This Week in Retail Marketing Innovation - Nov. 27th 2017
A Record Black Friday Kicks Off The Holiday Season
All eyes are on Black Friday as an indicator of holiday demand. Initial online volumes looked strong, although in-store showed weakness according to Retail Dive. Online sales hit $3b, which seem small compare to China's Singles Day performance last week, but the market reacted positively with retail stocks up.
The notion of Black Friday and Cyber Monday are getting blurred with those in the UK wondering why it is now a week long. Target is extending Cyber Monday sales for an entire week. But timing does matter. Did you know that Cyber Monday emails have 53% higher open rates than Black Friday ones?
Of course retailers are investing to convert holiday demand and acquisition into long-term relationships with loyalty programs. And this is a nice piece of what it takes behind the scenes for retailers like Best Buy to prepare for Black Friday.
Technology Spotlight on Artificial Intelligence
Artificial Intelligence is all the rage, and Fung Global has put together a nice report on the uses of AI in retail with a focus on personalization, customer service and inventory management. Personalization technologies are being used to update website copy, design and recommendations to optimize for conversion. Chatbots are being used to automate customer service and with the wealth of information in inventory management systems, AI is being used to better predict consumer demand and minimize inventory levels while maximizing turnover. The key will be to normalize your data now to prepare it for AI analysis and that’s why data-driven retailers will thrive in 2018.
Retail Industry News
More store closures were announced this week with an expected 40 Bon-Ton department stores and 50 more stores for J.Crew, who saw Q3 sales fall 5%, 9% comparably. And with $2b in debt on the books, J.Crew is in a precarious state. Retail Prophet posted a dire warning that to let retail thrive, we must first let it die. Harsh advice, when some are thriving. Department stores are taking the brunt of the retail shift, and Harrod’s CEO says they are to blame for their own lack of investment in technology and innovation, and while that has been historically true, we at PERCH are seeing increasing budgets for interactive retail displays and in-store technology. We should have a string of exciting new customers to announce in Q1 in the department store category.
That said, lately it seems the naysayers are outnumbered by optimists. Maybe it’s just the holiday cheer. Or maybe it’s looking at the number of brands expanding their retail storefronts; the technological confluence of omnichannel, cashier-less checkout, self-driving cars, and more. After years of asset sell-offs, retail space is interestingly become a contrarian buy because of record low prices. And even Macy’s is starting to do more experimentation to turn around their 12 quarters of decline. Neiman Marcus posted mix results with 3.8% sales growth, but widening losses. Neiman Marcus and many others are trying to move upmarket. $10,000 for a Kentucky Fried Chicken product? You have to see it to believe it. And of course, the discount market shows continued strength as Dollar Tree beat all estimates with 6.8% sales growth and 9.6% profit growth.
What to Share Around the Water Cooler
Want to learn more about NFC? Here’s a great white paper from Fung Global.
Amazon continues to expand in brick and mortar retail, even though it's just 3% of its revenue, with a focus on Kindles, books and toys.
Will robots replace humans? Some. But maybe Walmart’s inventory robot implies new models for how humans and robots can work together.
Do you remember the groundbreaking Elf Yourself campaign? Well it’s back now using augmented reality to bring the classic campaign back.
Automation is creating more retail jobs than it is taking, eCommerce is creating more jobs as well. Take a look how each industry has been impacted since 2003. Great data to share.