PROFILE

Ken Morris

Principal, Boston Retail Partners

Ken was CEO and President of LakeWest Group and founder of CFT Consulting and CFT Systems, a retail software company. Earlier in his career, he held retail information technology executive positions at Lord & Taylor, Filene’s (Macy’s), Talbots, Stop & Shop Supermarket Company, and Sears. His experience is with strategy, selection development and deployment of retail management systems and processes.

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  • Posted on: 07/27/2017

    Will ‘doubling down’ on tech help McD’s disrupt the fast food business?

    As McDonald’s lead the explosion of the fast food industry in the early days, now they are leading the next trends in customer experience in restaurants. Once consumers become to expect the new technologies introduced by McDonald's that make the fast food experience faster or better, other chains will be forced to follow. For many years, they have been testing new menu items and technology to determine what makes sense to roll-up in the U.S. or globally. They tested kiosks in Europe with positive results before they tested them in the U.S. Now they are on an aggressive rollout strategy in Europe and the U.S. McDelivery has been tested extensively in many Asian countries, primarily in markets with heavy use of motorcycles/mopeds for delivery. Apparently, it is proving to be quite successful and now they are testing delivery in the U.S. I applaud McDonald’s innovation in technology and their testing strategy makes sense. I believe the kiosk will be the game changer for McDonald’s by lowering the labor costs. McDonald's focus on customers and optimizing their experience will help them to continue to dominate the fast food industry. McDonald’s is the Amazon of the fast food category, that is until Amazon attacks this category. An interesting thought....
  • Posted on: 07/26/2017

    Can in-store experiences save retail?

    The store is not dead and the customer experience matters! Consumers love the theater of shopping and that is why pure-play online retailers are starting to open brick and mortar stores. While the in-store experience is not as important for commodity products, it is extremely important and relevant for apparel and other products consumers want to touch, feel, demo or try on.Providing the same experience for all customers is not a differentiator. However, personalizing the experience based on analytics and “customer context” to create a unique, personalized experience for each customer is a differentiator. BRP defines customer context as “the interrelated factors of customer insights and environmental conditions that make the shopping experience relevant.” With advances in technology (networks, WiFi, mobile, NFC, Beacons, etc.) retailers have the ability to access more customer information than ever before and in real-time. Retailers have the ability to know what a customer has in her closet, what she previously purchased, what she browsed on the Web site and abandoned in her online cart, when she is near your store and even exactly what she is browsing and where within the store.In addition to customer insights, customer context considers environmental conditions such as current and forecasted weather, time of day, time of year, media (news), social media, traffic, holidays, events, and other conditions that impact a consumer’s purchase decision. Combining this data with analytics to recommend products and predict customer behavior enables retailers to a truly personalize the shopping experience and differentiate their brand from online retailers.
  • Posted on: 07/25/2017

    How will smaller rivals survive in an Amazon and Walmart world?

    I think retailers understand who their competitors are. The more important issue is understanding who their customers are and what they really want. Small retailers can’t compete on price so they need to compete by personalizing the experience or offering custom products that aren’t available at Amazon or Walmart. You can't compete on commodity items! Successfully competing against the retail giants requires retailers to know as much about their customers as possible. With this knowledge and customer context, small retailers can truly personalize the shopping experience, curate to their customer personas and increase loyalty by exceeding their customers' expectations.
  • Posted on: 07/25/2017

    Do consumers want to be recognized across channels?

    I think some of the data may be understated based on how consumers perceived the questions. If the questions were asked a different way, the results might be quite different. For example, questions about “multiple touch points that add value to their experience” or “recognizing my history with the brand at every touchpoint” are tactical, behind the scenes capabilities that may not seem important to consumers. However if the questions were more focused on what those capabilities enabled for the consumer, they might get higher ratings from consumers. Questions like, “personalized recommendations and special offers based on your browsing history” or “better, customized service based on associate knowledge of previous purchases and preferences across channels” are only possible based on the questions above. If asked a different way that perks the interest of “what is in it for me,” consumers would probably rate the cross-channel capabilities higher.
  • Posted on: 07/20/2017

    Is the one-stop grocery shop coming to an end?

    As much as mega grocery stores have tried to become a one-stop shop for grocery, very few shoppers have entered into the spirit of this shopping strategy. It is really a “back to the future” story. Most consumer have identified their favorite stores for certain product categories like produce, meats, paper products and staple items. With their favorite stores identified, they become a creature of habit and shop a specific list of stores on a weekly basis and have a standard unique shopping list for each store: traditional grocery (discount or upscale), discount warehouses/department stores, specialty produce stores, butchers and dollar stores. Who isn't going to shop at the local farm stand or get seafood from the source? This trend will continue to increase as consumers make more healthy choices. The Amazon/Whole Foods play will be an interesting game to watch!
  • Posted on: 07/17/2017

    Are $3.00 generics a sound grocery e-tailing model?

    Many consumers have become more comfortable buying private label or generic products, as many educated consumers realize that many of the generic products are actually the same as brand name products and come from the same factory. The challenge will be to keep pricing lower than competitive brand name products and maintaining quality. If a consumer gets burned by a poor quality product, they will not only discontinue shopping on the site but may spread negative news across review sites and social media. The other issue is shipping costs. If a shopper doesn’t have $72 worth of merchandise to order, $9 may be too expensive for shipping. Generics have always been a challenge ... when I worked for a large supermarket chain early in my career, we conducted generic pricing experimentation using test and control methods and determined generic velocity increased the closer we got the price to national brand average. The perception being that the generic cannot be as good as the national brand despite the fact that it was frequently better.Consumers are a finicky lot!
  • Posted on: 07/14/2017

    Will an AR try-on app cut down on online clothing returns?

    I see this as the future of online apparel sales. Returns run between 25% to 35% of the total sale volume and this is an unsustainable model if you look at the fact that 85%+ of sales take place in a store today. As the numbers shift to higher online sales percentages, it is imperative to cut down on returns and math is the best way to do that -- and by that I mean the algorithmic modeled solutions can definitely improve these numbers.
  • Posted on: 07/13/2017

    Will more customer rewards lift J.C. Penney’s sales?

    Rewards programs can be extremely powerful tools to increase customer loyalty, if done right. Many loyalty programs don’t provide enough incentives to get consumers to join or recognize the value. Those programs often struggle to get enough members and to keep them. Penney recognizes that its main competitor, Kohl’s, has done a great job of cultivating loyal customers with its lucrative loyalty program that is also very mobile friendly. The new J.C. Penney rewards program is enticing for consumer and it even allows them to double-dip when they purchase Sephora merchandise if they are also a Sephora loyalty member.For a retailer to reap the benefit of a rewards program they must offer something meaningful to the member and Penney's is doing just that.
  • Posted on: 07/12/2017

    Why do so many people love shopping at Ace Hardware?

    The selection criteria for home improvement shoppers varies by consumer and by product type.  Commodity and easy to select items require no customer service assistance and are typically price and convenience driven.  Consumers will typically buy these items at the closest store.   On the flip side, products that are more complex or expensive often require assistance from a store associate to find or select the right product. Consumers will give more thought into store selection for these items, as they want to make the process easy and have confidence that they select the best product for their needs.  This is where Ace, “The Helpful Place,” excels.  Many of us have had frustrating and unsatisfactory experiences at big box home improvement stores when the staff is less than helpful or are nowhere to be found.When I go to Ace with a project that has a unique problem, like the product is discontinued, they solve my problem with a creative solution.   Ace stands out as having the most helpful staff in the home improvement category and they are prospering as a result. They understand that customers with higher levels of satisfaction are more likely to repurchase and recommend the brand to their friends.  Because of their laser focus on customer service, Ace has enjoyed annual same-store sales gains for seven straight years. Go Ace!
  • Posted on: 07/11/2017

    Are retailers measuring omnichannel all wrong?

    I definitely see the value if and only if the metric tracks the omni-channel purchase. The purchase can be made anytime and anywhere and the store associate who works with the customer must be rewarded for time spent when the sale happens online. We have worked with retailers doing just this type of metric and it is a far better way to track and fairly compensate the store associate. To me, a better way to track as our stores become showrooms is the geographic model now employed by savvy retailers who get the concept. Those sales within an x mile radius of a store apportioned to that location, or as we have done in some instances, begin the sale in the store and complete at home, thereby preserving sales associate identity.
  • Posted on: 07/10/2017

    Will Backstage shops draw customers to Macy’s mall stores?

    Off-price is one of the hottest segments in retail and using Backstage as a lure to bring customers into Macy’s department store is a smart strategy. Backstage will attract customers (some existing Macy’s shoppers and some new customers) who are looking for the thrill of the deal and some of these people will shop the full price merchandise if they don’t find the treasure they are looking for in the Backstage section.When I worked for Filene's, which was acquired by Macy's, we had the Filene's Basement concept. They were co-located in the Boston downtown crossing location and fed off the upstairs (full line) traffic. They had an automatic markdown strategy where every 15 days the price would drop by 25 percent. People would be lined up daily to find the treasure of the day. Macy’s has already seen a lift in overall sales in the test location, which proves it is a winner. Look for other department stores to follow this strategy ...
  • Posted on: 07/06/2017

    Have grocers figured out how to successfully do business online?

    The leading grocery chains are laser focused on offering customers flexible ordering and pick-up and delivery options. Whether or not they are fulfilling online orders profitably remains to be seen. However, profitability for online orders may not be critical. What is more important is keeping loyal customers by offering what they want. Like other retail categories, we are seeing retailers move to new metrics to measure success. Instead of looking at in-store and online as separate businesses from a profitability, some retailers are now assessing performance from a market area perspective – recognizing that online sales impact in-store sales and vice versa.The model will evolve over time, but retailers should learn from the Webvan experience, then not let that color their vision of the future. Webvan lived in a pre-GPS world where traffic logjams where not updated in real time like today ... no wonder they failed.Maybe our future might look a little like the past using the Mix & Match experience from Cemex, the Mexican cement manufacturer, who preloaded cement on their fleet of trucks and rerouted them on the fly to satisfy demand. In grocery it is an 80%/20% market basket where 80% of orders look very similar if not the same. This technique would service metro areas very well with next day delivery for items that are not mobile stock.
  • Posted on: 07/05/2017

    How can retailers make loyalty programs more effective?

    Modern loyalty programs need to go past traditional earn-points-and-receive-rewards structures. Oftentimes, consumers have to wait too long to earn a reward and, if they don’t see value quickly, will lose interest and the loyalty program has the opposite impact — it decreases loyalty. Retailers need to offer exclusive perks, relevant incentives, and personalized rewards as a way to further reward loyal customers. It’s all about engagement! Personalized offers based on personal preferences and past purchases are more meaningful as rewards and encourage participation in the loyalty program. Successful loyalty programs focus on immersive customer engagement and meaningful rewards that are sticky. Social media rewards instead of earn and burn are a great way to incentivize your brand enthusiasts. We need to get more creative to get back to the growth we achieved just a few years ago.
  • Posted on: 06/29/2017

    Can an app know a customer better than a personal shopper?

    Understanding your customers and personalizing their experience based on customer context is imperative to building loyalty and maximizing sales. While I am not convinced retailers can effectively use AI apps to read customers “emotions” today, there are many other elements of customer context that offer insights to personalize the shopping experience. BRP defines customer context as “the interrelated factors of customer insights and environmental conditions that make the shopping experience relevant.” With advances in technology (networks, WiFi, mobile, NFC, Beacons, etc.) retailers have the ability to access more customer information than ever before and in real-time. Retailers have the ability to know what a customer has in her closet, what she previously purchased, what she browsed on the Web site and abandoned in her online cart, when she is near your store and even exactly what she is browsing and where within the store. In addition to customer insights, customer context considers environmental conditions such as current and forecasted weather, time of day, time of year, media (news), social media, traffic, holidays, events, and other conditions that impact a consumer’s purchase decision.These solutions can be customer facing or associate facing but are much more effective when you invest in a "brand enthusiast" associate persona ... the right person, with the right technology tops just the tech approach.
  • Posted on: 06/28/2017

    Will Target’s answer to Prime Pantry help it outdo Amazon?

    Target’s Restock program is a smart response to Amazon’s Prime Pantry. While Target has the advantage of local distribution centers (its stores) in nearly every city, they will have a learning curve from a process perspective. Training employees to efficiently pick, pack and ship orders is essential to effectively deliver as promised. This is a totally new process for Target employees and missteps are costly. Since 57% of Target customers are Amazon Prime members, it will be essential that Target captures some of these customers. Since the shipping costs are slightly lower for Target and REDcard members will get an additional 5% discount if they pay with their REDcard, this should be a compelling reason to order from Target instead of Amazon. I believe this type of service is now table stakes to play in retail today. You can't just give up and surrender the field to Amazon. You have to innovate and execute. Go Target!

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