WHI T e PAPeR                                   RetailRenegades                          By LeSLie cLiFFord        and   L...
Blazing the retail trail toward                          deeper shopper connections.teens still need assurance that their ...
defying Channel noRMs                                      Adidas shoes and clothing options that shoppers     Pricing is ...
formula to provide a competitive edge, drive traffic           renegade perspective can infiltrate your initiatives:and in...
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Retail Renegades, By Laura Moser, Executive Director, Retail Strategy & Leslie Clifford, Executive Director, Strategic Planning and Consumer Insights, G2 USA

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Retail Renegades, By Laura Moser, Executive Director, Retail Strategy & Leslie Clifford, Executive Director, Strategic Planning and Consumer Insights, G2 USA

  1. 1. WHI T e PAPeR RetailRenegades By LeSLie cLiFFord and Laura moSer g2 uS aW hat comes to mind when you hear the term “renegade?” Do you think deserter? Outlaw? While the dictionary definition has a negative connotation — “an individual who rejects lawful or conventional behavior” — renegades often have a positive impact on culture. Manyare rejected by society during their lifetimes only to be admired later as innovators. From Mark Zuckerberg (father of Facebook) to to ground both products and product selection inthe Grateful Dead (who believed music was becoming emotional needs not broadly acknowledged by othertoo commercialized and encouraged fans to tape their marketers. These retail mavericks link their itemslive concerts), renegades have significantly enhanced with unexpected services that let shoppers fulfillour lives. Put another way, renegades often provide a intangible needs — even somewhat “darker desires.”glimpse into the future. In Japan, Nike opened a retail outlet with a Depending on your perspective, a “retail” renegade’s concept inspired by Tokyo’s Harajuku neighborhood —actions could range from a monumental shift to a more where originality is critical to defining your personalsubtle strategy. We find both to be relevant. Our goal street style — and features a NIKEiD Generator andis to share some of the most intriguing global examples, NIKEiD Studio. These tools elevate color selection tohighlight commonalities and provide inspiration for the art-and-science of creating a unique color “identity.”your quest to establish deeper shopper connections. The NIKEiD Generator, an interactive kiosk that scans As competition across many channels escalates, shoppers’ clothes, creates a personalized color shade.retailers have increased the sophistication of all aspects Shoppers take this shade to the NIKEiD Studio forof their marketing mix. Our research utilizes the five one-off Nike shoes, stickers and wallpaper, allowingPs (product, people, price, place and promotion) as Nike to tap into the youthful craving for a new forma framework to share examples of those who buck of individuality.convention. Our research took us on a metaphoric Wet Seal uses technology to provideshopping spree around the world, where we found customization that allows shoppers to virtuallysome innovative, unusual, and even irrational examples “snoop” into their friends’ closets before committingof retail (see chart). to a purchase. The retailer’s in-store kiosks and While vastly different in many ways, our Fashion Community site enables shoppers of theirrenegades share several traits we believe will shape brick-and-mortar and online outlets to create and postthe industry over the next five years. their personal outfits. Roughly 20,000 new combinations are createdfulfilling deepeR desiRes each month. This allows both shoppers and Wet Seal The first “P” in most marketing models refers to get a pulse on what’s hot for the season. Whileto product. Renegade retailers have found ways fashion is often touted as a means of self-expression,34 THe HuB  MARCH/APRIL 2011
  2. 2. Blazing the retail trail toward deeper shopper connections.teens still need assurance that their tastes are aligned destroy inanimate objects. This revolutionary offeringwith those of their friends. recognizes the emotional need that can drive the On a more extreme level, a group of retailers shopping trip itself — pent-up frustration.in China created a women-only “venting store.”Female shoppers who spend a given amount at select a bRoadeR VieWretailers in the mall receive a voucher for one minute Most retailers spend a considerable amountof destructive bliss — complete with a protective of time, money and energy building personalhelmet. For 60 seconds, shoppers can smash and connections with the people who shop their stores. Renegades, however, take a broader view of their shopper connections and help individuals build ties with other shoppers, the community-at-large and even competitive retailers. Search for Renegades Tesco is currently testing a ride-share program in London. The expected execution of this initiative Our metaphoric quest for renegades includes helping loyalty-card members arrange carpools included 185 retailers across 12 categories. to three north London stores. The irrational, renegade component includes also facilitating carpools to Number of school, rides to sporting events and transportation Channels Retailers to shows. Tesco may or may not receive any direct sales from this aspect of the service, but we suspect Food, Drug, shoppers who participate will feel a deeper sense of Mass, Grocery, loyalty — perhaps obligation — to the retailer. 53 A grocery store in Oregon, Mercado Los Gavilanes, C-store, Club, moves beyond food products to hosting anniversary Value/Discount parties, church fundraisers and teen nights. This US retailer of Latin products has converted an unused Fashion 33 storeroom into an events center that accommodates up to 500 people. The room offers a stage, bar, Restaurants 27 restroom and kitchen as well as a children’s room adjacent to the main hall. This service not only Department increases the store’s profit per-square-foot, it also 26 recognizes a strong community need unrelated to stores food. Shoppers have begun to see the store as more than a business; it’s now a destination. Liquor: 14 The owner of a small London coffee outlet, Gwilym Private & Chain Davies, turns the very definition of loyalty on its head. Winner of the 2009 UK Barista Championship, Davies’ electronics 13 love of the category runs deep. He feels education is key to coffee appreciation and rewards his patrons for Cash & Carry visiting other outlets. Davies provides a dis-loyalty 10 card that features eight, high-quality coffee outlets across east London. Once individuals visit each of DIY/Hardware 9 the listed venues, Davies rewards their category exploration with a free cup of his own brew. This twist on relationship marketing has already spurred S o u r c e : G2 USA imitations in Seattle and Toronto. MARCH/APRIL 2011  THe HuB 35
  3. 3. defying Channel noRMs Adidas shoes and clothing options that shoppers Pricing is the backbone of all business models can don for an immediate, and quite literal, testand therefore the least likely of the Ps to stray from run. Included on-site are 16 shower cubicles and 248conventional strategies. Most retailers resort to lockers for rent, accessible to the public-at-large.established channel norms to define their pricing Adidas’ extreme destination demonstrates anstructure. Our renegades have discovered ways to innate understanding of the runner’s mindset: “Idefy channel norms through pricing strategies that need to feel how it performs.” With a huge selectionexpress their unique DNA. to choose from, runners can sample endless product Topshop, a global fashion specialty store with combinations for the ultimate purchase confidence.more than 400 outlets, has a brave and irreverent Like Adidas, Luxottica, a manufacturer andapproach to style and a product range that has retailer of eyewear, recognizes its products arecaptured the imaginations of fashion-conscious fashion statements as well as functional accessories;shoppers. This specialty fashion retailer has a price therefore, real-world trial is key. At the EyeHub,offering that aligns with how women stock their Luxottica provides shoppers a simulator room tocloset. Merchandise ranges from $20 sweatshirts to evaluate glare and wind resistance. For the sports$800 designer dresses — but all are sold in a unique, enthusiast, Luxottica has a treadmill and exercisefashion-forward environment. At Topshop, edgy style bike to test eyewear in real-world, everyday situations.drives fast-turn inventory and price does not define Fashionista purists can take a touch-screen photothem or their clientele. of themselves wearing each option and select from an The Panera Cares Café also refines the price model. array of printouts. Shopping with kids? No problem.This bakery café suggests a recommended price for The store has a dedicated play area for children.each item, but customers pay what they can or think Going the extra mile to provide shoppers with real-is fair. Around 65 percent pay the recommended price world conditions underscores a true understanding ofwhile others pay more or less, and some pay nothing how to maximize the role that place can play.at all. Currently, they are operating at a nearly In their relentless pursuit of new outlets andbreakeven status and have two outlets, with expansion formats for delivering products to shoppers in realplanned in 2011. In an environment where consumers time, some businesses are proving to be extremelyare increasingly concerned about their communities innovative. Travelers, hotel guests and visitors toand the role they can play in supporting them, this fast-food restaurants can now use vending machinesretail price model is a daring demonstration of how to buy items ranging from prescriptions to fruits andcharitable retail programs can be self-sustaining vegetables and even freshly baked pizza. Best Buyentities, even in the toughest of times. recently installed more than 100 vending kiosks at airports with high-end electronics — from digitalReal-life Retail cameras to portable gaming devices — all catering to One of the most interesting aspects of retail on-the-go commuters.renegades is how they approach place. Shoppers’ Taking the number-one position in renegadeheightened focus on options, authenticity and vending retail, a butcher shop in Northern Spainimmediacy has these retailers going to extremes in understands that people do not always think aboutterms of interior design and shopper experience. dinner until it is dinnertime. They have developed aIncorporating real-life context into your retail format touch-screen vending machine in front of the store;or distribution point provides instant relevance and a shoppers can purchase fresh steak, poultry or hamburgercompelling competitive edge. around the clock. If you don’t speak Spanish, no worries, A Tokyo Adidas outlet has taken a bold move in the vending machine recognizes multiple languages.demonstrating how flexible the place of business canbe. Located near Imperial Palace, a popular area for th e h igh Roa d to sales Resultsthe city’s runners, the Adidas Runbase Store reinvents Conventional retail approaches promotion asthe traditional sports gear channel. Expert staff is a short-term sales driver that directly benefits theon hand to help with a broad array of cutting-edge retailer. For many years, this has been a winning36 THe HuB  MARCH/APRIL 2011
  4. 4. formula to provide a competitive edge, drive traffic renegade perspective can infiltrate your initiatives:and increase overall basket. Leaders today, however, • Align the product selection process with actualhave discovered ways to put their own financial needs product usage traits. Look for even smallon equal footing with prominent social movements. modifications of your physical environment that Promotional efforts that take a less direct route will help shoppers enjoy the process more, feelcan instill a deeper expression of brand positioning or better about their selection and perhaps evencreate a more compelling point-of-difference during increase their basket size.competitive sales periods. Renegades have the samegoal as their competitors — to drive return-on- • How does your pricing structure limit you? Lookinvestment — but deliver programs anchored in ideas for ways to expand your positioning in shoppers’bigger than savings. eyes via different pricing structures. Identify what The Waffle Shop is a neighborhood sit-down factors truly influence the selection and purchaserestaurant in Pittsburgh. It operates a take-out window of your products. Look for ways to link these need-that sells food from countries engaged in conflict with based factors more strongly with your pricingthe United States. The goal is to bring people from all structure.walks of life together over a common element (food), • Think of your retail outlets as individuals livingencourage dialogue on challenging topics, and share within a larger community. What roles andthem via a live, streaming talk show. responsibilities do other residents have? Does your This promotion increases foot traffic as customers outlet carry its weight within the community?gather to participate in community discussions andshared enlightenment. Its success has gained the • Does your view of relationship marketingattention of retailers like Whole Foods, which is now a incorporate shopper-to-shopper links, cross-contributing sponsor of the promotion. generational ties or even cross-cultural connections? Desigual, a Spanish clothing retailer, understands • Zig when everyone else is zagging. Many renegadesthe power behind the idea of random acts of kindness. do not aspire to be contrarians, but most justIt recently launched a program that rewards its shoppers refuse to take things on face value. They are openfor being kind to bloggers online. Desigual alerts its to examining multiple facets of their businesses,fan base of favorite bloggers to target with cheerful placing bets and making investments withoutcomments; the first 100 to get a reply from the blogger guaranteed outcomes. Determine which aspectseach win a clothing item they have pre-selected of your business model are ripe for a “renegadeinterest in. makeover” and do what feels right. n All blogs are non-Desigual related, just destinationsthat represent what they stand for. All participants inthe Happy Hunters program also receive a 20 percentdiscount on Desigual items. Developing a promotion LESLIE CLIFFORD is executive director, strategic planning and consumerthat exploits a behavior in current culture is a insights at G2 USA. she has 20 yearscompelling way to grab attention. of research planning and shopper- marketing experience across numerousth i n K i ng l i K e a Renegade industries. she can be reached at Being a renegade takes more than just a willingness lclifford@g2.com.to challenge convention. Renegades are tenacious andpassionate. They view obstacles as opportunities and LAURA MOSER is executive director, retail strategy at G2 USA. Laura’sbelieve that — with the freedom to fail — trial-and-error charge is to lead integrated marketingleads to true and lasting improvement. efforts with Kraft, Target, P&G, This last characteristic is a difficult pill to swallow Walmart, Heineken and Kroger,and in conflict with many corporate environments. among others. she can be reachedIn today’s corporate environment, it takes courage for at lmoser@g2.com.retailers to adopt such an attitude. Here are ways a MARCH/APRIL 2011  THe HuB 37

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