Why I don’t believe in “The Retail Apocalypse”

So much is being written about a “retail apocalypse” and many spent 2017 talking about the death of brick and mortar.

However, despite what pessimists might say, shoppers and data are telling us a slightly different story and the stats just don’t support such a doom and gloom situation…

  • 4,080 net new stores opened in 2017 (more than the number of stores that closed)
  • 71% of US shoppers still prefer to buy in-store (even if the product is available on-line)
  • 85% of US shoppers want to shop in-store because they want to “touch and feel” before they buy
  • 66% of millennial find store associates “extremely important to their shopping experience”

Sure, certain categories like Fast Fashion and Beauty have taken a hit in-store, but 2017 saw significant store count growth for the Dollars (General and Tree), value brands like T.J. Maxx, Grocers; Lidl and Aldi and beauty brands Sally Beauty and Ulta are demonstrating that brick and mortar retailers are still essential in today’s shopping ecosystem.

An evolution is taking place and brick and mortar retail is at the core.

What is changing are shoppers expectations and what they are looking for when they walk into a store. The right assortment at a good price is no longer enough. Today’s shoppers want more AND they want what they want immediately and they want to have an enjoyable experience. The “currency” of shopper satisfaction is now comprised of Value, Convenience, Discovery and Experience tightly wrapped in Personalization and topped with a shiny bow that is Technology.

While this may sound complex, it represents an opportunity that brick and mortar stores are uniquely positioned to deliver if they take advantage of all of their assets and ensure they are working together toward a common goal of delivering on what the shopper wants. By leveraging an entire store environment, associates on the floor, internal systems/operations and the right technology, retailers can create a “surround sound” affect to ensure the shopper walks out satisfied.

To do this, brick and mortar retailers have to abandon the “one size fits all” approach and move towards having a variety of store footprints that can deliver different brand and shopping experiences. Showrooms, express, pop-up, shop in shops (and a few that have yet to be revealed) all have a purpose and are here to stay. Within those store types, successful retailers can define the role of their associates and provide them with the proper tools and tech to support all shopper needs from basic fulfillment to expert advice. Systems and operations must move beyond self-check-in and inventory-control to be truly connected and assist in the delivery of a seam-less, frictionless, even channel-less shopping experience. That is what shoppers want and expect today – even if retailers aren’t structured to deliver it that way. Connecting on-line to off-line is a retailer problem, not a shopper’s, and connecting all of their systems and operations is the way to do it and make it personalized.

Brick and mortar retailers must become more agile and nimble, accept that partnerships and acquisitions are necessary to remain relevant and succeed. And most importantly, retailers must understand that piloting, testing, measuring and learning are essential and critical to continued success.

Written By: Tracy Faloon, TPN Chief of Client Integration

 

Sources: IHL Group, TimeTrade survey, ChargeItSpot Study, Fortune, ChargeItSpot Study

Maybe The Best Brand You Haven’t Heard Of… Yet.

I wouldn’t be surprised if you have never heard of KITH, and in the likelihood that you haven’t, consider this a short introduction to one of the most innovative and hottest streetwear brands that is redefining the sneaker industry.

It’s founder, Ronnie Fieg, is transcending the industry by carefully crafting his products and retail landscape to be indicative of what consumers find relatable, exciting, and motivating to be apart of. He has disposed of the typical seasonal calendar and rather created a 365-day invitation to product offerings and rotating retail format that keeps consumers engaged, surprised and delighted.

Specifically, his store format, located in New York City, is of particular intrigue as it includes one-third product offering while functioning as one-third art gallery and one-third ice cream/cereal bar (awesome). The use of purposeful digital integration, experiential components, and an ever-changing product offering to limit complacency and drive continual store visits makes this a must-study for innovative store formats of the future. Ronnie certainly has my interest and I promise that next time I’m in New York I’ll be taking a visit to KITH, as should you.

Written by: Brad Sauchak, TPN Associate Planner

CES2018: Reflections and Looking Forward

After a few days’ rest and some time to digest my experiences at CES 2018 last week, one things for certain: we are moving at a consistent and fast pace into some pretty amazing times. And I’m not talking about robots. Well, maybe I am… as long as they do not call me “master”, because that’s just weird.

No, I’m talking about the convergence of technology advancements that are all happening at once. In previous years, many felt overhyped. But now I feel certain in my prediction that my kids won’t need to learn to drive a car. It’s like we are headed to a new point on the horizon. And it’s going to be glorious… well, and quite scary for some.

AI is the new data

Last year’s CES was overrun with sensors providing data and metrics. Now artificial intelligence is here to provide the big “so-what” to all that data. AI enabled was the term to use when talking about personalization for all manner of items ranging from sports to health to food. While AI is the underlying tech connecting all the items below, 5G is providing the bandwidth.

Everything is connected

Sensors, IoT, whatever… now my toilet is connected and my baby’s bottle is tracking feeding.

The connected home was in full swing at CES. And, as opposed to last year, “smartified” products told a more complete story. Of course to a hub/each other, but also to content services like how whirlpool partners with yummly or how a folding clothes machine wants to be your fashion expert. And how will we interact? While many of the appliances sported touch screens, the dominate interface was voice.

Voice is the Interface

Since Alexa boomed onto the CES stage last year, we’ve been talking about the emergence of the conversational interface. Well, it’s here. Prior to the show, there was tons of discussion about who would win? Alexa or Google Home…. Despite Google’s best effort, I still felt Alexa had the upper hand with integrations, shopping, and being embedded in household objects. But a greater feeling was how similar the situation was to iOS v Android and there’s room for both (maybe Bixtby as well?) to coexist. With the rise of voice, inevitable questions come up like how will it impact mobile usage (people will use mobile less) and what does it mean for brands (a voice driven world will be a game changer).

Autonomous vehicles are close

Yes. I know they are actually here. But they are getting closer to being a reality for me. And I can’t stop thinking about how it will impact delivery. It’s become easy to imagine my Amazon/Blue Apron/Pizza packages will be delivered by a self-piloted shipping pod (Dominos and Ford partnered to show a pizza test solution right out of a recent Black Mirror episode).

We aren’t getting enough rest

Last year, we weren’t drinking enough water. “High tech” water bottles were everywhere. This year, AI driven mediation, sleep, and rest technology was peppered throughout.

The evolution from “I bought it online” to “it’ll be here in 2 days” to “it’ll to here in 2 hours” is on the trajectory to “Ben, this is your future assistant. Just letting you know I saw you had a stressful day. Your kid will be home from practice on Pod XYZ in 45 minutes. She has not done her homework yet. I’ve warmed up the shower for you to relax in and have picked out the family dinner for the evening. The ingredients are in the fridge.”

Or maybe it won’t say that. It will just do those things as we move from convenience and personalization to prediction.

Written by: Ben Gauthier, TPN VP, Innovation + Technology

Digital & Social Content Predictions for 2018

Digital and social content changes quickly! Brands must ensure their content is evolving just as quickly to meet consumer demand. We’ve been looking at the major trends. Here’s what you can expect to see:

VIDEO DOMINATES

Did you know that in 2017, 90% of all social content shared by consumers was video?1 Video must be woven into content marketing plans as consumers are overwhelmingly expecting this content type. Social platforms like Facebook have also placed a higher emphasis on video content, but its the marketers job to design video to grab attention within the first three seconds.

MORE EPHEMERAL CONTENT

Ephemeral content has been on the rise for three main reasons: 1) it’s mobile first, 2) it’s perceived as being more authentic given the content is often ‘scrappier’ and 3) it often sees higher engagement as consumers typically only have 24 hours to view it before it disappears. Snapchat pioneered this space, but Instagram and Facebook developed products to take advantage of the trend too.

INFLUENCER MARKETING GROWS

While Influencer marketing has been on the rise for some time, the space is maturing. We’ve seen the landscape divide into four main segments: Micro influencers (1k – 30k followers), the ‘Power Middle’ (35k – 250k followers), the Established Influencers 250k – 5MM, and Celebrity Influencers. Influencer marketing has become an important tactic as it ads authenticity to brand messaging and has more credibility with consumers.

ARTIFICIAL INTELLIGENCE GETS CONVERSATIONAL

Consumers have been reaching out to brands on social media with customer service inquiries for years, but Artificial Intelligence (AI) and chatbots have become so advanced that full dialogs can not only help answer common consumer questions, but can also help guide the shopper journey via a conversational experience.

AUGMENTED REALITY BRINGS NEW BRANDED EXPERIENCES

Pokemon Go put Augmented Reality (AR) in the spotlight, and the technology continues to grow as it has true potential to bring deeper, more immersive brand experiences to consumers. Nissan recently launched an AR Star Wars experience in their dealerships that enabled customers to view cars through their phone and highlighted Nissan’s Intelligent Mobility technologies.

Social Media Marketing Trends 2018

Written by: Andy Perez — TPN Content & Social Marketing Director

CES 2018: More Connected Than Ever

Another successful CES is wrapping up and it did not disappoint.

While there were no major announcements this year, the event truly wowed and delivered more of everything: more speed due to 5G, more screens that fit in every space imaginable, more content to view, more ways to capture images, more ways to power devices, more ways to connect the online and offline worlds, the ability to understand more about you and the ability to automate tasks, like driving, so you have MORE time to do meaningful things.

In 2017, the big news was connected everything and the rise of Alexa. This year was a coming out party for Voice command. Whether its Alexa, Google, Bixby, Cortana or Siri you can magically talk to almost everything now in order to get information, get things done without the touch of a finger and instantly buy.

There was not one tech introduction that felt incredibly breakthrough. But, there were definite improvements and builds on past developments. As a marketer (and as a mom), its exciting to see more technology for the connected life. ARTIFICIALLY intelligent things are truly going to change our lives—how we do things, how we communicate, how we shop/buy. And, it gives us as marketers more ways to constantly connect with consumers and move them to engage or buy brands. From connected fridges to speakers—the route to reach consumers is becoming more complex and we have to be mindful of communicating to both the machine and the consumer in meaningful ways. A few examples…

Kohler Konnect – More from your bathroom

KOHLER Konnect, a new platform and suite of smart fixtures that can interact with owners through voice commands, adapt to user preferences and collect data to provide valuable water usage feedback. “When people talk about smart homes, they always leave out the bathroom,” Kohler innovation practices director David Funk explained. “We wanted to bring tech into the bathroom. Now you can talk to the mirror and ask it anything you would ask of an assistant.”

Samsung – More from everyday living

Samsung will also double down on smart home technology this year, promising to bring connectivity seen in its popular Family Hub smart fridges to other machines around the home.

Samsung Electronics’ Family Hub Refrigerator offers “connected living” and is both a storage and communication device. With a built-in screen on its door, family members can leave messages, see what’s in the fridge while at the store, adjust the thermostat or even check on a sleeping baby in the next room.

Users will be able to direct their vacuum cleaners or query milk expiration dates with a voice command. Samsung’s SmartThings network will connect to devices from other manufacturers, including Ring’s video doorbell, Philips Hue lights, and Netgear security cameras.

Polaroid – More from your moment

Have digital photos left you longing for something more … tangible?

Retro Meets Modern at CES with the first immersive Polaroid Originals experience showcased in a colorful and creative exhibit. Meet the Polaroid OneStep 2 camera – an analog instant camera that is a proud successor to the original Polaroid OneStep camera that democratized instant photography 40 years ago. Polaroid instant digital products are the perfect blend of retro instant prints and modern digital camera technology.

Written By: Amy Lanzi, TPN Managing Director, New York

Amazon: What Does It Take To Win?

For brands today, Amazon.com is no longer just another retailer for selling products. Its a digital content provider, marketing channel, THE retailer and major starting point for all shopping research. 55% of product research leading up to a sale is now conducted on Amazon vs 28% on traditional search engines (BloomReach Survey—Sept. 2016). Because of this, brands can not treat Amazon like any other retailer. They have to take a Amazon-specific approach.

So what does an Amazon-specific approach look like? Well, we can’t give-away all of our knowledge and expertise over a blog post. But, here’s a starting point…

First, to orchestrate a winning plan, you need to start by knowing where you stand. What’s your Amazon.com Product Health Score? Understanding this allows you to build and adjust your actions and determine how to optimize.

Or, if you don’t know your Product Health Score, give us a call. We can help you determine where your product’s overall representation falls on the amazon.com health spectrum. Key elements of this include: evaluating your creative, SEO, inventory, third-party players, merchandising/AMS, and more.

Secondly, you have to build an experience based on the wants and needs of all parties: your target, brands and Amazon.com. That may sound like an simple and obvious thing and in some ways it is. But, if you get it wrong, you can quickly get off course.

YOUR TARGET

Create a plan that will engage your Amazon target in all her retail modes across the customer journey (consumer, shopper, buyer, influencer). Her mindset, behaviors and surroundings change in each so engaging in each will take the right plan.

YOUR BRAND

Understand you brand’s needs and presence on the platform, including your: Brand Position, Reach, PDP Impact, Conversion, Re-marketing, Influence and Overall Product Health.

 

AMAZON.COM

It’s imperative to know where your brand stands on amazon and we are talking about more than just sales – although certainly that is important. Talk to your customers, know how they are using amazon but also look at how they behave. Paint a broad picture that correlates your activities to action. Look at A/B testing, SEO, merchandising, traffic drivers and media segmentation, etc. More than anything, understand what your customer wants from your brand and translate that onto Amazon.com. It’s an environment where you can quickly become commoditized and understanding how it all works together is a full-time job.

Want to know more? Reach out to Joe_Scartz@tpnretail.com

The Amazon Effect on eCommerce and CPG Brands

The use of digital technologies in conjunction with changing shopper behaviors is making eCommerce an indispensable part of CPG omnichannel success. Brands seeking to convert online consumers should focus their attention on convenience, and how important it is in the shopper journey. According to Jennifer Silverberg, CEO of SmartCommerce, “Consumers might not care that something is more expensive, but if they can order it online and they don’t have to go to the store, they will.”

eCommerce and its ease of entry is growing and brands are taking notice. In fact, strong growth is forecast in several eCommerce shopping channels:

  • Computers and consumer electronics total $62.7B in 2017 and that number is expected to hit $97.6B by 2021[statista]
  • Apparel and Accessories eCommerce dollar sales come in at $86B and is expected to reach $96.4B by 2021[statista]
  • Auto and auto parts currently sit at $51.6B with growth projected to reach $57.4B in 2019[statista]
  • U.S. online grocery sales totaled $7B in 2015 and that total is expected to more than double to $18B by 2020[statista]

The biggest driver of eCommerce growth continues to be Amazon.  Amazon’s success isn’t just a byproduct of its huge inventory and rapid service. The online shopping behemoth, according to Yaakov Kimelfeld, Chief Research Officer for Kantar Media, “is not a retailer anymore; it is the largest behavioral marketing company in the world.” Amazon understands shopper motivation not just with purchases but with research. Fifty-five percent of product research that led to a purchase started on Amazon.com compared to 28 percent of the same on search engines. Amazon is now the preferred starting point for product research. How did that happen?

Amazon’s march toward eCommerce preeminence starts with its creative customer service model.  Amazon lives at the perfect intersection between shopper and brand. By understanding shopper behaviors and patterns, they’re able to create actionable plans that can make a more immediate impact for consumers. They’ve also built brand affinity and awareness by positioning brands in the immediate shopper path of purchase. With a heavy focus on the customer, Amazon can optimize constantly, giving their consumers more of what they’re looking for, and driving conversions and shopper loyalty for brands. The shared success model is a driver of Amazon’s eCommerce dominance.

Where does that leave retailers like Walmart?  The shopping giant is responding by spending more on mobile and digital technologies to expand their online shopping capabilities. They’ve strengthened their presence in the eCommerce market with their purchases of men’s internet clothing brand Bonobos, and the innovative online shopping company Jet.com.  Another recent Walmart acquisition is Parcel, a New York-based same-day delivery startup that specializes in perishable grocery delivery, an attempt to leverage the former acquisitions and compete heavily in a market where they have no brick and mortar stores.

CPG brands know that being competitive in today’s convenience shopping environment means the buying process needs to be as painless to the shopper as possible. Luring consumers into buying your product is only half of the equation. Giving them the easiest path to purchase the moment they want to purchase will win the day.

Competition Intensifies in the Voice Controlled Smart Home Market

Amazon, Google, and Apple battle it out for purchasing power in the smart home market. TPN’s Digital Marketing and Commerce Team monitor these brands and how their products continue to boost growth in eCommerce. Watch this week’s TECH+DMC minute below to learn more.

TechDMC October 10, 2017 from TPN on Vimeo.

Shopper Marketing Trends: How Mobile and Digital Keep Changing the Marketing Landscape

Digital and mobile are making the shopping cycle (research, discovery, awareness, and purchase) much shorter and faster than ever before. The growth of digital technology has given consumers access to copious amounts of product information—and they are accessing it. Subscription-based services centered around specific shopper data are delivering an engaging personalized experience, turning shoppers into repeat visitors.

Digital and mobile aren’t just changing the shopper experience. They’re changing the pattern of behavior shoppers exhibit before they purchase. Today, most consumers’ first impulse when contemplating a purchase includes digital research. According to a survey done by Kenshoo, 70% of shoppers use a mobile phone while in a retail store to read reviews. What’s more, 85% of prospective shoppers visit Google to research purchases before they buy. That’s followed by Amazon (72%) and eBay (38%).

What does all this mean for brands and their efforts to drive retail sales? It means they must adjust the way they communicate who they are, and how they say who they are to their audience. Sheryl Sandberg, Chief Operating Officer of Facebook states that for brands to grow in the new marketing landscape, “they must focus on three areas:

  • Focus on your brand mission
  • Building communities
  • Engaging those communities long-term

Building and engaging communities is something Amazon has done successfully given its position as the most important component in many consumers’ shopping journeys.

The world’s largest online retailer has now also become the second most used platform for search (behind Google) for product research. Amazon customers go even further with their research, as users also check for background information and alternatives, an important way to comparison shop with brick and mortar stores.

With the number of products Amazon carries and over 300 million active account holders, and now its reputation as a media platform where users and visitors come to research and compare products, the online retail giant is becoming a place where brands are turning for focused ad campaigns. Marketing directly to consumers through an e-commerce channel like Amazon gives you an already engaged and ready-to-buy audience.

There is a significant transformation taking place in the retail space, and digital and mobile are the prominent drivers in altering long-standing shopper behavior. With the rise of digital and the convenience of mobile, consumers shop everywhere and at any time. And that’s the sweet spot for Shopper Marketing.

The Changing Face of Online Ads

TPN’s Digital Marketing and Commerce team keep a constant eye on innovation to keep our agency and clients informed. Earlier this summer, we highlighted the latest news and trends surrounding online video ad content and viewing. In an ever-changing shopping landscape where consumers are making more and more purchases outside of the store, it is increasingly imperative to reach shoppers online. 64% of consumers say they are more likely to buy a product online after watching a video, making online video a key vehicle for targeting shoppers and making the buy happen right where they are.

Learn more about how the online video ad space is evolving and watch the TECH + DMC minute below.

TechDMC Report 17 July 2017 from TPN on Vimeo.