Retail Customer Experience: The 5 Biggest Retail Customer Experience Stories of 2009

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Dec 30, 2009
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By James Bickers,
editor

Through
a special arrangement, presented here for discussion is a summary of a
current article from Retail Customer Experience, a daily news portal
devoted to helping retailers differentiate the shopping experience.

If there was
anybody more nervous than shoppers this year, it was retailers. The industry
had just gone through a devastating holiday season — “we’ve all just lived
through it,” said outgoing Walmart CEO H. Lee Scott, Jr. at the 2009 NRF
show — and found itself staring down the new year with fear and trembling.

But the recession
officially ended, and bit by bit, consumers started feeling good about
spending again — especially online. Customer relationships with the brands
they buy changed in 2009, and the coming months will demonstrate whether
or not those relationships will change back or are fixed in new patterns
for good.

Here are a few
of the notable stories that caught our attention in 2009:

1. An emphasis
on “value”

Walmart made
a major shift in its marketing focus in 2009 — and the buzzword became “value.” Television
ads touted the company’s Great Value line of foods, telling the story of
how parents could feed their families for $2 per meal. Part of the “Save
Money, Live Better” campaign also included a branded web site with videos,
free classified ads and a message board where shoppers swap tips on stretching
paychecks.

2. Private
label brands take center stage

One of the biggest
beneficiaries of both the recession and the resulting push for value has
been the private label brand. Historically, sales of private label products
go up during a recession, then back down to normal levels once happy days
are here again. This time, however, looks to be different.

3. The shadow
of Apple

Computing giant
Apple was all over the news this year. Its branded stores continue to be
talked about virtually any time the phrase “great customer experience” is
mentioned. They also weighed heavily on the minds of people contemplating
the first branded Microsoft store, which opened in November.

4. Online
price war creates the need for better experiences

Things started
to get ugly in November between two of retail’s biggest names, Amazon and
Walmart. A back-and-forth discounting war started with hardcover books
and DVDs, but quickly spread to other products throughout the store. In
2010, retailers will be forced to face the reality that if you can’t compete
strictly on price, you have to differentiate on the experience, and give
your customers a reason to pay you more than your competitors for the same
goods.

5. Retailers
grapple with social media, mobile

That giant whooshing
sound you may have heard earlier this year was probably the vacuum created
by retailers rushing to figure out what to do with social media. Facebook
pages were created, tweets were tweeted, and an awful lot of exploration
was done to try to make sense of this incredible new set of media that
is equal parts exciting and terrifying.

Discussion
Questions: What do think were the biggest events or trends at retail
in 2009? Of the stories mentioned in the article, which ones will have
the most lasting impact on retail?

Please practice The RetailWire Golden Rule when submitting your comments.

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12 Comments on "Retail Customer Experience: The 5 Biggest Retail Customer Experience Stories of 2009"


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Doron Levy
Guest
Doron Levy
11 years 4 months ago

I’m thinking it’s the resurgence of the small merchant. I’m truly amazed and impressed at how small retail has evolved over the last year. The economy has forced small retailers to come up with new ways to cater to an even more frugal and stubborn customer. Instead of competing with big box head on, merchants are differentiating themselves and making deeper connections with their customers. I would love to see this progress and growth continue through 2010 and beyond.

Charlie Moro
Guest
Charlie Moro
11 years 4 months ago

The emphasis on value seems to be a constant thread throughout the decision process for retailers. I believe that is the foundation for SKU rationalization, private label growth and smaller store footprints.

While all those may be commendable tasks, the key to me, coming out of this cycle, will be if retailers go back to trying to build brands with companies, fill niches, and create new markets instead of sadly focusing on slotting, TPR fees and reclamation income.

David Biernbaum
Guest
11 years 4 months ago

Retailers still have a hard lesson to learn in terms of how they handled the economic downturn. I have a contrarian view from most, in that I strongly believe that retailers that “dumbed down” their SKU assortment are in for a rude awakening in the coming years.

One of the main tools used to fend off the recession was “high octane SKU rationalization.” The end result is that almost all stores now are looking exactly alike, with very little points of differentiation, with obvious exceptions being Whole Foods, Trader Joe’s, and others that were different in the first place.

In the process of “rationalization” many retailers listened to consultants that suggested the elimination of specialty, niche, and destination items. This was not a good strategy for the medium and long term and I predict this trend will find its way to a certain reversal once retailers take a new look again at average spending and body counts next year.

Gene Hoffman
Guest
Gene Hoffman
11 years 4 months ago

Biggest Retail Event in ’09: Uncertainty.

Between its conception and its creation,
Between its emotions and its responses,
Fell the Shadow of Doubt about Tomorrow.

J. Peter Deeb
Guest
11 years 4 months ago

The resurgence of value and the private label trends are 2 points that will have a huge bearing on 2010 and beyond. The consumer found that store brands can have both quality and value and the smart retailers will be continuing the emphasis on using store brands as part of the branding of their retail stores. Typically consumers go back to national brands as the economy improves but the push by retailers over the past decade to match or exceed national brand quality in their own products will pay dividends in the future.

Marge Laney
Guest
11 years 4 months ago

The biggest trend in retail in 2009 was “play it safe.” Cutting everything from product to capex to payroll was the result of the retailers circling the wagons with the goal of survival.

But, just like in football, a prevent defense often proves to be a losing strategy. Short term, survival seems to have been the result for most retailers as the avalanche of retail failures seems to have subsided. The folly comes when extending this strategy long term in the belief that there has been a sea change in the minds of consumers and that no matter what their future financial situation they will remain frugal and value oriented. History tells us that this has never been the case. The smart and successful retailer, going forward, will have their finger securely on the pulse of their customers. They will know who they are and who their customer is and will offer a cohesive, multi-channel proposition, which will give their target customers a reason to buy and remain loyal.

Ryan Mathews
Guest
11 years 4 months ago

I’ll vote with Gene on uncertainty. What we learned in 2009 is that consumer behavior can course correct almost in a heartbeat. The other clear lesson is that physical retailers have got to develop better strategies against online merchants. They just aren’t responding quickly or creatively enough.

Blair Johnson
Guest
Blair Johnson
11 years 4 months ago

‘Value’ should be the watchword for any retailer. The uncertainty mentioned will show its face in the redefinition of ‘value’ to consumers. Walmart is a superb example. The value the retailer offered formerly was “rolling back prices;” which generally translated to cheap stuff at low prices. Now, the giant has shown its nimbleness and has rebranded the value as “living better.” The low price leader is now delivering value that can help you keep up with the Joneses.

In the coming year, the successful dealing with uncertainty will be measured by a retailer’s ability to rebrand the value that they offer, and the ability to deliver that value. Whether the value is tangible or intangible, organizations must develop core strategies that are sustainable and strategic thrusts that are agile enough to build brand equity, deliver value, and deal with uncertainty.

Carol Spieckerman
Guest
11 years 4 months ago

In my opinion, the importance of “value” was validated this year, not by Walmart’s tagline, but by Target’s aping of Walmart’s value message. I’ll ditto Marge on the playing it safe trend with one surprising exception: Best Buy. I find their firing-on-all-fronts experimentation and clear determination to bring it refreshing and exciting from a strategic standpoint (even if their in-store execution is still inconsistent). They, and Walmart, have been stepping out while everyone else plays catch-up. Here’s hoping that retailers’ 2010 top resolution is to move from error correction and into true transformation!

Tim Henderson
Guest
Tim Henderson
11 years 4 months ago

The end of one year and beginning of another is always a time for reflection. While we must be students of history (lest we repeat it), I’m not much into navel-gazing. The most important story/event for this industry is the one yet to be lived. We’re nearing recession’s end, a changed shopper with a new value mindset has emerged, technology is quickly changing how we buy and creating the very exciting m-commerce channel, brands are increasingly crossing global borders, changed consumer lifestyles are creating new life stages and shopping needs, and plenty more forces are coming to bear on retail.

In short, this is a dynamic industry and continues to be just that. We’ve heard much over the past few months about “reinventing retail.” But the fact is retail is an industry in a constant state of reinvention, just as it should be. I’m excited to see what 2010 brings and equally happy to leave 2009 behind. And I’m hoping merchants are too.

Ted Hurlbut
Guest
Ted Hurlbut
11 years 4 months ago

I think the thing that struck me this year was how retailers of all sizes and stripes committed to managing their inventories much more prudently. Retailers, acting out of necessity, have learned that they can deliver significant dollars to the bottom line by minimizing markdowns, and creating a greater sense of urgency in their customers.

Just as many think that the trauma of this recession has changed consumer spending patterns in near-permanent ways, I suspect that 2009 has been a year that retailers will not soon forget. If that’s so, the new commitment to managing inventories more prudently is likely to have a significant, long-term positive impact on retailers.

Scott Knaul
Guest
Scott Knaul
11 years 4 months ago

It’s all about the value with price being a major component. It also needs to be bundled with service, quality and the experience. It will be interesting to see if some of the value merchants can keep their clients if the economy continues to improve.

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