Monday, June 28, 2010

Value, Innovation and Chipotle

Today let's take a look at some themes like value statements and innovation in product offerings. We'll also take a peek into brand identity, and find out that there is finally a good use for junk mail.

What does "Value" Mean?
For many retailers, the term "value" is simply a code word for cheap and discounted products. This is changing for retail marketers, as they broaden the term to mean not just lower prices. Value messages now incorporate such aspects as service, customization, craftsmanship, and convenience.

WalMart is a good example of this trend, dropping the "always low prices" tag line in favour or the more aspirational "Save Money, Live Better" moniker. Upscale furniture retailer Ethan Allan is another trying a new message, focusing on quality and style, rather than competing on price with mass merchant furniture vendors.

Broadening the value message comes as retailers look for ways to engage recession weary consumers. Customers want products that carry a aspirational "feel good" message at a reasonable price.

The Next Big Thing
Retailers have slashed costs and shuttered poor performing stores to combat the recession. But that doesn't mean they have given up trying. Many major retailers are investing heavily in the development of new products, trying to find the "next big thing" to woo customers and drive sales. Watching the sales of new and innovate items like the IPad, retailers are bringing products to market that are new, innovative and different than the same old tired products they are presently stocking.

It doesn't all have to be whiz bang technological products either. Medicines, Organic foods and a futuristic bra are some of the product lines that retailers are rolling out to snag your hard earned dollars. You can read more here.

You are what you buy
A recent article summarized some new research on how we identify with various brands. The study, called "Got to get you into my life: Do Brand Personalities Rub off on Consumers?" was written by a pair of University of Minnesota researchers and published in the "Journal of Consumer Research".

In one study, Women were given a Victoria's Secret shopping bag to use at a local mall. After using the bag for awhile, women perceived themselves to be glamorous, good looking and feminine carrying the bright pink bag. These were all traits of the Victoria's Secret brand personality, rubbing off on the users.

In a separate test, students at the University of Minnesota used pens branded with the MIT logo for a six week period. These students felt that they were more intelligent and harder working than those with regular non branded pens - another example of brand cache connecting with the user.

You can read more about the research HERE. It is interesting how some people get connected and "feel" the brand, while others are completely immune to any brand strategy. Worth contemplating as you slap logos on pens and binders and t-shirts.

Spam - Glorious Spam!
Chipotle has come up with a great promotional campaign, along with a useful fund raising effort. Starting last Friday, Chipotle is asking customers to forward their junk mail to For every 100,000 junk mails it receives, Chipotle will donate $10,000 to "The Lunch Box" a nonprofit that provides healthy recipes to schools throughout the US.

The campaign is part of Chipotle marketing and brand strategy to focus on good healthy food without any "junk" included. It's a very clever campaign and you can watch the junk mail countdown on their facebook fan page.

Tuesday, June 22, 2010

From Loss Prevention to Iggy Pop

The Muse found a few interesting nuggets from the giant world of retailing that might be of interest. Loss Prevention, Texas IKEA Gen Y speak and a little bit of Iggy Pop. What more can you ask for as Summer officially begins:

Whole lot of Loss Prevention Going on
An interesting article from an NRF Retail blog, described how two companies made modifications to their returns policy in order to combat ongoing fraud. Making simple changes, such as asking for Identification, and asking questions about the return, was a couple of changes these companies made, saving hundreds of thousands of dollars in the process. It's worth a read, and to think critically about your store's return policy now, in anticipation of the upcoming Fall "Rush" period.

Conversely, a story in the New York Times describes the practices of stores in the NYC area where detaining shoplifters, displaying shoplifter photographs, and demanding payment for stolen goods, is infringing on people rights. It's a cautionary tale of what NOT to to when confronted with shoplifting, and once again is a "rush" focused reminder for you and your staff.

Big Hat / IKEA Cattle.
A curious article appeared in the Houston Chronicle concerning the newly renovated Houston IKEA Store. Besides the fact that Swedish meatballs are $1.00 as a grand opening special, I was struck by the news that IKEA was modifying it's furniture offerings to be more "country" focused. 30% of the products are now country style compared to the contemporary Swedish style we have all come to expect from a typical IKEA store. I guess that is what people like in Texas?

An IKEA spokesperson stated that the company does a fair amount of adapting to the local market. This was a bit of a surprise, as I have never noticed this. Perhaps I live in a Swedish friendly town?

As an aside, note that IKEA is continuing it's focus on college store dorm room solutions. Ideas to take back to your own store! I also like that IKEA is shifting production into the US rather than off shore. Good to see a big corporation seize on the "made in the USA" idea these days.

It Smells So Good.
All along I thought that the smell emanating from my local Abercrombie and Fitch store was coming from the shirtless dudes spritzing cologne throughout their shift. Turns out I am wrong. There are many companies that scent the whole building for you. From apartment blocks to retailers (including Abercrombie), they supply an "ambient scent" process to bring customers in, and provide a relaxed setting. It's a growing industry, and is the latest and greatest retail environment craze. Much simpler than getting your staff to spray your campus cologne over the heads of customers standing in line...

Wearing Heritage and Nostalgia.
A fascinating article, again from the New York Times, points out the burgeoning trend of nostalgia and heritage clothing items. Eddie Bauer is re-introducing the WWII airplane pilot bomber jacket. Janzen is introducing a swimsuit modeled after 1940's pin up girl fashion, and L.L.Bean is revising a hunting shoe from a 1911 catalogue.

All of this heritage couture is an attempt to appeal to customers on an emotional level. Trading in on our nostalgic thoughts of a simpler, gentler time. It made me think that while retailers are combing their back catalogues for inspiration, perhaps college stores should be doing the same thing. Checking out graphics and logos from the forties and fifties, and refreshing them for today. Creating a private label line of iconic nostalgia wear.

Talk Gen Y
Plan on your customers speaking to you in a language you don't understand. But no fear. Now you can brush up on some Gen Y slang for this fall. The link here gives a quick overview of some new slang to know. I particularly like OMLG (Oh my Lady Gaga), to replace OMG. The article also suggested checking out - a great resource to while away some time at work. After all it's customer research!

I am the (online) Passenger.
Special Group Advertising just won a major international award for their Iggy Pop video, promoting ORCON Broadband service in New Zealand. Special Group held auditions for Kiwi's to play Iggy Pop's "passenger" song while he sang along. The kicker? Iggy was in Miami, and the amateur musicisans where all in New Zealand, connected live through ORCON's broadband service. (The video is below). It's a marvelous video, not only for the shirtless Iggy punk smirk, but also that it sells the service so well. Not sure it has a practical college store application, but it does make me sit up and take notice.

As Iggy Says:
Socks are good.

Thursday, June 17, 2010

One pen will do (part 1)

I needed a pen. Simple basic writing instrument. Blue ink. Fine point. Roller ball. How hard is that? So here I was, cruising into one of those mega office supply store (remember when they used to be called stationery stores?) Walking in, past the printers and faxes and software, I found the aisle marked "writing Instruments". Heading down the echoing corridor of pens, I was baffled and bewildered. 12 linear feet of pens! 8 feet into the sky. Suddenly I felt a consumerist panic attack. Which one to choose? what should I buy?

Examining each of the many many selections and muttering to myself that I just want a basic pen, I felt my inner Dr Seuss come out.

One pen, two pen, three pen four.
Red pen, blue pen, green pens more.
Boxed and pegged and blister packed galore
Can't make a choice so buy out the store!

As I sang my own personal Seussical, I finally chose something, much to relief of the slightly edgy staff member that was watching. I purchased my one pen, beating a hasty exit, worried that I might get home to find that I needed a pencil, but leaving that 12 foot dilemma to another day. Thinking (and singing), I uncapped my pen and wrote with the first drops of ink:


Now consumerist choice is a great thing. It's one of the tenants of a free society. No Soviet era lineups to buy one size 8 and one size 7 shoe in America. If you have the means, your choice of products is endless. Products come in all shapes, sizes, colors, styles and price points. Just consider; the average supermarket has grown by a third in 15 years, and stocks more that 45,000 items. The dizzying array of products is mind numbing.

Not all this choice is great though. Retailers, manufacturers and advertisers have sold us on choice being a good thing. The adage being, as a retailer, if you offer a huge variety, customers will buy something. If you offer 49 different types of highlighters, then you satisfy every customer need and want. But recent research shows that this business practice is counter intuitive. The more choice you give, the more customer confusion and uncertainty. The result? actually less sales over all as customers choose to NOT choose and leave empty handed.

WalMart - The bastion of product analysis, recently discovered this. Needing room on their shelves for, of all things, cinnamon spreads, they decided to drop two of their five brands of peanut butter. What did they discover? They sold MORE of the existing three brands than when they had five on the shelves. The WalMart chief merchandiser recognized a new adage in selection - increase variety, and customers don't buy.

A major grocery chain in the US tried a similar exercise, culling 10% of their slow moving products. Existing products increased in sales, and the grocer found many savings in reducing product selection. Yet, it is a bit hit and miss. While some products were not missed, others taken off the shelves created some negative backlash from customers.

Finally, I thought of Costco as the ubiquitous retailer of edited selection. The Costco model is all about selling a large volume of a few products. Not much selection. The top products are carried by Costco, and if you want some variety, you need to look to your favorite neighborhood grocer. Ted (not his real name), a manager at Costco agreed. He talked about the analysis, matrix and sales data that Costco head office performs to decide on product selection. Fierce criteria is used in analysis. Not selling through? Delete the product and replace. It's a clear single minded focus on sell through with as little product selection as possible.

So it is clear that there is a lot of evidence to support editing product selection. Carefully reducing variety can increase sales and reduce costs. How does this apply to campus retail? Well next time we will take a look at the campus store experience, and how using these big box retailer experiences can help the profitability of any campus retail operation.