Retail Predictions That Will Come True?

The following are 8 retail predictions "that will come true" made by the Marketing Maven

1. Self serve kiosks will become a prominent option with retailers and restaurants.
2. Mobile payment will replace debit cards.
3. Bricks and mortar will continue to outsell online retailers.
4. Significant increase in retailers offering personalized-custom options.
5. Mobile marketing with consumer targeted geo-fencing will become the new junk mail.
6. Convenience stores will become quick serve restaurant.
7. Technology will be everywhere within retail and will create job elimination.
8. Re-dedication to the consumer experience vs. a strong focus on price and product.

Do you agree? Do you have other predictions "that will come true"?

eBay Partnering With Retailers

eBay is changing strategy and repositioning itself as a technology partner for large retailers — not a competitor. Capitulating to prevailing competitive trends, eBay is communicating to retailers that eBay is their ally, not a competitor.
eBay CEO John Donahoe  notes that last year, the e-commerce was worth $5 billion. Now, he states that there is a $8 trillion to $10 trillion opportunity. “What’s happened over the last 12 to 18 months is that the line between e-commerce and retail is coming down,” said Donahoe, “It’s not just blurring. It’s falling down like the Berlin Wall.”

Before 2011eBay was a competitor for larger retailers primarily focused on promoting relationships with small and medium-sized businesses. But with several acquisitions in the last year that has formed eBay’s X.commerce platform (comprised of primarily mobile commerce startups and their technologies), eBay is going from what Donahoe described as from “defense to offense.” “We want to become the partner of choice for retailers of all sizes to compete in this new commerce world,” Donahoe affirmed.

Donahoe explained that eBay is responding to the following requests from retailers:
• A multi-channel platform because customers want a seamless experience between online and offline shopping
• A way to handle demand generation (stemming from sources such as Facebook, LivingSocial and Groupon) and also drive traffic into stores (online and offline)
• A way to go global

Donahue explains, “We are positioning the company as a technology partner for those retailers and we will not compete with them. We’re positioning to help provide data for them.” PayPal, an eBay company, is also part of ebay's retailing push with its new mobile commerce and digital wallet solutions, with a Facebook Connect-like integration seen on online stores and then mobile apps for shopping in brick-and-mortar locations.

Thus, eBay is working to cover all bases of the commerce scene going forward. Ebay will be going up against stiff competition in Amazon and Facebook and seems to be playing catch-up rather than being out front leading. What do you think about ebay's chances of becoming a e-tailing platform for large retailers?

Is Amazon Abandoning Moms?

Amazon used to treat Moms special. Offering the same free two-day shipping as Amazon Prime, Amazon Mom loaded on heart warming extra benefits for Moms (and anyone else who thought to ask for them). The benefits included:

• No fee at all for the first 90 days of membership
• Extra "free" months added on when you placed an order worth $25 or more
• A Kindle book rental-a-month -- also free
• Purchases of diapers and other baby-related consumables received discounts of as much as 30% off Amazon's regular prices!

Last week, Amazon revealed that the high cost of supporting programs like Amazon Mom had helped to cut the company's profits in half. Turned out, supporting Mom carried a high price tag. And so Amazon is no longer showing Mom the love.

Amazon is informing its millions of Moms, of significant cuts to the program's benefits. The cuts include:

• The ability to earn extra months of free shipping is on the chopping block
• Kindle rental is no longer part of the terms of service
• Discounts on diaper purchases have been slashed by a third. Instead of 30%-off, the most Amazon Moms can hope to score today is 20% -- of which 15% already comes with Amazon's ordinary subscribe-and-save program.

Amazon's legions of Moms are not taking this cut kindly. Using the same strategy as Bank of America and Verizon customers, Moms are organizing on Change.org. Already signed by 1447 Moms, the petition states:

"Times are very rough, unemployment is high, money is getting harder and harder to come by. This discount is the only way some people can afford to buy the necessities they need for their children, I know it certainly helped my budget. Not to mention all the moms out there without easy access to transportation, or who may be handicapped, who used this program to have necessities delivered right to their door. It was a great program until all the "changes" were rolled out..Considering that Amazon.com had a profit of over 15 billion dollars last year, misleading customers, alienating them, and then refusing to honor their program is not a very warranted or smart practice."

Unfortunately, Amazon's financial picture is unsupportive of Mom. Reporting earnings for the final quarter of 2011, Amazon admitted that despite 35% sales growth, profitability had headed in the entirely wrong direction. Operating profit margins got cut in half, while net profits were down 57%. The culprit: massive spending on a number of initiatives -- everything from building new warehouses, to subsidizing "Prime" membership, to selling Kindles at a loss -- which decimated the company's profit margin. Although the Mom program was not mentioned, it has the same costs as Prime membership and probably caused damage to the bottom line.

Amazon is caught between profit and Mom creating a small PR nightmare. Many of the 1447 petition signers are leaving statements that read very much like bad Amazon Reviews.  For example:

"In addition to missing this program, of which I have been a fan, I think the ending of this program is being handled rather poorly. The program not only helped out with getting baby stuff, it also was increasing the amount that we would shop with Amazon because we were on their site more. Cancelling the program is a lose lose situation."

"I tend to prefer to support small businesses but I am a stay at home mom right now and times are tight, so this allowed me to be able to afford the 7th Generation wipes for my 7 mo. old. I am so disappointed in Amazon for taking this program away - it's exactly the type of corporate greed that keeps me from big co's. AND it is going to make me an activist AGAINST Amazon now too."

So far 1447 petition signed is far less than 306,000 petitions signed by Bank of America customers. However, there is no predicting what will happen when Moms get organized and begin to focus on getting Amazon to listen. Stay tuned for a message from your Mom.

Online Beats In-store by A Lot in Consumer Survey

Interesting result- In almost every case, the online stores scored at least as high as their brick and mortar counterparts and often better!

 To inform consumers about outlet "big box" stores the Consumer Reports National Research Center surveyed subscribers about 55,108 shopping experiences buying a range of products at Costco, JCPenney, Kmart, Kohl’s, Macy’s, Meijer, Sam’s Club, Sears, Target, and Walmart. For the first time, Consumer Reports asked questions about the consumers' experiences the retailers’ online stores.

The research found the following:
* Respondents said the quality, selection, and value of the goods online equaled or surpassed those of store-bought purchases.
* Sixty-three percent of the online shoppers said the service they received was excellent or very good; only 47 percent of in-store shoppers rated the quality of sales help that high.
* Smart merchants provide help by phone, e-mail, or online chats.  All the stores in the overall satisfaction Ratings have customer service available by phone.
* Respondants said that buying was easier online than in stores. Among shoppers who rated both walk-in and online experiences, 81 percent said the ease of checking out online was excellent or very good; just 46 percent said the same about the speed of store checkouts.  The most prevalent problems walk-in customers said they faced were long checkout lines, a lack of sales help, and out-of-stock items. Twenty-nine percent said checkouts were jammed.

Costco, the standout, was the only chain to earn an outstanding grade for the overall quality of its merchandise, whether in stores or online. And it earned above-average scores for all 10 product categories rated, including electronic entertainment, jewelry, and sporting goods. Of note, its website did better than its walk-in stores on all counts except product quality (for which the two types tied) and earned top marks for layout, product value, and checkout. In-store shoppers found a few chinks in Costco’s armor: The chain’s walk-in stores scored below average for selection, checkout (because of long lines), and service, and its shoppers were more likely than those elsewhere to complain about a lack of fitting rooms.

This research shows the perceived value and convenience of online shopping is growing relative to shopping in stores- particularly in big box stores. This trend has been growing over the past several years however, this research clearly demonstrates the strength of the trend. Retailers and manufactureres know shopping is based a great deal on selection, value and convenience. Are offline stores losing ground so quickly they will not be able to recover?

According to an Accenture/Dunhumby/ConScore study, CPG manufacturers have invested millions of dollars in their brand websites and social media presence, yet they struggle to show how their brand websites are influencing brand purchases in stores. The Accenture/comScore/dunnhumbyUSA research found a significant potential for brand websites to become key drivers in building customer loyalty and preference for CPG brands by creating unique online brand experiences. The study found that:

• Visitors to CPG brand websites spend 37 percent more than non-visitors on the brand in retail stores.
• Brand website visitors are heavier buyers within a brand’s product category, spending 53 percent more than non-visitors on the category in retail stores.
• Brand website visitors have more purchase occasions than non-visitors for both the brand and the category, making 35 percent more purchase trips for the brand and 39 percent more in the overall category.

The study also concluded that to maximize impact, the most important website features include:

A compelling brand value message that provides a persuasive reason, other than a coupon, for a website visitor to buy the brand.

Fresh content updated at least weekly to encourage visitors to engage and participate and return frequently.

Content that creates an engaging online experience such as a pulse survey on the home page, or an opportunity to rate a new product or product attribute, or user generated content like recipes or weight-loss planning. Content with a philanthropic appeal such as sustainability or participation in a food bank also was shown to create greater engagement.

Well designed site navigation that is intuitive, uses simple menus and has clear site maps.

Overall online CPG brand experience influences between 1 percent to as much as 35 percent of a brand’s total USA in-store sales, highlighting a direct correlation between CPG brand web sites visitation and in-store purchase behavior. The important conclusion to the study is that some CPG companies are missing revenue opportunities and may be losing market share due to underinvestment in the digital channel. Is your CPG brand committing this mistake?

Taking Shopping Online is an International Phenomenon

As People Age Shopping Online Becomes More Attractive

According to results from a nationwide online survey of 1,000 U.K. online shoppers by web site building and hosting provider BaseKit Platform, British consumers like shopping online and, with website improvements, would do more of their purchasing online.  The survey also revealed:

* The average British consumer devotes 2.4 hours per week to shopping online compared with 1.2 hours per week shopping in stores—yet that consumers spend more in stores than online.
* The British consumer spends an average of 126 pounds ($198) per month in stores compared with 116 pounds ($182) spent online; that’s a total of 242 pounds ($380). * Women spend an average of 212 pounds ($333) monthly for retail goods, with that total split very nearly in half between online and store retailers
* Men spend more of their retail budgets in stores (53.0%) versus online (47.0%).
* Online shopping draws heavy interest from consumers age 55 and older, 86% of whom say they shop online regularly. More than a third (36%) of consumers in this age group say they do the majority of their retail shopping online. 59.2% of consumers age 55 and older cite the ability to have online orders delivered to their homes as a prime motivation for shopping online because it saves them from having to carry products home from stores.
* British consumers across all age groups say they shop online because it is convenient (60.5%) and because they get better deals online (53.4%).

This survey shows that Brits are increasingly taking shopping behavior online, and not just young people. Since older consumers are now the U.K.’s biggest online shoppers, retail outlets must consider their web sites as important as their physical stores and should be developing sites that are easier for older people to navigate.

Internationally the focus on convenience and price are the primary drivers of online shopping. As the world ages, this phenomenon will accelerate. What changes need to be made to websites to make them more accessible and attractive to an aging population?