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April 2011
Since retailers began adopting inventory management and POS technologies back in the late 1970s and early '80s, both consumers and retailers have reaped the benefits. Those early technologies helped reduce inventories and ensure retailers had the right merchandise in stores at the right time.
THE WORLD WIDE WEB
The next significant wave of technological change that profoundly affected retailing was the advent of the Internet. As the number of online stores grew exponentially, the Internet proved to be a bigger factor in retail than anyone could have imagined. For some consumers online shopping is the only way they shop.
For retailers it's been a means to reach shoppers they might never have reached otherwise. As a matter of fact, retailers ranked first in online advertising last year, spending nearly $2 billion more than the telecom industry that ranked second in online ad spending.
As we look back at great inventions of the last century, there's little doubt the birth of the Internet forever changed our lives. In the future, people will compare its societal impact to that of television as it grew in popularity in the early 1950s. What I find so amazing are the many ways businesses use the web to reach and communicate with people. It has quickly become one of the most valuable marketing tools available to business.SOCIAL MEDIA WEB SITES
This current wave of technological change is already proving to be even more important for consumers. As such online communities as Facebook, YouTube, Twitter, Foursquare, and LinkedIn grow in popularity, they reflect the interests of millions of people around the world. Facebook, being the biggest of all, boasts in excess of 500 million active users worldwide.
Social media web sites continue to fuel the explosive growth of mobile and smartphone communications. In a December 2010 report from Nielsen, 31 percent of mobile phone users now own a smartphone.SMARTPHONES
As with anything new, popular, and growing, a great deal of hype and misinformation is being publicized about ways in which consumers use their phones to shop and access the Internet. For example, earlier this month Arc Worldwide released a study claiming that 50 percent of Americans shop with mobile devices. I'm not sure how that's possible with less than one-third of Americans actually owning phones that can be used to shop online. Yes, we can expect smartphones and mobile shopping capabilities to continue growing among consumers, but they will do so even without the hype.
For retailers the benefits of business social media are often less tangible and more difficult to evaluate. That said, they are no less important. As marketers are discovering, simply having lots of online friends, fans, and followers does not necessarily translate into more sales. The good news is marketers are quickly learning and adapting to this new way of reaching and communicating with consumers. As the actions, opinions, and tastes of consumers drive business social media, retailers must integrate themselves into this massive online community.THE NEWEST MARKETING TOOLS
Recently home decor and furnishing's retailer Kirkland's ran a Facebook promotion that promised a cash prize of $25,000 and a chance to win Kirkland's merchandise. The promotion was built around a game. Everyone who played the game got a coupon for a future purchase at a Kirkland's store. The more visitors played, the more they could save.
When the promotion was launched the company had 73,000 fans. That number jumped to 140,000 in just the first four days. Although there's no word yet on how the promotion impacted sales, the number of participants continued to grow throughout the promotion.
Kirkland's engaged a Georgia-based advertising agency for this promotion. The agency can be reached at www.redpepperland.com.
Are you using business social media and mobile/smartphone marketing to communicate with current and prospective customers? I plan to write more about these technological changes and how retailers can use these tools to their advantage. One of the great things about the Internet is the massive amount of information available to anyone who wants to take the time to sort through it. With some searching, you can learn much of what you need to know about these subjects and how they might apply to your business.
A Whole New Future
I'm always bothered when I hear about a long-established retailer closing its doors. Well this story about a retailer closing actually has a happy ending. Bookery II, located in Ithaca, New York, opened 30 years ago. It was sold in 2006 and renamed Buffalo Street Books. As the economy struggled in recent years so, too, did the store.
In February of this year it looked like the end was near, and owner Gary Weissbrot considered liquidating. Instead Bob Proehl, the store's events coordinator, came up with the idea to reinvent the business as a cooperative and sell shares in the store.
On April 23, the store reopened as a cooperative with 600 shareholders from the community. Gary Weissbrot is the general manager, Bob Proehl is director of operations, and the people of Ithaca still have their beloved, independent bookstore.
MEN AND WOMEN SHOPPERS!
One of retail's most widely publicized statistics claims that women are responsible for 75 to 80 percent of all consumer spending. Those of us in the business have long believed this statistic to be incorrect. A recent study for the years 2004 through 2010 by The Nielsen Company shows that the number of shopping trips by men are increasing. The study also showed that men shop for a wide range of merchandise including apparel, shoes, books, music, furniture, and home accessories.
THE 10TH ANNIVERSARY OF APPLE STORES!
In late May Apple will celebrate the 10th anniversary of its first store that opened in McLean, VA. While the company doesn't break out retail sales numbers in its annual report, estimates are that Apple's more than 300 stores generate an average of $20 million in annual revenues. Some of the stores in New York and other large cities around the world do substantially more. Back in 2001 some so-called experts predicted the stores would fail. I've never seen an Apple store that wasn't jammed with customers.
Until next month...
George Whalin's Resources for Retailers
RETAIL SUCCESS! Increase Sales, Maximize Profits, and Wow Your Customers in the Most Competitive Marketplace in History!
by George Whalin
Check out George Whalin's Resources for Retailers for other excellent books he recommends.
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