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Jul 23, 2012

DayBreak USA: Ken Tencer Talks Constant Innovation

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Retail strategist at Kurt Salmon, Nancy Liu recently told the Dow Jones News wire that “there’s a dichotomy among retailers.  If your middle class you’re not going to spend freely across stores because you’re concerned about money.  This makes for a more competitive environment for retailers.”

The model remains “how do you best get your goods to the customer?” Retail is not just about the boxes.  Retail is really about making those small transactions and getting your goods into the hands of the customer.   Best Buy has continued to innovate by looking at rebuilding their foot prints while adding new formats for mobile and on the go express kiosks in airport terminals; all attempts to be more convenient and customer friendly.

Retailers need to rethink the retail model and figure out how to get what the customer wants from them where they want it.  Though Amazon is challenging Walmart for leadership in non-grocery retail sales, there are still a lot of items people like to touch, feel and try on.  Bricks and mortar can become smaller and online larger but the brand experience needs to remain consistent across all platforms.  It’s about being willing to constantly innovate in response to consumer trends.  Understand what’s made you successful in the past and translate that message to your online brand.

If you’re worried about being left behind as your competitors engage in constant innovation, listen to my radio interview with Jay Young, DayBreak USA.

For more, read Innovations Aren’t Us and Best Buy in a Small Box.

Jay Young is the host of DayBreak USA, radio’s first national morning magazine show.  For the past 25 years, he has let his voice be heard in radio broadcasts and morning talk shows across the country.

DayBreak USA is a live, fast-paced morning magazine program packed full of interviews, dollars and sense financial information, intelligent insights and positive features.

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May 7, 2012

Innovations Aren’t Us

Innovation Insights
One of a series by Ken Tencer, Spyder Works CEO

innovation-business-strategy

The Merriam-Webster dictionary defines “retail” as, “to sell in small quantities directly to the ultimate consumer.”

The dictionary doesn’t stipulate the size of the store, or even that you need a physical store at all. And this something that many “big box” retailers missed. They were operating on the “If you build it they will come” mentality, which worked for a while – but now it’s not. Last year, sales and profits declined at Toys R Us; Best Buy is closing 50 stores following a fourth-quarter loss of $1.7 billion; and even Walmart performed below analysts’ expectations last year.

The problem: many of these companies have underestimated the changes happening around them. Or as a true student of innovation might put it, they’ve been afraid to make their physical stores obsolete, and now they’re being forced to play catch-up.

If your business doesn’t try hard to make its processes obsolete, someone else will. Businesses, brands, business models and platforms all evolve – creating a need for continuous innovation. In big retail, innovation must focus on developing the right mix of platforms – bigger stores, smaller stores, kiosks, and digital storefronts that you access through your computer, tablet or smart phone – all enhanced by value-added services, education, and the building of dedicated “communities” of engaged customers and other stakeholders.

Can Toys R Us, Sears and Best Buy remain in “retail”? Yes. If, as with any good brand, they develop the right brand platform and a clear brand promise to the customer that differentiates, simplifies and builds trust.

Ten years ago Walmart was supposed to take over the retail world. Now, the Beast of Bentonville is starting to show stress fractures, and online retailer Amazon, with a net sales increase of 40% in 2011, is the new world beater. It’s time for the chains to focus less on what other retailers are doing, and more on what they are not doing: not clearly defining and supporting a customer value proposition.

Toys R Us, for instance, needs to revisit its value proposition and reimagine what it can do for consumers. Can and should it continue to bring toys and baby stuff together (to address the child lifecycle under one roof)? If it’s going to continue selling safety gates and other child-security accessories, should it also provide seminars on child safety, child care, or learning and development? Maybe it can convert some of its surplus space to indoor play areas and party rooms to promote children’s exercise and health. (Maybe it could even host baby showers!)

There is no shortage of innovation opportunities and possibilities. But nothing starts without a vision and a clear commitment to the customer.

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Apr 18, 2012

Best Buy in a Small Box

Branding Insights
One of a series by John Paulo Cardoso, Spyder Works Chief Creative Officer & Founder

best-buy-branding

On March 30th the roll out of Best Buy Express automated kiosks took off from Toronto’s Pearson airport. The new small box format will offer more than 60 product skus at prices consistent with their in-store and online pricing and promotions.

In 1958 ‘self-service’ in supermarkets and variety stores was on the rise and TIME magazine reported on a new merchandising pseudo science named impulse buying. Presenting a small selection of your most desired products in a well branded display makes the purchase decision easy for the customer. So easy in fact that they may not even realize why their buying your product. This format interrupts the consumer’s logical buying behaviour and replaces it with an irrational moment of self gratification.

General Manager of Retail for the GTAA, Janine Gervais, noted that “Many of our guests are moving through the airport quickly and are looking for efficient shopping options. The Best Buy Express kiosks will fill that need for these guests.”

iPods departing hourly.

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