May 1, 2018 § Leave a comment
Gift giving is an important part of retail sales. It also represents an emotional bond made between the giver and the recipient. Retailers should recognize the dual rewards in growing their gifting business because you are touching two targeted consumers at the same time – the purchaser and the recipient. Gift giving strategy can provide exponential results for marketers if done correctly.
Unity Marketing estimates that $1 out every $10 spent in the typical retail store, (general merchandise, apparel, furnishings and others) is spent to buy a gift. Gifts represent approximately $128 billion in spending in 2017. Consumers are typically buying a gift every one to two months.
So what’s behind the science of giving? The act of gifting is typically meant to communicate feelings for and with another, fostering stronger social relationships. New research by the Wharton School looked at what type of gifts build deeper personal relationships, a material gift or an experiential gift.
Experiential gifts win over material gifts
Despite gift givers’ tendencies to give material possessions, material gifts do less to foster meaningful relationships between gift givers and gift recipients. The researchers report, “Experiential gifts, in contrast, make recipients feel closer to the person who gave them the gift, regardless of whether the experience is consumed together with the gift giver. Experiential gifts have this effect because of the emotion they evoke when consumed, particularly when the emotion is shared.”
“Our findings demonstrate that giving experiential gifts is more effective at fostering closer relationships, and therefore implies that gift givers should feel happier as a result of giving an experiential gift compared to a material gift,”
What are experiential gifts? An experience could be providing services like a meal, spa outing, horseback riding, or vacation. But don’t dismay – material gifts can offer experiential aspects – candles, music, books, toys, food and drink items and even things that are nice to the touch – a furry throw, a cashmere pillow or silk pajamas.
Even the actual event of purchasing the gift can be experiential in a story setting or online by telling a story, allowing for touch and feel, and conjuring up warm feelings.
February 27, 2018 § Leave a comment
We do a good bit of research on what drives purchases in retail. Our research among female retail consumers points to the truth that convenience is today’s currency. In fact, it is so important that it might be the most powerful force shaping our lives and economy, according to a recent New York Times article called it “The Tyranny of Convenience”.
Just think about the types of convenience that exists today – mobile banking, Amazon shopping, grocery pick-up and delivery services, all kinds task apps, movie apps, on-demand movies, ride-sharing, meal services, clothing services and more.
While conventional wisdom might think that women spend more time shopping,; men spend three hours shopping, versus women spending two and a half, and men are twice as likely to visit more stores than women do.
For your business to have cultural relevance today, it is imperative to understand what convenience means to your customers. What is convenient for your business may not be convenient for the customer. To your customer, their need may be same-day pick-up, self-checkout, more convenient hours or online chat to facilitate online shopping. It may be omni-shopping with the ability to shop online and pick up at the store.
A new research study by Catalyst, a marketing agency specializing in the retail sector, found that the top five motivators for brick and mortar shoppers were convenience, efficiency, good customer service, and product quality, with value important to all.
Time Well Spent. It seems that if shoppers are going to take the time to come to your store, you need to provide them with an experience that equates to value and convenience. Think about an Apple Store with its live demo of products, workshops, informed sales representatives, and iPad checkout.
Do a convenience audit of your business. Talk to your customers about what they value in the shopping experience. Don’t be afraid to make changes.
April 18, 2016 § 1 Comment
The mall is no longer the cultural center of consumerism. The crown jewels of mall shopping like Macy’s, J Crew and Sears are suffering. Some predict 15% of malls will fail or be converted into non-retail space within the next ten years. In 2015 major retailers saw sales move away from brick and mortar stores while online giant Amazon increased sales 97%.
There are many reasons contributing to this decline but most importantly, there is a new savvy shopper out there who wants or needs new experiences.
- The mall as a hangout or destination is no longer necessary. Young people used to go to the mall to see and be seen. Today, social media, text messages and video chats replace some of that social activity. Movies can be downloaded. And goods are accessible online. So, the number of retail visits continues to fall. Time saving is paramount for many.
- The middle class shopper has moved on. Only upscale shopping centers are surviving. The affluent are keeping luxury brands in business, but middle class shoppers have left semi-luxury brands in favor of cheaper alternatives. The middle class shopper is less financially able to shop malls. Upscale malls in “super zip codes” are doing well, but the middle class mall is suffering. Middle class shoppers are seeking out dollar stores and stand alone retailers like Walmart and T. J. Maxx.
- Savvy shoppers are in control. Educated shoppers know where to get the best deal. Shopping decisions start online with price comparison. Some 87% of smartphone and tablet owners use a mobile device for shopping activities according to a Nielsen report. While 59% said online shopping was actually their favorite way to shop, many still prefer going to a store after checking prices online. Purchases are moving online, particularly with the prevalence of free shipping at many online retailers. Purchases are going to mega sellers like Amazon, department store online shops, boutiques, designer sites and buying clubs like Gilt and RueLaLa. With this type of price scrutiny, retailers have moved to heavy promotional selling.
- Fashion is moving to more year-round clothing. Traditional seasonal shopping has been replaced by just-in-time shopping to more closely follow current weather patterns. Year-round shopping and the prevalence of discount fashion like H&M has changed patterns and total expenditures.
- The retailer options have continued to grow. Premium outlet centers has replaced the mall for many bargain seekers and sales continue to grow. But discounting by major retailers and the continued growth of online shopping may make outlet centers less attractive for savvy shoppers in the future.
February 11, 2016 § Leave a comment
Disney seemed to think that only boys want action figures so our new crush Rey was left out of the toy line-up for the newest Star Wars movie. Guess those toy makers forgot who buys toys for their children. The dominant toy shopper is female. A social media campaign brought the omission to light, so now you can buy Rey toys.
We asked Girls To The Moon founder Courtenay Rogers her take on the Star Wars Rey and here’s what she offered.
“I’m extremely late to the Star Wars bandwagon. Like, over 30 years late.
My brother saw all of the movies when we were kids but I had no interest in watching movies so I missed the excitement the first time around, though we had every toy imaginable in our house. I never really got around to watching the famous movies until I realized my daughter wanted to see them so we decided to spend some quality time understanding what the fuss was all about.
The “original” three movies were very intriguing to watch, especially from an 8-year old’s perspective. She couldn’t stop talking about how old fashioned they were and even at 37, the difference between cinematography in the late 1970’s and 1980’s amazed me. The plots were interesting and the stories were compelling, but I didn’t end up a huge Star Wars fan. But then we saw the 7th film, The Force Awakens.
This movie is exceptional and my absolute favorite part is the addition of Rey, who is basically the main character (in my opinion) and made such an impression on me that I want to watch all of the movies again. Rey is a badass. Plain and simple. She is strong, intelligent, driven, powerful and independent. She is everything I strive to be and everything I want my daughter to strive for as she grows up. Yet, when merchandise started appearing to promote the movie and even after it was released, Rey was nowhere to be found.
A set of Hasbro figurines that were created to coincide with the release of the film didn’t include the heroine and fans took to social media to express their outrage. The #WheresRey hashtag on Twitter took off, targeted at figurines that includes Chewbacca, Finn and Kylo Ren but excludes Rey, the female protagonist of the film played by Daisy Ridley. The film’s director JJ Abrams even joined the conversation saying that this was “preposterous and wrong” while addressing the Television Critic’s Association in early January.
Forbes reports that “the assumption underlying each of these promotional choices discounts women’s buying power. Earlier this year, the MPAA released its annual breakdown of movie audience demographics, revealing that women constituted 52% of moviegoers in 2014. This trend, the study further explains, has prevailed since 2010. And though the highest-grossing films in the United States and Canada skewed 59 percent male with Guardians of the Galaxy, the second-place position went to The Hunger Games: Mockingjay – Part 1, whose audience was 57 percent female. And the movie was fronted by a woman. Since Star Wars — also featuring a female lead — is expected to break all kinds of records in a year that’s seen more than a few flops, it’s a fair guess that women will be a large part of the audience.” Read the full article here.
I’m officially a Star Wars convert solely because of Rey and I hope to see many more characters like this one on the big screen. She’s a wonderful role model for young girls and older girls alike, and she deserves the same amount of fanfare as the rest of the characters in the film. If you haven’t seen the movie yet, get some friends together and make a girl’s night out of it. You will leave feeling like you can save the universe, all by yourself.”
January 1, 2016 § 1 Comment
I have worked with retailers for most of my career and sharp retailers know that every single foot of store space needs to work hard. Spend some time in your store observing customers and what they are doing. And then try some tried and true store layout tips gleaned from retail consultants Kizer & Bender that might help get your stores optimized for the best selling environment.
- Allow for a “decompression zone”. When consumers enter a store, 90% will typically turn to the right. Shoppers typically don’t notice merchandising displays within 15 feet of the entrance. The first thing that customers are noticing is your general decor, your brand statement about your store – walls, flooring, accent colors, fixtures, pleasing smells and comfortable aisle widths. Your checkout should never be in the right front of your store.
- Check your Vista. According to Kizer and Bender, stand inside your front door just beyond the Decompression Zone (about 5’ inside the store) and spread your arms out at shoulder height with your index fingers extended. The space you see is called the Vista – the area that builds a shopper’s first impression of your store. The space inside the Vista needs to be clean, uncluttered and full of not-to-be-missed product. This is where you should place your Speed Bump displays. Speed Bumps are just past the decompression zone and are the place for those attractive items. Speed bumps can be special fixturing or small tables for display.
- Color is important. Neutral colors are used in 80% of all stores, with strong accent colors used sparingly. The wrong colors can change the whole shopping experience.
- Choose a story layout that fits your business. There are three types of store layouts– the Grid Layout typically used in supermarkets and big box stores, the Loop (Racetrack) layout that creates a clearly defined path through the store, and the Free Flow Layout, typically used by specialty retailers, where they find new merchandise displays at every turn. Make sure you are always leading a customer somewhere. Most stores use a circular path to get the customer to walk through the store and back to the front. But keep “merchandising outposts” in their path so they can discover items as they walk through the store.
- The Power Wall. Walk inside the front door, stop just past your decompression zone and turn right. That’s your Power Wall, the place to display important departments, new and seasonal items, high demand and high-profit items.
- Where’s the Bananas? Every store has a high volume necessity item like bananas or motor oil that customers always look for. Put them in a back place along the shopping loop that encourages your shopper to shop the entire store.
- Store Fixturing is a tool. Keep in mind the purpose of the fixture. You aren’t supposed to see the fixture. You should see the merchandise.
- Check out should be placed at a natural stopping point in the shopping experience or path you have created. Have a counter big enough for shoppers to place their bags and/or personal belongings. Last chance for encouraging impulse or “last minute” items.
And don’t forget technology in today’s world. The technology can include digital screens, iPads to aid shopping and online helps. Does your store have WiFi? It should because shoppers are using their smartphones in-store.
November 9, 2015 § Leave a comment
Millennial foodies are the new “tastemakers”. What Millennials want in food today is what the rest of the world will soon be asking for. This savvy generation loves lots of informal celebrations, intense flavor profiles, ethnic cuisines, more natural foods and lots of snacks. Champagnes like Chandon are courting Millennials as an irreverent celebration alternative to their parents’ brands and are designing bottles to fit their occasions.
Restaurants are working hard to cater to millennials as their incomes and spending habits grow. Here are some important facts to understand.
- They eat out more often. 53% of the group goes out to eat once a week, compared with 43% for the general population. They eat out more often in all categories – quick serve, casual dining and fast casual. While they all eat fast food, millennials don’t want to admit to eating it. They are the least likely to recommend fast food to others. Fast casual is their favorite. Millennials compose 51% of fast casual customers.
- They want healthy food which means fresh, less processed and with fewer artificial ingredients.
- They want food that comes from socially responsible companies. Types of companies that they like include those who have principles around fair trade, sustainability and fair wages. Companies that exhibit these qualities include Starbucks and Chipolte.
- They like to support local restaurants. Again this means higher quality food, social ethics, ethnic foods and flavor profiles.
- They want convenience which translates to easy online ordering, stellar apps and rewards programs. Starbucks has scored big with their new app revamp for pick-up orders.
- Sriracha is on everything. It is stocked in 9% of American households and in 16% of those under 35.
- They celebrate a lot. According to CEB Iconoculture, Millennials are celebrating more than just the traditional holidays. Super Bowl Parties, May the 4th Be With You celebrations (for Star Wars fans), and single girls’ gatherings for Valentine’s Day are just a few ways Millennials are celebrating outside of traditional holidays.
- The line between snacks and meals is blurring. According to research by Barkley and BCG, Millennials tend to snack far more than older generations. It is very common for Millennials to regularly have snacks in the mid-morning, mid-afternoon and late at night.
On the alcohol side of things, Chandon reports that 27 percent of adult millennials now choose beer as their favorite alcoholic drink and a lot of that beer is craft beer. But beer consumption is down from 33 percent in 2012, leaving room for other products including vodkas, wines and sparkling wines. Millennials like craft brands and made-for-me brands. Chandon has targeted Millennials with its “celebrate everyday” strategy, moving sparkling wines from only end of year special occasions to everyday occasions. Since Chandon is technically not Champagne since it is from Napa Valley, the wine has become Americanized. Chandon has been able to reimagine how sparkling wine can be consumed—and by whom. Chandon typically sells for a lower price point as well.
But price alone is not enough to lure young adults. They seek an experience. Chandon has given the classic champagne bottle a trendy makeover and creates seasonal designs for its bottles. Last year Chandon put out three limited-edition bottles that are scrawled with the phrases “The Party Starts Here,” “Bring on the Fun,” and “I am the After Party.” Ideally, consumers can pick out the bottle that matches their personality. Their marketing also matches this new look with a heavy dependence on social media using image heavy social platforms like Instagram.
“Any marketer will tell you that it is very difficult to change consumer behavior,” Cristian Yanez, VP of Estate and Wines at Moet Hennessy USA, Chandon’s parent company says. “But with sparkling wine, we’ve found that a simple approach works best. I know it sounds a bit basic, but just giving people another excuse to drink a bottle of sparkling wine is sometimes all we need to do.”
November 9, 2015 § 1 Comment
It’s no secret that the average American woman is a size 14. And it seems that American fashion is beginning to take note.
Several things have happened recently to amp up the plus size movement. Project Runway celebrated its first plus size fashion designer win last week. Ashley Tipton is only the second designer on the show who has specialized in plus sizes. Her unique collection celebrated her Mexican heritage, a nod to Frida Kahlo and a fashion forward plus look. Recently Melissa McCarthy launched her own clothing line which is carried at retailers like Nordstrom’s and shopping network HSN.
According to market research firm NPD group, sales of plus-size clothes grew five percent in 2014, making it a $17.5 billion industry. What’s more the study defined ‘plus-size’ as U.S. size 18 and up, whereas in the fashion industry it starts at size 14, meaning the growth may well have been significantly larger.
Over the past two years, plus-size sales within the e-commerce category have grown 31%. Online shopping seems to take a larger share of plus size shopping. Even traditional retailers have more plus size options online.
Most plus-size women feel that their body size is not sufficiently represented in fashion and retail. A recent study from ModCloth found that 46% of plus-size women ‘never or rarely’ find clothing that flatters their body.
The online retailer surveyed more than 1,500 women to determine how they feel about the current state of the plus-size market. They found that most women are dissatisfied. Some 81% said they would spend more on clothing if there were more options available in their size.
October 6, 2015 § Leave a comment
Gift cards have topped the list of most requested gifts for the last eight years, so it shouldn’t be a surprise to anyone that one out of three gifts is a gift card. Retailers should make gift card sales an important part of their 4Q sales strategy. Fourth quarter sales of gift cards can contribute to strong sales during January.
“It varies based on the business you’re in, but it is not unusual for as much 50 percent of some retailers’ business in the fourth quarter to come from gift cards,” says Ben Kaplan, president and CEO of digital gifting and incentive platform CashStar.
And some retailers are finding that gift cards are a better way to promote their products than the typical discounts. Discounts can have a negative perception. Customers might think “that you are just trying to move product. If you give a gift card instead of a discount, you’re sending a more positive perception of your product to customers.
Gift Card Buyer Segments
In a recent Blackhawk study of gift card buyers, 63% of respondents had purchased at least one gift card in the last year and 94% stated they would be likely to purchase a gift card in the next year.
So it should be no surprise that birthdays (70%) and winter holidays (64%) were the most popular occasions to buy gift cards.
The study segmented gift card buyers into four groups: It’s a Busy Life (33%), Budgeting for a Practical Gift (23%), The Meaningful Gift (22%) and It’s All About the Gift (21%). Marketers can use this information for gift card planning.
It’s All About the Gift. This is a group that loves to give and receive gift cards. Gift cards are their gift of choice. Although they give slightly less than the average amount of gift cards per year, they spend more on individual gift cards. These buyers purchase more restaurant, mass merchandiser, department store gift cards and open loop gift cards than other groups. They buy gift cards in more channels (than other groups) as they tend to buy gifts while doing other shopping. When redeeming gift cards, most spend more than the value of the gift card. This group is approximately 61% female and has a higher percentage of married people. They tend to be more middle aged.
It’s a Busy Life. This group buys gift cards for convenience. They are time strapped and buy out of necessity, rather than affinity. Overall, they tend to buy more than the average number of gift cards per year (8.7) and buy them more often for more occasions—for almost all occasions more than any other group. Because of convenience needs, this buyer tends to buy e-gift cards (47%) and they prefer to shop online or on their phone or tablet. There is a higher percentage of males in this group. They tend to have higher income, be employed full time and the group is more ethnically diverse.
A Meaningful Gift. This cluster of givers want to make people happy. They focus their gifting choices on gifts that have emotional meaning. Eighty-one percent want to give gifts that have an emotional meaning. In the past, gift cards tended to be viewed as impersonal or the lazy person’s gift. However, this viewpoint has changed, mainly because of public opinion. People have begun to realize that people prefer them to physical gifts. Gift cards are the most requested gift and people prefer them.
Budgeting for the Practical Gift. This is a fairly new segment. This group focuses on saving money. Buying gift cards help them budget their gift spending. This group is the most price conscious of all of the clusters. They tend to use coupons and look for promotions. Interestingly, this group uses gift cards as the highest percentage of all their gifts and they do that because they think gift cards are such practical gifts. They tend to give fewer gifts than the other groups and prefer to give a gift that is useful. They spend less on individual gift cards and tend to buy gift cards in mass merchandisers and in the grocery channel (already shopping there.) Of all the clusters, the consumers in this group buy the most for self-use. Birthdays and winter holidays are the most popular occasions for purchase. They tend to buy more restaurant and mass merchandiser gift cards. Only one-third purchase online. This cluster is about two-thirds female and contains more single moms. Overall they have a lower household income level and tend to have less education.