Movin’ On Up

TENSER’S TIRADES HAS RELOCATED to this much finer neighborhood following a dispute with the old landlord.

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Jamie Tenser

© Copyright 2012 James Tenser

Price Image in a Transparent World

ONE OF THE SIDE EFFECTS of the “showrooming” panic which seems to grip some of America’s big box retailers has been a flood of learned and not-so-learned opinions from learned and not-so-learned analysts and observers.

Showrooming anxiety emerged during the 2011 holiday selling season, when chains like Target and Best Buy were revealed as victims. Shoppers were inspecting and comparing merchandise in their stores, then using mobile apps to find and order the desired items at lower prices from places like Amazon.com and Buy.com. The story had a second surge in media coverage during April, when Best Buy reported soft sales and the departure of its CEO Brian Dunn. There are too many articles to count about this. How important is it, really?

The Pew Internet & American Life Project reported Jan. 30 that about one fourth of shoppers had used a smart phone at least once to check a price in a store during the last holiday period. The release did not specify which types of products were checked most. I’d bet a month of sales that the skew was heavily toward high-consideration purchases like TVs and major appliances.

Smartphone by Store Nielsen recently released findings that suggest there is indeed a significant variationin impact of mobile device use across retail channels. Nearly three fourths of respondents said they used a smartphone to check prices on a consumer electronic item, while more than half said they had scanned a code with their phone in a CE store. This behavior was much less prevalent in most other product categories – but not zero.

The New Transparency
Clearly there is much more we need to understand about this shopper behavior complex not only about how shoppers are altering their habits around certain purchases, but also regarding what brands and retailers should do about it.

To that end, DemandTec, an IBM Company, is now sponsoring a RetailWire survey with specific focus on how retail practitioners think brick ‘n mortar retailers should combat showrooming.This is a worthy undertaking with potential to help surface superior thinking about the new era of price transparency:

We’ll interpret findings from this study here later this summer.

Absent investigations like these, showrooming may remain a buzzword excuse used by unimaginative retailers to explain away their mediocre performance in the face of increasing price transparency. It’s already a hot-button headline word for the herd of analysts and reporters who interpret consumer behavior based on instinct rather then empirical analysis.

I’m concerned that retailers who focus too narrowly on defeating showrooming are at risk of actually defeating their own shoppers. I propose an alternative: Focus on helping them get the best deal possible from your bricks or clicks.

It could be that showrooming is not all bad, if we pay systematic attention. It could be just the reality check you need on your price image that could enable early corrective action.

Retailers collect slotting, display, and promotional allowances from manufacturers in exchange for putting products on their shelves. In some sectors, the net profits from these activities exceed the net profits from sale of goods. A lost sale, while unfortunate, is not a fatal occurrence. And manufacturers may still have powerful incentives to pay allowances to physical retailers who put their products on display even if some resulting purchases take place online.

© Copyright 2012 James Tenser

(This article was commissioned by IBM which is granted the right of republication. All other rights reserved.)

Lessons from the Transit of Venus

YESTERDAY I ATTENDED an event that will never be repeated in your or my lifetime. It was a viewing of the transit of the planet Venus across the face of the sun. That’s something like a solar eclipse by the moon, except much rarer and quite a bit harder to observe since Venus is much farther away.

The kind folks at the Loews Ventana Canyon Resort here in Tucson hosted the afternoon on the hotel patio, and scientists from The Planetary Science Institute, also based here, were our very enthusiastic guides. They set up several specialized solar telescopes for public viewing and presented a series of lectures which explained what was happening and what it meant, astronomically speaking.

The story of the transit of Venus is as much about cultural history as it is about science. For many centuries, natural scientists have been aware of the relative movement of the sun, moon and planets. Venus is the most visible object in the night sky, after the moon itself, but it is not normally visible in the day time. The transit itself happens in pairs, eight years apart; pairs then follow alternately by spans of 121½ years and 105½years. This makes it nearly impossible for a single observer to study.

According to the PSI scientists, it took several centuries for European astronomers, working in concert, to recognize and work out the basic facts of the transit. Once they did get it figured, it yielded important insights about such matters as the distance and size of the sun and whether more distant stars might also have planetary systems.

With the special telescopes it was easy to for us guests to observe the dark dot of Venus as it crept slowly across the solar disk. Several sunspots and solar prominences were a fascinating bonus. The lecturers had tons of anecdotes and insights about what could be learned from observing and measuring the transit.

Since I tend to view our world (and other worlds!) through the peculiar lens of the retail marketer, I was bound to consider what lessons we might derive from the transit of Venus. Several learnings came to mind:

You can see a lot just by looking.* The transit of Venus is hard to view due to the overwhelming brightness of the sun, but as I learned yesterday it’s not that difficult if you have a plan and the right scope. Active observation is key. This made me think about the challenges of in-store sensing and of capturing shopper insights in general. Valuable observations don’t happen by accident; they are a result of carefully planned and executed practices. (*Props to the Yankee sage Yogi Berra.)

Some misses are forever. June 5 marked your last chance to see a transit of Venus. It won’t happen again until 2117. Luckily astronomers recorded this event, so you may watch the video. How many merchandising opportunities and rare marketing insights pass us by just like this? What can we do now to ensure that we don’t miss out on future learnings that may enable us to to be better prepared for the next window of opportunity? In retail merchandising and marketing, it begins with active sensing and collaborative data sharing.

Long cycles are hard to track. Under the most fortunate of circumstances, an individual astronomer gets to see the transit of Venus twice in a lifetime. Many never see it once. Even the lucky ones must count on other recorded observations to grasp its periodicity. With such a slow rhythm, it’s tough to draw reliable conclusions about the nature of the phenomenon. In the product marketing world, we discover that fast-turning consumable products offer some informational advantages as compared with infrequently purchased, higher consideration products, like cars, TVs and appliances. With many fewer data points and behaviors to draw upon, slow-moving consumer goods engender a less granular picture for marketers.

Sometimes you just need a team. Understanding the transit of Venus and its implications has required numerous observations separated by both time and physical distance. The relevant data has been collected by teams of scientists and coordinated among them with a common intent. Consumer insights also accumulate from observations collected across many locations and moments in time. You can’t unlock their potential alone. The implications are too vast, and the effort must be shared and sustained over time to reveal actionable insights and best practices.

The transit of shoppers through retail stores can reveal insights that we can best capture through systematic tracking and observation. When we can get the shoppers themselves engaged in documenting and sharing their actions and preferences as through mobile devices even greater wins are possible.

© Copyright 2012 James Tenser

“Omni” What? It’s Da BOMB

IN MY MEANDERS around the vibrant NRF Expo hall (#NRF12) in New York this month, I tried my best to spot the visible stars of the show and detect the invisible three-degree background radiation that lurks behind the retail firmament.

The atmosphere was energized, the crowds were large and buzzwords were flying. Shopper insights swirled in the cloud, mobile technology hype charged the atmosphere, and business intelligence oozed out of every software booth into glowing puddles on the Javits Center exhibit floor.

Ultimately there was too much for one greying, recovering journalist to absorb. This is surely why I wound up at the bar in Manhattan’s Landmark Tavern one evening with a group of senior retail business writers (a.k.a.,”ink-stained wretches”) who gather each year to drink beer and tell lies.

The BSQ 

We talked about how NRF has become primarily a retail operations exhibition, and how that had evolved to be primarily about software solutions. Egged on by my fellowship of professional cynics and emboldened by many lagers and stouts, we began evaluating the first day’s bullshit quotient. The BSQ is a pretty simple ratio – buzzword repetition divided by genuine new ideas. (This is a party game only old journalists could love.)

The buzzwords were easy: “Insights” (every retail software solution promises better ones); “Analytics” (every retail software solutions promises faster ones); “Business Intelligence” (how every solution promises to deliver the insights and analytics); “Big Data” (what results from gathering so many insights and analytics); “Cloud” (the place in cyberspace where every vendor proposes to house its Big Data); “Dashboard” (a screen where retail practitioners are supposed to want to access their BI); and “Omni-Channel” (a state of retailing where online commerce coexists with mobile commerce and bricks & mortar, empowered by – you guessed it – insights, analytics, Big Data and BI).

As ever, the genuine new ideas were harder to detect. “Performance Management” may be a good one (the quaint notion that retailers might want to measure the outcomes of their insight-driven plans to see if they are really paying off). “Retail Industry Creates Jobs” is another, presented as a core theme by the NRF itself.

Readers familiar with basic arithmetic will quickly reason that for the umpteenth consecutive year, the BSQ on the exhibit floor was off the charts. The principle factor here is buzzword repetition, which drives the numerator toward infinity, while really genuine new ideas to pad the denominator are rare indeed.

Da BOMB
There is a lot to say about each of the major buzzwords and concepts that enlivened the NRF Expo. Right now let’s focus a little on “omni-channel retail,” which is recent nomenclature for an idea that has been around for quite a while. As far back as the dot-com boom in 1998 we began discussing the interplay between virtual and physical stores, catalogs, kiosks and call centers. By 2000 we identified several multi-channel players – like Eddie Bauer, and JCPenney – who had succeeded admirably (we thought then) in melding online, offline and catalog businesses to the benefit of shoppers.

The “shop anywhere, buy any where, return anywhere” principal was captured in the final edition of VStoreNews, where we labelled it “Broadband Merchant,” re-purposing a popular adjective. By then much of the industry had adopted “multi-channel” as the nom de jour.

At NRF this month, alot of folks were calling this “Omni-Channel,” I think because of the stunning influence of mobile technology within the mix. We can (and will!) argue long and hard about the appropriate understanding and application of mobile technology in retail, but for now let’s just stipulate that mobile is colossal in its influence. Explosive even.

Which is why I’d like to humbly offer an “omni” alternative. Call it BOMB retailing – Blend Online, Mobile & Bricks into a single entity where every channel shares a common information platform and consistent shopper interface. One brand, one shopper relationship, one inventory, one set of service standards, many moving touchpoints.

Surely after 14 years on the interweb machine, the omni-present, omni-channel, but hardly omniscient retail industry is ready to blow up the status quo.

© Copyright 2012 James Tenser
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