Retail Strategy: Target Launches A New Ecommerce Presence In Over 200 Countries

Target is one of the leading retailers in the United States and Canada. Nevertheless, they have a limited presence abroad. French magazine LSA has recently published an article announcing the launch of its Ecommerce website in over 200 countries. 

- 50% of the product range available on the US website

- Same prices than in the US

- Available in 60 different currencies

- In large international markets like The European Union or China

This is a very interesting move, because it is quite innovative to see a brick & mortar retailer trying to conquier new markets thanks to its Ecommerce website. Actually, another remarkable move have been previously made by Costco, settling in China thanks to an Ecommerce partnership with Alibaba.

I believe that this is a very interesting move. Ecommerce allow more flexible approach of new markets, either geographically, as does Target, but also new category to approach.

Now the challenge will be vast:

• The supply chain: Target needs to find a solution to ship products abroad, and there will be issues with the cost of shipping, but also the time to deliver the goods.
• The marketing: How could Target compete with Amazon, already settled in most countries. Moreover, there is already brick & mortar competition, and I don't really know how Target could position itself different enough to gain marketshares.
• How could they manage their websites? I don't believe Target will have local management for this initiative. And they'll need people in order to advertize, to boost the activity, in order to have real results.

Big Data Applied To Retail & CRM purposes

Big Data is obviously a big trend in our business world, but most of the time it is difficult to exactly understand how it could be used in a concrete environment. Big data has not a precised definition, it is rather a state of mind and/or a fact: Thanks to the information systems we have two facts that comes together:

• We have on one hand a massive load of data, that could give us more than necessary details about supply chain, customers behavior, sales, marketing effectiveness..
• But more importantly, tools that are able to analyze this data, and gives us a new vision of our business. Terry Leahy, former CEO of Tesco, explains in his book "Management in ten words" how its company had to wait for powerful computers to be available prior to launch their loyalty card, which allowed them to have customized messages and to have an hedge on their competition. Now the tools are available, we just need to know how to use them.

Pierre Paperon gives us two very good examples on how big data can be used in a retail and customer relationship management field.

Target Uses Big Data To Redifine Its Merchandise Strategy by Clusters

When you are a nationwide retailer with a large network of stores the question of how to meet local demand is crucial and difficult. Hence, once you adopt a merchandising strategy, how could you have a plan that will both meet national strategy and local specificities?

First of all, you need to set the right data in order to adapt your merchandizes plan: Is it based on geographic data? Socio-demographics? Sales performance? Moreover, the history of the store may have a deep impact on its performance: Has the store be renovated? Is it obsolete? What kind of competition do you face?

Big data allowed Target to find the right mix of data in order to segment its store networks, in order to propose the right merchandising response. They found out the 3 most reliable data to set a predictive modell with a correlation rate of 73%. 

How Dannon Improved Its CRM Efficiency Thanks To Big Data

As one of the leading FMCG supplier, Dannon owns a large customers data base, which it uses for its CRM programs. It mails to its 4 million members a quaterly newsletter with coupons. The issue was the ROI: Each euro spent returned 3 euros...

Dannon worked on two items:

1.  Work on the members that did not use the coupons. Some people are not responding to the trigger of coupons. Therefore they were left aside of the mailing.
2. Mutualize the mailing with other FMCG suppliers that own the same CRM strategy. They hence partenered with P&G in order to mutualize the sending and save some costs.

Hence, Dannon was able to turn their 1for3 to a 1 for7 ratio.

CRM in Retail: Target and Whole Food Market Testing New Loyalty Reward Programs

Loyalty progam has been existing for quite a while in the retail business. Some companies, especially Tesco, have thriven to use customer data to propose customized coupons and discounts, in order to reach customer loyalty.

Two US retailers have recently tested some new loyalty reward programs: Target and Whole Food Markets.

Both of the companies have points based loyalty programs. The particularity of points based is that it bases its value on points rather than cash. The good thing about such programs is that it allows to go beyond the cashback concepts, and propose some rewards that may be for example for Whole Food Markets some cooking classes. The bad thing is that it is harder for customers to see the generosity rate of the program, and hence the benefits of it.

Nevertheless, as both retailers are trying to add added value beyond the discount concept, it may be a good strategy. 

Both obviously set their strategy online, and using mobile devices. 

Now, it is difficult for fast moving goods retailers to have a strong customer experience via a loyalty reward programs. Indeed, the loyalty programs allow to have massive customer data, but it is difficult to have a clear added value to the relationship when you have discount products bought every week.

We will see what kind of results both retailers will have from these initiatives.

#Walmart #Target Setting Aggressive Online #Pricing Strategy To Fight Amazon

The Internet is becoming more and more important in the growth strategy of brick & mortar companies like Walmart or Target. Indeed, as traditionnal retailing is slow to find a solution to stop the decrease of instore visits, The Ecommerce economy is still growing.

The Internet Retailer Website has noticed that both Walmart and Target have changed their pricing strategy in order to be more aggressive against Amazon. Amazon's size and strength can't be ignore by anyone, and Amazon has already become one of the biggest retailer in the world, which implies a high purchasing power, and the ability to have low operationnal costs.

But Walmart and Target have some arguments to compete online:

• A strong brand
• A size that allows them to have the same kind of purchasing terms than Amazon
• A network allowing multi channel strategies and delivery possibilities to customers.

Now, is it the right approach to fight Amazon on its prices? Of course! How could a discounter like Walmart not be able to have the same prices and even cheaper prices than Amazon's?

Now Amazon still own 2 assests which will be difficult for brick & mortar retailers to own:

• Its high efficiency delivery system
• Its large product range, providing the best choice for customers.

Nevertheless, I believe that Amazon should fear a shrinkage of its market share, as competition will boost their investment online.