janelisy ... · may 22, 2016 syllabus ... • neiman marcus has a ... (49%) this past holiday...

5/17/2016

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Experience is Everything:New Rules for Driving Shopper Engagement

Jane LisyExecutive Retail Consultant

Alexander Babbage, Inc.May 22, 2016

Syllabus

• Shopper Engagement: the Customer Journey

– Why is it important?

– Who is leading the way?

– Omni-channel: obstacle or opportunity?

• Experience: the Retail Differentiator

– Retailers

– Shopping Centers

• Experience is Everything: Metrics for measuring success

VS

Mass Production

Mass Media

Mass Merchandising

Individual Products

Micro Media

Curated Retail Selection

Source: RTKL: Future Realities of Retail

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Seven Macro Trends are driving change in retail and shopping

centers

1. Demographics

2. E-commerce (old news, but growing)

3. Mobile

4. Omnichannel

5. The in-store experience

6. Big data

7. Fast and good

How do we determine and

influence their impact on our

business?

….by studying the Customer

Journey

The Customer Journey

Definition:

The customer journey is the complete sum of experiences

customers go through when interacting with your store,

shopping center or brand.

Instead of looking at just part of a transaction or experience, the

customer journey documents the full experience of being a

customer.

A customer journey map is a framework which clearly

identifies at which points along the path you can influence

their decisions and behavior, and hopefully facilitate and make

their journey more rewarding to them and you.

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Before you start…

• Current and potential customers

• Wants

• Needs

• Behavior – motivations and influences

• Can you answer:

“How your brand/store/center is perceived

in the eyes of your customers?”

Mapping the Customer Journey

Critical questions to ask yourself en route

1. Who is the experience serving?

2. Who controls that experience – what can I do to impact it?

3. What is the intent?

4. Is it on-brand or on-message?

5. What is the experience like – is it likely to strengthen

customer engagement?

Mapping The Customer Journey:

1) Discovery

• Three approaches:– You go to the customer (or potential customer)

– The customer comes to you

– The two are introduced by a third party

• A destination customer may be motivated to visit a shopping center or store in many ways:– Media including advertising, direct mail, catalog, digital marketing, email,

social media

– Personal recommendation (friends, relatives, hotel concierge, etc.)

– Brand and Message (This center is for people like you.)

– Need state (What do I want or need?)

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1) Discovery


2) First Encounter


2) First Encounter

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3) Inside the Environment


3) Inside the Environment |Simon-eBay Connected Mall

• High-tech kiosks for help

• The 72” LCD, full HD all-weather touchscreen kiosk can:

– Show 3D maps with accurate shopper orientation within center

– Browse the map, events, services, store deals, and find the best route to stores and amenities

– Mobile compatible

– “Today” button highlights events and deals happening that day.

– Can display advertising when not helping a shopper?


3) Inside the Environment |Cleveland Museum of Art

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3) Inside the Environment |Cleveland Museum of Art


3) Inside the Environment | Whole Foods

• Whole Foods is introducing

touchscreen installations to

familiarize customers with the

farmers who produce the foods

they eat and educate them

about Whole Food’s high

standards used to rate its new

Responsibly Grown produce

ratings program.


3) Inside the Environment | Adidas NEO brand

• The Adidas NEO brand

in Nürnberg, Germany

has an interactive

storefront where

customers can direct

the interactive model

to try on different

clothing which can

then be purchased via

their smartphones.

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4) Engaging| Moving beyond the transaction

• An employee promptly greets her, is friendly and knowledgeable and

helps her select two pair of shoes

• The checkout is at her convenience



• Australian-based retailer

Genuine has launched

“Facepay” in Shanghai – a

smart payment system

supported by face recognition



• Neiman Marcus has a

“Memory Mirror” that

enables shoppers to see

outfits from 360° and

compare clothing options

side-by-side

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• She shares her

experience with

friends via social

media.



• She decides to have the shoes sent (same-day) to her home along with

other purchases.



• Deliv provides same-day delivery for four mall operators:

– General Growth Properties

– Simon Property Group

– Macerich

– Westfield

• The four mall operators are testing the service in nine malls

• Deliv is partnering with an expanding base of national omnichannel retailers to provide the service

• For the price of standard shipping or less, mall shoppers can have same-day delivery of their purchases, including online purchases, to the stores, their homes or other locations

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5) Engaged

• Later that day, she Tweets a picture of

her new shoes and mentions the

store.

• She then writes a recommendation

for the store on Yelp.


5) Engaged

• A couple of weeks later, the store sends her a promotional email offering a

discount and reminds her of the store’s brand and its core values.

Why Are We Doing This?

• It may not be feasible or necessary to employ all of the steps above, but it

is important to map your customers’ journey and to consider at which

points you may facilitate and contribute enjoyment (or at least well-being)

to their experience.

Peter Drucker

“What gets measured,

gets managed”

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What industry is this?

• Increasingly older core group of customers

• Decreasing number of return customers year-after-year

• Expensive fixed assets and susceptible to the economic cycle

• Few new locations being delivered due to lower interest from younger people, who choose other places to spend their time and money

• Best years may be behind it…

Vail Resorts (NYSE:MTN)

• Operates in three separate, but integrated segments:

– Mountain: owns and operates ten premier resorts

– Lodging: owns and/or manages a portfolio of hotels and

condominiums, three destination resorts and several award-winning

golf courses

– Real Estate Development: holds, develops, buys and sells real estate in

and around the resort communities

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Vail Resorts took the challenge of changing their ski resorts

from just destinations for the general skiing population and

into to an experience through their web-based app, epicMIX™

• epicMIX™ began as an app for Vail Season-Pass holders to

track their progress, pictures and skiing experience

throughout the ski season

• The app is integrated with Facebook, Twitter and other

social media resources so sharing is simple

• The first season of epicMIX™ created more than 35 million

social media impressions from over 100,000 users

• Since inception, there has been a constant evolution of

the app, adding epicMIX™ Photo, epicMIX™ Racing and

epicMIX™ Academy

• The big question: Was the investment made by Vail

Properties worth it?

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Vail Properties had more than two million more skiers in the

2014-2015 season as they did before epicMIX™ in 2009-2010

6,010,000

6,991,000

6,144,000

6,977,000

7,688,000

8,466,000

5,500,000.00

6,000,000.00

6,500,000.00

7,000,000.00

7,500,000.00

8,000,000.00

8,500,000.00

9,000,000.00

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Tota

l S

kie

rs P

er

Yea

r

Total Skiers to Vail Properties Since epicMIX Inception

Season Pass Revenue up $100M over five years

$100$109

$125

$137

$166

$203

$90

$110

$130

$150

$170

$190

$210

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Se

aso

n P

ass

Re

ve

nu

e (

in

Mil

lio

ns)

Season Pass Revenue Since epicMIX Inception ($M)

$638

$752 $767

$868

$964

$1,104

$600

$700

$800

$900

$1,000

$1,100

$1,200

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Mo

un

tain

Ba

sed

Re

ve

nu

e

(in

Mil

lio

ns)

Mountain-based revenue for Vail Properties up more than $450M

since epicMIX™ was introduced at their resorts

Mountain Based Revenue Since epicMIX Inception ($M)

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Omni-channel Expectations: Obstacle or Opportunity?

Is Retail Still Important?

• Showrooming is when customers browse a store, select a product, and

buy online.

• Webrooming is when shoppers browse and research online and go to a

store to buy a product and most likely take it home.

• A Deloitte study found that more shoppers expected to webroom (68%)

than showroom (49%) this past holiday season, although certain

categories (particularly electronics) are more subject to showrooming

than others.

Alexander Babbage research found the 43% of shopping

center sales were unplanned or impulse purchases.

Nordstrom’s Omnichannel Strategy

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Kate Spade Saturday

Kate Spade Saturday

Kate Spade Saturday

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Kate Spade Saturday

Why Do Shoppers Shop Physical Stores Instead Of Online?

• Alexander Babbage research finds that although most shoppers – including

upper income – typically want good values and deals, the primary reasons

they shop successful shopping centers (and by extension stores) are:1. Location/convenience

2. Department or major destination stores

3. Tenant mix (or selection in the case of stores) which is described as “fresh, enticing

selection of stores”

4. Ambiance, or “pleasant shopping atmosphere”

5. Enjoyment and “fun things to see and do” which may come from the physical

surrounding and amenities, events, children’s play area, certain stores/uses (for

example theaters) or the tenant mix itself

…but of course there are exceptions such as neighborhood shopping centers

where products or services may be the primary motivators

Experiences Are The New Differentiator – And A Key Way To

Increase Value

Source: B. Joseph Pine II and James H. Gilmore, “The Experience Economy: Work is Theatre and Every Business a Stage”

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You can get coffee and oatmeal…or coffee and oatmeal

Starbucks Roastery

• Starbucks' industrial-chic Reserve facility turns out small batches of Peaberry Sumatra and other limited-supply Starbucks Reserve coffees that sell for anywhere from $13 to $50 per 8-ounce package.

• Starbucks anticipates adding 100 Reserve-only coffee shops in the U.S.

Starbucks, Tukwila, WA

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Movie theaters then…

…and now

Bowling then…

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…and now

You can go see Santa or…

DreamWorks video

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Light Show video

Light Show

You can go to the mall … or to the new mall

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Alexander Babbage:

Experiential Retail

Nasty Gal

Hollywood, California

• The store is centralized around the try-on experience, with a mirrored glass structure at the center of the space which houses five fitting rooms.

• These rooms allow voyeuristic shoppers to try on clothes behind two-way mirrored doors, allowing them to see out with complete privacy.

• The space takes inspiration from concert stages with reflective surfaces and open, cage-like structures that suggest both exhibitionism and privacy.

• Other features include a shoe salon and magazine library – and a live cactus garden.

UGG – subsidiary of Deckers Brands

Tysons Galleria – McLean, VA

• Using RFID technology, Deckers launched its new “innovation lab” for their UGG brand at Tysons Galleria.

• Customers stand on the RFID-enabled floor mat in front of a 65-inch HD touchscreen to learn more about the shoe they are trying on.

• Can’t find the shoe or item you want out of the 230 styles in stock? Use the touchscreen to access all the UGG products. Staffers can use their iPads to ship the products direct to customers or to the store for pick-up.

• Found the perfect shoe? Customers can send themselves a text message from the touchscreen with the product link.

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Bloomingdale's

Palo Alto, California

• Smart fitting rooms equipped with wall-mounted tablets

offer customers the ability to look up product

information, alternate color and size options,

ratings/reviews and recommendations on

complementary items to “complete the look.”

• The mirrors are equipped with touch-screen lighting

options that provide an optimal environment for trying

on the latest fashions.

• All selling associates will have mobile devices allowing

them to better assist shoppers with instant access to

product availability information, along with the ability to

call, email and text with customers.

• The cosmetics department is high on interactivity and

includes a multi-vendor beauty activity area containing

two glass-enclosed, private makeover rooms.

H&M

Fifth Avenue, New York City

• H&M’s New York flagship store is more than 57,000 sq. ft. and the most advanced H&M to-date.

• Large LED screens with changing content are throughout the store, including the 26-ft. by 20-ft. centerpiece in the atrium.

• Shoppers can schedule appointments with personal shoppers by phone or online at no extra charge.

• The store operates as a United States showroom for all of H&M’s products currently available, marking the first time the company’s entire line has been available in the U.S. under one roof.

Rebecca Minkoff

New York and California

• Rebecca Minkoff and eBay are blurring the lines between online and offline commerce with stores in SoHo and San Francisco.

• Mirrored displays allow customers to view video, inspirational content and request items to be put in a fitting room as well as have a drink to be delivered to them while they shop.

• The fitting rooms alert the shoppers via text message when their room is ready. Once in the room, customers can change the lighting, identify other sizes and colors available in-store or via online order and alert store associates with their needs.

• Each item in-store has an RFID tag for tracking, and customers can access what they’ve tried on through an app after they leave.

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Nation’s Restaurant News: Breakout Brands 2015

Nation’s Restaurant News: Breakout Brands 2015

Common themes to consider when looking at restaurant concepts

• “Authentic” is a common denominator

here….at least until these concepts get

established

• Entertainment combined with quality food

• Carefully curated in-store playlists are cited

by several as an important part of the

experience

• Value and experience also key ingredients

• Several talk of “community” being

important…a key issue for millennials

How retail stores are using virtual reality to make shopping

more fun

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RH Chicago

Alexander Babbage | Driving Shopper Engagement Retail

Common themes to consider when looking at retail concepts

1. Brand focuses on someone – not everyone

2. Experience is a key element of the retail presentation

3. Integrates technology to serve the shopper innovatively and enable a

deeper brand experience, definitely omnichannel

4. Measures how engaged consumers are to the brand

Alexander Babbage:

Experiential Shopping Centers 2015

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How does the owner of a shopping center create a compelling

experience that results in shopper engagement:

• Lease to retailers that deliver exceptional experiences

• Build “experience” into the very design of the center, play-areas,

gardens/landscape, fountains, new technology, rides & attractions

• Form experience partnerships

– Non-profit museums

– Civic centers

– Concert venues

• Surprise and delight with extraordinary, temporary shows and exhibits

Alexander Babbage:

Driving Shopper Engagement

Metrics to measure return on investment

Alexander Babbage 360o Analytics

Understand and Analyze the Entire Customer Journey

What is my addressable market?

How many shoppers do I have?

What do they do at the center?

Who are my best shoppers?

What motivates or drives their decision making?

How and when do I reach them to influence them?

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Summary

VS

Mass Production

Mass Media

Mass Merchandising

Individual Products

Micro Media

Curated Retail Selection

Source: RTKL: Future Realities of Retail

Experiences Are The New Differentiator – And A Key Way To

Increase Value

Source: B. Joseph Pine II and James H. Gilmore, “The Experience Economy: Work is Theatre and Every Business a Stage”

5/17/2016

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Five Rules for Driving Shopper Engagement

1. Without change, commoditization will happen – and destroy value

2. To create value (PSF, NOI) and to know what to change, measure experience

3. Map the Customer Journey to determine key experience touch points� Discovery, First Encounter, Inside the Environment, Engaging, Engaged

4. Quantify who and how improvements in experience touch points could improve customer engagement

5. Strategy first, then tactics� How your brand/store/center is perceived in the eyes of your customers?

� How do you want it to be perceived in the future?

� By which customers?

“It’s not the strongest of the species that survive,

nor the most intelligent,

but the ones most responsive to change.”

- Charles Darwin

Please Complete Your Evaluation Now.

1. Take Out Your Smartphone or Tablet

2. Go to survey.icsc.org/2016RECON

3. Select this course: Experience is Everything:

New Rules for Driving Shopper Engagement

Course Evaluation

janelisy ... · may 22, 2016 syllabus ... • neiman marcus has a ... (49%) this past holiday...

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