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Retail Renaissance

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The high street is dying, that’s what we keep hearing from all angles of the media but is it?

No, its evolving to meet the needs of generational shifts in shopping habits which retailers must adapt to in order to give consumers a desirable experience. Those that respond positively to shoppers and adapt, appreciate the increased value this change offers for potential survival. Retail is no longer there to serve the customer, it’s the customer who decides if retailers remain relevant to the high street.

Those retailers that refuse to listen are deserving of their fate. It’s not a surprise or the fault of external factors when a major retailer, who failed to adapt, calls in the administrators. Social and economic factors are not going to ‘improve’ as they are proving to be the norm, it’s just how life is now, therefore boards of major retailers need to stop procrastinating and adapt fast. With 89% of UK sales still generated through physical retail, the desire to shop on the High Street is still prevalent, retailers need to adapt creatively to capture a slice of those sales.

To believe that your exact same format which has been successful for decades remains relevant today as it did then, is wrong. Millennials are bored with the same format and Generation X, Z or Alpha are not ignorant to poor retail. This belligerent approach only serves to insult your existing and potential customers. That’s why they’ve abandoned trusted retailers and by doing so, they are clearly stating that it’s you not them that’s the problem.

From traditional retail chains to independents and pop up stores, the ones that ‘get it’ are doing so to great effect. Whether it be through introducing speaker spaces within the store, to conducting free classes or work zones to encourage consumers to dwell and soak up the atmosphere. By also introducing other brands to coexist alongside your brand, is winning hearts and minds. Retail is changing. Changing positively but perhaps not fast enough to decrease the failures of trusted retail brands and reduce the vacant units on our high streets.

Debenhams tried this by introducing Patisserie Valerie cafes within their stores which proved fatal for both brands, partly due to their incompetence to manage their finances or understand the consumer. You don’t ‘accidentally’ misplace £40m neither do you introduce a traditional patisserie into an already stale retail format such as Debenhams, in an attempt to entice new and younger shoppers. The opportunity to revive its fortunes could be taken from its past when it introduced designer names to its stable with huge success. Those designers are now only known by a generation who are 40+ and irrelevant to the shoppers needed to keep the Debenhams brand relevant on today’s high street.

With Arcadia group also struggling reputationally through the alleged actions of its high profile owner and also financially, they have a huge task ahead to transform. Reducing your retail footprint by closing stores to cut costs is not the solution, change is. But is it too late to turn some of Arcadias brands around, maybe not? The larger ‘flagship’ TopShop stores do it well by adopting shared spaces that offer consumers other brands or services like piercing or cosmetics to create an immersive shopping experience. Unfortunately, Topshop don’t seem to translate this successful format as well across the regions in the UK. Translating this ‘experience’ model across the entire estate is essential to relate to consumers who don’t necessarily have the means or desire to travel to a ‘flagship’ store. Placing short term profit over evolution is short-sighted as this approach is somewhat ironic, a lack of investment makes you stale rather than revolutionary, making a brand irrelevant to today’s shopper.

Those retailers who are winning have amalgamated, rather successfully, multiple brands under one roof that complement each other and often work in concert, to offer convenience for the shopper. Successful examples include the Argos purchase by Sainsbury’s and introducing Argos shop in shop (SiS) within larger Sainsbury formats and in 11 stores to include the desirable Habitat brand, which was snapped up by Argos several years back and now revived through the Sainsbury’s acquisition. This has enabled Sainsbury’s to continue trading within the non-food category and remain current without distracting from its core grocery business.

As the pioneer of mail order fashion, re-imagining retail seems to come easy for Next who have successfully evolved its physical presence with the inclusion of SiS concepts in selected stores. Brands such as Lipsy, Paperchase, Henna and Costa can be found in the Next Oxford Street store and Mamas & Papas in its Bristol Cribbs Causeway store. Unsurprisingly this approach works for both anchor brand and SiS. With a staggering 2,481 stores disappearing off the High Street in 2018, the opportunity to split the overheads in tough economic times impacted by changing shopping habits, this is a successful combination for both retailer and shopper.

Those who complain that they can’t make retail work need look no further than their competition who are getting it right through understanding the zeitgeist. Shopping habits have changed with generational shifts and the glory days many failing retailers harp on about are not going to make a reappearance. It’s up to retailers to carve out a niche and appeal to the generations who now prefer both the physical and online aspects of retail, but are also seeking convenience and above all an experience.

Experience to try, taste, smell, learn, question, dwell to be part of something that transcends generations and the stereotypes of what ‘Retail’ should be. Retail can be whatever you want it to be.

Successful retail evolves to remain current and relevant to its audience. A retail renaissance is what we need.

To read the full article please visit ipm Bitesize

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Grab your piece of the action

ERT Blog

With Smart Home product sales set to boom over the coming years now is the time to get in on the action and here, Rupert Cook, Sales and Marketing Director at Gekko, looks at how this can be done.

Here at Gekko we’ve been talking about the Smart Home for over four years now. Back in 2014, we commissioned research into ‘the connected home’ and asked consumers what they thought of having digitally connected devices in their homes. The vibe coming back from the 2,000 respondents wasn’t exactly positive.  When asked about what kind of product they would consider, smart thermostats came top of the list with 44% expressing an interest. Over a quarter said they wouldn’t be interested in any form of smart device.   The principal concerns cited were expense and the technology being deemed as not necessary.

Thankfully for us all, things have moved on from then and the numbers speak for themselves. Analysis by PWC The global market for smart home is expected to be worth $50bn by 2022. Around 30% of people are planning to purchase a smart home device for the home in the next two years and looking at just one product category in the smart home arena, Smart Speakers, further illustrates the potential. In 2017 Amazon sold 33m Echo devices whilst Google dominated selling more than one Home device per second from its launch in October 2017 to mid-2018.

Consumers aren’t only purchasing smart home products; they’re also discussing the merits online. A study by Crimson Hexagon indicates that positive sentiment is growing from 60% to 80% in the last year, another sign that smart home technology sales are poised for blockbuster growth.

So what will 2019 bring for the smart home. Well CES, the annual consumer electronics trade show in Las Vegas, is only just around the corner and a quick search for the subject on their website schedule brings up roughly 100 talks, seminars and events on the topic. Smart home is without a doubt going to be one of the lead stories for many journalists and the category will become more diverse, with new innovations and services coming to the mainstream. Looking beyond just the smart home, it’s worth noting that 5G technology is on it’s way in 2019 as it’s rolled out to certain cities in across the UK. With speeds 20 times faster than 4G, the advance is only going to hasten the Internet of Things and connectivity in general and will in future open up new possibilities for consumers. Everything from refrigerators and window shades to your family car will be linked, while housekeeping robots and next generation digital assistants facilitate day to day activities.

The potential is there for CE retailers to capitalise on the opportunities and as indicated by the ERT Turning Point survey back in October, 45% of respondents have been looking at the Smart Home as a new area for their businesses. There are however challenges that have meant slow consumer adoption. To be successful at selling smart home solutions, retailers need to acknowledge and overcome these barriers.

The perceived complexity of systems is one of the principal hurdles for consumers, so it’s essential that the sales approach simplifies the options available and doesn’t overwhelm the shopper. It’s easy to get carried away and attempt to impress by reeling off the endless possibilities of what can be done; ‘if you buy this, install these, connect it to that, then you’ll be able to get Alexa to run the household…’   The chances are that you’re going to elicit the response ‘Great but I’m never going to do that’.

Our Smart Shopper research from earlier in the year showed that 21% of people love the idea of the smart home tech but were intimidated by the complexities.  Look to address this and you can have these types of customer eating from the palm of your hand.

The idea of complexity isn’t helped by the challenges of market fragmentation. On a typical shop floor, product groups tend to be disconnected – smart lighting, smart speakers, thermostats, security, home appliances etc. all displayed in separate areas. This makes it hard for consumer picture the totality of what’s actually possible within their home. All the shopper can see is competing brands, competing products and competing technologies. There is a general fear that if you buy into a particular brand then you’re on a committed pathway as there is no guarantee you’ll be able to integrate with other devices or solutions.

Retailers must plan, order and merchandise to overcome these inconsistencies and create a conducive sales experience. As an example, the Google Smart Tables in some multiple retailers bring together their devices with compatible third party products such a Philips Hue and in doing so bring the category to life.

Intrinsically linked to the above points is the need for the human touch. For all the great interactive displays that can be installed to bring the concept and possibilities alive in-store, there needs to and effective sales person on hand to guide and advise the customer. Otherwise, what will happen? The shopper will do their own research from the comfort of home before making an online purchase.

In creating effective sales people, the approach to training is obviously fundamental. For retailers, sales teams should be able to present an agnostic solution, understanding the bigger smart home picture rather than focusing on specific product types. Retailers should also tap into the product training on offer from suppliers and take up any offers of seeded or loaned kit, creating users and thus advocates of the products.

Consumer education is the key to expanding the use of smart technology into the modern home and retailers sit on the front lines of that effort. For all the pessimistic talk surrounding physical retailing it should be remembered that it still accounts for 80% of consumer sales in the UK. There’s an opportunity for bricks and mortar retailers to demystify the smart home and become the shop of choice for consumers looking to invest in the tech. And our recently published study shows how shoppers desire great retail experiences, with 81%  claiming the personal touch has disappeared from customer service in modern British retailing. Moreover, a third said that the personal touch is more likely to make a repeat purchase, with a fifth saying it would make them spend more. By offering up a great experience, education, advice, opinions and added value services such as installation, the smart home is certainly a category where you can battle against online retailers.

To read the full article please visit ERT

For more information on our research please visit Gekko.

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It’s Black Friday – I’m in love

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With nearly seven out of 10 retailers (68.9 per cent) expecting Black Friday to become more popular over the coming years in the UK and Ireland, it is likely to remain an important retail event for the foreseeable future.

Cast your mind back to the Armageddon-like scenes of 2014 where people literally fought to secure a bargain and, in some cases, bargains they didn’t want or need.

From a brand perspective, retailer or product, how can you tame Black Friday to continue driving excitement while maintaining a positive customer experience?

The fact is that Black Friday is good for all retailers, irrespective of whether you take part or not. Statistics have shown that UK retail footfall year on year for Black Friday 2014 had an increase of 9.8 per cent overall. When broken down into locations, the high street saw a 7.2 per cent rise, shopping centres an 11.3 per cent rise and retail parks a 14.4 per cent rise. This demonstrates an increase in opportunities to sell not only deals, but also stock items.

Advertise your offers in advance and consider a “by invitation only” VIP Black Friday event for your customer database.

Looking online, use social media and your website to pull customers in-store. Local advertising and banners can help your store stand out from the rest, creating an event to enhance the customer experience and drive excitement.

It’s obvious that you need to make sure you have sufficient stock, perhaps also implement a ticketing system, as people who really want an offer won’t mind waiting if it means they get it without the risk of a scuffle. Also, consider your non-bargain-hunters who may just want to shop – the hordes will only discourage your average shopper.

Place bulk-stack deals near the doors, avoiding obvious security risks, and encourage a flow through your store.

Keep the store busy with offers located in prime positions, supported by staff on hand to carry the item to the till or at least make customers aware of the offer to help shift those boxes. Link sales to other items – while a big-screen TV may be appealing, it still needs an HDMI cable and you’re more likely to make that connection sale if it’s also on offer. Better to attach than not.

Your online sales shouldn’t be excluded – 30 per cent of survey respondents plan to buy online during Black Friday 2015, up from the eight per cent who purchased online in 2014.

Still, consider delivery charges, which can negate any profit made for both you and your customer. One key thing to consider is whether your website can keep up with the pressure of increased traffic. In 2014, 12 per cent of shoppers experienced technical issues when purchasing goods online during the rush. If you are planning to run important deals online, preparing your site to handle large numbers of users will prevent lost sales and angry customers.

Big-box retailers and grocers alike court the publicity and will create PR hubs that achieve those sensationalist, headline-grabbing TV images. It’s therefore important to note that if you put on a Black Friday promotion, it isn’t necessarily going to turn into a bloodbath. However, the increase in footfall and sales is evident but, just in case, do make sure you can still sell on the stock after the event.

Finally, how can your brands help support your promotion or even your event? In crowded categories, Black Friday is an opportunity for many brands to gain distribution and market share through selling end-of-line products. For electrical products, GfK measured a value growth rate year on year of 24 per cent and, not surprisingly, 59 per cent week on week. When broken down by category, Black Friday 2014 average sales increased significantly compared with the week before, with mobile sales up 129 per cent, more notably TV was up 103 per cent and audio up 157 per cent.

This clearly identifies the opportunity for electrical retailers with careful selection of products and brands within your core lines. Working in partnership to leverage sales could work to create a more intelligent and rewarding Black Friday experience for retailers, brands and most importantly consumers.

Read more at: http://bit.ly/1NYWNuI

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A Digital Challenge for Brands: Creating A Consistent Customer Experience

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Understanding the shopper journey and what motivates a shopper to buy your brand is essential to ensure your brand speaks to your target audience. New research has found that the number of consumers researching products online before buying in-store has decreased by 7 percent over the past year. The study, conducted by OnePoll, asked 2000 respondents what motivates them when shopping in retail. The research reflects the changing relationship between e-commerce and the high-street, the Omni-channel. Buying behaviours are becoming more complex, with consumers increasingly using both in-store and online research when making purchasing decisions, particularly on considered “high ticket” purchases.

Recent research conducted by Epson Europe also found that 45 percent of UK purchases are made online, meaning that the majority of purchases are still made in-store. However the gap is closing, with online sales in the UK making up the largest share in Europe, 7 percent above the average. The study also found that 20 percent of shoppers purchase goods online while in-store via mobile devices, using their in-store visit to guide their online purchases. It’s clear that shoppers are becoming more connected in-store, with smart phones beginning to make a clear impact on retail. Researching products online whilst in-store is common and the norm amongst some, with shoppers now able to compare prices on the shop floor more often and likely to become even more common with the development of wearable technology.

In-store social media use is also increasing among consumers, with 14 percent of 18-to-35 year olds using Facebook to ‘check-in’ to stores, and 15 percent using social media to discuss products with friends. Engaging with brands and retailers through social media is most prevalent with the younger age category, with older generations shying away from the social experience however, they are increasingly using online research before making purchases. Shoppertribes research identified that 58 percent of shoppers aged 55 and over use online research to aid their in-store purchases of electronic goods, and in crowded categories, brands should not ignore such a statistic. With all age groups engaging with brands across many digital platforms, it is unsurprising that the online experience, be that through e-commerce or social media, is beginning to shape how we chose to shop for certain items and brands, with those in the 35 and under more likely to shop online for smaller purchases, choosing to go down the traditional and more sociable route of shopping on the high street for those rewarding considered purchases.

Although the number of shoppers researching online and buying in-store is decreasing, the importance of the Omni-channel experience remains clear. The impact of e-commerce should not be underestimated as nearly half of all sales, predominantly small as identified by the average online basket, are now made online, a number which will likely increase. However, the primary motivation for consumers to shop in-store remains: ‘the ability to see and touch the product.’ This desire to engage in the brand experience is common with considered purchasing decisions associated with high ticket consumer electronics and luxury brands. Increasingly, in our digitally connected, social media world, the brand you carefully chose to wear, carry, and live with as an expression of your identity and lifestyle needs to be seen in person and not in the virtual world.

The benefits of the in-store experience can outweigh the convenience of shopping online. Brands need to combine their approach with seamless branding between online and in-store experiences and streamline the overall brand experience for consumers. Matching online branding in-store can assist sales by improving product recall to guide consumers through the in-store journey. By using an integrated approach, brands can guide the shopper journey, initially driven by ATL from online and social media recommendations to in-store where the unique selling points in relation to the design and quality of brand products are realised in person, which online can’t always achieve. That retail experience remains more successful in achieving the valuable emotional connection consistent with a brand and keeps “shopping” as a sensory event rather than just another virtual experience.

 

Read more at: http://www.brandingmagazine.com/2015/03/25/a-digital-challenge-for-brands-creating-a-consistent-customer-experience/

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Europe’s Warm Embrace to Advertising

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I understand the importance of a uniform approach for global brands, ensuring the same message, feel and equity is experienced by consumers whether they’re in Bangkok, Bombay or New York. However, on a recent trip to the style capital of Europe Milan, I experienced a global brand that successfully tapped into a region where style and brand are paramount.

As marketers we must not only make our brands inspirational but also accessible to all and in Milan, Samsung has tapped into a demographic you may have never thought possible through some particularly clever use of technology.

The Ambrosiana Gallery in Milan’s Duomo district was once the studio of Michelangelo and displays not only the works of the great man, but precious artwork in a remarkably beautiful and ancient setting. Samsung however, has cleverly added a unique modern twist through the use of technology, integrating smart phone functionality as a means of interpreting the art. Next to each piece is a magnetic/electronic chip that gives visitors more information when they place their smartphones over it.

In this instance it’s about the art that you’re viewing but – to Samsung – it’s about you engaging with the brand and experiencing the technology as a portal bestowing you entrance. For some it’s a revelation and I’m guessing that for many of the visitors who make a point of using the feature, it is just that.

What better way for a brand to show that it understands the consumer than by placing a campaign in a venue that is synonymous with the city’s characteristics and fits the perception of Milan. Samsung not only takes into account the consumer demographics within the city, but also uses a variety of publicly-available information to create a picture of how well-suited the city is to the brand. Beyond Samsung this model is adaptable for virtually any type of product. For a fashion label, I am sure a place like the Ambrosiana Gallery would make a beautiful home for greeting fashion-conscious consumers. A depiction of understanding for the cultural life of cities makes all the difference when analysing whether a brand’s campaign is relevant or not.

You only have to read the stats to know that Italy is a place of adland freedom, with a huge Samsung advert adorning the side of the city’s iconic Duomo Cathedral as it undergoes renovations. Could you imagine Samsung creating something like this in the UK, a Christmas installation in St. Paul’s Cathedral? In the UK, our heritage buildings are fiercely protected and they would certainly lock their doors to a brand’s knock. In Italy however, advertising can be found on buses, trams, buildings in glorious Technicolor lights, allowing brands to speak to their target audiences, even when they least expect it. Rules, whether right or wrong, are abandoned. Brands have a luxury of freedom that they don’t have in other countries.

Italians are I suppose, used to a heavier level of brand messaging. Just look at the production values of national TV (in particular any transmitted by a Berlusconi company). The advertising is plentiful and sometimes even better than the programme being watched! With this in mind, are Italians (or European’s in general) more accepting of consumer electronic brand advertising as they know what they want and their maximum price point for quality products or specific brands?

Subsequently I believe this has resulted in a market where brands are not commoditised and able to sell at a price point that enables a margin and sustainable, profitable growth as opposed to crowded categories with brands trading at a loss and eventually abandoning the category altogether.

Could this be why so many UK retailers have unsuccessfully succeeded in Europe and beyond?

Image credit: Leonard Ambrosiana 

Read the full article at http://www.brandingmagazine.com/2013/11/25/europes-warm-embrace-advertising/

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Has Product Placement Gone Too Far?

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Product placement within film and TV is hardly breaking news. Since the dawn of broadcast media, brands have been eager to muscle in on our attentions and put their logos in front of us. We now expect to see James Bond with his Omega watch, driving his Aston Martin and flashing his latest smartphone. But I have to ask, are brands now taking product placement to a whole new patronising level?
 
Recently, we took the kids on a cinema trip to see The Smurfs 2 (not my choice, I hasten to add!). I can’t say I was expecting an Oscar-worthy, two-hour emotional tour-de-force of filmmaking, but I was astounded by the degree of product placement within the film. Prior to the screening, I wasn’t aware that it was a Sony Pictures production, but by the end I was wondering if the script was actually based around Sony products!
 
From the newscaster presenting in front of a Sony LED TV to every single adult cast member using a Sony Mobile (of course, demonstrating its full range of services), I actually think it’s difficult to argue that the brands didn’t tailor the script to meet their product placement needs. The villain Gargamel even used a Sony Vaio tablet to cook up his dastardly plans. Twice!
 
As it transpires, Sony Pictures secured deals worth $150 million from over 100 corporate partners to promote a raft of products within the film, far exceeding the production budget of $110 million. To my kids, and I’m sure every other child in that theatre, this likely didn’t register. But for us more brand-aware adults, it was so blatant that I have no doubt I missed several more Sony products woven into the script.
 
Are brands beginning to push their luck a bit too far? Investment in the film and TV industry is crucial, but, in exchange for a sizable cash injection, brands are naturally going to push for as much of the limelight as possible, with scant regard for the script. The larger the investment, the larger the degree of control exerted.
 
The trend was highlighted in typically overstated-fashion by Morgan Spurlock last year with The Greatest Movie Ever Sold – a documentary on product placement with a $1.5 million budget entirely funded by… product placement. As brands become an even more ever-present constant in every facet of our lives, the natural progression is that the volume will further increase and the stakes raised even higher.
 
The connotations for the film and TV industry are slightly worrying, particularly at a time where the industry – I believe – is enjoying the rudest of health in recent years through some remarkable films, TV content and documentaries. I wonder if, as brands seek greater screen-time, we are going to see a day in the not-too-distant future when an actor will refuse to endorse a brand in a movie? Or will the lure of money continue to trump all as more and more blockbuster movies appear as little more than very long adverts with a storyline bolted on?
 
To some extent, audiences do want to see product placement within films; for example, to see a character entering Starbucks as opposed to a trademark-friendly, fictional alternative adds a degree of realism to proceedings. However, there is a fine line that needs to be observed or else the brand risks sticking out like a sore thumb. Unfortunately, since James Bond swapped his Martini for a Heineken, Will Smith dwelt a bit too long on a pair of Converse in I, Robot and Superman reboot Man of Steel hedged it’s box-office failure by securing over 100 global brand partners to the tune of $160 million, the act of product placement has been increasingly taking the spotlight away from the actual stories themselves.
 
I like to think I can appreciate both great branding and great filmmaking, but how closely should we be allowing these two disciplines to merge? With cinema visits in decline and gimmicky features such as 3D failing to take off, the money has to come from somewhere after all. But is it in the brands’ best interests to push their own agendas at the expense of great filmmaking? Is it in their best interests to appear cheesy, naff and downright uncool, thereby damaging their valuable brand equity?
 
You would think not, but, still, I can’t help but feel that it’s up to us – the audience – to make that stand.

Read more at: http://www.brandingmagazine.com/2013/11/05/has-product-placement-gone-too-far/

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