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Marketers are sold on the benefits of personalization: 88% say they have seen an increase in business from using personalization tactics. The catch, however, is that consumers are quick to compare different brands’ personalization prowess, and to take action when a brand comes up short: 44% of shoppers are willing to switch to brands that do a better job personalizing the experience, according to Infogroup.

Poor product recommendations are one of the biggest problem areas., according to the Infogroup survey, titled: The Power of Personalization: 53% of consumers say advertising for an irrelevant product is the most annoying thing a brand can get wrong.

Providing relevant messaging also is a major component to personalization, especially for Millennials. As many as 40% of Millennials say that the most important thing a brand can do is ensure that its messages are personalized to their interest, whether through targeted Google ads in their email or personalized via Instagram feeds.

The survey revealed that 93% of consumers report receiving marketing communications or advertising that are not relevant to them, showing that today’s retailers often still miss the mark on how to communicate effectively. As many as 90% of shoppers are at least slightly annoyed by irrelevant messaging.

The five biggest mistakes retailers and brands make when personalizing the shopper experience, according to the 1,500 U.S. shoppers surveyed, are:

  • Sharing/talking about topics that the shopper has no interest in;
  • Attempting to sell products the shopper already owns;
  • Misspelling the shopper’s name in a message;
  • Misidentifying the shopper’s gender; and
  • Misidentifying the shopper’s location.
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Target is showing that its aggressive investments in its stores, e-Commerce site, fulfillment and private label products have been fruitful in 2019: the retailer saw Q1 same-store sales jump 4.8%, lofted by e-Commerce sales growth of 42%.

Target’s earnings of $1.53 per share zoomed past Wall Street forecasts of $1.43 per share on net income of $795 million, while revenues reached $17.63 billion. Target also reported:

  • Traffic at stores increased 4.3%;
  • Transactions overall were up 4.3%;
  • Average transaction amount was up 0.5%; and
  • Profit margin expanded from 6.2% one year ago to 6.4% in Q1 2019.

The quarter’s digital sales increase heavily outpaced Target’s 29% Q4 holiday growth increase, and they represent 7.1% of all Target transactions, up from 5.2% one year ago. Same-day pickup and delivery services have contributed to 25% of overall same-store sales, with Target shoppers able to pick up online orders curbside at 1,250 stores or get same-day delivery on more than 55,000 items, thanks in large part to the Shipt delivery service.

While Amazon and Walmart are engaging in a back-and-forth over next-day delivery investments, a Target spokesperson said that half of its two-day shipping orders actually are delivered on the next day.

Target remodeled 400 stores between 2017 and 2018 as part of a $7 billion capital investment plan launched in 2017. The retailer said during a presentation to analysts earlier this year that it is remodeling another 300 stores in 2019, with 300 more remodels planned for 2020.

Although not reflected in the Q1 earnings, Target also generated buzz recently around the launch of its limited edition line with Vineyard Vines. When merchandise first hit stores on March 18, shoppers rushed to stores ahead of opening hours, with many items selling out that day. Target has used collaborations like this in the past to drive traffic.

Even with the looming threat of 25% tariffs on apparel and footwear imported from China going into effect, Target maintained its outlook for the full year, which remains in the range of $5.75 to $6.05 per share. Same-store sales are expected to increase by a low- to mid-single-digit percentage.

As more retailers plan around the tariffs, with major department stores such as Kohl’s, JCPenney and Nordstrom highlighting them as significant concerns in their own earnings calls, Target’s confidence throughout the trade tensions has spread to its investors. Target stock went up nearly 10% in the hours after the earnings release.

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Urban Outfitters will introduce Nuuly, a women’s apparel subscription rental service, this summer. Each month, shoppers will have access to a customizable box with six items that can be worn as often as they like before being swapped for new styles.

Nuuly initially will include a selection of more than 1,000 choices. Urban Outfitters plans to add at least 100 new styles a week to reach 3,000 choices by the end of 2019. The assortment will span multiple brands:

  • In-house selections from Anthropologie, Free People and Urban Outfitters;
  • Hundreds of curated vintage items;
  • Fashion and streetwear offerings from Reebok, Fila and Champion;
  • Denim from Levi’s, Wrangler, DL1961, Paige, AYR, Citizens of Humanity, One Teaspoon and AGOLDE; and
  • An assortment of products from designer labels including Universal Standard, Naadam, LoveShackFancy, Chufy, Gal Meets Glam, Ronny Kobo and Anna Sui.

Subscriptions will cost $88 per month and each box will contain more than $800 worth of clothes on average. Shoppers who like a particular item will have the option to purchase it.

Urban Outfitters expects the new service to appeal to Millennial shoppers who keep an eye on shifting fashion trends and have an interest in a more sustainable lifestyle. The company will leverage its existing customer relationships, brand partnerships and broad distribution network to help get Nuuly off the ground.

The retailer also is making the capital investments required to ensure the subscription service’s success. The company has a dedicated team of engineers, product managers and data scientists developing backend systems. Additionally, Urban Outfitters will use a dedicated warehouse and fulfilment center outside of Philadelphia with state-of-the-art laundry equipment to keep rented clothes reusable for as long as possible.

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JCPenney has tapped 25-year retail veteran Shawn Gensch as its new EVP and Chief Customer Officer (CCO), effective June 3. Gensch, who will report to CEO Jill Soltau, will be responsible for driving aggressive customer-centric strategies to grow traffic, engagement and customer retention.

Tasked with revitalizing the company’s brand, Gensch also will oversee marketing initiatives across all channels, shape the company’s messaging and lead the development of an outstanding digital experience and increased customer loyalty.

The retailer has been beefing up its C-suite leadership with retail industry mainstays since Soltau took the reins as CEO in October 2018. JCPenney named Bill Wafford, who had previously held financial leadership roles at Walgreens, The Vitamin Shoppe and Target, as its new CFO in March 2019.

“Shawn will be instrumental in developing a compelling brand identity that builds meaningful connections with new shoppers, and strengthens relationships with our most loyal customers,” said Soltau in a statement. “His proven leadership in brand management, digital marketing, analytics, mobile applications and customer loyalty programs makes him the ideal candidate to join our team.”

Most recently, Gensch held the CCO position at Sprouts Farmers Market, where he drove key strategic initiatives related to its brand repositioning, digital engagement, web site redesign, new mobile app and a successful new store prototype. Prior to Sprouts, Gensch co-founded and served as CEO of iAMroyalist, a consumer-driven loyalty platform. Gensch also spent 10 years at Target in positions of increasing responsibility, including SVP of Marketing.

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Deloitte’s 2019 Retail Industry Outlook signals a tipping point for retail this year and advocates for synchronized bets across six key focus areas, from emotional-based loyalty to emerging technologies. “To leverage the true power of next-generation technologies,” Deloitte writes in the report, “retailers should make some significant changes. They should be able to consistently mine the data they collect, transform their operations to deliver on the brand promise, and adapt to the future of work.”

Retailers across sectors are gaining a competitive edge by adopting mobile strategies that engage hourly team members, automate mundane work and validate consistency in the customer and brand experience. Simultaneously, these tools are helping them to mine qualitative and quantitative data, while also freeing up labor to focus on revenue-driving activities.

Retail operators understand which actions best accelerate business outcomes in stores and distribution centers. They work hard to train and standardize these actions. Inevitably, though, certain locations and teams will fall short. Operators need a mechanism to deliver concise, clear, focused direction, and a way to verify that what they expected to happen in-store actually did. Seasoned retailers know the power of focusing teams can deliver 2%-6% more in revenue performance on average; in retail, execution is everything.

Platforms that help team members easily collect and report data on top operational tasks and store conditions help spotlight execution gaps. Giving teams mobile apps that silence the noise of callouts and product shorts, and reduce email, free them up to offer exceptional customer experiences. The data they collect gives leadership an in-depth view of the field across every location. Top brands are informing new rounds of innovation and spotting winning trends to proliferate using this approach.

Our company’s experience guiding retailers in self-funding their digital transformation, and my past experience as an executive at a top natural grocery retailer, confirm three mobile strategies that offer tremendous value to the sector and align with Deloitte’s recommendations for 2019:

1. Digitized daily standard audits and inspections on mobile. Increasing efficiencies and consistency in execution and adapting to the future of work for Gen Y and Gen Z means digitizing daily standard operating procedures across merchandising, marketing, LPI and spoilage audits, new product launches and service protocols.

Mobile field execution apps should drive right actions in sequence, eliminate paper and Excel-based systems, reduce redundant data entry and human error and give teams the kind of intuitive, easy-to-use apps they expect in today’s workplace. They should also mirror the technology people use at home. These apps can deliver tremendous time savings both in-store and at the regional level — labor that can then be optimized for effectiveness. Our partners at JOH Brokers saw an 81% ROI using such an approach, with improved labor efficiencies at both market and regional levels. They redirected that time to selling, coaching and data-mining to benefit the business and their clients.

As data rolls in from the field, leaders are reimagining the power of instant reporting that doesn’t require business analyst labor to produce. They can drive accountability and see their stores as the customers do. Mobile data capture has an unintended side benefit in an era of shrinking travel and expense budgets: a single view of every location’s execution, from your home office.

Under Armour is at the forefront of adopting these trends. They successfully piloted a mobile merchandising app and transformed their ability to efficiently collect in-store data, train team members, and localize assortment. The brand’s leadership has new visibility into retail execution in real time and has captured incremental sales based on its findings. Under Armour’s frontline teams collect and submit critical data on sales, customer interactions, product issues, merchandising and marketing.Sales leaders no longer have to schedule office days or take time away from the retail environment to process reporting. Instead, they are able to prioritize execution, selling and training in stores. The impact to their business has been significant.

2. Mobile on-the-floor training. Training in a highly labor-leveraged retail environment has become increasingly complex and difficult to administer. The impact is felt in the customer experience and the numbers. Highly flexible apps that drive execution can also optimize training and provide reference materials, videos and “did you know” content that keep teams engaged, learning on the sales floor and responsive to customers. Studies from MIT and Wharton School of Business show that well-staffed, knowledgeable teams translate to higher retail sales and increased transactions — sometimes by upwards of 10%. Giving teams intuitive mobile tools that train in the moment can help even new hires be effective on day one and ensure retailers that the tasks most critical to their business are completed. Better-trained teams asked to “do more with less” need time saving platforms to deliver savings to the bottom line, and those tools need to be available on the sales floor.

3. Live imaging/image recognition capability. Technologies that fluidly leverage the power of human and machine capabilities, such as AI-powered computer vision and image recognition analysis of sets, can save retailers labor in analyzing and localizing displays, and free up team members to innovate for the business. Brands can repurpose labor toward selling and deliver incremental growth through stronger sets, informed by customer demand. Team members can use mobile devices to take photos of a drink box with trained UPCs, then accurately analyze the set using AI. Audits that used to take 15 minutes or more now return data in 30 seconds or less and communicate assortment, share of shelf and compliance to planogram. The machine manages the mundane and frees up the team member to write a sales order or troubleshoot in-stock conditions and voids.

A top global beverage company we work with is using computer vision AI to gather the ground-level insight they need to be more agile, responsive, and better equipped to deliver experiences that delight customers, team members and shareholders.

Investing in mobile platforms that optimize FTE labor, validate operational execution on business-critical tasks, train on the sales floor, capture data for innovation and elevate the brand experience will reap rewards for retailers in 2019 and beyond.

Heather Larrabee is an Executive Vice President at GoSpotCheck, the platform that is reimagining how the mobile workforce works. GoSpotCheck helps 200+ enterprise brands in 70 countries across six continents perfect merchandising, increase sales, reduce labor and expenses, ensure food safety and quality and improve profitability from the field with mobile surveys, photo capture, image recognition and business insight reporting. For more information, email solutions@gospotcheck.com.​

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During his 20 years in retail, Chris Walton has grown adept at combining a long-term, high-level view with a sharp focus on everyday practical business realities. As Vice President of Merchandising for Home Furnishings at Target.com, he oversaw Target’s first integrated store and digital merchandising and product development teams. Then he led Target’s Store of the Future initiative, eventually managing a team of 30+ people and a multi-million-dollar budget.

Now Walton shares the insights he’s gleaned as CEO of the Third Haus retail tech lab and the Omni Talk blog, and he will be speaking at Retail TouchPoints Live! @RetailX in Chicago, June 25-26.

Retail TouchPoints (RTP): What are some of the most significant innovations you see in retail today? 

Chris Walton: There are four technologies that fascinate me: search; social commerce; scan-and-go and checkout-free shopping; and micro-warehousing.

In terms of search, what blows my mind is the following statistic: 85% of the time when consumers know what they want, they search on Amazon or Google — which means that they are only going to retailers’ web sites 15% of the time, and that number has been on the decline. Right now, search is about helping us do what we explicitly tell a system to do, but there is so much context in and around how we can search or even discover products — both online and in the physical world — that is yet untapped. Stores need to exist around discovery, passion and experience.

Social commerce is becoming the new avenue for discovery. While we tell a marketplace what we want, a social network implicitly knows what we want already. That combination of input and understanding, along with greater contextualization of search, will make social networks the long-term places we go to discover products.

Checkout-free shopping is about the changing business model economics of brick-and-mortar retailing, where retailers need to do more with less, specifically less labor. Amazon Go and computer vision is the sexy topic, and there are a ton of companies in this space — Zippin, AVA Retail, Standard Cognition, Grabango, Trigo and more. I also like mobile scan-and-go experiences, such as what you see from Alibaba or even at Sam’s Club here in the U.S., that put the entire control of the shopping experience in the hands of the consumer in a very freeing and efficient way.

With the coming DTC grocery revolution, hyperlocal micro-warehousing is key — it’s the only reliable way to solve the last mile and efficient picking problems, and to separate shopping from buying regularly at scale. I love following companies like Takeoff, Alert Innovation and CommonSense in this space for that reason. All the other solutions, like centralized fulfillment (the Ocado model) and third-party picking (Shipt and Instacart) have their drawbacks.

RTP: Are there retail technologies that you think have been overhyped? 

Walton: VR is way overhyped, especially in terms of its impact on physical retail. At best, it’s a new way to shop at home, which is why I’ve derided Walmart for putting so much fanfare behind it. VR has miles to go — it hasn’t even taken off in the porn industry yet, so to say it will impact retail on a five-year horizon is ludicrous.

Voice would also make this list. I think you’re seeing great experimentation here and it’s important to further understanding in the space, but I would bet far more on messaging. Let history be the guide: What do you prefer to do now? Call your spouse or just message them when it’s a quick need? The same thing happened earlier with email — it was more efficient to just email people on our own schedules and to have a trail of the conversation. History has a way of repeating itself.

I would also put computer vision slightly in the overhyped bucket, along with the third-party delivery services I mentioned around grocery delivery. Computer vision is incredibly important — it is just a little overhyped too.

RTP: What were some of your most important learnings from your work on Target’s Store of the Future?

Walton: The most important lesson I took is that consumer psychology matters. Technology can be sexy, even experimentation can be sexy, but if your work isn’t grounded in tried-and-true concepts that make people’s lives better and that are grounded in the ‘universal truths’ about how consumers want to shop, then you won’t accomplish much.

A friend of mine once gave me great advice. He said that stores have always existed for five reasons: 1. Inspiration; 2. Convenience; 3. Immediate gratification; 4. Interaction; and 5. Experience. What digital did is challenge physical retail on numbers one through three. Amazon and other digital players came along and said, ‘We can do those three things as well, if not better, than physical retail can.’ And they can. So if you’re going to create store or even omnichannel experiences, you have to understand your reason for being and how your brand matters within this context.

One great example is that retailers shouldn’t re-create e-Commerce in a store. It goes against the whole psychology of why stores exist — to touch, feel and experience. It’s why you see so many kiosks standing idle throughout physical retail. Kiosks have to be placed within the appropriate flow of the user journey and they have to solve real points of friction, but finding extended aisle options as ‘bolt-ons’ in the store aisle isn’t one of them.

RTP: If you were designing a Store of the Future today, what would be some of its key elements? 

Walton: I always say it depends on your brand promise and how you plan to differentiate yourself as a retailer, but there are some fundamental principles. Technologically speaking, you should have the same analytical understanding of the physical design as you do of a web commerce browser. Physical movement should be thought of as the analog for a mouse on a desktop computer. To make that happen, you need three inherent things: 1. Cloud computing; 2. An application and recording layer; and 3. Robust data and location analytics.

With that as the foundation I would then ask, ‘How do I personalize my physical space? How do I separate shopping from buying? What matters most for my consumers?’ I would experiment with wholesale concept design around the new technologies I discussed — scan-and-go shopping micro-warehousing, and social commerce as a new form of omnichannel real estate.

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Stein Mart will install Amazon Hub Lockers at nearly 200 stores across 28 states. Amazon shoppers will be able to select their nearest locker as their shipping address, and when the package is ready for pickup they will receive an email with a barcode they can use to retrieve their item during store hours.

“We are thrilled to offer this innovative delivery experience to Amazon customers while introducing new shoppers to Stein Mart,” said Hunt Hawkins, CEO at Stein Mart in a statement. "Customer service and convenience are top priorities at Stein Mart, and the ability to give both to Amazon customers was a big factor in our decision to introduce this program.”

Amazon Lockers have been spreading in both the U.S. and internationally in recent months. Rite Aid added lockers to 900 stores, while Casino added lockers at 1,000 stores in France. The Casino partnership also includes making 3,500 Casino-branded products available on Amazon.com.

Kohl’s also has formed a relationship with Amazon; the retailer now carries Amazon products in more than 200 stores. Additionally, in July Kohl’s will start accepting unpackaged returns from Amazon customers at no charge, which could appeal to the 40% of shoppers who think it’s easier to return e-Commerce orders to a store, according to Narvar.

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Dressbarn is closing all 650 stores and its e-Commerce site, marking the end of a 57-year run for the women’s apparel retailer. For now, the stores and e-Commerce site remain open and conducting business as usual, while Dressbarn says it will share more specific information related to the store closings at a later date.

The retailer, which reorganized under its parent company Ascena Retail Group in 2011 and operates alongside brands such as Ann Taylor, LOFT and Lane Bryant, has retained A&G Realty Partners to assist on the closures.

Ascena, which operated 5,000 stores across its brands as of 2016, has been on a downward spiral in recent years, dealing with many of the problemsthat its mall-based specialty contemporaries have struggled with before restructuring or filing for bankruptcy. By the end of 2018, the company’s store footprint shrank to 4,486 as part of its “Change for Growth” plan, which is on track to cut $300 million in costs by July 2019.

Ascena’s major weakness across its banners is relatively low sales per store compared to competitors. The company’s average store sells 43% less than the average Express store, 68% less than the average Gap store and an estimated 72% less than the average U.S. Inditex store, according to 2018 data from RetailNext. In its most recent quarter, Ascena’s retailers saw 2% comparable store sales growth, but total net losses widened to $71.5 million from a $39.3 million loss last year. 

Ann Taylor and LOFT remain the company’s strongest brands, driving the best comparable sales growth rates at Ascena at 10% each in Q2.

Not counting the Dressbarn closures, Ascena expects to close 260+ more stores after July 2019. As part of its bounce-back attempt, Ascena recently sold its majority stake in the value fashion chain Maurices, to OpCapita for $300 million.

Ascena is seeking to steer its business back in the right direction under a new CEO, Gary Muto. The retail group saw both CEO David Jaffe and President/COO Brian Lynch step down from their roles in early May, with the former remaining on the company’s Board of Directors.

The Jaffe resignation was significant, marking the first time a Jaffe did not run the company in its history. Jaffe’s parents, Elliot and Roslyn, founded Dressbarn in 1962 in Stamford, Conn. Elliot served as a director since 1966, Chairman of the Board until 2011, CEO until 2002, and as non-executive Chairman of the Board until his retirement in December 2016. Together, Elliot and Roslyn Jaffe still own approximately 25% of Ascena stock.

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Taylor Stitch, a men’s apparel retailer, has launched the Restitch clothing recycling program. Shoppers can return their old clothes to Taylor Stitch for credit, while the clothing gets reconstructed into a new, one-of-a-kind garment that sells for a fraction of the original price.

The frictionless return process lets shoppers download a shipping label online or visit a store to drop off their items. The re-created clothes are sold as the retailer’s Vintage Collection, which is launching with 42 unique pieces created from some of the nearly 1,500 pieces of outerwear, denim, shirting, knits, footwear and accessories donated by the Taylor Stitch community.

The program was created through a partnership with Yerdle, an end-to-end technology and logistics resale platform. The solution provider also has launched resale programs with retailers including Patagonia, Eileen Fisher and REI.

“Restitch is our response to the clothing industry’s overproduction issue,” said Michael Maher, CEO and Co-Founder of Taylor Stitch in a statement. “Eighty-five percent of all apparel ends up in landfills, including what is donated, and 100% has the ability to be recycled or upcycled. Through Restitch, and our partnership with Yerdle, we prove there is no end of life, only end of use.”

Restitch is the second clothing creation program embraced by Taylor Stitch. The retailer also runs the Workshop, where new garments are announced and interested shoppers are given four weeks to place an order. Customers can back designs they like, and if the funding goal is met they receive the items at an average discount of 20%.

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Loyalty programs are a powerful driver in brand selection: CrowdTwist research finds that 63% of consumers could be persuaded to shop with a brand because they have a loyalty program.

Brands with omnichannel loyalty programs truly are able to set themselves apart from the competition by rewarding customers for every action they take with a brand, collecting rich consumer insights across each touch point.

Check out this white paper for loyalty program case studies, including how:

  • Philosophy leverages data to surprise and delight loyalty members;
  • Sleep Number's engagement program drives referrals;
  • Zumiez rewards members for visiting in-store;
  • Nordstrom's co-shopping concept pairs customers and associates;
  • Nike's NYC flagship store seamlessly blends online and in-store experiences; and
  • Macy's uses data to remove barriers to purchase and increase sales.

Check out the white paper!

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