Global Retail Executive Council

Kudos to Best Buy for wishing the world سعيد عيد الأضحى

The Internet is all atwitter about Best Buy including a small message greeting Muslims with a wish for a Happy Eid al Adha on Friday, 27 November 2009.

The offending ad featured a small circular message, and according to a Best Buy response posted on their forum:

Best Buy’s customers and employees around the world represent a variety of faiths and denominations.  We respect that diversity and choose to greet our customers and employees in ways that reflect their traditions.

We do use the word “holiday” in some of our advertising because it is meant to be inclusive to everyone.  However, just as we have in the past, we will also reference specific holidays such as Christmas, Hanukkah and Kwanzaa in our weekly ads, store signage and other advertising vehicles.

Apparently, this is not enough for some vitriolic politico-religious activists. The Best Buy forum is awash with ignorance and hatred, with the first posting on the topic claiming that Eid is a "muslim holiday that commemorates human sacrifice to please Allah" (it's not: check the Wikipedia entry) and one person claiming that he "didn't see any Best Buy stores in the Middle East" (ignoring Best Buy's expansion into Turkey which is - gasp - a Muslim country). Fox and other venomous right-wing sites were even more insane and off kilter; you can Google for those if you want - we won't link to them.

Here's our opinion:

GOOD ON YOU, BEST BUY.

We celebrated our Thanksgiving here at GREC in a relatively traditional way, but we also paused to remember our friends who lost people in the attack last year in Mumbai, and hardly a day doesn't go by when we don't remember the plane that crashed in New York City right after NRF last year with a close friend to many of us in retail on board. We also yesterday encouraged our readers to support orphans around the world through our friends at Retail ROI.

None of these things diminished Thanksgiving, and in fact many of us choose to celebrate the diversity of the world as something we are especially thankful for this year. The notion that somehow Best Buy's decision to recognize the six million Muslims in the United States by wishing them a happy celebration of a holiday should offend anyone is ludicrous. 

We at GREC believe some things in retail are worth standing up for, first amongst them sustainability and a global attitude of respect and tolerance. We applaud Best Buy and, along with them, wish all our members and readers (with immense respect for individual choice and desire for universal joy and peace:

• Happy Thanksgiving
• سعيد عيد الأضحى
• An illuminated 成道会
• Joyous Diwali
• חנוכה שמח
• Happy Yule

And of course, a happy and prosperous Black Friday... the all-inclusive retail holiday in the United States.

Thanksgiving and remembrance: GREC gives thanks in 2009

As most of the United States gears up for a combination of turkey-coma, football, and Black Friday shopping activities, we wanted to take a moment to share with our members and colleagues a few words of thanks and remembrance.

First and foremost, we at GREC want to thank our sponsors, partners, members and colleagues throughout the retail industry for their support and engagement over the past 10 months. Since we launched in February 2009, we've had the amazing fortune to put on executive events on three continents, speak at six conferences, and engage with members from 35+ countries. We are truly and deeply grateful for the acceptance and support of the retail community, and we look forward to expanding our activities in 2010.

Second, on 26 November 2008, gunmen in India began a three-day attack that left 174 people dead. On this first anniversary of that attack, we give thanks for the people we know who survived that attack and offer our thoughts and prayers to the families and friends of all those who didn't. Too often we find ourselves tied up in economic forecasts and shopping trends, so today we'd like to remind ourselves and everyone else that retail is the universal activity that binds us all together: from a tiny village in rural Africa to the boutiques of New York City, every single day billions of people exchange the value of their labor for something they want. So today - as we should on all days - let us remember that we share this among so many things, and work toward greater peace and prosperity for all humankind.

And third, I personally give thanks every day for an experience I had two years ago when I was privileged to work for a week in an orphanage in Haiti. There are 143 million orphans worldwide, and we are honored to work with the RetailROI initiative to support the retail industry in making a difference for those children. This holiday, please consider supporting RetailROI and those millions of children who are in need of even the basics this year.

Happy Thanksgiving to all, and thank you for all your support this year.

Sustainable retailing: We have a winner... and Global TalkBack too!

The results are in, and the winner of the GREC Sustainable Retailer contest is...

Mike Farley, from Australia, who wrote in:

Metcash Trading in Australia revamped their “Sustainability” journey when they employed a Sustainability Manager, Louise Rhodes in mid 2008. Servicing over 180,000 retail food and grocery customers mainly under the IGA banner. They measure + report key energy and carbon metrics, developed a suite of policy documents both internally and for their retailers. Activated an Energy Performance Contract process to highlight every energy and water saving option possible at their largest NINE energy using warehouse sites with a rollout plan to come.

Congratulations to Mike, and your copy of Yvon Chouinard's book Let My People Go Surfing, signed by the author, will be on the way soon (sent slowly to minimize the carbon footprint - no express air delivery here!)

Last week, we asked our global audience to nominate retailers who best embodied the principles of sustainability, and here are a few of the best responses, including Mike's winning entry:

Tune in next week and join the Global TalkBack!

Sustainable retailing: a top priority for 2010 and beyond

With this blog posting, GREC is launching a new primary content focus for 2010 and beyond: true sustainable retailing. The combination of economic, ecological, and social pressures have reached a tipping point where the retail industry has a responsibility to the global population, the environment... and itself to shift many long-standing ways of doing business to a model that is truly sustainable in the long term.

For too long, the focus on "sustainability" in retail has often meant "green"... but it needs to be something more. While ensuring that their operations are as minimally impactful on the environment as possible is an absolutely necessity for retailers, the truth is that there are many other areas where retailers need to improve the sustainability of their operations.

 The origin of the focus on the word sustainability in modern times stems from the 1980s, when the United Nations stated: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." This can be translated into retail in a similar concept:

Sustainable retailing is retail that meets the needs of the present without compromising a retailer's future ability to meet its own needs - and those of its customers and ecosystem.

One of the retailers who has both pioneered the concept of sustainability in a comprehensive way and turned a searchlight on itself in its quest to improve is Patagonia. As founder Yvon Chouinard has said: "It's always been difficult for us to lead an examined life as a corporation. I've always felt like a company has the responsibility to not wait for the government to tell it what to do, or to wait for the consumer to tell it what to do, but as soon as it finds out it’s doing something wrong, stop doing it."

Patagonia laid out a five step vision of what Yvon Chouinard called "corporate responsibility for planet earth:"

• Step One: Lead an examined life. Most of the environmental damage humans cause is a result of ignorance. That ignorance is willful when we avoid confronting our problems, when we refuse to learn because we don’t want to have to act on what we know.
• Step Two: Clean up your act. Once you learn the environmental costs, try to reduce them. And when you can reduce them, you must.
• Step Three: Do your penance. No matter how diligent a corporation, it causes waste and pollution. Like any other responsible corporation, Patagonia should pay penance for its sins – while we work to figure out how to clean up our act.
• Step Four: Support civil democracy. It’s obvious that governments and corporations hold a lot of power, but so do small groups of people who care passionately about an issue and press their cause.
• Step Five: Influence other companies. The company that discovers new ways to be more environmentally responsible has an obligation to spread the word to others – to share the knowledge of what can be done.

These five principles are key, and retailers - like every other industry - have a moral and ethical obligation to embrace the notion that there is more to their goals than to grow and profit and that as conservationist David Brower pointed out, "There is no business to be done on a dead planet."

But beyond the basics, retailers have both a special responsibility and a unique opportunity: to profit from their efforts to be sustainable by a stronger connection to their customers, a longer lasting and mutually beneficial relationship with suppliers, and an improved bottom line through more efficient and ecological operations. In short, retail - perhaps more than any other industry - can truly embrace and benefit from the triple bottom line of people, planet, and profit.

To support this vision, GREC is today launching sustainability as one of our two content focuses for 2010 and beyond, and to this end are embracing a comprehensive vision of sustainability for the retail industry. We'll spend a lot of time over the next year exploring and expanding this vision. We believe sustainable retailing to be composed of six key pillars:

1. sustainable business models, focused on maintainable growth rather than short term profits or volume at the expense of long-term viability
2. sustainable relationships with shoppers that maximize both "customer lifetime value" and the long term loyalty consumers have to their favorite retail brands
3. sustainable vendor relations, creating the opportunity for both retailer and supplier to profit and grow together
4. sustainable community, supporting the local economies where we operate through featuring local products where possible, paying fair wages and giving back to the community, and co-existing in synergy and harmony with residents and other businesses
5. sustainable sourcing, respecting both the natural resources required for production and the human labor expended to create the products sold in our stores, exploiting no one but instead using the power of retail and shopping to improve the human condition throughout the world
6. sustainable retail operations, reducing the environmental and ecological impact of store and supply chain operations while simultaneously improving the profitability of the retail enterprise

We recognize that this is a big challenge, but anything worthwhile requires both ingenuity, innovation and hard work. Some retailers are already blazing this new trail, while other lag behind. But as an industry, we owe it both to ourselves and to our children who will someday push grown-up sized shopping carts through our aisles to ensure that retailers of the future will thrive in harmony with society and the planet.

Tomorrow, we have the unique and inspiring opportunity to hear Yvon Chouinard speak, and we'll be covering the event live on our Twitter feed. For anyone else who wants to hear from one of the most sustainable and inspiring retailers, here is Yvon Chouinard speaking at the University of California in 2008.

Retail Innovation Trend: Pop-up retailing

The holidays have arrived and it's time for me to make that traditional annual visit! No, not to grandma's house... but to the mall!  Here in the United States and abroad malls (aka "shopping centres") have a similar vibe, format and purpose: Provide a disparate collection of chain stores under one "roof, a big box category killer or two, and anchor it all with a couple department stores or hypermarkets at the ends. It's a model that worked well for many decades, but like so many things in retail... is struggling in the "new normal" of 21st century retailing. According to Georgia Tech professor Ellen Dunham-Jones, coauthor of Retrofitting Suburbia, beginning in the mid 1990's, a decline in tenant occupancy began, suggesting shoppers were beginning to shy away from the tried and true mall model. A downward spiral began: vacant store windows and shuttered doors meant fewer choices for shoppers, leading many of them to look elsewhere, and the decline in foot traffic lead to even more vacancies, starting the cycle anew.

Now add in a global recession with an unprecedented number of retailers closing up stores: suddenly the sprinkling of vacant space "available for lease" has become in some cases whole corridors or even the entire mall. There's even an entire website dedicated to mourning the passing of shopping malls.

So how are malls trying to stave off demise or even prosper? Promotions? Increased advertising? Retrofitting? All of these are parts of the solution, but truly if that's all it takes, why are so many malls still going under or suffering so badly?

While there are many new ideas for how retailers can embrace new formats (and we'll be exploring several of them here on the GREC blog), this posting is about a particular concept that's rising in popularity all over the world: the pop-up store. According to RetailTraffic, the pop-up is where a retailer is allowed to sign a temporary lease lasting anywhere from two months to six months. Mall owners have pushed hard against this trend - preferring the perceived stability of long-term leases - but given the rising vacancy rates and big-box store closings, more and more are seeing the value in changing their mindset.

Pop-up retail isn't about the calendar/game stands or Halloween costume stores that spring into being during the holiday seasons or the ubiquitous kiosks selling everything from faux hair extensions to emulational sleeping kittens... pop-up implies something more...

I saw it in a mall in Hong Kong: A strikingly beautiful all glass building temporarily erected right in the middle of the main floor. The merchandise was unique graphic t-shirts artfully arranged as if in a museum. The entire roof was signage, announcing to the 7 floors of escalators that it was, indeed, the "I.TXX POP UP STORE" in unmistakable language. In short... it had my attention.

What makes the pop-up different isn't just that it's temporary; there are three major types of pop-up that are now gaining popularity:

• well known retailers testing the waters in a new territory or capitalizing on a season (for example Toys R' Us Holiday Express stores, or Target's pop-up stores in Sydney or their docked ship in Manhattan)
• brand names or startup retailers pulling out the stops on a product launch (for example adidas Originals at London Fashion Week)
• brands and retailers creating in-store experiences that reinforce their core brand values and customer activities in ways that don't fit their store formats (for example Quiksilver Pop-Up Skatepark)

So why is pop-up retailing the "big idea" that reinvents the mall and gets retailers and shoppers back into the mall space? Because pop-up retailing changes the rules: the store is an event - not just a destination. And this new paradigm gives retailers the flexibility to try new things, delight their customers, and create a sense of urgency without the "sale prices end Friday!!!!" hype. And I'll add one other point to that... consumers EXPECT more from the shopping experience - even in existing formats - so adding a pop-up experience to how shoppers see your brand can lead to increased sales in your existing stores as well.

And for extra customer satisfaction: for all of us who face this holiday season with lowered expectations, fully prepared for another trip to the mall to see the same tired holiday displays and "Black Friday" sale prices on the way to see Santa, surprise and delight us... Give us an incredible pop-up experience, and use a combination of social media and a mobile retail experience to lead us there to shop!

Introducing voices around the world: GREC Global TalkBack

GREC is pleased to announce a new feature: Global TalkBack. Each week, we'll ask a question of our global community and bring you the best thoughts and ideas from around the world. This week: Chain Store Age reported that retail shrink was up almost 6% over last year, and we asked our members "Do you concur with this report? Have you seen a significant rise in your shrink rate?" And here are this week's responses:

Tune in next week and join the Global TalkBack!

Mobile retail / ecommerce parallels: Part one - the platform wars

Those of us who have developed for the Web remember when you had to create different versions of your site for every browser or face the consequence of dumbing everything down to render properly on America Online. Animation? Javascript? Interaction? Forget it; straight HTML and GIF images, or you risk alienating a big chunk of visitors to your site.

Mobile retail faces a similar challenge today: to go beyond the raw simple mobile Web page, retailers need to embrace many different platforms, each with its own development environment, ecosystem, simplicities and complexities. Each smartphone platform has its own capabilities and unique challenges and opportunities, and the reality is that retailers looking to truly embrace mobile retail and thrive in that ecosystem HAVE to develop excellent apps across a critical mass of platforms.

While every retailer will face different mobile demographics across their customer base (teens shopping Forever 21 are far more likely to be heavy texters than customers of Coldwater Creek, for example), a good starting point is the current market share for both mobile phones and smartphones:

Mobile Phone Marketshare	Smartphone Marketshare
Nokia - 36.7% Samsung - 19.6% LG - 10.3% Motorola - 4.5% Sony Ericsson - 4.3% Others - 24.6%	Nokia - 39.3% Research in Motion - 20.8% Apple - 17.1% HTC - 6.5% Samsung - 3.2% Others - 13.1%

What this means for retailers is that if they are considering deploying a true smartphone application that will both add functionality based on the device beyond a simple mobile Web site and will hit a critical mass of their audience, they have to develop for several discrete smartphone plaftforms: Nokia, RIM (Blackberry), Apple (iPhone), Windows Mobile... and now Samsung.

This does indeed hearken back to the ecommerce days when a Web site needed to be tweaked and optimized for Netscape, Internet Explorer, America Online, Compuserve, Prodigy (and yes, I'm finding myself lost in a wave of Web-based nostalgia)... but eventually, this settled into a standard set of functions and code that works across virtually every browser today.

Unfortunately, such a time is quite a ways off for mobile retailing, for three primary reasons:

1. Carrier influence and customization of the user experience. Unlike my laptop, where my operating system (Mac OS X) and my browser (Firefox) determine most of my UI, cell phones often have the operating system (for example, Windows Mobile) overlaid with a custom interface developed either by the handset manufacturer (HTC, for example), the carrier (Sprint) or some combination of all three. This means that simple concepts like determining a user's location, detecting a finger swipe, or auto-detecting screen orientation are done literally thousands of different ways, making cross-handset application development a nightmare for the retailer.
2. Lack of convergence of economic model. Ecommerce was simple: everyone could go direct, and for a while, everyone did. You suddenly had manufacturers selling direct, followed promptly by echoing "Doh!"s and palm slaps to the forehead as they discovered that retailing was more than putting your catalog and a shopping cart online. But to create a mobile retail experience, the economic interests of user, brand/manufacturer and retailer all need to be aligned... and they aren't. Look at it this way: Proctor & Gamble doesn't care whether you buy Tide at Safeway or Albertsons, so long as you buy Tide... Safeway doesn't care whether you buy Tide or Woolite, so long as you buy it at Safeway... and the consumer simply wants the best deal. Mobile provides an execution vehicle that allows targeting individual shoppers, but without a more unified trade promotions and advertising model, mobile will remain a sideline to more traditional advertising.
3. A lack of organizational responsibility for mobile. Just as retailer struggled with the question of who "owns" ecommerce and how to manage it within the retail enterprise, mobile faces similar orphan status. It has the potential to be the true connection between Web sites and stores (touching the spheres of influence of both the ecommerce and store operations groups), it united manufacturer trade promotion dollars with retailer marketing (forcibly uniting buyers and marketers), and it bridges the gap between retailer technology infrastructure and customer-owned devices (blurring the line between IT and customer service). It's confusing as all hell, and unless retailers slice through the Gordian knot of their own organizational structure and embrace mobile as a top-level customer experience priority with a "czar" empowered to simply make it happen.

Execution is hard, and mobile raises the bar. Samsung's new platform has the potential to help simplify the problem, but it ain't EVER going to be easy for retailers. But it's worth doing, and retail winners in 2011 will spend 2010 diving in and investing their own resources in developing their strategies.

Dead mobile phone battery? There's no map (or "app") for that...

Let's get one thing straight... If you had told me that I would ever write a blog post on the battery of life of phones, I would have laughed. I'm not a geek - or for that matter someone who claims to know a great deal about technology. (I leave that to our executive director who is a rather passionate geek.)

But I do LOVE my gadgets.  My MacBook roams the world (and my living room) with me, rarely separated by more than a few feet... my iPod shuffle is my faithful friend every time I run... and hardly a week goes by when I don't praise Nintendo for the glorious moments of squabble-free silence that a pair of DS portable game systems give me when driving with my kids in the car.

But the one gadget that is my constant companion - the one I use from sun-up to past sundown, falling asleep to the soft glow of the screen - is my mobile phone.

So you may ask yourself what does this have to do with global retail?? Well, I will tell you shortly. It all started with a simple question I asked the exhibitors and speakers at this year's CTIA Wireless IT & Entertainment expo: "You are telling me I can do all these amazing things with my phone... How are you going to improve the battery life so I don't run out of juice mid-afternoon?"

When I asked this question I got a mix of puzzled stares, patronizing chortles... and a few thoughtful pauses followed by either a response that it was a good question or "if you can figure that out, you'll be a gazillionaire..."

So this week, with the debut and reviews of the new Droid phone from Verizon, the question of battery life has gone beyond the iPhone fanboy and hater debate. Tony Bradley of PCWorld reports that the Droid is "power hungry". Now, to be honest, I suspect that no matter what the device is, if you're a power user (i.e. you're on mobile Facebook), it's quite common to run out of battery in the middle of the day. Tony's point is that Droid users will have to change their entire outlook of charging their phone: if you're not using it, charge it... in the car, at your desk, on the treadmill, on your bedside table... pretty much everywhere. No more "once a day," it's "all the day."

Now for many of us, this is already a way of life: I spend a lot of time in my car and the majority of it I am recharging so that I don't go dead at an untimely moment (it's always just before the school calls with a kid-related "emergency" or a friend puts out a life changing Facebook status update), but I also want to use my phone for all of TODAY'S applications: checking a price on Amazon, getting a weather report, texting a friend... and all of that takes a ton of battery life.

So here's the connection to global retail.  There are more and more applications coming onto the market promising to help shoppers: in-store information, banking and mobile payments (especially in the emerging markets), mobile coupons, augmented reality... As we become more and more dependent on our phones to shop, what happens when I'm in the middle of a purchase and my battery dies? Or, trying to preserve that last sliver of battery life just in case my kids' school calls, what if I simply skip using the mobile app because I don't want to risk losing my PHONE in favor of my mobile device?

These problems compound in emerging markets, where the mobile phone is quickly becoming bank, wallet, computer, television and shopping device combined. And while a farmer in Uganda is more interested in real-time commodity pricing on his crops than mobile marketing from Kraft, the challenges to extending the battery life of an already-stretched device remain the same.

So yes, for now, I agree with Tony: I need to change my charging ways. But it does make me wonder when the superbattery is going to arrive and return "mobility" to my mobile phone.

I will certainly fall asleep tonight to the dim fading light of my phone, pondering this question...

Stay tuned for part two of this post: an exploration of how battery life and mobile phone use is changing around the globe, and some of the innovative solutions extending battery life in rural developing countries offers intriguing opportunities for retailers looking to help shoppers in their stores.

Live (well, delayed slightly) from the CTIA 2009 show floor: The Mobile Retail Experience

Over the weekend, received the raw footage shot by CTIA during the final day of the expo when they asked us to give them an overview of the Mobile Retail Experience and a guided tour of the pavilion. In this 10 minute video, you can see the incredible opportunity for how retailers can take advantage of mobile phones: from short codes, to text message coupon redemption, to the latest in image-recognizing handsets, the future of shopping is here today...

Walmart: When viral marketing becomes brand positioning flu

Line extensions are nothing new, particularly for Walmart as it expands the products and services it offers. Just as global rival Tesco offers shoppers everything from travel & pet insurance to mortgages, Walmart is constantly looking to add new things for shoppers to buy.

Its latest attempt, however, has suffered a bit of backlash. Not from union activists, fair trade proponents, or People of Walmart... no, this time Walmart ran afoul of the Internet.

Yes, that's right... the whole thing.

It happens to retailers all the time... Earlier this year, Amazon's top selling item was the "three wolf moon" shirt... all because some clever prankster posted a tongue-in-cheek review:

"This item has wolves on it which makes it intrinsically sweet and worth 5 stars by itself, but once I tried it on, that’s when the magic happened."

To which over 700 people replied with claims the shirt could cure baldness, attract women, and save their house from foreclosure.

And just like that, it went viral... climbing sites like Reddit and Digg repeatedly... spawning variations and even combining with other Internet memes like "keyboard cat" to create all new products on custom apparel sites like Threadless, Zazzle and CafePress.

This burst of popularity - albeit in a mocking way - propelled the shirt to the top of Amazon's sales, where even six months later... it is still #7 on Amazon's clothing best sellers.

This was a perfect example of how the power of viral communication could catapult a small brand's product to the top of the world's largest retailer's sales. The shirt was a quality product, granted appealing to a certain style, and despite the ludicrous claims, people actually BOUGHT the product in droves.

Fast forward six months... A couple days before Halloween, Walmart began listing caskets and urns on its ecommerce site. While the news was initially greeted with concern for competing funeral homes, it quickly was eclipsed with the Internet's reaction to Walmart's new items. Reddit users highlighted the irony of being able to select "Bill Me Later" for a casket purchase, among other comments... and the comments quickly migrated to new faux reviews on Walmart.com, including:

"I picked one up to bury my cat in. Other than having room for about 100 cats, it worked well. Oh, had to dig a really big hole too, and that was rough on my back. But at least when my dog dies I can just open 'er up again and stick him in too."

It was reviews like this that this weekend led Walmart to pull all the comments and begin (we assume) censoring the comments and reviews for more than just offensive language.

While Walmart has every right to do this, it's a mistake. Part of the power of the "Web 2.0" communication model is that retailers can get instant, accurate, and widespread market insights into perceptions of your brand simply by listening to the aggregate feedback from the Internet, and quite honestly, the counter-reaction to Walmart's entry into the casket market is a part of the brand positioning of the retailer. And as Glenn Beck learned the hard way after trying to stifle a parody site via WIPO legal attacks, fighting criticism  - whether legitimate or obnoxious - by stifling it only increases the ire and vitriol of a worldwide population armed with blogs, Twitter postings, and Facebook groups.

Would someone actually buying a casket be so offended by comments like the above that they wouldn't purchase it from Walmart? Unlikely... About 95% of people viewing the cat review above rated it as "helpful," and even if done facetiously, it shows that the overwhelming majority of people viewing the review were not offended. And given that Walmart got FAR more publicity through the viral spread of comments about its caskets than from its press releases, shutting that down is depriving the retailer of communication channels in both directions.

The Internet of 2010 is all about two-way communication: sharing information with your customers, listening to their thoughts and feedback, and finding better ways to meet their needs. Walmart's decision to stifle comments on their Web site is the shortsighted equivalent of putting your fingers in your ears and chanting "la la la la la la la" to drown out constructive criticism from a trusted friend: you might make it through the encounter with your pride intact, but in the end you've missed something you needed to hear.