In any business, it can be tempting to give people what they want. After all, if they’re coming to you asking for something that you can deliver — even if it’s not what you do — and you can make a transaction. Every business likes revenue, but you’ve also got to stick to your core values or you are going to lose your image outright.

David Rich, CEO of ICC/Decision Services, left a comment on this article using Costco as a great example. He said that Costco simply wouldn’t be Costco if they offered to bag your purchases because it’s not who they are. Costco manages to keep costs and labor low by avoiding offering these services, and if they made changes to those things, they’d be straying far away from their whole business model. Sure, at the threat of losing one customer they could theoretically offer up a plastic bag — but then it’s a slippery slope when everyone starts demanding it. The next thing you know, Costco’s prices will be on par with a major department store or specialty grocery store because they’ve had to change the core of who they are.

If customers don’t know what to expect from a business, they’re also never going to be satisfied. Their expectations need to be aligned up front. While there can be some leniency, too much “give” from a retailer is only going to lead to disaster.

You’ve got to set the standards of your business. If you’re going to make changes to your model, do it across the board based on demand. Otherwise, you’re going to lose your image, have no core values to abide by, and have a very confused and generally distressed clientelle.

With the season that for many retailers is ‘make-or-break’ rapidly approaching, many retailers are trying fresh approaches. Mobile shopping apps are gaining popularity, allowing retailers to send offers directly to shoppers’ phones with the aim of reaching those buyers when they’re within a short walk or drive of the stores.

About 33 percent of retailers plan to have “location-based marketing” technology in place by year’s end, up from almost nothing a year ago, according to the National Retail Federation.

Two months ago, The Gap offered coupon for a 24-hour window through the popular site groupon.com. Shoppers could buy half-price shopping vouchers for everything from jeans to trendy messenger bags.

“At one point more than 1,200 people a minute were snaring the coupons, so many that the site that arranged the “flash” sale had to redirect some shoppers and tell them to come back later. But by day’s end, almost 450,000 potential customers had bought into the deal” reports Jen Wieczner in SmartMoney Magazine.

That’s tantamount to having an entire city line up to make purchases at your store and makes understanding and embracing the new technology well worth the time and effort.

“They definitely aren’t shy about telling us what they like and don’t like,” says Lindsay Anvik, director of marketing at PlumWillow, who helps oversee the internship program at its offices in Manhattan.

Flexible, web-based companies aren’t just creating products and services based on customer preferences – they’re making their target market part of the design and marketing process reports Susan Etlinger, a consultant at the Altimeter Group, which researches Web technologies and advises companies on how to use them.

Moving beyond “the old-fashioned focus group and into co-creation with your demographic is something that will happen more in the next couple of years,” Ms. Etlinger says. “All business will have to learn how to cope with a new generation of users that are used to their particular experience of the Web.”

The Impulse department targets younger shoppers and prices will range from $50-300. “This customer loves to shop,” said Jeff Gennette, the chief merchandising officer of Macy’s. “She wants to be in our store all the time, and we’d better be interesting.”

The first designer featured will be Kinder Aggugini, well know on the London runways, but virtually unknown in the US. The New York Times reported that Mr. Aggugini was enticed by the notion of creating something affordable that still felt like a runway collection — draped dresses in washed silk paired with a tailored military or leather jacket, for example — especially for shoppers who may have never heard of him. “How cool,” he said. “Something that sells on the strength of what it is, rather than who I am.”

Among many other, it works for Martha Stewart at Home Depot and Isaac Mizrahi at Target, why not at Macy’s?

Who would have thought you could patent slower, more expensive shipping? The patent covers many consumer options including the option to have products shipped in smaller boxes, have items packaged together and using a shipping company that has a deliberately smaller carbon footprint.

Some of these shipping options may take longer and/or cost more, but Amazon apparently sees a market niche it can fill. It might just be the answer for people who don’t like all that Styrofoam floating around. We’ll keep an eye on how these new options are implemented and how the public responds.

According to NRF chief economist Jack Kleinhenz, retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout their marketing efforts,”

Colin Sebastian of Lazard Capital Markets is predicting e-tail growth of 10-15 percent this holiday season but also warned that customer acquisition costs could go up as well since more and more shoppers tend to begin their online shopping on search engines and marketplaces.

Retailers can position themselves to benefit from shoppers caution by responding to the interest in low prices. Consumers also noted that they favor the retailers that offer a broad selection of product choices.

When customers opt-in to the “Summit Signals” program, they automatically receive SMS offers once they are within a 1.5 miles radius of a North Face location. Customers also receive other information relevant to their location that would be of potential interest such as hiking trails or outdoor recreation areas.

The technology is provided by the San Francisco-based Placecast, using their “Shop Alerts”. The North Face markets the service through email, in stores and on their website and is testing the strategy in 31 of its locations.

According to a recent study done by the Pew Research Center, consumer needs aren’t the same as they once were. According to the study, just 42 percent of Americans say they consider a television set a necessity, down from 52 percent just last year and 64 percent in 2006. The landline telephone also saw a dip in numbers. Of those polled, 62 percent still consider the landline phone a necessity, down from 68 percent in 2009.

“It’s true that in the digital era, consumers know they can watch a lot of television programming on their computers or smartphones,” Pew said. They also can make calls from their cell phones, a belief young people especially share. Fewer than half of those in the 18-29 age range consider a landline phone a necessity, but almost 60 percent think a cell phone is a must have item.

The report also shows people consider cars, clothes dryers, microwaves, home air conditioners and home PCs as less of a necessity than years prior.

“This suggests that the psyche of the American consumer is in a much different place now than it had been in the heady days before the recession.”

Still, just because more people categorize certain goods as a luxury over a necessity doesn’t mean the products aren’t selling. Retailers can take this information and apply what they know to their future marketing strategies.

The study reports that only four percent of U.S. online adults use location-based mobile apps such as Foursquare, Gowalla and Loopt. Only one percent update these services more than once a week. Even more, a good majority of respondents””84 percent””claimed they were unfamiliar with the apps, a number to surely make companies rethink how necessary it is to start a marketing campaign using LBSNs.

Those numbers may seem like LBSNs aren’t a great investment at this time, but the report calls for another look. Among location-based service users, almost 80 percent of them are male and about 70 percent of them have a college degree and are between the ages of 19 and 35. Even more importantly, Forrester discovered these users are highly influential. They are far more likely to research products and read customer reviews and frequently have family and friends coming to them for advice before purchasing a product. In this sense, companies in the gaming, electronics and sportswear industry that target their marketing plan to men may want to include an early adoption of LBSNs.

Still, plenty of companies have launched marketing plans with location-based apps that aren’t just for the guys, including PepsiCo and Starbucks. When deciding whether LBSNs are right for you brand, consider your demographic and marketing plan’s goals. Weigh whether you want to establish yourself early in the location-based marketing playing field or whether you’d rather sit in the bullpen and wait until the user numbers grow to give it a try. Like every other marketing plan for a retailer, whether it be holding a sweepstakes, advertising or social networking, location-based mobile apps can be just another tool in a well-stocked toolbox.

The retailer that boasted more than $400 billion in store revenues in 2009 launched a store remodeling initiative named Project Impact in an effort to boost efficiency and sales. The project started in 2008 and is on track to have reached about 32 percent of its stores by the end of 2010. Forbes reports that the remaining stores should be remodeled by 2014.

Project Impact was put in place to declutter stores and highlight popular merchandise while discontinuing unpopular items. Reduced inventory and improved inventory turnover supports Wal-Mart™s goal to be the low price leader and helps attract customers and increase sales. Many believe the remodeling strategy was a way to appeal to consumers who frequent the retail stores Target and Costco.

Project Impact is reportedly yielding positive results. New customer data shows that Wal-Mart is attracting more upscale customers with higher household incomes and has driven a sales boost of between 1.2 percent and 1.5 percent. Even after bringing back several product categories that were initially cut, Wal-Mart still decreased its inventory volume by 6 to 8 percent, improving its working capital position.

In this volatile economy and fast-paced digital age, retailers can’t afford to be static fixtures. Wal-Mart’s™ renewed attention to customer service, consumer experience and store management has proved to be a winning combination for the retailer, reinforcing the idea that not all change is bad.

In an interview and a book excerpt posted on NPR, Underhill reveals that five years ago, young women under the age of thirty over took men in earning power for the first time in history. Underhill writes, “In the United States, the chances of being twenty-five years old and gainfully employed are higher if you’re a female than a male. These odds go up even further if we don’t consider immigrant, African-American, and Latino populations. Economic hard times favor females, too. During the recent recession, 82 percent of job losses befell men, who tend to be disproportionately represented in industries like construction and manufacturing. Historically, women are apt to work in fields such as education and health care, which are more resistant to economic swings.”

More money means more power, independence and wealth to spread. Retailers better take notice, and Underhill points out that some of them already have.

Using examples from the hospitality industry, Underhill explains how hotels have tweaked their shower curtains to appeal to a woman’s higher standards in personal hygiene and modified their check-in process to increase a woman’s feelings of security.

When trying to increase a female customer base, retailers should not only concentrate on what products and services they sell, they should also place importance on how they’re doing the selling.

“The retail territory of the next 10 years is truly up for grabs. New retail concepts, and even manufacturers that want their own stores, have big opportunities to become the big retail success stories of the next decade. Those that dazzle their customers with distinctive offerings and environments for purchasing them will thrive alongside the Wal-Marts and Amazons of the retail world.”

At times like this we tend to focus on tactics ““ are we doing enough to cut costs, what layoffs are coming up, what is the best discount to run, etc. ““ and too often strategy gets left behind. This is a critical time for strategy, vision, and asking the tough questions.

You’ve probably heard about marketing myopia, and the story about the fate of the railroad industry but a refresher is always useful. The question is, why did the railroads not become the airlines? The problem is that they saw themselves as being in the railroad business, not the transportation business. They had a vision problem, and a fatal one. What is your vision? What business are you in? Selling groceries? If you change that to “˜home convenience’, how does that change your business model? Do you “˜sell clothes’ or do you help your customers with their confidence and presentation?

We are looking at some rapid changes in the months and years ahead. The company that sees these changes the best will prosper. What are you doing to prepare? Do you know your customers well enough to make sure you thoroughly understand the value you bring them? Do you know their needs intimately?

Though the beginning of the recession, the retail industry witnessed online shopping growth, weakened in store spending, and discounters gaining headway against specialty shops. All of this will forever change the consumer and the way they buy. Retailers who look towards doing business in the next 10 years will have to refocus their efforts to match what attracts customers.

Now more then ever, customer service and experience will take precedence over any other single deciding factor. Amazingly, this is not a new concept. Right now, consumers are making their experience the most important aspect of their purchasing decisions.

Growth Of Online Shopping

Good by of the old days when stores could market their location to customers. The growth of online retailing makes location almost a non factor. Consumers can research the best bargains, find out customer satisfaction reviews, take advantage of online promotions, and discuss the hottest trends all from their laptop. What allows a company to stand out from the crowd, is the online customer experience. Retailers need to look at the ease of checkout, return policies, questions, and develop user friendly websites. The online space can make a retailer more competitive or loose it’s footing to the store a million miles away.

Smart retailers are looking at their online space as an extension of the overall customer experience. Gap, Inc. finally consolidated their online shopping carts to include Old Navy, Gap, Banana Republic, Piperlime, or Athleta. It allows customers more seamless shopping experience when visiting a single website with the ability to purchase from all the stores. The combination website promotes all the brands with a variety of customers. An loyal customer to Old Navy may be more compelled to visit Piperlime since the shopping carts are integrated.

The explosion of social media and brand visibility is another consideration. Retailers and brands will need to monitor word of mouth marketing online more then ever. Online viral marketing is more contagious then the flu. Reputation management is a dual front war: online and in store. Responding to customer suggestions or complaints means adjusting services in store along with following up online.

Beating the bargains with customer service

Since the beginning of 2009, consumer shopping behavior has been focused on finding the best value. Retailers such as Wal-Mart attracted consumers simply because it’s known for low-priced deals. As a retailer, you can offer more value without necessarily turning into a discount store. Your value can be passed to consumers through utilizing cross promotions, reward programs, and having an outstanding customer experience program.

In the long run, customer experience is going to weigh more in consumers minds then bargains. Customer’s want to have a balance of value and quality. Regardless if you offer the cheapest bagged salad, if it spoils too quickly, the value is lost. The customer experience is ruined. You’ve lost a customer.

It’s important for retailers and brands to emphasis their commitment to the customer’s experience in every step. Brands will need to reach out to consumers for feedback and respond adequately. Promotions and deals will be most effective if they are tailored to a consumer’s interest. This requires measuring promotion results and investing in consumer shopping metrics.

Retailers of the future will need to be more customer centric then ever. Consumers are looking for retailers and brands who connect with their market. Ensuring the connection leads to quality, value, and a positive experience.

Jensen’s store was recently refurbished to gain a sense of home warmth to it’s shoppers. Filled with antiques and specialtiy gift items from Europe, the storefront didn’t have a theme to it. Instead, the old set up was simple product displays with no Feng Shu.

Looking for a new appeal for customers, Jensen has opened his storefornt to other Danish companies to showcase their items. Instead of expanding the store’s product line to fill in the product gaps, Jensen is having other Danish retailers showcase their items. The items will not be sold by Jensen, only displayed.

Jensen’t techinique is a great way for retailers and brands partnering to create great brand experience. Jensen is able to create an appealing atmoshere for shoppers without increasing investment in larger product line. The showcased brands get to reach NY markets but without risking thier brand image tarnished through a discount retailer.

What partnerships have you seen between brands and retailers which where successful?

Michigan’s Ross School of Business and American Customer Satisfaction Index conducted research on customer experience and stock prices. The research indicated the higher level of positive customer experience, the better stock prices.

A Twice article discusses the findings of the report. Retailers with improving customer satisfaction scores from ACSI witnessed a smaller market value decline in 2008. Retailers will a smaller ACSI score had market value decline up to double the improving ACSI retailers had. The article highlight more of the research findings to include how well online retailer did.

The research emphasis how important customer experience program is to a retailer’s business. higher levels of customer satisfaction can only be reached through a well designed customer experience program. Of course, measurement of success will lead brands and retailers to know where the improvement areas are. Customer experience programs are a shot in the dark without proper measurement initiatives. Certainly, retailer’s who dedicate resources to measuring and implementing effective customer experience programs are seeing a boost of confidence from inventors.

Information Resources released several reports outlining the changing consumer shopping habits. In one of the recent reports, IRI points out more purchasing decisions are made more at home versus in-store. Where does that leave your brand at the retail shelves, or your direction of in-store promotions?

Purchase decisions made at home does not leave room for brands or retailers to miss a beat with their marketing campaign. Both in-store and out of store, brands need to on top of measuring their market’s response. A consumer can make the decision at home to purchase “cleaner A”, but if the merchandising fails to replenish stock or display the cleaner properly, it negates the brand’s effectiveness.

In-store advertising should not be comprised for the idea that once the consumer makes a decision, there is nothing to do at retail. It’s the wrong approach from a brand. Brands should engage and strengthen online, printed, and TV marketing campaigns with a reliable presence in the store. Coupon distribution does the brand no good if the merchandise isn’t on the shelf for the consumer to buy it.

Measuring your brand’s effectiveness takes initiative to look at the retail front. Brands should not make the mistake of assuming the retail center won’t influence a shopper’s decision.

Target is planning to move merchandising and store layouts to increase room for household commodities such as beauty products and perishables. It’s the retailer’s direct response to understanding the change in the long term consumer shopping behavior. The increased emphasis on consumables will mean less space for furniture and clothing, both of which are a part of Target’s brand.

CNNMoney report recommends Target is careful when moving more in the direction of Wal-Mart. Target has successfully branded itself as the higher end retailer superstore carrying brands such as Mossimo. Target’s emphasis on food and household products won’t likely hinder the brand’s appeal. Target will also start a second apparel promotion with snowboard Shawn White, which shows they won’t be veering too far off their branding.

It’s not a surprise retailers across the board are making changes big and small to product lines. Responding to consumer shopping behaviors is the key to keeping competitive over the next year.

Wal-Mart executives have also witnessed a jump in sales for self-medication items. Pharmaceutical sales have not increased dramatically, instead over the counter and basic first aid medicine are a way consumers can “self-medicate” to save a buck on health care.

Increase in demand for frozen and canned items allows retailers like Wal-mart and Krogers to safely expand their store-brand items to take advantage of changing consumer demands. If consumers are buying the basic items to fill their kitchen, how are fashion retailer’s noticing a change in product demand. Will consumers extend their “safety buys to spend less on trendy items, and more on classic items in basic colors to get more bang for the buck?

General Motors has believe that the key to making money in North America was maintaining market share and that having different brands helps the company reach more potential customers. They point to the company’s closure of its Oldsmobile division earlier this decade, which left many of that brand’s customers defecting to brands other than GM’s. However, critics say that having so many brands is a drain on resources.

GM has already put up the Hummer division for sale. What other brands should they sell, if any?

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