SEAMLESS RETAILING

   Global consulting company Accenture just came out with research that documents what we’ve been saying for years: online and in-store are converging as shoppers demand bricks-and-mortar stores evolve to provide the benefits of online and vice versa.

   Specifically, the report highlights these insights:

1.    Online Experience In-store: More people are buying online but picking up at a store.  Some are also ordering in-store and having delivered to their homes.

2.    More Webrooming, Less Showrooming: The study found that 78 percent of U.S. shoppers had webroomed (browse online then visit a store to make their purchase) in the 12 months before the latest survey, while 72 percent had showroomed (visit a physical store to see a product and then search online for a better price and make  purchase online).

3.    Free Beats Speed of Delivery: Though people have expectations of faster delivery, 57% of respondents preferred to wait rather than pay for next-day service.

4.    Retailers Aren’t There Yet: Survey respondents noted that they find offerings vary too much between online and in-store.  Retailers who figure this out – and many are working feverishly to do so – may enjoy a competitive advantage.

   As Chris Donnelly, global managing director of Accenture’s Retail practice, says, “Delivering a seamless experience across all retail touch points remains both a key challenge and prime opportunity for retailers today.”

   As long as shopping remains a vital part of the American economy, retail stores will, too.  Those retailers that deliver seamless shopping experiences - whether from one's phone, PC or shopping cart in an aisle - will remain vital to American shoppers as well.

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.

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.  

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.

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.

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.

WHAT'S YOUR RETAIL IQ?

   We all know them.  Perhaps you’re one, too.  They are the Smart Shoppers: people who know retail stores inside out.  Best store for double coupons?  Best place to find 2% milk on sale?  Nikes in narrow widths?  What time is Extreme Couponing on TLC this week?  Where are the pimentos?  (midway down Aisle 7 on the right on the top shelf)  These people – OK, they are most often women – are Shopping Savants.

   Few people have the time, talent and patience to aspire to that level of shopping supremacy but we all have a Retail IQ.  What’s yours?

   Do you know how to best navigate a store to find what you need and want?  Do you understand how a store uses discounts, coupons, weekly specials, shelf position, special displays and other techniques to prompt you to notice it, try it and come back and buy it again?  Do you know when a “sale” doesn’t actually save you money?

   Retail IQ has little to do with education, career or gender.  Your Retail IQ has more to do with observing, learning and applying what you learn in retail environments. 

   Next time you visit a store, ask yourself, “How is this store moving me around, presenting product choices and shaping my purchase decisions?”  The better you understand how a store (and its brand partners) unites you with their products while separating you from your money, the higher your Retail IQ.