Monday, May 31, 2010

Consumer Experience Always Matters

Sometimes we get caught up—caught up in our busy lives, in our desire to solve problems or to take advantage of opportunities.  Stepping back and taking perspective is good, doing it on a regular and productive basis is tough.  It’s interesting what jolts you out of your focus.

 

Recently I was organizing our archives (read: moving old piles of stuff around to get to the stuff we needed to get rid of) and came across a piece I wrote in 1995 for a newsletter for the retail design firm I worked for at the time. I nostalgically read through this and a few others, fully expecting to be embarrassed and shove them back in the box.  I was delighted to see, while dated—remember Incredible Universe?—the core ideas are still relevant (while the writing is a bit

 clunky). 

 

We have a different perspective on what’s important now, but in the end, it’s the experience that matters.  Read below and let me know what you think.

 

Remember Incredible Universe?  Customers had to be members—it was complicated and we stayed away in droves.

 

As we enter the last half of the last decade of the present millennium, how can we not look forward?  Much has been written, spoken, and videoed and typed about entertainment retail.  At the root of this is something that has been true from the beginning: the buying public wants to be engaged.  They want to be wow-ed.  Even when buying trends ebb and flow from value pricing to the highest levels of customer service or one-stop convenience, there is a common thread: engagement.

 

The customer wants to be engaged in the activity.  At one time it was the stained glass or mosaic domes of the grand palaces of retail, then it became the convenient suburban mall that soon offered the budge basement and good costume jewelry that captured the consumers’ imagination and wallet.

 

Then advent of specialty retailing illustrated what the customer was looking for: an engaging environment where the merchandise was of high quality and service was impeccable.  (Meanwhile, department stores were struggling to find direction.)  Next came the warehouse clubs, hypermarkets, superstores and category killers; customers sacrificed environment for another kind of engagement: the perception of dirt-cheap prices.  During the 80s hangover that was the recession-ridden early 90s, who didn’t hear a story about buying a case of paper towels for $5.48 or a 5lb. box of pasta for $3.28 (and those were prices before the member discount!)?

 

As our population ages and becomes more marketing savvy, the challenge to retrial is to five the consumer a substantial experience.  This takes the idea of value-added to the next level.  The value added in this case is that of a transaction that results in the consumer feeling better than they did before they walked into your store.  This is not all that new; it is just being applied in a different way. 

 

Well, here we are and now the superstores are taking a cue from the specialty stores.  Galyan’s Trading Company and Incredible Universe both use product and presentation elements to engage their customer. The climbing wall and new tech showcase invite customers to participate in the store environment.  Not just be entertained by it.

 

So, now we have 100,000 square foot stores with ambience, quality merchandise and service.  Sounds like the palaces of a century ago.  You see, the customer hasn’t changed; they are just a bit more focused.

 

Ok, it was a bit amateurish, but as I look back, the cycles are there, almost predictable, but I think what’s most important is that even when hit with BIG recessions, we all still want to be engaged.

Posted via email from ConsumerX: cXChuck's Stuff

Sunday, May 30, 2010

Monday, May 3, 2010

Online Customer Reviews Becoming Bigger Purchase Driver

According to a new survey from e-tailing group and PowerReviews, online shoppers are taking more time to read customer reviews before making purchase decisions. They are also reading more reviews to gain confidence.

Of the 1,000 respondents, 64 percent of the online shoppers spend 10+ minutes reading reviews, compared with 50 percent who did so in 2007, according to marketingprofs.com. Thirty-nine percent said they read eight or more reviews to be confident in judging a product (vs. 22 percent in 2007) and 12 percent say they read 16+ reviews (vs. five percent in 2007).

Overall, 64 percent said they consistently read online reviews prior to making product purchase decisions. When asked what website capabilities or features most influence product selection and purchase decisions, customer reviews and product ratings was the top selected answer (72 percent). That was closely followed by customer service information (69 percent), third-party buying category guides and expert opinions (64 percent). Top-rated product lists, as rated by customers, were named by 60 percent.

MY COMMENTARY:
The role of third-party opinion in human decision-making is very important. That importance increases as the gravity of the decision increases. Interestingly, it is human nature to work through levels of investigation and then seek opinion to--consciously or unconsciously--confirm what has more or less been decided.

I can find opinions about Sunday brunch spots and laptop computers. How far will I go before I make an actual purchase? That depends on a variety of values and situational attributes. Is brunch with my mom and family or is it a cure for a hangover with my buddies? Is the laptop for client presentations or gaming at home? Did I get drunk with my mom and clients while presenting on my laptop?

Seriously, my point here is that we as consumers have more purchasing confidence today than any other time in history because we have access to this information. It is incumbent on us marketers to provide as many credible and authentic ways as possible for consumers to find and use the information in the way they see fit. At the end of the day, if the offer is not competitive, it won't sell. Now, the speed to that conclusion is ever increasing.

Read the original post here: http://bit.ly/aF2zYU

Posted via email from ConsumerX: cXChuck's Stuff

Brand Dilution: When the Wrong Saks Comes to Town

Yes, when the wrong Saks comes to town, Saks dilutes its brand.

FROM RETAILWIRE:
Some retailers at the Bridgeport Village fashion lifestyle center in Portland, Oregon, were happy to hear about a Saks coming to their complex but were caught off guard when they realized it was actually the luxury retailer's Off 5th discount concept.

The 28,000-square foot location, opening in September, will be the chain's 12th "in a new 'luxury in a loft' design that aims for a modern and -- without aisles -- open feel," according to an article in The Oregonian.

Fred Bruning, chief executive of CenterCal Properties, which owns Bridgeport, told the paper that the concept looks like a mini department store. Jewelry departments are similar to Saks' full-price locations; with one Off 5th store he toured selling a $20,000 piece.

"We feel this will really fill a retail gap that exists here in Oregon," said Mr. Bruning.

About 20 percent of the Off 5th merchandise is from full-price stores, another 20 percent is private label, and the remainder is especially made for the store.

"We work with brands that you would find in other luxury retailers, whether Saks or Nordstrom or Neiman Marcus. We just work with them to create a value product," Robert Wallstrom, president of Off 5th, told the Oregonian.

The 500,000 square foot open-air center is located in one of the Portland metropolitan area's most affluent areas. Tenants include the Apple Store, Container Store, Crate & Barrel, Tommy Bahama, BCBGMAXAZRIA, J. Crew, Banana Republic, MAC Cosmetics and Ann Taylor Loft. It also includes restaurants such as California Pizza Kitchen and P.F. Chang's as well as the largest Regal Cinema in the state. The move comes as Saks just announced plans to close its full-price store in downtown Portland.

MY COMMENTARY:
I think it is an exciting prospect for the luxury department stores to be developing brand extensions. If that is, in fact, what they are doing.

It is not.

Unfortunately what's really happening here is forcing old formats into new places. AND on the heels of announcing the close of their “full-price” store.  This is considered strategic?

Consumers today know and understand the game. They realize that a small percentage--in this case 20%--of product is actually "off price." Will consumers accept and buy from these stores in lifestyle centers? Probably. They will be driven by price, not brand experience.

Easton in Columbus, Ohio was mentioned above. My gut tells me the we won't see an "off price" brand there. The managers of Easton are much better editors than that. (Puma, Lacoste, Burberry are the latest additions.)

My advice is to look at proper brand extensions such as Barney's Co-Op. While not an "off-pricer," it gives Barney's new and different relevancy in different centers, appealing to different customers. Consumers get the halo effect of the master brand, but it's accessible in their neighborhoods, more on their terms.

Saks et al should be re-inventing these operations for the new normal and to complement and enhance their core brands.

Check out Off 5th here: http://bit.ly/9xKifr

Read the original post here: http://bit.ly/cAiCk7

Posted via email from ConsumerX: cXChuck's Stuff

Women Will Swap Personal Information for Personal Attention?

I say it’s not that simple.

FROM RETAILWIRE:
Some of the 1,800 women participating in a survey by Q Interactive may have taken to heart the catch-phrase from a commercial that's frequently heard on British television - "Because you’re worth it." How open are women to targeted online ads?

According to the survey, 65 percent of the participants were delighted at receiving targeted online ads, exclaiming "Cool! How did they know I wanted this?" Of those surveyed 88 percent "wish brands they trust sent them more tailored offers."

But what they particularly appreciated was receiving gifts to show they are appreciated. To build an online relationship with women, brands need to "give me something" according to 58 percent of women; "get to know me better first" for over 19 percent; and "tell me something valuable" for over 17 percent.

MY COMMENTARY:
I'm not convinced that women (or men for that matter) differentiate their acceptance of online vs. other media messages as much as, say, an interactive agency might think. (Of course, that 1800 subject sample was probably skewed toward heavy internet users.)

The quid pro quo of "giving something" is simply a barrier to entry for this level of engagement. We need to not only get their attention, but the product/service must meet or exceed expectations AND if we want to maintain an ongoing relationship, it needs to be compelling and relevant over time.

Studies have shown that multi-faceted programs of engagement work best--tailor direct communication through a variety of channels and perhaps let your customer choose which way to engage your brand. That deepens the relationship even further.

Read the original post here: http://bit.ly/9k31nO

Posted via email from ConsumerX: cXChuck's Stuff