Editor’s Note: Retail Trends From INNOVATE 2011
Here are just five of several retail trends I learned about at INNOVATE 2011, the Retail Innovation and Marketing Conference sponsored by the National Retail Federation, held last month in San Francisco:
1. Assume your customer is a cross-channel shopper. Retailers must understand that cross-channel is here to stay; they have to build their business processes around that fact. "The shopping process is a multi- channel process for customers today and, as a result, retailers need to communicate with them in an integrated way," said Van Baker, vice president and research director for retail and manufacturing advisory services at Gartner Inc., who spoke at a session that discussed disruptive business models and how they're poised to influence retail.
2. Think carefully before using group buying sites. No one can deny the success and popularity of daily-deal sites such as Groupon and LivingSocial, but there are potential drawbacks to using these services, several speakers noted. "There's the possibility that the wrong customers — existing customers who'd likely purchase merchandise in your store anyway — may be getting the deals," said Bill Bass, president of the Charming Direct division of Charming Shoppes, who spoke at a session on how customer insights can shape retailers' futures. "This could have a huge effect on margins, devalue brands and cannibalize sales to existing customers," he said. But Greg Bettinelli, senior vice president of marketing at daily-deal fashion site HauteLook, said that deal sites and the deal mentality is here to stay. "I think after Sept. 2008, our lives changed forever," he said. "Value became cool again. And with gas prices currently hovering at $4 a gallon, I don't think the mind shift around finding the best deals is going away anytime soon."
3. Don't just jump into f-commerce. More and more retailers — large and small — are opening up Facebook storefronts as a way to offer shoppers "anywhere e-commerce," or the ability to purchase merchandise wherever they happen to be online. But the buzz at INNOVATE was that opening a Facebook store might not be the best use of a retailer's time. "I've looked at the J.C. Penney Facebook store … there's nothing special about it," said Gartner's Baker. "It looks just like J.C. Penney's website, but it's taking customers off of it and putting them on Facebook."
4. Experiment with sentiment analysis. This process, which enables retailers to analyze consumers' online comments about their brands in an effort to gather general sentiment towards them, is becoming more popular. Charming Shoppes' Bass, for example, said he works with a company called Clarabridge that performs natural language queries to track online sentiments, and then ties that data back into Charming Shoppes' databases. "We overlay this data over our purchase data, so we can track how much more a customer who gives us a 10 is worth to us than a customer who gives us a three. We then market to these groups accordingly."
5. Try using Facebook Credits or virtual goods incentives for customer acquisition and retention. Retailers are beginning to understand the power of social gaming and how it can be incorporated into their lead generation or customer acquisition programs, said Jay Feitenger, founder of digital marketing agency StringCan Interactive. Feitenger spoke at a session examining Facebook Credits, a virtual currency that enables consumers to buy virtual goods and services in games and apps on Facebook. "Currently, 53 percent of Facebook's 600 million users are playing social games — that's huge," Feitenger said. "As a result, retailers are starting to use Facebook Credits to reward and acquire customers."