Clicks and Bricks: 3 Reasons Omnichannel is Important in the Retail World

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We’ve all read the headlines. Millennials are killing industries left and right. Currently on the chopping block: brick-and-mortar stores. Regardless of whether you believe the hype or you feel like these stories are just sensational pieces made to move papers, it is worth considering what current shopping behaviors are relevant now. Online is becoming more and more popular, but that doesn’t necessarily mean the death of brick-and-mortar stores. Smart retailers are using an omnichannel approach to their stores, and are able to leverage their online sites to gain foot traffic at their physical locations.

What is omnichannel? In short, it boils down to meeting your customers where they are, both online and offline. Utilizing an approach like this means that you have to know who your customers are and where they are doing their shopping before you can successfully gain visibility. But why is this important? Let’s get into the main points.

  1. It makes it easy to please.

Shoppers want convenience. In a world of instant gratification and in-your-face ads from every store, if you aren’t as available and efficient as your competition, you are likely to be left out. According to bigcommerce.com, almost 100% of Americans have shopped online before, and 80% have done so just in the last month. It’s no secret that an online channel is important, especially with millennials and Gen-Xers. However, in-store shoppers account for about half of all purchases, and are still popular with older generations and those who don’t want to wait for shipping, so an omnichannel approach is the best way to reach your audience using their preferred shopping methods.

  1. It drives in-store traffic.

As great as it is, online shopping isn’t always the preferable way to get products for some shoppers.  Some consumers don’t want to pay shipping costs or risk having a package stolen or a missed delivery if they don’t have a secure drop-off location.  And having to wait for standard ground shipping can cause a customer to abandon their online cart before checkout. With omnichannel retail, buy-online/pickup-in-store (BOPIS) is a favorable option many shoppers prefer. Customers can purchase an item online and pick it up at their convenience, often times with the speed of expedited shipping sans costs.  This drives foot traffic to your store, which you can then measure with your people-counting solution. By combining the convenience of online shopping with the security and affordability of shopping in-store, you create a win/win situation in the eyes of the customer.

  1. Data, data, and more data.

When it comes to making business decisions, never go in blindly. Instead, you should always rely on hard numbers to inform you and fuel those decisions, so you can be sure that you’re doing what’s best for your business. Combining omnichannel data from online shopping, social interactions, and in-store purchase histories gives you a holistic, large-scale view of shoppers, so that you know what to stock for inventory, and how to create the best targeted marketing campaigns. Utilizing this data alongside data from your people counting solutions can provide you with all of the information you need to make successful, knowledgeable decisions that better your business.

Omnichannel is becoming omnipresent. Position yourself for success by making sure you offer all the shopping channels your customers demand. Then, contact us to discuss your people counting solution options and see how our technology can compliment your omnichannel solution.

Trend Report: Back-to-School Buying Doesn’t Hit The Mark

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Last Month’s Low Retail Numbers: What They Mean

In 2010 and 2011, the recession caused U.S. parents to be concerned with saving money during the back-to-school shopping season, seeking sales and reusing old supplies. In 2012, they spent a record high since the recession set in. This year, it was expected that they would cut back again.

Although retailers expected a cut back, they didn’t expect one this big. It seems they thought that by offering more promotions, they could entice consumers to spend the same amount of money but on more items. However, many clothing retailers fell short of their expected growth for back-to-school shopping this August. As the economical pressure slowly lifts, U.S. consumers have started shopping again… so what gives?

In this report, we’ll discuss:

  • Why stores fell short of their expected growth
  • How the economy is effecting consumer buying habits
  • What consumers bought instead of clothing
  • How clothing stores responded
  • What these numbers mean for the rest of 2013

Big-ticket items take over

Although retail sales increased in the months prior to the back-to-school season, clothing and apparel shopping wasn’t strong. According to the Department of Commerce, retail sales increased in July, but only by 0.2 percent.

Economists believe consumers are still concerned with the high unemployment rate, high payroll taxes and low wages. Reports suggest that, this month, they chose to remain cautious by taking advantage of low interest rates and buying more immediate, big-ticket items like appliances, electronics and vehicles – leaving them with a limited budget for clothing.

Thomson Reuters tracked the same-store sales of Gap Inc., Banana Republic and Old Navy – all of which fell short of their expected increases for August. Meanwhile, home appliance retailers and car dealerships fared well.

By the numbers: Home Depot and Lowe’s reported sold sales and raised their year views. Home appliances retailer Conn’s reported a whopping 31 percent increase in their August same-store sales. Additionally, automobile sales increased 17 percent since last August. Ford Motor Co., General Motors Co. and Chrysler Group all reported double-digit sales gains. GM reported that it sold 275,847 vehicles in the United States in August – a number 14.7 percent higher than last August’s.

Sales increased so much that dealers wound up without enough cars to sell. Consumers took advantage of low interest rates and enticing lease deals to replace their old cars. Car dealers saw the highest number of sales since the recession set in, and maybe even before that.

According to Ken Czubay, Vice President of U.S. Sales for Ford, August 2013 marked the best retail of any month for Ford going back to August 2006.

Deep discounts result

Upon realizing that customers were keeping cautious and spending smart, retailers responded to this problem by offering deeper discounts than last year’s back-to-school season to draw customers back in.

By the numbers: American Eagle offered 40 percent off all of their merchandise both in stores and online. Last year, it offered 30 percent off select styles. Similarly, Gap offered 40 percent off t-shirts, socks and underwear, compared to 30 percent off select styles last year. Hollister and Saks both extended the length of their sales. Macy’s Labor Day sale was 25 to 75 percent off, as opposed to 20 to 60 percent in 2012.

Unsuccessful season raises concern

While offering deeper discounts may have grown their numbers, it also grew their concerns about margins. Consumers’ cautiousness could mean that retailers may have to continue to offer an increased amount of incentives until they are ready to spend more money on clothing.

Not only are retailers concerned about the cost of offering increased incentives, they are also concerned about what last month’s weak mall traffic and slow sales will mean for fall and winter sales – especially the upcoming holiday season. Some are seeing the unsuccessful back-to-school season as a bad omen. Macy’s Inc. and Kohl’s Corp. recently lowered their fiscal-year outlooks.

Trend report: 2013 Back-to-school season

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This August, parents are doing just as much back-to-school shopping as they did last year – but they’re spending less and shopping smarter.

But that doesn’t mean that retailers won’t be making as many transactions as in 2012. Studies show that parents aren’t shopping less, but simply shopping smarter. The NRF reported that 37 percent of parents said they plan to browse before buying this year.

Back-to-school is the second biggest shopping occasion of the year next to the holiday season, with more average spending than Valentine’s Day, Mother’s Day, Father’s Day, Halloween and St. Patrick’s Day combined, according to National Retail Federation consumer trend data. Similar to the holiday season, back-to-school shoppers usually make several trips throughout the season – spending mass amounts of money each time.

In 2010 and 2011, American parents were concerned with saving money because of the bad state of the economy. They were more inclined to shop sales and save old supplies. As the economy improved, some shoppers became comfortable spending money again. In 2012, the NRA reported that parents spent an average of $688.62 – a record high since the recession. But that might have been more than some families bargained for, as parents are expected to cut back to $634.78 this year.

“The good news is that consumers are spending, but they are doing so with cost and practicality in mind,” NRF President and CEO Matthew Shay explained in a news release.

As Shay alluded, the weight of the recession is slowly lifting from families. According to a BIGinsight study, 77 percent of American families with school-aged children said the state of the state of the economy will impact their back-to-school spending in 2013 – a slight decrease from the 80 percent who said so in 2012.

The retail world is already getting their start in accommodating this season’s smart shoppers. Last week, Staples began its back-to-school promotions, including some school supplies on sale for a penny. Even the government is adding incentives for consumers. At least 17 states are offering sales tax breaks for back-to-school shoppers.

Retail people counting software is one way for back-to-school shopping destinations can make the most out of this money-making season. Here’s how it can help:

  • Compare: Compare your store’s numbers with those of others in your chain using a retail people counting system. The data obtained can answer questions like: How are they performing during the busy back-to-school season? How much traffic are they receiving and how are they accommodating it? Are we performing as well as they are? By asking these questions and analyzing these numbers – namely the overlap of peak traffic hours and peak transaction hours – managers can determine what their store might be missing or doing wrong. For a more in-depth analysis, compare your store’s numbers to the national or regional census boundaries and metropolitan statistical area markets.
  • Prepare: Use information about your store’s peak traffic hours and peak transaction hours to make staffing adjustments and, therefore, meet customer needs. Because shoppers are shopping smarter this year, they’re going to be looking for the best quality at the best price. With an adequate shopper-to-associate ratio, associates can offer their expertise to parents looking for the best product. Also, the more associates working at each station, the less time parents have to spend in the store. Quick and helpful service makes for a satisfying experience, especially for parents who are on their third or fourth shopping trip of the season.
  • Since shoppers are likely to go straight for the sale rack, retail stores should make sure their sales are spend-worthy. For example, 10 percent-off sales aren’t too enticing, whereas buy-one-get-one sales are almost always guaranteed to do well. Retail people counting software can help stores to determine which sales and promotions work best with customers.

Retailers Plan to Invest in Traffic Counting Systems in 2013

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In late 2012, Integrated Solutions for Retailers (ISR) magazine surveyed nearly 200 retailers on their plans for technology spending in 2013. Retailers were asked, “In 2013, In Which In-Store Software and Systems Will Your Company Invest?” Small and independent retailers showed up in force, and made their intentions for technology purchasing clear.

Throughout 2013, retailers plan to invest in software and systems such as mobile POS software, payment processing, POS software and traffic counting. Mobility has grown in recent years and will continue to be an investment for many companies in the year ahead as they work to make processes easier for customers. The small and independent retailers that participated in the survey also expressed interest in investing in POS software and payment processing. POS software can help many businesses become more secure, more efficient and more profitable, just as payment processing can.

Numerous companies also indicated they would invest in traffic counting systems to optimize labor and determine advertising effectiveness. With the help of traffic counting systems from a company like Traf-Sys, businesses are able to find out how many sales they are getting in relation to the traffic they are seeing. It also helps determine how much staff a company needs, as well as how much security they need, etc.

To learn more about how Traf-Sys can help your business, contact one of our sales reps today.