The Retail Technology Compass

Lowe's Rolling Out iPhone Based Mobile Devices

2011-11-22T08:42:00.001-08:00

This article was written by Adam Blair. The race is now on in retail to leverage new technology to improve productivity and customer service. It sounds like Lowe's is well on their way to doing this.

They're rolling out iPhone-based mobile devices to their staff so they can look up items, prices and stock levels on the floor. It's thus far elliminated over 400 trips per day to the fixed terminals, speeding up service levels to their customers. Now, Lowe's is trying to find ways to re-allocate the saved labor through the increased amount of time saved.

Click Here To Read The Article.

The Future Of Retail

2011-11-09T12:54:00.000-08:00

So, what will the future of retail look like? We are not far off from this. There's not much to be said, just watch the video.

Customer Reviews - A Potential Gold Mine For Sales?

2011-10-30T11:56:00.000-07:00

Most people who shop online read the product reviews andhaving them on your site plays a huge part in helping customers making that allimportant decision to buy. If you don’t already have this feature turnedon for your site, I would recommend doing this.

There are many reasons to encourage product reviews on youre-commerce site. Besides the obviousreason of providing prospective customers more trustworthy information, thereare added benefits that help improve the quality of your site as well as searchengine optimization benefits.

According to the company Reevoo, a company specializing inonline customer reviews, product reviews done the right way can boost sales upto 18%. In addition, successful reviews have beenshown to increase the average web order by more than 50%! Click here for source.

Here are some more interesting statistics they’ve compiledfrom their own business:

- A review reader is 200-300% more likely to convert than anon-review reader, boosting conversion rates by 8-15%

- Customers reading reviews are 13% more likely to returnresulting in a higher trust and customer satisfaction.

Another added benefit of customer reviews is that it increasesthe stickiness of your site. In short,customer reviews keep people on your site longer which search engineslike. When they see that customers whovisit your site spend more time browsing, it tells them that your site wasproviding something valuable to the reader. In fact according to digitalvisitor, another research site, addingreviews can double the browsing time on your site. - Click here for source

Another thing you may not want to discount are tools such asFacebook and Twitter. Encouraging genuineproduct reviews on your Facebook page from customers can help others followingthe page and encourage them to potentially buy. It can also serve as a great tool to gather unsolicited feedback fromyour customers about the products you’re selling. If something is not right with a product it maybe something you want to bring up with the manufacturer or even reconsiderwhether you want to carry that product.

There are a few ways that you can encourage your customersto leave reviews. You could periodically send out thank you e-mails tocustomers and ask them to review the product they just bought on yoursite. Quite often they will leave a positive comment about your companyand service as well. Make it easy for them by including the link in thee-mail to the product. You could also use your Facebook page and hold acontest where by you offer a promo discount or gift card to someone who leavesa product review on your site. Remember, let them know it doesn’t have tobe a five star review, but also know that you get the final say on what reviewscan get published. Also, you may want to correct grammar and spellingmistakes that reviewers may have left.

In honor of this, I thought I’d leave you with a sidesplitting article that lists The10 Best Amazon Reviews. Ever.

Visit Factor One Technology for more information about our retail and e-commerce products and the services we provide.

Universal Cycle Chooses NitroSell Integrated E-Commerce for Web Store

2011-05-05T11:46:00.000-07:00

Don Fergin has been operating Universal Cycle in Calgary for the past 27 years and has grown his store to be the largest premier independent motorcycle shop in the area. He’s also the exclusive Canadian dealer for popular brand Draggin Jeans, which was one of his primary reasons for starting an e-commerce site. “As a Canadian retailer we’ve lost some business to the US through online sales, so we wanted to get ahead of that and re-capture that business. The e-commerce site also allows me to capture customers that like to do their shopping during hours the store isn’t open.” Click here for full article.

To visit their site click here.

Is Groupon Worth It?

2011-02-02T08:53:00.000-08:00

For retailers, Groupon is an interesting concept, but you need to be extremely careful when it comes to your margins, so you need to selectively choose how you want to structure the deal. It makes sense for companies that provide services, or even hotels that have rooms that sit empty, but for retailers it much more difficult. You’re better off doing the discount on a loss leader product in hopes of getting people in the door rather than a straight up dollar amount promotion. Groupon charges a 50% commission on their deals. So let's look at a popular Groupon Deal that offers a coupon worth $50 off of a future purchase for the price of $25 (which in all reality is a $50 gift card for the price of $25). Let's also assume that our Groupon was a success and 400 people purchased our offer. How does the math work?

400 Bought at $25 = $10,000

Groupon Commission = $5,000

Retailer Revenue = $5,000

Total Liability = $20,000 (This is how much the coupons you sold are worth)

Assuming that our goal is to get people in the door and spend double what the coupon is worth, this is what we would need. If we are selling an item for $100 and our cost is $50 our margin is 50% which is healthy. But now someone comes in and uses their $50 card they bought for $25 so they are essentially buying the $100 but we're only getting $50 in cash. Combine that with the $12.50 cents that we received from the Groupon and the total income of that purchase is $62.50. Now our gross margin is only 20% or $12.50 profit as opposed to the $50 we would have made without the Groupon. So if the 400 people actually used it and the average price per transaction was $100 we would bring in $25,000 for the promotion for only $5,000 of pure profit.

Now, if we kept our margins in tact we would only need to sell 100 items at $100 to maintain our 50% margin and reach the same $5,000 of profit as opposed to 400 items! Essentially we would need to sell 400% more product to reach the same profit dollars.

Here is where it gets more interesting. Obviously the goal of the Groupon is to get people into the door and spend more than the face value of the Groupon, and having them spend an average of $100 per transaction at our 50% margin. But what if that average transaction was lower, like say $75? Assuming our profit margin again at 50% where cost is $37.50 the gross revenue will now only cover our costs, so the overall profit of our Groupon is $0! So anything less than $75 and we will actually lose money on our promotion.

But let's get back to the $100 where we make money. What did this promotion cost us? We already established that to make the same profit dollars we would have had to sell to 100 customers to reach the amount of profit we did with the Groupon. That means we potentially got an extra 300 people in the door which is great, that was our goal. But, in order to get those 300 people in the door we had to sacrifice profit and margin. But how much did we sacrifice? Assuming that these 300 people spent the $100 with no promotion we've sacrificed $11,250 in profit to get them in the door! This means the more Groupons sold, the higher our promotion cost.

While Groupon is a great way to get exposure, be careful in how you structure your deal. As a retailer you may want to consider limiting it to a certain amount of Groupon's sold, or to a specific product that has a very high profit margin for you. It's easy to get excited about the amount of people you expose your store to in a Groupon, but it's important to do the math and create one that makes you money and doesn't lose you money.

Is your supplier also your competitor?

2010-09-21T09:01:00.000-07:00

There are certain things some businesses do that make me scratch my head and wonder if they’ve thought of the implications behind their actions. One in particular is the way they’ve designed their websites that are not e-commerce capable. How many sites have you been to where they list the brands that they carry, usually with a link to that brand’s website, thereby taking you away from their own site?

Now, I understand why some retailers do this. Rather than paying a web developer to constantly update the product offerings, it’s easier to just link to the brand page and you can see the product there. Even better, the brand does a much better job at selling the product that they can do on their own page right? That’s perfect; except for one thing . . . the brand site is also an e-commerce site.

In essence, the retailer is sending their customer to another store that carries their product which invites that customer to purchase online. This would be the equivalent of sending them across town to the competition. Make no mistake; the supplier has no qualms about taking your sale. Sure you may have a territorial agreement but that usually does not cover web orders, and most suppliers will not have agreements in place to send the orders to various stores for fulfillment. Why would they? They just made the sale themselves and thanks to the retailer their site got free promotion.

So my suggestion would be that if you do this on your site, check the links you have going to your suppliers and see if they sell those products online. If so, you may want to reconsider sending your customers to their site. My second suggestion is this. If your customer can find you on the web, and find your product on the web, why aren’t you letting them buy from you on the web?

Competition is quickly heating up as customers buy more and more product online. Don’t give all your sales away to someone else; it’s not good for business.

Can E-Commerce Help Seasonal Retailers?

2010-09-14T13:18:00.000-07:00

On my most recent vacation to the east coast of Canada I had the opportunity to visit a lot of small towns in PEI, Nova Scotia and New Brunswick. Our timing was great as these towns were just heading into their off season, so there were lots of specials to be had and not a lot of line ups to participate in things that make these places so much fun to visit. Lots of shops were offering great sales and we took advantage of as many great deals as we could.

One thing struck me as interesting though. Almost all of these small specialty shops advertised that they ship anywhere in the world. When I asked them if I could order from them online, most said no, but I could just call them and place an order or just send them an e-mail for more information. There were others though that did allow me to go to their sites and place orders. This was important for me because there were some shops that had great products that I wanted to get for Christmas gifts but didn’t want the hassle of taking them on the plane, or simply didn’t want to blow my entire budget.

By using the old way of doing business, a seasonal retailer is virtually limited by the traffic that comes into the store during their busy season. With e-commerce that season is extended all year round and they are no longer dependent upon foot traffic. This is even more apparent for specialty retailers that produce or make unique items not available anywhere else.

Consider this example for some of the opportunities that e-commerce provides. I found this great shop in Nova Scotia that specialized in making unique jewelry from sea glass collected from the nearby beach. I bought several gifts for my family but I knew more people that would love this type of stuff. After purchasing a few necklaces, I got the website address so one day I could order more. When my girlfriend wore hers out one night, people were commenting on it and asked where we got it. When I told them, two of our friends went online and purchased some for gifts and one of them even posted it on their Facebook Wall.

Had this small (and I do mean small) retailer not had an e-commerce site we never would have had the opportunity to buy more when we got back and they never would have sold to our friends who had never even been to Nova Scotia. This little shop was not a giant retailer or even a large one for that matter, but they are learning to make money even when the tourists are gone. On top of that, we get updates through Facebook when the owner has made more new and unique items and we can just purchase it from their site.

I guess my question to everyone out there is what are you doing to ensure your season is extended all year? How easy is it for your customers to find, buy and share your items with their friends? How much money are you leaving on the table?

The Power Of A Post

2010-08-30T09:10:00.001-07:00

For those of you who may still be sitting on the fence about whether or not having some sort of social media presence may impact sales or product awareness, conider the following.

Yesterday I received a post from the Starbucks Facebook Fanpage which I follow, which means every time they put out a post I will see it in my Facebook feed. The announcement? Simply that their popular Pumpking Spiced Latte is going to soon be back on the menu. Now this is a drink that most people already know about and many enjoy.

I took a screen shot of what this post generated. Now the Starbucks page has more than 13 million followers. Yes, that's right, 13 million! That post genereated over 5,000 comments in less than a day, and close to 34,o00 people acknowledged the comment by saying the "liked" it.

The financial cost to Starbucks to generate that type of publicity? $0.

Still think social media shouldn't be part of your strategy?

Lessons Learned: Candle Retailer Regrets Custom Shopping Cart

2010-08-28T10:25:00.000-07:00

Lessons Learned: Candle Retailer Regrets Custom Shopping Cart

This is from another blog I follow. For those of you looking at starting an e-commerce site, beware of some of the pitfalls that can happen when deciding on a web page format. As this retailer found out, Flash can make a site really cool looking but Google search does not pick up Flash so your website can be very difficult to find.

Also, another good point he brough up was with regards to hosting versus a managed service. He made quite a large investment in servers that he ended up not needing in the end.

Anyone looking or considering e-commerce, please feel free to give me a call or e-mail me and I will be happy to share my thoughts, insights and ideas with you.

Charging Customers Merchant Fees

2010-07-12T15:32:00.000-07:00

This past weekend I was in a small town in Alberta, enjoying the gorgeous mountain scenery, nice weather and great little independant shops. Most of the time I really enjoy these stores because they are smaller, a bit less busy and quite friendly. However, it's these smaller stores that I always get very irked when it comes time to purchase something. Why? Because when I go to use my debit card some of these stores charge me 20 cents or more to use it.

Now, I understand the reason behind this, I'm not insensitive to the reason it is charged. Somewhere along the line the merchant is being charged by their provider that amount for each debit transaction. In a store with lower ticket transactions, such as $2 and $3 I can see that (even though I don't like it), but I can understand. Afterall, 20 cents on a $2 transaction is 10% which affects the bottom line no doubt.

But how about my $50 transaction? That 20 cents represents .004% of the transaction. Hardly fair and it leaves a very bad impression on me, the customer. This store went even further as to have an independant cash machine on hand that charged $1.50 to withdraw cash!

But in today's age of internet banking and my iPhone, this is what I did. I put the $50 on my Visa card because I refused to pay this 20 cents (on principal). In essence because I felt the merchant was making me pay for his cost of doing business in the form of a fee, if his Visa rate was 3% that transaction cost him $1.50. It cost me nothing because with my banking app on my iPhone I simply paid it online on the spot and didn't have to pay any fees.

I've noticed that there are some pubs and restaurants that don't take debit but have a cash machine on property that charges sometimes $4 to withdraw cash, and that's on top of the $1.50 the bank charges you! These businesses, in order to save on debit transaction fees and making it inconvenient for the customer are driving them towards using their credit cards, thus costing the business in the long run.

Have you come accross this practice anywhere? Do you think this is fair? Please let me know your thoughts on this, and if you're a business doing this, please enlighten me or change my thinking.

Do You Know What They Are Saying?

2010-07-07T11:30:00.000-07:00

Have you ever wondered what customers are saying about your business? Most owners think they know, but I promise you, most have no idea. Why? That is because they don’t look or listen. Most owners I’ve met are truly afraid of social media, but it’s more a fear of the unknown, which is a completely normal reaction. So, I wanted to put a challenge out to everyone on this no matter what your business is, and I’d like you to share your results with me. By doing this experiment, I’m hoping that you’ll see what is happening outside your doors without having to start a Facebook Fan Page, Twitter account or join Foursquare.

This is an exercise that any business can do and it won’t take you long at all. I also promise you that the results you’ll see will give you pause and will force you to think about your business. When you Google your businesses name, how deep into the search do you go? Are you just making sure your business name is listed at the top? Go deeper into Google and find out where your business name or product name(s) are popping up. Try the same with your own name. More importantly, what is being said about your business on Yelp? or Foursquare? or Facebook? How about the many other popular sites? Or sites you had no idea existed? What are they saying? If you found some conversations or comments that’s great, because if there’s nothing that means that no one is talking about you which is worse! That’s part one of the challenge.

For the second part of the challenge I want you to try and participate in the conversations. Is there a negative review or comment? Try answering that person directly through e-mail (don’t do it publically). If you resolved their complaint will they change their opinion? Are people asking questions about your business? Try answering them and helping them out. Are there any conversations going on around a topic or issue your business is trying to solve? Try participating in that conversation.
The point of this exercise is to show you that even if you aren’t part of the social media shift that is taking place, other people are and you don’t want to run the risk of alienating those customers or potential new ones. Join the conversation that you may not even know is happening. And if you can’t find it, ask yourself why and if there is anything you can do to start one!
Over the next couple of months, try devoting one hour per week to this exercise and see what the results are. Also, I’d love to hear your opinion on this and if you do try it, what your results were!

Try Starting With These:

Google

Youtube
Twitter
Yelp
Urban Spoon (Restaurants)
Facebook
Foursquare
Review Center

New Technology Trends For Restaurants

2010-06-25T08:08:00.000-07:00

The restaurant industry is facing new challenges with technology and how to rapidly change and adapt to take advantage of new trends, such as social media, mobile technology and the web.

The following video (first four minutes) is a brief interview with Jeff Riley, CEO of Dinerware regarding what they see as the upcoming technology trend challenges facing the industry and what they are doing in order to meet these challenges.

If you'd like some more information about Dinerware in Canada, check it out at my company website Factor One.

If you're a restaurant owner, please share what you feel is the most pressing trend for your business and how are you leveraging your current technology to meet your customers needs.
Do you feel that you are prepared to handle these challenges?

Foursquare Marketing

2010-06-23T14:21:00.001-07:00

I found this article online the other day. The example here is restaurant oriented, but the same prinicpals apply to retail. Nothing is stopping anyone from doing this right now except you and your imagination.

Check out the article.

The Power of 1-Click

2010-06-23T07:54:00.000-07:00

When you think about e-commerce and online ordering, without a doubt there are two kings that rule this world. Amazon and Apple. How big? In 2009 Amazon's net sales increased 28% to 24.51 billion dollars. For 2010 they're averaging about 65 million hits per month. iTunes statistics are just as amazing. In February of this year, Apple sold it's 10 billionth song. On January 5th, it had it's 3 billionth app downloaded. In 2009, iTunes generated just over 1.8 billion dollars in revenue.

One of the reasons for the success of these two sites is how easy it is for a customer to buy their products. If you have an account at Amazon, it is literally as easy to buy as 1-Click, talk about your impulse buy! In fact, Amazon has a patent on the term 1-Click and licenses that patent to Apple.

I can attest through my own experience how powerful that is. When I find a book I want to read on Amazon and I decide I want to buy it, I click on the "1-Click" icon and it literally downloads it to my Kindle. On my iPhone, I can hear a song on the radio and use and app to find out what that song is and simply click buy and it downloads it from iTunes instantly onto my phone.

My question to you as a retailer, is to look at how easy it is for your customers to buy your product, whether it's in the store or on-line? How many times have you walked out of a store because the line up was to long? How many times have you aborted a purchase online because of how many steps you have to take to complete the purchase?

If you want an example of how frustrating an online buying experience can be, try ordering a flight on Westjet and pay for your flight with a credit card. Not only do I have to put in my information, I have to then get my card "verified" by another credit card service that requires another password. Through my various bookings on Westjet it quite often makes me jump through this hoop even though I've saved my info. I have also booked on Air Canada when they've had the same seat price just because I didn't want to go through this hassle.

How important is this from an e-commerce standpoint? According to a recent Goldman Sachs report e-retail will grow at 5 times the rate of traditional retail. Online sales are currently $134.9 billion but are expected to grow to $624 billion by 2020. Where is your company positioned to capture a piece of this money?

Please let me know which sites you enjoy buying from and which ones you don't. I'd like to hear your opinions.