Banana Republic’s New Store Format in NYC’s SOHO

Credit: Zimbio

By Stuart Silverman

I visited Banana Republic’s new store format, that opened earlier this month, in New York City’s SOHO. It’s a nice store; fresh, attractive and easy to navigate.  From a layout perspective, they have made the store much Easier to understand in terms of what they offer and where to find it.

In both the men’s and women’s stores, along the right side, there is a clear circulation spine, a wide boulevard, running from the front to the back. As you walk the boulevard, on the left you see clearly separated boutiques, each merchandised around specific themes. For example, on the men’s floor, there are boutiques for casual wear, work wear, and formal wear. In each boutique, they show a full range of shirts, sweaters, pants, and accessories that support the theme.

An additional touch is the placement of the checkout registers along the shopping boulevard to the right of the boutiques.

From an overall experience, when you walk in to the store, you get a good sense of how you are going to interact with the store. You see this inviting boulevard, clearly defined and merchandised shops to the left, and checkout to the right. You see how you are going to get in, where you are going to go to shop, where you are going to checkout, and how you are going to get out.

In a world where we are continuously bombarded with all kinds of messages and have to work to sift through the good vs. the bad, where some retailers force you to walk through the whole store to get to the checkout, the new Banana Republic store format is clear, understandable, and Easy to shop.

The Supermarket of the Future: Do We Want Easy or Experience?

By Rena Granofsky

Toronto’s Globe and Mail recently brought a new supermarket concept to our attention: Eataly of Torino, Italy. According to Eric Reguly, “Eataly is an unlikely blend of food bazaar, farm stand, educational centre, museum, eclectic dining experience and political and environmental movement.” It is all about “slow food”, the antithesis of “fast food” and the movement to preserve the cultural cuisine and associated food plants and seeds, domestic animals, and farming within an eco-region.

According to Reguly, Eataly bombards the senses with aromas, colors, variety, energy and design flare that are almost entirely missing from the typical big-box North American supermarket. It is filled with artisanal products, with an emphasis on local producers, and there are restaurants or bars throughout to sample the products.

Credit: Eataly Torino

Eataly is therefore all about the Experience, a treat for the senses and the soul. This is a destination supermarket that seems to offer an entirely different Experience than the one offered by Whole Foods, long revered for its delivery of exceptional quality organic products and prepared foods to its loyal customers. It is not about making it Easy (saving time) and does not pretend to be Economical (saving money).

So is this the supermarket of the future, as predicted by Atlantic Magazine, or simply another option for consumers? Are consumers still time pressed, looking for Easy options, and price conscious, looking for Economical options? Given our current economy and fast-paced lifestyle in North America, it would seem that saving time and money will continue to be important in the foreseeable future.

Yet the supermarket chain that continues to outpace all others is Whole Foods, an Experience retailer. Perhaps it is time for other traditional supermarkets to take their cue from both Whole Foods and Eataly, and up the Experience.

Buy Anywhere Fulfill Anywhere Works for Easy Strategy

By Rena Granofsky

It is tough to stay loyal to a retailer when they are out of stock. And it is annoying, to say the least, when they say “I can call to check if another store has it, but it is Saturday so they may not pick up” or “Sorry, we don’t do transfers, you will have to go there to pick it up”. I am busy, I don’t have a lot of time, and I want this purchase to be EASY, so neither of these responses sit well with me.

Nor do I welcome killing time while the sales associate looks up the store numbers of adjacent stores, and between serving other customers, calls them one at a time, hoping to get an associate from the other store on the line.

And I am not alone. Many customers select a retailer because they make it EASY for them: they are EASY to get in and out of quickly, there are many locations to choose from, they are OPEN, and, most importantly, they are in stock.

But especially in this economy, frugal inventory investment is the New Normal. So how can retailers respond, make it Easy for customers, limit investments in inventory and be in stock to meet demand?

One approach is the emerging Cross Channel Order fulfillment solution. When a customer selects an out of stock item, the system automatically finds it somewhere else in the chain, and the item can either be transferred to another store for pickup or delivered to the customer’s home. The same approach can be used in the brick and mortar store, online store, kiosk, mobile device, or even Facebook!

The solution is quick and efficient, and a good choice for retailers who are focused on making the shopping trip EASY.

To read Rena’s White Paper on “Buy Anywhere Fulfill Anywhere” please click here.

Who is Making the Retail IT Budget Decisions?

By Stuart Silverman

We are in the process of pulling together some great materials and content for our upcoming Retail IT Impact Maximizer Seminars, and I recently came across the 2009 RSR Research Benchmark Study, IT and Business Alignment in Retail.

For years, we have debated whether IT should report to the CEO or to the CFO. I was surprised to see the RSR study reveal the following statistics: 50% to 55% of the top IT executives at winning and average performing retailers report to the CEO, whereas only 24% of IT execs at laggard retailers report to the CEO; in contrast, 18% to 19% of the top IT executives at winning and average performing retailers report to the CFO, whereas 41% of IT execs at laggard retailers report to the CFO. What does this mean?

At the risk of offending any of my CFO friends, It sounds as though there might be a disconnect when IT reports to the CFO. In this case, it looks like there is a better opportunity to achieve a more balanced perspective on the question of investing in cost reductions vs. investing in sales growth. Unless the CFO’s are broad minded, opportunistic, and entrepreneurial executives, there is a risk that, especially in today’s economy, the focus will be on cost reductions, which can have a significant impact on IT budgets.  Any investment in IT is likely to be focused on investment in applications that automate processes and/or show high ROI based on inventory and manpower reductions.

Still, that is only one part of the opportunity. While we are seeing that the economy is starting to rebound, the consumers have changed. In addition to shifting merchandising strategies, product mix, and price points, we must also look at how we can use technology to grab the consumers in this “new normal” retail environment.

This, of course, takes a broader view, which is the responsibility of the CEO. The RSR report reaffirms that IT should ideally report to the CEO.

From Order Taker to Profit Maker

I had been in the retail technology industry many years. I had worked at a leading retail system supplier, and successfully designed system enhancements, optimized business processes top to bottom, and implemented solutions at retailers across North America. Next, I helped retailers large and small set up efficient processes, define requirements and source solutions.

Then a large retailer hired me to help their merchandising and advertising departments benefit from technology. They invited me into their weekly meetings with senior Merchants and Marketers as the sole representative of technology. I was expected to contribute in a meaningful way.

I could certainly respond to any questions about whether technology was available to handle their ideas, but my contributions were limited to ways to enable their ideas, or to make things more efficient or perhaps interesting for the customer. Why? Because I really did not understand retail strategy and how to enable it through technology. So I sat there quietly, listened and learned. I was the quintessential Order Taker.

Years later, I was lucky enough to work as a partner at J.C. Williams Group and learn all about retail trends and strategy. I finally understood how to combine strategy and technology to drive revenues and profits.

That’s why we’ve launched the RIT Growth Seminars: to teach retail IT professionals how to enhance their contribution, communicate better with the rest of the business, and effectively drive revenues and profits.

This is how I moved from being an order taker to a profit maker. Check it out at www.ritgrowth.com.

Maximizing IT Impact

Over the years, we have come to the realization that IT departments at many retailers include IT professionals who do not have the ear of the business, and are therefore handicapped when it comes to helping those retailers enable their strategies. They become order takers, able to respond to requests from the business, but limited in their ability to recommend differentiating business models or new technologies or applications to drive revenues and profits.

The reason for the handicap: they don’t understand retail trends or strategy, or even the KPIs that matter. They are ill equipped to determine and recommend which of the many technology options make the most sense for the organization. And they lack the tools and knowledge to communicate effectively with the business decision makers.

To address this, we are launching a new educational division to deliver highly interactive seminars to IT Professionals within retail organizations. We will review the latest consumer trends, retail trends, technology trends, retail strategy methodologies and how to best map technologies to strategy so that they will be able to contribute to the business and transition from being order takers to profit makers.

The 1-day Retail IT Impact Maximizer seminar will be delivered first in Toronto Oct 28^th, 2009. Dates for US seminars in 2010 and the more comprehensive 4-day Retail IT Roadmap Intensive seminar will be announced shortly.

The seminars are designed to provide a Win/Win/Win:

• Retail IT Professionals will WIN with enhanced skill sets, respect from the business, contribution to the organization, and career advancement
• Retailers will WIN by understanding the potential of specific technology initiatives to enable strategy, and will drive more IT initiatives
• With more of the right IT initiatives in place, retailers will WIN with more revenues and profits

For more information on these seminars and schedules, please refer to our web-site at www.ritgrowth.com or contact me at rgranofsky@ritexperts.com.

Are You Greentailing Today?

Credit: medialyte

We hear so much about consumers and businesses behaving responsibly and keeping things ‘green’, but are retailers doing enough in this area? I recently read the book Greentailing (affiliate link), by Neil Stern and Willard Ander, and they took a close look at what some retailers are doing to behave as a socially and environmentally conscious company.

Here is their definition of ‘Greentailing’:

“Greentailing is conscientious retailing built on environmentally profitable business practices which explicitly consider the impact of a retailer’s actions on the environment and community, customer perception and behavior, employees, suppliers, and ultimately shareholder returns.”

Here are a few suggestions/examples, cited in Greentailing and other sources, that retailers can be focusing on today to improve their ‘Green’ factor:

1. Optimize energy efficiency in your stores - the U.S. LEED certification program has established guidelines and measurable standards for design, construction, and operation of your retail facilities. Companies like Target, Best Buy, and Office Depot have already started opening LEED certified stores.
2. Packaging – eliminate any unnecessary packaging. Excessive packaging is wasteful and not very consumer friendly. Retailers can proactively buy merchandise that has no excess packaging or packaging that is made from recyclable products.
3. Bagging - we have started to see the elimination of plastic bags in groceries and other retailers in major cities like San Francisco, Toronto, and others. In order to discourage consumers from choosing plastic bags rather than recyclable bags, Toronto has recently introduced the infamous ’5 cent bag‘ bylaw, forcing grocers to charge consumers 5 cents per bag if they still opt for plastic. While not everyone agrees with this approach of a ‘forced’ tax on their use of plastic bags, it is certainly one of many ways retailers can eliminate waste and use of products that are simply bad for the environment.
4. Recycling – retailers can offer more products that are made out of recycled goods or even sell high quality used items. Buffalo Exchange has made a retail business out of buying/selling vintage high quality used clothing.
5. Organic, Natural, Nontoxic – retailers can make an effort to buy environmentally preferable products. Retailers must pay attention to how products are being produced and are using the most natural, organic and nontoxic materials possible. Williams Sonoma has recently introduced a new line, ‘Pure & Green Collection’, using all natural products and recycled containers for a line of soaps, lotions, and cleaners.
6. Supply Chain – retailers can do more to make sure suppliers themselves are producing, operating, and delivering products in an eco-friendly manner. Wal-Mart introduced a scorecard system that measures and evaluates their suppliers on all of these factors.
7. Charity - Charity, philanthropy, and community services are all good for the environment. Giving something back to the local community with hands on services or charitable donations towards non-profit organizations that are improving the environment are other ways retailers can make a difference.
8. IT Initiatives – There are many IT initiatives that can be undertaken to help improve the environment. Software applications that can reduce or eliminate paper outputs, use of digital/shelf tags instead of price labels and other such applications. A colleague of mine is involved in a company, Transaction Tree, that eliminates paper receipts and can have them all e-mailed directly to the customer. Stores like the Stanford Store (a Stanford University apparel shop) have eliminated paper receipts and handles them electronically, sending out customized and personalized e-receipts. There are also companies like Carbon Foresight who provide services along with their CarbonConnect software that can evaluate & measure your overall carbon footprint.

These are just a few suggestions/ideas that might help you look at some of your own business practices with a ‘greener’ eye. What greentailing steps are you taking that I may not have covered? Please share your stories/examples with us.

[www.rickboretsky.com]

Why Aren’t There More Grocery Stores On-line?

I predict one day soon shopping for groceries online will be as common downloading songs. It just makes sense. Read my recent encounter with Grocery Gateway and you will understand why I see it this way.

I recently had the opportunity to meet with John Charleson, IT Director of Longo’s. Since 1956, Longo’s has been serving the Greater Toronto Area (GTA) with high service, high quality grocery stores. Longo’s has participated in the online grocery business since 1999. At first, they were merely the supplier to Grocery Gateway, where their shoppers would come into the store on a daily business and pick orders for their online customers. After Grocery Gateway made a brief departure using their own central distribution, Longo’s purchased the near bankrupt Grocery Gateway in 2004, and brought personal shopping back to their stores. The rest, as they say, is history. The online business was profitable within 6-9 months and has seen phenomonal growth at a pace of 15-25% per year.

A few more stats about their online business:

• Fills 4,000-8,000 orders per week in the GTA from about 6 stores.
• Regular customers order every 2nd week (supplemented by a few visits to the store in the interim)
• 8,000 SKUs available online
• Average online order is $140 vs $30 in-store
• Online sales account for about 5-10% of total sales.

Sales continue to grow as they add more stores for Grocery Gateway shoppers, expanding their customer reach, while increasing the number of SKUs available online.

What a great service. I remember my mom calling the local grocer placing an order over the phone, and having a delivery man show up later that same day with fresh goods, well packed, and carried right into our kitchen with a warm smile. Longo’s has been long on customer service and now has the ability to provide this kind of service to its customers once again, en masse, through the use of technology. While technology plays a significant role in this service, the personal and human touch is what makes it such a huge success.

Online Order Process:

Orders are placed online, and then picked at a nearby location by real people. Using handheld devices, the ’shoppers’ walk the aisles picking out the best produce and fresh products with a caring and discerning eye, as if they were buying groceries for their own family. If a product is not available, then the shopper will pick an appropriate substitution. Orders are packed in re-usable cartons and then picked up by the delivery trucks first thing in the morning. Longo’s uses their own well-trained delivery personnel, as this ultimately becomes the only ‘face’ to the customer. Delivery personnel provide friendly, high level service, carrying all cartons right into the customer’s kitchen for convenient unpacking.

Longo’s prides themselves on customer service and they are pleased with the satisfaction their customers get with this service. Many have said they could no longer live without it. Longo’s is always trying to improve upon this.

Even with their great service and an award-winning e-commerce site, they have plans (vision) for numerous improvements:

• Improve fill rates by showing available inventory by region and making more intelligent automated substitiutions, when the item is not found.
• Give customers the option of picking up their order at the store (with attendant putting packed groceries right into vehicle) or receiving it at home.
• Add more SKUs and specialized SKUs, depending on region of purchase.
• Offer promotions and specials while shopping online.
• Offer product suggestions based on purchase history.

This shows Longo’s desire to continually improve the overall online shopping experience. I think they can take this even further with more social interaction by adding such features as online product reviews, ’shopper’ feedback, and online discussions.

Why Aren’t More Grocers Providing This Service?

I think this is the ideal online business for for brick & mortar retailers. Tesco has been doing this for years with continued and growing success. It’s a time-saver, it’s ecologically friendly (less travel, re-usable cartons), and is a huge convenience for your customers. I understand that this is not a simple service to add and will be difficult to make it profitable, but nonetheless it is a great service to your customer and can give you an edge over your competition. Yes, it will eat into already tight margins, but as we have seen with other industries – adjust to the online world and make it work (profitable) or potentially lose altogether.

I am curious to hear what others think? Do you know of any grocers that are already providing this kind of service? Do you think you would use this type of service if it was available in your area? What other improvements would you recommend for online grocery shopping? [www.rickboretsky.com]

12 Ways Google Wave Can Help Retailers

If you haven’t seen this yet, take a glimpse at this presentation of the recently unveiled Google Wave at the Google I/O 2009 Conference (it’s long at 1h 20m, but watch a few minutes starting at the 4:30m mark, and you’ll get the idea).

It is the latest Google creation that may transform how we all work. In it’s simplest definition, it is the next generation of e-mail. But take a closer look, and you will quickly understand it’s way more than that – it’s the collision of email, instant messaging, wikis, blogging, video (youtube), photo albums (flickr), twitter, and much more into one single powerful collaborative tool. And ALL of this is done in a simple browser.

I expect this to be transformational, and I immediately began to think of how retailers might benefit from such a tool. Of course there are already lots of collaboration tools available in the market, but keep in mind that Google Wave is way more than that, it is:

• Free - anyone from any computer can simply open their browser and have access to all of this.
• Real-time – and when I say real-time, I mean real-time. Character by character, it is instantly displayed on the receiver(s)’ computer.
• Everything all in one - no separate components for email, instant messaging, blogging, tweeting, etc.
• All about a conversation – track every comment or reply in its appropriate place within the thread and specify who can or cannot see the reply. Also provides complete playback capability that allows you to step through a conversation from the beginning, one comment/reply at a time.
• Open Source – anyone can add more services/features to this, making it increasingly powerful. In typical Google fashion – they have created the foundation and will let the rest of the world improve on it!

Retailers with locations, employees, and customers across states, the country, and possibly the world, have a lot to benefit from all this. This tool is really about having conversations. Conversations that others can participate in and build upon. Conversations can consist of 2 participants or an entire organization, where everyone can participate in the conversation and follow along in a very flexible and powerful way. So with that in mind, here is my list of 12 ways that I can see retailers benefiting from Google Wave:

1. Education – Companies have always been good at delivering big binders/documents of policies, procedures, rules, etc. What if they can tailor those online documents to certain groups of employees? What if employees can post comments/questions right in the appropriate point of a document, where HR or other employees can respond? This is sort of like an FAQ, but organized in an ongoing conversation.
2. Product information – Buyers have stories to tell about their collections and products. Everyone in the organization can benefit from this information and then add their own comments/feedback. All of this information can be shared with everyone and buyers can learn from others.
3. Training materials - provide all training materials online that can be viewed and shared by all staff. Documents, videos, online conferencing, and employee feedback. Others can learn from what has worked best or not for others.
4. Product warnings – Inform your customers quickly with warnings of any product defects or potential hazards.
5. Customer invitations – Invite your customers to special events and upcoming promotions.
6. Customer feedback – Request customer feedback and let employees and other customers to respond. This information will be totally transparent and shared by all.
7. Customer polls/surveys – Conduct quick polls or surveys with your employees and customers. This will give you quick and instantaneous feedback on how things are going or testing out a new idea or strategy.
8. Share selling tips/techniques – Store employees can share their own tips on product benefits or selling techniques.
9. Store competitions - District or store managers can start competitions for employees or stores at a whim, and track the results.
10. Collaborative charity events – Start/promote charity events, locally or nationally, where employees and customers can easily participate.
11. Employee blogging/tweeting – Provides a platform for employees to express themselves through blogging and tweeting. Employees can share their personal stories and experiences with other employees and customers.
12. Suggestion box – How about an online transparent suggestion box, where employees or customers can make recommendations, and then HR or other managers can provide their feedback.

These are just a few ideas that came to mind. Any of these or other components/widgets can be added to Google Wave. What would you suggest? How would you like to see retailers use a tool like this?
[www.rickboretsky.com]

9 Things for Retailers to Tweet About

Last post I talked about what Retailers should be ‘listening’ for on twitter. Now the question is “what should they be tweeting about?”

Credit: a godly maiden

This is the most important thing I will say in this post: ‘Tweeting is personal’.  If your tweets are robotic, timed, and impersonal, they will be ineffective. Using Twitter should be about sharing who you are, what you have to offer, and why it is important to you and others that are following. For what not to do and some basic Twitter etiquette, see Chris Brogan’s recent post –  A Brief and Informal Twitter Etiquette Guide. Another recent post describes Tweeting Your Corporate Culture. Based on all of this information, I have put together a few suggestions, and my list of:

What Retailers Should Tweet About

1. Company history, vision, & mission - Your company has a history, a story to tell. It’s a great way for people to connect with your brand to tell them your history, war stories, visions, and missions. Sharing these 140 character tidbits can go a long way with your customers.
2. Customer success/feedback – Share customer stories. Positive feedback or customer stories about how a customer succeeded because of the use of your product or service.
3. Employee recognition – Sharing employee accomplishments, personalities, and insights, tells a lot about the company culture and what the company is all about.
4. Company news & events – Share any press releases, news stories, or special events.
5. Product features/benefits – Describe product features and how the customer will benefit from these features. Share different ways customers can use the product/service or different purposes that others may not have thought of.
6. Other relevant industry news – As an industry expert in your domain, you should share relevant  industry news with your customers. It is important to educate and inform your customer about the industry in general.
7. Related topics of interest/importance to the company – What other things are of interest to your organization? What other passions does your company have. I think it is very important to tweet about this. Maybe there are special interests or charitable organizations you believe in. Share this with your customers.
8. Product ideas/suggestions – Solicit feedback and ideas/suggestions for new products or how to improve on existing products.
9. Upcoming promotions/sales – And lastly, tweeting about special promotions and upcoming sales. I left this for last, since it is the most obvious use and the most common type of tweets used by retailers. I think this should be very limited in its use and it should be done as creatively as possible. Offer special competitions/promotions and giveaways to twitter followers, as another way to not only promote your stuff, but also to engage your customers or potential customers.

As you can see there are lots of things to tweet about, but it should all follow a well-laid out plan. Here are a few pointers to keep in mind when tweeting:

• Do not tweet too much. While there is no hard and fast rules about quantity, I think a handful of tweets per day (maybe 3-10) is more then sufficient.
• While you do not have to tweet about ALL of the above topics, do not limit your tweets to only a couple of topics. Try to mix it up and keep topics diverse and interesting. Also, test out different topics/approaches to see what works best.
• Try to engage your customers. Ask questions, solicit feedback.
• Try to @reply to as many questions/comments directed to you as possible. It is not required that you reply to every message, but try to as much as possible.
• Any conversation that does not need to be shared with everyone should be moved to Direct Messages or E-mail.
• HAVE FUN!! Tweeting is supposed to be fun, personal, casual, and impromptu. Sharing, engaging, and teaching is one of the most effective ways to market your products/services.

[www.rickboretsky.com]