Retailing for Dummies

Best Practice Tips From Our Editorial Advisory Board Members

"A common customer complaint for online purchases is that they're buying from someone who may be selling hundreds of thousands of products. If you have in-store expertise in even a small portion of these products, you should be trumpeting that to the best of your ability. Use employee-written Q&As on your site and include pictures of products as they exist on your floor. Take pictures of customers buying the product in your store. Having a brick-and-mortar presence is increasingly a rarity, so if you have one it's an investment and a competitive advantage you should use across all channels." — Richard Sexton, founder and president, Carolina Rustica

● "Successful cross-channel retailing now and in the future depends on forgetting all the channels! The goal is to deliver a seamless experience to your customers wherever they choose to shop. Make shopping and engaging with your brand omnichannel. Consumers should shop with you because of your brand, and the channel should fade into the background. With this in mind, every tactic, strategic decision, and marketing and operational detail gets a laser-like focus, and the customer gets an exceptional experience." — Margaret Moraskie, senior vice president of marketing, Boston Proper

● "Figure out how to compete or coexist with Amazon. You'll never beat it at the price game, so if your product is available on Amazon, you'd better be sure that in the minds of your customers they need more than just fast delivery at a low price." — Mike Faith, president and CEO, Headsets.com

● "Servicing the customer is more important than ever. While customer service is essential, staffing levels are low and each customer interaction takes longer, with a sale not guaranteed. Motivating and training employees must be a top priority. If a customer leaves your store unsatisfied, they may never return and could become an online-only shopper with a competitor." — Kathy Doyle Thomas, executive vice president, marketing/development, Half Price Books

"Think customers: With customers in full control, monitoring their behavior and making adjustments to meet their needs is a must in 2013.
Efficiency: Ensure that you can deliver orders quickly, expedite returns and handle all queries in a timely fashion.
Merchandising sophistication: Continue to elevate the customer experience you deliver, differentiating from assortments to execution.
Make mobile a priority: From optimized mobile sites to tablet shopping experiences to in-store efforts, mobile must be front and center for all retailers.
Socializing: Embrace social media to understand how consumers are using the channel relative to retail." — Lauren Freedman, president, the e-tailing group

● "Target your customers, not your personal preferences. I've seen a "monument to self" bring down many a company, large and small. New management wants to shake things up; creatives want a great portfolio; new owners want a flashy look to dazzle friends; and the poor customers get left out in the cold. The once-successful company shrinks and goes in the red. Sure, change can be great, but change to fit your customers' preferences, not your own. They'll reward you with sales." — Susan J. McIntyre, founder and chief strategist, McIntyre Direct

● "The best counter to stagnation is an activity that's diametrically opposite to comfort food marketing. You need to try new ideas. You need to test. Companies that saw significant double-digit growth in 2012 most likely tested new ideas in 2011. "Overnight" success usually takes a year or two. If you didn't test significant new concepts in 2012, you need to get some ideas rolling in 2013. Those successes will propel your growth in 2014." — George Hague, principal, HAGUEdirect

● "Maximize contribution to profit and overhead from all channels. Think as a cross-channel marketer, taking full advantage of the web and print catalogs, not the web or catalogs. It's not a matter of trading/selling expense dollars, but rather making certain the dollars being spent generate a positive incremental contribution to your company." — Stephen R. Lett, president, Lett Direct

● "Retailers shouldn't assume that replicating their brick-and-mortar store online will result in multichannel success. Rather, retailers have to analyze each product category they sell and each service they offer and determine how to best use the channels in each scenario to delight their customers and optimize their business. For example, an e-commerce site can enhance the store experience through extended assortments, recommendations, personalization, upselling, cross-selling, inventory visibility across outlets, product reviews, deep product content, how-to videos, end-of-season clearance, store locators, and more." — Richard E. Last, chairman of the board of directors, Shop.org

● "Technology is finally in place that allows for optimization via personalization. If I've never clicked on a yoga mat, I shouldn't see creative for yoga mats on a website or via an email. If I've demonstrated from previous clicks or purchases that I prefer a certain brand, say Tumi, then I should be exposed to appropriate Tumi products throughout shopping, in emails or even in retargeted banner ads on other websites." — Peter Cobb, co-founder and executive vice president, eBags.com

● "Now is the time to leverage multiple channels and incorporate loyalty strategy. Turning your loyal customers into advocates will be pivotal going forward. Let's face it, emails, TV ads, sponsored ad clicks are perishable; consumer advocacy is more far-reaching and powerful. If you can leverage your customers to do some heavy lifting to drive traffic and sales, you'll certainly find new revenue streams." — Howard Wyner, CEO and chief marketing officer, Scentiments.com

How to Do Mobile Marketing Right in 2013
Mobile marketing starts with the end in mind first. Looking through your company's ad calendar for the year will give insight into where you should head with your mobile marketing plans for 2013. To date, most companies haven't been able to successfully execute the ability to include mobile into their standard marketing plans — e.g., signage, print (flyers, circulars, magazine ads, mailers, direct mail, etc.), media, PR, etc. Every aspect of marketing can have a digital asset that drives consumers to purchase more quickly.

There are quite a few aspects of mobile marketing that should be considered, including social media (Facebook, Twitter, Pinterest, to name a few), apps, mobile websites, landing pages and mobile ads, along with the push/pull mechanisms that drive traffic — e.g., SMS, QR codes, email, NFC and others.

Starting with the end in mind first, complete in full your mobile app/web strategy in order to have a complete digital asset to drive consumers to an action for return on investment purposes. Once this is in place, then identify each of the items on the ad calendar to ensure there's an action to mobile included.

For example, run a new product campaign using signage. On the signage include a QR code or text to action that takes consumers to a specific mobile landing page that directs them to an action — e.g., make a purchase, drive social interaction, scan a coupon for use in-store. Allow the signage to become a live engagement vs. just a message that foot traffic would walk by and forget.

Always remember that behind every good strategy with a push/pull mechanism there's a content management strategy that needs to be embedded into the workflow. If you were to just launch a complete campaign of QR codes, text messages, emails or used NFC to gain traffic without a workflow to manage the content that's being delivered, it's really the same as taking a carton of flyers and dumping them out of a plane in the hope they hit the right target. A well-thought-out game plan with a workflow strategy will ensure success across mobile marketing.

Last but not least, ensure that your analytics team is carefully tracking campaigns in order to successfully engage the data and deliver the proper message to each individual consumer. The data will be there with a well-thought-out campaign and can be an extremely powerful tool for A/B testing and strategy movement going forward.

Mobile marketing is here to stay; get your strategy in place now so you aren't behind the curve in the future. — Marci Troutman is the founder and CEO of SiteMinis, a mobile software solutions provider. Marci can be reached at marci@siteminis.com.

Creating an Effective Labor Plan for Your Warehouse
Order fulfillment can be expensive. From technology to warehousing to shipping, there are a multitude of expenses involved with quickly getting the right orders to your customers.

Generally one of the largest ongoing expenses is labor. For retailers, better warehouse labor management can lead to better planning and better profits, and it all starts with getting the right data.

Starting With the Metrics
The first step toward labor optimization is making sure you have the right systems in place in order to gather accurate, meaningful metrics.

A key metric to look at is labor cost per order, which is calculated by dividing total labor costs by the number of orders for any given time period. If your goal is improved warehouse labor efficiencies, make sure your calculations account only for warehouse staff.

The more detailed data you have, the better. For instance, when evaluating warehouse labor costs, one option is to do so by department, such as receiving, pick/pack, returns, custom projects, etc. If you run multiple warehouse shifts, it's also a good idea to look at labor costs by shift.

Establishing Benchmarks
In order to see how far you've come, you first need to know where you started. That's why it's important to establish labor cost benchmarks prior to establishing new goals. When setting benchmarks, do so on a quarterly basis (at minimum) to account for the seasonality experienced by most retailers. For example, you may find your labor costs are significantly lower during the fourth quarter than at any other time of the year. Then as you compare metrics, make sure you analyze year-over-year data from the same time period.

If possible, take it a step further when establishing benchmarks, and do so on a monthly, weekly and even daily basis. Remember, the more detailed the data, the easier it is to identify the trouble areas.

Making Use of the Data
It's not uncommon for retailers to experience heavy variability in order volume throughout the year. Analyzing detailed labor cost data will help with one of the most important but difficult tasks of any fulfillment warehouse: labor planning.

Many warehouses plan accordingly for the seasons, but there's no reason labor planning can't go beyond that. For instance, if your data shows that labor costs are consistently high toward the latter part of the day or week as order volume decreases, you can adjust accordingly.

To reduce labor costs, it's a good idea to make use of both permanent and temporary workers. This will give you more flexibility to scale up or down as needed. It's also important that you give it time (analyze at least a year's worth of data) before making labor decisions.

One of the biggest benefits of outsourced fulfillment is that retailers don't have to worry about labor planning. For those that do their own fulfillment, however, the right data can lead to an effective labor plan, one which can have a dramatic impact on your business. — Steve Bulger is the marketing manager of eFulfillment Service, an order fulfillment service provider. Steve can be reached at bulger.s@efulfillmentservice.com.

Improve Your Shipping Operations in 2013
What does your company's shipping operation say about your business? Does it support your business strategy and help distinguish you in your market? Is shipping an afterthought, with practices and policies disconnected from your mission statement?

Logistics has long been integral to the success of market leaders. Consider the promulgation of home PCs fueled in part by Dell's direct ship strategy, a novelty in the computer industry in the 80s; Wal-Mart's drive to low-cost leadership through cross-docking and other logistics advances; Zappos.com's meteoric growth as the result of exceptional customer service, free shipping and hassle-free returns; the role membership-based shipping programs have had in Amazon.com's online market dominance.

Align Shipping With Your Strategic Mission
Regardless of the products and services you sell online, what strategic business are you really in? Convenience? Speed? Reliability? Economy? Choice?

If you sell "economy," ensure that shipping and returns are free or low cost, even if only via deferred methods. If you sell "speed" or "cutting edge," consider same-day delivery options, even if your customers have to pay more for the service.

Logistics isn't a one-size fits all scenario. There are many strategies to consider that have enormous impact on your business. Centralize operations to leverage economies of scale or take a regional approach to ensure product is closer to your customers? Focus on core competencies and outsource logistics to a third-party provider, or develop internal expertise in this area? Maintain inventory and distribution facilities, or develop a drop-ship program with key vendors? Offer key customers free shipping upgrades? Develop free shipping or membership-based programs?

Challenge your operations management to align your company's shipping operation (and frankly, all divisions of the business) with its strategic mission.

Other Improvement Opportunities
Here's a few other areas that you can address to improve the effectiveness of your shipping program:

Benchmarking and metrics: Are you measuring pick/pack accuracy, throughput, ship and delivery accuracy? Metrics provide shippers an understanding of current standards of operation while offering opportunities to make ongoing improvements. Benchmarking allows you to measure how you stack up against industry peers.

Automation: Is it time to upgrade your warehouse management software and transportation management system? Today's technology offers significant opportunities to reduce costs and improve accuracy. Least-cost routing features choose the best carrier based on cost and speed requirements, while systems integrated to ERP allow for closed loop convenience from customer order to delivery.

Packaging: Inefficient packaging leads to higher transportation and material costs and contributes to the mitigation of carrier discounts due to oversize charges and dimensional weight adjustments. The Retail Industry Leaders Association recommends an evaluation of current materials and packaging designs, analysis of alternatives, and education and engagement with product suppliers, transportation vendors, retail buyers, customers and other stakeholders.

Carrier/service choice: Are you using a single carrier for the majority of your shipping? You may find service improvements and cost-reduction opportunities by adding additional service providers to your carrier mix. The U.S. Postal Service, postal consolidators (FedEx SmartPost, UPS SurePost, DHL Global Mail) and regional carriers (OnTrac, Eastern Connection, Spee Dee Delivery, LaserShip, PITT OHIO and Lone Star Overnight) offer multiple shipping solutions and benefits to compliment parcel giants UPS and FedEx. — Rob Martinez is the president and CEO of Shipware, an transportation spend management consulting firm. Rob can be reached at rob@shipware.com.

Mastering Social Media Marketing
Want to be a social marketing superstar in 2013? Give your followers content they really (really, really) want to share, content they couldn't stop themselves from sharing even if they tried, content that's so fascinating, so useful, so hilarious, so inspiring and so totally ... "them."

Your brand isn't the only entity establishing itself through social media. Your fans and followers are also using Facebook, Twitter, Instagram, Pinterest and other platforms to show the world who they are and what they care about — and they can be very protective of these online versions of themselves. They remove tags from unflattering photos; they avoid (or try to avoid) saying anything humiliating; they want people to hold them in high esteem; they want people to think they're funny and clever; they want people to consider them cool, current and edgy.

What quality does associating with your content contribute to your unique fans' online "personas"? Thrifty? Competitive? Affluent? Glamorous? Smart? Techie? Sentimental? Publish content that bolsters these online personas, not detracts from them.

If liking, sharing, retweeting or reblogging your branded content makes your fans and followers look good (translation: contributes to who they are online), they'll do it. However, if your content is embarrassing, boring or irrelevant, they won't want their affinity for your brand to be known to their friends, and they're highly unlikely to click on anything. If they don't interact with your content, guess whose messaging is all wallflower and zero party animal?

Need a few good examples of companies doing social media marketing right? Check out some of the favorites of Media Logic's conversation management team: ThinkGeek, Spencer's, DKNY, National Geographic, Southwest Airlines, Taco Bell and King Arthur Flour, as well as many entertainment-based profiles (HBO, "Once Upon a Time" and "Portlandia"), publications (Rolling Stone) and sports teams. — Carolee Sherwood is the conversation manager at Media Logic, a social media-focused marketing agency. Carolee can be reached at csherwood@mlinc.com.

Steps to a More Profitable Email Program
Consumers in the purchasing funnel have channel preferences that change over time depending on where they are in the decision process.

In 2013, resolve to do more targeting, measurement and testing with your email marketing program. Send mobile-optimized emails to those who read most of your emails on a mobile device, which should result in increased engagement. Integrate channel behavioral data across the organization to understand how and when your customers are responding to multichannel campaigns, then use this intelligence to target your messaging at the right time using the right combination of channels.

One way to start this process is to work with a third-party data provider to overlay channel propensity information on your file to identify meaningful segments by channel — e.g., those who prefer to purchase in-store, via catalog or online. Your digital customers can be broken down further. Alternatively, have your analytics team develop predictive models to take advantage of key profit-driving opportunities within each unique customer group and then create appropriate targeted messaging. For example, you might employ RFM to identify frequent shoppers (by channel), fence sitters (engaged but not buying regularly) and inactives who are at risk of leaving your brand altogether. Once you've developed your segments, it should be easier to develop specific email campaigns for each group. — Reggie Brady is the president of Reggie Brady Marketing Solutions, a direct and email marketing consultancy. Reggie can be reached at reggie@reggiebrady.com.

Developing Best Practice Creative for Integration and Response
With the pressure on to develop highly effective integrated marketing programs, powerful, targeted creative is an essential component of a successful campaign. This includes voice and messaging of the copy as well as design to accommodate both attention-getting and high-level comprehension.

Clients and agencies often perceive striking graphic design as the best creative, but actually it's rarely in your best interest to allow your campaign to become an exercise in graphic design. Creativity without a base of marketing strategy and a planned, measurable outcome is wasted effort that jeopardizes the rest of the work you're doing.

The Indispensable Creative Brief
Developing a thoughtful creative brief increases your chance for success and lessens the risk of untargeted rampant creative. The client writes this document, sometimes with help from account services who may have additional knowledge about the account.

A good creative brief is an investment in time. It's said that the success of the promotion correlates directly with the effort put into the brief. Why? Your creative team needs enough information to make educated and effective choices on your behalf, and you need to revisit the brief whenever creative is presented to judge if it's on track. The creative brief should include the following information:

the product or service being promoted;
who currently owns and is happy with this product/service;
the market situation for your product (what challenges are you facing?);
a specific, measurable marketing objective;
how that objective will be measured;
what you want to change about consumers thinking regarding your product;
product/service cost;
the perceived value of the product; and
how profitable is the product (how many sales provide the necessary return on investment?).

A good creative brief will answer all of these points. It need not be long or complicated, but it must be specific enough for a creative team to really get the specific goals of the campaign. Sharing it with the creative team, and answering their questions, gives them a great foundation.

What are you working on right now in which creative is a component? If you didn't write a brief, it may not be too late to pull one together — and improve your project's outcome! — Carol Worthington-Levy is the founder and creative director of Worthington-Levy Creative, a multichannel marketing creative consulting firm. Carol can be reached at cwl@worthington-levy.com.

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Cover Story: Retailing for Dummies