What do you think of CompUSA’s new retail 2.0 concept, especially its move to allow unrestricted internet access throughout the store? Even with its TigerDirect connection, do you think CompUSA will be able to compete on price against online competition?
Here’s the money quote: “Consumers are looking for alternative places to go and the thrill of walking into a store and looking at products is not easily replaceable for shoppers.”As I have been saying for 8 years, multi-channel, then merged-channel is how the best, most successful retailers operate today and will in the future.
Shopping from home before buying is now the rule, but consumers will gladly visit physical stores for the total experience. They will be able to access in-store Internet terminals for comparison shopping, but this is an advantage to the store in which they are standing. I see this as expanding visits, sales, profits, and growth (and raising the stock price).
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13673
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What’s the key to creating a culture that drives innovation? Which approaches should companies use more?
For most companies, innovation is a proprietary activity conducted largely inside the organization in a series of closely managed steps. Over the last decade, however, a few consumer product, fashion, and technology businesses have been opening up the product-development process to new ideas hatched outside their walls–from suppliers, independent inventors, and university labs. Executives in a number of companies are now considering the next step in this trend toward more open innovation. So write authors Bughin, Chui and Johnson in The McKinsey Quarterly (June 2008), which I cite and quote at length in the current issue of Growth Strategies: Increasing numbers of organizations are now approaching innovation as a convergence of like-minded parties, or distributed co-creation, to use its technical name. LEGO, for instance, famously invited customers to suggest new models interactively and then financially rewarded the people whose ideas proved marketable. The shirt retailer Threadless sells merchandise online–and now in a physical store, in Chicago–that is designed interactively with the company’s customer base. In the software sector, open-source platforms developed through distributed co-creation have become standard components of the IT infrastructure at many corporations. What facilitates this new approach to innovation is the rise of the Web as a participatory platform…. Even the most advanced businesses are just taking the first few steps on a long path toward distributed co-creation, conclude the authors. Companies should experiment with this new approach to learn both how to use it successfully and more about its long-term significance. http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13102
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Would it benefit Amazon to add Borders’ bricks to its existing clicks business? Do you think Amazon can go on indefinitely as a pure-play e-tailer or will it eventually have to open physical store locations?
This is brilliant, inevitable, and necessary, as I have been saying for 8 years! Multi-channel, then merged-channel is how best, most successful retailers operate today and in the future. Even dedicated Amazon users will gladly visit physical stores for the total experience, where they will be able to access in-store terminals with with their accounts, history, etc. The Borders operation is a very good one; I see this as a win/win/win, with expanding visits, sales, profits, growth (and rising stock price).
Can Amazon go on indefinitely as a pure-play? No, that’s the point–they would be limiting their potential. It won’t be easy, and has to be done right, but it is the way to go.
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13024
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What do you think of Sears’ Amazon-like strategy for Sears.com?
As I wrote a year ago, Sears is going to make up for lost time in its efforts to become a fully integrated multi-channel retailer, and it’s about time. There are many strategic, operational and competitive reasons for doing so: growth, profitability, market share, customer service, efficiency, share of customer — as you know, I could go on.
When they are talking in terms of a seamless customer experience, and buy-online-pick-up-in-store, etc., I pronounce myself impressed. Sears may have lost some relevance over time, but the company has set out in a new direction to regain some of the great market share it used to command. The store has a long retail history. They are now recognizing the new multi-channel environment, taking a new approach, and reinvigorating a brand that so many people still trust.
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12979
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Do you agree that weaker business conditions are exposing flawed business models primarily resulting from the arrival of the Internet? What do you think are some common themes behind the bankruptcies and store closings taking place?
Of course the successful retail model has changed: 7 out of the top 10 retailers last year were multi-channel. They combine and integrate in-store, online and catalog components to complement each other and to grow traffic, sales, profits, market share, share of customer — in all channels.80% of retail winners (those that outperform peers in comparable store sales growth) operate in multiple channels versus only 50% of retailers who perform worse than average. It is amazing to me that so many retailers still do not realize the necessity of making the most of multiple channels.
Driven by the continued immersion of the Internet into our daily lives, Americans have dramatically changed the way they research purchases, shop and buy. And research continues to show online activity drives offline sales. Yet of the retailers with web sites, 40% still don’t have any integration between store and online operations. It is not enough to offer customers multiple channels; they expect to be able to move seamlessly between and among them.
As I have telling my retail clients and audiences for years, multi-channel (I should say merged channel) integration is the strategy being pursued by retail winners of today and tomorrow.
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12965
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Assuming it were to happen, what would a Dell acquisition of RadioShack mean for the two companies? What is your assessment of the challenges and opportunities faced by each of the companies without a deal taking place?
I like the idea; looks like a win/win to me. I am convinced the future of retail is multi-channel integration, giving consumers maximum choice and convenience. And the technology/computer/innovation market is still set for decades of growth, as more and more areas of life (and consumption) move among and between channels or platforms (I’m thinking entertainment, education, information, financial, health, etc.). What a great market position to be in. (Further analysis later.) http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12915
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Is now a good time for retailers to be looking to build new stores? Do economic slumps, particularly those that have hit the real estate market, represent an opportunity for retailers? Does the process for site selection change during economic slumps?
The US population recently surpassed 300 million. It will grow to 376 million by 2030, on its way to 400 million soon afterward. This will fuel a huge demand for residential, office, industrial and commercial properties. Nearly half the buildings Americans will live, work and shop in by 2030 haven’t been built yet.Yes, I would say it’s a good time to invest in real estate.
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12899
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Do you see much difference between how Target and Wal-Mart go about their business online? Which marketing approaches or features do you think offer the greatest opportunity for the respective websites?
Both are coordinating stores and web sites–that’s the main thing–finding what works and what doesn’t. It’s a big step away from “silos”–separate operations, merchandise. As for pricing, that is so fluid now I think even consumers understand (but they will expect one channel to match the other when confronted–I mean, requested).
The quoted executive is right: we are still early in the game; there is much to learn through experimentation.
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Are there opportunities to create happy customers returning products? Do you see the popularity of gift cards beginning to wane?
It might seem counterintuitive or counterproductive to become known as “a great place to return stuff,” but it is actually a great opportunity for competitive differentiation: more than half of all consumers take that into consideration when buying! And of course it builds into all the important stuff: customer service, upselling and cross-selling, loyalty. The most important factor from my perspective, of course, is THE ABILITY TO RETURN IN ANY CHANNEL, even if the item was bought in a different channel. This WILL lead to all of the above benefits.
As for gift cards, yes, they are huge and will continue to grow for the very reason some mentioned above: increasingly, what people want and are going to want more of is LESS. What a great opportunity for retailers: a large and growing share of the value of gift cards is never redeemed. That’s money that flows directly to the bottom line.
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Buy American
Is the time right for a retailer to establish a purchasing/sales strategy along the line of Sam Walton’s “Buy American” program? Are American consumers ready to buy “Made in the U.S.A.” goods? How would a retailer market such a program?
It would be almost impossible to establish and maintain such a strategy. Almost nothing is made wholly in one place anymore. There are foreign components in most every product made anywhere. (It’s called cross-border production sharing, a trend I identified some 20 years ago.) We live in a truly global economy, with outsourcing, fracturing and subcontracting.
The keys for retailers and consumers are quality, utility and affordability. Those features will trump patriotism, or even previous reputation, every time, in any product, from cars to shampoo.
Consumers have relationships with companies, providers of goods and services, and retailers. With countries? Not so much. With their own country? Of course. But again, it is virtually impossible to stick to wholly American goods exclusively. A recent book author tried this and failed–the book was called “A Year Without China.” Read it and see.
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