Monthly Newsletter | SEPTEMBER 2016 | Ninth Issue
S-CUBE Fixtures What's In Store this month

Table of Contents

Holiday Planning Playbook
Sizing Up Millennials
Mobile Payments & Potential Theft
Trends & Ideas to Inspire


Planning Tips for Holiday 2016
As the holiday season draws near, there is no better time than now to review the
“2016 Retail Holiday Planning Playbook”


The playbook was created by the National Retail Federation. Based on surveys and insights from the 2015 season, it highlights opportunities and trends in the five areas below. The overarching theme? Technology. It continues to influence how retailers market and sell, and how consumers shop.

1. Online and Mobile Shopping
Online and mobile shopping continues to trend upwards. More than half of consumers increased the amount of shopping they did online this past holiday season; one in three made more than half their holiday purchases online. Customers are looking for an easy and productive shopping experience.

Retailers continue to try to harness the power of mobile, with 84% of them working to improve site conversion rates. What works? Videos, blogs, reviews and improved product detail pages all help drive conversion. In a YouTube culture, four times as many consumers would rather watch a video about a product than read about it. Almost 9 in 10 consumers (88%) trust online reviews as much as personal recommendations.

2. In-Store Experience
Delivering a unique experience that surprises and delights is high on the list for most retailers. Consumer purchase decisions are still heavily influenced by what they see and feel once they are in the store, with shoppers making 43% of their purchase decisions on site. In-store holiday events can be memorable experiences and consumers are making time for them. Two in ten shoppers attended an event in 2015, and 6 in 10 purchased something while there.

Consumers want the same level of information available in store as online, including comparisons, ratings and reviews. Google reports that 42% of shoppers conduct online research while in-store, and 46% are visiting the retailer’s own app or website. “Smart” shelves and fitting rooms that interact with shoppers via mobile or touch provide information that help consumers get what they need.

3. Marketing & Promotions
Digital marketing leads the way in terms of retailer spending plans this year. On average, 41% of marketing budgets are dedicated to digital.

Search engine optimization is at the top of retailers’ wish list with 97% planning to use it in 2016 compared to 88% in 2015. Search engines delivered 19% of consumers to sites where they made purchases. A majority of retailers found email promotions to the house list were profitable. The most profitable promotions this last holiday season were online-only sales, limited-time offers, and free standard shipping.

4. Fulfillment
Consumers are more vocal about when and how they want their merchandise. Free shipping is becoming more of an expectation than a bonus, and consumers want to know the precise delivery date. To better meet expectations, retailers are learning to clearly and frequently communicate their holiday cut-off dates.

Omni-channel operations have led retailers to view their stores as mini-fulfillment centers. Shoppers are taking advantage of ship-to-store options as well as buy online, return in store. The bonus for in-store to pick-up or return is the opportunity for additional purchases.

5. Operations
The moment of truth for retailers is when a consumer is at the point of purchase. Ensure the decision falls in your favor by offering what consumers want: a seamless, efficient check out process. The right systems, like mobile POS, and preferred payment options will smooth the way. Alternative payments, like ApplePay and Google Wallet, are on the rise.

It’s fairly certain that technology will influence the holiday season in many ways. Whatever you choose to do, you have two additional shopping days between Thanksgiving and Christmas this year to make it a success.



Holiday Online Shopping


Back to Top >>   Information Compliments of:
The 2016 Retail Holiday Planning Playbook (NRF)


Millennials Are Shaping Retail
Much has been written and discussed about Millennials -- and for good reason.


Millennials are a large, unique group exerting significant influence on many industries, products and policies. In “Succeeding with Millennials at Retail”, Frank Mayer & Associates outlines who they are and how they are impacting the world of retail.

At 77 million strong, the Millennials are as large a cohort as the Boomers, whom they will eventually replace as the dominant group. Gen Y, as they are also known, are currently in their 20’s and 30’s (born between 1977 and 1995). It is estimated that they spend $600 billion annually, which is expected to increase to $1.4 trillion by 2020. This will represent about 30% of all retail sales.

What is their story?
Several key events have influenced their worldview and lifestyle choices, including the 9/11 tragedy, two wars, the Great Recession and dire warnings of global warming. As a result, they are skeptica and independent. Only 19% (vs 40% of Boomers) agree that, “generally speaking, most people can be trusted.” They are not strongly affiliated with political or religious groups. They tend to be single, with 2/3 of them renting, and many carry a heavy burden of college debt.

They are the social media generation and lead digital lives. They have grown up with technology and believe it makes their generation unique and improves their lives. They are social creatures and use a wide variety of social media networks. Choice and personalization are important.

How do they shop?
Their digital and social lifestyle also defines how they shop. They are big online shoppers - 91% have made online purchases and 45% spend more than an hour per day looking at retail-oriented websites. Even though they are more likely to shop online than their parents, 81% of their dollars are still spent in stores. They view shopping as a form of entertainment and something to share with friends and family and, therefore, tend to choose stores based on how engaging and fun they are. What moves them is experiences.

But they are selective. They like to browse and buy on only 57% of their shopping ventures. They are also price conscious and deal savvy. As heavy users of shopping apps, deals account for 31% of their shopping dollars.

Implications for Marketing and Merchandising
Millennials expect a seamless, ‘any channel’ approach to shopping with the convenience and dynamic nature of the online experience. You need to grab their attention in-and-out-of the store. Create environments that are vibrant and dynamic while merging physical and digital elements. Balance deal-­‐oriented incentives with exceptional experiences. Provide opportunities for validating purchase decisions through peers and ratings/reviews.

Develop marketing plans that incorporate multi-directional engagement. Reaching them through new forms of media may generate more response than traditional media. They see an average of 500 more digital impressions per month than someone 55-plus. They are 262 times more likely to be influenced by a phone app and 247 times more likely to be influenced by information on blogs and social media sites when making brand decisions.

A revealing test is to ask yourself this question, as posed by Les Berglass, CEO of retail executive search firm Berglass + Associates, “How would I change my store and messaging if nobody over 35 came into my store?”

There are myriad ways for retailers to adapt and appeal to this segment of the population. Their needs vary by shopping occasion and will change as they age. All the more reason to stay in touch with the customer. Macy’s CEO, Terry Lundgren, has a monthly breakfast with a group of Millennial employees to get their feedback on various initiatives. What are you doing to better understand your Millennial customers?



Millennials are shaping retail



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Information Compliments of:
“Succeeding with Millennials at Retail”
Frank Mayer & Associates


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Mobile Scanning & Payment (MSP)
Technology continues to influence all aspects of retail, is there a potential threat?


Mobile Scanning and Payment (MSP) is viewed by some as the next level of convenience and efficiency. A team at the University of Leicester in England studied how well it is working among select retailers, focusing on how it might expose retailers to increased theft and how to minimize the risk. A total of 8 retailers were interviewed in Britain, the United States and two other European countries.

As tech-savvy consumers continue to crave convenience and customization, the ability to scan and pay for items from a mobile phone gets high marks since it can offer:
• A quicker shopping experience with no need to use traditional check-outs
• Real time spending tally while shopping
• Personalized information such as shopping lists and purchase history
• Easier product searches within the store

Retailers enjoy many benefits as well:
• Move staff from check-outs to more customer-focused activities
• Increase customer loyalty with exclusive offers
• Drive add-on purchases through product notifications related to scanned items, e.g. suggesting cheese to go with deli meat
• Collect more shopper data to personalize the shopping experience and improve business planning

However, retailers and consumers have encountered technological and functional challenges with the system.
• Inconsistent store WiFi
• Phone battery life failure
• “Three hands syndrome” as consumers juggle the mobile phone, select an item and scan it while holding a bag or pushing a cart
• Age restricted products requiring ID validation
• Difficulty scanning some barcodes
• Limited use of mobile payment apps requires traditional check-outs

Increase in theft risk
The research found that there is a heightened risk of theft since MPS allows consumers to complete their shopping trip without any human interaction. This lowers the perceived sense of risk to those who are motivated to drop items in their basket without scanning them. Some of it is not malicious in intent, such as forgetting to scan an item or a scanning error. Proving intent and deciding whether to prosecute is difficult when it is hard to distinguish between absent-minded consumers and those with fraudulent intent.

There is also the potential for affixing phony self-scan labels, using stolen credit cards for payment, or submitting counterfeit electronic coupons.

Reducing the risk
Most retailers only have checkpoints at the beginning and end of the shopping journey – store entry registration and during the payment / check-out process.

The study recommends embedding other safeguards in the shoppers’ journey both virtual and physical to increase the perceived risk of being caught.
• Customer messages via the app when entering the store reduces anonymity
• Random audit checks
• Non-scan alerts to notify shoppers and security personnel when products aren’t scanned
• Geo secure areas for payment compliance
• Visible CCTV systems
• Registration system that is difficult to manipulate or use stolen credit cards

Mobile Scanning and Payment helps the retail industry move towards increased consumer autonomy and self-service, a long standing trend in the industry. However, MSP currently poses an increased risk of theft for retailers. As the apps and systems develop to improve the technology and functionality, more work needs to be done by retailers and technology providers to create solutions that reduce the risk of theft.



Girl making a mobile payment



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Information Compliments of:
A Study done by
University of Leicester - England



Trends and Ideas to Inspire
Stores Magazine rounds up the latest trends that may inspire your next big idea.
Here are five ranging from high tech to low tech.


As in Pokémon GO - the popular mobile game that has players of all ages searching for Pokémon creatures all over town. Using augmented reality technology, the real world becomes a hunting ground for “trainers”, or game participants.

How can your store capitalize on the fun?
Nikki Baird, managing partner at RSR Research, suggests creating promotions that play off the game concepts. For example, welcome Pokémon GO trainers and offer to help newbies of the game. Feature trainer-related merchandise (food and drink) at the front of the store. Invest in “lures” which players can purchase to attract Pokémon to a specific “PokeStop” for 30 minutes.

Using Augmented Reality to help you buy furniture Wouldn’t it be nice if you could visualize how that new sectional sofa is going to look in your family room? Well, Jerome’s Furniture has taken the guesswork out of it by launching a new app that allows customers to “see” furniture in their home before they buy. Jerome’s Augmented Reality scans the room and overlays the products in a realistic 3D image.

“Furniture shopping and visualizing pieces in your home is difficult, which is why we saw the need to create a way for our customers to envision a piece in their home, make it their own and trust in their investment,” says Scott Perry, vice president of digital for Jerome’s Furniture. The free app is available from Apple’s app store and the Google Play store.

The Robots are coming
Once the domain of Sci-Fi movies, robots are on the verge of becoming mainstream. Look for them to improve the shopping experience via robotic shopping carts. Wal-Mart is working with Five Elements Robotics to explore the use of robotic shopping carts to lead customers to items in the store via a touchscreen. “The robotic cart, called Dash, can map out the most effective route, follow the shopper on his journey, facilitate payment via the touchscreen — and then return itself to the store docking station upon completion.” Wal-Mart is mum about the details but has acknowledged they are evaluating a prototype in their lab.

Texts are best for Gen Z
Generation Z is a young, large cohort representing 25% of the population and $44 billion in buying power. They have the potential to ‘upend retail industry norms’ according to marketing firm Interactions, who authored “Next Generation of Retail.”

This tech-savvy group, has never known a world without cell phones or computers. Interestingly, a majority of them (64%) prefer shopping in-store vs. online. However, 75% prefer stores with an engaging in-store experience. They tend to value experiences over material things. They are price conscious and not very brand loyal.

Social media is important to this group and this translates to their retail experience – 63% expect retailers to have a social media presence and 60% prefer to shop at stores that engage with them via social media. They prefer to communicate via text messaging - even with retailers and brands, yet less than one in five (19%) say they currently receive new product texts from retailers.

A reason to look forward to grocery shopping
The monotonous errand becomes more appealing with a glass of beer or wine in hand, at least that’s what several supermarkets hope, according to The Wall Street Journal. Chains that offer the opportunity to sip while you shop include Whole Foods, Kroger, Giant Eagle and some Target stores.

Does it help draw more shoppers and encourage them to stay or buy more? Bonnie Riggs, a restaurant industry analyst for NPD, feels that shoppers perceive drinks at supermarkets to be a better value than drinks in a traditional bar or club. Other experts say it seems to be encouraging 20-somethings to linger.

Further support of this idea: a recent poll asked, “If you could drink beer while grocery shopping would you?” Over 60 percent of respondents said “yes.”



Trends & Ideas to Inspire



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Information Compliments of:
Stores Magazine


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