Retail Technology News: September 10 – 16, 2014

What consumers expect from omnichannel retail, how Generation Z shops, why the year-end outlook is bright for retail sales, what Apple Pay means for retailers, and more—welcome to this week’s edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Here’s what was news last week:

A Platform For Omnichannel Success (Retail TouchPoints)

Omnichannel infographic

Image Credit: Retail TouchPoints

To meet consumers’ demands for seamless and consistent experiences across all channels, retailers must evolve from a siloed channel approach to a centralized commerce approach. This infographic outlines consumers’ current expectations and retailers’ omnichannel aspirations.

“Generation Z” Is Poised To Drive A Surge In E-Commerce Growth (Business Insider)

There are surprising and important differences in behavior depending on gender, age (especially for Generation Z), income, and education. Generation Z, those aged 18 to 24, spends almost one in ten of their dollars online—and they are spending a much higher proportion of their income online compared to other generations.

RetailNext: Retail performance improves in 2014 (Chain Store Age)

Retail performance has continued to improve throughout 2014, according to the RetailNext Composite Index analyzing more than 15 million shopping trips across specialty and larger format retail stores within the U.S..

Being Hyperagile the Key to Future Retail Success (Retail Online Integration)

The retail industry is in the midst of a significant digital evolution. Leaps in technical innovation present major opportunities for retailers willing to embrace change and equally significant threats to those that stubbornly hold on to status quo.

Smart shoppers do it online, then in-store (Retail Systems)

59 percent of shoppers in the UK use their smartphones to check prices online before making a purchase in-store, according to a new survey. 44 percent say they prefer the experience of shopping in a physical store, followed by 31 per cent who stated that it depended on the type of shopping they were doing.

“Location, location, location.” How where you live influences how you shop online (The Washington Post)

In the digital era, there’s no doubt consumers are more connected to each other and to global retail brands than ever before. But despite this connectivity, the neighborhoods we live in—and the acquaintances we encounter there—still have deep influence on how we shop.

August retail sales increased 0.5 percent (National Retail Federation)

The National Retail Federation calculates that August retail sales increased 0.5 percent seasonally adjusted month-to-month and 2.7 percent unadjusted year-over-year. When combined with revisions to July, August sales indicate a consistent improvement in consumer confidence and spending.

Consumer spending showing renewed life (USA Today)

The American consumer has a pulse, after all. Economists are revising up estimates for consumer spending in the current quarter and the rest of 2014 after last week’s solid retail sales report. Americans stepped up their purchases broadly, snapping up furniture, electronics, sporting goods and clothing.

How Much Showrooming Are Consumers Really Doing? (eMarketer)

Brick-and-mortar retailers worry that their expensive storefronts are just museums for ecommerce sites—expensive to maintain and feeding product sales directly to competitor ecommerce sites like Amazon.com. But is worrying worth it if ecommerce sales only make up around 6% of total retail sales?

What Apple Pay means for retailers (Internet Retailer)

The adoption of Apple’s new mobile payment system depends on retailers installing terminals with new technology, and consumers finding it easier to pay with a smartphone than with plastic or cash. A change coming to store checkout counters could make it easier for many retailers to accept Apple Pay.

Further Reading:

Assortment Planning: Adapting to the new retail market (white paper)

Learn how to balance the complex challenges of assortment planning, SKU rationalization and localization. The current market is asking retailers some very difficult questions – questions that their existing processes and tools do not have the answer to. This white paper outlines how retailers can overcome these challenges to stay competitive and pull ahead.

Retail Technology News: September 3 – 9, 2014

How the iPhone 6 is changing mobile payments, which online challenges are most vexing to retailers, what major shift just occurred in online shopping, why showrooming is on the decline, and more—welcome to this week’s edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Here’s what was news last week:

Apple poised to supercharge mobile payments (Internet Retailer)

iPhone 6 changes retail paymentsInternet Retailer predicted just days ago that “Apple seems poised to light a fire under the slumbering mobile payments market when the technology giant debuts the iPhone 6 smartphone on Sept. 9.”  Here’s how retailers responded to the actual Apple announcement, and complete coverage of the
iPhone 6 launch
.

Online retail challenges hit home (Retail Systems)

Driving traffic to websites is the biggest challenge
faced by online retailers, according to new research. Forty one per cent of respondents said that getting potential customers to online shops was the top issue, while finding innovative ways to market products and staying competitive came joint second.

Exclusive: Mobile now the primary way consumers shop online (Internet Retailer)

Online retail is now dominated by mobile devices. A leading technology vendor reported that in August, mobile traffic to 26 retailer clients it has benchmarked for years surpassed 50%—50.7%, to be precise. comScore said that in July 2014, 56% of time spent with U.S. online retail occurred on a mobile device. And figures from the UK show the same pattern.

70% of retailers embrace omnichannel (FierceRetail)

Seventy percent of retailers said they have adopted an omnichannel strategy to link shoppers’ in-store experiences with e-commerce, mobile and social media platforms, according to the 2014 Retail Outlook Survey by KPMG. 53 percent of retail executives reported they feel ahead of their peers in omnichannel adoption.

The rise and fall of showrooming (Retail Gazette)

A recent report from BI Intelligence has discovered “reverse showrooming” – a trend which sees consumers reverting back to the old days of the internet and researching products online before heading to bricks-and-mortar stores to complete their purchases –has overtaken the initial trend of showrooming itself.

Further Reading:

Maximizing performance in the fast-moving world of fashion retail (white paper)

Download this free white paper to learn strategies to help retailers maximize performance in fast fashion. Learn best-practice strategies to unlock your competitive advantage.

Retail Technology News: August 27 – September 2, 2014

How parents are using technology for back-to-school shopping, what six trends retailers need to watch, who buys online, which technologies retailers will invest in next year, and more—welcome to this week’s edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Here’s what was news last week:

What Brands Need to Know About Back-to-School Shopping Habits (AdWeek)

Back to school shoppers appreciate ads

Image Credit: AdWeek

With spending on back-to-school and college estimated to reach $74.9 billion this year, the annual end-of-summer scramble for new clothes, tech products, pencils and pens now rivals the holiday season. Now, more than ever, parents are turning to tech to guide them in all stages of the purchase journey, from research to reviews to price comparisons.

Top Retail Trends of 2014-15 (RetailNext)

Retailers have faced a number of challenges this year, from record-setting inclement weather in the winter to shaky consumer confidence over macro-economic conditions. In response, retailers are developing and deploying new strategies. Here are the six most prominent trends in retail for the coming year.

Shoppers all over the world are buying more online (Internet Retailer)

Nearly half of global internet users plan to make an online purchase in the next six months in popular categories. Shoppers in Latin American browse more but buy less; shoppers in Asia-Pacific browse less but buy more, according to a new report.

Those Who Browse Online, Buy Online (MediaPost)

When shopping for clothes, event tickets, books and personal care products, there’s almost a one-to-one correlation between online searching and shopping, according to a new ecommerce study by Nielsen. Those who browse online also buy online.

IHL Forecast: 2015 retail IT spend to surpass $190 billion (Chain Store Age)

The retail and hospitality market is entering a time of unprecedented IT growth for 2015. A new report predicts overall IT spending growth of 5.7% in North America, driven by huge investments retailers in payment systems, data security, omnichannel integration and mobile proliferation and engagement.

Further Reading:

Effectively managing the evolving retail eco-system (white paper)

This white paper will give retailers strategies of how to better understand their customers and deliver the right products to the right channel at the right time and at the right price.

 

Retail Technology News: August 20 – 26, 2014

Why online retailers are opening brick-and-mortar stores, how mobile device use is changing the shopping experience, which nation leads in mobile and social shopping, and more—welcome to this week’s edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Also, stories about tablets, omnichannel, and back-to-school shopping, Here’s what was news last week:

Online shopping is the future. So why do so many Web retailers want to be in stores? (The Washington Post)

Etailers are going brick and mortar

Image credit: The Washington Post

A growing number of Web retailing pioneers have discovered the old school benefits of having a brick-and-mortar store. For example, products from Etsy,
a dominant online marketplace for handicrafts and vintage goods, will soon be available in independent boutiques and some major chain stores such as Nordstrom.

Online Retail Up 14% in July, Led By Jewelry And Clothing (MediaPost)

Shopping in categories like jewelry and watches
and apparel helped boost online retail spending
14% in July from a year ago.  Jewelry led the way with online sales up 18%, followed by clothing and accessories (17%), and packaged goods (16%).

Embracing big data, technology and omni-channel operations to enhance the customer experience (Retail Customer Experience)

The retail world today is epitomized by near-global access to the Internet and speedy adoption rates of smartphones. It is forcing savvy retailers to create a brick-and-mortar shopping experience that rivals the convenience and immediacy of the Internet, but delivers an experience that cannot be matched online.

The Mobile Mind Shift: The Six Truths of Mobile Commerce (Multichannel Merchant)

Mobile is constantly changing and the way consumers view the shopping experience since today people are “wedded” to their devices and are always connected. By 2017, companies will spend $189 billion in the back-end area of their business in order to be competitive in digital and mobile.

Users Turn To Tablets For Shopping And Leisure (exploreB2B)

70% of respondents in a recent survey said that their purchasing decisions are influenced by the quality and design of images on retail sites, and 67% say poor tablet experience would stop them from recommending a site to friends and family.

38% of All Ecommerce Site Visits Came From Mobile and Tablet Devices (Multichannel Merchant)

Ecommerce is going mobile: 38% of all ecommerce traffic during the first half of the year mobile devices and tablets. But despite the growing percentage of traffic, ecommerce conversion rates remain much lower on mobile devices and tablets, signaling a greater need to focus on an omnichannel user experience for all visitors, regardless of device.

Brits shop on mobile and social more than any other nation, Marin reports (Retail Times)

Mobile-loving Brits research purchases and shop on mobile devices (smartphones and tablets) more than any other nation. In the UK, over half of all online ad clicks are made from mobile devices. This compares to the rest of Europe where only one third of clicks came from mobile devices.

Mobile Shoppers & 15-Mile Deal Limit (MediaPost)

While more than a third (39%) of back-to-school shoppers spend more than an hour on their smartphone or tablet planning for their shopping, the majority (77%) are not willing to drive more than 15 miles to get the best price, based on a new survey.

Back-to-School Shopping Has Changed Forever (AdWeek)

For decades, back-to-school shopping used to mean heading off to the mall or department store to fill the cart with the usual haul of spiral notebooks and backpacks. The digital age has changed that process, of course, but two just-released studies indicate just how dramatic that change really is.

Want to know the future of back-to-school shopping? Look to the past. (JLL)

As deal sites abound, shipping prices fall away, inventory endlessly expands, and it begs the question: “does anyone load the kids up in the family car and drive to the mall anymore?” Turns out they do—and especially when school’s about to start.

Further Reading:

Four Strategies to Optimize Assortment Planning (free guide)

Assortment planning is one of the first areas retailers should assess in order to increase profit and margin. Matt Garvis, Director of Company Strategy, will be taking you through the top four strategies to optimize assortment planning, including: SKU rationalization, clustering, forecasting and financial plans.

 

Retail Technology News: August 13 – 19, 2014

Why ecommerce won’t kill brick-and-mortar stores, how retailers can use technology to maximize sales online and off, who (not who you may think) is shopping online, and more—welcome to the “omnichannel” edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Also, stories on retail sales trends and moms’ priorities for back-to-school shopping. Here’s what was news last week:

E-Commerce Is Not Eating Retail (Harvard Business Review)

Why omnichannel is the future of retail

Image credit: Harvard Business Review

Recent headlines suggesting the demise of physical stores at the hands of e-commerce are provocative, but misleading. To the contrary, omnichannel
retailers—those that seamlessly integrate the best
of both digital and physical worlds at each step of
the customer experience—are likely to enjoy significant advantages over retailers that try to
pursue either one alone or both independently.

7 Statistics About E-Commerce Shoppers That Reveal Why Many Consumer Stereotypes Don’t Apply Online (Business Insider)

Who shops online? The short answer is everyone. E-commerce has pervaded nearly every U.S. retail category. But digging into the data, there are surprising and important differences in behavior depending on gender, age (especially for Generation Z), income, and education. And some key findings run contrary to conventional wisdom.

Retail spending growth reaches 11-month high in July (Retail Customer Experience)

Retail spending growth was at an 11-month high in July. Overall retail spending growth was at its strongest levels in a year as nearly all retail categories turned in improved numbers, led by categories such as building materials, garden equipment, furniture and home furnishings. July’s dollar volume growth of 3.9 percent was robust, marking an improvement over June’s growth of 3.0 percent.

Retail technology: hi-tech high street fights for its future (The Telegraph)

In a world when you can be sitting on a beach and order products to be delivered to your home via your smartphone, the traditional store is no longer just about bricks and mortar. Developments in “omnichannel retailing,” including greater smartphone and tablet integration, are improving in-store shopping and shaping the future of retail.

How can businesses track the customer journey in a multichannel world? (Econsultancy)

More than three quarters of consumers have made a purchase online; even more have at least researched products online. Where once this would almost certainly have been on a desktop computer, the increasing popularity of smartphones and tablets makes mapping the online shopping journey more complex than ever. Tracking customer interactions across devices is essential to devising strategies.

It’s Official: Mobile Devices Rule Our Lives (PYMNTS.com)

Mobile is playing a growing role in commerce, both at the store and online. As marketers gain more sophistication in identifying how to capitalize on this trend, competition will become especially strong trying in capture the attention of omnichannel consumers via their smartphones and tablets.

Seniors: Kind of Digital Shoppers, Kind of Not (eMarketer)

While digital shopping and buying are not standard procedure for seniors to the degree that is true of younger generations, it’s not a rare occurrence for seniors to use digital resources in their purchase process. A surprising number of seniors are digital buyers. 36.7% of the US 65-and-older population will make a digital purchase this year—a market of 16.9 million people.

The customer journey & relevant experiences are the new business imperatives (Econsultancy)

It is time to unite all customer data from all data sources, across all channels and devices, into a unified profile that the business and marketer owns as first-party to them. Having this unified customer profile with data at the individual level and the ability to own and use that data in real-time offers significant benefits to marketers and enables them to achieve true one-to-one marketing.

Why 92 percent of retail purchases still happen offline (iMedia Connection)

Though the eCommerce industry continues to see rapid growth, the overwhelming majority of U.S. retail sales (92 percent) still take place offline. The most common reason? Shoppers want to see or feel products in person. It should came as no surprise that the chief reason consumers don’t like virtual shopping is because you just can’t feel pixels.

89% of Back-to-School, Smartphone-Shopping Moms Looking for Coupons (MediaPost)

No matter how you slice it, mobile consumers want to shop in stores and they’re looking for a deal. Even though they plan to buy in physical stores, most moms (60%) said they will use their smartphone while shopping and they’re looking for bargains and special offers. While in the store, moms are four times more likely to use their smartphone to look for coupons compared to other mobile activities.

Further Reading:

Making Omnichannel Inventory Optimization Profitable (report)

What’s always been true of inventory management – that it can make or break a retailer’s business model — is still true today, only the stakes are higher in the instant-gratification world of omnichannel retailing. This report explains how to create a 360-degree inventory optimization game plan built on a foundation of real-time accuracy and visibility, and use inventory management as a competitive weapon.

Retail Technology News: August 6 – 12, 2014

Which new technologies are revolutionizing retail, what stores of tomorrow may look like, where progressive retailers are turning to enhance customer service, and more—welcome to the “future of shopping” edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Also, stories on mobile shopping behavior, devices, and demographics. Here’s what was news last week:

The fuiture of shopping

                        Image credit: Retail TouchPoints

Innovative Technologies Revolutionize The Shopper Journey (Retail TouchPoints)

Whether shoppers are at home using PCs,
searching for products on mobile devices, walking near a store, or browsing the aisles in the store, retailers have access to a number of new technologies to enhance the experience at every touch point. Here are some of the new technologies they are investing in.

10 Futuristic Places to Shop (io9)

We’re on the verge of a huge revolution in the way
we shop, as physical retail spaces become more virtual, and smart businesses find more ways to get you the exact item you want, with no waiting. Innovations from augmented reality to 3D printers are already changing the way we think about browsing and shopping.

Retailers Increase Investment In Social Customer Service (Retail TouchPoints)

To engage with highly social shoppers in the omnichannel era, progressive retailers are looking to social customer service. More than half (67%) of businesses note that social customer service is growing in importance and is the most pressing short-term priority for contact centers in the U.S. and UK.

How Foot Locker Is Winning The Multichannel Race With Inventory Visibility (Retail TouchPoints)

Today’s retail customer shops in a number of different ways — online, through their mobile devices, in stores, in print — and retailers must adapt to these new shopping trends. The only way to support these new shopping patterns effectively is with an enterprise-wide view of inventory.

Mobile Shoppers Spend 27 Minutes in Stores; Smartphone Retail Revenue Increases 93% (MediaPost)

The good news for retailers is that the number of shoppers who entered a store as a percentage of those passing by increased to 8%. The bad news is that the number of shoppers who came into the store and left within five minutes increased to 9%. But fortunately for merchants, the amount of time the majority spent in their stores increased to 27 minutes per visit.

Men Are Actually More Likely To Shop On Mobile Than Women (Business Insider)

The conventional wisdom is that women account for the lion’s share of consumer spending, including online purchases.  But it turns out that men are the power shoppers when it comes to purchases made on smartphones and tablets.

Consumers prefer their web shopping done medium (Internet Retailer)

Medium screens for the win. When it comes to conversion rates, tablets beat their smaller smartphone counterparts and their larger desktop computer siblings in the U.S. and the U.K. However, desktop beats tablet in average order value.

Further Reading:

Adapting to the New Retail Marketplace (white paper)

Evolving consumer path to purchase patterns are creating a new set of challenges for retailers that their existing infrastructure may not support. This white paper examines options for addressing those challenges and details methods used by innovative retailers to leverage these opportunities.

Retail Technology News: July 30 – August 5, 2014

How much families will spend on back-to-school shopping this year, what they’ll be buying, where they’ll be purchasing, and more—welcome to the “back to school” edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Also, stories on omnichannel, smartphones, and BOPIS. Here’s what was news last week:

Back to school shopping news 2014

Image credit: Retail TouchPoints

Back-To-School Spend Trends: Sales, Social Media And Starting Early (Retail TouchPoints)

As the summer season nears the end, families will venture home from their vacations and head straight to the stores for their annual back-to-school
shopping spree.  In 2014, families are expected to spend more on school supplies compared to last year. The average family with children in grades K-12 will spend $669.28 on apparel, shoes, supplies and electronics, up 5% from 2013.

Most parents say back-to-school spending will increase this year (Retail Customer Experience)

A majority of parents plan to spend more on their children’s back-to-school shopping this year. The Accenture Back-to-School Shopping Survey, which polled U.S. parents of children entering kindergarten through college, shows that nearly all (89 percent) plan to do most of their back-to-school shopping in a physical store, though many will still use online to browse and search.

Back-to-School Becomes Bigger Part of Digital Retailing (eMarketer)

Though most back-to-school shopping will be done in brick-and-mortar stores (see story above), online sales are projected to increase year over year as well. eMarketer estimates retail ecommerce sales will be up 16.0% during this year’s back-to-school season vs. last year’s.

On Solid Ground: Brick-and-Mortar Is the Foundation of Omnichannel Retailing (A.T. Kearney)

Physical stores are clearly customers’ preferred shopping channel and a place where the most significant consumer and retailer value continues, and will continue, to be created. Digital retailing is capturing headlines and inspiring spirited debate as retailers plan how best to invest for future success. But beyond the headlines, physical stores remain the foundation of retailing, according to this research report.

physical stores are clearly customers’ preferred shopping channel and a place where the most significant consumer and retailer value continues, and will continue, to be created.

Digital retailing is capturing headlines and inspiring spirited debate as retailers plan how best to invest for future success. But beyond the headlines, physical stores remain the foundation of retailing

– See more at: http://www.atkearney.com/consumer-products-retail/on-solid-ground#sthash.MrLz9Wtq.dpuf

physical stores are clearly customers’ preferred shopping channel and a place where the most significant consumer and retailer value continues, and will continue, to be created.

Digital retailing is capturing headlines and inspiring spirited debate as retailers plan how best to invest for future success. But beyond the headlines, physical stores remain the foundation of retailing

– See more at: http://www.atkearney.com/consumer-products-retail/on-solid-ground#sthash.MrLz9Wtq.dpuf

Smartphone users in stores compare prices, read reviews and do much more (Internet Retailer)

Yes, U.S. smartphone users are showrooming for better deals online, but they are also doing many other things to help them decide whether to make a purchase in-store. Many smartphone owners use their devices to do deeper research on products while in the aisles, not necessarily looking for a better deal but simply looking to inform their buying decisions, decisions that may very well lead to making a purchase in stores.

Let’s talk about BOPIS (buy online, pickup in store) (RetailWire)

BOPIS (buy online, pickup in store) is one of the most effective ways retailers can differentiate from, and compete with, Amazon and other major online stores. But the store’s role must be adjusted.. Consumers today want convenience — and often that means a way of avoiding the hassle of going into an actual store when they already know what they want.

Further Reading:

Making Omnichannel Inventory Optimization Profitable (report)

What’s always been true of inventory management – that it can make or break a retailer’s business model — is still true today, only the stakes are higher in the instant-gratification world of omnichannel retailing. This report explains how to create a 360-degree inventory optimization game plan built on a foundation of real-time accuracy and visibility, and use inventory management as a competitive weapon.

 

Quantum Retail Ranked #83 on Deloitte 500 Social Currency Index

Quantum Retail was honored recently with inclusion on the Deloitte 500 Social Currency Index, published in conjunction with Insightpool.

Download the Deloitte 500 Social Currency ReportThis index is based on measurements of ” if and how each company within the Fast 500 is taking advantage of the opportunities that Social Currency offers.”

Specifically, per the report,   “In this study, we analyzed the companies on the Deloitte Technology Fast 500 list and how each utilizes ‘Social Currency.’ Like The Fortune 500 study, we focused our attention on the platform with the greatest adoption of the world’s largest brands – Twitter. We found that 401 of the Fast 500 have official Twitter accounts, an 80% adoption rate.

“The Fast 500’s high adoption rate of Twitter is unsurprising as they are the leaders in rapid growth and cutting edge technology. It makes perfect sense that they would also be on the forefront of marketing by realizing the value of social media.”

Download the full report to learn more.

Overseas expansion roundtable [Drapers]

Quantum Retail talks with leading fashion retailers

Passport to profits: Drapers and Quantum Retail invited retailers to hear about M&S’s international plans.

There is little doubt that international expansion is at the top of the retail agenda. With a flat market at home, overseas territories and developing economies, where consumers are enjoying increased spending power, are an attractive prospect for UK fashion retailers and brands.

However, due to changing shopping habits fashion businesses already have to adapt their practices for multichannel retail at home, so entering the international arena brings added complexities and fresh demands.

With this in mind Drapers, in association with retail software supplier Quantum Retail, brought together leading fashion retailers from Arcadia, Ted Baker and Dune Group over a dinner on June 26, at Fortnum & Mason in London, to listen to a presentation by Marks & Spencer’s then international director Jan Heere.

Heere, who was one of chief executive Marc Bolland’s first big hires and was formerly managing director of Spanish fashion group Inditex for five years, has since stepped down from his post at M&S, but spoke to the attendees about how he built the company’s international business in the three years since taking on the role in 2011. Heere is now said to be contemplating a job in Europe.

With 455 stores across 54 territories, M&S has grown its retail space by 41% under Heere and has built a formidable global business. Having famously exited the international arena in 2001, the company had its work cut out, said Heere. “When Marc Bolland joined in 2010 he said we want to become an international multichannel retailer. And we obviously have to catch up with what a lot of our competitors have been doing much earlier and much faster. Zara, for instance, decided to go global in 1988.”

He said the first step was establishing an international team with varied retail experience in and across different international markets, with the ability to speak the languages necessary to operate.

“We also wanted to focus our strategy in the first three years in the northeast quadrant of the world because we felt that going into the southern hemisphere or the Americas would create too much complexity. Within that area we focused on India, China, Russia, the Middle East, and to a certain extent western Europe as well,” he explained.

However, expanding overseas isn’t just about bricks and mortar. Just as the UK consumer is now a multichannel shopper, so are those in other international markets. Joe McManus, vice president of sales at Quantum Retail, which counts New Look, Marks & Spencer and Sainsbury’s among its customers, said: “Today’s retailers are having to find new ways to address challenges when expanding internationally. These include understanding and balancing the needs of new customers with the retailer’s ability to place inventory where it will deliver the highest value across their organisation. Successful retailers are achieving this with advanced allocation and replenishment and expanded omnichannel exposure.”

For M&S – which operates 10 international websites mainly in Europe under a .eu address that then localises to the given country – assessing the multichannel potential of a market is of utmost importance. “When we evaluate every country we look at the potential of the stores and of the website, and we rank all of the markets around the world depending on the potential in the different channels. That is how we have created our priority list and have decided where we will start investing first.”

With its vast and increasingly wealthy population, China is a top priority for many fashion retailers. M&S has 14 stores there and this year launched online on Tmall, essentially an online shopping centre and China’s largest etail platform with 500 million users. “It was important for us to start learning how to trade on a website in China and that is why we wanted to go onto Tmall,” said Heere. “We have learned you have to be on Tmall – that is the place to trade. We have taken the lessons from this launch, seen our traffic grow and believe that will be the way to develop online there.”

One of the key decisions to make when entering a new market is how to do it, both online and on the ground. The choices include directly operated, via a joint venture partnership, wholesale or through a franchise agreement. The latter has been implemented successfully by the likes of Debenhams, Mothercare and M&S.

M&S has a target of opening 250 international stores in the next three years, and Heere said he expects 60% of growth to come from the franchise part of the business. However, he told attendees M&S will still directly operate some markets. “We believe it is important that if we want to be a good franchiser then we know how to operate an international business. So places such as France, the Netherlands, Ireland and Belgium are direct ownership, but the growth will definitely come from franchise.”

The benefit of a franchise approach is it is less capital intensive, and the retailer benefits from a partner that understands local customs and consumers, and can navigate local bureaucracy. Conversely, when Heere directly operated the Russian market for Inditex, the national head office housed 80 accountants to service the country, more than at its main global headquarters in Spain. “That is a pressure we had as a business to have the right resource in place, which was heavy maintenance but very commercially rewarding.”

He also recommended close working practices with franchise partners, citing M&S’s strategy in Russia. “Today we see Russia with a lot of pressure because of the depreciation of the rouble and the situation in Ukraine, and obviously we have to work very closely with our partner to keep the growth going, to keep their margins sustainable. Otherwise they might lose interest in the brand.

“We now treat that market as our own market so we manage those franchise stores as if they were our own stores.” Of course, the challenge comes when retailers are faced with, and bound into, long-standing agreements. There are also operational hurdles in terms of logistics and managing product life cycles.

The key is overcoming the complexities in their system to best leverage their inventory investment and garner the highest returns. “Retailers need to make sure they have the right systems in place to accurately predict demand so that products are located where they will meet the retailer’s business objectives and generate the highest possible returns,” said McManus.

New Look head of commercial Steve Challes agreed UK businesses have a lot of work to do to ready themselves for international growth: “The biggest challenges are actually understanding customer tastes and expectations coupled with details such as size ratios – every market is quite simply different. Support areas such as logistics, finance, IT and HR then need to pragmatically deliver. Thorough research is key and we’re steadily building an experienced team within New Look and some key trusted third-party partners.”

Debenhams trading director Adam Rose asked whether it is important to vary clothes sizing by market. Heere explained that at Inditex the strategy was trends are the same everywhere, and although there were some particularities by market, flexibility is the most important factor.

For Challes, international expansion will remain a key fashion retailer story over the coming years.

“Good fashion retailers will always seek to grow internationally both via online and where possible with stores – it’s a natural ambition. Being able to say we’re from the UK with the inherent fashion credibility is a strong selling point, although we need to tailor that to local markets. Global operators such as Inditex and H&M are huge and successful and have shown what can be achieved over time – they have set a very high benchmark for others.”

The overriding message from the evening was that retailers need to fully assess the multichannel opportunities presented by the different markets, and ensure the teams and systems are in place internally before pushing the button to make it happen.

Quantum Retail on M&S expansion plans

Retail Technology News: July 16 – 22, 2014

Which digital technologies provide the greatest near-term impact for retailers, why June’s “disappointing” retail sales figures actually point to an improving economy, how the Internet has affected brick-and-mortar store design, what assumptions about baby boomers and mobile commerce may be off target, and more—welcome to this week’s edition of Retail Technology News, a weekly wrap-up from Quantum Retail of some of the top stories in the retail industry. Here’s what was news last week:

Augmented reality has impacts now in retail

                Image credit: Retail Dive

It’s all an illusion: How augmented reality is
changing the future of retail
(Retail Dive)

Change is hard, especially when retailers are forced to ask their customers to change habits to adapt.
But augmented reality—the technology that allows users to cast digital images on screens depicting
real-time situations—has very big implications of change for the better. Here are some ways retailers can use this technology to drive sales, both in
stores and out.

Retail apps with store mode drive up to 5x more interactions (Mobile Commerce Daily)

The demand for more mobile inside stores is being driven by both consumers and retailers. The use of mobile applications for in-store shopping purposes nearly doubled in the past year, and shoppers who use apps featuring in-store mode display a four to five times increase in interactions compared to users of apps without indoor location.

Why June’s ‘Disappointing’ Retail Sales Were Good News for the Economy (FiveThirtyEight)

What matters here isn’t the month-to-month moves, but the bigger picture. The economy hit a major roadblock in the first three months of the year. Since then, economists have been trying to figure out whether the slowdown was a blip or a reflection of a deeper problem. The most recent figures point strongly toward blip.

U.S. retail sales, manufacturing data point at firming economy (Reuters)

Echoing the story above, a gauge of U.S. consumer spending rose solidly in June, in the latest indication that the economy ended the second quarter on a stronger footing. Core sales, which strip out automobiles, gasoline, building materials and food services, increased 0.6 percent last month after rising an upwardly revised 0.2 percent in May.

The Evolution of the Internet and Its Impact on Retail Spaces (Wired)

Omni-channel retailing has converged the online and offline shopping experiences. In this approach, prices are consistent in all formats, and consumers can choose between numerous options: shopping online with home delivery, shopping online and picking up at a store, shopping at a store and taking merchandise away, or shopping at a store and having it delivered to their home.

How Old-Fashioned Are Baby Boomer Shoppers? (eMarketer)

When a marketer ignores aging baby boomers, this typically reflects an assumption that boomers have made their choices as purchasers and will stick with them to the grave. In fact, though, many boomers have introduced a digital element into their shopping process, and prepurchase research online is now common among boomers.

Digital Top Priority For 54% Of Consumer Goods Firms (European Supermarket Magazine)

More than any previous year, the focus of executive attention has shifted from economic uncertainty to data, technology and the supply chain. As the consumer demand for digital experiences and ecommerce grows, retailers and manufacturers are looking at how they can meet these needs and operate in this new era of disruptive technology.

CHART: A Lot Of People Who Buy On A Smartphone First Browse On A Tablet Or PC (Business Insider)

Smartphones account for a greater share of mobile commerce purchases than tablets. However, as we know, the path to purchase begins long before someone clicks “buy.” And, as it turns out, 41% of e-commerce purchases made on a smartphone began with a shopping session that occurred on either a PC or tablet. In contrast, for purchases made on a PC, nearly all — 95% — originated on that device.

Further Reading:

A Guide to Creating a SKU Rationalization Strategy that Works (white paper)

SKU rationalization may be a popular buzzword, but it is not something to be taken lightly. This guide will delve into examples of strategies that have worked, and some that haven’t. With a proper strategy, this process can be both beneficial for you as well as your customers.