Doing Retail Right

Shopper Angst

noreply@blogger.com (Unknown) — Sun, 14 Mar 2010 23:12:00 +0000

I just started reading Inside the Mind of the Shopper (by Herb Sorensen). So far, it's great. Lot's a concepts that I have already started pulling through to my day job. One in particular has me thinking a lot about retail experiences I have had (or analyzed).

Early in his book, Herb introduces a concept that he calls 'shopper angst'. It definitely resonated with me. Basically, 'shopper angst' is the frustration caused by some action taken by the retailer. Maybe it is poor store layout, or potentially not enough staff to address questions. Regardless, it's a taxing feeling experienced by the shopper. I would argue that it is even more central to the profitability of retailers than Herb suggests (keep in mind I'm only about a third of the way through the book, so maybe he elaborates more).

Think about when you enter Target to pick up a mundane household item. Your spirit is lifted by the bright red colors accenting your shopping experience. The wide aisles make you comfortable in your environment. The clear signage makes is simple for you to find what you need. I'd be willing to bet a vast majority of you actually look forward to these trips.

Now think about going to the local Walmart to make the same purchase. The aisles are narrow. Product is stacked to the ceiling, so you can't tell where you need to head to find the item you are looking for. There are way too many customers blocking your way. And there are too many options to choose from.

Target has definitely won on the shopper angst front. If this were the only factor in retail strategy, they'd be winning by a landslide.

Westin Announces New Retail Storefront

noreply@blogger.com (Unknown) — Tue, 23 Feb 2010 01:17:00 +0000

In big retail news today, Westin announced plans to launch a first of its kind storefront in partnership with Amazon. This project will allow the hotelier to further entrench itself among the minds of travelers as a supplier of "wellness".

A concept that started as a differentiator for the in-room experience has made the full transition to retail presence. Starting on March 1st, Starwood enthusiasts and healthy people across the board will be able to purchase a curated product selection slated to include Westin proprietary items like calming candles and bedding products in addition to items from brands that Westin has identified as being like minded. At this point, it seems that Westin is selecting brands that may well known in niche markets but certainly don't have the broad consumer recognition that they enjoy.

While the move to a creating a broad based online storefront is new and unique, this isn't the first time a hotelier has enhanced its offering and overall customer experience by selling an edited group of products that aligns with the brand sentiment. Westin's sister brand, W, normally has a small retail outlet in the lobby that sells trend forward clothing and knickknacks. Most resorts sell 'resort ware'. And Vegas giants have entire malls that distribute products they have deemed on-brand.

To drive awareness and trial for the new store, Westin will be targeting their core customer (mid-week business travelers) with a promotion that awards a $100 Amazon gift card. A nice touch to ensure this experiment gets off on the right foot.

This new take on a proven strategy is definitely something to watch.

Unique 'in context' product merchandising - Soiree Wine Aerator

noreply@blogger.com (Unknown) — Tue, 16 Feb 2010 00:50:00 +0000

This weekend, my husband and I went to a wine festival here in DC. Lots of good wine and cheese, but what really stands out is the product merchandising one company did.

Soiree wine aerators were very inventive about getting their product noticed by two different customer groups - the distributors & wineries pouring wines and the event attendees. The folks from Soiree walked around handing out their aerators (for free, I assume), asking those pouring wine to place them on a couple of their bottles. There was a ton of conversation about this interesting use of 'in context' product display. It's pretty rare that a potential b2b customer get to try your product and provide real time recommendations to a b2c customer.

They made one mistake though. They were not actually selling the aerator anywhere at the show. Lots of lost potential sales.

Ann Taylor's New Website - Product Categories

noreply@blogger.com (Unknown) — Sat, 06 Feb 2010 22:24:00 +0000

I am a sucker for unique web design. And I get even more excited when it is useful and unique. Ann Taylor has made a shift on their site that accomplishes both. For the most part, online retailers follow a template when laying out their category pages. Look at Gap, JCrew, Nordstrom, and until recently, Ann Taylor, and it is very hard to decipher any difference. This isn't necessarily a bad thing. The standard grid has been proven to work and customers have learned to use it to efficiently scan products.

Enter the new Ann Taylor page design. It is just slightly different, but the small variations make a world of difference. A quick run down of the features that make this new site shine:

1) The customer can change the size of the product grid, allowing them to choose how large the product photo is. This is the first time I have seen this, and I think it is an elegant solution to a problem online retailers have been struggling with for some time.

2) There is no white space between the products, allowing for larger product images regardless of the grid the customer has chosen. Accomplishing this without creating an overwhelming, cluttered experience is very challenging.

3) They have brought forward the important product attributes for their product set. Simply scroll over a product, and the price, in a nice size font, and the additional colors appear. It's important information presented in a manner that does not distract from the most important attribute, the photo.

The rest of the site has is executed well too. Later this month I'll discuss other highlights.

Simplicity for the win

noreply@blogger.com (Unknown) — Thu, 05 Nov 2009 00:45:00 +0000

When you are selling basics, should you have a complex strategy? Something doesn't sound quite right about that, but lots of retailers have taken that path. Not Uniqlo, a Japanese private label apparel company. Simplicity is the main theme of their strategy, starting with product design, continuing all the way through to the in-store experience.

Let's start with their product categorization. If you visit their website today, you will find a total of 7. Things like "shirt" and "bottom". And items for both genders (their only departments) are grouped together. The display, both in store and online, reflects the minimalist strategy as well. You can view all of their products at one time, and can see all of the available colors exposed, making the shopping process extremely easy. You can even control the size of the images in their online display, leaving the amount of clicks and scrolling necessary completely in the customer's hands.

This strategy certainly isn't for everyone. Many product lines do not lend themselves to this methodology, but it is working for Uniqlo. Their Manhattan US flagship (also their only US store) is a destination. And the best part - simplicity throughout allows this retailer to keep their prices low, a win for everyone in this economy.

Avoca - an Irish example of product categorization by sensibility

noreply@blogger.com (Unknown) — Sun, 25 Oct 2009 21:08:00 +0000

One of my favorite examples of unique product selection and categorization has always been Anthropologie. I thought there was no where else to buy clothes, gifts and housewares that all fit in to one sensibility (except for other stores owned by this company like Urban Outfitters). Imagine my surprise when I found another place that has done this even better - meandering though the shopping district in Dublin!

Enter Avoca. Around since the 1700s, this company specializes in hand-made wool products. But wow have they expanded. In their Dublin store, found just off Grafton Street, sells clothing for women, men and children, housewares, jewelry, gifts, even food, all centered around the same sensibility evoked by their original product - wool scarves. The store is welcoming, in a way that brings to mind a cozy cottage and the layout that at first seems a bit haphazard, but really encourages the customer to make their way all the way through all fives floors of product. You can buy cookbooks, pots and a lot of ingredients for the recipes, while finding sweaters that you'd imagine wearing while enjoying the stew recipe you just read about. Or you can buy a bracelet as gift for a new mom, and a baby blanket that matches her style. It's even possible to purchase a pea coat for yourself and enjoy a lunch that seems perfectly suited for you.

If you can't make it all the way to Ireland for merchandising inspiration, make a stop at their Annapolis, MD location. It sure looks like the Anthrologies folks have!

Find a way to make men enjoy shopping for clothes

noreply@blogger.com (Unknown) — Sun, 11 Oct 2009 22:19:00 +0000

This has always been a challenge for apparel retailers. The fact remains that a majority of this audience prefers the go in, get what they need and leave within minutes. It's rare to find a group of guys who want to hang out at a store.

The J. Crew in Tribeca has found a unique way to tackle this problem. By choosing to display their product in a setting that is comfortable and enjoyable for their customers, they have created an environment where their male customer base might actually consider staying for a while. And, of course, spend more money. The Liquor Store concept is enviable. With sweaters laid artfully across the top of a a decades old wooder bar, ties wrapped in to low ball glasses and comfortable, high-backed leather chairs, this place feels more like a cigar bar than a t-shirt store.

And I'm not certain, but I'm pretty sure you can order a drink while you shop. Perfect.

Amazon should be your role model

noreply@blogger.com (Unknown) — Sun, 27 Sep 2009 19:27:00 +0000

A relatively recent addition to the vast world of retailers, Amazon has grown from a book distributor to the go to stop for just about any product over night. Ok, maybe that's an exaggeration, but it did happen at light speed. They regularly add new merchandising techniques that make their customers more and more addicted, and make their competitors want to cry.

My current favorite is their most recently added cross-sell technique. "What did customers ultimately buy after viewing this item" is a refreshingly transparent way of helping customers meet their needs. Using this tool, customers can not only get a view into the other products customers with their needs considered, but they also see what they purchased. What makes this feature even better is it appears to run itself. If you take it at face value, Amazon doesn't have to do anything to keep it going. The customers populate it for them. And everyone knows customers trust each other more than they trust the man.

Genius.

McDonald's is the king of merchandising

noreply@blogger.com (Unknown) — Sun, 20 Sep 2009 16:48:00 +0000

During a five day long strategy session this past week, I decided to let my co-workers in on a little secret. I actually love McDonald's. I am one of the few Americans who is willing to admit that even after hearing all about how toxic their food is, I still crave fries and quarter-pounders. And I eat them with some regularity. I'm not talking about a weekly habit or anything, but I do partake often. One good thing has come of this habit though - I've been able to keep up with their amazing merchandising techniques.

McDonald's has mastered many of the methods I write about in this blog. They pretty much created the bundled package in the food service industry. Everyone knows the value meal. It is so successful that many of this franchisers locations only show them on the menu. Of course you can still order the a la carte items like cheese burgers and small fries, but who would do that when you can get a yummy #1 for only $4.49?

They are also very adept at using their limited product display to their advantage. Over the years they have cycled new products through their featured item slot (the middle panel of the menu board), in many cases creating new product categories like the premium chicken sandwich and the McCafe coffee.

And I wouldn't be doing this post justice if I didn't mention the most perfect upsell - super-sizing! Sure, it's not pc for them to do this anymore, but who can fault McDonald's for significantly increasing their average order size by inserting a five second conversation?

Yay McDonald's! These techniques will ensure you sell the next billion burgers.

IKEA, on a Saturday, the weekend before classes start...

noreply@blogger.com (Unknown) — Sun, 30 Aug 2009 20:13:00 +0000

What was I thinking? I mean, really? Going to IKEA in a college town the Saturday before classes start? The parking lot was so packed that I almost turned around immediately. There were 18 year-olds driving UHAUL trucks everywhere. Can you say scary? But I'm so glad I fought for a spot and went in anyway.

I frequently mention IKEA as being the king of merchandising. I really think they have covered just about every base from sophisticated pricing strategy all the way to unique product bundling. I could write a thesis on them. But today I'm going to focus on just one of their admirable techniques.

Product display at IKEA is amazing. Even on this unfortunate Saturday, while I was being swarmed by co-eds and their dazed parents, I could have spent hours admiring the seamless execution of thier strategy. Combining in-context displays with product callouts that are almost completely masked by the design, they inspire shoppers across all demographics. They have turned their showroom in to numerous fully functioning, livable spaces in order to showcase the flexibility of their product. Whether you are moving into a dorm room the size of most people's closets, or furnishing an expansive space, they provide a solution. While it isn't necessarily unique for a furniture retailer to layout the showroom like real rooms, IKEA has taken this to a new level. With the addition of walls that seperate space and products they don't even sell, like books for shelves and TVs on the walls, they've made a real difference. They've also made it easy to navigate what could have become a very cluttered mess with the addition of a wide path that compels the shopper to take a fixed route through the store. And for those who don't love to wander through this area like I do, they've created short cuts that appear hidden, but are actually simple to find.

The transition from the showroom into the marketplace and then on to the warehouse works very well for them. End caps and middle isle violators call out to the customer, resulting in the accumulation of picture frames, and strainers and glassware you didn't even realize you needed. And once you've made it through all of that, you're presented with bins full of additional trinkets that you can't help but pick up just before you checkout.

It's rare that I leave IKEA with just what I went in for. I was so proud of myself this weekend for buying only the picture frames and entertainment center I had on my list when I set out on my trip!

Would you like extra leg room with that?

noreply@blogger.com (Unknown) — Wed, 26 Aug 2009 01:24:00 +0000

In the travel industry, many have been selling ancillary products for years. Hoteliers make a good portion their revenue off of food and beverages that they sell to guests, and cruise lines sell shore excursions and upgraded food options to make their gargantuan ships profitable. Airlines are relatively new to this type of selling. I am sure many of you can remember the days of free meals on all flights and no limits on the number of bags you could bring with you. That has all changed. Most airlines have started to move in the direction of a la carte pricing, but United has taken it to another level.

Leveraging their website and check-in kiosks, they have integrated a shopping process reminiscent of a traditional retailer, increasing their revenues while simultaneously providing unique services that many customers think of as a value ad as opposed to a nuisance. Products offered through the check-in kiosk range from extra legroom for approximately $15, upgrades to first class and mileage excelerators.

But the website is really where they have gotten creative...

Enter Opt - the cutsie name for United's Travel Options shop. Here they are leveraging all the techniques that traditional retailers use when selling hard goods:

1) Unique product categorization - Categories are based on the customer need they satisfy. Comfort is where you can find things like Economy Plus for the year which can afford the frequent traveler extra leg room on every flight. Peace of Mind contains travel insurance.

2) Product Flagging - Little red words call out the fact that they have put some products on a temporary sale.

3) Cross-sells - Head over to the product page of one of their options and you'll see suggestions like "other options" at the bottom of the page. You'll find yourself thinking, "Am I at Amazon or United?"

4) Ancillary on ancillary - Really? Are they suggesting ancillary sells to accompany products that are already ancillary sells? Yes, they are. Thinking about economy plus for the year? Why don't you add on Red Carpet club? Or better yet, give it to your boss as a gift. And it's not only on the product page, they are also at the bottom of the shopping cart (yup, they have a shopping cart and a checkout!)

If all of that weren't enough, they allow you to pay for all of the products that they are selling with the ease of an expert merchandiser with your frequent flier mile.

Kudos United. You're leading the pack of what will surely be a trend in the travel industry.

How did I end up with apples and extra cheese?

noreply@blogger.com (Unknown) — Wed, 19 Aug 2009 01:11:00 +0000

Eating on a road trip has always been a challenge. A person can only take in so many burgers and fries. And it's frustrating to have to make a stop for gas and another for food, right? For as long as I can remember, gas stations have offered less than inventive food options, most of them with very little nutritional value. Sure, some of them have managed to share real estate with a McDonald's, but now we're back to the first problem - more burgers and fries!

Enter Sheetz, an inventive solution to the problem. Based in Philadelphia this company has been spreading outward from Altoona, PA for over fifty years. So far, they can be found in VA, MD, WV, and Ohio, too. Their basic model is simple - offer cafe style food and cheap gas in one stop. But they've added a key strategy that every retailer could learn from. Instead of ordering food from a person, customers enter their order through an interactive kiosk. The benefits are huge:

1) Control over product presentation in a franchised business.
Every customer who attempts to order at a Sheetz has the same experience, and there is no associate training required. Sandwiches, soup, and salads are all displayed on the computer screen. The descriptions are identical, the order in which they appear is the same and there is no personal bias delivered. I'm not certain, but I would bet the interface is managed by a central system in their corporate office. The value of this type of control over a franchise is impossible to measure.

2) Upsell is seamlessly integrated in to the experience.
Extra meat, cheese, maybe an additional packet of dressing for your salad? It's all right there in front of you, for an extra $0.69. That's not that much right? And what if you run out of dressing - it's so much better to be safe than sorry!

3) Ancillary sells can be displayed right at the customers finger tips.
A side salad would compliment that flatbread sandwich perfectly right? Oh, you're not interested, just push the next button.

Bonus points - not only do they have convenient kiosks in the store, they also have them at the pump. Talk about great product placement. This is a great technique to increase the total size of the purchase from a customer that was only planning to buy gas.

Sheetz has identified a way to make the customer feel like all of their advanced merchandising techniques are a service the customer deserves, not an annoying selling technique. Plus the food tastes great - so great that I almost always add a little something extra on.

I got cross sold today

noreply@blogger.com (Unknown) — Mon, 10 Aug 2009 22:41:00 +0000

...and I bet you did too. But I also got offered an ancillary product and wasn't even a little bit annoyed by either.

We were staying at a hotel, getting ready for the evening, when my husband realized he had forgotten collar stays. We set out to solve the problem, and were pleasantly surprised to find a Johnston & Murphy right across the street. The sales associate greeted us pleasantly, let us browse for a bit and then asked if she could help. She promptly showed us where to find the collar stays we were looking for and then casually pointed out the sale items located close by. My husband saw a pair of sandals he was interested in, and she went off to look for his size. Unfortunately, they weren't available, but she arrived with two other sale shoes in his size (cross-sell!). As we proceeded to checkout, she mentioned the shoe shine products behind the counter (ancillary!).

While we left the store with only the collar stays we came for, the expertise of this associate resulted in our consideration of multiple other products. If implemented well, this type of strategy can result in a significant lift in revenue for a retailer. In this blog I will explore how others have added this type of sales technique to their strategy. I hope you'll come back to read more and share your experiences with excellent merchandising techniques.