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What retailers can learn from a microwave oven

 

In Jon Stine’s blog recently In Between the Numbers: Less than a Third, and Less than Half.”  He wrote that complexity is an issue with technology and Bob Anderson, former CTO at Best Buy, points us to the “popcorn” button on the microwave as a perfect guide for consumer-facing technology.  No questions.  Immediate understanding of value.  One push and sixty seconds equals hot buttery-salted goodness..

That got me thinking that we can extend the analogy of the microwave oven toretailers.  The fact is successful retailers can learn a lot from a microwave oven :-)

There are five areas that successful retailers operates like a microwave oven. Speed, Convenience, Security, Cost Effectiveness and Set/Meeting Expectations.

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In Between the Numbers: E-Com’s Killer Advantage, and What It Means for the Store

May 6, 2011 at 9:27 pm PST

E-Com’s Killer Advantage, and What It Means for the Store

Thinking about the store – and asking, in this age of Amazon.com, how the physical environment can create and deliver sustainable, differentiating value. It might be that the answers are found within the digital walls of e-commerce.

First, in all its various forms, e-commerce offers remarkable convenience – in time, in selection, shipment options, even prices. Can’t find it on one site? You’ll find it on another. Don’t want a new one? Would a used one do? Do you want to receive it tomorrow or next week?

E-commerce, in all its various forms, is also steadily improved through detailed analysis of shopper behavior. Total site visits, unique site visits, site navigation, abandon rates by page by product, and on and on.

Finally, e-commerce – and this, I think, is the real killer advantage for net-based retailing – offers a remarkable breadth and depth of content: What-it-is, how-to-use-it, how-good-it-is, what-they’re-saying, and what-else-you-might-like.

According to the Pew Research Center, Internet & American Life Project (2010), available retail content – more than convenience, more than price – is the reason why 83% of all broadband users in the US researched products online in the last year. On a typical day, 21% of US adults search for product information: Scan a top-quality site. Note the peer reviews and ratings. Product comparisons. Recommendations for accessories. Advice from designers. How-to-use-it videos. Quick connections to product experts. References to manufacturer links. On and on and on.

Content creates knowledge. Knowledge creates confidence. Confidence translates in retail to conversion and repeat business.

Envision Amazon.com for a moment without the breadth and depth of content. What if it gave its customers the standard experience of . . . a standard-issue store?

The challenge going forward for brick-and-mortar merchants: how to create convenience, enable behavioral analysis, and integrate content with the store’s inherent advantage of immediate product.

In the days ahead, it may be the difference between retail life and death.

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In Between the Numbers: Less than a Third, and Less than Half.

April 29, 2011 at 11:58 am PST

Less than a Third, and Less than Half.

I was reminiscing with a friend recently about NRF shows past, and the graveyard of consumer-facing retail technology ideas.

Yikes. Lots of ghosts. Even a few zombie ideas that refuse to die (cart tablets, anyone?). The big question is why – with the exception of self-service – have so few new “breakthrough” ideas found acceptance?

Here’s a hypothesis: Caught in an ever-fast cycle of innovation, the sales and engineering departments – understandably – always seek more. More headroom. More functionality. More interoperability.

We dream of the possible. We dream of platforms, of vendor lock-in, of recurring streams of high-margin revenue, of bosses pinning ribbons to our medaled chests. Ignore the cost implications for a moment.  (As grave as they may be, given the expense of rolling something out to all stores.)

Here’s what we too often forget: Shoppers dream of ease and simplicity.  

A 2009 McKinsey study on consumers’ use of electronics devices sheds some light on the matter.  Less than one-third of all consumers use the advanced features of any CE device – and less than one-half even know that the features exist.  

Allow those factoids to simmer for a moment. Think of the hours of brilliant engineering innovation that most consumers simply ignore -- that for most is too complicated, too complex. Brilliant engineering innovation that brings joy to the engineer, but immediate dismissive frustration from the consumer who simply wants to watch a movie.

Simplicity is the byword of the McKinsey paper. Simplicity in functionality.  Simplicity in usability. A quick glance, and you know how to use it and what to do.  A quick glance, and you know why it matters. The learning curve: a straight line north.

But it’s not just simplicity. Just as important is the usability – perhaps defined for retail as simplicity in context. Who’ll use it? When? Why? To what benefit? Consider the mother-of-two-in-a-hurry at the modern mega-grocery/mass retailer.  Consider, for a moment, the value of a cart tablet to her.  See wailing children pounding on the screen. Weep.

The very smart and always wise Bob Anderson, former CTO at Best Buy, points us to the “popcorn” button on the microwave as a perfect guide for consumer-facing technology.  No questions.  Immediate understanding of value.  One push and sixty seconds equals hot buttery-salted goodness.

Food for thought.

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The Future of Shopping Malls

 Recently my colleague Jon Stine, wrote on his blog In between the numbers – Big Changes for Stores about amount of retail square footage that is available today and the need for stores to evolve with changing consumer patterns.

This change is also reflected in shopping malls that needs to change to make the destination attractive to shoppers and for retail store operators.  In a recent trip to the local shopping mall in San Bruno, California, I noticed how the retail shopping mall has changed in the last few years to adopt to the new shopping trends.

httpv://www.youtube.com/watch?v=T5NIOrIOmhs

Some of the changes include:

  • Mixture of services and store formats in the main mall aisles
  • Use of vending machines to dispense higher end products such as cosmetics and electronics
  • Integration of digital video inside the store and at the display window to draw traffic/interest
  • Store exclusive offerings from personal appearances to store only merchandise that is not available online
  • More services offering in the mall from child care to education and entertainment. Read More »

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In between the numbers – Pay Me Now or Pay Me (More) Later

April 14, 2011 at 8:17 pm PST

Maybe it’s because I grew up in the Midwest.   But I just don’t like writing checks to lawyers.

 I’ve lots of friends in the legal profession, and all are lovely people (well, most of them, anyway).

 But as the pragmatic sort, it pains me to spend money to resolve something that might have been settled at a lesser price well before.

 Which leads me to the topic of PCI.

 Just reviewed a 2010 study from the data security experts at The Ponemon Institute that looked at the post-incident cost of data breaches.  Forget, for a moment, the brand humiliation, the CEO news conferences, the critical whiplash in the blogosphere and throughout Facebook.  Ignore, for a moment, that research suggests that 30% of consumers who were victimized by retailer data breaches promise never to patronize the offending brand again.

 The Ponemon research found that 42% of all data breach incidents led to the involvement of a third party (there to provide additional, independent investigation, resolve disputes, and soak up consulting fees.)

 The average cost of that third party involvement in the United States was $1.52 million, with final resolution costs ranging from $750,000 to upwards of $31 million.   That’s on top of lost business estimated at $4.47M per incident.

 Total:  $6M.  Perhaps not fatal to a billion-dollar business, but not a check I’d like to request.

 Yes, I know that active, careful PCI compliance is no guarantee.   And that active, careful PCI compliance doesn’t put revenue on the top line.  And that there’s ongoing confusion about PCI for mobile.  And everyone thinks it’s all too expensive.  And on and on and on.

 But I also know this:  active, careful compliance reduces risk.  Significantly. 

 And that the price of risk is not just a bruised brand. 

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