bricks click in part because they never stop changing.
   Dollar General has opened some new DG Market stores that offer fresh food as well as their standard stuff.  Drug chains are doing the same, especially in areas underserved by grocery stores.  RiteAid has announced that they’re revitalizing all of their 4700 stores this fiscal year.  NYC drug chain Duane Reade (part of Walgreens) is transforming their 250+ stores, too.  Gap is brightening their stores – and seeing results.  JCPenney hired CEO Ron Johnson away from Apple store last year and is making sweeping changes to their stores, pricing, merchandise and almost everything they do. 
      We live in a dynamic, ever-changing world.  Retail knows that it adapts or dies.  Changing a store’s footprint or location can be costly, time-consuming and difficult but revitalizing the floor plan, graphics, lighting and fixtures to upgrade, refresh and revitalize can work well and quickly.
      Effective at-retail marketing may change the perception of any product or brand and determine success or failure.  Same goes for retailers.

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.