The Future of Retail is Here: Shoppers with money.

Wednesday, October 6th, 2010

A couple of unrelated articles in today’s WSJournal today indicate to me how retailers are sharpening, necessarily, their focus on who really are the good customers. The one size fits all where every mall in every city looks like every other mall in every other city is rapidly falling out of fashion. Local is a movement. Local means knowing who comes into the store or, if Amazon, has its way, who visits on-line. The accelerator for this movement is the distribution of discretionary income or the nearly unimaginable debt load across the aspiring classes, meaning those pinned in the middle aspiring for the upper end. This article in the Journal describes the financial plight of this middle class.

1. Middle Class Spending In this category spending is down 3.5{915b2618a7c304f461205894c34b2284541042d3c677679407e2f30838792dcd} from 2008 and 3.1{915b2618a7c304f461205894c34b2284541042d3c677679407e2f30838792dcd} from 2007. The associated drop is the largest since such began to be collected in 1984.

2. Amazon Several dozen retailers agreed to support ShopRunner, an on-line collective, in order to compete for the “highest spending on-line customers.”

Throughout this year in a wide range of customer discussions, all are concerned about retention. In the case of retailers, the target is the high value customer as the near term economic outlook offers little hope that many in the middle will rise to the high end (call this ‘organic growth).

shop runner

Step one is to reliably identify who is the high value customer and how to effectively communicate with that customer (call this ‘retention). It’s more than up-sell or sentiment analysis. How performance and accuracy improvements in large scale analytics can help to uncover this critical segment within each customer set would be a compelling lead-in for vendors of related data analytics technologies.

You be the babe: who needs a spokes-model for shopping satisfaction

Monday, October 26th, 2009

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when you can be your own. This 22 October 2009 article in the New York Times, section E1, by Ruth La Ferla, describes how many shoppers get their kicks in virtual worlds in much the same way as they do in the genuine shopping mall. I recall last year being advised by an exec of a major television shopping network that 30+{915b2618a7c304f461205894c34b2284541042d3c677679407e2f30838792dcd} of packages that they shipped were never opened by the buyer, mainly because the buying experience is one of association with the hostess on the show, i.e. buy this and be like me or be my friend, more than a genuine need/want for the item.

I think that improvements in overall virtual world experience due to faster update rates and improved user-interfaces will dimish dramatically the need or want to go to the mall to buy something to feel special. I suppose that the mall serves the purpose of bringing us together, but who truly values that experience?! I am not looking forward to virtual exercise or pixel-offspring and feel that shopping in Second Life, for example, and being the handsome hunk or more likely, the fashionista, will be a lot healthier and less expensive than relying on a celebrity spokes-person flogging some product that they don’t use themselves. In short, who will need them to trick us; we’ll shape our own shopping fantasies, thank you.

Complete article at: http://www.nytimes.com/2009/10/22/fashion/22Avatar.html