(Our current research stream on in-store marketing for retailers and CPGs is on its way in a few months, and we’re looking for interested marketers to talk to about the topic! If you’re working on any in-store activations – shopper, mobile, etc. – please e-mail me and we’ll set up a time to chat!)
Last week, Target generated so much buzz that increased traffic shut down its website and some stores sold out of new merchandise within hours. Surprisingly, this wasn’t a big Black Friday-style sale – it was the introduction of a new clothing line.
With e-commerce sites increasingly encroaching on bricks-and-mortar sales, retailers are being forced to innovate to keep consumers coming back to their stores. From 2009 to 2010, e-commerce revenue increased 15.8%, while general merchandisers’ revenue increased 2.9% and department stores saw a revenue decrease of .8%.
A major factor in this shift to e-commerce is the rise of price transparency. Before the rise of smartphones and price trackers, consumers would have to either go to many physical stores or leaf through many weekly circulars to know which stores offered the lowest prices. Since both of these methods are incredibly time-consuming, though, consumers didn’t research the products and prices as much. This gave retailers some wiggle room to offer slightly higher prices without alienating their shoppers.
But now, price trackers and smartphones abound. Consumers are able to research products in-store, getting historical price information on sites like camelcamelcamel and finding cross-store location-based price information on sites like Goodzer. And since so many shoppers have smartphones, they are now able to do this anywhere – even while standing in one retailer’s aisles, examining the product.
So what’s a retailer to do?
Make stores more of a destination experience.
One way to do this is to make the shopping experience incredibly fun, like I wrote about earlier about the American Girl Place or the World of Coca Cola. Retailers are making their stores more novel by pursuing strategies like launching lines of unique merchandise (like Target’s Missoni example above), while others are hosting classes and events (like Home Depot’s Kids Workshops). These unique products and classes can intrigue shoppers enough to get them into the store, and they will often buy more things once they are there.
Several retailers are also adding departments that feature products that can’t be or aren’t yet often purchased online. For examples, health clinics can encourage shoppers to come to the store. Since most visitors to a health clinic will pick up little things like cough drops and medicine on their way out, these health clinics can help increase both foot traffic and sales. Groceries, too, can help increase foot traffic. Since most grocery products have relatively short shelf lives, most consumers go shopping on a weekly basis, boosting foot traffic.
Use technology like mobile alerts and coupons.
New technologies like Shopkick can reward consumers for going into a store by providing points and coupons. These points for checking in may be enough to actually get to the store, and the coupons may be enough to get them to buy more once they are there.
Take the store to the shoppers.
This summer, H&M successfully took its merchandise to the consumers by building a beachfront pop-up store that sold summer clothes and accessories, like shorts, swimsuits, and sundresses. Shoppers were able to buy the beach gear and use it almost instantly. This model increases foot traffic by significantly reducing the effort shoppers must exert to get to the store.
Other retailers are doing this by building smaller locations that cater to local shoppers. This is taking the form of City Target, a store under construction that will be in a historic building to blend in with the nearby streetscape, and it will feature products like apartment furnishings to cater to neighborhood shoppers.
We have just begun our 2011 research on ways to boost foot traffic. If have any ideas on how retailers should do this, please email me at email@example.com to get involved!