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VOLUME 21 ISSUE 02 • 2013

THE IMPORTANCE OF

PERSONAL SERVICE RE-EMERGES

RETAIL FRAGMENTATION CONTINUES

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HISPANIC SHOPPERS

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THE MONTH THAT

4

GOOD OLD FASHIONED

5

CONTINUE TO SHOW POWER

SHOOK RETAIL...AGAIN

MERCHANDISING STILL WINS

THE IMPORTANCE OF PERSONAL SERVICE RE-EMERGES In our recently published From Buzz to Buy 3.0 study we asked shoppers where they go for information to make shopping decisions. In the earlier two editions of this study, the importance and influence of the in-store sales person had diminished as shoppers "serviced" themselves through the Internet and the growing number of digital shopping devices. With digital at their fingertips, many shoppers did their research before they got to the store -- if they got to the store -- often preempting anything the sales associate could tell them. The shopper was often better informed than the sales person. As a consequence, some retailers added digital tools in-store (kiosks, iPads, apps, QR codes, and other digital bells and whistles). Some took the opportunity to reduce headcount and/or invest in their websites. Today, two years later, the shoppers’ view of sales people as a viable go-to resource in store is growing again. One-third of shoppers tell us they value their advice, up five points from a year ago and seven points from 2010.

What’s especially interesting is that the increases are across all generational groups, including the youngest (Millennials, those under 35) who are “traditionally” more digitally engaged (dare I say obsessed?). Even though sales people still fall behind “family & friends” (offline and online) and manufacturer and retailer websites as sources for advice, they are beginning to be more valued again -- in this digital age. The message here: don’t undervalue their importance. The key is to determine where they can be of most help to shoppers. It's not necessarily where you might think. For example, some years ago, we asked shoppers in what part of a drug store they’d like to see personal service, and would be willing to pay a little more to get it. The answer was the children’s analgesics aisle. Shoppers were not interested in help in other departments (for example, cosmetics) but they were in this complicated aisle of the store where they needed to make wise choices for their children. So here’s a thought: As self-checkout becomes more prevalent (and it will), let’s take those associates and put them to good use

DO YOU GO TO SALES ASSOCIATE IN STORE FOR SHOPPING ADVICE?

32%

2012 2011 2010

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© WSL MARKETING INC. 2013

27% 25%

Quick Snapshot from WSL Strategic Retail, How America Shops® From Buzz To Buy 3.0, Jan. 2013 To learn more about this report, please contact us at info@wslstrategicretail.com


VOLUME 21 ISSUE 02 • 2013

WENDY LIEBMANN | CEO will speak at:

08.11.13 NACDS TOTAL STORE EXPO

"Virtual Retail Safari® of the Most influential Retail Around the World" LOCATION:

Las Vegas, NV

elsewhere in the store. (And not just stocking shelves.) Imagine what the impact could be. If you doubt this, just ask the management at Apple or REI or Eataly or Wegmans what they think.

RETAIL FRAGMENTATION CONTINUES As many of you know, our Retail Strategy and Shopping Futures work is grounded in our understanding of and passion for how shoppers live their lives and shop everyday. It’s what we call “Shopping Life.” It should be no surprise to you then that we regularly identify new questions to ask, build new hypotheses beginning with pure and simple observations – everyday. A recent example... The scene: New York subway, 7th Avenue Line, 3rd car from the front. The observation: As many people were reading books or magazines on paper as were reading from iPads, tablets or smartphones. A year ago, the vast majority of riders (on this subway line at least) who were reading did so from a digital device. Our question: “Is this an anomaly? Or a trend? A ripple? Or a wave?” Two weeks later, in a different subway car with older riders, same story. Check out the picture below. What the heck is going on? At its most obvious, we can say a number of people on the 7th Avenue subway line prefer to read the old way – at least some of the time, and may have foregone their digital device, at least some of the time.

© WSL MARKETING INC. 2013

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© WSL MARKETING INC. 2013

PEOPLE READING BOOKS ON PAPER IN SUBWAY

UNIVISION AD: #4 TV NETWORK IN THE US

At its less obvious, this is one more example of how, today, nothing goes away. Shoppers (AKA subway riders) merely continue to add layers of choice to the layers of choice. In this example, some prefer a digital device, some prefer paper, and some prefer both, depending on the day, the time, their passion for the new, their preference for the old, or both. The same goes for retail. Some days, shoppers prefer the physical store; some days or times of day, they prefer the virtual. As we have seen in our How America Shops® MegaTrends studies for the last 10 years, a growing number prefer both. The same is true for digital. In our From Buzz to Buy 3.0 study, a growing number of shoppers use digital devices in the store while they shop.

42% of women shoppers use their smartphones and

16% use tablets while in the store to help them shop.

The point, worth repeating, is that nothing goes away. Whatever your business, you need to understand how emerging trends fit into your shoppers’ lives, but you also need to understand how to blend old with new, and when not to go overboard one way or the other. That’s the art and science required in successfully managing a fragmented shopping world. Whether you’re selling beauty or food, fashion or health, or media or anything. Worth noting: Be careful snapping pictures of your fellow riders on the subway. Almost as

NAVARRO DISCOUNT PHARMACY, FLORDIA


"dangerous" as doing it in store.

HISPANIC SHOPPERS CONTINUE TO SHOW POWER Univision, the Hispanic-language television network, was rated the #4 network in the US, beating out NBC in the recent JanuaryFebruary TV ratings period. This was another example of the growing impact of Hispanics in the US, coming on top of their influence on the 2012 presidential election. These two examples bring to life the findings in the 2010 US Census that showed the growth of the Hispanic population.

There is no denying it. No ignoring it. The face of America has changed. And that’s an opportunity. Certainly, more and more companies are dabbling with strategies to reach Hispanic shoppers. However, many of the initiatives still don’t reflect who these shoppers really are and how to engage them. Things to consider: Don’t assume Hispanic shoppers only live in the southern states. Increasingly they live across the country. Don’t assume because of their often lower incomes they are not digitally engaged. They have a high usage of smartphones and social media (often more than Anglo shoppers). Digital gives them access to information and resources that are more customized to their shopping preferences, language and cultural needs. They are significantly less likely than Anglo shoppers to use retailer and manufacturer websites for shopping information. Which

SHOPPING INFORMATION SOURCES

Quick Snapshot from WSL Strategic Retail, How America Shops® From Buzz To Buy 3.0, Jan. 2013 To learn more about this report, please contact us at info@wslstrategicretail.com

means companies need a different strategy to reach this digitally-engaged shopper. They are community minded – something that is reflected in their high use of social networks and peer reviews as tools to make brand and retail decisions. They have increased their use of peer reviews significantly more than other demographic groups in the last year: 40% versus 28% of Anglo shoppers and versus 34% of African-Americans. While food and beverages are categories where their preferences have long been noted (but not always creatively delivered upon), beauty, health, fashion, technology, and entertainment are other categories where they are deeply engaged, eager for information, product innovation, and experiences – yet often under-served. While in certain areas of the US large food retailers (such as HEB and Walmart) and specialty health and beauty retailers (e.g., Navarro, Florida) have been proactive reaching out to their local Hispanic communities, the fact is the majority of US retailers (and manufacturers) have not. And that’s a missed opportunity -- one that cannot be missed any longer. In case you doubt that ask your local political pundit or NBC.

As global retail strategists and shopping futurists, we at WSL/STRATEGIC RETAIL are recognized for our ability to turn shopper insights into smart actionable strategies. Since 1989, in our HOW AMERICA SHOPS® studies, we have tracked the mindset, attitudes and behaviors that shape shopper trends, successfully predicting how they transform brands and retailers throughout the US. Check out our database at... www.wslstrategicretail.com For more info, contact us at: PHONE

212.924.7780

FAX

212.924.7608

EMAIL

info@wslstrategicretail.com

THE MONTH THAT SHOOK RETAIL…AGAIN

Last month, there was so much high-octane retail news we felt as if our hair was on fire. JC Penney announced stunningly devastating sales and earnings results -- and the re© WSL MARKETING INC. 2013

55%

48%

RETAILER WEBSITES

CAUCASIAN

37%

29%

MASS MERCHANDISERS

21%

16%

DEPARTMENT STORES

HISPANIC

16%

11%

SUPERMARKETS

© WSL MARKETING INC. 2013

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VOLUME 21 ISSUE 02 • 2013

is published by WSL STRATEGIC RETAIL

1 yr. Individual Subscription $300 2 yr. Individual Subscription $500 1 yr. Corporate Subscription $3000 2 yr. Corporate Subscription $5000 Send check to: WSL STRATEGIC RETAIL 307 Seventh Avenue, Suite 1707 New York NY 10001 CEO/EDITOR ART DIRECTOR CONTRIBUTORS

Wendy Liebmann KC Chung Ivan Babajko Candace Corlett Maryann Jimenez Allison Konish Peter Muratore Elizabeth Neagle Desiree Phillips Gretchen Simmons Cynthia Walsh Peggy Wang

We have lots of tools, research, shopper insights to help you. Drop by to find out more... www.wslstrategicretail.com

turn of the coupon and the sale. While the stores look more exciting, the merchandise more intriguing, once-core shoppers appear to have just given up, as they question whether the merchandise and prices are really a good deal.

perhaps because of it.

Walmart announced disappointingly sluggish sales, due in part, management said, to the impact on their lower-income shoppers of the payroll tax increase and delayed tax refunds. In addition, there’s concern about the level of out-of-stocks in store (according to a recent Bloomberg article, “Wal-Mart Struggles to Restock Store Shelves as U.S. Sales Slump”).

Right at the center of the store there is an island of candy. It looks like an old-fashioned candy store. The section is organized under the headings of “Sweet Favorites,” “Chocolate Delights” and “Old Fashioned Candy.” Shoppers can make their own custom selection from apothecary jars filled with brightly colored candy, chocolates, jelly beans, yogurt covered raisins and more. Or they can quickly grab a prepackaged version.

Google was rumored to be opening physical stores by year-end to feature its new augmented reality Google Glass, then management quickly refuted the fact. For a brief moment, we anticipated Holiday 2013 retail fireworks as Google and Apple battled it out for shoppers. Oh well, that will have to wait for another season.

The Fresh Market, the North Carolina-based grocery retailer, with 100 stores in 20 states, does a wonderful job merchandising candy (amongst other things).

Color blocking of the Sweet Favorites selection draws every shoppers’ eye as they enter the store. And the wealth of chocolate options encourages those about to check out to add one more item to their basket.

And then of course we reached the now infamous March 1, 2013 “sequester” date. As if American shoppers didn’t have enough reason to keep their wallets zipped up.

This is an example of how Center Store can become a vibrant, attractive and very tempting place to shop for young and old…if only retailers put the right product in the right presentation in the right place.

Anyone have a fire extinguisher?

See you from the EDGE,

GOOD OLD FASHIONED MERCHANDISING STILL WINS It is amazing how good old-fashioned merchandising still wins over shoppers -- even in this fast-emerging digital shopping world. Or

FOLLOW US TO HEAR ABOUT WHAT’S HAPPENING IN RETAIL

© WSL MARKETING INC. 2013

CANDY DEPT. AT THE FRESH MARKET, FLORIDA

CANDY DEPT. AT THE FRESH MARKET, FLORIDA

AUGMENTED REALITY GLASS, GOOGLE GLASS

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