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THE IMPORTANCE OF

PERSONAL SERVICE RE-EMERGES

RETAIL FRAGMENTATION CONTINUES

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FRAGRANCE REINVENTED

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ONE SHOPPER AT A TIME

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THE MONTH THAT

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AH, THE SMELL OF IT

THE AMAZON REALITY

SHOOK RETAIL...AGAIN

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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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


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.

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PEOPLE READING BOOKS ON PAPER IN SUBWAY

PRINTEMPS, PARIS, FRANCE

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 "dangerous" as doing it in store.

FREDERIC MALLE @ PRINTEMPS, PARIS


FRAGRANCE REINVENTED AH, THE SMELL OF IT The category that causes many retailers to groan is fragrance. Whether big boxes or small, luxury or discount, retailers struggle with how to drive fragrance sales every day, not only during the holiday season. The category has evolved so much in the last decade as shoppers changed their attitudes to wearing fragrance. Bath and body fragrances emerged as a more utilitarian (and affordable) option. Deo-colognes, like Axe, brought young men into the category but at lower price points. Celebrity brands changed up the speed at which new products are launched. Manufacturers of household products, like fabric softeners and air fresheners, ramped up the level of fragrance and became acceptable fragrance experiences for many. Mass retailers locked up the category (too much theft). Luxury retailers grouped fragrances together on a fragrance bar (making it feel like all fragrances are equal). The category lost its mystery. It began to feel commoditized, no matter the price point. However, during a recent trip to Paris, this everyday fragrance wearer was dazzled by a most wonderful, inspiring fragrance experience. At Printemps, the Parisian department store, fragrance brands now have their own boutiques, much as luxury fashion designers do. Each boutique is different. Here the brand is king. Not the store. Perfumer Fredéric Malle's boutique has three red fragrance tubes that shoppers walk into

DYPTIQUE @ PRINTEMPS, PARIS

to better smell fragrances. The Dyptique boutique is all white and black, like a modern apartment. Annick Goutel has a Provence style table and chairs so shoppers can sit and learn about the fragrance. Armani fragrances emerge like jewels from a black shelf. Shoppers lift the polished stone caps to test the fragrances without beauty advisors looming over them. What makes this department so intriguing, inviting is that fragrances are not treated like commodities. Each is special, with a unique story to tell. A lesson for all.

ONE SHOPPER AT A TIME THE AMAZON REALITY This is no longer the shopper we once knew. She and he are more unique, with more differentiated backgrounds and tastes. They are less willing to be considered a single, generic population. And they come fully armed with technology to battle for the best value. As such, they are redefining the way we need to service them. Welcome to the new shopping world.

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 new American shopper is as diverse as the population. We now no longer have the luxury, the simplicity, of delivering goods and services to a “one-size-fits-all” world. The days of creating a brand relevant to millions and millions of Anglo shoppers are over. The days of enticing them with messages delivered through one or two major media outlets are over. The days of distributing goods and services to them through two or three or four big retailers are over. We have finally arrived at a time when the

ARMANI @ PRINTEMPS, PARIS

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business community must understand and deliver to one shopper at a time. Which means the days of mass marketing are dead. (If you doubt this, consider what happened in the 2012 Presidential election.) If you have ever wondered about the real power of a retailer like Amazon, it is not that it can efficiently deliver lots of products around the world at the very best prices. It is rather that it knows what products each shopper wants – or will want. That is the inherent threat of Amazon to traditional retailers. In today’s world where shoppers expect to be recognized for who they are and offered what they want, Amazon has a leg up on everyone. “Hi Wendy, If you like that, you might like this…” And you usually do.

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 return 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.

out-of-stocks in store (according to a recent Bloomberg article, “Wal-Mart Struggles to Restock Store Shelves as U.S. Sales Slump”). 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.

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. Anyone have a fire extinguisher? See you from the EDGE,

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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

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