Jelinek Keith HorizontalBased on its recent survey of over 100 retail executives, Berkeley Research Group predicts another year of moderate holiday sales growth and aggressive discounting and pricing. By Keith Jelinek

Executives in the October BRG survey show a cautious optimism for their companies and retail segments when it comes to holiday sales expectations: 46 percent foresee slight increases for their retail segment; 39 percent expect a similar increase for their own company. Approximately 25 percent see sales declines, with about 17 percent expecting flat holiday sales. But promotional activity has the potential to materially impact retailers.

Over the last several years, holiday sales have been characterized by heavy promotions as retailers have fought to grab their share of consumers’ holiday spending. In the BRG survey, executives indicated that they anticipate a more promotional holiday season in 2017; 64 percent expect promotional activity to play a more prominent role in driving holiday sales in 2017 compared to last year. A number of factors are likely to drive high promotional activity during the 2017 holiday season:

* Weather: Unseasonably warmer weather has created excess inventories that retailers need to move.

* Industry Distress: Many retailers enter the holidays with soft sales in the late summer and early fall and will be aggressive with promotions as they seek to clear inventory to generate cash.

* Consumer Expectations: A record number of store closings has conditioned consumers to buying at large discounts. Consumers will be looking for the type of discounts they’ve seen throughout the year from going-out-of-business sales.

* Long Shopping Season: In 2017, there will be five shopping weekends instead of four after Thanksgiving, and Christmas day falls on a Monday. Shoppers may wait until the last two weeks of December, leading to a highly promotional close to the holiday.

Retail Implications – Call For Action

Online sales will drive holiday sales again in 2017, but the price to retailers will be reduced margins. Shoppers will find great buys both online and in-store as holiday promotions begin to roll out. We expect online sales to increase by approximately 15% this holiday season, but that comes at a cost to bricks-and-mortar stores.

Retailers are approaching the holiday with anticipation and trepidation, and expect modest sales growth this year, but that’s far from the whole story. Given the calendar, holiday success will likely be driven by the final two weeks of the season. Achieving higher top-line sales will likely require added promotional activity, along with increased execution and complexity costs.

Executives sent a clear signal that promotional activity will be higher this year, and this message crossed retail segments. Through the holiday sales period, success will hinge on retailers’ real-time agility. Retail teams can still take key actions to drive a profitable holiday season:

1. Manage store labor effectively; monitor and adjust as the holidays progress. Traffic will peak on Dec. 22 and 23—retailers must determine which actions can be put into place to get customers in and out of the store quickly.

2. Monitor seasonal sell-thru daily; in retail, the first markdown is the best markdown.

3. Fine-tune merchandise allocation adjustment; ensure product is placed in the best stores.

4. Review e-commerce free-shipping thresholds and determine how late in the season the supply chain can offer guaranteed delivery windows.

Retail sales increases will likely come at the expense of increased profitability, as added promotional activity and complexity are required to generate top-line sales. This dynamic will not just impact retailer success during the 2017 holidays, but will likely lead to further retailer challenges in 2018.

Keith Jelinek is a Managing Director at California-based Berkeley Research Group where he is a member of the Retail practice. For more than 35 years, he has led and advised Fortune 100 retail companies C-level executives. 

The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position or policy of Berkeley Research Group LLC or its other employees and affiliates.

kathleen 2Omnichannel retailers have the advantage over their single channel competitors. But omnichannel pricing can be a challenge. By Kathleen Egan

Sixty-two percent of shoppers now expect omnichannel capabilities from retailers – and they have more information than ever at their fingertips. Shoppers today can compare products and prices in the aisle or on their couch, and even the smallest discrepancy could lead them to choose a competitor over you. It’s a tall task, but large-scale retailers can improve their pricing while providing a more cohesive customer experience. Here’s your definitive guide.

How to determine your omnichannel pricing strategy

There are three basic ways to approach omnichannel pricing:

1. Uniform pricing is exactly what it sounds like: providing one price, no matter the channel. This strategy is best for providing a unified customer experience, where brand equity and product quality are more important than the specific channel.

2. Channel-specific pricing starts with taking an inventory of where you sell, the respective customers, and their shopping habits (elasticity). Amazon, for example, requires that list prices be on-par or below prices posted elsewhere. Of course, there’s a fine line between helping and hurting your brand image with channel-specific pricing. Only sell into channels that protect and preserve your brand and customer experience. Brands and retailers that sell on many channels may consider using homepage ads, email newsletters or social media to drive shoppers to their most profitable channel.

3. Hybrid pricing is a combination of the two, varied along a wide spectrum. When determining your strategy, consider value-adds like free gifts, shipping options and rewards programs. Ultimately, the right omnichannel pricing strategy for you is the one that upholds your brand value and increases your bottom line.

How to get omnichannel pricing right

Once you set your omnichannel pricing strategy, you must keep it in check. One way is with a pricing solution that allows for intelligent price and promotion optimization and testing. Should market conditions change, retailers can analyze data from these sources to tweak pricing strategies in real-time.

Speaking of data, analyze past years’ pricing and promotional trends for you and your competitors. Whenever possible, get these insights in real time, or risk your competitive edge. Scrambling to update pricing across your many selling channels while falling behind competitors is one of the many omnichannel pricing pitfalls.

Finally, account for regional differences. International retailers know this well. Winter in Canada is summer in Australia, so heavily discounting swimsuits globally will destroy margins. For a robust omnichannel pricing strategy, consider season, demand, buying habits, competitive offerings, inventory levels, and more for any given region. Manage this scientific process internally with a dedicated team or outsource to a third party re-pricer.

How to police your omnichannel pricing

The line between brand and retailer is blurring. Digitally Native Vertical Brands (DNVBs) like Warby Parker and Bonobos now have a brick-and-mortar presence and sell direct-to-consumer.

Today, these brands must not only set their omnichannel pricing strategy, but also protect it wherever their products are sold. Minimum Advertised Price (MAP) violations are rampant, and it’s nearly impossible to keep up with reseller pricing manually. Even more complex, resellers may hold site-wide buy one, get one or other promotions that impact the final sale price of products.

Historically, retailers have had very little incentive to police pricing infractions on brands. Instead, brands should invest in automated MAP monitoring. MAP abuse impacts brand image, retail value and margins for resellers. While marketplaces and unauthorized sellers are the most common perpetrators, even authorized resellers are subject to frequent MAP abuse.

Final thoughts

According to Accenture: “Many retailers have reached a false state of omnichannel comfort. With many retailers having invested in some level of omni-channel capabilities, it may seem they are far along in their omnichannel initiatives. Yet customer expectations are constantly increasing." Pricing optimization is an ongoing process – especially for omnichannel. Set your strategy, and monitor and police your prices on demand, or your competitors will.

Kathleen Egan is vice president of customer success at Wiser. Wiser collects and analyzes online and offline data with unmatched speed, scale and accuracy for brands, retailers and more.

Heath HeadshotRetailers are feeling building pressure to meet the demands of customers who expect the latest and greatest at all times. Technology can assist in this effort by reducing lead-time between buying and delivery and providing brands with insightful data about their customers. By Heath Wells

As e-commerce grows, consumers are becoming more and more accustomed to needs instantly being met. Customers want the latest and greatest home décor, sporting equipment, footwear, strollers, and they want it now. One industry exemplifying this retail shift is fashion.

In today’s competitive retail environment, traditional retailers must be empowered to keep pace with the “fast fashion” that consumers crave. Fast fashion is the ability to go from design to in-store in as short an amount of time as possible in order to keep up with constantly shifting consumer preferences while maintaining a consistent turnover of inventory.

Retailers including Zara and H&M have set the precedent in the retail industry and rely on the fast fashion business model, spotting trends and producing them as quickly as possible. Forrester research explains that this accelerated introduction of short-life items, based on current trends rather than dictated by seasons, drives more intense customer engagement in all retail sectors. In order to successfully achieve this type of quick inventory turnover, brands must be able to produce and sell out product effectively, while buyers must have the ability to discover product and make purchases on a regular basis.

The move from seasonal to real-time planning

Technology allows brands to streamline business operations and improve communication with manufacturers and retailers, reducing the lead time between buying and delivery. Traditional brands sell product pre-season, often at tradeshows or showrooms, but this doesn’t work for this new retail model.

By relying on tradeshows, retailers are limiting their discovery of new brands and products to once or twice a year, leaving plenty of time for trends to come and go. Additionally, retailers don’t want to risk committing to a product so far ahead of season and prefer to make more frequent orders to reduce inventory risks. Shifting this discovery and purchasing process online means placing smaller orders more often and more quickly, in-season rather than pre-season, reducing time between discovery and getting the product on the shelf. 

Additionally, traditional fashion brands often sell from printed catalogs, take handwritten orders, and manually enter them into a tracking system. Even when buying does happen in-season rather than pre-season, these process inefficiencies can prevent retailers from getting the right inventory into their stores at the right time.

With this manual process, brands may overlook or underutilize valuable product and inventory data, which can be helpful for sales and trend identification. This outdated process also means that not all data is integrated. With sales history, inventory, and planning data all stored in different places, the selling process is naturally slower. Brands should be able to feed sales, e-commerce channels and retailers a live and accurate product catalog, including inventory positions.

Retailers should rely on their brands for this live, accurate data. Understanding brand inventory allows retailers to maximize every customer opportunity while minimizing stock outs.

Looking ahead

In 2018 and ahead, this instant-gratification model will be an expectation for both retailers and consumers across the retail landscape. In fashion, we can expect to see more brands entering the arena, like Amazon, who recently launched the line “Find” in the UK, which is poised to compete directly with H&M and Zara. Brands that don’t typically deliver fast fashion will use technology to manage inventory and sales, allowing them to join in and more quickly meet demands.

But this model certainly isn’t limited to fashion. We’ll see more and more retailers across sectors who will participate in trend identification and in-season purchasing. As retailers and brands streamline processes through use of e-commerce platforms, both sides will rely more on data to ensure they’re on trend and prepared to meet customer demands.

As Forrester explains, retailers that diligently track transactions can analyze this data and use it to guide pricing and promotion tactics. Beyond this, they can analyze inventory data to learn more about customer preferences and apply these patterns to future trends.

There is an undeniable shift in the retail industry, and both brands and retailers are evolving to adapt to consumer expectations. Traditional retailers and brands are learning to leverage technology to streamline communication, inventory, and ordering processes in order to stay relevant and keep pace with ever-changing preferences.

Heath Wells is co-founder and co-CEO of B2B e-commerce platform NuORDER.

RETAIL SOLUTIONSParcel lockers provide customers with a free, convenient delivery option and easy returns process. By Bianca Herron

Since Amazon joined the retail industry, the company has been pushing the envelope. First there was two-day shipping, which was an amazing breakthrough for customers. Now, national retailers like Wal-Mart and Best Buy are making this delivery service commonplace.

With Amazon’s introduction into the parcel locker sector, now is the time to jump into this convenient delivery and returns service not only to compete, but also to save money, according to Vice President of Product at ProShip Inc. Tim Casey.

“Amazon leads the curve in the retail industry,” Casey says. “With the company introducing its own parcel lockers, it’s vital retailers do the same. Retailers are able to customize parcel lockers with their own brand and a configuration that works for their parcel sizes.

“Not only will retailers benefit from further brand recognition, but customers can also have the added convenience of picking up and returning their orders on their own time when it’s convenient for them,” Casey continues.

A “Win-Win”

Parcel lockers provide customers with a free, convenient delivery option and easy returns process, Casey adds. According to UPS, more than half of shoppers are interested in an alternate delivery location with extended hours and lower fees, with 35 percent of these shoppers preferring parcel lockers.

With parcel lockers, customers receive a notification via email or SMS message with a one-time PIN code or QR code to retrieve their order. The returns process is just as easy, Casey says, adding that customers simply drop off their returns at a parcel locker station by using the retailer’s return label.

“All they need do is scan the label and then place the parcel into the locker that opens,” he explains. “The best part is that the convenient delivery service can be placed inside or outside the store. In fact, placing parcel lockers inside or adjacent to a brick-and-mortar store can increase in-store foot traffic.

“This is a win-win for retailers and for customers who enjoy the additional in-store shopping experience after picking up their order, as well as the convenience and cheaper delivery option of parcel lockers,” Casey adds. “According to the International Council of Shopping Centers, during the 2015 holiday season, 32 percent of shoppers purchased an item online and then picked it up at a brick-and-mortar store.

Of those that used the buy online, pick up in-store program, 69 percent purchased additional items while picking up in-store and 36 percent made another purchase in an adjacent store, Casey notes. “The numbers speak for themselves, but ProShip’s Packcity Intelligent Parcel Lockers can also offer reporting and metrics capabilities to prove it,” Casey says. “Although parcel lockers can offer retailers numerous benefits, many executives want to see the numbers.”

Packcity Parcel Lockers offer reports and metrics on a number of key performance indicators including occupancy, turnover, pickup times, parcel size and more, according to Casey. “Using these reports, retailers can determine the parcel locker station’s return on investment as well as the need for additional parcel lockers on site,” he explains.

Reducing Costs

According to Casey, many major retailers offer free final-mile delivery services that can be expensive to compete with, especially for small to mid-sized retailers. That is why retailers should consider adding parcel lockers to their list of delivery options.

“Not only does this solution provide a competitive advantage, but also parcel lockers save retailers money by significantly decreasing freight costs,” Casey says. “Retailers can ship bulk orders to parcel lockers instead of shipping hundreds or thousands of small orders to each residence.

“In fact, retailers can use their own transportation and combine online orders with other deliveries that were already on schedule to be shipped to the store, saving even more on shipping costs,” he adds.

Ultimately, parcel lockers give e-retailers a competitive advantage by providing a function similar to a service desk in a brick-and-mortar store, with the exception of having to hire employees and excluding lengthy lines. “Not only are parcel lockers another delivery option for customers’ online orders, but they also allow customers to return their order in three simple steps,” Casey concludes. “Customers love the added benefit of visiting their favorite e-retailer’s parcel locker station just down the road from where they live.”

Tim Casey is vice president of Product at ProShip Inc., a Neopost company, and a global provider of logistics software and product solutions including enterprise-wide, multi-carrier shipping and manifesting software, automated packing solutions and intelligent parcel lockers. 

Zorn Retailers need to understand the causes behind burnout and how they can combat these to improve customer service and their employees’ well being. By Mike Zorn

Every year, employee burnout strikes retail employees when they have exhausted their physical or emotional strength during the holiday season. This usually occurs as a result of prolonged stress or frustration, and often the cause is the work environment. Stressful jobs, lack of support and resources, feeling unappreciated, and tight deadlines can all contribute to burnout. Other times, burnout has more to do with employees' expectations of themselves or their personal circumstances.

Burnout may also occur when employees are bored or depressed and under-stimulated. It can also be seen in employees that are fearful of losing their job, insecure about their level of work, or are unclear about job expectations. Regardless, it’s important for retailers to understand the signs and causes behind burnout in the retail industry, as well as how they can combat these to improve customer service and, moreover, their employees’ well-being.

What are some of the most common signs of employee burnout? How can retailers identify these in their workforce?

Some of the common signs of burnout are unexplained absences from work or other attendance issues, decreased productivity or quality of work, obvious frustration or temperament at work including increased complaining, decline in health, or lack of engagement or motivation at work. 

The impacts of burnout are also felt by employees’ peers and can impact team dynamics and camaraderie. Additionally, another less direct is the impact it has on the employee’s family; in turn, that leads to greater stress and burnout at work as part of a burnout cycle. 

Why is this especially common for retail associates during the holiday season? What other industries might experience this?

The intensity of the effort needed to prepare for the holiday, the long hours during the holidays, and the necessary level of physical and mental activity to meet customer demand all increase the potential for retail associates to experience burnout. This may also surface in the hospitality industry, the culinary industry, as well as any industry or company that is not sensitive to the needs of its associates and don’t work with them to minimize potential burnout.

Many experts would suggest that burnout is a company issue, rather than an employee issue. Companies that are aware of their workplace’s demands and the always-on digital world of work can support their associates and help avoid the negative impact of burnout. Working to develop a positive, employee-first company culture that supports a more disciplined work environment can help reduce burnout.

NRF predicts that retail sales will reach about $682 billion this season. With this number up significantly from last year, how can retailers prepare for a rise in demand now (to avoid burnout later)?

As is commonly said, preparation is 90 percent of the act. Retailers should ensure that plans are in place and communicated to all that need to know, and that regular associates have the opportunity to work and have some control over when they can’t work. Openly recognize and acknowledge the challenges and the importance of their work. Emphasis the positive and downplay the negative.

Communicate regularly and clearly the expectations and listen to feedback from the field what is working and what is not—this can be done both in person and via digital workplace platforms. Encourage stress relievers for employees by finding some time for fun, and encourage them to get away from the store on breaks by taking walks and relaxing.

By assigning tasks that meet the abilities and capabilities without overdoing it, fairly distributing the workload, and keeping track of employees’ mental well-being, employers can avoid burnout and boost customer service.

Mike Zorn is the vice president of workplace strategy for WorkJam. In his role, he works with client companies to develop strategies, using the WorkJam Digital Workplace, to empower and engage their hourly workforce.

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