Ten things you should know about Millennials, the life blood of future retail growth

The definition of a Millennial is some born between 1981and 1996 and therefore is between 18 and 36. Marketers have been defining Millennials as the following: Narcissists, self absorbed, anti social and entitled. An article is this past’s Sunday New York Times Life Style section pants a very different picture based upon a recent Pew Research study.
1. They are confident
2. Connected
3. Open to change
4. Complex and introspective
5. Digitally wired
6. Skeptical of institutions ( Political and Religious)
7. Indifferent to prestige brands ( prefer social conscious brands)
8. Health conscious
9. Empathetic
10. Price is not the prime motivator for purchase decisions
Successful retailers will adapt some of their marketing strategies, product mix and technology to match this demographic. Research provides some valuable insight into market segments. The more you know about the audience you need to attract enhances your ability to reach that market.

Consumers may be the hidden persuaders for EMV adoption!

I have a few clients weighting the pros and cons of upgrading their software to comply with the EMV mandate. In my opinion the risks are compelling to comply rather than wait and see. The risk of a data breech is the worst case scenario but there are other costs that must be considered. Processors and banks could refuse to let you use their processing network if you can’t pass a vulnerability test. It could take weeks to get your system back on line. The cost to Target for their data breech has been grossly under stated since they only reported the cost of $168 million to remedy the breech. The stock took a hit and their last quarter’s sales were far below forecasts and both of these factors can be attributed to loss of consumer confidence which are costs that should be included. Banks are beginning to send out cards with the EMV chips as replacements to the existing credit cards. There will be a grace period as most large retailers come online with the capability to process the chip cards but once that grace period is over consumers will feel their data is more secure with this technology. If you don’t comply with the EMV mandate consumers may elect to vote with their wallets and shop where they feel more secure. Think of the cost of becoming compliant in the same terms as insurance, you hope you never have to use but you need just in case.

He who has the most data wins. Five rules retailers should follow when collecting data

Data is the driver of most business decisions so why should retail be any different. I just received my quarterly Search Engine Optimization report for my website. The breakdown of data is incredible, session, page views, average duration, new sessions and, returning sessions. All the search terms used are broken down geographically and by all the search engines. Know that I have all this data what’s the next step to make it useful. I’ve scheduled a call with the company hosting my site to discuss what we can to tweak my site to create more visits since this is my main marketing tool.
For retailers to be successful in this new age of age of data aggregation it’s essential that they not only collect data but become skillful at utilizing that data. For years it was sufficient to have data on inventory but now it’s equally as critical to have customer data. It’s the convergence of these two data silos that’s the pot of gold. Knowing the specifics of a customer’s purchases, their shopping frequency, the last date they shopped for starters allows you to market to them intelligently. I realize there are concerns about data beaches but the fact is consumers will become somewhat inured to them as a fact of life. The calculus is simple if they derive a benefit by allowing you to collect their purchase history the majoring of customers will opt in. A few key rules:
• Make your offers relevant
• Understand your not giving away margin, you’re creating additional sales
• Provide some content that is informational not just promotional
• Allow customers the option to easily opt out
• Monitor the results of your offers and keep tweaking them
Data is you new friend, embrace it. As with all friendships both parties must benefit to make it sustaining.

Why do you do what you do?

At a recent conference I attend the speaker posed that question to the audience. It resonated with me because in my everyday contact with retailers it’s obvious some are still passionate about what they do and others are going through the motions. We should all step back every now and then and ask ourselves the same question. Proving an income for your family is not a sustaining reason. Reflect back when you first started your business and you were passionate about making it a success and providing a superior experience for your customers. Do you still have the same feeling or have you gradually lost some of that verve and energy that helped you become successful? It may have happened over time and almost imperceptibly. You may not have noticed the change but I guarantee you your employees and customers have. There’s a fine line between merely opening the door everyday for business and being totally enthusiastic about welcoming the challenges. Being in business is either invigorating or humdrum, you choose, or your customers will.

Picking through the crumbs!

Crumbs the 46 store chain announced last week it was filing for bankruptcy and ceasing operation. I’ve read all the post mortem commentary on how this happened. They over expanded, they were poorly run their business model was vulnerable since it was based primarily on one product category. I’m sure it’s a combination of factors that eventually did them in. There is another factor that I’ve hasn’t seen mentioned that deserves consideration. Retailers that expand have to very careful that they can duplicate the sense, the feel and the personality of the business. Successful small retail businesses usually have a personality that is an extension of the owners. Employees and customers both are influenced by that presence. Think in terms of one of your favorite restaurants where the owner is also the chief. You know what to expect when you go there, no surprises always consistent. So the challenge is how that same feel can be duplicated when a business expands. Think of the Seinfeld episode where they could no longer make the crepes at The Magic Pan because Izzy Mandlebaum and his son and father were all in the hospital at the time and no one else was trained to make the crepes. The first step to becoming a successful multi- store operation is to learn how to delegate. Give your key employees latitude. Let them make mistakes and grow. You can’t grow until you have the right people in place who know exactly how you want the business to be managed.
A joint venture firm has come forward to provide financing and reopen the chain as a private company. Besides the financing I sure they will provide the management expertise to reinvigorate the brand and expand the brand. It will certainly be interesting to watch.

Ten Things retailers need to know about EMV

1. EMV stands for Europay MasterCard Visa
2. Credit card fraud in 2013 was estimated at $5.33 billion dollars world wide
3. October 2105 is the mandated date for retailers to be EMV compliant
4. Automated fuel dispensers (Gas Stations) have until October 2017 to be compliant
5. Merchants who decided not to become EMV complaint will be responsible for issuers lose due to fraud.
6. EMV cards will cost banks ten times more than magnetic stripe cards
7. Unlike magnetic swipe cards EMV cards encrypt data and authenticate communication
8. There is also an option for prompting for PIN authentication which will create an additional level of security
9. The US is one of the last non adopters of EMV technology
10. We are the country of choice for fraudsters because we are not EMV compliant

“Keeper of the Karma”

I had the distinct pleasure of visiting a great independent retailer last week. Being an unabashed admirer of small retail it was a treat seeing first hand of what it takes to survive and thrive in today’s hyper competitive marketplace. The store recently celebrated its fiftieth anniversary and servicing product into the third generation of many families. Skip Beitze bought Hickory and Tweed in 1986 and currently runs it with his wife Michaela. The one theme I heard from both of them repeatedly was their commitment to customer satisfaction. Most independent retailers claim that their customer centric but the reality some just don’t meet the standard. Skip told me he empowers his employees even the high school partimers to resolve a customer’s problem on the spot following a common sense rule, “If you were the customer how would you want it resolved”
Before I left our meeting Skip told me his job description at this point in his career is “Keeper of the Karma”. After our meeting I thought about the definition of Karma and how it applies to a retail business. If you define Karma as the destiny you create by your actions and behavior then his job description is spot on. Skip’s makes sure that every customer and employee understands they are appreciated and valued. To use the current vernacular, “he doesn’t talk the talk he walks the walk”.

Mobile point of sale is quickly gaining popularity among small- and medium-sized retailers.

I was interviewed recently for an article written by Sue Hildreth which was published in Techtarget. The article offers some interesting perspectives from retailers on how they are embracing Mobile Point of Sale. Any retailer considering implementing a Mobile POS solution will find the article informative.

http://searchcrm.techtarget.com/feature/Mobile-POS-systems-gain-ground-among-SMBs

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Do you really want to know what your customers are thinking?

As with any retailer one of your major concerns is customer service. You coach your employees and do your best to resolve problems. Even for the most diligent retailer maintaining a high level of customer service and satisfaction is an elusive goal. Many times a customer’s opinion of a store is based on their last experience. In reality your margin of error with customers is thin since social media has empowered customers, but it also provides a tool for retailers. Social media can be used by retailers to find out exactly what customers think of them. The postings on Social Media sites aren’t always correct but no more so than word of mouth. In actuality Social Media sites provide a great vehicle for retailers to get feedback both positive and negative. The harsh truth many retailers simply don’t want to know what customers think. The reality is if you decided to engage in the whole social media process you have to respond. Social Media engagement is not a passive activity, it requires that you respond to postings and learn from customers comments. You now have the capability to join the conversation and actively protect your image but only if you’re willing to listen to criticism. The question you have to ask yourself, “Do you really want to know what your customers are thinking?

What retailers should know about selling to the various market segments?

Now that we’ve identified the three major segments that makeup the market place let’s define them more finitely.

Boomers:
They were born between 1946 and 1964 and represent 80 million people. They tend to more traditional and have greater loyalty to the stores where they shop. As a demographic group they have enjoyed a significant increase in both the quality and longevity of their lives. They want to be recognized as loyal customers and want salespeople who are knowledgeable.

GenX’s
Were born between 1964 and 1980 and they represent 35 million people which is the smallest market segment. As a group their average expenditure using e-commerce is significantly greater than any other market group. They do a lot of research before buying and seek word of mouth confirmation before making a major purchase. They also want retailers who have expertise in the products they sell.

Millenials:
This group is the 2000 pound gorilla in the room. They were born between 1980 and 2000 and represent the same market share as Boomers, 80 million. By 2015 they will have a purchasing power of 2.45 trillion dollars and will make up 75% of the workforce worldwide. This is the most mobile enabled segment of the market and social media is the way they communicate their likes and dislikes to their peers. They seek the affirmation of where they shop and what they buy through Social Media. So how do you tap into and stay relevant to Millenials. Here are a few suggestions.

- Communicate with them through social media, Facebook, Instagram etc.
– Offer them personalized discounts based on their past purchases
– Hold special events specifically for this age group
-Tailor your offers to them to move into new areas in your store
– Provide relevant product information and product reviews

It’s absolutely crucial to your future growth that you address the millennial segment of the market using the devices and modes of communication they use.

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