Well this is the 2015 store and the largest in the Group, their ‘Coles response’, their ‘Costco response’ and the general footprint moving forward, Phew, that’s quite a bit to live up to!

So did it? Not in my opinion or that of another three long-term experienced industry executives.

Sure it was BIG, sure it was neat and tidy and well stocked for opening day. But where were the new initiatives, where was the theatre, where was the step change that pushes Woolworths past Coles? A nice store but the changes were certainly not evident to us.

Fresh was good but not great, and at least Woolworths know how to cross merchandise using barrels and baskets. The layout is crisp and clean, but does it have  a market place feel to it – no.

Sure it is a bigger store but with more facings of a larger store range fixes the “what do I do with the added space” question.

My Kitchen (thanks for the idea Bernie) was good but hardly “new”.

One chilled case for seafood looked undercooked, especially when:

• There is no specialist seafood retailer in the entire complex apart from Costco
• Coles do it way better

Chilled/ Dairy adjacent to Fresh is not new, but sliding doors for Butter and Margarine? Then leaving Frozens all by itself at the end of the store looked incongruous.

Health and Beauty had the same purple treatment and included the shop-within- a-shop concept readily seen in many (and not just Woolworths) stores including Big W and Target.

There are larger pack sizes available with due deference to the Costso competition, but for all intensive purposes it was  a regular Woolworths revisited.

Visiting Woolworths Eastgardens one week later, which is a recent refurbishment, the theatre of the Sushi  Shop and the Berry Farm was missing , and the Seafood offer at Eastgardens was better merchandised and more interactive than the 2015 offer at Majura Park – a couple of good examples of what is sorely needed to drive the point of difference between them and Costco and Coles.

Keeping in mind it was opening day, but it appeared to be a soft opening possibly due to the rest of the centre not being completely ready. But photocopied tickets advertising their new Fresh Guarantee would not have been tolerated under previous regimes.

Nor would Dick Smith being closed (again on opening day) at 5.30pm, no doubt because that was the time on the trading hours ticket at the front entrance. There was a day…..

In both cases you get what you accept and in the latter case, maybe Elvis has already left the building!

By comparison, we were there around 6pm on opening evening, the competing Costco was trading hard with most registers open and a good flow of trolleys in the store. Woolies had idle cashiers – and one thing missing – Shoppers with big trolleys willing to part with their hard-earned cash!

Apparently the weekend trade was much better, with a very high basket size driving a good sales result. The impact and draw has been more local rather than across Canberra which is alos interesting, as Majura Park is seen as a real destination site.

We’ll see how it’s trading after a month or two and things have settled down to a steady rhythm.

Meanwhile, for a change of pace, I revisited La Mana last week whilst in Melbourne after a disappointing visit mid last year.

How things have changed, what a great offer and a dynamic place to shop. The Fresh was sensational with fabulous displays, tastings, recipe suggestions, creative menus, different ranges and stock….and the size of the baskets!

Do yourself a favour and visit the next time you are down there, it out-trades the Coles opposite in the carpark, and you can see why. Try to leave without being sorely tempted to buy something!

During a recent trip to New York I visited the Whole Foods store on Union Square (on advice of a local who said it was a “must see”). In a busy city filled with young professionals this Whole Foods store definitely hits the mark offering an extensive range of meal solutions, with a focus throughout the store on health and wellbeing, service and the environment.

This store is set over 3 levels. The top floor is a dining room, ground floor (street level) is filled with convenience offers while the basement level houses traditional grocery categories.

The selection of ready made and self serve food is seriously impressive with the majority of the ground floor dedicated to meal solutions which include ready-to-eat fruit salads, sandwiches, wraps, a self serve soup bar, make your own salad bar, a wide selection of prepared hot dishes offering everything from noodles to curries and roasts.

While not cheap, these food offers represent good value for SINK/DINK households who would find it more expensive to purchase all of the ingredients required to make these meals at home. They are also extremely convenient to pick up to eat on the go or take home for an easy dinner…not to mention the fact you could easily eat something different every day for a year with the huge selection on offer.

The basement houses a full range of grocery categories with everything from traditional centre store categories to a wide selection of fresh fruit, cheese, meat and seafood. The focus is on better-for-you offers with a 10% discount on offer for members of the Whole Foods Wellness Club. Even the health and beauty aisle has a health food feel about it with the focus on ‘Whole Body’.

The entire store has a delicatessen or market ambience that engages the shopper and encouraging them to try new things and discover new foods. There are expert staff and sampling areas located throughout the store adding to the experience.

The registers, all 35 of them, are located on the ground floor and allow shoppers to get out of the store quickly, further emphasising the focus this retailer has placed on convenience in an effort to satisfy its shoppers.

Oh, and for those of you wondering how you get a full trolley from the basement to the registers on the ground floor, they’ve thought of that too. There is a purpose-built trolley escalator that transports your trolley up to the ground floor as you ride the regular escalator beside your groceries.

Coles and Woolworths may be slowly embracing the idea of ready-made meals and convenience based offers but they have a long way to go before they are even close to the same league as Whole Foods.

Going down to the Melbourne Food and Wine Festival in Mid-March, I had a chance to come face to face with Melbourne’s food trucks. What started as 1 or 2 mini-kitchens in a truck driving around the Northern Suburbs of Melbourne (c’mon south of the river Councils!) has now turned into something quite remarkable. At last count there were 10 different trucks including: Beatbox Kitchen, Cornutopia, Taco Truck, Gumbo Kitchen, Dhaba, Grub Food Van, Le Sausage, Massive Weiners and Grill’d Airstream.

Fortunately for me, the Melbourne Food and Wine Festival managed to organise Food-Trucks-Unite. On the day I went, the Taco Truck, Dhaba and the Beatbox Kitchen all converged in the same place on the Northbank for an afternoon of food tasting.

While the Curry Truck and Beatbox Kitchen looked inviting, there was only one place I was interested in – the taco truck. Unfortunately, so was everyone else! Luckily I just beat the rush because by 3pm they had sold out of fish tacos, by 4pm there was no chicken and by 4:30pm they had sold out of absolutely everything.

So what is it that makes these so attractive, is it the new format? Is it just a fad? Well not in my opinion. There are a number of reasons that the Taco truck has every reason to succeed. The food is fresh, it’s made right in front of you and the lemon and limes are right in front of you. It feels reasonably healthy, well, better than our other take away friends anyway. It feels authentic – fish tacos, chipotle mayo, Tapatio salsa all on the menu. It’s simple, there are 5 things you can order and that’s it. You can customise your heat for those of you that like your habanero sauce. And yes there is something intangibly cool about being able to park on the side of the road and serve food.

Oh and they are also fully integrated with social media, if you want to know where they are at during the week get onto Facebook or twitter. You can even try www.wherethetruck.at, which looks like it is trying to assemble them under one roof.

Now to find that Gumbo Kitchen…

Previous articles we’ve written have discussed convenience channel segmentation, role and trip types. Here we’re going to look at some of the trends in shopper behaviour driving, or arising from, some of the newer technologies and some ideas for leveraging them in the convenience channel.

Let’s start with some macro themes are amalgamated from a number of conferences we’ve attended over the past 12 months in Australia, in Asia and the USA as well as numerous trade publications and articles.

Table 1 summarises some of the major shopping and retailing shifts.

Table 1: Major shopper behaviour trends and preferences, 2012 © ShopAbility 2012

CUSTOMISATION

The abundance of choice means shoppers are looking for ‘curated’ collections by experts that will make their choice both easy and special. This isn’t purely about range rationalization, it’s about tailoring to various needs. Boots for women with larger calves. Gluten free meal components. Accessories to match specific outfits. If you’ve collected data on your customers via loyalty programs and your POS system you’ll be able to figure out what they buy with what and what the curated collection opportunities might be. Using your customer data, customization is also about tailoring offers to certain segments of the market rather than trying to be all things to all people with every promotion. Customisation provides a means for you to differentiate yourself from competitors so that everyone is not flogging exactly the same stuff.  In convenience if you have customer loyalty data you can analyse it to see what they’re buying and offer specific bundles, and it may not just be on snacks and drinks. It might be on services, auto etc.

EMPOWERED SHOPPERS

There’s a lot happening here. Consumers and shoppers are voicing their opinions on products and companies (customer service, corporate citizenship and behaviour etc) via social media like Facebook, Twitter, blogs and forums. Corporations are no longer in control, the game has become about responding quickly to and leveraging social media for advocacy. Monetizing social media remains a challenge for many (Facebook ecommerce pages are yet to set the world on fire), but some enterprising manufacturers and retailers are running social media exclusive promotions, using social media for new product research ideas, and distribution gaps.

Social media is formalizing traditional word of mouth and this means that it is becoming part of the path to purchase – both prestore (Zero Moment of Truth – active search) and post purchase (Second Moment of Truth – expressing your opinion of the product once you’ve purchased and consumed it).

Shoppers are also empowered by technologies like self scanning and mobile price comparison tools such as GetPrice, which are impacting their channel and retailer choice.

SHOP ANY TIME, ANYWHERE

We mentioned this in our previous article about virtual shopping walls. The game has changed from fixed time and place (bricks and mortar) shopping to shopping from my mobile wherever I am (including sitting on the couch watching TV – 60% of consumers now multitask eg use their mobiles or tablets whilst doing something else). It’s not just about PC-based ‘online’ shopping, the rate of shoppers shopping from their mobile devices is increasing exponentially.

Multichannel is becoming a shopper expectation. They want a choice of research in store, buy online (this is called ‘showrooming’), research online buy/collect instore (Coles Click & Collect is an example), research online and deliver to my door (eg Amazon, Light N Easy et al), research instore and deliver to my door (eg consumer electronics, furniture), research o

So even if your physical store is closed, you need a mechanism for having customer conversations and converting sales outside of your bricks and mortar trading hours.

GLOBAL SEARCH IN THE GLOBAL VILLAGE

Many retailers are now not just competing with the retailer down the street who may have item X cheaper than them. They are now competing globally. More than 10% of Australian shoppers’ retail sales went to overseas online retailers in 2011.(And that doesn’t take into account travellers physically shopping overseas in places like the USA whilst the Aussie dollar is strong).

Shop anytime, wherever you are translates into ‘from wherever I can get the product’. And it’s not just about the cheapest price (which is becoming a given, see below). It’s tied into Customisation … something that’s not available to me in Australia, something that is special because it came from somewhere else (there are some bragging rights attached to this … a pair of boots from Turkey are somehow more exotic and special than a pair purchased in a mall here).

This means you need to consider your range and how it can be globalized … not just parallel importing, but rather what will make your range more global, more exotic, more interesting, more special. Not just ‘snacks and drinks in the sin channel’. And it has impacts on your opening hours as well. Do you have an opportunity to adjust your hours to be open earlier/later as a point of difference?

AUTHENTICITY

This is another big one, encompassing a number of things. Concepts like slow food. Food miles. Provenance. Sustainability. Real food (natural, not processed).

This ties into the curating thing. What’s the retail translation of ‘Cootamundra Lamb’, ‘Marlborough Sauvignon Blanc’? Can you communicate that the milk you range comes from Farmer Brown’s cows in paddock X in Smithville?  Should you add more ‘authentic’ products to your range? (Again, mitigating the ‘convenience as sin channel’ perception).

DISCOUNT FATIGUE

Low price is becoming a given, and it’s deflated the value of categories and stripped profit margins out of businesses. But we are where we are. You need to figure out what ‘value’ actually means for your various shoppers, and communicate that. As Jon Bird from Ideaworks says, 70%off is the new 50%off, and where do you go from there? EDLP, or forms of it, are becoming the cost of entry or cost to play, rather than a differentiator.

The definition of insanity is throwing more money at discounts, trying to trade your way out of a hole via lower prices, when price is just one of a number of shifts in shopper behaviour.

WHAT ARE DIGITAL, MOBILE AND SOCIAL MEDIA MARKETING, AND WHY IS IT IMPORTANT?

What does this have to do with me? you ask. Here are a few statistics for context:

• Australia is second only to Singapore in leading global smartphone penetration. According to DigitalMarketingLab, Australian smartphone penetration is currently above 50%, it will be 60% by end of 2012 and 90% by 2015. So it’s not just teens using smartphones, it’s actually more likely currently to be professionals and mums, who are heavy users to stay connected
• Tablet (Ipad etc) penetration in Australia is above 15% and expected to reach 25% (or 1 in 4 Australians) over the next 2 years
• Within the next 12 months, more Google searches will be done using mobile devices than desktop PCs
• According to Yahoo/Nielsen, 86% of web users now use a mobile device while watching TV
• Australia is the global leader in per capita Facebook subscribers and time spent per week
• An average 3-6 digital touchpoints per week are influencing shopping decisions
• ‘Showrooming’ is on the rise (off a small base), where shoppers research a product instore and then go home and buy it online.

So there is a shift from desktop PC-based web usage and surfing to mobile.

So bricks and mortar retailers are competing not just with other physical retailers or with ‘online’, they are now competing for mcommerce – shop anytime anywhere.

Social media (things like Facebook and Twitter) are increasingly being used by consumers for reviews, opinions, recommendations and content. Social media provides options for smart marketers for social media specific/exclusive deals and coupons/codes.  Ben Grill of NewsLife media lists 8 social media platforms impacting the shopper path to purchase: Facebook, Twitter, YouTube, 4Square, Group deal sites such as Groupon, Yelp and other review sites, Communities and forums, and blogs. This means shoppers are also now more likely to be influenced by what friends (and strangers) say about something than what retailers and manufacturers say.

The macro shift is from traditional command-and-control retailer and manufacturer based marketing to consumer-empowered marketing where the consumers are creating their own conversations.

HOW IS IT IMPACTING SHOPPING BEHAVIOUR AND THE PATH TO PURCHASE?

So shoppers can now buy instore (fixed hours), online (at home, any time), or mobile (on the go, any time).

For many types of retailers this means just being the closest or most local – and relying on your location for store traffic – isn’t good enough anymore, as shoppers are on the move and can shop from anywhere.

Conversely, they are becoming more planned in their shopping behaviours.

As fuel prices increase and shoppers’ discretionary spend on traditional ‘impulse lines’ in convenience reduces, fuel sites’ ‘front of store’ category sales will be challenged. The question is how to maintain the role of impulse categories, or at least to mitigate reduced sales in these by increasing the profile of ‘distress’ categories or to be known for something specific (ie auto). This will depend on your site type ie promoting breakfast if you’re an inbound arterial site, quick meals if you’re outbound arterial, or drive traffic via services and/or promoting extended opening hours for distress purchases if you’re a local/neighbourhood site. Using various mobile offers for front-of-store categories, coupled with instore complementary selling skills, theoretically would mean an additional sale once the shopper is in your store.

LEVERAGING THE NEW BEHAVIOURS

There are lots of different models for the path to purchase. Forrester Research, who run a lot of studies into online behaviours and shopping, describe the stages as discover, search, purchase, networking, and advocacy.

Loosely you can divide these into prestore (advertising and marketing stimulus, ‘zero moment of truth’  shopper-driven active search); instore (purchase, ‘first moment of truth’), and post store (‘second moment of truth’  – product usage, networking/socialisation, advocacy).

The good news about the path to purchase is that mobile and social media give you opportunities to market to your shoppers along each of the stages of the path to purchase.

Mobile marketing, such as text and email offers and mobile website exclusive offers, can not only be used prestore to drive traffic, they can be used as retention and loyalty tool.

Best Buy, an American equivalent of JBHiFi, has established a Twelpforce (play on Yelp), an online and mobile specialist customer service team which provides instant after-service updates for its computers and other equipment.   Or you may have received SMS texts from your car service provider post-service asking to rate their service. This is a form of post-purchase mobile marketing (or at least, customer service based) … their next step would be to provide an offer, or prompt the next car service.

So mobile can be used as a retention and loyalty tool as well and therefore as a repeat traffic driver. This has applications for convenience stores that have an auto offer … database marketing for post car registration check services for instance.  This assumes you have developed a customer database and have their details already, which you can achieve a number of ways … collecting details when they bring their car in for a check, or by running a promotion where they have to provide their details to enter the draw.

Social media can be used to provide ideas, content, and offers … it’s not just about being ‘liked’ on Facebook. The trick is to monetize it and create conversions in a way that is non-exploitative. You can use social media prestore, instore eg for social sign on and ‘check in’ and obviously post-purchase for testimonials and recommendations.

Some shoppers will Tweet/Facebook or word of mouth your store/their shopping experience … the majority of the time this is positive, it’s not just haters venting (and negative posts are an opportunity for you to turn the disgruntled shopper around and into an advocate).  Ask for a testimonial.

One person’s recommendation (second moment of truth) becomes the next person’s active search result (zero moment of truth).

APPLICATIONS, EXAMPLES AND OPPORTUNITIES

Who’s doing stuff in this space? Some examples:

• Mobile only offers with the redemption code in the email/text you send (so you don’t have to print or mail physical vouchers). Queenspark apparel here do this well
• Mobile phone app enabled rewards (loyalty program based) – Macys and ShopKick (similar to GetPrice here) run joint promotions for points for mobile only
• In pharmacy, script renewal services with mobile prompts  – Boots (UK), Superdrug (UK), CVS (US) and RiteAid (US) all do this as a matter of course
• Boots and CVS pharmacy chains offer mobile order placement with collection instore or home delivery
• Day-of-week specific promotions run by a large Indian department store chain called Shoppers Stop. They promote their Thursday ‘master classes’ via Facebook and Twitter

Some other ideas:

• Use your website and mobile for relevant category content (auto for fuel based sites for instance, particularly those with a mechanic offer for rego checks etc)
• QR code/app-based loyalty card (no need for physical loyalty card) … I’ve seen independent coffee shops in Melbourne do this and in 4 months have transitioned most of their buy 9-get the 10^th free- coffee drinkers to mobile redemption … saves them the costs of printing coffee cards. Could you do an app based loyalty card buy 9 get 10^th free for your destination categories, such as beverages?
• SMS vouchers for instore traffic/acquisition … that they can forward to a friend (or neighbor, in the case of local/neighbourhood store types)
• Online mini-catalogues set up for mobile – ‘what’s new’ or ‘what’s seasonal’ … could be menu based, summer bbq bundles etc
• Develop applications, where relevant (ie automated script renewal and prompt)
• Use mobile content to promote services – trailer hire, gas refills, Moneygram etc.

And the beauty of all of it is that it’s relatively cheap to do, it’s as applicable for a single store enterprise as for a chain, and you build relationship with your shoppers in the process.

It’s about changing your thinking from having to be cheapest or shouting loudest to one of one-on-one connection with your shoppers … wherever they are.

Taken together, you can see that the new retail game is about leveraging digital, mobile and social technologies for a more one-on-one relationship with your shoppers based on a solid reason for being, rather than leaving traffic to chance.

Previous articles we’ve written have come from the viewpoint that pharmacy is a retail channel, a form of health and wellbeing retailer. So here I’m going to discuss how digital, mobile and social media technology advances are impacting on retail generally, and how broad retail and shopping trends can be tapped into by pharmacies.

The advent of digital, mobile and social shopping doesn’t mean losing pharmacy’s traditionally strong personalized service, or that it becomes less important. Rather the opposite, in an environment where customization, tailoring and individual experiences are becoming king. Digital/mobile/social just provides you with more ways to market your business and get shoppers to your store.

WHAT ARE DIGITAL, MOBILE AND SOCIAL MEDIA MARKETING, AND WHY IS IT IMPORTANT?

What does this have to do with me? you ask, since 90% of (grocery retail) in Australia is still transacted in bricks and mortar stores?

Here are a few statistics for context:

• Australia is second only to Singapore in leading global smartphone penetration. According to DigitalMarketingLab, Australian smartphone penetration is currently above 50%, it will be 60% by end of 2012 and 90% by 2015. So it’s not just teens using smartphones, it’s actually more likely currently to be professionals and mums, who are heavy users to stay connected
• Tablet (Ipad etc) penetration in Australia is above 15% and expected to reach 25% (or 1 in 4 Australians) over the next 2 years
• Within the next 12 months, more Google searches will be done using mobile devices than desktop PCs
• According to Yahoo/Nielsen, 86% of web users now use a mobile device while watching TV
• Australia is the global leader in per capita Facebook subscribers and time spent per week
• An average 3-6 digital touchpoints per week are influencing shopping decisions
• ‘Showrooming’ is on the rise (off a small base), where shoppers research a product instore and then go home and buy it online.

So there is a shift from desktop PC-based web usage and surfing to mobile.

So bricks and mortar retailers are competing not just with other physical retailers or with ‘online’, they are now competing for mcommerce – shop anytime anywhere.

Australian retailers have been slow to embrace ecommerce and now mcommerce (mobile commerce) opportunities, which means they’ve lost sales to overseas retailers, particularly for categories like apparel and consumer electronics.

However the consumer behaviour is changing (more on that it a minute) and retailers need to catch up or be left behind.  Woolworths appears to have got the message, now trialling virtual shopping walls (use your mobile phone to scan codes on ‘walls’ of products in train stations), albeit more than 12 months after Tesco first experimented with this in Korea.  The major grocery retailers have smartphone apps to make shopping their stores easier and in theory drive loyalty (more about this shortly also).

So the emerging technologies mean that mobile is now a separate channel to PC-based online (where in addition to your website – and you need to have one – you have been utilizing electronic direct mail, eg email based offers to your database).

This means that at a minimum you should be formatting your website for mobile, and starting to investigate mobile based offers (text, email) to your existing database.

Social media (things like Facebook and Twitter) are increasingly being used by consumers for reviews, opinions, recommendations and content. Social media provides options for smart marketers for social media specific/exclusive deals and coupons/codes.  Ben Grill of NewsLife media lists 8 social media platforms impacting the shopper path to purchase: Facebook, Twitter, YouTube, 4Square, Group deal sites such as Groupon, Yelp and other review sites, Communities and forums, and blogs.

The macro shift is from traditional command-and-control retailer and manufacturer based marketing to consumer-empowered marketing where the consumers are creating their own conversations.

HOW IS IT IMPACTING SHOPPING BEHAVIOUR AND THE PATH TO PURCHASE?

So shoppers can now buy instore (fixed hours), online (at home, any time), or mobile (on the go, any time).

Shoppers are also now more likely to be influenced by what friends (and strangers) say about something than what retailers and manufacturers say.

This means just being the closest or most local – and relying on your location for store traffic – isn’t good enough anymore, as shoppers are on the move and can shop from anywhere.  This is a challenge for your front of store categories, so one answer is to drive traffic via prescription refill services and then various mobile offers for front-of-store categories, coupled with instore complementary selling skills, theoretically would mean an additional sale once the shopper is in your store.

There are lots of different models for the path to purchase. Forrester Research, who run a lot of studies into online behaviours and shopping, describe the stages as discover, search, purchase, networking, and advocacy.

Loosely you can divide these into prestore (advertising and marketing stimulus, ‘zero moment of truth’  shopper-driven active search); instore (purchase, ‘first moment of truth’), and post store (‘second moment of truth’  – product usage, networking/socialisation, advocacy).

The good news about the path to purchase is that mobile and social media give you opportunities to market to your shoppers along each of the stages of the path to purchase.

Mobile marketing, such as text and email offers and mobile website exclusive offers, can not only be used prestore to drive traffic, they can be used as retention and loyalty tool. An example is automated script renewal  – reminding your shopper that their next script is ready and waiting for them to collect. (This assumes you have developed a customer database and have their details already for script).

Best Buy, an American equivalent of JBHiFi, has established a Twelpforce (play on Yelp), an online and mobile specialist customer service team which provides instant after-service updates for its computers and other equipment.

You may have received SMS texts from your car service provider post-service asking to rate their service. This is a form of post-purchase mobile marketing (or at least, customer service based) … their next step would be to provide an offer, or prompt the next car service.

So mobile can be used as a retention and loyalty tool as well as a traffic driver.

Social media can be used to provide ideas, content, and offers … it’s not just about being ‘liked’ on Facebook. The trick is to monetize it and create conversions in a way that is non-exploitative. You can use social media prestore, instore eg for social sign on and ‘check in’ and obviously post-purchase for testimonials and recommendations.

Some shoppers will Tweet/Facebook or word of mouth your store/their shopping experience … the majority of the time this is positive, it’s not just haters venting (and negative posts are an opportunity for you to turn the disgruntled shopper around and into an advocate).  Ask for a testimonial.

One person’s recommendation (second moment of truth) becomes the next person’s active search result (zero moment of truth).

WHO USES IT? THE ROLE OF MUMS IN PHARMACY

Around half of pharmacy shoppers visit a pharmacy once every 3-4 weeks. This is similar for most lifestages (except the elderly, who are more frequent).

Community and local pharmacies are more likely to be frequented by young families and the elderly. Shopping centre pharmacies and franchise/chain pharmacies will see relatively more singles/couples without kids than other pharmacy types.

Young families also have a slightly larger range of pharmacies they visit (due to kids’ emergencies).

Why am I banging on about the family lifestage?

Because women 35-54 are the most active in mobile socialization, according to Gwen Morrison of The Store. Mothers of young kids historically have very strong networking groups and word-of-mouth recommendations, and this is now playing out in social media.

Mums of older and young families are the most likely to browse rest of store/front of store whilst waiting for script fill … so drive traffic of mums for script renewal and you’re more likely to get an additional front of store sale from them.

Mums of young families are information hungry with very strong networks and heavy users of

mums forums online such as Mia Freedman’s MamaMia.  Opportunities for pharmacists here include repost/retweeting content from the site, ranging and promoting products reviewed positively on the site, promote products ‘as recommended by MamaMia users’ for products listed on your own website and instore etc.

APPLICATIONS, EXAMPLES AND OPPORTUNITIES

Who’s doing stuff in this space? Some examples:

• Mobile only offers with the redemption code in the email/text you send (so you don’t have to print or mail physical vouchers). Queenspark apparel here do this well
• Mobile phone app enabled rewards (loyalty program based) – Macys and ShopKick (similar to GetPrice here) run joint promotions for points for mobile only
• Script renewal services with mobile prompts  – Boots (UK), Superdrug (UK), CVS (US) and RiteAid (US) all do this as a matter of course
• Boots and CVS offer mobile order placement with collection instore or home delivery
• Superdrug and Walgreens offer a substantial list of health services (ranging from allergy to blood pressure to sexual health and food intolerance) which they promote to specific customers via mobile and email based on their customers’ lifestage profiles and prior purchase history.

Some other ideas:

• Use your website and mobile for relevant category content (baby etc … back to young mums) not just offers. In this way you’re providing reasons to browse
• QR code/app-based loyalty card (no need for physical loyalty card) … I’ve seen independent coffee shops in Melbourne do this and in 4 months have transitioned most of their buy 9-get the 10^th free- coffee drinkers to mobile redemption … saves them the costs of printing coffee cards
• SMS vouchers for instore traffic/acquisition … that they can forward to a friend also
• Online mini-catalogues set up for mobile – ‘what’s new’ or ‘what’s seasonal’ (hayfever season etc)
• Ask your Young Mums what social and mobile media they use and what content is important to them
• Do a mobile version of your website
• Develop applications, where relevant (ie automated script renewal and prompt)
• Use mobile content to promote services, baby related health checks etc.

And the beauty of all of it is that it’s relatively cheap to do, it’s as applicable for a single store enterprise as for a chain, and you build relationship with your shoppers in the process.

It’s about changing your thinking from having to be cheapest or shouting loudest to one of one-on-one connection with your shoppers … wherever they are.

Back in September last year we discussed here in Retail World the new path to purchase and the role of prestore stimulus vs active online/mobile search (the Zero Moment of Truth), its impacts on instore behaviour (traditionally the First Moment of Truth), and how conversion can now be happening prestore.

The need to explore the impacts and opportunities of this was confirmed with last night’s news story on the Woolworths virtual shopping wall at Sydney’s Town Hall station. This was preceded the day before by a front page story in the Sydney Morning Herald (18 Feb) on Sportsgirl’s use of QR codes in virtual shopping wall ‘billboards’.

Virtual shopping walls really started with Tesco’s Homeplus subway-located virtual shopping wall in Korea in December 2010 , where shoppers standing in the subway station could scan products on the virtual shelf and the products were delivered to them by the time they got home.  The technology is a simple QR code, a scanner for which is downloadable as an IPhone app.

During 2011 a number of companies have started to explore virtual shopping walls, with US-based department store Sears focussing on toys for Christmas via virtual shopping walls in airports, cinemas and bus shelters ,  and in September 2011 Procter & Gamble commenced activating a P&G brands-only set of virtual shopping walls in the Czech Republic with fulfillment provided by the Czech Republic’s largest online retailer, thereby bypassing that country’s traditional bricks and mortar retailers.

Virtual shopping walls will by their nature likely be temporary executions, a form of pop-up retail. Pop-up retail itself has been around for more than 10 years. And whilst likely to nip at the edges of top-up and dinner tonight shopping trips in grocery, the limited range provided on a virtual wall and the impulse/time bound nature of the virtual shopping location means they’re not suitable for longer stock-up shops.

So from a grocery store point of view we wouldn’t expect virtual shopping walls and pop up retail to cannibalise ‘mainstream’ sales, more to kind of nibble sales around the edges a bit. And depending whose statistic you use, online grocery shopping is still at fewer than 10% … it remains to be seen how well CatchoftheDay/Scoopon’s GroceryRun online grocery store does.

However, whilst still in their infancy, virtual shopping walls mean the advent of shopping anywhere (not just instore or online). Not only can shoppers receive and look up shopping related products and offers anywhere they are, they can order them anywhere they are. This throws up both commercial and marketing opportunities.

So the ‘where do I get it from’ options, from a shopper’s point of view, are becoming:

• Buy it in a store
• Buy it online and have it delivered to me
• Order it online and pick it up instore
• Order it instore and have it delivered to me
• Buy it from a temporary store (pop up retail, temporary)
• Buy it from somewhere that’s not a store or online (ie virtual shopping wall, temporary) and have it delivered to me.

What the advent of virtual shopping walls and pop-up retail does is to get shoppers comfortable with the notion they can shop from anywhere. Which in theory means they’re open to offers and communications anywhere. And this is where technology developments mean you have communications opportunities outside of traditional media such as television and catalogues.

PRESTORE

Anyone remember the 2002 movie Minority Report, where Tom Cruise winds up wearing a Japanese man’s eyes (long story), and as he walks around retail centres various anonymous voices address ‘Mr Yamamoto’ (or whatever his name was) with various tailored offers?

This is location based marketing, or geo targeting. We’re not doing it with eye retinas (yet), it’s happening with mobile devices where location based media deliver multimedia and content directly to the device. A number of digital and online companies in Australia have been offering these services for a year or two.

This can be used to drive traffic to your store as the field of the geo-target is not limited to within store, it can be up to 1 km or more. It’s great for local and community based stores with regular clients who go to their ‘local shops’ frequently and thus are likely to be ‘in range’ eg if a shopper is on a shopping strip or shopping centre, and your store is located on that strip/in that centre, they can receive offers from you.

Shoppers (well, people in general) are already actively, albeit unknowingly, helping you with this – telling you where they are – by ‘checking in’ where they are on Facebook, Foursquare, Yelp etc. (Feels like an opportunity for a location based media application that links the checkin sites with offers, if that hasn’t been developed already).

INSTORE

As we’ve discussed in other articles, grocery shoppers are crying out for information, education and entertainment (not just simplicity via range and space). A number of technologies and tools are available that can provide shoppers more information at shelf via their mobile device, without the need for paper-based pamphlets.

QR Codes are basically a re-routing application where the shopper scans the QR code with their smartphone and are taken to a specific website or landing page where the additional content is held. They can be used for product and process information, recipes etc. In consumer electronics for instance, the JBHiFi equivalent store in the USA, Best Buy, uses QR codes for product and technical specifications at shelf. But they can also be used to educate shoppers on health regimes, access promotions etc.

Augmented Reality is sort of the next step on from QR codes, where shoppers with smartphones and tablets scan an icon on a pack or shelf, such as Blippar, and additional ‘real-life’ content appears on their phone screen. Heinz have trialled this in the US with recipe books that ‘appear’ from their tomato sauce bottles when scanned. Augmented reality is also being used for promotions as the content is dynamic, in video format. Kit Kat Chunky have run augmented reality interactive promotions in other markets. Tablets like Ipads mean larger screen applications such as apparel where you can scan an item of clothing and it virtually ‘tries it on’ for you by placing the item over a head-to-toe image of you.

Words don’t describe it very well; you need to see it in action. Check out www.blippar.com as a starting point, or there are quite a few videos on YouTube.

With both QR Codes and Augmented Reality, as with any at-shelf promotion or information, the basic rules of communication apply. It needs to be made clear to the shopper that the additional information, via whatever technology, is available … just putting it on the pack of a specific brand may not make it visible enough. This will still require at-shelf signage to promote the information.

NOT ONLY FOR THE YOUNG

So what’s all this got to do with me, you say, because you run an IGA and the majority of your shoppers are people over 55 aside from the schoolkids who come in for drinks in the mornings and afternoons? Well, location based media is perfect for you, for a start.

Smartphones and tablets aren’t just for the young. Whilst the generational shift means that those under 25 don’t operate ‘offline’ (if you’re not digital, you don’t exist for under 25s) the penetration of smartphone users will be at 60% in Australia within 12 months (ie nearly 2/3 of all mobile phone owners will have a smartphone within 12 months) and the current penetration of tablets is around 15% (1 in 6) and rising quickly.

Many sectors are getting in on the act. A personal example was in Hobart’s MONA museum over New Year, where all exhibits have codes and you are given a smartphone with scanner on entry (a visual version of the AV ‘listening sticks’) to use to scan exhibits for artist and artwork details. My 75+ year old parents took to it like ducks to water.

The retail revolution is not just to ‘online’ retailing, it’s to mobile … anytime, anywhere. And this gives you more opportunities to communicate with your shoppers, not fewer.

With the launch of the Mix clothing range within selected Coles stores we thought it was worth visiting Coles Epping to see how they would incorporate the new category into their store layout.

The first thing you notice when entering is a lack of traditional security barriers and trolley bays clogging the front entrance. The trolley bay is neatly located outside the store and there are no obvious barriers directing traffic giving the store an open and expansive feel.

As usual you enter into the fresh food department with all of the offers you would expect to see. There is a baker onsite and the offer is extensive.  The meat, poultry and seafood offer is not as pronounced as it is in other new format stores but there is a reasonable specialty cheese selection available.

The fresh food offer is presented in the market style which both Coles and Woolworths have been rolling out across new format stores. With chalkboard style signage this section is nothing new. However, the main difference between the Coles offer and the recent Woolworths rollouts is the lighting. This store is well lit and feels much more open than the dark moody style Woolworths have been executing.

The next thing you notice in this store are the wide aisles. They give the store a feeling of space and make it very easy to shop and even browse. Multiple facings within a wide selection of categories helps shoppers navigate the shelf and find what they are looking for. There is also a store map attached to the fixture at both ends of each aisle helping shoppers find categories within the store.

The most obvious difference in this store is the Mix clothing offer which is located in the middle of the store offering predominately women’s clothing, some men’s and even some accessories. You feel like you are in a Big W store when you reach this section. The POS is even blue replicating the Big W offer. The clothes are basic as you would expect but there are people shopping the section so it is either appealing to them or they are just curious to see what is available.

There are two glaring omissions from this section. The first is children’s wear which is puzzling. I had definitely expected to find a children’s offer and would have thought it would be more popular than an adults range. The catalogue does not show any children’s wear but perhaps it is available in other stores. The second is a change room. While it is difficult to imagine someone pulling up their trolley full of groceries and heading into a change room within a supermarket to try something on it does seem strange not to have the option.

There are a number of new category executions in the store including extensive stationery, mobile phone and home entertainment offers as well as some exercise equipment not noticed previously in other stores.

The health and beauty aisle has interchangeable POS that feels like it belongs in a Priceline or Mass Merchant cosmetic section.

The freezer section at the far end of the store has signage to assist with navigation signposting the various frozen categories in shopper friendly segments (e.g. treats, entertaining and main meals).

Overall the store feels spacious with some great initiatives to help shoppers locate aisles, categories and products within the store. It is well lit and feels clean and pleasant to shop. There was however a lot of empty shelves for a Thursday morning indicating that there is either too much space allocated to some categories or poor shelf replenishment procedures in place. It’s a nice store and if you’re keen to see the Mix offer in store it is worth a visit.

It’s 6pm on a cold Canberra Monday evening, one week after Costco opened, and surprisingly the car park is relatively empty.

Plenty of people pushing trolleys within the store, but only 3 registers open, that says it all.

This format is the same as many of us have seen in Melbourne, Sydney and overseas with the normal mix of Food, General Merchandise  and outstanding stunt lines – same layout, same merchandising, same POD. You know what you expect to find in a Costco and they deliver.

The interesting element to this Canberra store is not the internal dynamics but what Costco’s arrival will cause in this conservative town of 330,000 people.

Apparently a full line Woolies, Big W and Dick Smith are all planned for an adjoining mini centre in January 2012, supposedly supporting a ‘Costco competitive’ range and pricing structure (apparently they outbid Coles for the privilege of opening there). Both of the majors have implemented competitive strategies in an attempt to counter the Costco effect (larger pack sizes, price reductions etc).

There is already a Jim Murphy liquor super store there so the expectation I would think is that the central car park will draw from a huge catchment – think Goulburn, Wagga and the coastal strip right up to Wollongong, around 200kms/ 2 hours, as well as from the existing neighbourhood and destination centres around Canberra. Costco would be looking at $75-100m pa, Woolies at least $50m and that type of turnover just does not happen. It is about changing current shopping habits away from the local retailers and drawing big country style baskets from a very wide catchment.

The quote “everything in Canberra is only 20 minutes away” certainly puts the above into perspective.

So what will be the long term impact of a combined offer such as this on the current offers servicing Canberra population and the ripple effect into the wider catchment?  Think about the WalMart effect on regional US A – possibly, but  it certainly has the potential.

Watch this space for further developments. If successful it could come to a town near you!

First impressions as you pass the multitude of signs at the front entrance challenging Woolies and Coles to their price/ value proposition was one of the vast size of the place, it’s just huge. At 9am it was a lonely shopping experience but you could imagine the hustle and bustle of the weekend traffic.

Standard layout, Meat and Fresh Produce on the left, in house bakery in the middle and Grocery and GM on the right with a Liquor barn at the far end, and we are talking a distance of over 100mtrs from start to finish which is one hell of a trip for older people or families with whinging kids. I’m now beginning to be thankful for an early morning visit.

Concrete floors, adequate lighting, quirky black and white signage and tickets make for a fairly plain shopping experience with little to no theatre, at that time of the day anyway. The store may come alive with tastings and demos in peak trading periods but outside of those times it felt pretty cold and uninviting.

The range of Grocery is OK but not wide, all of the bases are covered and you could do a shop with ease. Their price position appears to be EDLP supplementing the normal range of Weekly Specials, but no house brands or PL at all. Based on that offer alone La Mana will not be cheaper than Woolies or Coles, but Value in a Shoppers mind is delivered through more complex criteria than a one dimensional price offer.

The Fresh areas were certainly well ranged, stocked and merchandised and this is clearly the area that they see as an opportunity to differentiate. The range of cheese in particular was great. Produce was good, but it reminded you of the old WW and Coles offer on pine tables.

The coffee shop looked tempting with fresh cakes etc, and was the busiest of any of the depts., but you’d expect that at 9am.

Whilst standing just inside the checkouts and surveying this vast store, I could not help but ask “what is the key point of difference here that will make this store a destination vs others?” How will they draw from the Sunbury/ Craigieburn/ Essendon area and ask people to drive past quite a few of the majors to visit this offer, week in, week out.

No theatre a la Big Fresh, a cavernous shed, impossible to heat in winter, no huge width or depth in Grocery, not a sustainable price leadership offer that will stand up to intense scrutiny, good well signed Fresh and quality was impressive, but the complete package was nothing well out of the ordinary.

The La Mana name is an icon in Melbourne, but is this the serious threat that many of us would hope that it would be?

Be interested in your feedback.

There’s been a lot of media huff and puff lately about the growth of online shopping in Australia. But the larger revolution – albeit quieter from a media point of view – is the change in shopper behaviour before they purchase, brought about by the ability to search online for product information before they even get to a store.

This has implications for the ‘path to purchase’ and for impulse purchases. As the degree of prestore search increases, so does the degree of planning.

I thought it worthwhile having a look at this and its implications for what stores will need to do in order to retain a role broader than being a mere transaction zone. The game SHOULD be much bigger than just range and layout, which are hygiene, navigation and deselection (narrowing down) factors, they’re not strategy. Once you’ve got your range and layout right, then what are you going to do to increase your category sales in an environment where shoppers are getting harder to influence?

THE PATH TO PURCHASE IS BLURRING

Traditionally the path to purchase was thought to be prestore and instore.

Prestore was when shoppers were making lists and were the passive subjects of advertising and promotional stimulus. Prestore was about consideration.

Instore was where the shopper was influenced on which of their considered products in a category they would buy. Instore was where the conversion happened.

Now the model is blurred. We have conversion happening prestore, and consideration happening instore.

The advent of mobile search and compare is creating consideration at shelf, not just conversion. An example is a shopper standing in a shoe store looking at training shoes. The shopper can whip out their mobile phone and price compare the shoe in the store they are in versus somewhere else. And if the somewhere else is nearby they may change their store choice. You’re then relying on your store staff service and sales capabilities to keep the shopper in your store. Or they might be looking at a shoe on shelf and if a staff member isn’t available, look up the product information online using their smartphone.

This isn’t just for the ‘few’ who have smartphones, by the way. Australia has one of the highest smartphone penetrations in the world, currently nearing 40%, and set to hit 60% by the end of 2012.

THE ‘FIRST MOMENT OF TRUTH’ – JUST ONE OF A SERIES OF TRUTH MOMENTS

P&G are largely credited with coining the expression the ‘First Moment of Truth’ to describe the shopper experience at shelf, where theoretically all the prestore and instore marketing and category management efforts come together to create a purchase decision at the shelf (or offlocation display).

Now we have not only a First Moment of Truth, but a Zero Moment of Truth (prestore) and a Second Moment of Truth (post store, when the purchased product is actually trialled).

Google’s recent report (April 2011) on the Zero Moment of Truth (ZMOT), whilst not expressing a new idea, has probably been the first to articulate it clearly.

It identifies the shift in shopper behaviour by differentiating advertising and promotional stimulus (considered passive) from online and mobile search (proactive).

The ZMOT is when a shopper actively searches for product information online. This may be from a retailer’s website, manufacturer’s website, product reviews, social media such as Facebook, and blogs (which are a form of organized word of mouth), among other things a search engine may dig up. ZMOT is everywhere because it can be accessed whilst mobile, and it’s not just for high involvement purchase categories like cars and entertainment systems. Shoppers are actively searching prestore in product categories ranging from plasticware to pet food.

The Second Moment of Truth (SMOT) – product trial, usage and experience – has an impact on ZMOT. Users of a product when they get it home may post a comment about the product (and their purchase experience) on a social media website, or a product review on a blog or website. These reviews then contribute to the next shopper’s ZMOT findings.  In a recent report from IBM it was stated that a shopper is more likely to believe a review from a stranger than what a retailer or manufacturer says about a product. This demonstrates the need/role for informal product advocates and ambassadors (rather than paid celebrity sponsors).

Whilst marketers can’t control what shoppers post for SMOT, smart marketers in manufacturing can use ZMOT tools – including offers – to mitigate retailer clean store policies.

So now we have a model where advertising stimulus and promotions (Stimulus) may be prestore or instore. The ZMOT is everywhere (accessed prestore, instore, in transit) as is the SMOT. The First Moment of Truth may now be online, or in bricks and mortar stores, or multichannel (eg order online, pick up instore or order instore, have delivered to your home).

I haven’t figured out how to draw this yet in a pretty diagram. Stay tuned. It’ll probably look like one of those communication network diagrams like a cloud with lots of lines where everything connects to everything else.

THE DEGREE OF PLANNING IS INCREASING

The more ZMOT proactive product search that occurs, the greater the degree of pre-store product planning.

Depending on the channel, category and trip type, there may be a lot or a little impulse. On average in Australia across a number of shopper research projects in the past few years, we’ve found that most categories in grocery are planned down to product or brand level between 60% and 70%. That is within a specific category.

But this doesn’t mean you can’t get switch, upgrade or impulse instore, or that a shopper doesn’t buy other categories/products on impulse. We know that around 80% of shoppers deviate from (add to) their grocery shopping list once instore. That is, they come in for 4 things totaling $20 and wander out $50 and 8 items later.

What it does mean is that you need to work harder to interrupt them within a given category.

Interestingly, the recent Coles and Woolworths smartphone apps have a number of functions that will actually increase the degree of planning (My List, My Specials, where items are located in my store so I can find them faster etc) with fewer of the apps to increase browse time/impulse/engagement (recipe finders being the main one at this point).

In an environment where retailers have trained shoppers to expect low prices as the cost of entry and promotional strategies have simply shifted the majority of a category’s sales to on promotion (and deflated category value in the process), the crying need instore is for INTERRUPTION. Shoppers want to discover, be surprised, delighted, and informed … this requires engagement and theatre.

THE NEED TO PLAY TO EMOTIONAL, NOT JUST RATIONAL

In ‘The Buying Brain’, Dr AK Pradeep emphasizes that 95% of human decision making is unconscious and emotional not subconscious and rational. He outlines 7 shopper experience dimensions. In no particular order, these are Information, Interaction, Entertainment, Community, Education, Simplicity, and Self Worth. These serve as a useful ‘retail health’ scorecard for a brand or category.

It’s evident from this list that grocery retailing only really talks to simplicity (ease of shop) at the moment, with perhaps some bits of information and some Community (charity) activities. But supermarkets have work to do on the interaction, entertainment, education and self worth dimensions.

When you look at the traditional point of purchase drivers (range, space & layout, visibility & display, price, promotion and persuasion) there are 3 that are rational (range, space, price) and 3 that are more emotional (display/theatre, promotion, persuasion).

Clean store policies are effectively stripping the emotion out of a shopping trip that for many is already a grudge trip or considered a chore.

When we run shopper research typically the retailers want to understand what their range and layout should be, and most of what shoppers want is not just a layout that makes sense but typically category information, samples, tastings and demonstrations. They want things that will help them with solutions and keep them entertained.

Interruption and engagement – the levers to pull for impulse sales and category growth – will come from more theatre; better thought through relevant/tailored/interactive promotions that pull levers other than price, and from personalized service.

In the brave new world of shopper-controlled retailing, the retailers who retain relevance will be those who can interrupt, surprise and delight by playing to emotions.