Adidas Makes an Omni-channel Move on India

The Financial Express is reporting that Adidas is making a play in India to convert their strategy to an omni-channel approach. The initiative includes integrating digital tech into 200 of its 750 stores, allowing shoppers to browse items that are not currently in stock via an iPad.

Although this isn't a particularly imaginative approach, Abhishek Lal (senior e-commerce at Adidas) has indicated that the company is hoping to see a 10 to 15% lift in revenue thanks to the new integration. As an incentive, Adidas has made certain product lines available only through their ecommerce offering. Their Neo line of shoes and clothing has been acting as a test model, being available only through the web in the Indian Market.

From a business standpoint, the move allows the company to see what product lines are gaining traction in different markets before making the commitment to ship large amounts of inventory. It remains to be seen whether the lack of tactile feel will affect the sales.

Personally,  I'm a bit skeptical that an iPad in a store can be as effective as the product. The customer has made the effort to come into a branded location, it would make more sense to have, at least, a show room version available. That may be part of the plan, but the Financial Express article had no clear indication on the depth of the strategy.

Read More on Business Line

Myanmar Sets Daily Minimum wage $2.80

 Myanmar's government has set the daily minimum wage for workers in the country at $2.80. Industry experts are predicting this move to be a shot at recovering the garment industry that was once incredibly strong in the country.

According to the International Labor Organization, this would put Myanmar (formally called Burma) at a great competitive advantage over other countries in the region. A single worker in Myanmar would cost $67, versus $90 in Vietnam and $128 in Cambodia. 

The move comes as the Untied states announced that it will be lifting the sanctions placed on the country back in 2012. The original issue stemmed from the US being concerned that many companies were tied to the generals who ran the region up until 2011. The blacklist was seen as a way to ensure the flow of money stopped. 

The new law excludes family run operations and companies with less than 15 workers and is aimed primarily at the large international companies that do business in the region.

Read More at Reuters:
http://www.reuters.com/article/2015/08/29/us-myanmar-economy-wages-idUSKCN0QY0A620150829

Retail Stocks Showing Promise Amid Market Volitility

The Dow Jones industrial has gone a wild ride as the Chinese market has entered into a correction. The industrial average dropped 3.5% yesterday and the stock prices of major retailers like Wal-mart, target and Costco followed but to the surprise of many analysts, they bounced back slightly.

While analysts are quick to scream that the sky is falling, others are holding off to see what will happen before making any grave predictions. CNBC economist Jack Kleinhenz pointed out that it's "too soon to make any changes to the near-term outlook for U.S. economic growth and consumer spending,"

Wal-mart has already lowered their forecasts based on the increased costs of labor and slumping currency markets. It remains to be seen how other large retailers like Macy's and Target will be affected by the slide. With back to school season in full swing and the holiday's coming on quickly many are expecting most big chain stocks to feel the pinch of a contracting economy.

Yahoo Will Acquire Polyvore to Gain Foothold in Fashion Retail

Internet dinosaur Yahoo.com continues to roam the internet. This time eating up San Francisco based fashion site Polyvore for a reported 230 million dollars. Yahoo CEO Marissa Meyer has been on dealing with the unpleasant task of trying to stop the downward spiral of the company and has been making some progress. This acquisition comes as part of her plan to expand their reach across the essential product verticals.

If you're unfamiliar with Polyvore, they're site is outfit based and designed to suck you into scrolling for new styles and outfits. It's much like Pinterest, but has stronger ties to the brands that are featured. I was surprised to check Alexa and see that they're in close to breaking the top 500.

It's not entirely clear what Yahoo's strategy will be with the property. If you look at their acquisition track record they will often let a property mature before injecting too much of their own editorial on it. Tumblr is a prime example of a property that was left to be its own community, while Flickr is one of the platforms that Yahoo is mostly thought to have ruined with bureaucracy.

Target Increases Pressure Online with Back to School Online Push

Sticking to their 'Expect More, Pay Less' approach to retailing, American giant Target turned up the heat on competitors this week when they announced free shipping and free returns during the back to school season.

The company vowed to further expand their omni-channel offerings back in May, and this new push shows that they're willing to make moves to secure a bigger share of the online market. As noted in this Retail Dive article, the back to school 'season' is the biggest part of the buying season aside from the holidays. It makes perfect sense that the retailer would want to try and have customers form good online buying habits before Black Friday or Cyber Monday.

Target held on to their $50 minimum purchase threshold for free shipping significantly longer than other big chains, which some observers note could be the reason that Target is now racing to make up for lost time.

Despite being a bit slow out of the gate, the company managed to grow their eCommerce business by 30% during 2014. Given that they were coming from behind established retailers like Amazon and growing powerhouse Wal-mart, it will be interesting to see if they can maintain that kind of growth year over year without causing damage to their brick and mortar traffic.

Should you be targeting shoppers during their commute?

As the omni-channel marketplace continues to evolve, more data is becoming available as to when customers are browsing and shopping. I just came across this article, which estimates that UK shoppers spend £9.3 billion while commuting to and from their daily job.

With shopping malls on the decline and smartphone penetration estimated to be over 70% the time spent idle during the daily commute would naturally turn to shopping. It's unclear as to whether or not the study takes into account sales with mobile attribution - for example a purchase made on a home computer after researching on a mobile device - but the numbers are significant either way. The study was done in partnership with mobile payments company Zapp and their CEO was quick to point out that the checkout process could still be optimized.

“But fishing out your credit or debit card and then tapping in a long sequence of numbers does not represent the ideal checkout experience on a packed train. If commuter commerce is to continue to flourish we need faster, safer mobile payment methods.” 

How could an omni-channel ready company use this information? Maybe they could hold a flash sale during the hours of the average persons commute or make a specific offer to users on the wifi provided by public transit. The possibilities are limited only by the creativity of the marketing team and a companies ability to deliver on their promise.

Indian Companies Set sights on Omnichannel

With so much going on in North America we often overlook massive foreign markets like Brazil and India. To think that the savvy business people in these places aren't following the trends would be silly. Case and point is this article, which makes the point that omni-channel is the future for retailers in India.

The minister of commerce recently spoke at a Retail Summit and had this to say:

“Omnichannel retailing is the way to go in India. All retailers have a big market, nevertheless organised retailers will have to find local relevance,”

He makes an excellent point. Although there is a billion people in India there is also a wide range of cultural and local diversity. To succeed in omni-channel in India retailers will need to maintain strong ties within each area to find to success. In some ways the omni-channel model works to their benefit in that store to consumer shipping can be presented in the localized flavor of language and customs. The businesses that can grasp how to stay organized and go above and beyond the simple, pick and ship process stands to make huge gains over their competition.

Wal-mart Sets Course for Omni-channel Strategy

In a recent shareholders meeting, Wal-mart CEO Doug McMillon acknowledged the need for the retail giant to make a shift towards an omni-channel approach to business. As mentioned in this ZDnet article McMillon pointed out:

"One customer can shop with us in so many different ways - in stores, on their phones, at homes, a pick-up point," he said. "But they just think they're shopping at Walmart, at ASDA, at Sam's Club."

With a worldwide footprint of eleven thousand stores, making the shift will not be easy. However, Wal-mart has a strong background in adopting technology. Their early adoption and development of advanced supply chain management software helped them to grow to their current size. While it may not be a smooth transition, they have proven the ability to manage that kind of change in the past.

In the past year they've been exercising a strong push to get their piece of the ecommerce pie, which is essential in the omni-channel market. Their low-cost shipping and pick up in store options have been picking up steam. With affiliate partnerships in place, they've been getting significantly more love from the deal blog community and are primed to have a big 2015 online.

Although McMillon didn't reveal any specific plans, he did send a clear message to everyone in attendance.

"I want us to stop talking about digital and physical retail as if they're two separate things. The customer doesn't think of it that way, and we can't either,"

Can Amazon be Beaten With a Good Omnichannel Strategy?

I was just going through my newsfeed and I came across this article on Multichannel Merchant. The points all come from a talk by Jason Goldberger, president of Target. One point that stuck out to me was the speed in which data is becoming obsolete for retailers. Goldberger recounted the launch of their Lilly Pulitzer line, which overwhelmed their web properties and backed up their fulfillment centers. All because the projections were made off data that was 6 months old.

You can’t attend a tech conference without hearing one speaker talk about the glories of failure, and we failed very publically - Jason Goldberger

While your company might not be the size of Target, the lesson can still be adapted. Make your decision based on the latest data or, where possible, in real-time. The environment changes dramatically in 6 months. Also, test your website(s) to know how much traffic the infrastructure can handle and have a plan in place for how to manage it if something goes wrong.

Goldberger also outlined how Target was taking omni-channel to the next level with their free shipping. They've lowered the threshold from a $50 spend to $25 in a bid to make their competitively priced items more attractive than Amazon. This might now be an option for a lot of smaller brands, as they would most likely be taking a lost on low margin products as a way to instill customer loyalty.

Target also took an interesting approach to the showrooming issue that concerns so many stores. In their Denver area stores they set up patio furniture and allowed customers to see the sets that were only available for purchase online. To keep their stores happy, they received credit for sales made in their area. While this is still a crude way of accounting for sales, Goldberger noted that they sold 3x more furniture than prior seasons.

The main take away from this article, to me, was that retailers who are willing to take risks and try new approaches will eventually find their sweet spot in the shifting omni-channel market place. For brands with less cash or leverage to experiement, you can piggy back on the research being done by big retailers like Target.

What do you think?

JC Penny Brings Back the Catalog As Part of their Omnichannel Strategy

After cutting costs by axing its catalog a few years ago, the executives JC Penny have changed their tune. When the original decision was made, it was expected that customers would simply switch to browsing online on their desktop or mobile device.

According to this article over on Diginomica, now that the change has had time to sink in its starting to look like the print material played a bigger part in the sales cycle than expected. The numbers don't lie, and JC Penny has just published a small (by their standards) catalog for home items. While it isn't the 1000 page thick book they published traditionally, it is a concession based on what they think the customers want.

The man in charge of the catalog initiative is, oddly enough, the one who chose to take it away, Myron Ullman.

We’re not going back to the thousand page several times a year book. That’s frankly with paper and postage not a good proposition and frankly, that’s not the way the customer wants to shop.

It's true. With rising postage and printing costs, it could be hard to justify the investment in the full blown catalog that was once a JC Penny staple. If the move proves to be profitable, the brand could follow other big retailers like Target and customize their catalogs based on customer preferences.

It's not all about Sales. Customer Service Needs to Adapt to Omni-channel as well

I was doing my morning reading when I came across this article on 1 to 1 marketing. It it is a shallow dive piece on customer service in the omni-channel marketplace, but it raised some interesting points and got me thinking about a few things.

Number one, was that despite the near ubiquity of the internet in developed countries, management still thinks the customer is too dumb to Google their issue or question.

Just 9 percent of managers believe that customers use the web frequently before reaching out to the contact center. 

Nine percent?

Really?

While I understand that not every customer is as fiercely independent as me (I hate having to deal with sales and customer support!) I think you'd be pretty blind to think that they didn't try to solve their own problem first. Most customers have the internet in the palm of their hand after all.

The article also pointed out that many customer service systems aren't equipped with the ability to track users across various interaction with the help desk. This is more of an issue in process and I think the companies that address the ability to see customers across channels in the service department will see a huge edge in the next few years.

Beyond systems, training of the support team to maintain an even temperament and manage the conversation with the client is also key.

If an agent is unable to find the information they need to support a customer quickly and easily, they're going to be frustrated. And that frustration is going to transfer over into the experience that the customer receives.

This is very true and could easily turn your customer away from the idea of making return purchases. A frustrated or irritable customer service rep is going to pass that attitude over to your customer who will be more than happy to share it with their friends. This could easily spill over to social media and amplify further.

Is Communication the Key to Success in OmniChannel Retail?

I just finished reading Paul Murphy's blog post over on Fourth Source and he raised a few excellent points about the costs, concerns and challenges facing retailers who try to go omnichannel. While the article is focused on the UK, who have long been ahead of North America in online shopping, he raises some points that enterprises on this side of the pond could pick up on and use to win.

According to his post, 56% of John Lewis shoppers chose collect their orders in the store. Providing the inventory count is correct, it shouldn't be a big issue right? But shoppers are impatient people, so it's now on the store to know who the customer is when they get there and have the order somewhere that it can be picked quickly and easily. This would also be a great opportunity to personalize the experience, as you know a bit about the customer when they come to get their items.

Paul also points out that email may not be the best way to reach a potential customer to re-market to them or let them know their order is ready.

email open rates for the retail sector currently are 23.6%, making them too unreliable for this application. SMS by comparison has an open rate of over 95% and is available

 With the advent of cheap cloud messaging services like Twillio, SMS or MMS is a viable & cost effective way of reaching consumers. The key here though, will be to ensure the messages are timely, useful and written in a way that they feel personal. The text message stream is more sacred the inbox in my opinion.

Subscription Fashion Services, the New Monster to Kill Retail

Business bloggers are always looking for a new monster to call out for sneaking around in the shadows and looking to kill old school business. This article on business insider points the finger at the new wave of subscription fashion services as the boogie man that will take a bite out of big retail.

The article also argues that kids these days are "addicted to promotions" that are available through loyalty programs, points cards and other avenues. This one takes the cake for me thoough:

A recent report by Morgan Stanley shows that millennials are spending more on expenses like rent, cellphones, and personal services than young people a decade ago. This leaves less money for buying clothes.

While this is true, I think that it points the blame at the real issue facing North Americans and is disposable income. Are the kids addicted to promotions and cheap subscription clothing services, or victims of inflation and the high cost of modern life? 

The Trans Pacific Partnership & Retail. What does it mean?

The Obama administration has fast-tracked the initiative they've called the Trans-Pacific Partnership. If you've heard about this, you may have heard the famous "NAFTA on Steriods" from Elizibeth Warren.

NAFTA, the North American Free Trade Agreement was signed between Canada and the USA in the mid-ninteties and has since been held up as the reason for jobs leaving America. Since the Canadian dollar is usually worth 20% less than the USD, it was a natural move for companies looking to save a few dollars and have no cultural issues.

The agreement will be among U.S. and Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam to gradually reduce and in some cases eliminate tariffs, and otherwise promote trade. Given the amount of apparel made in markets like Malaysia and Vietnam US companies stand to benefit.

The catch could be in provisions made within the agreement. For example, the agreement could require that signatories to the agreement must have a certain percentage of raw materials sourced within the country where they’re made.This would make for a radical change in sourcing and production. This provision is only hypothetical, but we'll have to wait and see how this develops.

Fashion Business for the "I want it now generation"

I was just reading this article over at Apparel Magazine where they just labeled the kids the "I want it now generation". While I think that Kevin is taking some liberties to try and make a good headline (because who doesn't want it now?) some of his thoughts on where the business side of fashion needs to move are quite on point.

If you follow business supply technology, you'll already know that omni-channel is the buzzword de jour. It refers to the ability to view your entire business and it's distribution systems through one platform. Great in theory, hard to implement and maintain. Without laser accurate inventory, it's very possible that your omni-channel strategy will result in customer dissatisfaction.

Some stats from Kevin's Article:

50 percent of all consumers consider store pickup options important when shopping online, and 41 percent would like alternative delivery options available upon request....only 23 percent of retailers have a buy online, pickup in-store program in place and just 20 percent have implemented a reserve online, pickup in-store program.

So people want it, but most companies aren't there yet. Not surprising. Consumer technology moves a lot faster than corporate infrastructure a lot of the time. To run a truly omni-channel fashion business you'd want to have a great ERP system for apparel companies.

How long will it take before omni-channel is truly adopted? It's hard to say. Big companies are starting to make the switch. Ann Taylor has done it, and it has come at the cost of some of their physical stores. Macy's is trying to do it but has had issues making it work for customers.

It's not easy.

But as more fashion companies and large retailers take the leap they will iron out the wrinkles, which will trickle down to smaller apparel and non-apparel businesses.

Wearable Tech: Is it fashionable and do we need it?

I was browsing my morning newsfeed and this article on wearable tech came up. High fashion has begun to embrace the future and big companies like Apple, Google and Samsung have rolled out watches & augmented reality glasses, but do we really need it?

From the Telegraph article.

"The key to good product design is having a need for something, not creating something because you can," - designer Sean Miles

This is a quote I completely agree with, then I saw the bags he designed and wondered if he actually understands his own words. Check them out:

I guess it is kind of a pain to have to take your mobile device out of your bag, but this is the best we can do? It's kind of like Google's foray into face computers that resulted in major public backlash. Maybe we're not there yet.

On the pure fashion front there is some interesting stuff happening, like this hat designed by Phillip Treacy:

Futurey, huh?

It's actually a light on a string helicoptering around, so while it looks cool it remains in the world of completely unwearable fashion. When will the two merge? Drop a comment below and let me know what you think.