Sometimes a Great Notion - July 19 Edition

What a week for the Retail world! It seems like just yesterday that everyone was packing away their 2008 holiday wares, and focusing on the spring, when what do you know? Christmas in July 2009! For those that can’t stomach the idea of Christmas music in your store this early, a great deal of activity as retailers gear up for the 2009 Back to School season. Finally, a cautionary tale of what happens when you break someone’s guitar. And, how online viral video can send your business into a tailspin.

Happy holiday notions!

Sometimes a Great Notion

It’s beginning to look a lot like....

Christmas? Well, that seems to be the plan with Sears and Kmart, both launching Christmas promotions on their respective web sites. Sears has launched Christmas Lane departments in 372 stores, encouraging shoppers to buy early (while they have a job I guess), and take advantage of Sears and Kmart layaway plans. Is this a good idea? One analyst suggests that it is desperation, rather than retailer inspiration.

In other Holiday news, look for retailers to push harder on holiday shopping this year, as they try to clear inventory levels and respond to slumping spring and summer sales. Word on the

street is that Black Friday will start earlier this year with greater discounts, pushing up the sales blitz to Columbus Day, six weeks earlier than the traditional Thanksgiving weekend.

It’s starting to be a gloomy......

Back to school! After lackluster June sales, retailers are already gloomy about the BTS shopping season this year. According to a recent National Retail Federation (NRF) survey, parents expect to spend about 7.7% less this year on back to school items, most noticeably in apparel. It reflects the continued lack of consumer confidence in the economy.

Two bright spots in the survey however. Technology and electronic products are still a must buy, and the survey estimates as much as an 11% increase in consumer spending in these areas. College bound students and families expect to spend 25% MORE than last year, a huge increase that raises the question, will this expectation actually translate into greater sales at the campus store register?

With BTS the second biggest shopping season, expect retailers to respond accordingly. JCPenny has recently launched a new website for teens to shop and choose their own clothes, and big box discounters like Target, Wal-Mart, and TJ Maxx all have campaigns in the works to woo parents and teen shoppers to their stores. Staples is taking an aggressive tact (isn’t this short for “tactic”?) this BTS season, lowering the prices on 250 core school supplies. Additionally, Staples is planning to bring back its well know “it’s the most wonderful time of the year” commercial spots in an effort to spark consumer enthusiasm. Expect to see Alice Cooper dancing through the Staples aisles on your tube soon!

If all else fails....

Dress like Cows! Chick-Fil-a, the rapidly growing chicken fast food chain, has a habit of creating interesting and humorous promotional campaigns. The latest, allows customers who show up at their restaurants in cow regalia to receive a free meal on “cow appreciation day.” Sort of makes you wonder if you can’t convert this idea to the campus store with the college mascot.

Chick-Fil-a has a Labor Day weekend promotion planned for this year, giving away a free chicken sandwich to any person showing up wearing a sports logo shirt (professional or amateur). Sounds like a way to partner and move some branded merchandise!

The greening of Wal-Mart

Wal-Mart stores just announced a new environmental initiative, telling over 100,000 suppliers that they will be expected to provide full environmental costs for a new labelling initiative on store shelves. Suppliers will be required to provide information on waste generation, community involvement, and resource use in manufacturing products.

As the largest retailer in the world, Wal-Mart’s gambit is significant. Compliance by manufacturers will be a requirement of doing business, and the expectation is that this initiative will roll out as early as 2011.

In terms of supplier transparency and sustainability, this is big news for the campus store. Expect to see suppliers providing this environmental information to all accounts in the next few years, as they change their packaging to meet the Wal-Mart initiative.

And finally,

A cautionary tale of consumer power. After United Airlines broke his guitar on a flight from Toronto to Chicago, Musician Dave Carrol took matters into his own hands, producing a “rock video” of his experience. Posting it on YouTube, the video has gone viral with thousands of views, and prompting United Airlines to post an apology and offer to pay for a replacement of Carrol’s guitar. What’s the fable in all of this? That power is shifting to the consumer. Businesses not responding quickly and effectively to consumer complaints run a real risk of negative public relations and brand degradation.

The Sign of The Times

What do you think of when you see a dollar sign, or a $ symbol? Most likely you think money. Either parting with or receiving money. Do you give it any thought when you see a $ symbol on a menu, or a price tag? What message does it send to your customers and how do they react? These were the type of questions researchers at Cornell University asked. A recent study by Cornell’s Centre for Hospitality Research, tested how consumer spending patterns were subtly influenced, depending on including a $ symbol or not including one.

The research team created three different menus at a nearby restaurant. One included the $ sign and price ($10.00), one with no dollar sign (10.00), and a third with the price written as words (Ten dollars) . Testing their menus on 200 lunch goers they discovered that customers spent more when the price was listed without a $ sign.

One theory for this behavior is the thought that including a $ or the scripted word "dollar" created a mind set of "pain in paying" for the customer. A repetitious sub conscious cue that they were parting with real money causing them to spend less.

Although this test was focused in a restaurant setting, it stands to reason that the same principle would apply in any retail location. Removing the dollar sign from shelf or price tags might create a more positive customer reaction. No visual cue exists that they are spending real money.

Could this simple change result in higher sales? It’s an interesting theory and one that deserves some experiments in a retail setting. In these tight economic times it seems like an interesting exercise to try at Back to School time, and see if dropping a ubiquitous symbol like the $ sign converts more browsers to buyers.

Sometimes a great notion - July 13/09

Sometimes a Great Notion

Welcome to the maiden voyage of our weekly newsletter, summarizing the latest trends and developments in the retail service world. Brought to you by The Retail Muse, and posted each Monday morning, this collection of the latest, most interesting retail developments, will be sure to inspire and engage you, and help your store remain on the cutting edge.

Don’t forget to sign up at The Retail Muse website, to receive SOMETIMES A GREAT NOTION in your inbox each Monday. And, look for more in depth discussion each Thursday, as the The Retail Muse dips into a specific topic each week, giving you a more comprehensive overview of developing stories.

Enjoy, and onto the notions for this week!

PayPal for your website – The future is here.

Consumers are avoiding shopping on line again as fear of on line fraud grows, and person

al debt rises, making debit and credit cards not as welcome as a payment method on line . The result, a growing percentage of the top 50 online retailers offering new payment methods including PAYPAL and BILLMELATER.

What an easy enhancement for websites in campus stores to consider. With the growing acceptance of PayPal accounts, especially with the younger student demographic, adding these payment methods to campus store websites could drive some new traffic and larger sales activity.

Theft in your store? Say it ain’t so!

A new survey by KPMG, of 47 large worldwide retailers, found that retailers are losing 3% of their sales each year to theft and inventory errors. These retailers seem to see this loss as a cost of doing business. Retailers blamed customer and staff theft more than inventory errors.

The report reminds retailers that most shrinkage mistakes can be avoided, by focusing on improving errors in counting, and data entry errors. This is a good reminder, to focus on the receiving and inventory process, to easily mitigate inventory losses.

Designers look to Mass Merchants

A flood of designers, have recently turned their attention to large scale retailers, in an effort to make their products available for reasonable prices in the largest, and most influential stores. Vera Wang is adding a new line at Kohl’s called Simply Vera, H and M is adding Jimmy Choo. Lo low priced versions of his famous shoe brand. Wal-Mart, endlessly looking for new markets, is planning to add a line from BCBG Max Azaria.

All this price pushdown, by traditionally exclusive high priced designers, is a direct response to the slumping economy. Expect to see even more designers join the fray as they look to increase margins and profits.

Are Isaac Mizrahi or Ralph Loren branded campus sweatshirts far behind?

It’s Free on facebook and twitter.

Major vendors, such as Pizza hut and Starbucks ,are looking for ways to make their facebook and twitter activities of interest to customers. Pizza Hut awarded facebook and twitter followers with a coupon for a free stuffed pizza roll, while Starbucks is giving away free pints of ice cream to followers on their page.

Proves again that businesses setting up social networking sites, need to offer some value to the customer. to keep interest going. Otherwise, why bother? Seems like an easy low cost marketing idea to reach college students.

Pizza Hut has a new intern for the summer – a “tweet tern”! A great idea, snagging a college student to tweet for your store, and enhance your networking presence.

Widgets – the new big retail application.

Desktop and mobile widgets are growing in popularity with large scale retailers. From the fun “snow globe” gift suggestion widget of Target to the “EASY Button” widget at Staples, retailers are trying new ways to bring info, promotions, and ordering ease to the customer.

Imagine a campus bookstore widget on every staff and student computer on campus! Now imagine the sales and marketing possibilities. No snow globes though, dancing books? Prancing mascots? Shimmering sweatshirts? Sounds like a good project for the Widg-tern!

No Smooth Sailing Ahead

With the July 4th holiday weekend upon us (for my U.S. colleagues), lakefront picnics and boating ventures are on the mind.

But as retailers, there doesn't seem to be smooth waters awaiting us. Pundits are predicting rough waters ahead for the back-to-school season. And they are suggesting we all keep a close eye on those seasonal sales as a predictor for the holiday season to follow.

So are we to do? It IS the time to celebrate our independence, after all! Can't we celebrate our freedom and exert a little influence on our situation in this economy? Certainly!

In reviewing some retail industry magazines recently--I do that...I'm a nerd that way--I ran across two cover stories from the NRF Stores magazine (www.stores.org) that combine for some interesting thoughts on getting through these tough times. In case you want to find them and read the full pieces, the articles are "Navigating the Road Ahead: What's next for retail in '09" and "Something's Got to Give: Cash-strapped customers are cutting back on (almost) everything" (Dec. 2008 and Feb. 2009 , respectively).

Following are some points from the articles and my two cents (of course) for campus stores.

1. Shoppers are looking for an antedote from the gloom. The retailers that can alleviate some of the distress (or drown the pain) being caused by this economic slump will win the sales. As we know, "affordable luxury" is IN and retailers that provide creative, quality products at affordable prices will do well. Seek to engage your customers, allow them to provide feedback and reviews, and empathize with their predicament--both through your service and your promotions. Bargain Buys and Power Hours can really drive traffic and help your customers know you are on their side.

2. Consumers are making some tough choices. They are giving up luxuries such as satellite radio, specialty apparel, high-end cosmetics, and fine dining. However, the "untouchables" are Internet service, basic cell phone service, basic cable, and discount shopping for apparel. For campus retailers, consider accessories for cell phones and electronics, sale events on apparel, and other ways to offer your customers something they can purchase to update their existing cell phone or wardrobe without breaking the bank.

3. IT is it! The data explosion is real and understanding what is happening in your store, with your sales, and everything you can about your customers is going to be more crucial as time marches on. I know money for POS systems, integrations, and other IT investments is tight (or non-existent) in higher education...but you simply must keep up the good fight and continue to look for solutions that you CAN put into place. It's imperative that you be able to manage the numbers of your business and track at least the basic information about your customers.

4. Retailing is Relationships...and Social Networking is hear to stay. Being engaging is no longer "nice", it's imperative. Our primary target market spends its days online and connected to each other. Mobile is the wave of the future--we have to prepare for the tide. Social networks are influence networks and your business needs to establish "outposts" in the virtual spaces where your customers spend their time: Face Book, Twitter, etc. If you're not sure how to start, talk to your students, go to the application website and click around, or stop a 12 year old on the street! Reach out. Let your customers know what you have to offer that will solve their problems or ease their pain. Make connections and nurture relationships.

Many campus retailers are doing good things and everything within their control. Some others are not putting 100% into the endeavor. The best time to take action is when times are GOOD. That's not the case now, I know. So let's say this is the second best time to take action. Regardless, take action we must!

- The Retail Muse