Former Apple retail chief: Only 1 in 100 Apple store visitors actually buys...

According to a new interview reported in Cnet.com, "The Apple store's a place to be," Ron Johnson said. Not a place to shop, a place to be, in a redefinition of shopping experience....

(Ron Johnson was brought in from Target to set up the Apple store, 'giving reasons to visit and figuring out how to create more intimacy, relationship and experience in stores, but it does not mean you have to buy...')

Yet 'rule-breaker' Apple  is usually the busiest shop in the shopping centre, and generates annual sales per sq. ft. of £2,654 compared with £1,100 for UK mults...

(See the full 50 minute interview at Stanford Graduate School of Business on YouTube)

Simply food-for-thought in classic grocery retailing?

Or a fundamental challenge to our assumptions re collaboration with retailers in connecting with a brand via the in-store experience?

Online Betting via Grocery Dark Stores

Whilst grocers are cutting back on megastores, rising internet food sales will see supermarkets sign up for twice as much online warehouse space in 2014.

Tesco, Asda and Waitrose will this year commit to doubling the space devoted to internet dark stores, according to property agent Jones Lang LaSalle. Around 1.8m sq. ft. of warehouse space is devoted to dark stores, but that is set to increase as online shopping transforms the retail sector.

Tesco is expected to open its seventh dark store in Didcot, Oxfordshire, later this year. They opened two dark stores in 2013 and have previously said they are scouting for further sites in Birmingham and Manchester. Their newest centre in Erith, south east London, can process 4,000 orders a day and offer 30,000 different items, 50% more than the average store. The site has also been designed to help Tesco launch same-day deliveries, a service already offered by Asda and Ocado.

The combination of faster picking, more delivery slots and increased use of ‘click & collect’ means acceleration of online growth, mainly at the expense of less efficient competition.

However, faster online supply of goods – especially bulky items – has to also accelerate the redundancy of large space retailing, and given that there are no obvious alternative use options – i.e. selloff- available, then the major retailers will seek to optimise available space via a combination of instore theatre and franchising.

Providing the numbers add up, this new availability of space has to represent a major opportunity for suppliers and retailers to fundamentally re-think the application of shopper marketing, a process conceived at a time when retail space was at a premium….

Who’s minding the shopper?

The old deathbed story raises an interesting dilemma in retailing today:
An elderly shopkeeper on his deathbed asks for his wife and then for each of his six children. When the last one replies “I’m here” the old guy demands: “then who’s minding the shop?”

In other words, if the key retail stakeholders are all pre-occupied with survival and continuity of the business, then who’s minding the shopper?

Most of us accept the fact that, given the extent of their loyalty-data insight, compared with that of the supplier, and if knowledge defines ownership, the major retailers now ‘own’ the shopper. Despite the fact that a retailer’s knowledge is mainly derived from analysis of shopping behaviour, their increasing share of consumption via own label growth also means that they have potential access to the shopper’s consumers, and their consumption behaviour.

They are thus capable of leveraging shopper insight in also taking ownership of the consumer…

Unfortunately, ownership does not guarantee action in the best interests of the shopping consumer…
This means that brand owners need to enter the aisle and ‘hand-hold’ the shopper in an attempt to complete the intended purchase in favour of brand-consumer and supplier…

More in this month’s edition of NamNews, now in your mailbox.

Understanding the shopping-consumer

At the moment of purchase a shopping-consumer’s world is all about one SKU, with potential access to all possible alternatives, literally at their fingertips…

Meanwhile, a retailer is coming from a perspective that covers the entire shop’s offering, a world of up to 50,000 SKUs, an expert in selection.

This classic case of depth vs. breadth can be synergistic in that the shopping-consumer can be reassured by the assumption that the retailer, as expert, has surveyed the entire market on their behalf and is now presenting the best offer available. Moreover, the shopper is also taking for granted the implied endorsement i.e. that the product contains ‘what it says on the tin’, especially given the fact that the shopping-consumer may also be making the purchase-decision on behalf of family, etc.

One can only imagine the shopper’s reaction when even a cursory check reveals they have been misled, or even short-changed, either financially, or in terms of what they expected to receive for the money... Moreover, they have a hand-held means of communicating their dis-satisfaction well beyond the walls of the store…

Whereas, if the retailer plays by even the rudimentary rules of consumer marketing, and meets or even exceeds shopper-expectation, they can harness the positive aspects a shopper’s ability to ‘tell a friend’, endorse a purchase and even recommend a visit… 

A shelf nearby is watching you....

According to The Washington Post, Mondelez, says it's planning to debut a grocery shelf in 2015 that comes equipped with sensors to determine the age and sex of passing customers. Hooked up to Microsoft's Kinect controller, the shelf will be able to use basic facial features like bone structure to build a profile of a potential snacker.

While pictures of your actual face won't be stored, aggregate demographic data from thousands of transactions will be used to funnel appropriate products for impulse purchase....

It remains to be seen whether the resulting privacy-agro will the negate the obvious advantages of shelf optimisation...

Stores charging shoppers a 'showrooming' fee

Reports of stores charging* shoppers up to $25 to TRY ON clothes in a backlash against the time-wasting trend for 'showrooming', raises some issues that might respond to some creative thinking tools:

Suppose a NAM ran the store?
This creative leap hopefully removes all the prejudice relating to 'how we have always done it' and takes a fresh view, hopefully from outside the business. A NAM in charge would switch the emphasis from selling the goods to helping people buy..., taking into account the existence of competition from a shopper's perspective.

Given that most shoppers already think that online provides a cheaper alternative, a NAM would see the danger of simply adding to the cost of reality shopping, making the price difference even greater. Instead, the NAM-retailer would perhaps explore options re absorbing the additional cost of 'try-ons' by linking the purchase to the shop's online facility, and failing that, a payment from the supplier.  If the same product were  available via alternative online retailers, then an introduction-fee arrangement could be agreed, perhaps in return for reciprocal direction of online shoppers to the showrooming facility, thereby converting a 'dithering shopper' into a sale, to the benefit of all..?

With the NAM's experience of the upfront effort and advantages of a long term relationship with the customer vs. a transactional sale, the potential lifetime value of the shopper would be automatically factored into the instore-encounter, at operating level, one-to-one, and not left at mission-statement level....

Showroom owners are right in counting the additional costs and potential wastage of a 'try-on' customer, but they miss a trick in not seeing the total value of having a real person appear in the aisle, already in the market for a purchase, ideally with the wherewithall (money) and highly susceptible to the personal conversion-skills an online provider can only dream about..

A NAM would not have to be told twice... 
[ For NAMs that need reminding, we are always available to help :) ]

* Press article here