retailing trends is a powerful
mix of technology-adaptability
and consumer-knowledge. Noted
retail and marketing speaker Tom
de Leon identifies emerging consumer
and technology trends to help
retailers position themselves
in the new century.
High Tech, High Touch
exciting world of retailing is
really going “high tech, high
touch”. What does this mean? Well,
traditional retailers have seen
the power of technology, particularly
its contribution to bottom line
results. Yet almost intuitively,
these same retailers know that
getting close and personal to
their customers must likewise
be given priority.
on about the top 10 global retail
trends and learn how we can capitalize
Content and context - speaking
the customer's language
success of some of the star retailers
on the Global 100 list, such as
Wal-Mart, Carrefour, Tesco, The
Home Depot and Seven Eleven Japan
is best understood in terms of
a new market mode: customer relevance.
companies ascended into the top
ranks because they positioned
their products and services against
the “human values” of target customers.
They understand clearly the standards
of the consumers and they consciously
build relationships and provide
offerings that resonate with these
needs and wants. Instead of focusing
primarily on the content of a
sale, they strike a more balanced
and appropriate view of content
and context, that is the manner
in which the transaction is carried
out and how it fits into a customer’s
instance, retailers that successfully
addresses the market's need for
convenience and/or competitive
pricing will have the edge. Hongkong's
popular supermarket chain Park
and Shop is a good example. In
this fast-paced era, we see stores
paying more attention to cross-merchandising,
speedy payment counters, and checkout
areas. We also see the emergence
of superstores and malls like
the country's SM Supermalls that
offer food, entertainment, products,
and services all under one roof.
Shoppers shop for "items"
and no longer purchase from any
vendor exclusively. That’s why
retailers such as Saks Fifth Avenue
focus on filling their shops with
new merchandises - representing
goods from all vendors.
research study conducted by Ernst
and Young proved that this successful
balancing of content and context
explains Wal-Mart’s continued
dominance in the world's top retailers,
Carrefour’s move into the No.
2 spot, Tesco’s phenomenal growth,
and Seven-Eleven Japan’s meteoric
rise from the 67th position in
1996 to the 29th position in 1999.
This was contrary to common belief
that these superstores' prowess
stem from the introduction of
the hypermarket concept, domination
of the supply chain and even by
study also found that failures
in global retailing result when
a company misses a key perspective
on the market and speaks a different
language than its customers.
essence, the customer’s definition
of seemingly obvious terms such
as “price”, “service”, and “experience”
should correlate with the retailer's.
Creating personalities in store
linked with customer relevance
is retailers' continuous search
for store designs that would appeal
to their target market. Two years
ago, the Tommy Hilfiger men’s
department in Bloomie’s Manhattan
measured 2,400 sq. ft. complete
with an interactive kiosk, a wall
of video monitors and custom fixtures.
Today, the shop has been relocated
and downsized to 1,500 sq. ft.
While Hilfiger's custom signage
and fixtures are still there,
the videos are history.
are using multi-dimensional storefronts
that create a distinct identity
and unique appeal that will stand-out
inside malls. Department store
and mall owners are using merchandise
themes to create a coherent and
exciting personality for their
stores. Maritime Square in Tsing
Yi, Hongkong uses the "marine"
concept in dressing up the entire
are also discovering that changing
merchandise displays more often
will attract consumer attention.
What's in a name? branding and
in a name? These days it's everything.
Retailers are discovering that
branding not only adds value to
their products, but also helps
to differentiate them from the
competition. Disney leveraged
its well-known name to create
a successful branded line of retail
products including clothing, toys,
key chains, jewelry, and videos.
happens when two businesses or
brands form a strategic alliance
to produce/market products jointly.
Co-branding not only creates added
value for their products, it also
means higher marketing efficiency
by attracting more customers at
lesser costs. Co-branding is also
believed to be the solution to
generate new dynamics to individual
brands in difficult or emerging
a popular innovation in franchising
today, co-branding was designed
to reduce franchise marketing
costs, optimize operational and
administrative costs to increase
profit. Examples include Taco
Bell and KFC, Burger King and
TCBY, and Baskin Robbins and Dunkin
Growth in lifestyle products -
the promise of a better life!
Lifestyle has been defined as
"a way of life". Lifestyle
also encompasses the way we live
or want to live our lives, the
things that we want and aspire
for. It has also been dubbed as
the "dream factor in selling,
the promise of something better"
said Professor Martin M. Pegler
who teachers visual merchandising
at the Fashion Institute of Technology
in New York, USA.
true that while shoppers seek
convenience, quality, and value-for-their
money in purchasing goods, they
are also seeking "personal
satisfaction". That's why
from store designs, product brands
and logos to merchandise, retailers
make sure they tickle the hearts
and minds of their market with
the message: "We know what
you want and who you want to be
and we're here to help you realize
country's first interactive sports
superstore - TOBY's Sports Arena
located in Ayala Mall believes
in providing customers an "experience"
that is rich and rewarding as
much as selling merchandise on
multi-level sports superstore
is designed as a sleek arena environment,
with a track oval, a 30-foot high
ceiling with exposed steel trusses,
and a stylized bleachers section.
As customers enter the store,
they are greeted by a nine-bank
video wall featuring highlights
from different sports events.
A realistic, 20-meter long mural
of a cheering crowd competes the
stadium look and feel. According
to Toby Claudio, the company's
Operations Manager, the Arena
gives customers a "sensory
experience", with authentic
arena music, video entertainment,
and various interactive features
that make people feel they are
in more than just a sports store.
this lifestyle concept to tickle
the imagination of the athlete,
sports enthusiast, or avid fan,
the Arena hopes to engage them
in a buying spree.
Managing costs - increasing profits
technology that will reduce energy
consumption is on top of the wish
list of every store operations
and facilities manager. Managers
agree on the need for control
systems that can manage equipments,
lights, and other building functions.
The use of energy efficient lighting
such as light-emitting diode (LED)
technology is effective in lowering
store-lighting and energy costs.
facilities managers who participated
in a round table discussion expressed
interest in increased on-line
capabilities that will monitor
energy-management systems in their
stores. “It would be great if
those systems could communicate
utility-data information on what
the current rates are so that
we could make real-time decisions
as to where we can shed load,”
says Brian Schadrie, facilities
management engineer-HVAC, ShopKo
Stores, Green Bay, Wisconsin,
Selecting the right partner -
has been gaining popularity in
energy and facilities maintenance
for some time for major retailers.
Chain stores have outsourced many
of its key functions. The Limited,
a high-end clothing shop, with
roughly 5,000 stores nationwide
in the United States, discussed
its philosophy in a recent survey
conducted by Chain Store Magazine.
“The Limited is very good at marketing
and selling clothes but that is
less true for facilities management,
maintenance and things like that,”
explains Jonathan Swann, Senior
Manager for Energy Services. “For
us, outsourcing has everything
to do with an organization’s core
competence.” Selecting the right
partner is the key to The Limited’s
strategy. It considers whether
the outside company has the technology
and infrastructure to do the job
more easily and better than it
could be done in-house.
Maximizing turnover - using technology
in inventory management
merchandise inventory tops the
list of valuable physical assets
in almost every retail company,
it is not surprising to find today’s
merchants devote substantial time
and money in finding new ways
to make these huge investments
have long understood that by streamlining
their ordering and replenishing
processes, they can maximize turnover
and improve in-stock positions.
In the process, they enhance customer
service levels—as well as their
own bottom lines. It is the role
of technology to drive this effort.
The more quickly and accurately
retailers can capture, analyze
and act on inventory movement
and sales data, the better they
can respond to customer needs
and preferences and at the same
time improve cash flow.
survey conducted last December
2000 by leading retail consultancy
Kurt Salmon Associates (KSA) analyzes
the frequency with which retailers
monitor inventory movement to
evaluate performance - one clear
sign of the importance retailers
place on tracking inventory movement.
percent of the retailers surveyed
said they track changes on a weekly
basis; another 30 percent monitor
inventory movement once a month.
Discounters (50 percent) and specialty
apparel stores (56 percent) were
most likely to analyze inventory
movement on a weekly basis, hoping
to find in small variations the
opportunities and exceptions that
will help them respond more quickly
to market and fashion trends.
The Internet - inexpensive way
to link with vendors
likewise recognize the need for
supply-chain improvements. More
and more retailers are turning
to the Internet, finding it an
inexpensive way to share information
with vendor/business partners.
those surveyed, 44 percent say
they now use the Internet to link
directly with suppliers. This
move towards Internet utilization
will only intensify, as will the
move to integrated electronic
communications and on-line B2B
Newspaper headlines attest to
this accelerating trend of electronic
exchanges. These developments
hold out special promise for companies
with smaller stores.
example, convenience chains and
mall operators which have been
unable to rationalize the high
costs associated with installing
dedicated lines, will now be able
to take advantage of these lower-cost
links, and may ultimately use
them for everything from transmitting
sales and order data to relaying
payroll and other Human Resource
Information sharing - promoting
joint responsibility and accountability
information is another definite
trend in the retail industry.
This year’s survey by KSA reveals
that retailers’ long held reluctance
to share internal information
with vendors is still pervasive.
However, large retailers like
Carrefour, Wal-Mart, Kruger, and
K Mart have started the move towards
sharing data such as sales forecasts
and margin figures.
data does not mean giving up competitive
advantage,” explains Steve Nevill,
principal in KSA’s Merchandising
Services practice, noting that
few retailers have the strength
to run the race alone. “Sharing
data with your partners allows
for more ideas, analysis and leverage
to occur. It promotes a sense
of responsibility and accountability,
which ultimately may be the biggest
motivator for rallying toward
results indicate those areas where
retailers are most willing to
share information tend to center
around unit sales, inventory count,
and revenue figures, with about
half of the survey group reporting
they share this information with
Stricter internal controls - rapidly
becoming a competitive advantage
Internet has also given rise to
the retail industry’s push for
collaborative planning, forecasting
and replenishment (CPFR). Plus
the emergence of B2B exchanges
offer retailers a growing number
of opportunities that will strengthen
inventory management controls.
With too many stores, catalogs,
and Web sites competing for shopper
money - and the economy showing
signs of slowing - these exchanges
come at the right time.
is rapidly becoming a competitive
advantage for the larger retailers,
and small retailers should take
notice. “There is a big difference
between the leaders in this area
and others just hanging back and
waiting,” according to KSA’s Nevill.
“The leaders have been experimenting.
They are learning and they are
seeing real results. I fear this
is one area where the rich will
get richer at the expense of the
these opportunities bring with
them certain technological challenges,
including finding ways to extract
the right data out of information
systems. Even more critically,
retailers need to be able to rely
on the data they do collect and
as the survey points out, the
majority of chains have far to
go on this front especially as
manual entry and human intervention
in semi-automated systems are
widely prevalent practices in
most retail companies.
With over 30 years of experience
in retailing, Tomas "Tom"
De Leon, Jr. shares with us his
sharp insights into worldwide
retailing movements. De Leon,
who is currently the Program Director
for the Ateneo Graduate School
of Business – Center for Continuing
Education and the Ateneo Bankers
Association of the Philippines
(BAP) Institute of Banking, pioneered
the development of relevant, work-place
based and applications oriented
training seminars geared specifically
for the retail and banking sector.
the programs he initiated included:
Retail Store Wars, Retail Executive
Development Program, Retail Supply
Chain Management and Effective
Supervision of Retail Operations.