Stores are becoming advertisements for their brands as much as they are becoming the knowledge centre. And yes, that does mean customers try instore before they buy online so you better be ready to get them at both touchpoints. But what if stores were designed to exploit the desire to try stuff out rather than purely to push the sale? They would then invariably remain as part of the consumer shopping experience and work to help people make their buying decision. A casual browsing environment with convenient points of purchase rather than a barrage of high-pressured sales people and a line of cash registers can lure people in to browse even when they are not intending to purchase.

The sale may be converted now or later, either online or instore, as long as they buy your brand then you have them hooked. When retailing multiple brands the challenge becomes one of building trust with consumers at store level, offering after-sales services or added value services that may not be available online. Repairs and product warranties are a good place to start the customer relationship and build strength against online shopping.

Most companies think they need to be part of the social media landscape—and in some cases this is a good idea. There are good and bad ways of doing this and we’ve all seen it backfire. The interesting part of social media is how much we listen to each other. Recent information shows that eight out of ten people trust peer reviews over all other sources. Peer reviews from people they do not, and never will, meet or know. A clear opportunity exists here to stop trying to beat staff into the perfect walking product info expert and engage customers who have already purchased the product and are happy with what they have. Even better, if they are happy with the service they receive from the store then it will speak volumes more than any TVC or glossy advertisement.

This is not rocket science. Treat your customer well, honestly and give them a good deal and they will come back and tell others. Educate them, have instore trials and drive membership experiences to win your customers over. Marketing, promoting and advertising on price-slashing or bargains only leads to bargain hunters and drives the market down. Price can only go down so far. Then where do you go?

The successful retailers of the next generation will be the ones that create and develop an open, two-way relationship with their customers. They will value their customers opinions and know what to do with that information. They will recommend products that are of value to their customers and admit when they got it wrong. But they will be doing it by proxy through their customers’ recommendations and reviews with brand ambassadors online. Some of these will be paid, some will not. Some already are.

Retail still has one major drawcard over any online experience: face time with customers. This is the opportunity to build the relationship and take it to the next level. Creating a community feel and space for shoppers to linger without feeling like prey might add to their feeling of being welcome and wanting to explore. Having staff that are well-versed in striking up conversations and can relate to the customer will mean they can gather insights from them as to why they are there or what they want. It’s human-centric design thinking.

Gathering intelligence on the shop floor about the wants and needs of your customer is not something that’s easy to emulate online, not even in the latest e-shops.

• Tony Reardon is resident copywriter and business manager at Lemonade.

European and North American retailers such as Walmart and Tesco are investing heavily in these emerging channels and, while Reach Media’s chief cheese Greg Radford says we’re well behind the curve, local retail organisations like Farmers, which released an interactive catalogue a few weeks back, are starting to follow suit.

“An increasing number of New Zealanders are turning to mobile and social channels for product information, recommendations and advice on where to purchase, as well as for transactions,” says David Nation, general manager of sales and marketing for Reachmedia, Lasoo New Zealand’s parent company (one criticism of the Farmers catalogue was that there was no way to buy from it, and strangely, there’s no e-commerce functionality or links to the retailers’ websites through the Facebook catalogues either, despite being available on the catalogues featuring lasoo.co.nz website).

In addition to the new Facebook and mobile platforms, Lasoo.co.nz has recently added a daily deals department that collates a host of available offers from the likes of Groupy, GrabOne and Cudo and also moved its content to HTML 5 to enable cross platform social and mobile applications.

“The Lasoo development aims to support consumer discovery on multimedia devices while maintaining a low involvement mantra for retail partners,” he says.

Not surprisingly, Nation thinks retailers should be allocating a higher percentage of their budgets to emerging channels, with a strong focus on mobile.

“Retailers are not able to keep up with their customers changing preferences, and are missing opportunities to connect with consumers on the go. We believe we have developed a simplified cost-effective solution to fulfil this need.”

Click here to view the embedded video.

Before

After

There’s been a bit of green-fingered, grow-your-own food renaissance around the developed world in recent years, to the point where the approximately $600 million New Zealand gardening market is one of the few retail sectors currently moving in the right direction. To help those numbers keep growing, Hotfoot and Tangible Media have chucked a bit of fertiliser on the Nurserymen and Gardeners Industry Association and launched a one-year long Go Gardening campaign that aims to get more Kiwis in the garden.

The NGIA is 107 years old, has more than 400 members—from big behemoths like Mitre 10 and Bunnings, to small independent shops—and represents over 75 percent of the industry. And Linda Geary, strategy client services at Hotfoot, says the campaign, which includes TVCs under BrandWorld’s Discover umbrella, point-of-sale, a consumer website www.gogardening.co.nz and a newly relaunched magazine, needed to be relevant to all of them and grow the whole green-life products and services sector. So they’ve decided to try and give more confidence—and guidance—to consumers who understood the social, health and economic benefits of gardening but don’t really know what to do.

From erectile dysfunction pills to Telecom broadband packages, there’s a wealth of informational advertising on TV at the moment (so much so that BrandWorld, which also operates brands like Family Healthy Diary and Eating Well, is TVNZ’s biggest client). And, as Geary says, this is a little bit like the gardening equivalent of Watties Food Minute.

This campaign is part of the NGIA’s five year development plan and it hopes to create a movement—or, given that gardening is ranked by SPARC as the country’s second favourite leisure activity, catalyse a movement that has already begun—and the halo effect of that will benefit all of the association’s members. And while she says there’s been a bit of a wait and see approach from many of the brands that have been approached to feature alongside the brand, the first instalment featuring Tui Vegetable Mix, Zealandia and Seasol has been very well-received.

Head of sales and marketing Paul Whiston said the impact of the Cup on the retail landscape was already evident, with total foreign card spending through the network up 27.4 percent over the weekend compared to the same period last year.

“The buildup started a week out from the opening ceremony, and on the day itself (midday Friday to midday Saturday), an extra $1.3 million flowed through the hospitality merchants linked to our network compared to the same period last year – an effort repeated in the next 24 hours,” he said.

For the week ending September 8, spending through the network excluding fuel was just over 10 percent, in comparison to the 6 percent growth rate of the previous week, with Auckland and Northland leading the pre-opening spending surge.

Car rentals over the weekend grew by 46.6 percent year-on-year, and hospitality across the board increased 10.5 percent.

Whiston said the strongest surge was recorded in Southland (up 24.4 percent over the three days), which was most evident on Sunday (32.7 percent).

Spending in Otago was also buoyed to the tune of 17 percent, with Sunday the strongest for sales (up 26.1 percent), while Canterbury’s peak came on Friday at a 27.4 percent (15 percent growth for the weekend – bearing in mind spending last year was affected by the September 2010 earthquake).

In Auckland/Northland, Saturday was the busiest day for the hospitality sector, with total spending hitting $50 million and annual spending growth up by nearly a third.

Some regions, however, experienced lower spending in the hospitality sector, including the Bay of Plenty, Hawkes Bay, Palmerston North, Wairarapa and Marlborough.

• This article originally appeared on Idealog.co.nz.

In the extremely competitive grocery game, market share is king. And a minor change equates to millions of dollars in gained or lost revenue. Progressive Enterprises, which operates 158 Countdown, Foodtown and Woolworths supermarkets around the country, had been losing share to its main rival Foodstuffs since 2007. So something had to be done. And to do it, it had to take some big risks and break an age old grocery paradigm. 

In the past, premium offerings were typically seen as ‘quality at a price’ and value offerings equated to ‘low prices but lesser quality’. But post-recession consumers have become exceptionally demanding and saving money is no longer enough. They want a brand they can trust and can build a long-term relationship with. They want deals. They want ideas. They want a great range. They want nice stores to shop in. They want great service. Hell, the greedy buggers want everything, really. But before Progressive started on this journey around eighteen months ago, no supermarket in New Zealand delivered on all these fronts. And that was the major goal: redefine value in the eyes of Kiwi customers to let them have their cake and eat it too—cheaply.

Grocery retailing is typically conservative, particularly in a recessionary environment, and most brands find a position and defend it to the death because anything else is just too risky. Progressive was brave, ignored the rules and went for broke. And through the clever and consistent integration of business, marketing and communications strategies, it increased its market share and turned the tide on Foodstuffs.

• Full case studies of all the winners are available in the latest edition of NZ Marketing and the first 20 humans to subscribe here will receive a copy of James Hurman’s new book The Case For Creativity, valued at $40.

CATEGORY COMMENT: “The retail category was quite exciting, in that it’s really a demonstration of great business strategy, and in all of the examples, it was about how the marketing plan really accelerated those business strategies.”

THE PEOPLE: Bridget Lamont, Elizabeth Ryley

THE PARTNERS: Ogilvy

RETAIL FINALISTS:

ASB Bank Creating Futures

Postie Delivering the good news at Postie

Z Energy Fish for Prizes

• Download the full report here PwC and F&S Retail Report

Online retail now accounts for 5.1 percent of all retail sales in New Zealand, which puts us on a par with Australia. We’re still well behind markets such as the USA and UK, however, where online now accounts for 7.5 percent and nine percent respectively.

“Online shopping, both locally and offshore, is expected to show strong growth over the next four years, reaching $4.22 billion by 2015,” says Frost & Sullivan senior research manager Phil Harpur. ”This represents a compound annual growth rate (CAGR) of around 12 percent.”

82 percent of online shoppers indicated they would increase or at least maintain their current level of online expenditure in the next 12 months (compared to 86 percent in Australia) and more than a third were using smartphones or tablet devices to buy products online.

“New Zealand’s retailers are now competing on the global stage and need to embrace the fundamental shift in underlying business models caused by the digital revolution,” says PwC New Zealand retail partner Julian Prior.

“As online retailing continues to grow, some retail sectors are more at risk than others,” the report says. “Retail sectors that are non-food are more vulnerable to offshore online retailing and these include clothing, footwear, gaming, books, magazines, recreational products, cosmetics etc.”

The study showed New Zealanders have particularly high adoption rates of social media, with 81 percent of online shoppers in New Zealand using Facebook within the last year, compared to 76 percent in Australia. Added to that, more than a third of all online shoppers in New Zealand currently follow an online shopping site on Facebook, compared to 26 percent in Australia.

Group buying sites are also becoming increasingly popular in New Zealand, with nearly half of online shoppers having used a group buying site in the past year.

There’s been much wringing of hands and gnashing of teeth from aggrieved bricks and mortar retailers about the ability online retailers have to undercut their prices and the fact that many purchases don’t attract GST. The report says one third of all online sales were expected to go to offshore retailers, but ”while price and range remain the key drivers for growth in overseas online shopping, very few respondents (<1%) cited that they shopped overseas to avoid GST. Our survey findings indicate that the price differential between local and overseas retailers is far greater than the 10 percent rate of GST imposed locally”.

Of course, it’s not just about buying: 95 percent of online shoppers in Australia searched the web for product information, price comparisons and peer reviews before making a purchase online and over 65 percent of in-store purchases are initiated on the web.

In a special section in its monthly economic indicator report, the Treasury said the internet was coming of age economically and was unleashing its power at the right time during a retail downturn. Online competition is also likely to lead to lower inflation over time, it said.

“Consumers’ ability to find bargains will drive a competitive response among firms … As a result, someone, somewhere on the internet is bound to be having a sale.”

Treasury said a survey by Australia’s Macquarie Bank showed the number one reason for online shopping was price (55 percent), more than double the next reason (convenience at 25 percent). “One can assume that New Zealand online shoppers share similar preferences.”

Click here to view the embedded video.

Despite all the hype around all things digital, however, there’s still a long way to go before it infiltrates some of the the more traditional business areas, as evidenced by a recent MYOB study that showed less than a third of Kiwi businesses have a website, and the vast majority of those without had no intention of establishing one.

“The general lack of an online presence by the large retail chains in New Zealand and in Australia over the last decade has been a significant factor for a relatively poor uptake of online shopping within this region,” Prior says. “Retailers that are able to engage customers through multiple channels will build a deeper relationship than through a single traditional store channel.”

According to Statistics New Zealand, the highest percentage of online purchases are made by the 25-44 age group.

“Interestingly, the 15-24 group’s third ranking is unlikely to be due to low internet skills, but rather their lower purchasing power and also because many may not possess a credit card for online purchases,” Treasury said. “Visa debit cards may mean this last factor is less of a constraint in future surveys.”

As the only Kiwi participant at the conference, my fellow conference attendees from Walmart, Macy’s and Best Buy were streets ahead of what’s happening down here in Godzone. So when it comes to technology use, information access and connecting with customers digitally, we are behind the curve.

Digital shopping, also known as ‘e-tailing’, is an area strongly impacting consumers’ shopping habits—and it all comes down to smart-phones, smart applications and even smarter people. Speakers at the conference, and my subsequent talks with staff at Google HQ in San Francisco, highlighted a number of trends driving a radical change in the way everyday shoppers use technology to get ahead of the game and demand the best value from stores.

US shoppers have been making the most of the smart-phone explosion, from pre-purchase research on the best deals available, to making use of a social media presence for help and advice, to comparing prices with competitor websites while in-store (then demanding a better price). Studies have shown almost 70 percent of smart-phone users were doing so, a figure that has doubled in recent times (Foresee Results Report on Mobile Shopping – US edition 2010).

US retailers were quick to point out this wasn’t new and cutting edge; it’s the way business is now carried out in a retail environment. Customers demand better access to information as they hunt for better deals and prices, with a huge resulting growth in price comparison websites (like Reachmedia’s lasoo.co.nz) for those on the move.

For example, since 2009 the number of US smart-phone users making use of these sites has jumped from 15 percent to 35 percent. Similarly, store websites optimised for phone viewing, with all the outlet’s product information and availability, is already commonplace overseas, yet in New Zealand many stores lack even the most basic mobile website. These digital advances not only act as a leveller for retailers as their prices and services become more comparable and transparent, but also offer untapped potential to connect with customers in a personal, customised and business building way, through their mobile phone.

The final trend that has struck a high note with customers off-shore is the growth of video content in-store and online. In a shift from static imagery, stores are now delivering digital product videos. You’ll see how it works, the product in action, views from all angles, basically everything that makes it that little bit more tangible than just a picture. It’s commonplace in the US, and major sites are seeing up to a 55 times increase in search engine results and seeing an 85 percent success rate of video viewers buying the product.

These trends aren’t distant on the horizon. They are arriving on our shores here and now. Kiwis are rapidly embracing smart phones. Our retailers would be wise to adapt and make the most of these emerging trends. The use of in-store smart-phone applications, like Reachmedia’s recently launched iPhone lasso.co.nz app (growing 21.5 percent a month), and Android and Windows Phone apps, present a unique opportunity to talk to customers in a relevant way about what interests them, build on customer loyalty and become a trend-setter in digital shopping.

It’s commonplace overseas and a major drive in Google’s next stage development and retailers report massive sales increases as a result.

The International Data Corporation recently forecast the Android and Windows Phones to take first and second place in popularity ahead of the iPhone by 2015 as lower phone cost, cheaper data and post-recession spending boosts their attractiveness. With device sales and increased use of the iPhone, Android and Windows Phones only moving upward, it’s not a matter of will this smarter, savvier shopper arrive. It’s when.

The n.gage event will assist brands, retailers and network owners with information for every step of planning, managing and evaluating successful digital signage networks and content.

Andrew McIntosh, managing director of Digital Signage Group, says the results in Australia and New Zealand for digital signage are phenomenal, but brands and retailers are not up to speed with the power of content.

“One liquor brand provided us with awful content and the sales still rose by 23 percent. We took the same content and applied the right retail messages for that environment and sales rose 157 percent percent.”

To book a seat at the Auckland event visit www.ngagewithus.com. Early bird rates are available until the end of this week.

Let me share a story of a recent conversation I had with a marketing director of a well-known Australian and New Zealand retailer. Returning from a recent overseas business trip, the chief executive had briefed the marketing director to look at the possibility of earning revenue from digital screens provided free by a media company in exchange for running advertising. It seemed like a great option. It’s another revenue stream.

The marketing director had been investigating a digital out-of-home network and he wanted phdcreative’s opinion on whether this was possible in Australia and New Zealand. The good news is there are many DOOH companies who offer this free model. However, nothing in business is really “free”. You pay downstream. This model would come at the cost of supporting his own brand and of enhancing and supporting the in-store environment.

Furthermore, consumers are currently suffering from “digital blanking” as more and more companies choose irrelevant content to show within the store environment. However, there is a way of navigating through the various signage, software and hardware companies to find a partner that approaches digital signage in a more holistic, customer-focused way. And it involves six key steps: Assess, Involve, Engage, Brief, Create and Test.

Assess

Identify the business objectives. Is it brand building, sales uplift, entertainment, cross promotion, up sell, or loyalty promotions? Clarifying the objectives for using digital signage will help you assess the right digital signage model, as well as assisting in building the content strategy. It will also allow you to set the correct parameters up front for evaluating your signage.

Involve

One of the biggest problems we see is when our retail clients hand responsibility to one department without the continuous involvement or buy-in of the others. Given the potential capital expenditure as well as the on-going IT connectivity requirements, it is understandable why these departments may take control, however it is ultimately about what goes on the screen that will meet the business objectives. As such, the involvement of the marketing department is crucial.

Engage

Recent research by IBM conducted with over 30,000 consumers clearly identified that the tables have turned. Consumers no longer want to be dictated to. Instead they want you to listen to them, serve them and empower them. They will tell you what will enrich their experiences on the in-store screens and it is highly unlikely to be another advertisement from a credit card company. Your research will uncover whether they move left, or right, whether there is a queuing “issue” and what offers will they will respond to. Keep listening to them once the screens are in place, as they will continue to assist in your content strategy.

Brief

Brief a media neutral digital signage company, one that can offer media, proprietary or a mix depending upon their strategic recommendations. Ask them to assist you in building the business case and calculating your return on investment (ROI) and your return on experience (ROE).

This neutrality means you will receive a strategic proposal that will best meet your business objectives. It further enhances your opportunity to consider different hardware and software platforms that will be the best for your business. Consider a company that has strong links to research and content design companies so they can collaborate to bring you the best result. This company will also assist you in all aspects of the brief from hardware selection, IT integration, software, installation and maintenance.

Create

A good content design agency will be able to map your customers path to purchase and understand what messages belong on which screen depending upon their placement. They will also be able to create messaging that entices customers with offers at the correct times of day. Do your homework to find a retail agency that can not only recommend the right content strategy but also manage your content on a day-to-day basis.

Test

We advise all our clients to run a digital signage test in different store layouts that will most represent the final roll out. The most appropriate time to test digital signage is when you are opening or renovating new stores. Investing in good content strategy up front, even if it’s only for one to five stores, will provide the most accurate sales results to establish a case for the roll out.

In conclusion, brands and retailers may not be up to speed with the power of this medium, but they soon will be. Frost & Sullivan has forecast that the Australian Digital Signage industry will grow to A$58.4 million by 2013. With that much capital being invested, it is imperative that retail screens give back.

• For a more detailed look at the digital signage industry and how to use it to your advantage, register to attend the n.gage digital signage forum in Auckland on 31 May.

The full day conference programme, which is run part of the massive NZ Retail Show, will be held at Auckland’s ASB Showgrounds on Wednesday 6 April 2011.

Martin Butler

The international speakers are UK-based Martin Butler, who interviewed 100 of the world’s top retail chief executives and has published the results in his book, The Art of Being Chosen, and Jack Smith, who revolutionised the sporting goods sector in the US with his retail concept – The Sports Authority.

Jack Smith

Butler will be sharing some of his highly inspirational stories with attendees, including some great insights into the personality traits of these chief executives and how this has driven them to succeed. And Smith will talk about paving the way for a whole new era of retail store by taking on the big box mentality of ‘stack ‘em high, sell ‘em cheap’ and offering an extensive product selection as well as great service.

These two keynotes are complemented by a number of highly influential speakers from New Zealand, such as John Hartmann from Mitre 10, Annah Stretton from The Stretton Group and Tim Edwards from Noel Leeming.

Caroline Dewe from Alphero, who has recently returned from working with huge global retail brands such as Marks and Spencer, will also be speaking and will reveal how retailers can effectively use mobile technology in the current environment.

It’s a goldmine of retailing information. To find out more and to register click here.