ARE WE EXPERIENCING “Retail APOCALYPSE”? |
 | Now if that isn’t just plain scary, we’ve all heard and read the headline from the New York Times and in the furniture magazines that should make all of our industry start convulsing; Amazon’s Ambitions Unboxed: Stores for Furniture, Appliances and More The article was quoted as saying; |
“The company is exploring the idea of creating stores to sell furniture and home appliances, like refrigerators — the kinds of products that shoppers are reluctant to buy over the internet sight unseen, said one of several people with knowledge of the discussions who, in conversations with The New York Times, spoke on condition of anonymity because the plans were confidential. The stores would serve as showcases where people could view the items in person, with orders being delivered to their homes”.
And here is the holy grail of the article
“These would not be your average Home Depots: Amazon has considered using forms of augmented or virtual reality to allow people to see how couches, stoves, and credenzas will look in their homes”, the person briefed on the discussions said.
| Yep, Amazon will focus on using TECHNOLOGY to enhance the shopping experience to show more and sell more, something that is more foreign in our industry, than not, and probably one of the reasons our industry is contracting by over 20,000 retail fronts in the last 10 years. With the advent of “Outsiders” entering our industry, companies like KPS Partners buying Heritage Home Brands, Bain Capital buying Bob’s, Thomas H. Lee Partners buying Art Van and so on, they have all recognized one critical shortcoming of our industry; the reluctance of furniture retailers to understand and adapt technology to drive traffic, improve merchandising/store experience and to close more sales in their brick and mortar store. These companies know instinctively that by investing in technology, they can grow their footprint at the expense of those that do not … |  |
Thus THE RETAIL APOCALYPSE for our smaller and medium sized B & M retailers unless they embrace technology NOW
Technology can save this from happenning
First some background. Take for instance an article I read over the weekend;
http://losspreventionmedia.com/insider/retail-industry/do-retailers-need-to-increase-foot-traffic/
http://losspreventionmedia.com/insider/retail-industry/do-retailers-need-to-increase-foot-traffic/
Do Retailers Need to Increase Foot Traffic?
Retail statistics show that store foot traffic is declining in 2016.
By Mark Ryski of LPM Insider
It’s a must read for retailers
Here are a couple quotes from the article that retailers MUST read and learn from;
Store Traffic and Sales: Correlation vs. Causation
All retailers know that store traffic and store sales are connected. But store traffic is only one piece of the retail sales puzzle. While store traffic and sales are correlated, a decline in store traffic does not necessarily cause lower sales.
Retailers that don’t have traffic count data are literally flying blind. Or worse, they use sales transaction counts as a proxy for store traffic so they think they know what their store traffic is when they actually do not.
Transaction Counts vs. Traffic Counts
There is a profound difference between transaction counts and traffic counts. It’s mind-boggling to me that, in the data-savvy world we live in today, many of those in the retail industry still do not get this simple concept.
Store traffic is a measure of all the people who visit the store, including buyers and non-buyers. Transactions only account for the number of buyers.
Using transaction counts as a proxy for store traffic will lead to wrong conclusions; wrong conclusions lead to bad decisions; bad decisions lead to poor results. It’s wrong and reckless.
Store Traffic and Sales: Correlation vs. Causation
All retailers know that store traffic and store sales are connected. But store traffic is only one piece of the retail sales puzzle. While store traffic and sales are correlated, a decline in store traffic does not necessarily cause lower sales.
Retailers that don’t have traffic count data are literally flying blind. Or worse, they use sales transaction counts as a proxy for store traffic so they think they know what their store traffic is when they actually do not.
Transaction Counts vs. Traffic Counts
There is a profound difference between transaction counts and traffic counts. It’s mind-boggling to me that, in the data-savvy world we live in today, many of those in the retail industry still do not get this simple concept.
Store traffic is a measure of all the people who visit the store, including buyers and non-buyers. Transactions only account for the number of buyers.
Using transaction counts as a proxy for store traffic will lead to wrong conclusions; wrong conclusions lead to bad decisions; bad decisions lead to poor results. It’s wrong and reckless.
Five Things Retailers Need to Do to Thrive in a Declining Store Traffic World
|  |
3. Focus your store and district managers on driving conversion and average sale. Store/district managers cannot control or increase foot traffic, but they absolutely influence conversion and average sale values. Provide your managers with easy-to-digest insights on traffic/conversion/average sale results, train them on what to do with the insights and then hold them accountable for results.
4. Stop understaffing your stores. What’s the point of driving traffic to the store if you don’t have enough staff to service it? Make rational allocations of labor for each store based on the traffic volume it receives. Establish optimal staff to traffic ratios and then staff accordingly.
5. Rationalize your store base. Review long-term traffic trends and conversion/average sale productivity of every store. If you have stores that have significantly less traffic opportunities, either invest marketing dollars to try to drive up traffic, or close the store. High productivity won’t matter if you have no traffic.
If you follow Furniture Today Magazine, they just wrote about this subject and quoted two retailers, Jerome’s & Ben Streiff an Ashley HomeStores licensee who have just implemented a product by iConnect Group’ VISYLITICS;
4. Stop understaffing your stores. What’s the point of driving traffic to the store if you don’t have enough staff to service it? Make rational allocations of labor for each store based on the traffic volume it receives. Establish optimal staff to traffic ratios and then staff accordingly.
5. Rationalize your store base. Review long-term traffic trends and conversion/average sale productivity of every store. If you have stores that have significantly less traffic opportunities, either invest marketing dollars to try to drive up traffic, or close the store. High productivity won’t matter if you have no traffic.
If you follow Furniture Today Magazine, they just wrote about this subject and quoted two retailers, Jerome’s & Ben Streiff an Ashley HomeStores licensee who have just implemented a product by iConnect Group’ VISYLITICS;
 | But store counts are not enough to level the playing field in-store. You must integrate technology into everything you do to get accurate/real time reports concerning all your business information, so you can make informed decisions on;
|
- .Measure Sales & Deliveries across the enterprise
- Measure benchmarks for store, products, vendors
- Several reports to measure individual sales performance, compare stores, train sales people to be more effective.
To do all this you need business intelligence solution where you can see everything on a single dashboard with visual “triggers”, not endless excel reports that must be reviewed and could take days to decipher. This is another technology solution offered by iConnect Group that should be reviewed and per their website, it doesn’t cost a lot of money to set up and manage your customized information.
To do all this you need business intelligence solution where you can see everything on a single dashboard with visual “triggers”, not endless excel reports that must be reviewed and could take days to decipher. This is another technology solution offered by iConnect Group that should be reviewed and per their website, it doesn’t cost a lot of money to set up and manage your customized information
And they guarantee their accuracy, too with free trials and a money back guarantee based off agreed upon expectations! WHY would you not try this?
Put it this way; You don’t know what you don’t know. Knowledge is power, and the lack of knowledge leads to irrelevance.
But the use of new technology doesn’t end here, there are so many other tools that retailers can implement, such as;
But the use of new technology doesn’t end here, there are so many other tools that retailers can implement, such as;
Artificial Intelligence
Out of Store On Your Website -
AND In-Store Showing More To Sell More
 | Why does Amazon dominate? Two of many reasons: content and artificial intelligence. They have over 110,000,000 pages indexed on their website which translates into consumers being able to find unique stuff that they want – not the commoditized stuff large retailers decide that you want and push out everywhere. That’s a key reason why so many national retailers are crashing. Commoditizing everything and probably guessing at that, too. An endless aisle of products on your website. Sure, it may cost you a few hundred dollars/month more to add 100M SKU’s, - everything you have open to buy, but ask yourself, by not showing an endless aisle, how many consumers ASSUME you don’t have what they want and go elsewhere to buy? Maybe Wayfair, Amazon, Overstock all of whom have millions and millions of SKU’s for consumers to find and buy what THEY want. They are all growing their furniture sales in double digits … at YOUR expense! |
This brings me to my second technology company that “gets it” and you should too –
THINKDEEP.LY
http://www.thinkdeeply.com/
A robust and intuitive imaging sort system embedded into your website that shows “similar” products automatically. This allows you to show the consumer all the similar product images on one page of the product image sort, without them having to try and hunt them down inside your website. This increases “time on site”, conversions and more.
Just the concept of AI scares the small and medium retailers because they perceive it’s too complicated or expensive, IT’S NOT. An example in the home furnishings category is a new company ThinkDeeply whose solution is a few lines of code embedded on product category pages.
Just the concept of AI scares the small and medium retailers because they perceive it’s too complicated or expensive, IT’S NOT. An example in the home furnishings category is a new company ThinkDeeply whose solution is a few lines of code embedded on product category pages.
- Increases Engagement by 5X
- Increases Conversion by 3X
- Lower Data Maintenance Costs
- Average Cart Performance Item Value Increased up to 40%
HERE'S HOW IT WORKS, FOR FURNITURE, LIGHTING, RUGS & ACCESSORIES
| The research firm MarketingSherpa undertook an extended study encompassing 1.5 billion shopping sessions during the second quarter of 2015. The study found that on the whole, 11.5% of the revenue (whether from more volume or higher value of products) generated in the shopping sessions was attributable to purchases from the product recommendations. A study published by Barilliance states that up to 31% of ecommerce site revenues were generated from personalized product recommendations during the last quarter of 2014. Why would anyone not try this? The numbers are proven. AI is everywhere, your Smartphone, websites, Siri, Google Home, etc. WHY, simple: Technology is retail's savior. It can help you show more, tell more, and SELL MORE. Stop thinking and start doing! Technology is retail's savior. It can help you show more, tell more, and SELL MORE. Stop thinking and start doing! How much will implementing technology into your day to day business save you, NOT cost you? |  |
Your Choice ... TECHNOLOGY
OR “RETAIL-APOCALYPSE”
Visit our technology section on www.social4retail.com/technologies for more technologies that can help your brick and mortar business.
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About Bill Napier
Bill Napier is Managing Partner of Napier Marketing Group. He has been the chief marketing officer of several small, medium and large companies throughout his career, most notably Ashley Furniture Industries Inc.
Many in the home furnishings industry call him an industry serial disrupter. "His thought provoking blog will challenge conventional wisdom, look under the industry’s hood and seek to uncover the critical clues to improving its performance".
Bill is also a featured writer and speaker in the retail industry. His vast understanding of the issues retailers and brands face competing in the digital arena, coupled with his humorous interpretation of his knowledge of trends, facts, and solutions for helping companies compete, makes for an engaging and informative session for every brand or retailer that attends his sessions.
His passion is to help retail brands & brick mortar retailers grow their business by creating, guiding and deploying successful marketing B2B/B2C solutions integrating traditional marketing with the web/social media.
You can see his passion for this at his FREE marketing information website; www.social4retail.com
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