Nurun Marketing and Merchandising Retail Trend Report September 2012


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Created by my team and me at Nurun Toronto, this is the first of five trend reports that will inform a strategic foresight report on preparing for the future of retail in North America (to be published in 2013).

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Nurun Marketing and Merchandising Retail Trend Report September 2012

  1. 1. TH E FUTURE RETAIL ofMarketing and Merchandising Trend Report September 2012
  2. 2. Marketing and Merchandising Trend Report | September 2012Manage the ambiguous futurewith strategic foresightDaily blog posts. Monthly magazines. Quarterly trend reports. Must-read books.Anyone who works at the intersection of technology and people is swimming in Steps of strategic foresightinformation. This data smog can make deciphering the implications of the latesttech and social developments difficult. One solution is strategic foresight, which 1 Trend scancan help you make sense of emerging trends and clearly evaluate your options forthe future. It’s a tool to manage risk when facing ambiguity in the marketplace. 2 Identify trend driversStrategic foresight doesn’t predict the future, but it does help prepare you for it 3 Evaluate critical uncertaintiesby envisioning a number of different, yet possible, future states in the market 4 Future scenarioslandscape 10+ years from now. These future states are often described as a setof scenarios, and they emerge from an analysis of current trends. So, as a simple 5 Strategic implicationsexample, the increasing popularity of pop-up retail spaces, combined with thehigh adoption of mobile devices, could develop into a future filled with transient 6 Action planstorefronts. This scenario would be made possible due to the minimal wired 7 Monitor trendsinfrastructure required for information and payment.The rapid uptake of technology means that our social lives, cultural experiences,policies, regulations, ecological landscape, and business models are increasinglyintertwined. Through its very design, strategic foresight is built to accommodatecomplexity by considering trends from a multi-dimensional perspective. 2
  3. 3. Marketing and Merchandising Trend Report | September 2012Why Retail Foresight?The Nurun Toronto team has launched a strategic foresight initiative to articulatethe future of business-to-consumer (“B2C”) retail and commerce, and explore Steps of strategic foresightimplications for Canadian and U.S. retailers. The scenarios we generate will giveour retail clients the toolkit necessary to start imagining (and preparing for) the 1 Trend scanpossible futures in the marketplace. Marketing and MerchandisingThe first of seven steps in the strategic foresight process involves trend scanning. Business ModelsThe trends we capture will be published as a series of trend reports that focus onfive domains of importance to both online and omni-channel retailers. Value Exchange AnalyticsThis is the first of five trend reports, and it looks at retail through the lens ofmarketing and merchandising. Next will be a report on business models, followed Emerging Technology Platformsby value exchange, analytics and emerging technology platforms. The culminationof trend scanning and subsequent phases will inform future scenarios in our final 2 Identify trend driversstrategic foresight report. For more information, you can follow the project onNurun’s blog, Digital for Real Life or subscribe to our email list, 3 Evaluate critical uncertainties 4 Future scenarios 5 Strategic implications Preparing for the Future of Retail: A Strategic Foresight Report 6 Action plan 7 Monitor trends 3
  4. 4. Marketing and Merchandising Trend Report | September 2012IntroductionOver the last five years, new forms of technology have radically altered, “You have to be really agileaugmented and disrupted how Canadian and U.S. retailers approach many and flexible in how you deliverfundamental aspects of their business. New devices such as tablets and information to people andsmartphones, along with an explosion of social media channels, have meant thatretailers are able to market and merchandise their products in a number of novel give them choices. Thereways. Technology is both a blessing and curse, however, as it has introduced was a time years ago whennew competitive pressures. It has also significantly altered buying behaviour, retailers and packaged goodsforcing retailers to react and adapt to a smarter and more informed consumer. companies dictated whatRetailers continue to struggle with the fact that consumers are taking advantage consumers could have. Nowof new technologies to locate, research and compare products, thanks to a it’s the other way around.”trend toward Social Product Discovery, Consideration and Evaluation. In – Joanna Trackorder to better attract and entertain their customers, retailers have started to Founder & CEO of eLUXEtake inspiration from film and print magazines in a trend of Product PlacementMorphs into Content + Commerce.Retailers also need to make sure they reach customers wherever they are,seamlessly integrating and supporting the shopping experience across multiplechannels. This might mean creating digital catalogues for the iPad so customers Defining Our Termscan browse and purchase products directly from their tablet, or allowing Given our expertise in the realmcustomers to order laundry detergent through a smartphone app that can scan of digital retail, we defined retailitems on a wall poster thanks to The Integrated Expansion of the Omni-Channel marketing to include:Storefront trend. ·· Product findability and discoverabilityU.S and Canadian retailers are also trying to reconcile the promises of The New ·· Recommendation and comparison toolsGeography of Merchandising trend with the reality that e-commerce is not yet ·· Social commerceborderless. Duties, shipping fees and supplier markup have meant significantly ·· Issues relating to consumer privacyhigher prices for Canadians who wish to buy products from U.S. retailers, be it Our examination of merchandisingin-store or online. trends focused on: ·· PricingNew e-commerce developments, while providing many benefits for both ·· Localization of assortmentconsumers and retailers, can come at a personal cost, as the I’ll Trade My ·· Product presentationPrivacy for a $5 Coupon trend demonstrates. Retailers are reacting in verydifferent ways to the shifts in how consumer data is being collected and utilized. ⊲1 2 3 4 5 6 4
  5. 5. Marketing and Merchandising Trend Report | September 2012Some aspects of retail remain constant, however. Emerging technologies arebeing used by retailers to deliver century-old marketing and merchandisingstrategies like coupons, while bulk discounts and private labeling havenewfound relevance, as demonstrated by the Sophisticated Frugality trend.Canadian and U.S. retailers will need to contend with these trends if theywish to remain successful in the coming decade. This report offers a thought-provoking look at each of the six key trends mentioned above, along with aseries of provocative questions that relate to each trend.A complete strategic foresight report that incorporates these six marketing andmerchandising trends, along with key retail trends relating to business models,value exchange, analytics and emerging technology platforms, will be releasedin early 2013. ■ Nurun Toronto found six key trends relating to marketing and merchandising: 1 Social Product Discovery, Consideration and Evaluation 2 Product Placement Morphs into Content + Commerce 3 The Integrated Expansion of the Omni-Channel Storefront 4 The New Geography of Merchandising 5 I’ll Trade My Privacy for a $5 Coupon 6 Sophisticated Frugality1 2 3 4 5 6 5
  6. 6. Marketing and Merchandising Trend Report | September 2012 1Social Product Discovery,Consideration and EvaluationWant to find the perfect gift for a friend’s birthday? Rather than taking your “Collective consumers have greatbest guess as you wander around a local mall, you can now utilize your friend’s power. Communities now formFacebook data to generate a more relevant list of suggestions. That’s the premise around dissatisfaction and theyof a mobile app called Karma, which helps people discover, consider and evaluateproducts and services for purchase. Through Facebook integration, Karma is able instantly scale and become reallyto send out birthday reminders for close friends and provide personalized gift influential and powerful. And theyideas. Karma, along with other social discovery and recommendation sites such often appear out of the vapor.”as LYST, Glimpse, and Curisma, speak to a consumer desire for social approval – Joe Jackmanand belonging. CEO of Joe Jackman Brand Inc.At the same time, a number of visual discovery tools have emerged to make theprocess of online browsing more efficient and visually pleasing. Many of thesetools borrow inspiration from Pinterest, an image sharing website that allowsusers to pin their favourite images onto unique digital boards.Fancy, for example, is an online store that combines elements of blogs and “The big challenge is to strip awaymagazines with a wish list function, while Polyvore encourages users to act like the marketing hype and spin andmagazine editors and curate collections of their favourite fashion finds. Sites like find the commercial utility inLockerz, meanwhile, allow customers to act as brand ambassadors, a functiontraditionally performed by celebrity endorsements. word-of-mouth referrals. A friend recommending to a friend is stillA March 2012, Bizrate Insights Online Consumer Pulse report found that 32 one of the most powerful salespercent of online consumers have purchased a product after seeing it on a drivers. But getting beyond thesocial image sharing site such as Pinterest, Juxtapost, Discoveredd, Fancy orPolyvore. (Silver, Tan, & Mitchell, 2012). These sites tap into the long-standing technobabble can be tough.”popularity of in-store window-shopping, but eliminate the need for consumers to – Dr. Paul Marsdenvisit multiple websites in order to recreate the same experience online. Editor of Social Commerce TodayFor Canadian and U.S. retailers, this trend presents an opportunity to movebeyond the use of on-site dynamic product recommendation and merchandisingtools, such as Certona, RichRelevance, and PredictiveIntent. Some retailers arestarting to offer personalized assortments and storefronts, including Amazon’s“My Store, (, Inc., 2012). While these tools are frequently used ”to boost online conversion, they can alienate privacy-conscious customerswhen used improperly, as discovered by omni-channel retailer Urban Outfitters(Singer, 2012). In the same way, retailers are working to find the right approach toretargeting and remarketing, two techniques that involve displaying online ads forproducts from websites consumers have recently visited (Hof, 2012). ⊲1 2 3 4 5 6 6
  7. 7. Marketing and Merchandising Trend Report | September 2012Meanwhile, retailers such as Krush (Walker, 2012) and Modcloth (Amed &Company, 2012) are collecting customer product preferences and post-purchasefeedback. This data is then used to create new products and better respond toshifts in supply and demand for existing items. Clothing company Betabrandhas gone so far as to encourage customers to submit new clothing ideas forcommunity consideration (Kavilanz, 2011). These user-submitted ideas are thenturned into new Betabrand products if sufficient consumer interest exists(Kavilanz, 2011).Looking ahead, retailers should stop viewing their online catalogues aswalled-gardens and look for ways to attract new customers by showcasing acurated selection of products across a variety of niche social discovery sites.Otherwise, visual discovery tools might augment their e-commerce capabilities,leading to increased retail competition. Retailers also need to treat customerfeedback as a source of future product innovation and incorporate this feedbackinto their merchandising analytics so they can be more nimble in adjusting theircatalogue assortments. ■ 8 Forward Thinking Are you ready to distribute your products not only through your own e-commerce site, but also Pinterest and Fancy? Are you prepared to let your customers make suggestions for new products? Would you be willing to put “talking” price tags on your in-store merchandise so that customers could instantly connect to an external social recommendation tool through their smartphones?1 2 3 4 5 6 7
  8. 8. Marketing and Merchandising Trend Report | September 2012 2Product Placement Morphsinto Content + CommerceThe print magazine industry has struggled to stay relevant over the last decade as “You’ll continue to see moreconsumers turn to blogs such as Fashionista, Gizmodo, and Apartment Therapy retailers getting into contentas their preferred source of information about new products. At the same, and more publishers gettingretailers are starting to realize that engaging lifestyle content integrated withinan e-commerce environment can be a very compelling method of speaking to into e-commerce. The pathconsumers. The mixture of content and commerce also provides new opportunities to purchase is going into a bigfor creative merchandising approaches, visual narratives and brand curation. blender and the lines between the two will disappear.”This helps to explain why the humble email newsletter remains a viable wayto market new products, used by companies as varied as the Gilt Groupe and – Joanna Track Founder & CEO of eLUXESephora. Some retailers, including Zappos, publish a monthly magazine of originalcontent to promote their products and reinforce their overall brand image.Meanwhile, online luxury retailers including eLUXE, MR PORTER, and IWCprovide specific fashion and lifestyle advice alongside their products. This adviceresembles the how-to style guides found in legacy print publications such as Vogueor Esquire, but their e-commerce platforms allow for a more seamless and rapidprocess of discovery and purchase. This type of approach represents the latestevolution of the advertorial.More sophisticated versions of this trend involve shoppable online videos. Byembedding their clothing line within a music video, SSENSE was able to put afresh spin on the traditional fashion catalogue (FKi, Azalea, Diplo, 2012). This videoserved to demonstrate products in a relevant lifestyle context and entertainedyounger consumers who may be tired of traditional marketing approaches.In the same way, short films created and produced by companies such asBMW and Chanel showcases sophisticated narratives with brand and productintegration. A recent example is Karl Lagerfeld’s multi-part branded film The Tale ofa Fairy (2012).In many cases, Canadian and U.S. retailers can take advantage of existing content(blog posts, online video) to generate newsletters or produce magazine-likeexperiences on their websites. A successful blend of content and commerce mightrequire retailers to think like a publisher and develop an editorial calendar so thatfresh, engaging content can be created and published on a regular schedule. ■ 8 Forward Thinking Is your company ready to hire editorial staff in order to create a retail catalogue that leads with editorial and offers embedded e-commerce options, indistinguishable from a content-rich online magazine? Is your brand robust enough to create captivating stories?1 2 3 4 5 6 8
  9. 9. Marketing and Merchandising Trend Report | September 2012 3The Integrated Expansion ofthe Omni-Channel StorefrontMobile technology makes it possible to offer time-strapped consumers the “Historically, Canadian retailconvenience of purchasing products from almost anywhere. In response, a investment in technologynumber of unique sales channels have emerged, including QR code enabled has involved a relatively longvirtual storefronts. Canadian online retailer used the public walls of atransit corridor to display photos of dozens of products that consumers could cycle. The trouble today ispurchase by pointing at specific items with a smartphone app. eBay has also that the technology in thecreated a 24/7 shoppable storefront window display in New York that utilizes consumer’s hands is betterQR codes (Kats, 2011). [than the retailer’s] andThe audio search technology provided by Shazam, meanwhile, allows marketers it’s refreshing faster.”to “magically” send TV audiences to special mobile microsites based on audio – Joe Jackmanrecognition tools (Hockenson, 2012). And locative technologies such as geo- CEO of Joe Jackman Brand Inc.fencing allow retailers to define a specific geographic area surrounding theirstore within which customers receive push notifications for promotions via appsor text messages (Burby, 2012).Retailers are also trying to anticipate consumers’ purchasing needs from withinsocial media and tablets. CoffeeTable is an iPad app that compiles multiple retailcatalogues and adds an e-commerce option. This allows customers to not onlybrowse, but also purchase products at their convenience.As these and other options emerge, retailers are being careful to integrate newchannels with existing approaches in order to provide a seamless customerexperience. Since customers shop by brand, not channel, retailers can nolonger segment brick-and-mortar and online operations if they wish to avoidredundancies and conflicts of interest. Merging channels makes it possible tooffer a more unified brand message, a more seamless shopping experience anda more consistent approach to assortment, pricing and promotions.Best Buy Canada, for example, is opening two new pilot stores in the Fall of2012 with only 5,000 square feet of retail (instead of the average 32,000 squarefeet) (Wexler, 2012). Every aisle will include a tablet that allows customers toview and order from Best Buy’s complete inventory for a given product category(Wexler 2012). UK retailer Marks and Spencer has also been aggressivelypursuing an omni-channel shopping strategy with a unique store format thatrecently debuted in Cheshire, England (Wood, 2012). The new location connectsthe in-store and online shopping experience through free Wi-Fi, iPad-equippedsales assistants that can access additional inventory and giant touchscreenkiosks that allow customers to browse and order online items (Wood, 2012). ⊲1 2 3 4 5 6 9
  10. 10. Marketing and Merchandising Trend Report | September 2012This shift in approach has been described as “omni-channel retail” and will require “Are bricks and mortar dead?merging disparate channels that include websites, mobile devices, gaming No. But people want choice.”consoles and physical stores (Rigby, 2011). For example, embedded RFID tags are – Joanna Trackbeing used in some New Balance stores to trigger additional product information Founder & CEO of eLUXEthrough a video display when customers place the sneaker on a hotspot(Swedberg, 2012). The move toward omni-channel retail also includes aligning in-store and online operations through “buy online pickup in-store”; “buy online returnin-store” and “buy in-store ship to home options. Canadian retailers have been ”slower to adapt to such innovations as compared with their U.S. counterparts.Increased retail integration requires an ability to provide equivalent levels ofcustomer experience in-store and online. For example, online retailers are tryingto ensure that customers have access to 360-degree product views and onlinevideo reviews to compensate for the lack of tactility (Charlton, 2010). At the sametime, retailers are trying to develop integrated CRM perspectives that generatea 360-degree view of their customers, including cross-channel order histories.However, most retailers are still encountering difficulties integrating customer dataacross all channels, as they lack a sophisticated master data management system(IBM, n.d.). Without investing in appropriate infrastructure, customer informationtends to get “trapped” within complex information systems that include businessperformance metrics, in-store and online transaction data, promotional data andsocial media listening and trend data.The challenge for Canadian and U.S. retailers is to provide a seamless retailexperience through consistent brand experiences amidst increasing complexityand customer expectations, regardless of the touch point. Omni-channel retailrequires a significant investment in infrastructure and training, which can be amajor barrier to entry. This approach to retail also necessitates a willingness tobridge e-commerce operations with physical retailing through the use of cross-functional teams with both digital and in-store expertise. This will allow retailersto eliminate the current silo-based approach that developed before and after thedot-com crash of March 2000 (Rigby, 2011). ■ 8 Forward Thinking Have you considered adding an extended aisle or virtual backroom functionality to your retail operation so that in-store and online customers enjoy a wider range of products? Is your brand voice connected and consistent across all channels? Can your customers purchase an item directly from your bus shelter ad by simply taking a photo of it?1 2 3 4 5 6 10
  11. 11. Marketing and Merchandising Trend Report | September 2012 4The New Geographyof MerchandisingThe erasure of borders that e-commerce makes possible means that retailers cantheoretically sell their products to anyone, anywhere in the world. The reality ismore complicated however, and geography continues to assert its influence onmerchandising strategies in both obvious and subtle ways.Despite their proximity to the United States, many Canadians have beendisappointed to discover that online retailers such as West Elm are unable tosell and ship specific products to Canada (Williams-Sonoma Inc., 2012). This isespecially confusing since both companies have physical stores located in Canada.Along with a more limited product selection, Canadians face higher prices for thesame merchandise as compared with the U.S., which can range anywhere from 10to 50 percent (Beltrame, 2012). This price gap has become more noticeable overthe last decade thanks to an influx of U.S. retail chains arriving in Canada. Within aweek of opening their first store in Canada in August, 2011, J. Crew had to adjusttheir shipping fees and lower their online prices through the elimination of dutyfees after The Globe and Mail reported significant price disparities between theU.S. and Canadian versions of the website (Strauss, 2011).Technology has made the price gap between the U.S. and Canada nearlytransparent, and helps to explain the rise of cross-border shopping through bothonline orders and physical trips to U.S. destinations (Strauss & Grant, 2012). BlackFriday, for example, has now become a more popular Google search term thanBoxing Day in Canada (Oliveira, 2011).Within their own borders, national retailers in Canada and the U.S. are carefullyconsidering geography in order to localize their in-store product assortment andreflect the needs of regional customers. By offering products based on seasonalweather patterns and region-specific cultural preferences, retailers are better ableto serve their local markets and manage their overall inventory (Schouten, 2010;Deale, 2012). The same cannot be said for e-commerce retailers, although this isslowly changing. Columbia Sportswear has recently begun initiatives to localizesite messaging, product assortment, pricing and promotions (Florletta, 2012). ■ 8 Forward Thinking As a Canadian retailer, how are you preparing to compete with the wide online product assortment and streamlined cross-border shipping policies of large American retailers, such as Nordstrom and Bloomingdales? Have you considered fortifying your online presence with robust e-commerce operations? How might you compete on uniquely branded customer experiences instead of price?1 2 3 4 5 6 11
  12. 12. Marketing and Merchandising Trend Report | September 2012 5I’ll Trade My Privacyfor a $5 CouponMany consumers have developed complicated math in order to maximize their “People are smarter than wereturn on loyalty programs such as Best Buy’s Reward Zone, Shoppers Optimum, give them credit for. TheySafeway’s Club Card and AIR MILES (LoyaltyOne Inc.). The savings and rewards will give up their personalthese programs offer aren’t technically free however, as they cost consumers someof their privacy. information, but only if they get something in return.”Canadian and U.S. retailers, meanwhile, are also finding it necessary to develop – Dr. Paul Marsdencomplicated math to cope with the era of “big data. An increasing number of ” Editor of Social Commerce Todayretailers are focusing on data collection and analysis in order to more effectivelypersonalize their marketing appeals and strengthen customer loyalty in the process.Target, for example, is now able to offer relevant coupons to women in the earlystages of their pregnancy based on their purchasing habits (Duhigg, 2012).While many customers appreciate this type of personalization, they may also feelthat the information security practices of these companies are murky. In mostcases, privacy is no longer a default option, but something that must be configuredby consumers.Despite some negative associations regarding corporate approaches to privacy,consumers remain quite willing to gamble with their personal information if theybelieve there is a clear benefit in doing so. For example, a November 2011 surveyfound that nearly two-thirds of consumers do not trust online companies such asFacebook or Google with their personal information (eMarketer, 2012).Despite this skepticism, the value that consumers receive from these samecompanies is high enough to overlook or ignore issues of trust. The popularity andgrowth in Facebook usage may be due in part to a human desire for communitybelonging. Social media also allows people to satisfy their personal curiosity aboutthe lives of friends and family.As the importance of lifestyle marketing continues to grow, Canadian and U.S.retailers will need to rethink critical aspects of data collection and privacy policiesin order to generate relevant and targeted marketing campaigns. One approach toprivacy is to better reward customers for the data they provide or offer a higherdegree of transparency about how their consumer data will be used. ■ 8 Forward Thinking Want to gain access to the private habits of influential customers? Be prepared to openly barter for this information.1 2 3 4 5 6 12
  13. 13. Marketing and Merchandising Trend Report | September 2012 6SophisticatedFrugalityThe coupon made its debut in the late 1880s, and the basic idea behind it has “The ability to compare valuechanged very little in the intervening 120 years. While saving money will probably instantly via mobile has creatednever go out of style, it is surprising that many successful new technologies and an amplification of are being used to deliver coupons, bulk discounts, auctions and othertimeless pricing tactics. It has real impact on sales and the brand relationship.”At the same time, the dynamic pricing made possible by current CRM systems – Joe Jackmanmeans that retailers can offer promotions that reward and enhance loyalty, as CEO of Joe Jackman Brand Inc.these offers are based on a customer’s purchasing history. Getting customers tolook beyond simple price reductions requires a long-term education strategy, asdemonstrated by the difficulties encountered with JCPenney’s recent EverydayLow Price Strategy (Mohammed, 2012).Retailers must continue to experiment with new discount options and thebest way to deliver these deals. SavingStar, for example, is a mobile app thatgenerates coupons based on a customer’s cluster of loyalty card information.Discounts are applied automatically at the point of sale via the loyalty card (VanGrove, 2011). Decide helps consumers predict the best time to purchase majorappliances based on historical discount data, and recently added a ConsumerReports style recommendation component. Groupon, meanwhile, has made bulkpurchasing a popular option for retailers who want to reach new customers. Itssuccess has inspired a host of competitors including TeamBuy (Buyers UniteInc.), LivingSocial and AllDailyDeals.Consumers have also become more vocal about product pricing due to thepopularity of social media. The result of this trend are co-buying sites such asBuyapowa, where the price of a specific product drops based on the number ofconfirmed purchasers, and Netotiate, a site that allows consumers to name theirprice for a wide range of consumer goods.Sophisticated frugality refers not only to the use of technology-enabled discounts,but merchandising strategies that developed in response to the economicdownturn of 2008. This has included a focus on developing more robust linesof private label products. (Nielsen Wire, 2010). The ability of retailers to developprivate label products that can compete on both quality and value has helpedencourage the recent emergence of luxury private labels. Examples includeLoblaw’s PC Black Label, launched in October 2011 (Scott-Thomas, 2012); DuaneReade’s DR Delish launched in April 2010 (The Dieline, 2010); and Wal-Mart’s OurFinest, launched in November 2011 (Kwon, 2011). ⊲1 2 3 4 5 6 13
  14. 14. Marketing and Merchandising Trend Report | September 2012The growing importance of private labels is reflected in the fact that both IBM(“Consumer-Centric Analytics: The Foundation for Competitive Advantage, ”Waldron, 2011) and Accenture (“The Waiting is Over: Why retailers have to getbetter at private label now,” 2011) have conducted extensive research into thisincreasingly critical aspect of retail merchandising.Canadian and U.S. retailers considering a discount strategy need to decidewhether they want to pursue a price-based strategy over a brand-driven approach(or vice-versa). However, dynamic pricing and an inventive mix of privatelabel products can help retailers split the difference between value and brandapproaches. Brands also have an opportunity to reframe what frugality means byrecognizing that consumers may prefer to be smart with their money, rather thansimply being cheap. ■ 8 Forward Thinking Are you ready to think beyond the coupon? Are you willing to barter with customers who expect to be able to name their own price for your products? How might a line of luxury private label products reinforce or augment the key strengths of your retail brand?1 2 3 4 5 6 14
  15. 15. Marketing and Merchandising Trend Report | September 2012What’s NextOur next report will look at retail trends through the lens of emergingbusiness models, followed by value exchange, analytics, and technology Steps of strategic foresightplatforms. Once these trend reports are complete, we will move to the nextphase of strategic foresight: identifying the driving forces underlying the 1 Trend scantrends. Those driving forces will inform future scenarios, leading to the last Marketing and Merchandisingphases in this strategic foresight initiative to articulate the future of B2C retailand commerce. Business ModelsFor more information, you can follow the project on Nurun’s blog, Value ExchangeDigital for Real Life. If you have any questions, or want to receive an Analyticsemail reminder when our next trend report is published, please contact Emerging Technology 2 Identify trend drivers 3 Evaluate critical uncertainties 4 Future scenarios 5 Strategic implications Preparing for the Future of Retail: A Strategic Foresight Report 6 Action plan 7 Monitor trends 15
  16. 16. Marketing and Merchandising Trend Report | September 2012MethodologyNurun’s strategic foresight team performed a horizon scan using the “STEEPV”framework to locate current and emerging trends and signals in the following areas:Social, Technological, Economic, Environmental, Political, and Cultural Values. Thisscan generated over 100 relevant trends.These signals and trends were then clustered and sorted into six overarching trends.Each of these overarching trends required the support of three to five strong signalsor examples. Some trends had an excess of signals – in those cases, excess signalswere catalogued for future inclusion or consideration.Sincere thanks to the merchandising and marketing experts who graciously sharedtheir insights with us for this report: Joe Jackman, CEO of Joe Jackman Brand Inc Joe leads a 60-person multi-discipline team of ‘retail reinventionists’ – researchers, analysts, management consultants, marketers, creative directors, writers, designers and activation managers – focused on accelerating value creation and disrupting the status quo. Joe Jackman Brand is the first company to combine in-depth analytics and strategy with creative vision, design, marketing, and the hands-on shaping of all touch points of customer experience. Dr. Paul Marsden, Editor of Social Commerce Today Paul is a social psychologist and market researcher specializing in digital and social media, influencer marketing and reputation management. He works with brands and organizations to develop effective digital marketing and PR strategies. Joanna Track, Founder & CEO of eLUXE Joanna has over 15 years experience in marketing, business strategy, branding and advertising. In 2004 she started Sweetspot, the ultimate destination for Canadian women to stay in the know about what’s new and fabulous in their city. In 2011 she founded eLUXE, Canada’s online shopping destination, offering the best edit of global contemporary brands through engaging consumable content.The Nurun foresight team will continue to monitor and collect new developmentsin marketing and merchandising to inform subsequent strategic foresight work,especially scenario development. 16
  17. 17. Marketing and Merchandising Trend Report | September 2012SourcesAccenture. (2011). The Waiting is Over: Why Retailers Have Deale, S. (2012, January 25). 5 Ways Chain Retailers to Get Better at Private Label Now. Retrieved from http:// are Localizing Their Stores | InStore Trends. In-Store Trends. Retrieved August 20, 2012, from http://www. private-label.aspx chain-retail-store-trends-merchandising/ Inc. (2012). All Daily - View all daily deals and group buys in one place! Retrieved June 14, Decide. (2012). How it Works / Decide. Retrieved August 20, 2012, from 2012, from, Inc. (2012). Help: Discoveredd. (2012). Discoveredd - Recommendations. Retrieved September 11, 2012, Retrieved August 20, 2012, from http://www.discoveredd. from com/ html?ie=UTF8&nodeId=13316081 Duhigg, C. (2012, February 16). How Companies Learn YourApartment Therapy, Inc. (2012). Apartment Therapy. Retrieved Secrets. The New York Times. Retrieved from http://www. July 30, 2012, from, J. (2012, April 24). Retailers blame multinational (2012). eLUXE. Retrieved from http://www.eluxe. suppliers for Canada-U.S. price gap. The Canadian Press. ca/ Ottawa. Retrieved from http://www.theglobeandmail. eMarketer. (2012, January 24). How Marketers Can Manage com/report-on-business/international-business/retailers- the Privacy Problem. eMarketer. Retrieved from http:// blame-multinational-suppliers-for-canada-us-price-gap/ article4102212/ 06033675d47f881651943c21c5ed4Best Buy, Inc. (2012). Best Buy Reward Zone. Retrieved July Facebook, Inc. (2012). Facebook. Retrieved July 30, 2012, 30, 2012, from from (2012). Betabrand - Pants, Jackets, Hoodies, Fancy. (2012). Fancy. Retrieved June 13, 2012, from http:// Bags & Fabrications. Retrieved August 20, 2012, from Fashionista, Inc. (2012). Fashionista. Fashionista. RetrievedBurby, J. (2012, June 11). Building Relevance With Geo- July 30, 2012, from Fencing. ClickZ. Retrieved from clickz/column/2182814/building-relevance-geo-fencing FKi, Iggy Azalea, & Diplo. (2012). I Think She Ready. VIDEO // The World’s First Interactive Shoppable Video | SSENSE.BuyaPowa Ltd. (2012). BuyaPowa - Social Commerce tools Retrieved July 3, 2012, from to turn buyers into brand ambassadors. Retrieved August video/iggy-azalea-diplo-fki-i-think-she-ready/ 20, 2012, from Florletta, A. (2012, March 9). Columbia Sportswear PartnersBuyers Unite Inc. (2012). TeamBuy. Retrieved June 14, 2012, With PFSweb For Global E-Commerce Expansion. Retail from TouchPoints. Retrieved August 20, 2012, from http://CBC News. (2012, August 10). 6 U.S. retailers set to invade Canada’s malls. CBC News. Retrieved from http://www. columbia-sportswear-partners-with-pfsweb-for-global-e- commerce-expansion-Certona, Inc. (2012). Certona. Retrieved July 30, 2012, from Gilt Groupe. (2012). Gilt Groupe. Retrieved July 10, 2012, from, G. (2010, November 10). Why online retailers Gizmodo, Inc. (2012). Gizmodo. Retrieved July 30, 2012, from need product videos | Econsultancy. Econsultancy Blog. Retrieved from Glimpse, Inc. (2012). Glimpse. Retrieved July 30, 2012, from why-etailers-need-product-videos (2012). The Leading Retail Catalog App for iPad. Goodreads, Inc. (2012). Goodreads. Goodreads. Retrieved Retrieved July 3, 2012, from June 13, 2012, from, Inc. (2012). Curisma. Retrieved July 30, 2012, from Google, Inc. (2012). Google. Retrieved July 30, 2012, from 17
  18. 18. Marketing and Merchandising Trend Report | September 2012Groupon, Inc. (2012). Groupon Deal of the Day: Find Great Lockerz. (2012). Top Finds From Friends & Celebrities | Deals on Fun Things to Do. Retrieved June 14, 2012, from Lockerz. Retrieved September 11, 2012, from http://, L. (2012, May 3). Shazam: The Secret to Better LoyaltyOne, Inc. (2012). AIR MILES. Retrieved July 10, 2012, TV Engagement? Retrieved July 3, 2012, from http:// from LYST, Inc. (2012). LYST. Retrieved from, R. (2012, July 11). Ad Tech Funding Rolls On With $15 Mohammed, R. (2012). J.C. Penney: Ditch the Risky Pricing Million For Retargeter AdRoll. Forbes. Retrieved from Strategy. Harvard Business Review. Retrieved July 17 , 2012, from tech-funding-rolls-on-with-15-million-for-retargeter-adroll/ ditch_the_risky_pric.htmlIBM. (n.d.). IBM Single View of Customer for retail. IBM MRPORTER. (2012). MR PORTER - The online retail Smarter Planet - Retail performance analytics. Retrieved destination for men’s style. Retrieved July 10, 2012, from September 11, 2012, from smarterplanet/us/en/consumer_advocacy/nextsteps/ solution/B584923C34249D42.html Netotiate Inc. (2012). Netotiate | Online Shopping for Electronics, Computers, Cameras, Watches & more.IWC, Inc. (2012). IWC Schaffhausen | International Watch Retrieved August 20, 2012, from http://www.netotiate. Company. IWC.COM. Retrieved July 30, 2012, from com/ Nielsen Wire. (2012, August 25). The Global Staying PowerJuxtapost. (2012). Juxtapost - All your favorite things, side- of Private Label. Retrieved August 20, 2012, from http:// by-side. Retrieved August 20, 2012, from http://www. staying-power-of-private-label/Karma Science. (2012). Karma - How It Works. Retrieved Oliveira, M. (2011, November 23). Black Friday? Canadians August 1, 2012, from eye Cyber Monday deals. The Globe and Mail. RetrievedKats, R. (2011, October 24). EBay lets mobile consumers from shop via interactive windows at 24/7 storefront. Mobile friday-canadians-eye-cyber-monday-deals/article4252268/ Commerce Daily - Software and technology. Retrieved Pinterest. (2012). Pinterest / Home. Retrieved July 10, 2012, from from ebay-lets-mobile-consumers-shop-via-interactive- windows-at-247-storefront Polyvore. (2012). Polyvore. Retrieved May 16, 2012, from, P (2011, November 17). Two new products a . week, $2 million in sales. Retrieved August 20, 2012, PredictiveIntent, Inc. (2012). PredictiveIntent. Retrieved July from 30, 2012, from betabrand_products/ RichRelevance, Inc. (2012). RichRelevance. Retrieved July 30,Kwon, N. (2011, November 23). Walmart launches high-end 2012, from private label line. Canadian Grocer. Retrieved from http:// Rigby, D. (2011). The Future of Shopping. Harvard Business high-end-private-label-line-10351 Review. Retrieved July 17 2012, from http://hbr. , org/2011/12/the-future-of-shopping/Lagerfeld, K. (2012). Chanel - Cruise 2012 | The Tale of a Fairy The Short Film by Karl Lagerfeld Part 2 | Exclusive. The Safeway, Inc. (2012). Safeway Club Card. Retrieved July 30, Tale of a Fairy The Short Film. Retrieved from http://www. 2012, from aspLivingSocial Inc. (2012). The Best Daily Deals - LivingSocial. Schouten, C. (2012, November 27). Retail giants hope to cash Retrieved June 14, 2012, from http://www.livingsocial. in on local flavor. Indianapolis Business Journal. Retrieved com/canada/cities/53-toronto August 20, 2012, from hope-to-cash-in-on-local-flavor/PARAMS/article/23662 18
  19. 19. Marketing and Merchandising Trend Report | September 2012Scott-Thomas, C. (2012, July 26). Canadian private label (2012). Virtual Store | - Canada’s online makers target affordable luxury: Euromonitor. Retrieved health, beauty, and skin care store. Retrieved July 3, August 20, 2012, from http://www.foodnavigator-usa. 2012, from com/Market/Canadian-private-label-makers-target- Wexler, E. (2012, August 28). Best Buy Canada’s bold plan affordable-luxury-Euromonitor to stay #1. Strategy. Retrieved from http://strategyonline.Sephora USA, Inc. (2012). Shop Makeup, Fragrance, Skincare ca/2012/08/28/best-buy-canadas-bold-plan-to-stay- & More | Sephora. Retrieved August 20, 2012, from http:// 1/#ixzz25oNQDvjH Williams-Sonoma Inc. (2012). International Returns (2012). Shoppers Drug Mart Optimum Exceptions | west elm. Retrieved August 20, 2012, from Program. Retrieved from http://www1.shoppersdrugmart. ca/en/Optimum/Earn.aspx exceptions.htmlSilver, H., Tan, E., & Mitchell, C. (2012). Pinterest is not Wood, Z. (2012, September 2). Marks and Spencer gambles only for window shopping, nearly 1 in 3 buy. Online on bringing internet age to the shop floor. The Observer. Consumer Pulse. Bizrate Insights. Retrieved from Retrieved from sep/02/marks-and-spencer-multichannel-shopping VisualShopping.pdf Yin, Sara. (2012). Serious New Android Privacy LeakSinger, N. (2012, June 23). E-Tailer Customization: What’s Demonstrated. PCMAG. Retrieved July 3, 2012, from Convenient and What’s Just Plain Creepy. The New York Times. Retrieved July 30, 2012, from http://www.nytimes. new-android-privacy-leak-demonstrated com/2012/06/24/technology/e-tailer-customization-whats- Zappos ZN. (2012). Zappos ZN. Retrieved June 28, 2012, from convenient-and-whats-just-plain-creepy.html, M. (2011, September 1). J. Crew backtracks on higher Canadian prices. The Globe and Mail. Retrieved from crew-backtracks-on-higher-canadian-prices/article1360475/Strauss, M., & Grant, T. (2012, June 4). Retailers brace for more cross-border shopping pain. The Globe and Mail. Retrieved from report-on-business/retailers-brace-for-more-cross-border- shopping-pain/article2435077/Swedberg, C. (2012). RFID Has Shoppers Running to New Balance’s Store in Boston. RFID Journal. Retrieved from, Inc. (2012). Target. Retrieved July 30, 2012, from Dieline. (2010, April 26). Duane Reade Private Label. Retrieved August 20, 2012, from http://www.thedieline. com/blog/2010/4/26/duane-reade-private-label.htmlVan Grove, J. (2011, May 12). Hot Coupon App Automates Savings Via Loyalty Cards. Retrieved June 28, 2012, from, P V. (2011, November 1). Customer-Centric . Analytics: The Foundation for Competitive Advantage. IBM Retail Industry Blog. Retrieved from https:// november_1_2011_12_01_pm32?lang=en_us 19
  20. 20. Marketing and Merchandising Trend Report | September 2012Meet the Nurun TorontoStrategic Foresight TeamRyan BiggeAs a Digital Content Strategist at Nurun Toronto, Ryan Bigge combines over 12years of experience as a freelance journalist with a passion for design thinking andinteractive art. His writing has been published in the New York Times Magazine,Report on Business, and the Toronto Star. As part of a recent residency at the CFCMedia Lab, Ryan co-created and, two related interactiveprojects that convert digital experiences into tangible, permanent keepsakes.Jen ChowAs Nurun Toronto’s Design Research lead, Jen utilizes a diverse set of consumerresearch techniques to uncover insights and shape new opportunities for variousretail clients. Jen recently co-authored a report on the future of consumer-to-businesspayments that focused on the Canadian banking industry as part of her work inOCAD University’s Master of Design Foresight & Innovation program. Jen’s workfuses her eclectic background in accounting and finance with her keen interest insociocultural trends and technology.Kira LevineAs Senior Retail Strategist at Nurun Toronto, Kira’s focus is on translating consumerneeds into viable retail solutions, bridging both in-store and online capabilities.She brings a unique blend of passion for retail with over nine years of experiencein category and product management. She holds a Bachelor’s degree in RetailManagement and an International MBA.Audrey CarrAs Director of Digital Strategy, Audrey guides Nurun Toronto’s cross-functionalteams in identifying, framing and solving customer-centric opportunities across ouromni-channel retail clients, including Sears Canada, Home Depot Canada, Acklands-Grainger, and the LCBO. She also leads the development and evolution of NurunToronto’s strategic capabilities in design research, design & retail strategy, analytics,and interaction design. 20
  21. 21. Marketing and Merchandising Trend Report | September 2012About NurunNurun is the world’s largest independent full-service digital agency, providinga broad scope of services that are uniquely tuned to the opportunities andchallenges faced by online and omni-channel retailers.With strong expertise in digital retail strategy, experience design, platformdevelopment, enterprise integration, and platform management, Nurun Torontocrafts experiences that marry consumer brand engagement and digital utility forsome of Canada’s most recognized retailers, including Sears Canada, The HomeDepot Canada, Holt Renfrew, LCBO, and Walmart Canada.For Toronto new business inquiries, please contact Emily Bond, Vice President,General Manager at 21