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NRF 102: Sunday Takeaways
By Jessica Binns, Contributing Editor
NRF's 102nd annual Big Show kicked off in New York City's Javits Center on Sunday, Jan. 13 with more than 25,000 attendees expected over the course of the conference and 500 exhibitors showing off game-changing retail technology solutions. Catch up on key insights from day one.
What are retailers' top digital priorities in the coming year? Although designing for mobile and tablet gets all the buzz, with 26 of about 60 retailers indicating mobile as an imperative, 31 merchant respondents to a Forrester Research survey are focusing on bread-and-butter issues such as site conversion. Another 16 are working on site redesign and 15 say they're putting their efforts into establishing multichannel operations, according to Forrester principal analyst Sucharita Mulpuru. What retailers are doing around mobile, she says, is less focused just on apps but more about analytics, conversion and ensuring a mobile-optimized website.
Despite the proliferation of new touchpoints, most (67 percent) new customers arrive at a brand or retailer via one touchpoint and 33 percent arrive via two.
Retailers looking for ways to improve their business should go after "low-hanging fruit" such as email marketing and list segmentation, says Mulpuru, and give customers a way to "opt down" in the number of emails they receive.
Eye on Amazon
Whatever Amazon has up its sleeve will keep retailers up at night, Mulpuru says, adding that the ecommerce giant has single-handedly put the retail industry in check.
Amazon's announcement of its impending same-day service has spurred others to test similar systems. Walmart piloted a same-day program during the holidays, and startups such as Suddenlee offer next-day service in the northeastern U.S. But Mulpuru says same-day delivery is an expensive investment that consumers don't necessarily want. Instead, smart retailers are taking their second-most-powerful asset — ecommerce — and aligning it to support the valuable bricks-and-mortar channel, explains Mulpuru.
Intriguingly, "Socialnomics" author Erik Qualman believes Amazon just might let consumers shop the shelves on the new crop of local distribution centers that are enabling its much-discussed same-day delivery service.
Price-matching is table stakes
Nearly one-third (32 percent) of consumers intend to do more showrooming in the future, with 47 percent of men ages 18-34 planning to use their mobile devices in physical stores more often. The best way to combat and leverage the showrooming phenomenon is to offer price matching, which 57 percent of consumers expect, and which Mulpuru describes as "table stakes." And while showrooming happens most frequently with electronics and tech devices, grocery and apparel round out the top three categories that consumers are price-checking with their smartphones and tablets.
In an IBM Retail consumer research survey, 35 percent of shoppers say they're unsure about where they will make their next purchase -- online vs. in store -- while 9 percent plan to abandon bricks-and-mortar altogether. These abandoners are the desirable, affluent 18- to 34-year-olds that marketers covet most. While 56 percent definitely plan to buy in store, these respondents are mostly "old people," says IBM's Jill Puleri.
Social, mobile and all that jazz
Forget social commerce and mobile commerce: expect to hear more about curated commerce, distributed commerce and crowdsourced commerce going forward.
From mobile to social to cloud and more, Gartner says the industry is facing a "nexus of forces" like nothing seen before.
HSN's Mindy Grossman says retailers need to create experiences, not just transactions. Social responsibility has become a business imperative, she adds. Retailers that don't respond to the showrooming phenomenon are akin to the music industry ignoring the digital downloading revolution, Grossman adds.
Socialnomics is "word of mouth on digital steroids," says Qualman. "If content is king, culture is checkmate," he adds. Companies should strive to be "flawsome" and turn their flaws and errors into something positive. For example, after the American Red Cross took an employee's tweet about drinking with her boyfriend (that she meant to send from her personal account) and responded with a tongue-in-cheek tweet to its followers about drinking and driving, donations went up, and the beer brand mentioned in the original offending tweet encouraged its fans to donate a pint of blood instead of buying a pint of its beer. "There's always a social play no matter what you're doing," Qualman says.
Retailers increasingly start their web design with mobile in mind and trickle down from there.
Pinterest drives more traffic than Twitter and can sometimes take the place of a traditional search engine when, for example, a consumer is searching for a gift idea.
Multichannel shoppers are more valuable shoppers. Walgreens customers who interacted via its store and online channels are 3.5 times more than those who purchase via store only; those shopping in the store and on mobile are 4 times more valuable; and consumers using store, online and mobile are 6 times more valuable, the retailer found.
When expanding into new markets, do your research but beware preconceived notions about the local culture. Spanish fast-fashion chain Mango, which operates in 110 countries, originally didn't manufacture size 0 clothes for its expansion into the U.S. because the company thought Americans just wore larger sizes. José Gómez, the retailer's senior vice president of business development, says the company missed out on some sales during that time. And Mango, which creates special, more conservative collections for Arab countries, found that Iraqi women didn't want the more covered-up styles; they clamored for Mango's mainstream fashions.
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