Monday, May 25, 2015

The Beacon Marketing Playbook by Swirl: How to Use Beacons Efficiently

Swirl is a company specialized in mobile marketing. It has recently hit the headlines as Twitter invested in the company, in an effort to develop its mobile marketing activities.

They have published a White book you may download here, where it gives some tips on how to use Ibeacons. Ibeacons is for sure one of the most hyped word in retailing right now and the potential is great. Now I like the advices and the detail they give on how Ibeacons work.

How to use Ibeacons? What for?
This is one of the key to an Ibeacon implementation success. Ibeacons could be very intrusive, and the added value must be clear to shoppers. Moreover, depending on your business modell, your store concept, you may use more one or another technique. To me, there are two main visions of Ibeacons

Increase sales figures via couponing
  • Increase overall purchase rate 
  • Increase average basket size
  • Increase department-specific traffic
  • Increase category purchase rates
  • Cross-sell products/services 
  • Drive repeat store traffic 
  • Increase sell-through of specific products
Enhance the customer experience
  • Increase mobile engagement
  • Increase brand loyalty
  • Enhance shopping experience & customer satisfaction
  • Introduce new products/categories behaviors. 
There is no need to launch a beacon initiative throughout a whole store. There are very little examples of mass success, and it is important to test on a small scale to benefit from the experience. 

Always Think About The Customers
Beacons can be very intrusive. This is the weakness and the reason why geolocalization mobile marketing techniques have never emerged in the past. Therefore, you need to be cautious about how your shoppers perceive your usage of the technology.
  1. Be transparent
  2. Be relevant
  3. Create value for shoppers

Educate Customers About Beacons And Your Shopping Experience
Beacons are not meant to be designed for geeks. There success will be effective if the most of people can use it. Therefore, it is important to explain how your beacons work, and the added value it creates. Don't hesitate to give examples in your store, and explain to the salesforce how to educate customers about it.

Friday, May 22, 2015

Mark & Spencer @La Défense, Paris: An Example of Proximity and Strong Concept in Retail

English retailer Mark & Spencer has recently come back in France after having left about 10 years ago. I visited not so long ago their deli store at La Défense. I highly recommend you to have a look at the store. Indeed, it is a great example on how to work a concept based on 2 strong basis:
  • Private Label: Mark & Spencer has innovative and long product ranges of private label. It allows the business to differenciate itself with a unique offer, but also to secure strong profitability. Private Label allows also the store to have a clear message and branding all along the store, to strengthen the whole concept.
  • Specific furniture with for example basket cases under the fresh section, to add chips to the ready to eat meals, or wooden furnitures for specific categories. A lot of work has been done to ease the extra sales.
Also, keep in mind that Mark & Spencer has in France about the same product range than in the UK. Instead of trying to match French taste, they keep their different offer to be more attractive. A lot of food for thought in this store.

Thursday, May 21, 2015

Category Management: Should Retailers have a lock on their Data?

Big data is emerging as one of the key trend in retail. With millions of customers and transactions, the retail business can be empowered by data analytics capabilities. Category management aim to leverage those data in order to make the right decision in the SKUs selection.

But the question of data is also a difficult one. In which extend can a retailer share with some suppliers some data about stores sales and customers. Obviously, the question is not that easy to answer, even though there are great opportunities to better understand customers and hence, improve categories.

One example from the pilot program was in the baby wipes category. BJ’s Wholesale Club felt the number of SKUs being carried was possibly too high. The “Assortment Module” in Self Serve was used to identify SKUs with both low sales and low member loyalty.
Buckingham: “You’ve got a very big and powerful CPG vendor who at first might have thought it’s not in their best interests for one of the products to be delisted… but actually through these detailed analytics we’re able to show that a very high proportion of the sales would most likely transfer to other items within the existing range. Therefore, the risk on category sales was very low and the risk on the CPG manufacturer sales was very low. So we did make that change and we found there was actually a positive effect.”

Two things to keep from this article
    • Datasharing empowers the discussion between retailers and suppliers in order to better perceive the category evolution. Nevertheless, it also requires quite an objectivity of both sides in order to make the right decisions.
    • Sometimes, as I have previously discussed in this blog, decreasing the number of SKUs represent an opportunity of sales growth.

A New Way To Set Your Pricing

I love the Neuromarketing blog. It always gives great examples, and well documented article. This time, they wrote a great article about how to set up your prices.

Rather than discussing about the whole pricing stategy, based on items such as competition, margins, among others; it gives you a great advice on how to set your pricetag in order to boost sales, beyond the infamous $99,99 pricetag.

What the researchers found was that the way the price was expressed “felt right” if it matched the way customers were thinking about the purchase. Rounded prices, like $100, matched purchasing decisions that were driven by emotion. Non-rounded prices, on the other hand, felt better when the purchase decision was a logical evaluation process (cognition).

Hence, the the strategy will change also depending on the decision making process of one customer. Here are clear charts to explain you how to get your pricing right.

Obviously, the best is to visit the article, which is well detailed and well explained. But I hope it helps you out to see how working on pricing can have clear and fast benefits.

New Innovative Ways To Set Your Pricing Strategy

I love to read the article of the Neuromarketing blog, because it is always well documented. They have a way to analyze customers that is unique. In this great article, they discuss different techniques to set up a price backed up with scientific data. 

Here we are speaking about how to currently place a pricetag on one article, not the whole pricing strategy that could be applied by one corporation, depending on factors such as margin, competition, impacting customers' decision making for instance.

Better than me trying to explain to you the article, I believe the best for you is to visit the article. Indeed, it gives clear charts and explanation on how they work.

"What the researchers found was that the way the price was expressed “felt right” if it matched the way customers were thinking about the purchase. Rounded prices, like $100, matched purchasing decisions that were driven by emotion. Non-rounded prices, on the other hand, felt better when the purchase decision was a logical evaluation process (cognition)."

Here is the chart which explains how both pricing method works.

This article shows well how complex pricing may be, but also clear and quick tips in order to get great results.

Wednesday, May 20, 2015

Retail Strategy: How Starbucks Impact Real Estate Value

We all know how important location is in a retail strategy, either online (where you need to get the best keywords on search engines) or brick & mortar.
Hence, to be able to get the best locations to open new stores is key to secure high traffic and high revenues. It is an art Starbucks has thriven on. Furthermore, real estate equity where Starbucks settled tends to grow faster than in the neighbourhoods where they are not located. 

How Starbucks select its locations
The Starbucks team explained that while they have 20 or so analytics experts around the world poring over maps and geographic information systems data—assessing factors like an area’s traffic patterns and businesses—the company also empowers dozens of regional teams to come to their own conclusions about location, store design, and a host of other issues.

Yet, even with their reams of data and locally-driven decision making, our Starbucks friends noted that there was no single silver bullet. “The beauty of Starbucks is our understanding of real-estate site locationing,” Arthur told us. “It’s an art and a science.”

We couldn’t have put it better ourselves.

There have been times and places—like before the financial crisis, when Starbucks bet on an up-and-coming Seattle commercial area that never materialized—where the art of site location is displayed in all of its messiness. In other instances, the science has delivered big-time returns.

Ultimately, one Starbucks pro told us, “We try to provide consistency in the science… so that local decision makers have everything they need at their fingertips to make easy decisions.”

Indeed, at the end of the day, where you buy a home is based on countless subjective factors. As in Moby-Dick—whose pages gave us the first mate Starbuck and inspired the Starbucks name—finding that perfect, ahead-of-the- curve home can sometimes seem like chasing your very own white whale. But some factors can make that search a little bit easier. So grab a venti skim latte—hey, get the extra shot—and go find the right home for you.

This is the clear message of the article: Big data and scientific facts can not be taken solely while selecting a location to open a new store. And the know how of Starbucks in is expansion program is placed in the local people that make the final decision.

Monday, May 11, 2015

Book Review: The Art Of Always Being Right

I recently finished the reading of the book of Arthur Schopenhauer the art of always being right. As the title suggest, the book aims to give you techniques in order to seem that you are always right, either in a conversation, a debate or a negociation. The goal is not to provide argumentation, but to leverage the art of dialectic, which the author considers as different.

Very interesting book, quick and easy to read, which gives you concrete examples on how to use those techniques. I believe the best way to use this book is to read it, then to watch couple of politic debates in order to see how those masters use the techniques.

2 important information about the top 50 E-Merchants in the US

I recently read an article about the top 50 e-merchants in the world. As you may know if you follow frequently this blog, one of my hottest topic is about how the retail fight will happen online in a very short term between pure players and brick & mortar businesses. 

To me, if you see below the charts, there are 2 very important information to understand:
Amazon dominates the market
It is by far the largest retailer, and it grows faster than the market. Also, it is one of the most efficient one, as it has a 35% market shares with 13% of the audience, which shows how good it is at selling to visitors. Now, what will be interesting to see, is how Amazon keep on keeping its marketshare as the market is getting slower, but, as the growth rates show, so far, it works great for him.

Brick & Mortar are clearly in the competition
9 of the top 15 are brick & Mortar retailers. It shows clearly their will to perform on this market, and their ability to be attractive for customers. When you look at the growth of Walmart, it shows clearly that its strategy to grow online works.

Now will it be enough to narrow the gap with Amazon? It is far from being done. But once again, a lot of room for improvement exists, which will be interesting to follow.

Top 50 des plus gros e-commerçants américains en 2014
RangMarchandCA Web 2014 (millions de dollars)Croissance 2014 / 2013Audience 2014 (millions de VU / mois)
Source : Top 500 Guide / Internet Retailer
1Amazon79 48017,13%109,98
2Apple20 62112,68%38,62
3Walmart12 13621,00%41,54
4Staples11 2328,00%16,80
5Seas5 70016,33%15,48
6Netflix5 50525,83%30,22
7Macy's5 40030,12%12,95
8Office Depot4 3004,88%4,09
9CDW3 80012,09%0,71
10The Home Depot3 76236,95%16,23
11Costco3 73921,15%33,33
12Dell3 6502,82%6,36
13W.W.Grainger3 60016,13%4,84
14Best Buy3 54016,45%21,62
15QVC3 5338,98%21,55
16Target2 99030,00%23,93
17Newegg2 8303,66%11,25
18Gap2 50010,62%20,00
18Nordstrom2 50028,07%5,85
20Williams-Sonoma2 37112,10%9,00
21Sony2 2004,76%2,50
22Kohl's2 16823,18%11,57
23Symantec1 9555,34%12,00
24Etsy1 93042,96%50,00
25HSN1 7228,82%15,00
26Liberty Ventures1 6986,39%10,00
27Google Play1 6485,00%30,00
28L Brands1 628-0,12%10,00
29Amway1 60550,00%4,00
30Groupon Goods1 56470,53%48,50
31Overstock1 49714,80%13,00
32Systemax1 4002,19%3,50
33Wayfair1 30044,00%17,25
34L.L.Bean1 2847,00%4,00
35Vistaprint1 4708,80%18,75
36Lowe's1 26515,00%10,75
37J.C.Penny1 22012,96%9,23
38Lands' End1 2012,39%1,68
39Zulily1 20072,50%14,00
40Toys'R'Us1 2003,72%13,00
41MSC Industrial Supply1 19815,80%0,63
42HP Home & Home Office Store1 1605,45%3,50
43Neiman Marcus1 14811,50%3,50
44Walgreen1 12515,38%6,77
45Fanatics1 10011,11%12,00
46APMEX1 053-16,71%0,43
47Barnes and Noble1 040-25,89%6,65
48Lenovo1 00011,11%27,89
49Urban Outfitters95420,00%10,50

Saturday, May 09, 2015

What Future For A Non Profitable Twitter

You know that my love story with Twitter is complicated. I have been an early adopter (back in 2007), I am using a lot the service, and I am a real fan of it. It is obviously one of the most useful social media of the moment. And obviously, I believe that it changed the life of a lot of people.

But if you read me on this blog, you know I have been questionning a lot the business modell. I still find hard to believe how Twitter will be a cash machine someday. Still, the number of people using the service is growing, and it seems that the usage is so great it must have a future.

  • 302 million users (+18%)
  • 80% of users connect via mobile
  • $436 millions in revenues (1,44 €/users)
  • $200 million in R&D
  • $-162 millions in loss
The stock price fell by 18%...
Just to explain more about the last figure. Losing $160 means: 
  • 37% of the sales
  • Losing 53 cents per users (I want my 53 cents!)
I don't know that many companies that can hold such figures.Now obviously Twitter has a real meaning and a reason to live on. As previously the telegram, the phone and/or the television, it costed a lot of money to develop those media. Actually I would like to have the annual report of the ABC or the AT&T of their early days, to see how it looked like.

Let's see the sunny side; Revenues are still growing, and faster than the number of users, which means that they are doing a good job on monetization.

What Twitter really needs to do is to be able to lift its revenues per users, in order to reach some standards which are similar to the TV business or the newspaper business.

Friday, May 08, 2015

Ibeacons in Retail: Monoprix Experimenting The Topic

Ibeacons is a hyped word in the retail business right now. A lot of expectation is set in this new kind of technology allowing to provide customized marketing content to shoppers. So far, very few experimentations have been undertaken, but they start to spring up. French retailer Monoprix has recently released a new application using Ibeacons to provide customized discounts along the shoppers' paths.

22 stores will test the beacons in the Paris area. The goal is to test the technology and to better perceive the behavior of shoppers when they receive such communication. The application has been designed by Catalina which is a company specialized in the promotional coupon business. Experimentation will be processed until the month of june, to see if a broader launch will be decided.

To me, Ibeacons could be used in two specific occasions in the retail world:

  • To provide customized and premium content, in order to enhance customer experience. It could for example provide you extra information about one product or its usage. It is more a pull technique.
  • To boost sales by sending geolocalized promotions, based on the customer profile. It is in this case a push tool.
But the problem is obviously to see how privacy is dealt with both ideas. Hence, geolocalization promotion systems have already been tried in the past using for example text messages. But it has so far not been much effective. Nevertheless, it is very interesting to see how these Ibeacons will be used and what kind of results retailers will have from those experimentations.