WWTT? La-Z-Boy Campaign Offers Comfort and Thanks to Healthcare Workers

If you’re a bit of a YouTube watcher, or a fan of The Office, you may have heard about “Some Good News,” hosted by John Krasinski. So in that vein, here is some more excellent news, along the lines of a new La-Z-Boy campaign that combines a considerate donation with some heartfelt user-generated content.

If you’re a bit of a YouTube watcher like me, or a fan of The Office, you may have heard about “Some Good News,” hosted by John Krasinski. If not, watch through some episodes, and take joy that there is still plenty of good in the world. So, in a similar vein to SGN, here is some more excellent marketing news, along the lines of a new La-Z-Boy campaign that combines a considerate donation with some heartfelt user-generated content.

To offer some physical comfort to healthcare workers, La-Z-Boy is donating $1 million worth of furniture to frontline nurses. According to the furniture retailer’s CMO, Eli Winkler, the company is working directly with the American Nurses Association to select nurses in areas of the country most heavily impacted by COVID-19, and those individuals will be able to receive their choice of a chair, recliner, or sofa.

But the La-Z-Boy campaign doesn’t just end there. Dubbed “#OneMillionThanks,” the furniture retailer has created a microsite that encourages the public to find creative ways to thank healthcare workers — and to share those thanks on social.

#OneMillionThanks La-Z-Boy CampaignI had the opportunity to ask Winkler some questions about the La-Z-Boy campaign earlier this week, and of course my first question was about the campaign’s inspiration, and why the retailer wanted to get the public involved. Winkler responded:

“La-Z-Boy has always provided comfort to those who need it most. Frontline medical professionals have had to live without the normal comforts of home for the last while. In many cases they have had to distance themselves from their families, while also enduring an incredible amount of stress. We saw an opportunity to say ‘thanks’ in the way that we know best — by providing furniture to nurses who deserve both physical and emotional comfort.

“This is our way of showing thanks. But we wanted to create a million more ways to say ‘thank you.’ People have shown an incredible amount of creativity while at home. We wanted to harness all that creativity and generate one big “thank you” for medical professionals. A simple show of thanks goes a long way.”

Participants are encouraged to get creative with their thank yous and post to social, tagging with the hashtag #OneMillionThanks. The campaign is supported by 15 and 30 second video clips, created by creative agency RPA and supported by a digital buy.

La-Z-Boy campaign, featuring Kristen BellIt’s great that La-Z-Boy has its brand ambassador Kristen Bell participating in the project, but I feel like there’s more to this than having a Hollywood sweetheart encourage UGC.

When I look at the microsite, the impression I get (whether intentional or not) is that this campaign does more than just help healthcare workers feel good. #OneMillionThanks is also a creative exercise to help the people doing the thanking feel good, too.

Scrolling through the site, you come across myriad activity ideas to help create your thank yous, from origami heart-folding to DIY sidewalk chalk paint.

La-Z-Boy campaign ideas for showing thanksDespite the fact that these activities are geared toward creating thank yous for healthcare workers, at the end of the day they’re also great activities for individuals, couples, and families to work on while under quarantine — whether they’re creating a thank you or something else. I’m certain the DIY sidewalk chalk paint instructions will be put to use for many more projects down the road, and perhaps the origami heart folding will inspire people to look deeper into the Japanese art form as way to de-stress and be creative in general.

Practicing the act of gratitude is a great way to improve your mental health and well-being … something I’m sure we could all use a bit more of nowadays. And while the #OneMillionThanks La-Z-Boy campaign probably wasn’t aiming for this, I’m glad that by asking people to create thankful content, La-Z-Boy is helping us all be a little more creative and gracious.

Speaking of practicing the art of gratitude, one of my and favorite authors and YouTube personalities, John Green created a wonderful Vlogbrothers video about it, as well as gratitude journaling. I highly recommend giving it a watch — once you’ve finished making your own #OneMillionThanks post.

Marketers, tell me what you think about this campaign, how you’re practicing creativity and gratitude, or anything else on your mind in the comments below!

WWTT? Walmart Learns Important Lesson About Third-Party Sellers This Holiday Season

I’m not sure when Ugly Christmas Sweaters became a thing, but they seem to show up regularly each holiday season, spurred by Ugly Christmas Sweater parties and people who enjoy making poor fashion decisions. However, it seems this trend has gone awry for Walmart Canada.

I’m not sure when Ugly Christmas Sweaters became a thing, but they seem to show up regularly each holiday season, spurred by Ugly Christmas Sweater parties and  people who enjoy making poor fashion decisions. However, it seems that what used to be ironic sweater-wearing has turned into shock-value sweater-wearing for some individuals, and there are sellers out there who will gladly cash in on that trend. And so we have the recent problem that Walmart Canada faced when a number of highly inappropriate Ugly Christmas Sweaters were made available for purchase on walmart.ca by one of the third-party sellers, Fun Wear, that sells its merchandise on the site.

The sweater that has caused the most uproar features a bug-eyed Santa Claus in front of a table with three lines of a white substance, with the words “Let It Snow” below. Okay, so not great. But then it gets way worse.

https://twitter.com/HurrbaSousJohn/status/1203353309396029440?

Unfortunately for Walmart, this is more than an embarrassment for selling something tacky and enduring some snickering from the Internet. The product description, partially seen in the tweet above, is particularly problematic:

“We all know how snow works. It’s white, powdery and the best snow comes straight from South America. That’s bad news for jolly old St. Nick, who lives far away in the North Pole. That’s why Santa really likes to savor the moment when he gets his hands on some quality, grade A, Colombian snow. He packs it in perfect lines on his coffee table and then takes a big whiff to smell the high quality aroma of the snow. It’s exactly what he needs to get inspired for Christmas Eve.”

On Saturday, Dec. 7, Walmart Canada removed the product, and issued an apology. A spokesperson provided the following quote to Business Insider:

“These sweaters, sold by a third-party seller on Walmart.ca (our website in Canada), do not represent Walmart’s values and have no place on our website. We have removed these products from our marketplace. We apologize for any unintended offense this may have caused. These sweaters were not offered on Walmart.com in the US.”

Despite the removal of the product and the apology, the reference of “Colombian snow” has the National Agency for the Legal Defense of the State in Colombia prepared to sue. According to the Washington Post and El Tiempo, on Dec. 10 the agency stated that Walmart’s apology about the product from a third-party seller on Walmart.ca was not enough. Agency director Camilo Gómez Alzate provided this statement to El Tiempo, reported by the Washington Post:

“The Walmart sweater is an offense to the country. It generates damage to the legal products of Colombia and damage to the country’s reputation. Although Walmart apologized, the damage was done.”

So the lesson to be learned here: third-party sellers may expand the amount of business you do and the revenue you pull in, but you can’t always trust that their products will be in line with your company’s values. This was not the only Ugly Christmas Sweater that Fun Wear had up on Walmart Canada’s site … and the majority of them were in rather poor taste.

While Walmart may have policies in place to limit undesirable products from third-party sellers, it’s clear these policies are either difficult to enforce or they’re not being enforced. The consequence of losing customers over this is one thing, but having Colombia’s National Agency for the Legal Defense of the State sue if appropriate reparations aren’t made is an even bigger problem for the retailer.

What do you think marketers? Is it worth it to have third-party sellers offer their products on your sites, checked or unchecked, or are issues like this enough of a reason to avoid third-party relationships? Oh, and yes, Amazon is selling products with similar and identical designs.

 

Rihanna and Amazon — Marketing Perfectly Together

Rihanna’s second Savage X Fenty lingerie show will be a highlight of New York Fashion Week, with its inclusive line-up of models representing all body types. Last year’s show was available to anyone on YouTube. But “this year’s Savage X Fenty Show will be available to stream exclusively on Amazon Prime Video.”

Rihanna’s second Savage X Fenty lingerie show will be a highlight of New York Fashion Week, with its inclusive line-up of models representing all body types.

Last year’s show was available to anyone on YouTube. But “this year’s Savage X Fenty Show will be available to stream exclusively on Amazon Prime Video in more than 200 countries and territories worldwide, beginning Friday, September 20,” according to Deadline.

So why limit access to the 100 million Amazon Prime members, instead of letting anyone view the show?

It’s a win for Rihanna, because those 100 million Prime members are excellent e-commerce prospects. Why not take advantage of their ability to shop the new collection and buy with a single click? And it’s a win for Amazon, which iis interested in making further forays into the fashion world as traditional department store retail sales wane.

Wired reports:

“Amazon isn’t exactly the most stylish place to shop for clothes. Most of its top-selling women’s fashion items are simple pieces: easy dresses, spandex workout gear, socks, and underwear — a lot of it from brands you’ve probably never heard of … Now, Amazon is experimenting to attract a new, more fashionable segment of consumers: social media influencers and the people who love to follow them.”

With 93 million Twitter followers (fourth highest), Rihanna certainly fits that bill.

What’s more, Rihanna can expect to benefit from Amazon’s targeting capabilities. Who’s purchased similar lingerie lines? Who’s purchased Rihanna make-up, perfume, clothing, and music in the past? Who are the big spenders? What else have they bought? When are they likely to buy?

Dazed writes:

“The Amazon Prime stream will include behind-the-scenes footage of the show and the making of the collection, allowing us a peak into Rihanna’s creation of an inclusive lingerie brand for all women.

“What can we expect from the lingerie brand’s second show? Last year, a diverse group of models hit the runway, while a heavily pregnant Slick Woods walked the catwalk in nothing but pasties and a bodysuit. No bombshell bras and mermaid hair here.”

DTC Brands — How Data Fluency Enabled a Digital Disruption

My small apartment building’s lobby is a testament to these changing behaviors — there’s barely any room for the incoming DTC brands and related subscription economy shipments, daily. UPS, Amazon, FedEx and USPS — and their contractor networks — are delivering the goods that pile up. No drones just yet.

One of the entrepreneurial wonders of the 21st Century economy is actually not a very new concept at all. Direct-to-the-consumer (DTC) brands have been around since the first mail-order catalogues. Names such as LLBean, Orvis and Lands’ End revolutionized remote selling, as they understood the power of data and measurement in building these enterprises, by earning customer loyalty through superior products and customer service, and generating lifetime value.

So perhaps it’s only natural that in an increasingly digital, social and mobile world where data enables such direct connections more fluidly and products can be personalized at-scale DTC startups would come to be powerful brands in their own right. Bonobos, Casper and hundreds of others are rising to disrupt consumption and create new patterns of consumer behavior for even the most everyday product. Just this week, Rent the Runway officially became the newest unicorn in the venture capital investment world.

My small apartment building’s lobby is a testament to these changing behaviors there’s barely any room for the incoming DTC and related subscription economy shipments, daily. UPS, Amazon, FedEx and USPS  and their contractor networks  are delivering the goods that pile up. No drones just yet.

If You Can’t Beat Them …

Most retailers today report that their biggest threat comes from DTC brands (see Figure 1). Yes, Amazon and private labels also are leading concerns … but the truth is that building a business with seamless data flows enables the customer, and not the product, to be front-and-center. Brands that embrace customer-centricity, and have the customer data directly, cull the benefits.

Figure 1.

DTC brands
Credit: eMarketer, 2019. Used with Permission.

When database marketing and customer relationship management came of age, we knew that pesky problems such as data silos, legacy systems, senior executive buy-in and lack of data bench strength were crippling. Where entrepreneurs love data and have great products and service, those hurdles don’t exist.

No wonder traditional brands are quickly starting up or buying their own DTC brands and relationships. There’s power in data, and having first-party data relationships with consumers even as third-party data, and perhaps a few social influencers, enable discovery and facilitate connection – has brought about the mail-order bonanza of the digital age.

Physical retailers are not powerless in this mix after all, point-of-sale transactions still rule, and hybrids are flourishing (online to offline, buy online pick up in store). It’s how quickly these stores can integrate POS and transaction data with other forms of advertising data, and even serve as data-sharing coops with the brands they carry, to serve customers better. It’s about more relevance and more personalization. We haven’t heard the last roar from Main Street, Big Box and shopping malls. They’ll need to tap data’s power in similar fashion to go back on offense.

5 Multichannel Video Marketing Tactics to Engage Holiday Shoppers

Utilizing a multi-pronged holiday video marketing approach enables marketers to take their seasonal performance to the next level by increasing visibility through social media platforms and search, while also boosting the brand’s and its products’ popularity among shoppers during the critical holiday season.

It’s the time of year again for marketers to kick their holiday marketing efforts into high gear. As consumer buying behaviors and media consumption continue to change, it’s crucial for marketers to understand that shoppers increasingly use a variety of channels to find inspiration and make purchases, and therefore marketers must align their messaging across channels to effectively engage customers at optimal touchpoints along their purchase journey. Once they grasp the basics of these channels, marketers can start to utilize more advanced strategies as part of a holistic approach during this critical time of the year.

Among the channels consumers seek out when considering purchases, social videos have become a staple of product research and consideration. Social media marketing puts products right where consumers spend their time, and consumers expect product videos from brands, with many shoppers searching for a product video before visiting a store. Marketers often use social video ads to capture demand throughout the year, but during the holidays, they should be more proactive. By leveraging a multi-channel approach with targeting precision to be more assertive, they can take greater control in driving demand and expanding their results.

Retail marketers should consider the following tactics for developing a multi-channel holiday marketing strategy centered on social video ads to better align marketing with the customer journey.

Utilize Video Across a Variety of Social Platforms

There are many places marketers can reach their target audience, so investing holiday budgets by leveraging video ads across multiple channels generates more opportunities to create impressions and engage with shoppers.

After establishing which social channels target audiences frequent most, marketers can better determine what type of content and video ads to plan and post to offer a seamless experience between preferred platforms and capitalize on different stages of the holiday shopping experience.

Fostering Interest on Pinterest

Pinterest remains a popular destination for consumers to visually interact with brands and discover new products. With many users flocking to the platform to create lists for the holiday season and aid in their gift purchasing decisions, it’s vital for marketers to get their products and brand on the platform immediately.

The ability to showcase branded videos on the platform received a boost just in time for the holidays with the rollout of wide-format promoted video ads, driving efficient costs-per-view and lifts in brand awareness. With 67 percent of Pinterest video viewers saying videos on Pinterest inspire them to take action, there’s ample opportunity for marketers to capture interest for their products heading into the holidays.

Pinterest users’ inspiration period can start up to three months prior to an actual purchase; therefore, it’s important for marketers to reach customers early with video ads to cultivate their interest and move users toward conversion. Marketers looking to land on shoppers’ holiday radars should utilize Pinterest as a visual catalog. For example, a toy retailer could leverage video ads on the platform to reveal the hottest toys of 2018 or a clothing retailer might showcase their winter apparel line as customers look for inspiration for their holiday party attire.

Once they’ve captured interest through Pinterest video ads, marketers need to consider engaging customers by retargeting and remarketing to push their customer even further than the purchase funnel.

Tap Into the Enduring Influence of YouTube

YouTube continues to be a driving influence when it comes to making purchases, especially around the holidays, with mobile watch time for product review videos on YouTube growing each year.

As part of marketers’ holiday strategies, they should leverage YouTube TrueView followed by bumper ads to target prospective audiences and new customers. The best part is marketers only get charged when a user chooses to watch the full 30 second ad – a win, win!

Utilizing companion banners to drive click through rates (CTRs), bumper ads exist as a reminder to customers to purchase specific products. These products should be served via remarketing lists and similar audiences to maximize efficiency and reduce cost per impressions. Additionally, with Google’s mobile-first focus, these ads will serve in a format that is easily viewable for customers on-the-go.

Marketers should also consider running a brand lift study alongside these video ads to measure impact on metrics like brand awareness, ad recall and purchase intent. By doing so, marketers can tweak their strategy within the first week of results to better connect with audiences and more effectively drive results throughout the holiday season.

Leverage Facebook and Instagram for Merchandising, Not Just Branding

Aside from being among the most popular social networks, Instagram and Facebook both command a greater interaction frequency than YouTube. Undoubtedly, video ads on Facebook and Instagram serve the purpose of effectively stimulating a marketer’s target audience on highly actionable and engaged channels. On Facebook alone, views on branded or sponsored video content increased 258% in 2017, with the highest numbers generated around the holiday season as shoppers sought inspiration for gift ideas. Facebook Carousel ads are a favorite among retail marketers because they encourage consumers to interact with their ads and allow greater opportunity to showcase products through images and videos with the potential for several different calls-to-action.

Instagram also recently expanded its ad offerings to more marketers with its Collection ad units, enabling online retailers to add the Shopping Bag icon within their Stories for the holiday season. The images and videos used within the carousel display can link to the brand’s site or product pages to drive e-commerce purchases.

Targeting users that have shown an interest or interacted with holiday topics across Facebook properties should be a key consideration in marketers’ holiday strategies. Marketers can utilize dynamic product ad offerings as an effective way to get in front of new customers with specific product sets or SKUs; for example, targeting users interested in a holiday sweater, gift wrap or children’s toys, or leveraging parental or relationship targeting to hone in on those most likely to convert.

Complement Video Strategies With Highly Relevant Keywords

Driving the desired targeted traffic that converts requires a varied strategy designed for a marketer’s specific brand and product set. To capitalize on the demand social videos generate across channels, marketers should create highly-relevant holiday-specific keywords as consumers who watched a video and are searching for the brand or products by name are likely deeper within the sales funnel. Marketers should develop and expand coverage on relevant keywords that reinforce messaging from their videos to include search terms like “gift ideas,” “best,” “kids,” and “holiday deal,” along with brand and product-specific terms.

Likewise, leveraging remarketing lists for search ads with proper messaging helps ensure marketers can reach customers in their exact moment of need to foster engagement and move them through the purchase funnel with greater precision to drive better results.

Utilizing a video-centric, multi-pronged holiday marketing approach will better enable marketers to take their seasonal performance to the next level by increasing visibility through Pinterest, YouTube, social media platforms and search, while also boosting the brand’s and its products’ popularity among shoppers during the critical holiday season.

Swimming in Amazon Shopping — for the Exotic and Different

Amazon shopping is its own beast. When I moved to Brazil, any mention of “Amazon” immediately conjured up visions of this great river teeming with hungry piranhas, surrounded by nearly impenetrable jungle; one of the last truly wild places on Earth, a great place to visit. But, as the expression goes, you wouldn’t want to live there. That was 19 years ago.

Walking in the Amazon
Credit: Peter J. Rosenwald

Amazon shopping is its own beast. When I moved to Brazil, any mention of “Amazon” immediately conjured up visions of this great river teeming with hungry piranhas, surrounded by nearly impenetrable jungle; one of the last truly wild places on Earth, a great place to visit. But, as the expression goes, you wouldn’t want to live there. That was 19 years ago.

Say “Amazon” today and the 24-year-old behemoth that comes to mind is the largest online retailer in the world, a direct seller and digital marketplace with a piranha’s aggressive appetite. It is said to have chosen its name because the Amazon was “exotic” and “different.” It is both. This year, Jeff Bezos, Amazon’s founder and boss, reported that the company had achieved 100 million Amazon Prime subscribers, or 64% of households in the U.S. If any company can be said to have disrupted the retail landscape, Amazon is the one.

Swimming in Amazon
Credit: Peter J. Rosenwald

The unbroken growth of Amazon shopping worldwide demands the answer to the difficult question: which came first, a consumer desire to be able to conveniently purchase a wide range of goods with the convenience, price and choice offered online by Amazon and its principal competitors? Or Amazon’s brilliant marketing, which seduced the consumer away from brick-and-mortar retailers — even shopping malls — to the computer screen and convenient home delivery?

Amazon River
Credit: Peter J. Rosenwald

There is no doubt that sophisticated online shopping appeared at just the right moment in the digital revolution. Whether it will doom retail shopping is an open question.

A recent article in eMarketer Retail provides some clues to the direction where consumers are driving the online business model.

“According to ‘eMarketer’ forecasts, the gap between U.S. first-party sales on Amazon and third-party sales is widening. In 2017, direct sales grew 20.9% to reach $70.40 billion. By 2019, that total will climb to $95.08 billion. By comparison, marketplace sales jumped 41.4% to $129.45 billion last year. And marketplace sales are expected to log growth topping 30% this year and next. “

What is the “marketplace,” other than a digital shopping mall in your home or in your pocket? Why endure the traffic, parking problems, store clerks who frequently know less about the merchandise than you do and all of the bother that comes with it?

The answer would seem to be that consumers still find “shopping” fun, and welcome the live interaction with like humanoids. (What was that great one-liner? Christmas is the time people stop shopping and start buying things.) Last weekend, a visit to a nearby shopping mall found it teeming with happy families, kids and canines in tow, enjoying the experience.

But shouldn’t the generous loyalty programs offered by some online marketers overcome the temptation to go out and shop? It appears not always. Another recent article, also from eMarketer, said:

“Loyalty programs have a serious retention problem. Consumers are quick to sign up, but quick to forget about a loyalty program once they get their initial discount. Members, overloaded with points, miles and free shipping offers, are not necessarily consolidating purchases with one brand in order to accrue rewards.”

There is no simple answer, which is good news for resilient retailers. The many benefits of the Amazon marketplace model appear not to always outweigh the entertainment value of physical retail shopping. Social media is not really very social and you can’t buy the kids ice cream cones on your iPhone.

The piranhas may have to go hungry for a while longer.

humanoids on the Amazon
Credit: Peter J. Rosenwald

Millennial Habits on Black Friday 2015 vs. 2017

New research from Influenster shows how Millennial Black Friday and Cyber Monday shopping habits have changed. And while it’s certainly not great news for in-store retail, it’s not as big a shift as you might expect.

No shopping holiday is more old-school than the retail war zone that is Black Friday. I can remember people camping out the night before for Black Friday deals all the way back to when I was a kid — South Park even did an episode on it! Surely, if there’s one shopping experience tech-savvy, retail-resistant Millennials are going to opt-out of over time, it’s Black Friday, right?

New research from Influenster shows how Millennial Black Friday and Cyber Monday shopping habits have changed. And while it’s certainly not great news for in-store retail, it’s not as big a shift as you might expect.

Black Friday for Millennials: 2015 vs. 2017

The research, “Influenster Black Friday and Cyber Monday Millennial Shopping Survey 2015 vs. 2017,” shows a few interesting trends comparing this year’s results to results from two years ago.

For starters, slightly fewer millennials intend to participate in he combined shopping holiday of Black Friday and Cyber Monday: 89 percent vs. 93 percent in 2015.

Out of them, more still intend to shop on Black Friday than Cyber Monday, but the gap is narrowing:

Do you shop more on Black Friday
or Cyber Monday?
2015 2017
More on Black Friday 35% 32%
More on Cyber Monday 26% 30%
Equal on both days 39% 38%

However, far fewer millennials plan to shop in-store on Black Friday: 35 percent in 2017 vs. 61 percent in 2015. And 92 percent of all respondents plan to look for deals online before heading to the stores.

The survey respondents said their overall shopping plans look like this:

How do you plan on shopping this Black Friday and/or Cyber Monday? 2015 2017
Online for Black Friday and/or Cyber Monday 67% 61%
Browsing in stores, before buying online for Black Friday and/or Cyber Monday 44% 29%
In stores for Black Friday 61% 35%
Research online, before buying in stores on Black Friday 48% 40%

On the bright side for retailers, fewer millennials plan on “showrooming,” i.e. shopping on the phone for better deals while looking at the product in-store: 29 percent in 2017 vs. 44 percent in 2015. After all, why go to a store on Black Friday only to find the store you should’ve gone to online? By then, it’s probably already too late to get that doorbuster deal.

When it comes to what wins the sale, online reviews still appear to be the most powerful influencer (although, here it’s worth noting that Influenster is a company that powers online reviews). However, word of mouth has slipped slightly compared to social media:

What factors would most influence your purchase decision this Black Friday/Cyber Monday? 2015 2017
Word of mouth 53% 47%
Online reviews 72% 70%
Social media 58% 61%
Brand websites 47% 39%
News websites 12% 6%
Television 28% 15%
Newspaper 23% 9%
Magazines 24% 10%
Mail catalogues 24% 14%

Computer vs. Mobile, Website vs. App

Out of those who will shop online, there are some interesting changes in where and how. More plan to shop via mobile:

If you plan on online shopping on Black Friday and/or Cyber Mondays how would you do so? 2015 2017
On my desktop/laptop 83% 70%
On my mobile device/tablet 58% 62%

But when it comes to how they’ll prefer to order on mobile, all of the options came in lower than 2015.

If you plan on shopping on your mobile device/tablet, how would you make your purchases? 2015 2017
Through websites 95% 90%
Through apps 55% 50%
Through “buy” buttons on social media 10% 7%

It’s really time we improved that mobile ordering experience!

Holiday Favorites

And to wrap this up, when it comes to where millennials go and the brands they buy, some of the favorites appear to be shifting. Congrats to Target for holding off Amazon and Walmart to be the favorite Black Friday retailer.

Which are your favorite retailers to shop at on Black Friday and/or Cyber Monday? 2015 2017
Target 85% 71%
Amazon 70% 66%
Walmart 66% 54%
Best Buy 49% 29%
Kohl’s 47% 27%
Macy’s 41% 26%
TJ Maxx 33% 26%
JCPenney 35% 21%
Toys ‘R’ Us 36% 20%
Bed Bath and Beyond 39% 20%
Nordstrom 25% 19%
Marshalls 27% 18%
eBay 21% 10%
Dick’s Sporting Goods 17% 9%
Kmart 20% 8%
Sears 18% 7%
Home Depot 13% 7%
Neiman Marcus 8% 5%
Lord & Taylor 6% 3%

In the end, how Millennials shop may be changing, but the raw volume of commerce they’ll participate in this holiday is still staggering.

The Future of Retail Is in a Data Stream Near You

For all of the digital disruption, store closures and bankruptcies, the retail industry still has not had its transformative “moment.” While some might see a slow death through a thousand cuts, there’s really no need for such doom and gloom.

Retail
Magnificent Mile, Chicago, Nov. 13 | Credit: Chet Dalzell

For all of the digital disruption, store closures and bankruptcies, the retail industry still has not had its transformative “moment.” While some might see a slow death through a thousand cuts, there’s really no need for such doom and gloom. Unless you’re a retailer that can’t handle change.

For every piece of negative news out there, there’s a slew of innovation happening now. Even at the macro level, retailing is thriving!

First off, consumers are still shopping. Despite $1.2 trillion in student debt and $800 billion in credit card debt, the American consumer has resilience and fortitude. The National Retail Federation forecasts 3 percent-plus growth in retail spending this year.

But don’t dare measure retail health any more in year-over-year “comps” (comparable sales by store).

The metrics of success are undergoing a (sea) change — much because the customer journey is changing … rapidly. Smartphones, tablets, kiosks, websites, search… and stores — it’s all in the mix. And it’s not just Millennials who are all over the customer journey map.

To capitalize on today’s highly personalized paths to purchase, data is the currency that’s making a difference. In its most recent U.S. Retail Industry StatPack 2017 (download access), eMarketer reported:

“If I can start to take browsing history, social media history and tie that to your transaction history, I can start to do very specific segmentation … If you can master the data, you can really target customers with what they want and optimize your marketing,” said Michael Relich, COO, Crate & Barrel.

“There has been device proliferation in natural consumer shopping behavior,” said David Doctorow, head of global growth, eBay. “To serve customers well, we have to identify them no matter the device they’re interacting with us on.”

So much for CPMs and sales per square foot.

Look at these profound shifts in retail ad spending. Retail dominates U.S. digital ad spend among vertical categories, primarily because of e-commerce competition. Retail accounts for 21.9 percent of total U.S. digital ad spend, and will grow 15.8 percent this year to more than $18 billion. (Automotive and Financial Services — second- and third-ranked industries, respectively — each net around 12 percent of total U.S. digital ad spend, for comparison). Kantar reports that TV retail ad spend sits at $7 billion — digital’s nearest above-the-line neighbor.

Within digital advertising categories, tried-and-true display ads have nearly closed the gap with search — the former helped by mobile display and digital video display ads targeted to Millennials, eMarketer reports. Video is now 14.2 percent of total digital ad spend among retailers, and more than half of this spend is purchased directly with premium video sites. Meanwhile, programmatic ad spend is driven by retailer spending on social media: Facebook, Instagram and elsewhere, though brands reportedly are cautiously guarding where their ads appear — turning to “private, one-to-one setups to buy high-quality inventory.”

Search ads, as one might guess, prevail in retail’s mobile ad spend, as consumers conduct price comparisons and look for product reviews and recommendations while in-store.

And what of Amazon, the so-called retail killer? On the contrary, Amazon (and other marketplace platforms, such as Walmart) “storefronts” may prove a survival mechanism for many stores — though don’t expect that highly sought path-to-purchase data to find its way back to the retail brand. Data usually is not shared outside the “walled garden.” According to retail consultant Ryan Craver, speaking recently at Marketing Idea eXchange, half of Amazon’s U.S. product sales are now sold through third-party vendors (storefronts).

Yes, there’s more to today’s and tomorrow’s retail story than data-driven targeting and marketing … yes, physical stores need to be destinations, malls need to be destinations, retail may need to entertain, etc. But mass marketing is scaling to 1:1 personalization, anonymized or other, through data. Recognize that customer well, she will reward you. Sounds a lot like the 19th Century shopkeeper, virtually yours.

Amazon Accused of ‘Surge Pricing,’ Misleading Consumers During Prime Day

According to a recent report, a vendor who sells direct through Amazon has stepped forward to accuse the e-commerce giant of misleading business practices. Specifically, the vendor said that Amazon jacked up the suggested retail price of its product on Prime Day 2017 to make it seem like the discount consumers were getting was far better than it actually was.

According to a recent report, a vendor who sells direct through Amazon has stepped forward to accuse the e-commerce giant of misleading business practices. Specifically, the vendor said that Amazon jacked up the suggested retail price of its product on Prime Day 2017 to make it seem like the discount consumers were getting was far better than it actually was.

In the report, Jason Jacobs, founder of Remodeez — a company that makes nontoxic foot deodorizers and other odor-defense products — said he’s been doing business with Amazon since 2015 and has an agreement with the company that lists his product with a suggested retail price of $9.99. However, he found that on Prime Day, that price was nearly doubled.

“They showed the product at $15.42 and then exed it out to put ‘$9.99 for Amazon Prime Day,’” Jacobs told FOX Business. “And on the final day, the price was like $18.44. So, we put a support ticket in right away and I rallied some friends through social media to go to their complaint board and complain.”

Credit: FOX Business by Remodeez

Jacobs said the suggested price came back down to $9.99 the following day, but a little more digging showed that this wasn’t the first time Amazon did this to this product. Over the past year, Jacobs found that the suggested price of the product had been bumped up on two different occasions to more than $15. Important to note, Amazon’s agreement with Remodeez does enable it (Amazon) to set its own pricing as it sees fit.

Jacobs noticed that each time the price was increased over the past year, it correlated with media attention directed at its product. That coverage, in BuzzFeed on numerous occasions and in Forbes, led to an increase in demand for the product and, as it turns out, an increase in the suggested retail price. And those increases, according to Jacobs, caused sales to tank.

“It’s not like they’re bumping it by a buck and making a little bit more money,” he said. “They are really tanking sales and it kind of has a ripple effect to us, being a small company trying to do demand planning.”

Dynamic Surge Pricing

This kind of business practice from retailers isn’t uncommon. In fact, dynamic surge pricing — where retailers quickly change the price of products based on data-driven algorithms that look at things like demand, inventory and competitors’ prices — is a hot trend in the industry.

Think of it like surge pricing on an app like Uber. Though it did get out of hand and cause quite a controversy at one point (because of a screwy algorithm), Uber’s surge pricing is designed to enable the cost of a ride to reflect the current level of demand at any particular point in time.

It’s a practice that could make sense if executed correctly at retail. But without proper explanation to the customer, it more or less reads as a shady business practice. And the Federal Trade Commission keeps an eye out for that type of misleading sales information. Its recommendation is to make an item available at “list price on a regular basis for a reasonably substantial period of time” before setting a sale price. If a retailer appears to be veering away from that recommendation, the FTC can go after it.

Customer-Centric?

And that’s the case right now with Amazon. As part of its review of the company’s agreement to buy Whole Foods, the FTC is reportedly looking into whether the discounts that Amazon offers are actually as good as they seem to be. The FTC’s interest, more specifically, stems from a Consumer Watchdog complaint. In a report published in early July, the organization claimed that Amazon “routinely uses inflated and fictitious previous prices” to offer misleading discounts.

Not the kind of thing you expect from a company that claims right there in its mission statement that it puts the customer first…

Amazon refuted the Consumer Watchdog report, calling the study “deeply flawed” and based on incomplete data and improper assumptions. “The conclusions the Consumer Watchdog group reached are flat-out wrong,” the company said in a statement. “We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”

And in response to the vendor accusations reported by FOX Business, Amazon said “Our customers expect to come to Amazon and find the lowest prices and we work hard to meet or beat them for all customers, across our entire retail selection. The world’s prices fluctuate all the time and we seek to match the lowest price.”

The Effectiveness of Pop-Up Shops and Partnerships

During a recent visit to New York City, I passed through Grand Central Station. There, I saw a hotbed of shopping activity: A section of Grand Central had been converted into a series of pop-up shops. What had happened to the retail bust?

Group of friends sitting outdoors with shopping bags - Several people holding smartphones and tablets - Concepts about lifestyle,shopping,technology and friendshipDuring a recent visit to New York City, I passed through Grand Central Station. There, I saw a hotbed of shopping activity: A section of Grand Central had been converted into a series of pop-up shops. What had happened to the retail bust?

The small pop-ups were doing a brisk business, selling everything from jewelry to men’s toiletries to candles. The shops were small, but had tons of personality. The experience was interactive and fun.

This was not an isolated incident. Pop-up shops are making their presence felt across the retail industry. The concept is not new — bazaars and flea markets have existed for many years. But lately, pop-up stores have become ubiquitous in everything from restaurants to rock festivals.

They are used by online retailers who are looking to experiment within the bricks-and-mortar space, and by chain stores who want to experiment with new locations and venues. Fashion retailer Nordstrom has launched pop-ups at music festivals that offer products and feature photo booths.

According to PopUp Republic, a service provider to the pop-up retail industry, pop-up shops have grown into a $50 billion industry and expected to grow further in 2017.

Why do retailers invest in pop-ups? Smaller retailers or Internet start-ups can launch a low-cost shop to test the waters without a significant time or money commitment. A new bricks-and-mortar retail storefront can cost tens of thousands of dollars to launch and often requires a lease of at least five years.

With a pop-up shop, the commitment can be a matter of months, with an investment of a few thousand dollars. And consumers seem to love it. They can touch and feel the merchandise and get to know the creator or store owner. The interaction often results in a loyal following. According to pop-up expert, The Lion’esque Group, one international foods and goods marketplace increased their e-commerce traffic by 300 percent through pop-ups.

Another growing retail concept is the store-within-a-store. Large retailers have been partnering with smaller businesses to set up areas within their stores for a differentiated experience for the shopper. Macy’s announced a partnership with beGlammed to provide at-home grooming and makeup services, and Neiman Marcus recently announced a partnership with Le Metier de Beaute to provide services such as manicures and blowouts at affordable prices.

Plus, JCPenney has had a partnership with Sephora for years, providing a cute area within the store where shoppers can purchase cosmetics and get quick makeovers. In its 1st Quarter Earnings call, JCPenney mentioned Sephora as one of the areas in the store with positive comp store sales and there are plans to add 16 new Sephora locations in June. These partnerships fulfill the goal of the retailer to pull in a different customer set, while also fulfilling the desire for a quick, differentiated experience for the customer.

For retailers who want to test the waters with a low-cost concept, partnering with another retailer or setting up a pop-up shop may be a viable solution. And for the customer, it provides a new, interactive shopping experience.

Next time you’re in Grand Central during the holiday season, check out the shopping arcade. It may be a nice place to pick up that unique gift or chat with a person who makes hand knit scarves by hand.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial.