Skirting the Apocalypse: Rethinking Retail for Brick-and-Mortars in 2018

Jennifer Powell

CMO of Installation & Service Technologies (IST)

Skirting the Apocalypse:  Rethinking Retail for Brick-and-Mortars in 2018

By Guest Author Tim Flavin, CMO of Installation & Service Technologies (IST)

This is part one in a two-part series with end-of-year observations on shifting retail strategies and the role that emerging technologies will play through 2018.

As early reports emerge, it’s becoming evident 2017 was a good holiday season for the retail industry. Sales increased by 4.9 percent, which marks the industry’s largest year-over-year increase since 2011. As expected, e-commerce led the charge with an 18.1 percent increase from 2016, but brick-and-mortar held its own.

Despite the last-minute uptick, retail is still in correction mode, shedding underperforming brands as slowing foot traffic and decades of overbuilding and overexpansion take their toll.

According to a recent IHL Group study “Debunking the Retail Apocalypse,” the sector faces authentic challenges in the coming years with the portfolio of successful brands shifting according to both the usual demographic changes and a notably unusual disruption in consumer attitudes towards shopping.

This too has been years in the marking, but panic right now is premature as the IHL Group reports:

  • S. retailers have opened 4,080 more locations in 2017 than they closed.
  • Forty-two percent of retailers saw a net increase in locations, while only 15 percent reported a decrease.
  • Sixteen struggling brands were responsible for 48 percent of store closings.

In these more extreme cases, managerial missteps and outdated business plans were clearly to blame. It should be plain to any industry insider that change is vital. Some industry segments are simply better suited for e-commerce and not much can be done to change to overall trajectory.

But for most retailers, a shift in perspective can improve the odds of survival. An apocalypse may be coming, but only for retailers unwilling or unable to change. The following are a few key places to start:

1. Move from Need to Want

Until the internet, shoppers had to go in-store to buy a product, but over the years they’ve been able to get more online with greater convenience, often at a lower cost. This points to a shift in thinking many brick-and-mortars have yet to act on: consumers shop in stores because they want to, not because they have to. Retailers must scrub the very thought of need from their minds.

Instead, leverage the customer experience to generate demand for your channel as well as your product. Merchants must move from transactional to relational thinking and establish an emotional connection, as well as, if applicable, a sense of identity, community or belonging. The question is no longer how to get consumers to buy, it’s how to get them to buy there and then with a sense of urgency. There must be a payoff they can’t find through other channels.

2. Sell with Experiences

To this end, top-performing brick-and-mortars will look for ways to provide unique in-store experiences that reinforce brand identity, values and associations.

All demographics are moving towards experiences over objects and are more likely to buy when a product is part of a larger set of associations and unique sense of place. For example, Urban Outfitters will soon serve pizza in-store, while Lululemon has yoga classes and Frank + Oak gives seminars on high-end whiskey investing. These efforts give consumers a sense of community and a shred identity that they cannot get on Amazon. Gather like minds and give consumers something to talk (or post) about.

3. Play Nice with Digital Integration

Visiting a store to try on or examine a product before buying it online at a lower price, or showrooming, is also becoming a common practice for 73 percent of active shoppers, according to an Accenture study. Fortunately for brick-and-mortars, this practice is a two-way street. Consumers also research products online before eventually purchasing in a real-world location where they can see and touch. By many estimates, this is even more common than showrooming.

The savvy merchant will understand that the two-way relationship between online and in-store purchases is not something to fear. It’s a lifeline to exploit. In fact, in its report “Navigating the New Digital Divide: Capitalizing on Digital Influence in Retail,” Deloitte Digital states:

  • Shoppers who use social media to help shop either before or during their trip are almost 30 percent more likely to make a purchase that same day.
  • Over 65 percent of consumers read product reviews online before making an in-store purchase.
  • Consumers who use social media while shopping are four times more likely to spend more than they otherwise would.
  • Shoppers who say they’re influenced by social media are six times more likely to spend more after a digital interaction.

When planning your showroom, make social integration a key part of your strategy. Make products easy to research online while prominently featuring social feedback and reviews. If technology allows, integrate reviews directly into your in-store displays. Customers are drawn to stores-as-social-hubs, which is something to embrace rather than fight.

Make it easy for shoppers to post items to social media and ask friends for feedback. If they get real-time feedback, they’re statistically more likely to convert, especially on impulse buys. Keep narratives in mind when creating shopping experiences, as story-type posts have spread to nearly every other social platform.

4. Implement Testing, Iteration and Play

A robust testing program will give customers more input into your merchandising strategy, which is clearly preferable since they’re who you hope to enchant with it.

Start small and see which simple changes make an impact and try running different experience tests in multiple stores. Sometimes the same solutions don’t to work in all parts of the country so testing what works best for that market is key. Experimentation is an invaluable tool for creating the kind retail brand experiences that will keep sales healthy well past 2018.

Part two of this series will outline some retail technologies that can assist with these recommended strategies for success in this next year.

 

Jennifer Powell

CMO of Installation & Service Technologies (IST)

Warning signs can be as clear as rain water dripping from a ceiling or the check engine light on a car’s dashboard. But let’s say the system isn’t a roof or a car, but a business that depends on its technological network. What are the warning signs an IT system is in desperate need of an update? Is it a screen glitch or a pause in activity?

At Skinny IT, when identifying a client’s technology needs we begin with assessing where the system is failing and notify the owner of red flags that need an update so the business can perform at its best.

As these warning signs can be quite common to the eye of a service provider, it’s not as easy to spot for others. But with the knowledge outlined in the quick tips below, a business owner can begin to identify red flags and take action.

Warning sign #1 – The IT system isn’t helping overall business goals

If your IT system is functioning like a one-off answer rather than a holistic solution, this a major warning sign to upgrade to an enterprise-level network.

Businesses often invest in single services to fix short-term needs. For example, a restaurant could incorporate a new online reservation system that is a simple-to-use website where customers enter dates and times to reserve seating at their favorite Friday night spot. While this may seem like a solution, the service doesn’t fully contribute to the overall customer experience.

For true customer-centric service, the restaurant should upgrade to an enterprise-level solution. There are a few different services to do so, but reservation systems can transform into complete customer journeys. The updated system will not only make the reservation, but also text the customer when the table is ready, and after the meal, check in with the customer allowing them to rate their experience. The long-term goal is to build relationships with customers and to better business, and the IT systems should reflect this same agenda.

Warning sign #2 – The IT isn’t up to the challenge

If your IT system is acting as a band aid rather than proactive medicine, the network is bound for a costly repair.

When stadiums host football games for more than 80,000 fans, the Wi-Fi network handles a great amount of traffic, often resulting in a ‘can’t connect to network’ pop-up message for mobile users. This is because the stadium installed a network that is not capable of handling a large scale. A network that is optimized for stadiums has sufficient hardware touchpoints throughout the stadium and a sophisticated software design, both partnering for a quality, high-speed connectivity.

IT needs to be flexible to handle a business’s reality of complex problems that require smart solutions. Using short-sighted services that end up resembling band aids when circumstances are in need of a larger remedy is a significant warning sign to upgrade the system.

A Tip to Management

At the end of the day, the number one warning sign to look out for isn’t necessarily within the technology itself. Any warning sign will become a real-time issue if those who recognize them don’t take the problem seriously. If there was an oil light notification on the dashboard, the car owner would make an appointment with their mechanic. When you find your business’ technology isn’t operating at an enterprise level and isn’t up to the challenge, then contact your IT vendor to start implementing change.

Jennifer Powell

CMO of Installation & Service Technologies (IST)

One of the most apparent and concerning trends we noticed in 2016 was the rise of data breaches and the stealing of millions of Americans’ personal information. At Skinny IT, we believe every business, regardless of its size, should have an understanding of what cybersecurity is and how it plays a role in its success.

This blog post will serve as an introduction to cybersecurity for those who have little prior knowledge of the industry. It will be the first in a series of blogs focusing on cybersecurity as it relates to business owners and the capabilities Skinny IT has to help prevent a cyberattack.

According to a Gallup poll, 70 percent of the U.S. population is concerned about the possibility of their information being stolen. Whether it be cases of identity theft or credit card fraud, it has never been more important for business owners to ensure they are taking necessary precautions to protect their customers.

When a customer uses a Point of Sale system (PoS) to make a purchase at a retail store, pay for food at a restaurant or buy an item online, they are trusting businesses to ensure their information cannot be stolen. Data breaches cause companies to lose revenue, status within the industry and customer loyalty. Reputation is everything when running a business, and getting hacked is a surefire way to lose customers.

Business owners must understand the importance of cybersecurity in order to ensure the success and longevity of their company. Here is a list of 5 proactive steps companies should take to protect their business and customers:

  1. PoS Systems – Hackers often look for the biggest outcome that requires the least amount of work, which is why data breaches of PoS systems are among the highest ranked. These cybercriminals are able to steal large amounts of personal information from a single system. To protect the safety of customers, make sure your business is following government-regulated PCI compliance guidelines and always use the most updated PoS system. Currently, business owners should be using EMV chip card readers, which use computer chips to authenticate and secure debit and credit card transactions. Additionally, it is best practice for business owners to utilize a third-party vendor who is an expert in the IT industry to install and host the PoS system on an outside network.
  1. Employee Training – In order to ensure the security of your business, it is essential for all employees to go through cybersecurity training. This training will allow employees to watch for signs of a data breach and implement preventative measures to ensure the company’s success. Employee training is important because it acts as one more wall cybercriminals must navigate to access private information.
  1. Wi-Fi Access – Several retail stores and restaurants choose to offer customers free Wi-Fi access. These are large public networks that are accessible to anyone, and by anyone, we mean hackers. If your business chooses to offer free Wi-Fi, ensure it is a protected network. For Wi-Fi networks and all additional technology components that require password protection, business owners must change the standard default password that comes with the system in order to prevent an easy cyberattack.
  1. E-Commerce – If your business has an e-commerce site, offer customers a secure checkout process. Send verification emails once they have made a purchase, and remind them to report any emails that look suspicious or fake. For example, Amazon recently had an issue with a hacker sending customers fake emails requesting them to re-input their shipping information because it had been lost. The customers who responded to this email had their information stolen.
  1. Have a Crisis Communications Plan in Place – The unfortunate reality is that you can do everything in your power to prevent a data breach, and still fall victim. Cybersecurity attacks lead to loss of reputation, customer loyalty, and additional fines that can cause damage that is unrecoverable. Because of this, it is always best practice to have a crisis communications plan in place if a data breach occurs to help prevent your company from going out of business.
  • First, have a prepared statement drafted informing your customers of a data breach. Be transparent and provide all details legally allowed regarding the breach so your customers know you are doing everything in your power to fix the issue.
  • To ensure false information is not leaked, designate one member of the leadership team to address the crisis situation. No one else from your company should address the media. This way, you and the public can know that all information is coming from a reliable source.
  • Keep customers updated and informed on the status of the recovery process so they are aware of the action items you are taking to solve the problem as time progresses.
  • Lastly, once the crisis is under control and all issues have been addressed, notify all customers, apologize and explain the steps put in place to ensure it will not happen again.

Hackers often take seconds to break into your system, and reversing the consequences of that data breach can take years. Some companies never fully recover once they have been hacked. By taking action and securing your IT ahead of time, you are not only protecting your business, but the people who make it function: your customers.

As an IT company with years of experience within the industry, we have seen businesses that did not utilize a professional IT service fall victim to cybersecurity attacks. We want to ensure that does not happen to you. Skinny IT can help protect your business from cyberattacks and data breaches quickly and efficiently by ensuring your technology is installed and protected correctly. If you want to chat about cybersecurity and the security of your IT system, give us a call.

Jennifer Powell

CMO of Installation & Service Technologies (IST)

After the market decline of 2008 and 2009, the retail industry has continued a slow but steady stream of growth. Today, we can finally see a thriving market with emerging retailers.

The National Retail Federation predicts continued growth in 2016 with an estimated 3.1 percent annual retail sales increase. And the trend is expected to continue throughout 2017 with retailers focused on opening additional stores in multiple markets.

With such rapid expansion, how should emerging retailers tackle the increased needs of IT infrastructure?

When opening a new location, the start-up checklist can seem endless. From hiring staff members and stocking product, to designing the space and ensuring all technology components work seamlessly, it is easy to feel overwhelmed or let details slip through the cracks.

Consider our two recommendations below to ensure IT stays current with the growth plan.

  1. Prioritize – Start big with a full list of potential IT needs and pare down to determine which are necessary for your growing business. Then, make an action plan and timeline for each buildout.
  • Database collection from customers
  • Surveillance cameras
  • Physical and cyber security system
  • Point-of-sale systems
  • Linked network of cash registers
  • Receipt printers
  • Wi-Fi access
  • Pricing guns
  • eCommerce site
  • Shipping software and hardware
  • Repeat touch points with customers
  1. Invite the Right People on the Bus – To keep a healthy growth pace, partner with one service provider to handle all IT needs. That’s one company, one contact and one integrated system ensuring all technical components work together.

Harry & David is an example of a rapidly growing franchise with complex IT needs in a retail setting. The company specializes in creating gourmet gift baskets suitable for any special occasion. Thousands of gift baskets are sent out each year and it takes a large IT database to keep track of their many sales.

The Harry & David headquarters in Medford, Oregon, contacted Skinny IT requesting the team to replace 125 computers that needed significant updates. Skinny IT was given three weeks to secure new units, update each machine, back up the data and ensure the 125 computers would be on the employees’ desks as if nothing had changed. Skinny IT sent three team members out to complete the task and within five days the job was done. Our team provided Harry & David with a low project cost, quick turnaround and ensured business continuity so they were able to continue running their business effectively with no loss of work.

If you’re in an emerging retail industry with aggressive growth plans for 2017, let us know if we can help strategize your IT needs.

SkinnyIT

If you think restaurants are incorporating a lot of technology into their businesses lately, we can guarantee a new San Francisco restaurant has them beat.

A start-up restaurant named has officially opened its first location. The new restaurant is all technology, meaning customers have zero human interaction during their entire experience.

The non-human experience includes ordering and paying on tablets. After ordering, the customer picks up their food at one of the multiple glass cubbies, which displays the customer’s name. The cubby opens by pressing a button.

Co-founder of Eatsa Tim Young told Chain Store Age that Eatsa is a different kind of fast food.

“Eatsa is reinventing fast food by combining the speed and affordability of fast food with the delicious flavors and nutritious ingredients of premium fast casual,” Young said. “By developing new technology to automate every aspect of the food experience, we are able to deliver a product with the best qualities of premium fast casual at a price point that is accessible to everyone.”

If you think this is a cool concept and want to try it out, there’s one requirement: you must like quinoa. All of the menu options have quinoa as an ingredient, but customizing your order is a possibility.

We don’t know if this is the restaurant of the future, but we think it shows some of the endless possibilities investing in technology can lead to.

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