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.



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.

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.

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.

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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To live with the masses sell to the classes!

This is an expression I first heard years ago when I started my first company. It was at a business seminar presentation where the main speaker was a well known marketing guru. I still believe the basic premise of his comment still holds true, except it’s become more complicated in today’s digital marketplace. Back then we typically shopped where our family shopped. If they favored a certain clothing store we shopped there. Retailer understood if they did a good job they would do business with each succeeding generation. Gut instinct and intuition were strong factors of successful retailers. Unfortunately today it’s about understanding how to sell to the different market segments, Boomers, GenX and Millennial. Here’s how the market breaks down: Boomers were born between 1946 -1964 are 80 million. GenX between were born between 1964-1980 represent 35 million and Millennial between 1980 and 2000 equal 80 million. The key for the future growth of most retailers is how to relate to the Millennial, who is a mobile enabled shopper seeking affirmation from their peers on social media. About three years ago I was in a meeting with very traditional men’s clothing store. We were discussing how they could leverage their customer data to attract new customers. After much back and forth their marketing person who was becoming very frustrated said, “Look every time a hearse passes the store we lose a customer and we aren’t replacing them”. This is the stark reality for any retailer who isn’t figuring out how to attract millennial customers. In my next blog we begin discussing the traits of the several segments of the market and how to attract them.

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Disruptive technologies in retail

The term disruptive technology is being bandied about a lot recently. Like most people I haven’t given the term much thought until recently. In working with clients POS projects have grown in scope to include and myriad of associated technologies including but not limited to digital signage, integration to social media, loss prevention and enhanced customer analytics. I think the term disruptive technology is being used negatively to describe a technology or program that causes some amount of chaos in a business. To me it means just the opposite, a technology that challenges the norm for the benefit of the business. The disruptive part comes in when businesses are resistant to change and want to stay the course and continue with the same old stuff. Most retail businesses have three generations working in their stores. These three generations can provide an interesting cross generational partnership. Actively engage the younger people in your business so they can provide insights on how their age group wants to be communicated with. Use this information to initiate a “Disruptive Technology” in your business. Create some chaos shake up the norm.

Retail is location, location, location or is it?

We all agree that one of the main criteria for retail is retail. Chains spend a lot of money and time analyzing data on where to locate store new stores. The independent retailer has fewer resources  and has to base the decision on where to locate a new store on gut instinct and intuition many times. The emergence of the mobile customer has level the playing field a bit.  Understanding how a millennial interacts with retailers is one of the new paradigms of retail.

-          They are heavily influenced by social engagement with a store

-          Most millennials own a least five mobile devices

-          Your website needs to be mobile enabled

-          They want to make informed purchasing decision and have access  current pricing

-          Instagram is growing rapidly in user acceptance by millennials

-          They still use Facebook despite recent reports

-          They want to interact with stores and communicate their experience

Learn how to play in their sandbox if you want reach them.

One last thought, good customer service is still the number one customer influencer.

Four big lies about data security

This article was written by David French and posted on The Retail Big Blog from the NRF.

In the wake of some major data thefts in the past few months, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit held a hearing last week on “Data Security: Examining Efforts to Protect Americans’ Financial Information” to find some answers.

To get to the bottom of these data thefts perpetrated against some of the largest retailers in the country and affecting millions of consumers, the committee invited precisely — you guessed it — zero retailers to learn about the problem and get their side of the story. As you would expect, the hearing was rife with falsehoods, inaccuracies and half-truths.

We thought we’d highlight four of the best (worst) “whoppers” from this hearing and set the record straight.

Whopper #1: Retailers are not properly incentivized to protect their data: this is why “assigning liability” for these data breaches is important.

Truth: Retailers pay a very large price for data breaches and are very well incented by the market to protect their customers and protect their brand reputation.

Retailers have a vested interest in protecting consumers’ financial information – customers won’t shop in a store they don’t trust. Retailers MUST—and do—comply with the PCI Standard, designed by financial institutions, to protect sensitive information first, before they are even able to process payments in the first place. “Assigning liability” is not the issue, the fundamental problem is that the current card number system is too easily monetized by thieves. Thieves wouldn’t be so quick to steal card data online if it were nearly impossible to convert into credit cards and make fraudulent purchases. Requiring a PIN will quickly render this kind of card data theft fruitless.

Whopper #2: Retailers are in the best position to discover and disclose breaches, but they are reluctant to do so as it could adversely impact sales, stock price or reputation.

Truth: In fact, financial institutions are the ones who typically spot breaches, as their fraud detection systems usually trace back suspicious activity to the source from their fraud-prone cards.

In many cases, the reports of fraudulent card activity provide the first signs (even to the financial institutions) of a sophisticated breach. Even when hacked companies discover they have been breached, they may not immediately disclose it for fear of compromising an undercover “sting” or making the breach worse. A total of 46 states and the District of Columbia legally require retailers to notify customers of data breaches and retailers comply with all laws.

Whopper #3: Financial institutions’ systems are better protected than retailers’ systems, and financial institutions have to adhere to much higher standards.


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