RetailTechExec Blog

With 2-D Barcodes

I am sure you have noticed the accelerating pervasiveness of QR Codes in magazines, billboards, TV, T-shirts and of course retail.  It’s being touted as the “virtual bridge” between the physical world and the internet, but too often in the US, execution does more to disenfranchise customers than engage them.

Let me explain. Many large retailers and the vendors that supply them (think bigger boxes) are starting to label their products with 2-D codes in hopes of converting smartphone wielding customers at the point of decision. Unfortunately, in the US at least,  the user experience is seldom worth the effort because scan results can be slow and generally lead the user to a smaller, harder to read version of the vendors existing website. What a loss of opportunity!

 In Asia, QR codes have been the rage for a couple of years and the experience is becoming more  enticing and innovative. One study claims that 90% of all Japanese consumers have “shot a code” in the past year.

In Korea, Tesco wanted to become the #1 retailer without opening more stores. This is a market with hard-working time-starved, commuting  consumers who dread shopping. So, Tesco created life-like retail environment on the walls of the subway stations, where commuters could “shop” by scanning  codes of pictured items and have them  delivered that same day.

Following this campaign, online sales increased dramatically (Nov 2010 to Jan 2011). Through this campaign, 10,287 consumers visited the online Tesco (recently renamed Homeplus) mall using smartphones. The number of new registered members rose by 76%, and online sales increased 130%. Currently, Homeplus has become No.1 in online market and is a very close 2nd offline.

By comparison, US adoption is slower. A ComScore study released last month said that 6% of US mobile shoppers scanned a QR code in June of 2011.  These users tend to be relatively affluent, under 45 years old and more often than not, male.  I’ve attached Comscore’s results to the left. Most surprisingly, a total of 64% of users claimed to have scanned inside a retail or grocery store. That 9.2M people scanning retail codes in a single month… not a bad start.

  (Click to Enlarge)

What will it take for QR codes to reach critical mass? Real consumer value! Using the technology in creative ways that make the consumer want to interact with the brand and learn more about complex product offerings. I saw Mick McCormick, EVP of Global Sales & Marketing for Columbia Sportswear speak at last weeks Shop.org 2011 Summit. McCormick demonstrated a few QR code-driven videos that were improving in-store conversion on technical  apparel by as much 500%!  Based upon that kind of  sales improvement, they have plans on using QR codes across all of their product lines.

During the presentation, one apparel vendor expressed frustration with retailer hessitancy in allowing coded tags within their stores. McCormick’s advice was clear – deliver relevant content that drives the retailer’s objectives (e.g. conversion) and avoid redirecting consumers to vendor landing pages.  For retailers, the brand experience is everything. Redirection to potentially thousands of vendor sites undermines that objective.

ClickGenie, a mobile QR startup in North Carolina has an interesting approach to managing this problem. They have developed a hosted solution that simplifies the content management from disparate vendors. This is accomplished by customizing a number of pre-approve templates that are branded to match the retailer’s desired user experience. Vendors simply upload content and the environment is controlled and branded by the solution, using generally available smartphone QR readers.  Additionally, the solution enables other retail-specific workflows like consumer wish lists, product recommendations and real-time offers.

See the recent Apparel article or scan the QR code below to learn more about ClikGenie.

The mobile revolution is in it’s infancy and in the not too distant future all of us will be using new technologies like mobile NFC  and QR to learn more about the products we buy and hopefully, to simplify our lives.

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Posted Date: 8/19/2011

ClikGenie Video

Leverage the QR Craze to Engage Shoppers

By  George Hoffman

Apparel retailers and brand owners looking to open a mobile channel for virtually unrestricted customer engagement on the selling floor and beyond, need search no further than QR (quick response) bar codes and their own imaginative merchandising practices. The increasingly ubiquitous checkerboard-like bar codes have become a staple at such big box venues as Home Depot, Lowe’s and Best Buy where they enable smartphone delivery of information on retail products ranging from potted plants to high-def TVs.

Apparel businesses are likely close behind, and those that launch early will gain a competitive advantage, especially with the young, tech-savvy demographic so coveted by clothing retailers. In 2011, the smart play for apparel retailers and brands is to set business objectives for QR bar codes and develop merchandising strategies to achieve them.

Opening the door to two-way engagement  

If you’re like most retailers, chances are good that increasing interaction with customers will rank high among your QR business objectives. According to a recent Forrester Research Study, 66 percent of retailers stated their number one objective for investing in mobile technology was to increase customer engagement.

But QR codes alone will not create an engaging customer experience. It’s how you employ the technology that will determine its success. The opportunities to engage in-store shoppers via QR codes are limited only by a retailer’s or brand’s creativity. The code opens a two-way channel that can accommodate video, chat, text, images and virtually any other type of messaging. Providing additional product information is one obvious potential QR use. Helping shoppers to accessorize is another.

In each case, imaginative merchandising will be key to increasing sales…

Click Here to Read the Full Article.

George Hoffman is president of ClikGenie, Inc., a QR merchandising solutions firm based in Charlotte, N.C. Reach him at [email protected]

Posted Date: 8/19/2011

By  George Hoffman

• Consider which products should be tagged. Does the product lend itself to accessory suggestions or other crossselling opportunities? Does the consumer spend a thoughtful period considering the purchase of this product? Does the customer usually require more information about this product?
• Start small. Select a group of 10-15 items and implement in one pilot store.
• Educate your shoppers and associates on the technology and how to use it.
• Incentivize shoppers to try it out.
• Survey shoppers to find out what they like and don’t like with the technology.
• Measure everything, especially sales, total scans and scans per item.

While I don’t pretend to be a social coupon expert, I have been a troubled observer of this growing phenomenon for some time. As Rocky Agrawal said in Monday’s widely circulated post, the model simply does not make sense. http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-collapse/

There are all types of economic reasons why this model is poised to fail, but that is not what troubles me most. I am most concerned about the long term “destruction of value” that this tactic promotes.  Let me explain. Jack decides to buy Jill something nice for Mothers Day, perhaps a $75 massage.  Miraculously, ping,  a $17 Swedish massage coupon appears on his iPhone.  Its an incredible deal so  he buys it, gives it to Jill, and everybody is happy…right?

Well, not really…  First, the spa probably wasn’t doing well in the first place, which explains why it was so desperate to “buy” a customer.  Now the spa is so overwhelmed that it was almost impossible for Jill to get an appointment. A month later she finally has her massage, from a service provider who has been losing $30 on every customer since Mothers Day! Maybe the quality of the spa’s service hasn’t degraded yet, but customers are tipping less and I am willing to bet that it won’t be the kind of extraordinary experience that builds long-lasting loyalty.  Maybe Jill comes back, maybe she doesn’t… but neither she nor Jack will pay anything close to $75 for her next massage. Furthermore, those loyal customers that have been gladly paying full price are now feeling cheated.  Apparently, it was worth less! Eventually this retailer, and others like it,  complete their death spiral and go out of business.

In some ways the “irrational exuberance” of social couponing was predictable, much like the dot com and real estate bubbles. Consumers and investors get excited by opportunities where the cost to value equation is dramatically in their favor. But, long term, that imbalance is simply not sustainable. No retailer can lose money on every customer but hope to make it up in volume. That is simply mortgaging the future. Eventually it has to collapse.

But the collapse doesn’t hurt just that retailer. It hurts all of us. The pervasiveness of deeply discounted couponing is changing consumers perception of value and driving down margin for many reputable retailers in competitive categories. It’s very similar to the dynamics of the current real estate market. Why would a buyer pay “retail” for my home when my neighbor or his banker is willing to sell a comparable product at a distressed sale price? Ultimately, value is destroyed because a few ill performing merchants are willing to canabalize themselves in a futile effort to survive another month or two.

Retail excellence and corresponding financial success comes from delivering real value not the lowest cost. Retailers need to identify those products, services, activities, behaviours and customer experiences that differentiate them from their competitors in a way that supersedes price.  Create a learning relationship with your customers, become the destination of choice in the category… and you’ll have customers for life!

I was recently speaking with a good friend and former client at two well known Italian luxury brands. We got onto the topic of the roles and responsbilities of a luxury CIO and how it differed from the traditional high-street retailer.  Having worked the luxury segment in IT and CRM for many years, she had some very interesting stories to share. Luxury  is simply different, perhaps more so than many of my readers realize. So, at the end of our conversastion I asked her if she would like to share her perspective as an IT executive on the inside, supporting  two of the worlds most demanding retail brands, catering to the difficult to reach, “rich and famous” customer.

The article that follows highlights some of the considerations that luxury retailers must incorporate into their Clienteling and CRM strategy.

Demystifying the Luxury Customer

     In my years working as a VP of Information Systems within luxury fashion retail I have often been at the center of CRM vendor intrigue.  The luxury client is a customer few understand and fewer still know how to reach.  They can’t be induced by traditional retailing techniques. Loyalty cards, promotional savings, free gifts are simply ignored, or worse, damage the brand. This leaves most  marketers wondering, “How do you reach this client?”  My answer is emphatically — by building a Customer Centric organization.   By effectively and creatively utilizing BI and CRM analytical tools in conjunction with consistent clienteling activities, with an enterprise-wide customer centric philosophy, a luxury retailer can begin to connect and build loyalty with their client.

     The key to reaching the luxury client is to really know them, their lifestyle and shopping behavior.  However,  success is based on how you use that information and how relevant the channel and messaging.  Every customer has a unique value equation that must come into balance before they buy.  The mass market customer  generally buys based on “need” and is motivated by savings and incremental offers.  The luxury client buys because of “want” and is willing to pay a premium for an experience.

     Let’s take a minute to examine the lifestyle of the luxury client.  We already know their income bracket is high, but what else do we know?  They are social, aware of their status, often busy (perhaps too busy to even shop during regular hours), uncompromising and specific with style, they value quality and service over quantity, are event or experience driven, and value trust at the hands of experts.  Knowing these “soft” characteristics and combining them with “hard” purchase behavior provides the retailer with the data to personalize, influence and delight their customers.  Armed with this customer knowledge and the analytical detail provided by CRM and BI tools, the purveyor of luxury products can sustain a relevant profitable relationship with their exclusive clientele.

     Let’s look further.  As I mentioned, they are social and event driven. So, why not create social shopping events like an invite a friend (new shopper) luncheon or a charity fashion show (forgive me, I am in luxury fashion). These are fabulous ways to bring in existing clients and add their closest friends to your roster of customers.   While a sale will not necessarily cause the luxury client to shop, selecting pieces that their trusted associate believes is “just right for them”  is often irresistible.  In home shopping and approval shipments to top customers has been proven to build exceptional loyalty.  Since a luxury client is looking for a shopping experience built on convenience and trust, the relationship you build with them must be one that welcomes them in to your company’s “family”.  Their associate becomes their friend, their confidant who knows them and knows what is best for them.  This level of customer intimacy requires capturing and leveraging information at every customer touch point and making that knowledge accessible to all constituents across the organization.

     A great place to start is to ask questions and LISTEN to their story.  Know your local social event calendar and know their personal interests and events.  Knowledge is power particularly in luxury.  Think out of the box when analyzing their shopping behavior and look for the patterns that will guide your next move.  Every decision your luxury client makes tells you something about who they are.  Every piece of information, from how often they shop, with whom they choose to shop, what pieces they buy, to when they buy helps you create a picture of “your client”.  Build and continually revise your client “profile” to remain current with an ever changing world and how our world affects your client.  The foundation for approaching luxury clientele is the same as it is for all customers.  It is your response to the data you uncover that is different.  The key success factor is to gain a deep understanding of whom your client is and what they value.  Analyze your successes and failures and always be willing to adjust your strategy to connect with an ever changing clientele culture.

     The author, Genine Fargnoli is the former VP of IS  and Director of CRM at Georgio Armani. She previously worked in Program Managment for  Gucci Group NYC. She can be reached at [email protected]

Welcome and thanks for visiting my new blogspot. I’ve created this site to share and connect with all my friends and colleagues in the retail industry. Many of you know me as the Founder & CEO of Retaligent Solutions and may have been wondering where I have been for the last couple of months. There have been quite a few changes at Retaligent and I hope to be sharing some of that story with you in a future post.

Anyway, I believe this site will be a great way to complile and tweet interesting content that I come across every day. It also provides a venue to share my personal thoughts and my expertise that comes from being a 30 year retail veteran with 20+ years of developing and marketing innovative technology solutions for retailers. I hope you will find some of the posts valuable and I welcome your comments and perspectives. Take a moment to sign up and I will send you a periodic compilation of the “best of the best” related to the topics above.

While customer centricity is getting a lot of attention at the moment, I’ve been deploying customer centric solutions and consulting services since the early 1990’s. I thought you might enjoy seeing some of the videos, white papers, brochures, newsletters,  editorials, and articles that I’ve authored and that have been published about my work over the years. You will see that the concepts behind great retailing haven’t changed too much– we just have more mature and accessible technology that ensures that multi-channel best practices can be executed consistently.  Take a look at some of this content and see where it might help you in understanding and redefining the new retail reality.

Again, let me thank you for taking the time to visit and if you think I can help you in any way, I’d enjoy hearing from you.

Best regards,

Bryan

[email protected]