How to Generate $2,000 per Square Foot…Ten Steps to Success!

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On a recent trip to New York I ventured off Fifth Avenue, Madison Avenue, and Soho – to Brooklyn and the Atlantic Terminal Mall on Flatbush Avenue (not exactly the haute couture centre of the City).

There on the second floor was a Uniqlo store, opened in October 2013, which was nowhere near as “jazzy” as its Fifth Avenue or Soho older brothers’ (or sisters’) stores. But look beyond all the fancy Christmas stuff of the Manhattan store and you’ll observe a lean-mean-merchandising-machine! This store has to be pushing $2,000 per square foot. And here is why.

Lessons Learned from Uniqlo
#1 Choose a Solid Location with Strong Adjacent Tenants
Co-anchor tenants include Target (not a Canadian version!), Burlington Coat Factory, DSW, Victoria’s Secret, and 25 national specialty chains. These are located at a major transit junction in central Brooklyn, so lots of shopper traffic!

#2 Straight Forward Messages are Best
Shoppers are in a hurry, often confused or conflicted, and need simple choices. Make sure your “theme” messages are easy to comprehend and react to!

The entrance and store sign are open and inviting.
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The windows tell the “colour theme” story clearly. Shoppers “get it” in the blink of an eye.
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#3 The Front 10 Feet Pays the Rent!
The “front and forward” space productivity should be three to four times the rest of the store. You cannot generate sensational sales revenue with an artsy-fartsy display or minimal intensity. Good retailers know and practice this. They load up the front with best sellers.

Just look at Uniqlo’s displays with:
1. Sales associates beside each one
2. Bright, colourful product
3. In depth assortment
4. Fantastic prices on cashmere women’s and men’s sweaters! $59.90
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#4 Backup Feature Item In-depth
Part of Uniqlo’s success is single-focused promotional items featured in limited ranges (huge buying clout!). Winter jackets were in big demand at $59.90 and $29.90.
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#5 In-depth Merchandise Sends a “These Items are Important” Message
“If they have that much of this item – it must be important and popular” is what these walls convey.
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#6 End-aisles are Great for Add-on Sales of Smaller Accessories
Building high productivity is done using many different merchandising techniques. Every one has to be used!
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#7 Make the Store a Merchandising Machine with Lots of Impulse Items
Your store gets to $2,000 a square foot by using every space and idea.
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#8 What is Your Inventory per Square Foot?
All retailers should use this metric to analyse sales trends in departments and classifications. Uniqlo does not shy away from “using the cube” to showcase assortments and build productivity. All these pictured items have in-depth backup right on the fixture.
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#9 An Efficient Check-out is Essential
While Uniqlo had long lines at the service desk, they moved quickly.
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#10 Lots of Team Members
While almost hidden in the crush of shoppers, there were dozens of uniformed (all in black) staff continuously re-stocking and straightening inventory. This store was managed in an obviously organized and disciplined manner.

Uniqlo’s unique value position is re-enforced by the simplicity of its visual presentation, the commitment to inventory depth, and the efficiency of the shopping experience.

Mexx Brand About to Die in Its Omni-channel Sleep!

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News of the Dutch fashion brand, Mexx, filing for bankruptcy did not come as a surprise to us.

Earlier this year, while working on an international omni-channel strategy for a Canadian competitor of Mexx, we attempted to audit Mexx’s online strategy. At the time, we found that they had recently put their online business to bed.

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According to the company, they decided to close the website to build a better one that would provide its customers with a superior shopping experience—a wise move in a digitally driven world.

However, now that the company is bankrupt, it appears that not only their online business but also the brand has died, or is about to die in its sleep!

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On December 5, 2014, the day after Mexx filed for bankruptcy, we discovered the company’s website is no longer in a state of slumber, but it has not fully awaken. For instance, a banner that advertised a door crasher special for girls’ apparel was still on the homepage despite the fact that the offer had ended on December 1, 2014, which was four days ago!

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Online Sales Continue to Rise

An interesting shift is occurring in the retail world. For some retailers, online sales could potentially account for the majority of total sales in the near future. A new research report from UBS highlighted four companies that are expected to see a large portion of sales coming from e-commerce in the fourth quarter of 2014. These retailers include:

Retailer Estimated Online Sales (as a % of Total Sales)
American Eagle Outfitters 24%
Urban Outfitters 38%
Lululemon 22%
Abercrombie & Fitch 29%

It was not long ago when many had said apparel purchases would not be well-received online!

“Go Omni-channel or Go Home”

While e-commerce is clearly the way to go, successful retailers are not stopping at a spectacular website. They are embracing what it means to be an omni-channel retailer. An omni-channel retailer integrates all of their channels to engage customers with a consistent, seamless and superior experience and message, and/or to gain efficiencies, such as inventory efficiency.

J.C. Williams Group’s quarterly Canadian E-tail Report surveys Canadian consumers regarding their online purchasing habits. The message has consistently been “Go Omni-channel or Go Home!”

Retailers who have invested in an omni-channel strategy have seen both their online sales and enterprise value increase.

If you don’t have an omni-channel strategy, in its place is a gaping hole in your business. Your customers are probably going elsewhere while you are sleeping. It is time to wake up before your brand falls into an eternal omni-channel slumber.

Shoes: The New Retail Anchor

What woman doesn’t love shoes?

While always regarded as an “anchor” department in traditional department stores and some shopping centers, no one really capitalized on it dramatically.

That was until Shelfridges London flagship store devoted about one-half a floor to women’s shoes with dramatic feature displays and a full range of brands.

Now, The Dubai Mall (±6,000,000 sq. ft.) has created a new twist on “shoes as an anchor.” Featured in small boutique shops are “branch-shops” of all the brands and designer names elsewhere in this mall. They are all clustered in the mall’s “Level Shoe District.”

This grouping is a mix of formal small spaces, open displays in the mall, and mini designer flagships. Whatever can be thought of the Level Shoe District, it is exceptional. However, drawbacks include some “shops” without staff, others without back-up stock immediately available, and confusion if it is a shop or a display. As well, it is not featured prominently on their website.

One thing that is clearly proven in retail—classification dominance of a particular category is a powerful shopper draw. With this lineup (below), The Mall of Dubai’s Level Shoe District is unique!

Bally Berluti Car Shoe
Chanel Christian Louboutin Diesel
Dior Dolce & Gabbana Fendi
Fred Perry Geox Giuseppe Zanotti
Gucci Harry’s of London Kate Spade
Lacoste Le Coq Sportif Louis Vuitton
Marc by Marc Jacobs Miu Miu Onitsuka Tiger
Paul Smith Pierre Corthay Prada
Private Collection Puma Ralph Lauren
Repetto Roger Vivier Saint Laurent Paris
Sergio Rossi Stuart Weitzman Tods
Tory Burch Valentino Vogue Café
Sole Lounge by Margaret Dabbs Concept Store by The Zoo The Cobbler

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Alibaba’s Plan of Attack: 3 Keys to Success

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Jack Ma, the founder of Alibaba Group Holding Ltd., was quoted on several occasions saying “eBay is a shark in the ocean; we are a crocodile in the Yangtze River, if we fight in the ocean, we will lose, but if we fight in the river, we will win.”

In recent years, that crocodile has grown enormous in size and is no longer content with the Yangtze River. It is no secret that Alibaba wants a piece of the ocean; a piece of the North American market. Besides, what is there to fear? Sales from Alibaba’s two e-commerce platforms, Tmall and Taobao, have already surpassed the combined sales of eBay and Amazon.

Alibaba Group Holding Ltd. is an e-commerce business that offers B2B, retail and wholesale of goods, its line of business also includes an online payment system and a shopping search engine among other developing programs.

Unless you are an e-commerce aficionado, chances are, you have not heard of 11 Main. It is the shark that Alibaba has been breeding in captivity to hopefully one day share the ocean with eBay and Amazon. 11main.com is in its beta phase with approximately 1,000 merchants selling products from categories such as apparel and accessories, technology, sporting goods, toys, and entertainment.

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11main.com beta phase

More vendors and products are expected before the site is fully launched. It will be no easy task to break into the already crowded U.S. e-commerce space, but the Asian giant has done a few things that will certainly increase its chances at success.

1. Acknowledging the Cultural Difference

Any international expansion is not without its cultural difficulties. Target encountered numerous problems during its first year in Canada partly due to its inability to recognize the cultural differences between the U.S. and Canada.

Alibaba recognizes the significant cultural differences between China and the U.S., and it has taken a number of steps to learn from the locals in order to minimize potential culture-related hiccups.

Back in 2010, Alibaba made the strategic decision to acquire two U.S. companies, Vendio and Auctiva, to provide them with insights and expertise on the U.S. e-commerce market. The two companies later built 11main.com. Alibaba also recruited key e-commerce personnel from eBay, Gap, and Walmart to better understand the market.

2. Unique Products

In the face of a crowded market and fierce competition, Alibaba’s entry into the U.S. market will undoubtedly be an uphill battle. 11 Main plans to stand out in the crowd by offering product differentiation. Instead of bringing over vendors who are on Taobao and who are likely already selling on eBay or Amazon, 11 Main is picking vendors that offer unique and high quality products made in the U.S. The marketplace will sell products from categories such as apparel and accessories, technology, sporting goods, toys, and entertainment.

3. Service Differentiation

While the e-commerce platform can offer many things, one thing it seems to be missing is the personal relationships and the interactive experience that comes with in-store shopping. Alibaba plans to set itself apart by encouraging 11 Main shop owners to not only sell a product, but also their story, their passion, and their point-of-view in order to establish a firm brand identity and to build a one-to-one relationship with their customers. Alibaba is also building a key success feature―social media―into 11 Main by allowing customers to follow shops they like and feel a personal connection with.

This crocodile’s endless ambition for global dominance has led itself to its current path; however, the ever changing global marketplace will undoubtedly present more difficulties for this foreign creature. Will it survive and thrive? We’ll be sure to keep our eyes on them!

 

Nordstrom Lassos the Calgary Market

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First things first. The charity launch for the Alberta Children’s Hospital and Calgary’s United Way at Nordstrom Chinook Centre brought out the who’s who of Calgary society. The store was rocking with high heeled locals that one woman described as “utterly amazing” as she was able to meet her entire social circle. The food was delicious and kept coming all night. The wine and beer bar was the place to hang out with friends, and the photo booth allowed friends to camp it up.

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Second, Nordstrom pulled off a beautiful store. Their skill at creating a curated collection was in full force. The pairings of looks, outfits, and “must-have” styles was fully noted. A guest pointed out that she wanted the exact looks that were on the models and mannequins.

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The price points ranged from $18 for a t-shirt in the juniors section to $2,500 for a Herve Leger or Roberto Cavalli dress. Often the brands are inter mixed as part of creating that specific must-have look.

Third, the overall design of the store and layout matched the aesthetic. Beautiful local Canadian and international art work and exceptional rugs complemented the clothing to create the whole package.

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Another noticeable design feature is the mixture of heights, textures, and materiality that created depth and multiple eye levels to draw consumers through the store—an exceptional attention to detail that is a Nordstrom trademark.

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For all the wonderful details and things they got right there were stumbles:

  • There are missing brands. A woman remarked that she came specifically for certain make up brands and footwear but was a bit disappointed they weren’t available. (She was a very loyal Nordstrom shopper who will now shop at the Calgary store but will continue to shop for more unique brands in the USA.)
  • That same shopper was dismayed to find out her Nordstrom card would not work in Canada. One would have thought that this detail may have been ironed out before opening.
  • As stated, there were missing brands—and perhaps an over representation of some brands such as Burberry, Michael Kors, and Kate Spade. Chinook Centre carries many of the same brands in full line stores such as Tory Burch, Kiehl’s, Eileen Fisher, Michael Kors.
  • The service level was en point. The staff was in full force showcasing the Nordstrom charm. However, check-out required five attempts. Only the managers were sent to the USA for training, but the staff did receive an intensive three week in-store training.
  • Finally, the retailers at the mall entrance that leads to Nordstrom are not complementary. They include Fairweather, International Clothiers, and Watch It. OUCH!

In light of these bumps, shoppers noted that the store is a welcome addition to the Calgary retail scene and sure to be a success.

This store had just enough Calgary and Canadian charm. All in all, if not a home run then a triple. Watch out Holt Renfrew, HBC—and eventually Saks!

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Missing the Target

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As Canadian based retail advisors, we have been inundated by business writers on both sides of the Canadian/U.S. border asking about what is happening with Target’s foray into Canada and what they should do to fix their problems.

It is now over a year since the first stores opened and things should be getting better. To test this, we recently went to several of their newly built stores. On the Labor Day weekend, Target dropped a very attractive book in leading newspapers that features fashion, cosmetics, and home décor products with style and attractive prices. As well, on a weekly basis, they are very promotional for household basics in their flyers.

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Up to until now, as analysts of the retail sector, we have been very bullish on Targets ability to get on track in Canada. After our most recent visits, we question our assessment.

Our observations in Canada have been that the Target marketing machine is much better at generating demand for some of their cool products than their operations and merchandising groups are delivering on the promise. Our field trips confirm much of what we believe to be a significant challenge for Target’s new management.

Key observations were:

On the good side…

  • The two cosmetic lines featured in the fashion book were in stock and on end cappers which we suspect may be done by the supplier.

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  • There were plenty of staff in the store and the back store.
  • They had instructions to make customers laugh – at the cash desk.
  • Staff did know about the fashion book and said that the merchandise would be in soon – everyone was very helpful and pleasant.

On the not so good side…

  • There was very little recognition that by September most stores have much of their fall fashion story on the floor.
  • None of the fashion items for either men or women were in stock and featured on the main aisle.

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  • The store continues to have significant out of stock issues with empty shelves and fixtures.

  • Store shelves are not restocked, especially for promotional items, in spite of having plenty of staff on the floor and in the back store.
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Gain laundry detergent on sale for $9.99 as advertised in flyer

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Gain laundry detergent nearly out of stock

  • The in-store presentation is as bad or worse than Walmart – signs and merchandise on fixtures do not match with few coordinated packages on fixtures to encourage multiple purchases.
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Boots displayed in front of signage for “it” sandals

  • Store staff, when asked about promotional items that are not in stock on the floor, need to be prompted to offer a raincheck or check to see if they have replenishment stock in the back store. Some even advise us to visit a neighbouring store a few kilometers away in case this store may have the item in stock.
  • When store staff are convinced to check stock availability in the back store, the delay to get it into the hands of the waiting customer is extremely long.

Target Canada is missing on Retail 101 – have the merchandise in stock when the advertising drops. It begs that question – Who is responsible for in-store merchandising? Who is coordinating schedules for merchandise packages? How much longer will it take to get the supply chain fixed or at least functioning better? Does the senior management team spend enough time in the stores? Discipline comes from the top.

It is our contention that price is not Target’s biggest issue. The biggest challenge is to provide the fun merchandise at great prices that Canadian’s have seen in the U.S. and provide week to week value on consumables. The Target marketing machine keeps giving Canadians a glimpse of what could be, but how long will they disappoint at the store level before Canadians will just ignore the marketing.

Vibrant Cities Celebrate the Unusual

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We’ve often thought that one of the greatest “city-killers” is a political and bureaucratic situation where regulations curtailed entrepreneurial growth. In the food-service industry, often these regulations were justifiably focused on food safety issues. But the world has changed. Toronto, the world’s most ethnically diverse city, has finally found another way to embrace and celebrate the best of its diverse population—mobile food trucks. In the spring, the city loosened its strict rules on food trucks that previously hindered the growth in this industry.

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Run by entrepreneurial chefs that are in different locations on different days, food trucks offer a wonderful array of tasty and imaginative food. Clean standards are guaranteed by their more formal prep-kitchens situated in industrial buildings. The fee is steep at $5,000 per year and trucks must be parked 50 metres away from established restaurants—or rent from parking lots. Nevertheless, a food truck offers a budding chef a relatively low start-up cost and a chance to test a concept before investing into a brick and mortar restaurant. And, with the advancement of social media, mobile apps and the internet, these entrepreneurs now have the necessary tools to reach and interact with a greater number of consumers (even without having a permanent location). Mobile apps such as Toronto Street Food App and Toronto Food Truck App provide location information, photos, news and events for Toronto’s food trucks. Many independent food trucks have their own website and active Facebook and Twitter pages.

Whatever the pros and cons, downtown workers and residents of Toronto enjoy this delight for the eyes, taste buds—and wallet!

Resident of Toronto or visiting soon? Be sure to check out Toronto’s Food Truck Alley, inspired by Hamilton’s Food Truck Alley—created for food truck lovers by food truck owners. They are open every week, Wednesday to Friday, located at the corner of Queen Street East and Jarvis Street. Here are a few vendors that you may have the pleasure of running into.

The Feisty Jack – British comfort food. They plan to open their first brick and mortar location soon

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Steel Cut Coffee – premium espressos, tea and baked goods IMG_2134

Curbside Deliciousness – gourmet homestyle cuisine

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Canadian Omni-channel Retail Progresses through Online Marketplaces and Partnerships

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Canadian retailers and shopping centers are scrambling to understand how to partake in omni-channel retailing in order to meet the needs of a growing customer base who shop anytime and anywhere. Consumers are browsing/researching products online, showrooming, webrooming, posting reviews with their mobile devices, and buying online and returning in-store. For many consumers however, a seamless omni-channel retailing environment is lacking when shopping with most Canadian retailers. That is for good reason.

Setting up an omni-channel environment requires significant resources, expertise, budget, and a long-term outlook. Canadian retailers are in the early stages, determining their strategic plans and how to invest and create an omni-channel environment for their consumers.

At the Canadian Research Conference hosted by the Centre for the Study of Commercial Activity (CSCA) and the International Council of Shopping Centers (ICSC) on June 25th, two top executives shared their experiences on servicing retailers and customers in the online and omni-channel environment. Drew Green, founder, CEO, and chairman of SHOP.CA and Chloe Raincock, owner of heel boy shared their insights as part of a panel discussion.

HEEL BOY

heel boy is a Canadian specialty shoe retailer. Starting out in Kingston with one store in 1998, Chloe grew the business to four stores, including one in the renowned Distillery District in Toronto. Like many small and mid-sized Canadian retailers, she faced critical questions on how to expand her business amidst a changing consumer landscape. However, as Chloe put it they wanted to “be competitive in the present and relevant in the future.” To do so she knew she had to adapt, and SHOP.CA was an ideal partnership to help further heel boy’s success.

SHOP.CA

SHOP.CA is a Canadian online marketplace that works with retailers to setup the e-commerce leg of their business. For retailers, an advantage of any online marketplace is access to an aggregated consumer base that they can serve; however, there are other advantages that go far beyond that. Aggregated consumer insights, superior technology investments (well over what individual retailers can afford), marketing reach, online marketing expertise, and a cohesive consumer experience are additional benefits that online marketplaces offer. Some online marketplaces, like Amazon, are a dual-edged sword. Amazon provides a solid platform and services for retailers with millions of customers to sell to; however, competition is high on the platform and Amazon itself gains insights into retailers’ sales and consumer history, which is used not only to improve the overall shopping experience, but to sell their own private-label products (e.g., Denali Tools, Pinzon: Home & Kitchen, etc.)

KEY TAKEAWAYS

A few key learnings from the panel session included:

  • For Canadian retailers, partnerships with service providers and experts are crucial for success online. To build up a great online Canadian economy there must be a long-term vision on both sides. Mature online retailing countries like the U.S. and the U.K. were built on solid partnerships where both parties assumed the risk and benefited from the large returns.
  • “Last mile in this country is increasingly important”—Drew Green. Consumers want to pick up items in-store, especially if it means they can get it faster. Whether they are picking up at their local post office, at their local retailer or their shopping center, the “last mile” is an opportunity that many retail partners and retailers have yet to discover.
  • Driving traffic online is the top priority for online stores. The top two channels for driving demand for retailers are SEM, dominated by Google, and online marketplaces. Retailers must consider the multiple online opportunities for driving traffic as part of their overall strategy.

The two panelists had a dearth of other information and experience to share. Some nuggets include the following:

  • A surprising 60% of site visitors at SHOP.CA are males.
  • Repeat customers come back on average 5 times per year for SHOP.CA, illustrating the pent-up demand amongst Canadians for great local shopping.
  • heel boy’s strategic decision to partner instead of building an e-commerce platform in-house was due to several reasons including: (a) a lack of intimate understanding of online technology platforms, (b) understanding that marketing the brand would be a difficult task in the competitive environment online, and (c) to create a competitive online shopping experience would require huge investments and resources that smaller retailers cannot always afford.
  • 65% of SHOP.CA’s 2,200 stores have their own e-commerce business but these retailers are also using an online marketplace; for others they provide the e-commerce operational stack from end to end.
  • A Canadian online challenge turned opportunity for SHOP.CA includes transparency, providing Canadian customers with transparent pricing (e.g., including customs/duty, shipping, etc.).
  • The majority of SHOP.CA’s traffic comes from partnerships (e.g., Aeroplan) and there is less emphasis on Google marketing (i.e., ads).

For more information on the panelists or the session, please contact: spoolo@jcwg.com.

 

About SHOP.CA

SHOP.CA was launched in July 2012 as Canada’s first online marketplace. Before founding the company Drew Green (founder & CEO) identified that Canadian consumers were forced to shop on U.S. sites as a result of retailers and entrepreneurs not investing in the types of e-commerce experiences needed to keep consumers shopping in Canada, when they shop online. With this conclusion, SHOP.CA was created to fill this gap and to help retailers be successful online, through a marketplace built for Canadian retailers, distributors and brands, therefore offering a more consistent and cohesive consumer experience for Canadians.

Today the marketplace has over 2,000 stores and over 10,000 brands. Its primary function for merchants is to provide a marketplace platform, on a cost per order basis, helping to drive sales at scale and at a price that retailers would be otherwise unable to afford on their own, and a wealth of consumer traffic in one location to help build a retailer’s online business. SHOP.CA’s technology platform was built in partnership with IBM and continues to be innovated through an in-house development team. Additional services provide the expertise that many retailers find difficult to acquire in Canada or cannot afford to hire for internally. For example, SHOP.CA works with its retailers to educate them on content, pricing strategies, digital marketing, and fulfilment excellence. They act as an extension of their merchant partner’s team to ensure the retailer is successful online.

SHOP.CA is a direct competitor of Amazon; however, they are distinct in two ways. First, they are purely focused on the Canadian consumer and secondly, they do not act as a competitor to retailers (e.g., do not sell private-label products). This provides an advantage to Canadian retailers that join the marketplace who do not want to risk their competitive product and customer data and create a new competitor in the form of their online marketplace (e.g., Amazon). For more information and to shop online, please visit www.shop.ca.

About heel boy

Founded in 1998 in Kingston, Ontario, heel boy has been offering a unique shoe shopping experience for 16 years. Owned and operated by Chloe Raincock, heel boy offers something for everyone. From a girls’ (or boys’) night out, to a rainy spring morning with the kids in the park, to a power lunch with the boss, customers can find a shoe right for every occasion at heel boy. With stores located on Queen Street West and the Distillery District in Toronto as well as in Kingston and Waterloo, heel boy’s dedicated sales staff will help solve even the trickiest shoe dilemma. For more information and to shop online, please visit www.heelboy.com.

Retail Innovations 9: Global Retail Trends 2013 Part 9—Technology Intervention

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Technology itself is not an innovation; what the technology enables customers to do is that which provides a glimpse of true innovation. There are marvelous examples of uses of technology providing consumers with more choice, more access and more information than ever before. Let’s take a look at two such cases from Retail Innovations 9.

Hointer (USA – Seattle)

Retail meets technology at Hointer where they have reinvented shopping through the use of smartphones and robotics in their apparel stores.
Hointer is a micro-warehouse within a store, allowing easy exchange and visibility of products across stores. Product status and the whereabouts of every item are always readily available in store, which helps in inventory control.

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For customers, this translates into a unique omni-channel way to shop that utilizes a tool most customers already have — a smartphone. Because all of the apparel is tracked in the cloud by Hointer’s back-end system, the company knows exactly where each article of clothing is at all times. So, if a customer in one of their stores wants a specific pair of jeans not available in store, the app will show where else the product is available. Customers can try on the jeans for proper fit, and then order their preferred wash or size with Hointer’s overnight shipping for next day delivery — or perhaps receive it on the same day via Google if the product is available in their area.

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This inventory-sharing model allows Hointer to carry just the right amount of product and distribute them across their locations. With this model, it is unnecessary to carry ten different washes of jeans or colors of shirts at every store. As long as Hointer has one model in each size and examples of what other colors are available, customers have instant access to the entire inventory, regardless of location.

Hointer is designed so customers can be in and out in minutes, a play on the word ‘hunter’ because it is believed that men always have a target when they shop and they want to get it done quickly. Before shopping, customers download the Hointer app or can ask a tablet-equipped employee to accompany them through the store. When they see something they want to try on, customers simply scan the QR code — or place their phone next to the NFC-enabled tag.

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After scanning or tapping, customers are prompted with available sizes and once a specific pair is selected, the clothes are dropped into a virtual shopping cart. Customers can continue to drop other items into their shopping carts; when ready, they click “try on” which sends them to a designated dressing room.

When customers arrive at the dressing room, the clothes are already there waiting for them, delivered through an automated robotic process on the back-end. If they don’t like the clothes or want to try on a different size, they can be sent back through the chute in the dressing room and are then automatically taken out of the shopping cart. When ready to purchase, customers tap their phone to a pay station in the store and swipe a credit card.

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Hointer displays only one of each item and puts the bulk of its merchandise in an automated stockroom. Garments are hung so customers can see every detail, rather than the piles often seen in apparel stores. The back-end is very small, accounting for only 10% of the store, but is able to hold thousands of products due its unique organization format. This back-end system is entirely automated, but can also be configured to a more manual setting.

Hointer’s data collection allows the company to keep track of every customer’s purchase habits, every scan they’ve made, how many times they have requested alterations, as well as how much product is available and at which stores.

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Hointer’s stores have combined the best of the physical and online world by allowing customers to see, feel and try on clothing while offering a quick and convenient way for men and women to make purchases and proceed with life. They have lowered overall operational costs for their retail stores through the use of an automated stockroom while gathering customer data through the use of their mobile app. Hointer represents a new way of shopping by simplifying the customer experience while using technology that customers already own.

Audi City Mayfair (UK – London)

A new digital car showroom format that uses state-of-the-art technology to make clever use of a small store format, as space is so precious in central London.

Audi City

Audi has solved the problem of having large objects in a high-rent retail space through the use of digital technology. The store only showcases a few cars in combination with top-to-bottom digital screens that line the walls. Customers can customize any model of Audi car from interactive touch screens and drag the virtual image of it onto these digital walls. The digital visualization of the car is life-size and moveable, so the customer may view it from as many different angles as they choose.

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Audi has shown itself to be an early innovator in developing complex digital configurators. While the likes of NIKE have been offering digital personalization services since 1999 with NIKEiD, the complexity and scale of a car presents a very different challenge. For the customer to have the confidence to purchase a car from only having seen a digital visualization of it, the technology has to be state of the art and highly realistic. Audi City delivers just that. Audi City has proved that it is possible to sell cars without having seen, felt and tried them out.

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Audi has made its mark in digital personalization. The retail model itself can offer significant operational benefits by having a customer pay for a product before it is produced to specification, limiting the need to predict range.

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Conclusion

Through state-of-the-art technology retailers continue to realize significant gains that go beyond operational efficiency. As the above cases demonstrate, technology can be used in many new and exciting ways as a means to solve the problems that retailers face today. Retailers can also benefit by incorporating their customers’ technology tools into their operations as well.

About Retail Innovations 9

RI9 - imageRetail lnnovations 9 is J.C. Williams Group’s and Ebeltoft Group’s (www.ebeltoftgroup.com) latest compilation of leading edge innovation, highlighting individual ideas and the key themes that emerge from studying the whole.

This edition features 54 of the best innovation cases from 23 countries and pinpoints the nine global innovation trends.

To obtain a copy of this publication, click here.

Retail Innovations 9: Global Retail Trends 2013 Part 8—Retailvention/Verticality

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How do you think about an existing business in a completely different way, shattering the tried and true methods of distribution and selling? How do you build and take a business directly to the customer, by-passing traditional selling channels? Cases in retailvention and verticality are not limited to the old ways of thinking but break new ground in creating new business models. From savvy start-ups to some of the world’s largest companies, these new models force one to rethink the very nature of what retailing can be. Let’s take a look at two cases on retailvention/verticality from Retail Innovations 9.

Chilli Beans (Brazil – Sao Paulo)

Imagine a place where you can try a large variety of Chilli Beans sunglasses. Now imagine that same place, adding great music, the possibility to interact with other cities and cultures all around the world, and at the same time share the experience with your friends.

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The concept store showcases the total brand and offers exclusive access to all new and special edition Chilli Beans products, ranging from sunglasses to bikes and skateboards to handmade electric guitars.

Customers are encouraged to experiment with the products and to live the Chilli Beans experience while sharing it with their friends on social networks.
The flagship hosts various events every Saturday in a designated area and offers customers the convenience of not having to leave the store with its in-store Coffee Suplicy kiosk.

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Chilli Beans introduced the fast fashion model to the sunglass world by launching a new collection every 15 days. This new collection is themed and often in partnership with a designer or other famous brand, and each release has a special display at the store. The Chilli Beans brand is based on a dynamic concept and connection with the customer. Chilli Beans has over one million followers on Facebook and, of course, the experience at the flagship can be shared live on any social network.

Fun and interactivity are the most striking features of the Chilli Beans flagship. Contact with a wide variety of product and sharing with friends while remaining in a store without the feeling of being in a store make the experience something memorable.

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With a wide variety of sunglasses and the opportunity to buy personalized glasses while exploring other products, Chilli Beans cannot be described as just a simple store. Customers feel comfortable coming back to the store and trying new products. The store is full of interesting news and products, the environment is laid-back, and customers are welcomed to discover even more products and to enjoy the brand.

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Nespresso Regent Street (UK – London)

The new concept focuses on telling its brand story by providing a tailored, educational and experimental experience for consumers where they can try out the different blends and live the experience.

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Nespresso has identified the development of the British consumer (in particular the Londoner) from coffee drinker to coffee connoisseur. They have used this increasingly discerning palate as inspiration for the customer experience in-store. The London flagship boutique offers customers a multi-sensorial space where they can discover the entire product range while enhancing consumer perceptions of the brand’s coffee expertise.

Nespresso has created a convincing and enticing brand experience around the tiny core product of a coffee capsule. The visual merchandising is impeccable and the service of an equally high standard, achieved through Nespresso’s decision to recruit its staff from hospitality backgrounds rather than retail.

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The different elements of the store work together to provide the consumer with a uniquely personalized experience, featuring a number of different areas. The Tasting Area, for example, is managed by a team of coffee specialists to guide customer tastings. The store also makes use of video walls and tablets to provide a huge visual impact and allow for deeper customer engagement with the brand and its products.

Nespresso has shown that even the smallest product can be put on a pedestal. They have created a successful store format that is an immersive experience, educating the consumer and increasing engagement with the brand off the back of a coffee capsule.

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Conclusion

Retailers are finding new ways to delight their customers. The idea of the store goes beyond simple merchandising to creating an engaging and memorable experience for customers. In the cases above we have seen two ways of doing this: 1. create a social and relaxing environment that encourages customers to play and have fun with products, and 2. turn something simple into a fascinating customer experience.

About Retail Innovations 9

RI9 - imageRetail lnnovations 9 is J.C. Williams Group’s and Ebeltoft Group’s (www.ebeltoftgroup.com) latest compilation of leading edge innovation, highlighting individual ideas and the key themes that emerge from studying the whole.

This edition features 54 of the best innovation cases from 23 countries and pinpoints the nine global innovation trends.

To obtain a copy of this publication, click here.

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