468 Retail and Channel Management Blog

Bonjour Simons!

2012-01-31T15:56:00.003-07:00

Last summer I spent five weeks in lovely Montreal learning French and more about their culture. My favourite thing about Montreal you may ask? Surprisingly it wasn’t the European architecture in Old Montreal nor was it the different festivals they had every week; it was the department stores of all department stores, Simons.

Simons was established in Quebec in the 1840s as a dry foods store. It wasn’t until the 1960’s that Simons grasped the importance of meeting the clothing needs of modern society and thus becoming one of Canada’s top fashion retailers. One of Simons Retail Value Proposition is to focus on selection. They have created 9 brands; Twix, Icone, Contemporaine, Sport, Miiyu, La Lingere, DJAB, R1, and I.Five. Each of these brands merchandise has a specific personality matching to the characteristics of their consumers. For example, Twix is a line for young women 16-24 who are into fashion, are vibrant and like to stand out. The consumers that fit this description will see merchandise located in one area of the store tailored to their needs and preferences. Simons constantly tracks patterns in sales to make sure that the items they are selecting for each line is in tune with what consumers like. This allows them to efficiently reorder or discontinue merchandise. I believe this precise consumer tailoring is what makes Simons superior to its competitors such as The Bay.

One of Simons unique
architectural designs

Their second RVP is customer experience. According to the UrbanToronto article Simons has said “We approach service in a unique way. We don’t focus on the selling, we focus on the experience.” How does Simons accomplish that you may ask? Well they invest in the architecture of their stores. Having been to the store many times I can vouch how truly spectacular it is. From the grand glass entrance that greets you to the open layout with high ceilings. It was a breath of fresh air from Edmonton’s cramped, cluttered and confusing department stores. Each store is a big location with size ranging from 80,000 to 100,000 square feet, and is home to many expensive artworks. Their RVP combined with an innovative and insightful leader Peter Simons has made Simons very successful and report more than 200 million dollars of annual sales.

Inside a Simons store

It was recently announced that Simons was venturing out of Quebec for the first time and has set their eyes on a 120,000 square feet store in West Edmonton Mall. It’s one of the rare moments that I find myself thankful that I live in Edmonton! But I fear that Simons will change their RVP to adapt to Edmonton’s culture and thus lose the essence of what makes them successful. Time will only tell, and as a number one fan of Simons I am willing to wait to make my final verdict.

Simons under construction in WEM

Sources:

http://www.simons.ca/eng/simons/our-exclusive-brands_twik.cfm

http://urbantoronto.ca/forum/showthread.php/4747-Simons

http://www.wem.ca/#/shop/theme-streets/europa-boulevard

http://www.canadianarchitect.com/news/simons-says/1000115863/

The Gooey Inside of Cadbury

2012-01-31T13:15:00.001-07:00

The Gooey Inside of Cadbury

The Cadbury Creme Egg has, for many years, been a signature seasonal chocolate brand that is only available from January to the end of the Easter season each year. The product that we know and love today has been manufactured in Bournville, in the United Kingdom, since 1971 producing eggs at a rate of 1.5 million a day! Its annual sales in the UK is over 200 million eggs, with a further 100 million exported around the world, including Canada (Cadbury, 2012).

Cadbury Creme Egg is seen by consumers as a one of a kind product through its unique product attributes. Advertisers claim that “Getting the ‘goo’ out, and the mess and play factor that goes along with this are seen as fun aspects of the product and integral to the entire product experience (Advertising Standards Bureau, 2009). Marketers of the Cadbury Creme Egg brand realize that its young target audience of 16 – 24 year olds have a unique experience of the Creme Egg brand values through its consumption, developing a distinct consumer connection (Sarhan, 2008).

This product is one of the many reasons Cadbury is a prime example of a retailer that directly focuses on the consumer experience in the real value proposition formula. I believe they have taken full advantage of the consumption experience adding to the consumer relationship by creating clever interactive campaigns focusing on their products’ attributes and the consumption process. For example, Cadbury began a viral campaign for their Creme Eggs by creating a website where people were encouraged to visit to play games to stop the eggs from “releasing their goo”, participate in contests, and where they could watch the humorous television ads Cadbury had created (like the one posted below). Cadbury has done well at extending this interactive technique in the sale of their other products such as Maynards with their “Most Wanted” campaign in 2010. These game type viral campaigns have encouraged consumers to interact with the brand in a fun way and be actively involved in a relationship with Cadbury.

I believe that the strong relationship that Cadbury has built with their consumers has created customer loyalty to the Cadbury brand and has made consumers think that buying a Cadbury product is not just buying another candy; it is the purchase of a fun and exciting interactive product that does more than simply satisfy ones sweet tooth. This playful relationship keeps consumers coming back every Easter to purchase Creme Eggs and it is what has kept them in such high demand. That is why it does not surprise me that Cadbury Creme Egg has used its focus on customer experience to capture 70% of the filled egg market, suppressing competition such as Nestlé Double Cream, Milky bar, Smarties eggs, Mars egg, Lindt Lindor chocolate egg, and the Wonka confectioners Golden Creme egg, to reach a brand value of £50 million in the United Kingdom (Cadbury, 2012). Now that’s a whole lot of Goo!

Tar-zhey, Eh?

2012-01-30T15:19:00.000-07:00

Canada’sstrong economy and low unemployment rate has made Canada an attractive destinationfor American retailers. Most significantly, the US discount retailer Target,which is often referred to as Tar-zhey, announced its acquisition of ZellersInc, a subsidiary of the Hudson’s Bay Company for $1.825 billion. They have purchased the leaseholds of 220Zellers locations across Canada and have plans to convert up to 150 of them intoTarget in 2013.

Is thereroom in the Canadian discount retail market for a new major player, or will theyhave the same fate as K-Mart’s Canadian division? In my opinion, Target’sunique retail value proposition (RVP) will allow them to differentiatethemselves from their arch-rival Wal-Mart, by providing a unique shoppingexperience and a wide selection of high quality goods at low prices. TargetPresident and CEO Gregg Steinhafel says that their Canadian strategy will bethe same as their American one “Expect More, Pay Less”, which has proved to bevery successful and difficult to replicate.

One ofTarget’s most differentiating RVP in the U.S. is the experience that it offers. They are clean, bright, organized andhave a policy of referring to their customers as “guests.” Target plans toinvest $1 billion in Canada to renovate the Zellers locations and create asimilar “WOW” factor, says Steinhafel.

Target’ssecond differentiating RVP is the selection that it offers. Targetrevolutionized the American discount retail market in 1987 when it proved thathigh-end designers can be successful by selling their goods at discount prices. Target has partnered with designers tocreate exclusive designer lines making “cheap chique.” These cool and trendyproducts are their differentiating factor in its competition with Wal-Mart andother discount retailers.

Thechallenge that Target Canada will have is to maintain the same low prices thattheir American stores have, which I believe is unlikely. It is easy to seeonline that most Canadian retailers have higher prices for the same product, eventhough the Canadian dollar is almost at par with the American dollar.

AmericanTarget stores have become wildly successful and a pop culture phenomenonwith a cult-like following. Will Canadian consumers embrace the new retailerthe same as our American neighbours have? I believe the market is right for anew up-scale discount retailer and that Canadians will respond with the sameopen hearts and open wallets.

CNBC Documentary “Target: Inside the Bullseye”

Target Press Release

Target Boss Outlines Canadian Vision

2012-01-30T11:25:00.000-07:00

Revved Up

HarleyDavidson

I personallyhave always been drawn to the muscle over import. That’s in the motorcycledepartment of course!

The womenare getting more of the much needed attention from the impressionable HarleyDavidson staff. Harley-Davidson’s old target market of baby boomers is reachingan older age of 60. They needed to transform the Harley image of revving bikesto a safer product. This brand has been commonly stereotyped into a brand ofmean looking men for a long time but Harley wants to take a different approach.This hog is bringing a new product to market by increasing their customerservice to more of a personalized approach. This might be the best thing tohappen to this luxury brand.

The womenare revving their engines to this transformation. The campaign “real women riders” are usinghouse parties with a twist to develop a social aspect to the raiders by hostinggarage parties. This is based off theidea of many Tupperware, Avon and Mary Kay parties that our neighbors havethrown. By showing women the independent, freedom andexcitement of the Harley Davidson brand, they are learning the basics likefinding the right fit, how to pick up a bike or the lifestyle.

This focusis one of the engines powering the driving increase of revenues all over the world. Harley-Davidson is gaining marketshares of 11% worldwide from last year’s fourth quarter. They are alsocontributing this success to the increase in service to the customers by makingtheir dreams come true.

Most womenright now are looking to increase the amount of leather in their closet anywaythey can. The fashion trend that I can’t help but be a part of! Harley is agreat excuse for this.

www.canadianbusiness.com

http://www.harley-davidson.com/wcm/Content/Pages/Women/GarageParty.jsp?locale=en_CA

http://www.targetmarketnews.com/storyid03160601A.htm

http://seekingalpha.com/article/321672-harley-davidson-s-ceo-discusses-q4-2011-results-earnings-call-transcript

http://www.harley-davidson.com/wcm/Content/Pages/Women/GarageParty.jsp?locale=en_CA

Behind The Call

2012-01-30T11:23:00.018-07:00

“Hello? Hello? You still there?”

Cutoffs like this are happening all around Canada with emerging cellphone carriers, such as Mobilicity and Virgin Mobile. Have no fear, Rogers Wireless is here! Rogers is branded as “Canada’s most reliable network”. At the end of the first quarter of 2006, statistics show approximately 52 subscribers per 100 inhabitants have adopted the cellular technology that exists around us. According to Statistics Canada, the current 16.8 million subscribers all across the country contribute a growth rate of 11.9% year-over-year, under the control of the Big 3: Rogers, Bell, and TELUS Mobility. Staying connected seems easier than ever when everyone is a hand-dial away.

Rogers is a diversified communication and media company engaged primarily in three fields: Wireless, Cable and Media. Rogers Wireless focuses on a hybrid between experience and price within the retail value proposition. Being the country’s only national carrier operating on both the world standard GSM and HSPA+ technology platforms where a majority of their 7.5 million subscribers’ plans average around $70 per month. No wonder dropped calls never really happen when I am with Rogers. However, the price of my contract isn’t what you’d call “cheap”, making life more difficult (if it wasn’t hard enough to pay for tuition and groceries). While the segments they meet have varying demographics, psychographics, geographic and behavioral elements, Rogers still offers a wide range of contracts optimal to the lifestyle you currently have. Whether you are a gossiper, who prefers unlimited talk, or maybe an entrepreneur who relies on data for business. But hold on… don’t like contracts? Rogers offers no term contracts where prices are drastically lower for individuals who seldom use their device. Looking upon price comparatives, new carriers are competing on price, ranging from $23 to $40 for UNLIMITED EVERYTHING!

However, reception is an important factor in my mind in relation to experience. Getting cut off while …. actually almost anywhere when I think about it…. The new carriers were ridiculous. Not only was Roger’s network reception much better, the customer service offered was consistent and accommodating, whether it be over the phone or online. Rogers essentially utilized every tool: kiosks, walk-in stores, catalogues, internet and newspaper to gain awareness and reinforce the experience portion of the RVP. For example, walk-in stores and kiosks offer face-to-face interactions with representatives and gain insight on purchases, thus refining the importance of social marketing. I would also think that their locations are also conveniently placed. Also, it is hard to choose from the extensive line of phones they offer. Apple? Android? Blackberry? Rogers, contributing to green marketing and corporate social responsibility, is a national sponsor for Phones for Food which is a program encouraging customers to raise funds for local food banks by recycling used cellphones and accessories. The trade-off between price and experience is a recurring dilemma among the cellular communication industry. Essentially, Rogers has to make the decisions that best meet the consumer’s expectations and perceptions.

http://www.rogers.com/web/content/wireless_plan_landing

http://www.rogers.com/web/content/CSR_energy

http://stopthecap.com/2011/08/17/canadas-cellular-cartel-3-wireless-companies-control-94-percent-of-the-market/

http://corpo.videotron.com/static/site/static/documents/en/Mobile-GDP-benefits-07-06.pdf

http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02267.html

2012-01-29T14:33:00.000-07:00

Why Burberry?

When peoplecome across the trademarked checkered pattern, the brand Burberry often comesto mind. According to the CNBC article,” Burberrysaid its revenues rose to £574 million ($879.7 million), a rise of 22 percentin its fiscal third quarter”,while other brands like Prada, Gucci and LVMH have said to have decreased orkept constant in sales as compared to other years. What exactly has thiscompany done in order for its sales to increase? Does this luxury brand really attract more people thanothers? Burberry has had a historysince the early 19^th century and has continued to bloom ever since. It is a brand that greatly emphasizesit long heritage, which can be visually seen on its website. On the site a timeline is presentedwith years from when the brand was created till present.

I believe oneof the reasons behind the success of the brand Burberry is the experience andatmosphere customers are encountering in the stores. For example with the advancements in technology, Angela Ahrendts, the CEO of Burberry says that inside the 180 Burberrystores are Ipads, where customers are able to check right away for a certainitem they may want. By doing this customers have thecapability to access the items in all circumstance and thus increasing thelikelihood of a purchase. As well,inside the store there is live streaming of the fashion shows in London, givingconsumers the feel that they are physically at the show. In this way, customers will want tostay in the store longer in the store. By implementing the different technologies into the store, Ithink consumers will not only remember the name Burberry, but attached with thebrand name is this pleasure and excitement they encountered when they were inthe store.

Another reason that plays a role in the successof this brand is knowing who their target consumers are. From the CNBC article Burberryunderstands that Asia plays a huge role in the high revenues and that “Burberry has a long story, they are an Asia story and they have it figured itout. The Asian consumer loves a very traditional story.” Burberry is continually investing into the flagshipstores in China. When companiesunderstand what their consumers are looking for and are able to provide it, thebrand has successfully attracted their customers to continually return.

Sources:

http://www.cnbc.com/id/46024993/What_Burberry_Is_Doing_Right_That_Other_Luxury_Retailers_Are_Not

www.burberry.com

http://2threads.com/article/burberry-flagship-store-opens-in-sydney

http://burberrytie.org/burberry-online-shop/

Revolveclothing.com, Revolutionary Experience

2012-01-25T12:47:00.000-07:00

Electronic retailing is a growing trend in Canada as in many other parts of the world. According to Statistics Canada, “In 2009, about 39% of Canadians aged 16 and over used the Internet to place more than 95 million orders. This was up from 32% and the 70 million orders placed in 2007, when the survey was last conducted.” The growth in electronic retailing has resulted in increased competition among online stores. As a result, the ease at which consumers are able to compare price, selection and service when shopping online means retailers have to set themselves apart.

Revolveclothing.com started in March of 2003. Their Retail Value Proposition focuses on two key components; selection and experience. They offer over 400 brands in both men’s and women’s designer clothing and accessories. When browsing their extensive selection clients are able to search by designer or by category depending on what they’re looking for. The site also contains a “sale” section, which features hundreds of clothing, accessories and shoes. The selection is phenomenal! You are able to find something for every occasion.

The website exudes luxury, is modern and is highly interactive. Revolveclothing.com features beautiful high fashion photography for the brands they carry which adds to the customer experience and keeps you engaged. The homepage is beautiful in design and updates regularly as new merchandise makes it way to the site.

Revolveclothing.com offers a unique customer experience with their boutique feature. This section of the website features trendy fashionable individuals, celebrities and brands that have gone through the selection on revolveclothing.com and picked out their favorite items. They have created an innovative way for consumers to interact with the site through the boutique, which keeps them shopping longer. The boutique includes elements of social media allowing members to follow their favorite shoppers and purchase items from their boutiques. Featured boutiques include influential fashion celebrities such as Nicole Richie as well as Taylor Tomasi-Hill from Marie Claire magazine to name a few. As a member of the site you are able to create your own boutique in order to “track your favorite designers, items and trends in one convenient, personalized shop!” You are able to customize your own boutique on the site with pictures, and video’s sharing your favorite items from the store as well as your personal styling tips. They even offer a 1% cash back commission to you if purchases are made directly from your boutique.

Lastly revolveclothing.com takes the risk out of online shopping. From my experience the scariest part about purchasing clothing online can be the risk of it not fitting. I can be a size small in one brand and a large in another so picking a size online is often difficult. Revolveclothing.com offers free shipping as well as free returns. This gives shoppers the peace of mind needed to make an online decision.

Revolveclothing.com offers a unique customer experience as well as great selection, both of which add value to their store and make them my favorite online retailer.

http://www.revolveclothing.com/browseBoutique/BoutiqueHome.jsp?HPsource=Boutiques

http://www.statcan.gc.ca/daily-quotidien/100927/dq100927a-eng.htm

http://www.revolveclothing.com/

http://www.revolveclothing.com/InfoAbout.jsp

Tim Horton's New Extra Large: Too Large?

2012-01-23T23:02:00.000-07:00

Since its creation in1964, Tim Hortons has expanded to become one of Canada’s leading icons and oneof its most popular food chains. Part of its success can be attributed to itsadaptability in the face of changing consumer tastes. From the baked goods andspecialty coffees that were introduced in the 80’s and 90’s to the healthier chickensalad wraps and hot Breakfast Sandwiches that were added in 2006, Tim Hortonshas successfully expanded its menu to keep up with new consumer trends whilemaintaining its brand image. However, is the new Extra Large cup size that debuted today going a step too far?

Tim’s Extra Large “will offer coffee loversacross Canada a premium quality, extra large coffee at a value price.” At awhopping 24 ounces, it will be bigger than a Starbucks’ venti which is alreadytwo-thirds of the average capacity of an adult human stomach! On top of that, HealthCanada recommends an average daily intake of no more than 21 ounces of caffeinea day meaning that this one cup of coffee would already be over the recommendedlimit!

From a retail management perspective, it’s asmart move. Coffee is one of the most popular beverages consumed by Canadiansand as their consumption increases so will their need for more caffeine toexperience the same feeling of alertness. With the new Extra Large, they can nowget the quantity they "need" in one cup at a “value price” instead of having to buy 2 or more cups andspending more money. This adds retail value in terms of selection, experience, convenience,and price.

As shown by the expansive history of theirmenu changes, selection is a central driver for the Tim Hortons business andthis new cup size will allow them to keep up with current (and future) consumertastes. It will also add to the experience because the chain’s “biggest drawingcard remains its legendary Tim Hortons coffee” that is brewed fresh every 20minutes with quality beans. Now, consumers will be able to experience more of their quality coffee in oneorder. The fact that they only need to buy the one cup will also add value fromthe convenience and price perspective because they will no longer need to makemultiple trips to the restaurant to grab drinks throughout the day and it will onlycost $1.90. This will give them a competitive edge against Starbucks whoseventi coffee can be over $2.60 depending on the location.

So far, it seems like Tim Hortons has somevery aware and capable business minds behind its latest menu change. Based onthe generally positive response of consumers to the new cup size, it willundoubtedly increase revenues and further establish its brand image…but at whatcost to the consumer? Will the increased retail value be worth the health risks?Will consumer response remain positive after health awareness groups and concernedparents catch wind of it? Only time will tell.

http://www.timhortons.com/ca/en/about/index.html

http://www.timhortons.com/ca/en/about/new-cup-sizes.html

http://news.nationalpost.com/2011/01/17/graphic-how-big-exactly-is-starbucks-new-trenta-size/

http://www.hc-sc.gc.ca/hl-vs/iyh-vsv/food-aliment/caffeine-eng.php

http://www.statcan.gc.ca/daily-quotidien/081119/dq081119c-eng.htm

ARK Music Factory and its shipwrecked production...

2011-03-19T00:00:00.000-06:00

It was the worst song I'd ever heard.

For me, it didn't stem from the auto-tuned voice, or the young teenager singing like she was having the best day of her life...

...it was the lyrics. The completely mundane, entirely too obvious lyrics like, "Today is Friday...Tomorrow is Saturday/And Sunday comes afterwards" made me hang my head in shame of the monster we'd created through YouTube and by allowing any user-generated content to be published, regardless of its quality.

Then I realized...it's not YouTube's fault that Rebecca Black’s music video, “Friday” went viral and hit 19,440,159 views in a week due to a few initial viewers calling it “the worst song ever”. It's ARK Music Factory's. The record label company based out of Hollywood has the goal of discovering young talent, and helping these rising stars to a celebrity level of stardom. Parents pay to have kids create a 'professional' music video, and with the popularity of "Glee" (11.146 million viewers, March 16, 2011), it would be difficult to stop your child from achieving their dream of singing on television. With ARK's RVP focused on providing an experience with a music community, professional team, and career advancement, it is an attractive bundle to consumers seeking this type of entertainment. This completely personalized experience, unique to that one 'star', makes it appealing to today's consumer. The selection value of the RVP is also quite high, as any number of complex (or simplistic) topics can be covered in the video, making the breadth and depth of product offerings much more expansive than they could be otherwise.

Retailing an experience like this would heavily rely on status enhancement, as demonstrated in the interview between Rebecca Black and KISS 92.5 Radio (Toronto) where she states that she heard about ARK from a friend who had recently made a video. Word-of-mouth would be important in a case like this, and it is likely that ARK segments their market based on this psychographic information – targeting teenagers who would like to be admired by their peers, with middle- to upper-class socio-economic standing so they can afford it.

ARK also thoroughly brands each video by incorporating one of the producers, Clarence Jey, in almost every one of their video – and starting the video with “ARK Music Factory”.

However, word-of-mouth is a double-edged sword – although Rebecca Black’s music video went completely viral and hit the Top 100 downloads on iTunes, it made it there for all the wrong reasons. Black is an overnight celebrity, despite the negative comments. With ARK’s terrible productions, will it still achieve a flood of customers as a result of its recent ‘success’? Black is now highly in demand and receiving offers everywhere due to her popularity – but has this irreparably damaged ARK’s reputation? The trade-off between creating a popular song to be ridiculed or a high quality song to never be seen, seems to be the decision ARK had to make – we’ll see how things turn out for their business.

Sources:

http://arkmusicfactory.com/

http://tvbythenumbers.zap2it.com/2011/03/16/tuesday-final-ratings-v-glee-adjusted-up-raising-hope-detroit-1-8-7-traffic-light-adjusted-down/86025

TopShop: A Fast Fashion Giant

2011-03-18T22:00:00.006-06:00

It was announced last week that the Hudson’s Bay Company is bringing UK retailer Topshop to Canada this fall. This is exciting news for young, fashionable consumers who shop at fast-fashion retailers such as H&M and Zara. The inclusion of Topshop into many Bay stores is a part of an effort to revive the image of Hudson’s Bay Company. Due to Topshop’s international success, it is forecasted that there could be up to 50 stores in Canada within the next five years.

TopShop has 300 stores in the United Kingdom with another 50 international stores. The flagship store is on Oxford Street in London, and boasts three floors full of clothing, shoes and accessories. In addition to the conventional merchandise sold, the flagship store has a candy shop, free massages and manicure services. The retail chain attempts to differentiate itself from its competitors by creating an exciting in-store experience for consumers.

Throughout the 1990s, the Topshop chain experienced slow market growth. The brand was unfashionable and was not popular among young consumers. Jane Shepherdson was hired as brand director in 1999 and revolutionized the Topshop image. She helped increase the chain’s annual turnover to 500 million GBP across all stores. Shepherdson claims that the success of Topshop is due in part to speed to market and investment in product development. Topshop produces 7000 lines every season that almost always sell out within weeks. The brand has capitalized among the youth market and the opportunity to satisfy hedonic needs. As a fast-fashion giant in the UK, Topshop is an example of a company that operates under the trickle-down effect. When celebrities such as Kate Moss and Sienna Miller are seen wearing a fashionable item, Topshop capitalizes on the trends and engages in speed to market so that consumers can have a similar item within days or weeks.

The success of Topshop is also a result of the company’s engagement and investment in its customers. Topshop provides personal shopping and at-home delivery to time sensitive shoppers. They also provide discounts and promotional events for their customers, including student discounts and shop-a-thons equipped with free breakfast and beauty services. During her time as brand director, Shepherdson would also visit the flagship location at least 3 times a week to observe store activity. Observational research is effective because it captures the process and outcome without any special requirements or equipment. It is not invasive and allows a company to understand the shopping experience from the consumer’s point of view.

It is clear that Topshop has reached success in the fast-fashion retailing segment. During the economic downturn in 2008, they managed to bring in 100million GBP in revenues. By expanding Topshop into Canada, the company is faced with a competitive market of low-cost, fast-fashion retailers such as H&M, Zara and Joe Fresh. I think that Topshop will be a strong competitor in this segment because of its edgy, fun fashions. Furthermore, the Hudson’s Bay Company has already been trying to rejuvenate its brand selection and I believe that Topshop will bring more fashion-forward, young consumers into Bay stores across Canada.

Sources:

http://www.mirror.co.uk/news/tm_objectid=16261614&method=full&siteid=115875&headline=shy-genius-who-turned-flopshop-into-the-high-st-darling-topshop---name_page.html

http://www.insideretailing.com.au/Latest/tabid/53/ID/651/Topshops-turnaround.aspx

http://www.theglobeandmail.com/report-on-business/uk-retailer-topshop-coming-to-canada/article1934430/

Lululemon’s Success and Lessons

2011-03-18T19:44:00.004-06:00

Lululemon was founded by Chip Wilson in 1998. It was built on providing both quality and fashionable yoga attire to active women. They have primarily focused on developing the customer experience segment of the RVP formula providing both care and entertainment to their shoppers including services such as free yoga classes and free hemming. Since the opening of its first store November 2000 in Kitsilano Vancouver BC, Lululemon has quickly expanded and become one of the most dominate players in the yoga appeal industry holding a market value in excess of 3 billion dollars.

2010 provided to be a record year for Lululemon in many areas. The fourth quarter sales jumped 53% from the fourth quarter of 2009. Per store sales also rose 30% leading to a record high average of $1726 sales per square foot.

Lululemon’s success in the past year may be contributed to lessons that they learned from the Recession. CFO John Currie told Bloomberg "Thank God for the recession. It forced us to slow down and actually approach our real-estate strategy in a disciplined way." Lululemon carless approach to expansion caused high cost little demand stores to be built. The 35 stores that were opened throughout the United States in 2008 were the least productive in the company’s history after poor market research was done. Today Lululemon focuses on individual neighborhoods when deciding on a new store location using factors such as income level to better reach their target customers of sophisticated and educated women. Currie reports, "At this point, we have maps that say, not only do we want to be in Kansas City or Minneapolis, but we know what neighborhoods we want to be in." LuLulemon plans on expanding from 120 store to 300 stores in the United States possibly opening up as many as 25 new ones in 2011 using their new approach to real-estate.

http://investor.lululemon.com/
http://www.bnet.com/blog/retail-stores/what-lululemon-learned-from-the-recession/1478
http://www.bloomberg.com/news/2010-09-20/lululemon-yoga-wear-store-expansion-disciplined-after-recession-lesson.html

Bustin Through the Online Retail Barrier

2011-03-18T19:03:00.008-06:00

Bustin Lonboards N.Y.C. is a longboard manufacturer with a single retail outlet in Manhattan. I discovered them because of the unmatched experience I received on their website, while shopping for a new longboard last spring. The value proposition for Bustin is simple: educate the customer, and then allow them to individually customize from the selection of quality products that Bustin manufactures.
Bustin has an advantage over national brands of longboards with their ability to mass customize. They offer decks that are designed to perform optimally in all styles and applications (campus cruising, downhill racing, carving etc.) then allow the customer to completely personalize the artwork and setup of the board. This is important, since a major component of longboarding is self expression and no consumer is overly interested in riding on the exact same board as their friend.
The retailer is further separated from its competitors by offering a very unique experience. Bustin creates an experience that nearly reaches the standard of walking into a store but adds the benefit of having their very best sales representative ready to great me as I arrive. The experience compared to other longboard retailers (ones with stores included) is far more educational. I sometimes feel bad for wasting a salesman’s time when I’m just browsing and not interested in buying at the moment. But Online I enjoy reading about a product and learning about what makes it unique without purchase pressure. The online experience with Bustin offers this and pairs it with a site that is easy and fun to navigate. The website’s depth of testimonials, videos, and of course, the “design your own board” features were so easy to use that the site became a frequently visited part of my leisure time. Oh and I did end up buying my board from there.
The price for a Bustin longboard is in the right range for a good quality complete board. Setups of similar quality range between $180 and $300 from a local store. All of Bustin’s offerings are between $195 and $235 and are guaranteed to be unique.
Convenience for Bustin is probably its lowest score in terms of RVP. The first thing you see when you begin to design a board is the estimated wait time before your board is started. This is explained, as the order is unique, so waiting 5 days wasn’t a big deal. Once the board was finished it had to be shipped. Since I don’t like spending lots of money on shipping, I had to wait 2 weeks for it to arrive. There are options, for the impatient, allowing you to select from a narrow array of premade decks (losing your choice of design) and then paying a little more for priority shipping.
Fortunately, after waiting 3 weeks, when I opened my parcel I was presently surprised to see the board completely assembled and ready to use... unfortunately it had snowed that day, so the only thing I couldn’t order was a longer skating season.

Sources:

http://www.bustinboards.com/

http://www.facebook.com/#!/pages/Bustin-Boards-Custom-Longboards/9244515490

Capitalizing on Social Media

2011-03-18T16:10:00.004-06:00

I can say with almost 100% certainty that everyone I know, grandparents included, has by now heard of YouTube. I can also say that almost all of the people I know, probably not my grandparents, have heard of Old Spice and has seen one of their now famous commercials with the Old Spice guy, Isaiah Mustafa, in the past year. While Old Spice is not a retailer their product is sold throughout many different stores and these retailers could take a lesson in social media marketing. With a majority of people in North America with internet access marketing on the internet has now become a huge sector and Old Spice has capitalized. With Old Spice being a Procter & Gamble brand they conducted some marketing research revealing women purchase as much as 70% of shower gel for men. With this knowledge they tried to target female purchasers while trying to maintain a masculine product. With this they came up with the “Smell Like a man, man” campaign.

http://www.youtube.com/watch?v=owGykVbfgUE

This video has become one of the most popular videos to date with almost 31 million views. But posting a commercial isn’t all that Old Spice has done. Old Spice made personal response video messages to some of their followers on Twitter, Facebook and other social media sites. This is a new take on social media marketing and it worked. The Old Spice guy’s responses surpassed some of the most popular videos. They had 5.9 million views within 24 hours of the responses. The entire campaign was a tremendous success. According to Old Spice on data from July 2010 “overall sales for Old Spice body-wash products are up 11 percent in the last 12 months; up 27 percent in the last six months; up 55 percent in the last three months; and in the last month, with two new TV spots and the online response videos, up a whopping 107 percent.”Retailers can use this same social media marketing idea in their own way. They can provide personal response video messages to help build their own private labels like President’s Choice with Loblaw Companies to help build a sturdier reputation. Retailers like Wal-Mart can also have these personal messages to reinforce their chain and the actual stores instead of a product. As well with mobile marketing coming up and many devices with access to the internet consumers could ask questions and if someone had already asked the company, view these personal messages while in store. With how well Old Spice did with this new way of marketing, only time will tell if other companies will follow suit or find their own personal way to take advantage of social media.

Sources:

http://www.adweek.com/aw/content_display/news/agency/e3i3639278d2189e4efd2b8ab7d46542e93?pn=2

http://www.thestar.com/living/fashion/article/836942--how-old-spice-campaign-changed-social-media

http://www.nytimes.com/2010/07/16/business/media/16adco.html

Japan quake affecting Suppy Chain of Apple iPad 2

2011-03-18T16:04:00.004-06:00

As if the list of problems resulting from the earthquake that shook Japan last Friday wasn't big enough, stock markets are seeing sharp declines due to the fear that the earthquake has affected manufacturers supply chains because of the temporary closure of many production facilities. The earthquake and tsunami ravaged mainly the north eastern part of Japan but the threat of a nuclear meltdown has caused many facilities to shut down its operations to conserve energy in part with the already planned black outs that will be taking place.

So how does all this affect the newly released iPad 2? According to a report by IHS iSuppli, Apple uses five components in manufacturing the iPad that come from Japan, main parts which include the flash memory and battery. Japan is said to produce upwards of 40% of all flash drives with big electronics companies getting these parts from Japan. Apple is currently running on their remaining supply of components which is said to last them another 2-3 weeks while the uncertainty of when manufacturing facilities will resume production remains unknown, especially with the Fukushima nuclear meltdown crisis still keeping Japan, and the world, on edge. The crisis overseas is monumental and economically the repercussions are being felt at home. Many companies, such as Apple, will now face a shortage of their products and see a rise in production costs indefinitely.

As soon as the production process is hit, the effects inevitably reach us, the consumers. What seemed like a crisis far away from us is now becoming a reality that products like the Apple iPad 2 and Toshiba cellular phones (which get many of its components from facilities that were located very close to the main area hit) may not be available to us in the very short future. With the future of all production and manufacturing facilities in Japan uncertain and some plants having no foreseeable reopening dates, how do we begin to deal with this huge void in the supply-chain? Well as consumers it seems we must start getting used to the idea of less is more, for now, and looking to more locally produced products until those companies with production facilities in Japan can find new plants elsewhere. Based on reports, we will see supply chain shortages get very bad in as little as three months. That is when most electronics firms will start to run out of their manufacturing components. Fortunately for Apple, being a tier-1 vendor and its ability to pay fully in cash will help them in the future when it comes time to delegate the limited stocks of electronic components.

For now all we can do as consumers is sit and wait for Apple’s next big move. Will they risk stock outs or move quick to find a new vendor to facilitate the manufacturing process of the iPad 2 and with that, charge higher prices for their products.

Sources:

http://www.reuters.com/article/2011/03/18/us-japan-quake-companies-idUSTRE72H22320110318?pageNumber=2

http://www.msnbc.msn.com/id/42141369/ns/business-us_business/

http://news.cnet.com/8301-13579_3-20044479-37.html

Carlson Marketing & Loyalty 4.0

2011-03-18T14:52:00.006-06:00

Carlson Marketing is one of the worlds largest marketing companies. Some of its clients include Coca-Cola, Nestle, Ford, Visa, and Hallmark, among others. They call themselves “The Relationship Building Company,” and strive to develop loyalty among consumers and employees. Early this month Carlson and Hallmark revealed that they would be revitalizing Hallmark’s customer loyalty program and, “...moving from transaction loyalty to relationship-based interactions,” (Carlson Marketing, 2011).

Hallmark Cards is an extremely well known card and accessories company and has been around for over 100 years. Since 1994 they have held the same customer loyalty program, “Crown Rewards” store loyalty program where you buy a greeting card, get your reward card stamped, and one day get a free greeting card (assuming you haven’t lost your stamp card by that time). Now, 17 years later, there is nothing especially innovative about this program; in fact, this “loyalty program” may not really even be considered a loyalty program: are the cusotmers buying the greeting card because they are loyal to the store, or because they just want that free card in the end? This type of loyalty program acts like a bribe to the customers, “We’ll give you

a free card if you continue to buy from us.”

As stated above, Carlson Marketing and Hallmark are now introducing a new way to go about Hallmark’s customer loyalty program, and although currently there is only limited information on their plans, they will be revealing more information at the 2011 Loyalty Expo March 20 - 22 in Orlando, Florida.

While there is no specific information on Hallmark’s new program, Carlson Marketing has released a pamphlet entitled, “Loyalty 4.0: The New World Order for Customer Strategy,” (Carlson Marketing, 2010). This pamphlet sums up previous models of loyalty programs, and shows the evolution of loyalty marketing. As well, it prophesies what the near future will look like as far as loyalty marketing, what they call Loyalty 4.0. They state that all loyalty programs build on the loyalty 1.0 model, where you spend some money, earn a point, and redeem the accumulated points for a benefit, however, this is not enough to inspire loyalty in customers on it own. Without creating any sort of relationship with the customer, and only bribing them to buy more, you risk the chance of them becoming a liability, since you owe them something for all of their investment.

Loyalty 4.0 is focused on marketing networks, instead of points and prizes. It will build relationships with customers based on each one’s unique needs and wants. Instead of targeting segments of customers, it can target “segments of one,” (Carlson Marketing, 2010). It is easy to come up with something that every customer will like, such as points or prizes, but what Loyalty 4.0 is concerned with, at least in part, is finding out what each customer specifically wants from the company.

This expected evolution of loyalty programs is at the same time innovative and rather basic. The idea of creating a customer loyalty program, by instilling loyalty towards a brand in customers (and not just providing them with an incentive to buy, such as points cards) is not a very difficult concept, but coming up with an efficient means to do this on a large scale is a more difficult. While their pamphlet give no specific details as to how they plan to go about Loyalty 4.0, it does state that, “...with more efficient and effective technology,” what was only a theoretical goal is now possible.

References:

http://www.carlsonmarketing.com/

http://www.jerishallmark.com/WebPages.cfm?action=viewCat&BIZ_UNL_id=502

http://loyalty.carlsonmarketing.com/Download.aspx?FileName=Loyalty4_0.pdf

http://carlsonmarketing.mediaroom.com/index.php?s=43&item=164

http://corporate.hallmark.com/Company/Hallmark-Gold-Crown-stores

Unique Approach to Customer Relations

2011-03-17T17:09:00.003-06:00

Kevin’s Curling Supplies started as a very small family owned and operated pro-shop in the Ottewell Curling Club in Edmonton in 1991. Selling curling apparel, equipment and rink supplies the company found itself with very few competitors in its early years. As the business’s numbers grew along with the sports’ increasing popularity many more competitors started to arise. This is when Kevin came up with his Retail Value Proposition. To stay in business, he realized he would have to enhance the customers experience, selection and convenience to stay ahead of his competitors. Being a competitive curler and a former ice-maker, born and raised in a small town, he knew that most of the curling business happened to be in rural towns all across Western Canada and therefore he made a point within the next couple years to personally travel to every curling club west of Winnipeg. The experience and convenience of having an expert like himself was thought to be a service that could be unmatched by competitors. By helping and teaching the curling club’s icemakers about their rocks, ice plants and curling equipment, he hoped to gain trusting loyal relationships with many of these curling clubs throughout Western Canada. After his visits he left each club with price lists and hoped that in return for his services, if the club or any of its members needed apparel, equipment or rink supplies in the future they would order through Kevin’s Curling Supplies. This extreme approach to attracting loyal customers had seemed to be working as the businesses revenue started to increase immensely as well as repeat purchases began to be more probable as well. Furthermore, these newly attained customers also became some of the stores greatest assets as they would promote Kevin’s store to not only their own members but to beginners and visitors as well.

In September, following the year of Kevin’s tour to the curling clubs, hundreds of curling clubs “first dates” had turned into friendly, habitual and committed long term relationships. These relationships based on trust and accommodation let customers also experience reduced uncertainty towards Kevins Curling and perceptual bias against competitors.

Today, Kevin deals with over 350 rural curling clubs in Western Canada that order or come in to purchase all their curling supplies every year. Also, through these rural curling clubs promoting Kevin's on-going, unique type of customer relationships, the business has expanded into northern markets (territories) as well as the United States. Great relationships, with a very unique approach to the customers experience, selection and convenience has set Kevin’s Curling Supplies apart from all competitors and as of 2008 this unmatched customer service has eliminated nearly all competitors in high-end curling supplies in Western Canada.

www.kevinscurling.com

Stepping into a store that's a whole other world...

2011-03-17T17:01:00.000-06:00

I’m a fairly regular West Edmonton Mall shopper and have a set of staple stores I make sure to visit on each shopping occasion. Of these, one of my favourites is Anthropologie. But, what is it about this particular store that keeps me coming back and causes me to linger, for sometimes an hour, looking through merchandise? It is that every time I step foot in the retailer, I feel as if I am transported to another world filled with magic and art. By using retail format and store layout in combination with unique displays and product selection Anthropologie has successfully created an atmosphere that provides customers with an experience through entertainment

The retailer is renowned for its creative window and store displays as well as an extensive selection of products, carrying everything from clothing and accessories to home furnishing and unique gifts and decorative items. In this way the store layout combined with product selection works to stimulate and inspire customers, creating a fun and exciting shopping experience. Entering Anthroplogie, a customer can almost forget that they are in a store since the sense of comfort is one that makes you feel at home and like you are free to browse and shop at your convenience. This draws the customer in and encourages them to spend more time in the store examining every product and creative display. As well, the lay out is extremely open allowing you to see each detail and spot the products that appeal to you.

Urban Outfitters Inc. owner of Anthropologie describes the brand as “an escape from the everyday; [a] source of inspiration and delight, where innovative merchandising, customer centricity and a curated array of products come together to create an unimagined experience.” By successfully fulfilling this goal Anthropologie has differentiated their brand through experience and has been able to add value for customers by continuing to also consider selection and convenience. By enhancing these three aspects of the RVP Anthropologie is able to carry higher priced items because for consumers, like myself, there are few stores that compare to Anthropologie.

What’s more Anthrolplogie has been able to carry over their in store experience online by launching The Anthropologist, in 2009. This link off their store website is an online space for creativity and imagination sharing creative works and encouraging customers to be inspired by life. As well, Athntoplogie's website links to Youtube videos that they have posted that work to promote the creative concept of the brand experience.

For those of you who are not familiar with the retailer I strongly encourage that you stop in next time you’re at West Edmonton Mall to see an excellent example of how store format and layout can step beyond the expected to create customer experience.

http://www.anthropologie.com/anthro/index.jsp

http://www.urbanoutfittersinc.com/

http://theanthropologist.net/

http://en.wikipedia.org/wiki/Anthropologie

Brand Ambassadors in the Retail World

2011-03-17T13:49:00.014-06:00

In today's retail world, companies are striving to increase sales by any means possible. Working for a experiential marketing company based out of Toronto, I have been representing various brands and products to consumers through poorly designed retail programs, which have tended to saturate the buying process with unwanted samples and information that may not be relevant to the consumer. This push to in your face "Car salesman" type promotional strategy at the point of purchase is a relatively new phenomenon here in Edmonton, being the relatively small city it is compared to such Canadian hubs as Vancouver and Toronto, which have been saturated with numerous "experiential" marketing companies for a number of years

However, this style of promotion is not new in the retail world, brand ambassadors have been the face of companies selling products and services which may not even be relevant to that individual. For example, just recently, Turkish Airlines signed a deal with Kobe Byrant to become the face of the company. Now if you know who Kobe Byrant is, you'll know that he has absolutely nothing to do with the airline industry or for that matter, Turkey. However, Turkish Airlines felt his international status would help publicize and for that matter, increase sales of flights from Istanbul to Los Angele's. However, this deal came with an enormous backlash as almost a million Armenians living in Los Angeles have boycotted Kobe Byrant and the LA Lakers, still protesting the genocide of over a million Armenians by the Ottoman Empire. This led me to ask, at what cost do these promotional strategies come at?

This past weekend, I was the "face" of Corona in various retail stores, promoting the "Easy drinking taste of Corona" to the consumers entering the store. Not only did I not sell a single case of Corona, I was bombarded by angry consumers who felt my presence at the store was absolutely unnecessary. Not only was I unable to sell any beer, I potentially represented Corona as a in your face "Car salesmen" type beer, that drive hard sales, which overall may have detracted from the company's original brand image. Furthermore, the manager of the particular store, was not pleased by the response of his clientele to the promotion which forced him to cancel the promotion in his store a day early. In regards to the retail value proposition, having a brand ambassador may come at a price to the consumers overall experience. Pushy sampling and key messaging in order to increase sales may negatively effect the company of the product and the overall retail location at which the promotion is taking place. Just think about those people who always want to straighten your hair at West Edmonton Mall, effective or ineffective? And are there ways to improve the overall experience of store patrons while also accommodating companies who find these strategies useful?

With companies utilizing print and television advertisements, seasonal discounts, club cards, and other promotional tools used to drive sales, is it absolutely necessary to have that one last individual trying to sell you a product at the point of purchase?

Gurshan Dhillon

References

http://www.matchmg.com/

http://www.businessweek.com/news/2010-12-15/kobe-s-turkey-ties-ire-l-a-armenians-like-kardashian.html

Canadian Music Week and the Indies

2011-03-16T22:32:00.002-06:00

Recently, I had the utmost pleasure of missing a week of classes to go to Toronto, because my band Striker was nominated for Best Metal Band of the Year at the Canadian Independent Awards. The awards were in conjunction with Canadian Music Week, where something like over 800 bands from all over Canada and across the world performed in dozens of venues over 5 days. Furthermore, industry conferences were taking place throughout the week, with speakers such as Sammy Hagar (Van Halen), Nikky Sixx (Motley Crue) and Troy Carter (Lady Gaga’s Manager).

…I’ll be completely honest. The week was a blast. But nothing like what I had expected.

Going to Toronto, we all had the general concept that we would be attending the industry conferences as our main focus of the trip. We’ve gone to a similar Industry conference in Calgary and actually learnt quite a bit, so we were quite excited.

So here we are right… 4 metalheads, who all dished out about $600 of own pockets just to fly to Toronto…Sharing two double beds in some over-priced hotel… just so we can go to these industry conferences. So Thursday morning (the first day of presentations) we all show up to the ticket booth, to try and see if we could get into an event. Turns out our awesome nominee passes didn’t get us in for free. Shitty. Turns out, you can’t just attend specific lectures. Extra Shitty. Turns out you have to buy a pass for the entire week. Really? That sucks. Turns out that pass costs $900 A PERSON!!!!!!!! Like WTF!!!!!!!!!!!!

They call it the Independent Awards, for independent (thus poor) bands obviously, and expect us to dish out $3,600 for passes!?!?!?! Blows my mind. After explaining how incredibly poor we were, I think they were willing to go half price because we were nominated, but that’s just $$$ we don’t have. So needless to say, that was a serious game changer.

So what is a band to do? Sit around doing nothing, being sad about expensive passes? Or go around being an awesome metal band getting people’s attention and promoting the band in every way possible? …Well, we went with the latter. Hit the streets, bars, fancy ass hotel (Royal York, where the events took place) with CDs and Electronic Press Kits.

But what trumps absolutely everything, ever, was the awards night on Saturday. Why you ask?

Because we showed up in a limo, filled with smoking hot models. Hands up if you’ve partied in a limo with models!?...yeah…that’s what I thought.

We did lose the award though, to the biggest band on the list- but really- we won the night.

…Favourite quote of the night: “Holy #$!@ what band you guys!?... You guys got styyyyyle!!!!”

Absolute victory. And honestly, the nomination was a huge honour in the first place, and placed us as one of Canada’s top 5 Metal bands. Which is awesome. And will help booking our upcoming Canadian Tour tremendously.

Check us out at www.myspace.com/listentostriker if you feel so inclined!

The Reinvention of a Canadian Icon

2011-03-16T20:35:00.006-06:00

The fashion community across Canada was celebrating last week as The Hudson's Bay Company announced it has earned the Canadian franchise rights to UK-based retail fashion powerhouse Topshop and Topman. This deal comes to no surprise as The Bay has been continually adding high fashion brands from all over the world to their merchandise line-up. Bonnie Brooks, CEO and President of The Bay commented on the franchise deal saying, "We couldn't be more excited about adding Topshop and Topman to The Bay's growing roster of fashion-forward finds... it’s a material step towards cementing The Bay as a world-class department store that delivers the ultimate fashion experience for our savvy clientele."

The Hudson’s Bay Company (HBC) is the oldest commercial corporation in North America and one of the oldest in the world. It was incorporated by British royal charter in 1670. In 1912, the “original six” Hudson’s Bay Company department stores opened in Victoria, Vancouver, Edmonton, Calgary, Saskatoon, and Winnipeg. Now, The Bay is one of Canada’s top fashion retailers with 92 stores across the country. When Bonnie Brooks became CEO and President of The Bay in 2008, the department store was in need of serious revitalization. The store “was flailing, with an over-stretched staff that had packed stores with a confusing, too broad array of merchandise... customers couldn’t find anything”. Because of this, Brooks dropped 800 brands and to compensate introduced 220. These changes paid off as the company celebrated its most profitable year last year.

Presently, the Retail Value Proposition (RVP) for The Bay mostly focuses on selection however, convenience can also be considered. Selection has become a more integral part of the company and it shows. The Bay offers everything from clothing, accessories, shoes, perfume, cosmetics, home decor, etc. With a focus on their clothing, they offer inexpensive designer brands like Moon and Material Girl to expensive, high-end brands like Rachel Roy and Halston Heritage. As for convenience, The Bay has stores located in suburban and urban markets as well as stores in the downtown cores of most major Canadian cities. It’s also a one-stop shop department store; you can find everything you’re looking for in one trip.

On the negative side, experience is where The Bay is lacking. They have been so caught up in updating their selection that they haven’t stopped to look at the customer’s experience. It’s great that they sell all those high-end designer brands but they need to offer an experience that matches those brands, something of exclusiveness and class. Currently, most Bay stores have beige walls, boring displays, poor customer service, and tend to be unclean. The only nice Bay store I’ve been in is the one on Queen Street in Toronto and that’s only because it houses “The Room”, a separate part of the store that showcasing over 70 of the top designers in the world. If you want experience, go to The Room. My opinion is that they should take the concept of The Room and incorporate it into each Bay retail outlet. It doesn’t have to be a drastic change, just a small face-lift.

(Above: The Room at The Bay in Toronto)

The Bay is on the right track. They should continue to introduce top designer brands from across the world but they also need to start focusing on the experience and feel of each individual store. With Bonnie Brooks in charge I am positive we will continue to see The Bay succeed.

http://www.theglobeandmail.com/report-on-business/uk-retailer-topshop-coming-to-canada/article1934430/

http://www.fastcompany.com/100/2010/89/bonnie-brooks

http://en.wikipedia.org/wiki/Hudson%27s_Bay_Company

http://www2.thebay.com/theroom/

http://www2.hbc.com/hbc/about/default.asp

http://www2.hbc.com/hbc/mediacentre/press/hbc/press.asp?prId=399

Furry Couture

2011-03-16T19:43:00.014-06:00

When one thinks of pet products and grooming, pet couture and a spa that promises fabulous fur doesn’t immediately pop into mind. This changed in 2007, when Krista Castellarin moved to Alberta, and discovered that there was a very limited variety of couture pet clothes to choose from. To meet the needs of her pets, she opened Fabulous Furballs, the first high end pet boutique and spa in the Edmonton area.

As Krista had only been able to find lower quality pet sweaters, her focus is on high quality products, which are supplied not only from travels abroad, but also from local companies, such as Coco Napoleon. Many of the local companies that deal with Fabulous Furballs are based online, therefore not only does this enhance their promise of having unique handmade products, but also creates an opportunity for customers to support these locally owned businesses.

Fabulous Furballs currently has three locations: Sherwood Park, Edmonton, and St. Albert. Each of the stores carries a slightly different mixture of apparel and accessories, but the premise for each is the same: the selection is all based on high quality products that are unique and exclusive to their stores. Although the retail space of the stores are small, with more room allocated to the spa and salon area, the space is utilized in such a manner that there is quite an assortment of clothing to choose from, without the appearance of being cluttered. The layout allows customers to easily access everything that is offered. There is also a wide range of products that are available, from being the “exclusive carrier of doggy couture” to pet carriers, collars, fragrances, nail polish, and more. Even the grooming salon services are numerous, ranging from a full dog groom, to a grooming specialized for cats, or just a simple bath to rejuvenate your pet.

The experience and atmosphere is different from any specialty pet store I’ve encountered. Upon entering, the first thing that’s noticed is the color. The store is painted a vibrant pink, with small chandeliers hanging from the ceiling. Although, as previously mentioned, the retail space is fairly small, it’s open and clean. Large windows allow natural light to mingle with the soft lighting of the store. Experience plays a large role for Fabulous Furballs, as you don’t feel that you’re stepping into a pet salon. Rather, there’s a sense of entering an exclusive boutique. Staff are attentive to the needs of both the pet and their owner. They are knowledgeable about all store products and extremely helpful in making recommendations and providing information.

In addition, all groomers are certified pet stylists. Fabulous Furballs is the only pet salon in Western Canada that ensures all their groomers are certified by the Fur Institute, a licensed grooming school. This puts owners at ease that their pets will be handled with the utmost care.

With plans to open two more stores, Fabulous Furballs has redefined the pet experience.

http://www.thefurinstitute.com/index.html

http://www.fabulousfurballs.com/

Middle Child Syndrome

2011-03-15T23:09:00.003-06:00

Three things come to mind whenever I think about GAP: khakis, cotton-stretch white t-shirts, and a realization that I have not stepped into that store in over 10 years. When I was younger, you could have looked through my closet and I am willing to bet that over 40% of the items I had were from GAP – virtually the majority of my wardrobe was purchased there. Now, I own nothing from GAP. So what happened?

I’ve read countless articles describing how GAP lost direction with their clothing line by trying to please too many types of customers. However, I am still not convinced that this was the entire reason behind the utter disappearance of GAP from my wardrobe.

Founded in 1969 by Donald Fisher, GAP currently has over 3000 stores spanned across the globe. They targeted the ‘gap’ generation, hence the name, in providing the basics to every wardrobe. Building on their continued success, in 1994 Gap Inc. created Old Navy – a clothing store targeted at price conscious families and younger customers. And in 1983, Gap Inc. acquired Banana Republic, which appeals to more high-end customers, offering “modern, accessible luxury”.

With customers having to decide the tradeoff of price versus quality, the retail value proposition (RVP) is more important than ever. Currently, the strategic placement of GAP’s products lies between Old Navy and Banana Republic. I walked into a local store to find that their RVP was all over the map. The convenience and selection of GAP was top notch – I could find everything I was looking for. And GAP has a huge selection; you can find almost everything from blue jeans to swim wear. However, when it came to experience and price, that’s where things got a bit messy. After trying on a few items, I found they were extremely over priced based the fit and quality. Finally, my experience at GAP was lackluster. Importantly, I was not inspired by anything of the clothing items I saw – nothing seemed to have a ‘spark’. And the store’s interior had the same white walls and boring displays that I remember from 10 years ago.

Unless Gap Inc. considers GAP stores as redundant, and chooses to eliminate them from their line; a couple of things need to happen. First, GAP needs to target a core clientele, and stick to it. In other words, no more “trying to please everybody”. By successfully targeting a niche market, people will regain confidence in shopping at GAP. Secondly, they either need to lower their prices or increase the quality. By providing a great product to either price-conscious customers, or quality-seeking clientele, GAP will be able to put its label back in people’s closets. For retailer positioning, death lies in the middle – which is exactly where GAP is currently sitting.

sources:

http://en.wikipedia.org/wiki/Gap_(clothing_retailer)

http://www.gap.com/

http://www.nytimes.com/2009/12/06/t-magazine/mens-fashion/06well-gap.html?_r=1&ref=gaptheinc

http://www.brandchannel.com/features_effect.asp?pf_id=86

Unforgettable Moments: Pandora

2011-03-15T20:43:00.028-06:00

Pandora was started by a local Danish Jeweller and has now become one of the top three largest jewellery brands in the world. Pandora has also been true to its first mission which was to “offer women across the world a universe of high quality, hand finished, modern and genuine jewellery products at affordable prices, thereby inspiring women to express their individuality.” The collectible charm bracelets have been the cornerstone product attributing to Pandora’s success.

Besides Pandora’s signature charm bracelets, the company’s products also consist of watches, rings, bracelets, necklaces, brooches, earrings and charms. Pandora’s products are positioned as “affordable luxury” because it offers a wide range of products at different price points starting with affordable prices up to expensive/luxurious products.

West Edmonton Mall is the mega mall where the Pandora store in Edmonton is located. Pandora chose to have its store in this center because of the huge trade area brought forth by West Edmonton Mall. I think West Edmonton Mall was a great location to have a Pandora store because this mall brings people in from all over the world which fits precisely with Pandora’s customer base.

The retail format of Pandora stores consist of a classy, luxurious and airy feel. The store’s appearance is very bright, clean and solid white is the primary colour used for the decor. Most of the products are under glass counters or in glass display boxes. The lighting in the Pandora store is very bright and it shines on the Pandora jewellery and watches.

Retail Value proposition of Pandora focuses mainly on elevating the dimension of selection over experience, convenience and price. In terms of selection, Pandora carries only a small variety of products.

Pandora is a specialty store that primarily sells within the categories of jewellery and watches. Pandora also offers a small breadth of selections within these categories. Although Pandora doesn't carry a large variety or breadth, it has a large depth of selection. For example in the charms section of products, there are over six hundred different charms to choose from.

Pandora also demonstrates a strong

commitment to proprietary products.

Proprietary selection offers exclusivity; collectible charm bracelets have a patented threading system that differentiates these bracelets from any others. The charms screw onto the bracelet via the threading system and this system also ensures that the charms stay in the desired section of the bracelet. Only Pandora charms fit perfectly on the Pandora bracelets. This instills loyalty among customers who will continue to return and continue purchasing the exclusive Pandora products. By having this exclusive brand, Pandora is able to charge a premium and gain higher profits from the consumers who desire these products.

On December 28, 2010, Pandora set up 6 stores in Russia and plans on entering other emerging markets around the world. The plan to upgrade and establish new point of sales in existing markets and this expansion into new markets should continue to increase growth for Pandora.

Sites Used:

http://www.pandora.net

http://www.pandoragroup.com

http://www.wem.ca/#/store-directory-maps/jewelry-accessories/pandora

Transcend: Coffee Education

2011-03-15T01:01:00.007-06:00

Coffee has become an integrated part of life in modern times. As a result, companies have taken full advantage of this economic opportunity such as Starbucks and Second Cup. It is hard to imagine that small coffee shops can hold their own against these massive corporations. However, Transcend has recently opened its third shop in Edmonton, growing slowly but surely.

I did not think too much about it when I walked into a Transcend store for the first time by Argyll; I thought it was a small little coffee shop hidden between commercial buildings. After looking around some more, I saw the neat condiment station, the coffee bar and behind a massive glass window in a well-lit room, a coffee bean roaster. I was absolutely fascinated with the bean roaster, just watching it churn out roasted coffee beans. It definitely added to the experience for me as a customer. Right next to the window was the coffee bar, which is a great transition in terms of drawing customer attention. The menu board for just coffee was overwhelming with the number of selections there were. My experience at Transcend is different than my experience at Starbucks or Second Cup. I felt that Transcend had a lighter feel to it, mainly because the lighting was incredibly bright for a coffee shop and the fact there is a bean roaster that you can stare hours on end at.

Transcend Coffee is an interesting store in that it not only serves specialty coffee, it also seeks to educate its customers on coffee. Transcend offers a huge variety of coffee types, which the baristas skilfully make for you behind the coffee bar, and some snacks that are generally found in coffee shops. An interesting thing to note is that the baristas undergo a minimum of 40 hours of training before they are ready to serve customers, showing that customer experience and product quality is indeed a top priority. However, what makes Transcend different from other coffee shops is that they seek to broaden the customers' knowledge of coffee. Transcend believes that "the more people learn about coffee and how it's grown, processed, roasted and brewed, the more they tend to enjoy it." And they definitely stick with this motto; there are blog posts about coffee and tea, podcasts, e-newsletters and twice monthly public coffee tastings. On their website, brewing equipments and accessories are sold as well as monthly coffee subscriptions and packs of coffee beans.

What Transcend excels at is definitely in the area of experience as well as the selection of coffee beans. And seeing how Transcend is expanding into higher traffic areas, they are improving on the convenience factor as well. Next time you want to have a cup of coffee and want to know more about coffee, think Transcend.

Sources:

http://www.edmontonjournal.com/Transcend+opens+third+Edmonton+location/4404451/story.html

http://transcendcoffee.com/

Fresh‘n Natural Cream Puffs

2011-03-13T20:07:00.020-06:00

My first experience with Beard Papa’s was during a trip to Vancouver. I was having lunch at the Aberdeen Centre food court, and all of a sudden I noticed an enormous line starting to form up at this one store, so I decided to check out what it was all about. To my astonishment, they were all waiting for the next batch of cream puffs that were ready to be filled with custard. It was definitely an interesting experience as I have never seen such a craze for cream puffs before.

This enthusiasm for cream puffs started in 1999, when a man named Yuji Hirota opened the first Beard Papa’s in Osaka, Japan. His bearded grandfather was the inspiration for the name and logo. The popularity of Hirota’s cream puffs grew quickly, and Beard Papa’s started to expand to other parts of the world including China, Korea, Indonesia, Australia, Europe, the Philippines, the UK, Canada, and the United States. Beard Papa’s is now a franchise with over 300 stores across the globe.

What led to Beard Papa’s rapid success was due to the unique experience of having a whipped cream custard puff made freshly in front of you. Behind the glass display, you can watch as the Beard Papa staff make the cream puffs from scratch and put them in the oven. The custard is made daily and is only filled at the time you order. This freshness is what makes the cream puff extra attractive. Finally the puff is sprinkled with powdered sugar and is served. This flaky puff is highly addictive as you experience the sweet aroma and filling that oozes out as you bite into it.

In addition to the experience, Beard Papa’s main highlight that draws its customers back to its store is its selection. Beard Papa’s offers a large variety of flavours for the custard. Customers get to choose between the original Vanilla filling, or one of their “special flavours” which include Chocolate, Coffee, Caramel, Earl Grey, Green Tea, Mango, Piña Colada, Banana, Chestnut, or Strawberry. The different custards available depend on the location and day. There are seasonal custards as well, which are only available at specific time periods during the year. For example, during Halloween they offer custard made with pumpkin puree, which entices people to grab some before they’re gone until the next year. In addition to the filling, the puffs can be dipped in chocolate as an éclair, which is extremely popular in western countries.

Edmonton’s first Beard Papa’s opened in January 2011 at West Edmonton Mall, a convenient location for regular shoppers. However, the store is currently situated in a less populated area of the mall across from the McDonald's by Galaxyland, and its prices are higher compared to their other locations. A special flavoured cream puff costs $2.99. Even though it may be slightly expensive for a cream puff, it is an extraordinary experience you will not regret. Be sure to try one next time you’re at the mall!

Sources:
http://en.wikipedia.org/wiki/Beard_Papa's
http://www.muginohointl.com/
http://www.beardpapascanada.com/

Breaking Blockbuster

2011-03-10T20:20:00.007-07:00

The drastic increase in digital media distribution has greatly changed the direction that traditional brick and mortar retailers can take when attempting to sell media. This is apparent with the increasing success of Netflix and other similar services, at the expense of businesses like Blockbuster. To complicate the issue further is social media giants Facebook and Youtube dipping their toes into the market of streaming feature length movies. Looming over all of this is the ever present issues of P2P and illegal downloading. and the legislation that is being put forward concerning them.

To give some insight into the quick fall of Blockbuster inc., in 2009 it had revenues of approximately $4 billion, on September 23 2010 Blockbuster filed for chapter 11. After this Blockbuster set up a restructuring plan, in which the amount of debt it had was greatly reduced. It then tried to implement strategies similar to Netflix, particularly by mail rentals and streaming video. However it was too weak of an effort, too late in the game. Now this month Blockbuster has been put up for sale. What led to Blockbusters downfall was it's inability to change it's RVP to capitalize on the change in the market, or to even realize there was a major change. Blockbuster's most recent RVP focus was on selection, specifically having the newest movies the day they were released guaranteed. However; with the new methods of distribution available to consumers, it was becoming increasingly unattractive to pay as much as blockbuster was charging and inconvenient to have to go to the store to get movies.

On the other hand services such as Netflix and hulu have been thriving. I will focus on Netflix. Netflix started out as a mail order DVD rental service. The initial driver for Netflix's success was the high level of convenience associated with this business model. The consumer sets up a preference list, the highest selection is sent, then after the customer is finished with the movie they send it back and get the next one on the list. This system eliminated the need for late fees. The other important driving factor was the price. For a relatively low monthly fee consumers could get the movies they wanted. In 2007 they offered a combined mail order/streaming service that even further increased the convenience and price advantage. In 2009 Netflix offered a standalone streaming service, but what really allowed this to take off was the amount of platforms that partnered with Netflix for distribution. It became viewable not only on the P.C. but all three major gaming consoles, many Blueray players, some t.v.'s, and Apple's iPod/iPad. This strengthened Netflix's RVP even more, further increasing convenience and lowering price. Also Netflix's selection is improving as it gets more popular. As I mentioned before, Blockbuster's major decline corresponds very closely with Netflix's new offering.

What has been interesting recently in this market is that both Youtube and Facebook have started providing feature films. This is a problem for Netflix because of the sheer size and popularity of these services. If streaming full length movies catches on on Facebook and Youtube, Netflix is going to have to change it's own RVP to differentiate itself from these giants.

Of course following all of these pay services is competition from peer to peer sites and illegal downloading. The pay services must watch legislation regarding this activity, particularly bill c-32 in Canada. If passed this could give a big advantage to the pay services in this market.

Overall there has been a very quick transition in this market and traditional brick and mortar stores are probably not going to be able to compete

Sources
http://mashable.com/2010/09/23/blockbuster-bankruptcy/
http://thecopypasteblog.com/watch-full-length-movies-youtube/
http://blockbuster.mediaroom.com/index.php?s=119&item=929
http://news.cnet.com/8301-31001_3-20014895-261.html
http://www.socialtimes.com/2011/03/netflix-destroyed-blockbuster-infographic/
http://www.pcworld.com/article/160276/netflix_will_offer_streamingonly_subscription_plans.html
http://nexus404.com/Blog/2011/03/08/warner-bros-to-make-facebook-movie-rentals-the-next-big-thing-wb-starts-renting-the-dark-knight-to-facebook-users-facebook-credits-accepted-as-payment/
http://www.thestar.com/entertainment/music/article/892432--bill-c-32-no-crossing-the-great-divide-over-creative-rights

The Great Return of an American Legend

2011-03-08T13:07:00.023-07:00

A true legend among motorcycle enthusiasts has returned and is striving to create a new future in the wake of a colourful past. Founded in 1901, two years ahead of Harley Davidson, Indian motorcycles had the reputation of producing some of the most advanced motorcycles of the day. During the 1910's Indian was the largest producer of motorcycles in the world and among race tracks of the day, Indian bikes continually dominated. After 52 years of production Indian went bankrupt in 1953, and from that time on a number of subsequent organizations have perpetuated the name with little success. In 2006, Indian returned to production with new owners and a new vision after the subsequent collapse of the Gilroy, California based Indian Motorcycle Company in 2003. With strong growth and expanding sales among a sluggish economy it appears that new owners have chosen the right direction to move the troubled brand back to its reputable roots. So what are they doing different?

Many have tried and failed to salvage this iconic brand and now the task has been taken on by new owners, Stephen Julius and Steve Heese. In there approach to revitalizing the company they have tried to tap into the past while looking into the future of the brand. The new owners have tried to bring back the heritage and historic aspects of Indians past in their bike designs while adhering to a modern context. Furthermore, Indian has continued the tradition of introducing new products to the public at the world famous Sturgis Motorcycle Rally in South Dakota, USA. Sturgis has a deep historic connection to Indian as this rally was started some 71 years ago by one of the first Indian dealerships in the United States.

In terms of sales, Indian has taken on a mass customization approach to selling motorcycles. In the past Indians bikes were produced on a mass scale and sold through dealers. Now each bike is custom ordered from a dealer according to customer preferences. Then the bike is hand built according to a customers stipulations and can be delivered or picked up directly at the factory in Kings Mountain, NC which conveniently is surrounded by some of the best riding in the United States. The purchase of an Indian motorcycle now takes on a much more personal and involving experience. Each customer is able to feel the passion and heritage behind a brand that has such a rich past. Additionally, motorcycles are being produced in limited numbers which will increase gradually as the company shows positive and sustainable growth. This will allow Indian to focus their business on the important aspects of designing and building custom bikes rather than an immediate profit driven business model. This hopefully will allow the Indian Motorcycle Company to become a dominant American brand once more.

RFID and Your Smartphone

2011-03-07T17:25:00.007-07:00

Recently, several smartphones have come out with NFC technology. NFC stands for Near Field Communications and is basically just an extension of RFID technology. NFC is not a new technology but until now there was no clear use for it. NFC is likely to have the biggest impact in the following ways: contactless payments, public transportation, healthcare, and smart objects.

For contactless payment there are numerous companies exploring the possibilities of making a “digital wallet”. This would eliminate the need for a consumer to carry around any credit cards, debit cards, memberships cards etc. Both Visa and Mastercard are members of the NFC forum and are involved with pilot programs. Also AT&T and Verizon have teamed up with credit card companies to make it possible for consumers to pay with their phones. In 2009, two MIT students came up with an app called Eclectyk, which enables consumers to carry their loyalty membership information on their smartphone. So some options already exist for contactless payment but there is more work to be done before it catches on and people feel secure paying with their smartphones.

By integrating NFC technology into public transportation it would allow consumers to use their phones to communicate with the public system, paying for fares and proving membership. As early as 2008, there was a German company that adopted a NFC pilot program. Travelers touched their phones to an NFC tag upon entering and exiting and then the fare was calculated and added to their monthly bill.

The use of NFC and smartphones in healthcare could be one of the most important NFC uses yet. A doctor could have instant access to a patient’s conditions, allergies, history, past doctors and medical alerts.

The idea behind smart objects is that a consumer would be able to use their smartphones to get information about various places or objects around a city. For example: restaurants, monuments, stores, bus stops, schools and even gravestones have been tested. Every time a consumer would communicate with a reader at a store, the retailer would know which specific consumer was seeking information and would have the ability to control what information is available to the consumer.

The possibility for NFC and RFID technologies is endless especially today when we rely more and more on the technology that aids us throughout the day. NFC technology in smartphones is important because most people have their smartphones with them at any given time of the day. Like we discussed in “the store of the future” class, this means that retailers are going to have access to more information about the consumer and consumers are going to have a lot more information about products, stores etc. and ease of use will play a big role. As NFC and RFID technology catches on, it is going to have an enormous impact on the way people shop and it is going to take the shopping experience to a whole different level.

Sources:

http://money.cnn.com/2011/02/17/technology/connected_everything_mwc/index.htm

http://mashable.com/2010/05/06/near-field-communication/

http://money.cnn.com/2010/08/02/technology/mobile_payment/index.htm

The Apple Store: A Retail Phenom

2011-03-07T13:56:00.006-07:00

Chances are, if you've been to either Southgate or West Edmonton Mall lately, you've paid a visit to, or at the very least NOTICED the Apple Store. "Apple fever" has taken the world by storm; and with it, the tech-giant has established a commanding physical presence worldwide, with 300 stores in 12 different countries. If numbers are of any interest to you, Apple makes roughly $4000 per square foot of Apple Store surface area, every year. 20% of Apple's revenue comes from their retail locations alone.

So what's with all the success? What is it about the Apple Store that continually compels us to enter the pearly, white-walled gates?

If you want to talk about aesthetics, you don't need to be Picasso to realise that these guys are doing something right. Track lighting, wire-mould recessed floor boxes, stainless steel handrails, shot blasted panels, glass spiral staircases....and this stuff didn't all come from the same country either! The futuristic architecture and the excess luminosity of the Apple Store tends to stand out from the dim, bleak corridors of your typical shopping mall or street corner. If you happen to pay a visit to Fifth Avenue Manhattan (see picture below), just one look and you'll see part of the reason why Apple generally brings in so much foot traffic. "Aesthetic seduction" I suppose you could call it.

Setting aside the gloss and glamour, if you look at the layout of your typical Apple Store, you'll find that their "hot" products (I-Phones, I-Pads, Macbooks) are within the "grab zone" of customers, and scattered about in plain view on the various tables nearer to the front of the store. This is the first thing that shoppers see as they come in; and as it plays out, it's what receives the most attention. If you've happened to be around at a major product launch (i.e. I-Phone 4), you probably noticed the ridiculous line length and all the fuss that's made over "thinner", "lighter", "faster", models of essentially the same product. Apple has consistently been able to make a killing off of the sheer novelty of its high-tech products, and its early-adopters have always been the darling of the company's revenue stream.

Apple's most effective promotional weapon, however, is no doubt the hands-on experience that it offers at all its retail locations. Apple employees pride themselves in wiping off your greasy finger prints off their gear at the end of every day. Having their products out and free to try for window-shopper and big-spender alike is what gets the public excited about the Apple brand and brings the critical "tactile sensation" that encourages children to start begging their parents, among other things. Apple Store locations also feature free WiFi, and let shoppers browse and watch videos, allow them to get an idea what real-world use will feel like. Put a hot product in the hands of your average consumer, and the thing will sell itself.

Sources:

http://en.wikipedia.org/wiki/Apple_Store

http://www.crunchgear.com/2001/12/27/the-apple-store-success-story-deconstructed/

http://www.oobject.com/category/items-to-build-an-apple-store/

A Fresh Bite out of the Big Apple

2011-02-23T11:03:00.012-07:00

There's no argument that private labels have grown in popularity. We see them throughout every grocery store and too many other retailers to even list. However, to this point they have been an important way for retailers to lure their customers back with something that only they offer and an opportunity to expand their product line, control quality and enjoy a greater share of profit. So how about the little clothing line that could, Joe Fresh and its evolution into stand-alone stores across Canada and a debut south of the border, on fifth avenue no less. Canadian retailers aren't notorious for their successful invasion of the US market, Lululemon comes to mind for its success across North America, but that is more the exception than the rule. So what makes Joe Fresh such a special character that the bigwigs at Loblaws believe that it has what it takes to conquer the challenging US market?

Perhaps it's exactly what has helped it become its own entity on home soil. Loblaws works hard to offer its consumers a large selection at a good price. It wants its consumers to find all of what they're looking for right there in one store and Joe Fresh is no different. Offering affordable and chic clothing for women, men & children for every part of the body, any time of day, all year-round. They quickly became the highest selling brand of kids apparel in the country and in 2009 they even added a bath and cosmetics line.

Perhaps it's the choice locations. Loblaws has chosen carefully for what real estate would be worthy of its clothing line, selecting high-profile locations across its home country and the US will be no different. The debut store will take on the big apple...arguably one of the most exciting cities in the country and holding true to the motto, go big or go home, they have chosen fifth avenue for its flagship location with a quaint five-story, transparent glass building erected in 1954.

Perhaps it's Joe Fresh himself. Behind the scenes he's better known as Joe Mimran, creative director for the apparel, home and entertainment divisions of Loblaw Companies Limited, with the development of successful fashion labels such as Alfred Sung, Club Monaco and Caban already under his belt. Who better to have chosen to head up your private clothing label that a man who has been there, done that, and done it well.

At the end of the day it is always wise to never put all your eggs in one basket. Loblaws is approaching the US-expansion of Joe Fresh with extreme caution, all too aware that many have tried and too many have failed. At this point they have one location set in stone, with three others planned as they feel out how well this will go. No matter what happens, the amazing success that this grocers' private label has experienced on home soil is nothing short of impressive.

http://www.financialpost.com/news/Fresh+takes+Apple/4332460/story.html

http://www.joefresh.com/en/about_joe_fresh/

http://www.joefresh.com/en/about_joe_fresh/who_is_joe/

http://www.torontosun.com/life/fashion/2011/02/23/17377681.html

A Push for Private Labels

2011-02-19T18:14:00.009-07:00

Private labels used to be found only on the bottom shelves in grocery store aisles. These low price alternatives were a sub-par, lesser quality option wrapped in unattractive packaging. Yet, as the profit margins associated with Private Labels became more and more attractive, retailers began to take notice and private label products began to take on a new form. As the private labels have changed, so has the competition landscape. Now more than ever, private labels are competing on parity with National Brands

The ideals in consumers’ minds have also begun to shift. As retailers start to allocate more resources to advertise their private labels, and consumers become more educated about the money back guarantee these products come with, the percentage of people buying private labels is going up and the demographic of these consumers is greatly expanding. No longer are Private Label goods the bottom of the shelf option they used to be.

One of the more popular and mainstream Private Label groups is the President’s Choice and No Name brand by Loblaw’s. Company spokesperson Galen Weston is frequently seen on Superstore commercials informing his customer base of the new private label products that Superstore now has. This type of mainstream advertising is building up brand name recognition and trust with the Private Label product line. Because of this, more consumers are opening up to the idea of purchasing private label products.

Not only are Canadians warming up to Private labels, but some United States companies are giving their own Private Labels a big push. Walgreens is unrolling a national marketing campaign to inform their clients about their new Private Label brands. This campaign will focus on the new Walgreens Pain Relievers.

Building on the marketing research that Walgreens has done on their customers, they have found that consumers are already comfortable purchasing store brand medications and are consuming other private brand products. With this information in mind, Walgreens is strongly going forward with this product launch.

This marketing campaign is making use of many digital fronts to reach consumers. Walgreens has hired high profile bloggers to use and report on their products. As well, they have placed banner ads and short video spots on pages such as ABC.com and CBS.com. Walgreens will also be unveiling a print and TV campaign to highlight the arrival of these pain reliever products. This multi million dollar advertising campaign will completely focus on the use of Walgreens Private Label products.

Walgreens is taking a value added approach with this product line as well. One cent from every Walgreen Pain Reliever product purchased will go to the Walgreens Way to Well Fund which helps with local educational and health related services. Although the individual donation amount is not high, this is a way for Walgreens to reach the consumer that likes to give back with their purchase decisions. It is also a way for Walgreens to show customers that their private label brand has more to offer than a cheaper price incentive.

As private labels step up their advertising, and the stigma around these non National Brands begins to dissipate, consumers will have a much wider range of choices on grocery store shelves. With this increase in profit, more large retailers may realize the potential gains they can receive by setting up their own Private Label products. As National Brand producers begin to notice the drifting loyalty from their products to the cheaper alternatives, the market place may take a large shift. In the end, the consumer will be the winner. With a large choice of products ranging in quality and price, higher levels of product competition will only allow for a higher outcome for consumers.

Jacob and Changes

2011-02-12T21:13:00.000-07:00

Jacob instantly came to mind when thinking of a Canadian woman apparel company that has underwent significant changes in the last year and half. That is, with the purpose of meeting the needs of its target market and compete against international retailers. So, what is it about this brand? Jacob caught my attention the minute I noticed one of its banners, Jacob Connexion, no longer had an existing space within West Edmonton Mall, Kingsway Garden Mall and Edmonton City Centre. My curiosity led me to discover Jacob had made a strategic move to unite Jacob Connexion’s casual attire with Jacob’s formal attire as a means to solidify their brand positioning.

The result from this move since last May, 61 Jacob Connexion stores across Canada were transformed, 58 Jacob stores expanded their product offering and 3 revamped into Jacob Lingerie locations. The changes made it clear Jacob’s retail value proposition (RVP) heavily focused on convenience, selection and price to attract young professional women between the ages of 25 to 34. A concept behind uniting the Jacob Connexion and Jacob banners was convenience because “with an average of only 72 minutes to shop, women expect to find everything they need for the many aspects of their lifestyle at one store...clothing and accessories inspired by the latest trends for the office, cocktails, and everything in between” as told by the Communications Director Cristelle Basmaji. Then, the selection of its products expanded within a single retail because it offered a wider variety of styles that included formal and casual attire, lingerie and accessories. Finally, Jacob had always emphasized on the importance that they offer quality products at affordable prices for the young professional women.

Regardless of Jacob’s increasing attempts to be more appealing and competitive in the apparel industry, it just seemed they lacked a certain spark. I looked further into their background and the various directions their retail has taken over the years. First, Jacob is a unique Montreal-based company founded in 1977 and nearly eight years after it was established, it decided to expand beyond the province of Quebec and throughout Canada. As we discussed in class, Quebec is a province known to have distinct tastes and needs comparing to the rest of the country so branching out was indeed a surprise. Then it carried popular brands like Jacob Jr. for preschoolers to pre-teens and Jacob Homme for men for some time until discontinuing its operations to focus on their adult female segmentation. Almost ten years ago, it managed to cross the U.S. borders and open a store in Cambridge, Massachusetts. Although the existence of the store in the U.S. remains a mystery, my assumption is that Jacob was unsuccessful making their mark within the American market. Furthermore, Jacob along with other domestic chains suffered as a result of foreign retailers entering and stealing business away from them and now it is in talks about potentially being acquired. Lastly, Jacob began a campaign against the fashion industry’s practice of digitally retouching images to reshape the bodies of its models after being inspired by Dove’s beauty campaign. Although, the creation of their retouching policy would reassure a real body image, Jacob would continue to retouch as far as calibrating colours or even out skin tones for advertising.

As for me, I’ve shopped several times at Jacob and was satisfied with the selection of clothing and reasonable price. For some reason, my perception of their quality has diminished over the last few months, I’ve seen fewer customers entering their store and I feel as though Jacob has lost a clear sight of their vision because they seem to be all over place to save its business. Hopefully with time, they will have greater innovative strategies to stay ahead of competition and a better awareness among its target market!

Sources:

http://www.jacob.ca/

http://www.jacob.ca/htm/en/JACOB_PRESS_RELEASE_Jacob_JacobConnexion.pdf

http://www.theglobeandmail.com/report-on-business/canadian-clothing-retailers-brace-for-us-tide/article1829009/

http://www.thestar.com/Business/article/871041

http://en.wikipedia.org/wiki/Jacob_(clothing_retailer)

Greasy car salesman tactics or retail value proposition magic?

2011-02-11T23:25:00.008-07:00

We’ve all heard of the pushy car salesman. Every dealership has them, and every customer dreads dealing with them. The salesman is overly friendly and annoyingly attentive. You tell him that you are just browsing today. You have a planned budget of $20,000 in mind and do not intend to buy the first car you test drive. Two hours later, he has you excited about being locked into a $30,000 dollar purchase you can barely afford. These stories are commonplace in the car sales industry, an industry that lies atop the Canadian retail marketplace with a 19% share of the market (1). So what is it about the car dealership that turns casual browsers into irrational impulse buyers? The retail value proposition may give us some insight into how that greasy salesman got you to sign on the dotted line.

The salesman’s game plan begins with a focus on selection by asking the right questions. What kind of vehicle you are looking at? Sedan or SUV? Automatic or manual? Is having a sunroof important? What is your budget? You feel as if he is trying to find the perfect vehicle for you. He hopes to select a vehicle for you that fits the criteria, and if he doesn’t have one, he’ll just have to convince you against that expensive sunroof add-on if it’s out of budget or to go with the manual for better fuel efficiency if there are no automatics left in his inventory.

A friendly and professional atmosphere enhances your experience. The bright lights of the showroom highlight how great the new vehicle looks. He offers you free coffee and serves up cheesy jokes. He’ll drudge through the snow to pull up the perfect vehicle for you. He’ll outline all the great features and benefits of the vehicle. He takes ‘genuine’ interest in your place of work. If all goes well for the salesman he becomes more of a friend to you than an annoying pest. Now comes the test drive, it allows you to fall in love with the car, taking mental ownership of a vehicle you haven’t even decided to buy yet.

It’ll be easy for you to visit the dealerships’ exceptional service department, with its convenient shuttle service and drive-thru service bays. He realizes that when you are spending over $20,000 of your hard earned cash, you are buying more than just the car, you are buying convenient customer service. He’ll show you this on his service department walk through, right before your back at his desk ready to work some numbers.

If all went well in the steps above, price should be easy. In fact, the better the customer feels about the selection of the vehicle, the experience of driving it, and the convenience in purchasing it, the fewer the discounts required to close the sale. But what if the customer isn't totally convinced about the car? How about a $1000 dollar discount and a free trip to Vegas? CONGRATULATIONS ON YOUR NEW CAR.

(1) http://www.retailcouncil.org/mediacentre/profile.asp

Commercial Karma

2011-02-11T23:11:00.013-07:00

My parents recently bought a personal video recorder (PVR). I wouldn’t say they are the most technologically able people you would meet. In fact, they still use our step by step directions on how to turn on the DVD player and get to the proper input so they can watch a movie. And now they have a PVR; the newest frontier (well maybe not newest but it is a big leap for them).

With PVRs and DVRs (digital video recorders) becoming increasingly more affordable, there seems to be a looming problem for advertisers. People are skipping through the commercials. I am a little torn about this because I am a person who enjoys TV... a lot. And I will actually wait a half hour to watch a show so that I can fast forward through the commercials. As someone pursuing a career in marketing, I am my own biggest problem.

It was enough of an obstacle to develop a commercial that would make a lasting impression on the consumers. How much longer are companies going to pay hundreds of thousands of dollars for a television ad that people are not even watching? Sure, when it is the Super Bowl, of course they will be watched but we have all heard about the price tag on those commercial. The cost for a 30 second commercial during Super Bowl XLV was $3 million¹; a once a year opportunity and expense. But what can be done for regularly scheduled programming?

Television networks are quite aware of the problem. Fox came up with a resolution. They charged a premium price for advertisements so they could play only 2 commercials in a 60 second break². This allowed for advertisers to have the first and last commercial spots, which have shown better brand recall. However, the higher costs of advertising will have to be paid somehow. The obvious conclusion would be that companies will have to charge more to the consumers to recover this increase in expense. This will inevitably affect these companies retail value proposition. They will have to charge a higher price without any improvement on selection, experience or convenience. This isn’t something consumers appreciate very much. It seems ironic that consumers are paying more for an electronic device to fast forward through the commercials, just to have the companies charge them more for their purchase, all so they can place the ads that were being skipped where the consumers will now see them. Fox was not as successful as they had hoped but it was progress none the less. I am interested to see what solutions will be made in this area, as it cannot continue the way it is going. And if we get our way, my fellow marketing students and I will have an opportunity to help with that! Until then, happy fast forwarding!

1: http://www.superbowl-commercials.org/1071.html

2: http://www.nytimes.com/2009/02/13/business/media/13adco.html

Ease; Convenience; Availability; 7-Eleven

2011-02-11T21:56:00.008-07:00

As the world's largest operator, franchisor and licensor of convenience stores, 7-Eleven is the perfect archetype of humanity’s desire for time and convenience. As a matter of fact, at no point in human existence have consumer goods been so available to us. This world, characterized by obesity, laziness, and comfort gave Joe C. Thompson, the founder of 7-Eleven, the chance to establish a retail giant.

Today, Thompson’s retail extravaganza operates more than 39,400 outlets in eighteen countries, and on average opens a new outlet every six and a half hours. To put this in perspective, 7- Eleven operates one thousand more stores than McDonalds Corporation, and sells more cold beer, newspapers and bottled water than any other retailer in the U.S!

The cornerstone of this retail giant’s success lies in their focus on creating a convenient shopping experience for customers. Stores are located in highly populated, urban, and usually residential neighbourhoods. Their storefronts are marked by the trademarked 7-Eleven logo and classic green, white and red color scheme. Unfortunately, the convenience of 7-Eleven stores also means higher prices for consumers. It is without question that consumers are willing to pay a higher price for a more convenient and comfortable shopping experience. Evaluating this from a retail value proposition perspective exhibits an emphasis placed on experience as well as convenience. Shopping at a convenience store is a much different experience than if one were to buy the same items at a big-box retailer. One thing of particular interest is how 7-Eleven manages to compact all the essentials into one small store. In addition to a large selection of beverages, food, and bare essentials, most 7-Eleven stores also include a gas bar. The compact floor design and focus on keeping things easy to find make the stores very appealing to consumers. I guess what I’m trying to say is, it wouldn’t make much sense for a convenience store to be “inconvenient”.

7- Elevens motto since opening its first store in 1969 has been, “to provide you with the products and services that you want, when you want them, in a clean, safe and friendly environment.” Have they lived up to this standard? Possibly, however a better question is what goals has 7-Eleven set for itself in an industry which it already dominates? One of their more recent goals has been to globally expand their business activities to various regions, including: Southeast Asia, Central America, and Europe. However, the challenge in such an extensive goal is promoting its global expansion into emerging and already mature markets.

With global expansion as the next piece in the puzzle, one must consider how the rest of the world will react to a company like 7-Eleven. With less emphasis placed on convenience and “one stop shopping”, places like Europe and Southeast Asia might not welcome the retail giant the same way North Americans have. It is important for 7-Eleven to re-evaluate their retail value proposition and perhaps place more emphasis on selection and experience.

Communication is pivotal in the success or failure of a company; 7-Eleven struck me as a great example of successful integration of a retail information system. Franchise owners reap the benefits of having access to important information regarding what items are selling best in stores, market trends, re-orders merchandise and sales forecasts. This communication between vendors and franchise owners ensures that all their stores have equal access to information. Although there are surely are many reasons for 7-Elevens success, communication is definitely a front runner.

As 2011 comes into fruition we can expect 7-Eleven to remain a dominant player in the convenience foods industry. So don’t forget to take in your daily dose of pizza rolls, big gulps, and hot dogs on your next drive home!

References
http://www.helium.com/items/1123399-franchise-information-for-7-eleven
http://www.7-eleven.com/
http://en.wikipedia.org/wiki/7-Eleven

Your Super Bowl MVP

2011-02-11T21:05:00.011-07:00

Another year, another Super Bowl. This year, the game's Most Valuable ~~Player~~ Promoter has to be ~~Aaron Rodgers~~ Volkswagen. Volkswagen had two commercials during the Super Bowl broadcast, airing “The Force” in the second quarter and “Black Beetle” in the fourth quarter. From every angle, Volkswagen has turned out to be one of the big winners this year. The first advertisement, for the Passat, ranked 3rd overall out of 61 commercials in USA Today’s ad meter ranking; the ad for the Beetle ranked 12th. Industry-wise, it had the top 2 ads out of all the commercials from auto-makers.

This begs the question: what made Volkswagen so successful with their advertisements? Using the retail value proposition (RVP), Volkswagen differentiated itself from its competitors. It clearly defined consumer segments and then found a way to genuinely connect with them.

In “The Force,” Volkswagen uses experience to target young families. Volkswagen understood their consumer so well that they even knew how a 5 year-old boy acts. If you've met one recently, you know exactly what I’m talking about. By knowing these little details, Volkswagen tells families that it understands their needs and it cares. The use of star power didn’t hurt the experience either. I haven’t watched a single Star Wars movie (I know, shame on me—but I’m a Disney guy!) and I still recognized the costume and understood what was going on.

Finally, a major factor for Volkswagen’s success with “The Force” can be attributed to its use of the Internet, expanding upon multi-channel retailing. Contrary to most companies, who protect their $3 million investment from being leaked online, Volkswagen posted the commercial online before the Super Bowl. The strategy worked. When I checked before the Super Bowl, the clip had over 17 million views. Now, almost a week later, it’s at 27 million and counting. Volkswagen quite literally added another channel to its operations.

With the “Black Beetle” ad, Volkswagen flexes its muscles in terms of selection. It advertises its flagship vehicle, the Beetle, and reminds customers that the Beetle isn’t out of style. Not at all. This time, Volkswagen understood the unique design of the Beetle is crucial to its success as a company. Still not convinced? Watch the clip again and notice that Volkswagen is advertising a car without ever showing the car in the commercial, only a silhouette. I don't think any other manufacturer can pull that off. Hyundai tried to, failing miserably (two of its three commercials showed the vehicle for just 3 seconds near the end. Both ranked 60 and 61. Dead last). As well, “Black Beetle” played to the experience of driving the Beetle—driving fast, taking tight turns, and making heads turns.

This year, Volkswagen shows how a retailer can utilize RVP to differentiate itself. They adapted to the growing social media market and are primed to take another step up in the automotive industry. It’s just a shame that the dad thinks he started the Passat.

The Business of Music

2011-02-11T16:28:00.000-07:00

So it’s marketing class. We’re probably talking about what? Apple? Ford? WalMart? Coca-Cola!?!?

Most likely. Because we like to discuss successful and well-marketed brands- which makes sense after all- it is Business School. But to my continual dismay, not a single person even cares to mention Lady Gaga. Not a single presentation on Britney Spears. Not a word on Justin Beiber. These are huge brands that position themselves and segment their markets just like any other major company. Yet music remains a topic for those ‘Arts’ kids to discuss- an industry shunned from our learning experience.

The music industry is huge. In 2010, the US Major Record Label Industry grossed 7.5 billion in revenue¹. That’s a lot of money. And really that is just the beginning. The economic ripple effect the music industry has on the global economy is enormous.

Why did I buy my IPod? To listen to music.

What do I listen to on the radio? Music, and advertisements.

Name me a television program that somehow does not use music in its programming.

I mean, why do you think bars get packed on a Friday night? Yeah, there’s booze, but there’s also a DJ, who’s off blasting the top 40 like no tomorrow.

How big would the IPod gotten if there had been no music? Would there even be a broadcasting industry without music? The music industry does not only define many aspects of our social lives, it also drives other businesses, and is a business in its own right.

So if you think being in a band is just about drinking beer and looking good- you’re on to something- but you’re missing the big picture. Because being a successful band means being a successful retailer. It means pushing a product, working with distributers, knowing your market, innovation and creativity, and being better than the next guy. A day in the life no different from our good friends at Apple.

And these days, the record industry’s profits aren’t doing so hot. Described best as “near-catastrophic revenue losses”². The business platforms may be changing due to new technological advances, but I assure this industry is not going anywhere. It’s merely a time for change.

Just as major retailers, such as Home Depot, can introduce eco-friendly options to boost business and drive profits, so can musicians. An interesting report from www.musicindustryreport.org describes the story of rap artist going completely digital- not producing a single CD- and still managing to release his music across the globe. No CDs, no pollution. Generally, the three major costs of producing a CD are recording, printing & distribution, and promotion; and this guy is essentially skipping a third of it.

Environmentally friendly, innovative, and profitable? Sounds like a modern day business solution to me.

I could probably write an entire thesis on the subject of music and retailing, as 500 words can hardly do it justice!

Striker Rules^3,4.

Sources

1: http://www.ibisworld.com/industryus/default.aspx?indid=1252

2: http://musicindustryreport.org/

3: www.myspace.com/listentostriker

4: http://www.youtube.com/watch?v=8d3HRQUrDYc&feature=related