STORES Trends: January 2017

VP, Education Strategy
January 4, 2017

#STOREStrends is a monthly roundup of fresh retail ideas from STORES Magazine.


Just walk out technology

Amazon Go is going where few others have: Last month the company launched an 1,800-square-foot automated, checkout-free convenience store in Seattle.

The shelves are stocked with essentials including bread, milk, cheese and chocolate, along with ready-to-eat meals prepared by on-site chefs. But it’s the technologies powering the store — computer vision, sensor fusion and deep learning — that industry watchers believe have the potential to revolutionize the bricks-and-mortar experience.

Described as running the “world’s most advanced shopping technology,” Amazon Go bridges the digital and physical worlds, creating unprecedented shopper convenience in the process. Shoppers are provided with QR codes to scan upon entering the store. As they shop, picking up some items for purchase and returning others to the shelves, the technology detects what’s in their basket to be purchased. When shoppers walk out of the store, the items purchased are charged to their Amazon account — eliminating the checkout station, cashiers and physical payments.

As Bloomberg notes, “If Amazon can solve one of bricks-and-mortar retail’s biggest sources of friction, then that could be a harbinger of how else the company might turn physical retail on its head.”

Others are more skeptical, asking if Amazon Go will replace cashier jobs. “One thing [groceries and c-stores] will have to consider before any sort of adoption like this is the PR/brand backlash if they continue to phase out people,” says Babs Ryan, grocery and retail customer behavioral expert at ThoughtWorks Retail.

1WorldSync’s CEO Nihat Arkan believes Amazon will have to rethink supply chain strategy. “Amazon will have to address [challenges] in terms of inventory management and logistical readiness for a bigger launch [along with] additional concerns about theft that come with the elimination of a checkout process.” Still, ask any shopper if they enjoy standing in line to check out. Moreover, do you know someone under 35 who would hesitate to adopt this technology? Retailers: Start your engines.


Mangia mondo

Could Eataly be on the verge of becoming an empire? That might be a bit overstated, but when plans are announced to open a 20-acre theme park in Bologna, Italy, folks are bound to speculate.

FICO Eataly World will be “a place where values are produced, even before produce and products.” (FICO stands for Fabbrica Italiana Contadina: “Italian Farming Factory.”) The space, expected to be a hub for production, education and consumerism, will invite visitors to explore 25 different restaurants and food stalls as well as see agriculture in progress at the complex’s pastures, gardens and orchards.

The education component is set to include 40 workshop classes during which guests can learn about Italian culinary practices like pasta and cheese production. Eataly World, expected to open to the public in September, anticipates 6 million tourists annually, including 2 million international visitors. The complex will be powered by some 44,000 solar panels, the most of any single property in Europe. A 200-room Eataly Hotel is also planned to open in 2018.

Late last year Eataly opened its latest U.S. location in Boston in the city’s Prudential Center; Los Angeles will be the beneficiary of the next Italian marketplace. There are currently dozens of stores operating worldwide — including 10 in Italy. Can the purveyor of all things pizza, pasta and pork sausage succeed at attracting foodies to eat and play at a theme park? Eataly visitors are likely to bet plenty of bread on the Farinetti family to conquer this new venture.


Mobile munchies

Mobile has changed the dynamics of ordering and payment at fast-casual restaurants; mobile apps have elevated those processes to a new level.

End-to-end mobility services company DMI recently surveyed 2,500 patrons of quick-serve restaurants to find out what they want from mobile. The company developed a Mobile Maturity Model, a proprietary tool designed to assess brands’ mobile experiences, and then evaluated the mobile offerings of some 75 fast-casual restaurants across the six areas customers consider most important: personalization, ordering, payment, expectations, pickup and offers and loyalty.

The research uncovered a new audience restaurants should get to know; dubbed “High Mobiles,” this group accounts for nearly a third of QSR diners — and they actively engage with QSR apps. The survey found that 35 percent of all respondents use mobile every time they visit a QSR and nearly two-thirds have at least one QSR app on their phone.

Of the 75 restaurants evaluated, Domino’s led the pack in offers and loyalty. Starbucks was the clear winner for personalization and ordering, while Taco Bell stands out on the payment front.


When the going gets tough …

Sure, you’re tough. You know how to tackle problems and put out fires — at least figuratively. But are you capable of holding the title Director of Toughness?

Columbia Sportswear recently named two people to that position; Faith Briggs and Mark Chase will spend the next nine months testing Columbia’s gear in the toughest conditions around the globe. Briggs and Chase are the second duo to hold the positions; the company introduced the roles last year as an extension of the #TestedTough brand campaign.

Columbia’s human resources team had more than 4,000 applicants from the United States, Canada and the United Kingdom who scaled mountains, hiked overnight and kayaked their way to “the toughest interview [to get to]” — and that was just the beginning. Top candidates then faced a barrage of questions and challenges in multiple cities. The new directors of toughness are charged with supporting Columbia’s promise to deliver products that are #TestedTough, and are already in the field putting the company’s gear through the paces.


Keep ’em happy

Retailers talk a lot about turnover — or more specifically, how to reduce it, especially since the median turnover rate for part-time employees is reported to be 67 percent, according to the Hay Group. Looking for ways to retain employees and reduce turnover rates, several retailers have recently announced some standout programs.

The U.S. division of Swedish furniture maker IKEA says it will expand paid benefits up to four months for all workers welcoming a new baby into their lives. The expanded family-leave benefits at IKEA includes both salaried and hourly employees — and both new moms and dads are eligible for longer paid leaves, as are adoptive and foster parents.

Staples announced the launch of a new student loan repayment plan designed to help ease the burden of associates with student debt. The program targets specific new-hire sales associates and existing internal candidates who have been identified as high-potential and top performers. Full-time associates with at least one outstanding student loan obligation (incurred in the past or currently being pursued) will have their loan principal paid at $100 per month for 36 months.

Meanwhile, Kronos — a leader in workforce management and human capital management solutions — revealed the findings of a new study suggesting what “gifts” retail employees were hoping to receive during the holiday season. Topping the list were bonus pay, not having to work seven consecutive days and the ability to create their own schedules.


Crowdsourced closets

It’s hard to imagine a more clothing-conscious group than teenage girls, so it shouldn’t be a surprise to hear that one of them is the driving force behind new clothes-swap app FriendIts. Billed as a social exchange network for friends to borrow, lend and give away goods, FriendIts allows users to share their closets with friends.

“My friends and I constantly struggle with opening our closets and feeling like we don’t have anything to wear,” says 14-year-old founder Mercer Henderson, who also created music and emoji mash-up app Audiots and founded 4GirlsTech. “Whether it’s because we’ve outgrown clothes or can’t find the right outfit for an occasion, getting dressed is usually stressful,” Henderson says. “We also realize all closets aren’t created equal and some of our friends have more than others. After meeting at school to exchange clothes, I realized there was a need for an app to help friends share with each other more easily.”

FriendIts users create private networks, allowing them to only lend and borrow with people they already know. To create a virtual closet, users click a photo of the item and upload. Automatic notifications go out when someone is interested in borrowing an item, as well as to remind people when the item is due back. Although the app is primarily used for sharing clothes and accessories, there’s no need for users to stop there — FriendIts can be used to exchange sports equipment, books and more.

While the target demographic right now is Henderson’s Gen Z — a cohort that makes up a quarter of the population and influences $600 billion in family spending annually — the concept holds equal appeal for a broad range of consumers. FriendIts is available for free on iTunes.


Throwing shade

The new year inevitably symbolizes new beginnings, replete with predictions for what’s in store in the months ahead. One of the most eagerly anticipated annual predictions is the color palette for the new year, and 2017 does not disappoint.

Last month, PANTONE revealed its Color of the Year: PANTONE 15-0343 Greenery. The global authority on all things color described Greenery as “a fresh and zesty yellow-green shade that evokes the first days of spring when nature’s greens revive, restore and renew. Illustrative of flourishing foliage and the lushness of the great outdoors, the fortifying attributes of Greenery signals individuals to take a deep breath, oxygenate and reinvigorate.”

PANTONE’s color experts predict that Greenery will make an impact on all industries in the coming year, from fashion, where the shade has already made an appearance in the runway collections of Kenzo, Michael Kors, Zac Posen and Cynthia Rowley; to beauty products like butter London’s nail polish line; and home décor including Keurig’s latest model.

PANTONE is far from the only brand predicting the year’s most influential color palettes. Paint companies Benjamin Moore and PPG Paints both went to the purple palette for their selections. Benjamin Moore chose Shadow as its color of the year: “Moody and mysterious, this amethyst purple is inspired by the play of light and shadows at dusk, just as the day dissolves into nightfall and tints everything in a violet shade.”

PPG lightened the mood with Violet Verbena, attributing its strength to “a focus on duality in this color: It has a nostalgic, spiritual side while also being luxurious and contemporary; it brings together masculine and feminine, warm and cold.”

Sherwin Williams took a different approach, choosing a neutral, Poised Taupe, as its signature color for 2017. Described as “the perfect grounding neutral, it blends cool grey and earthy brown and represents a wonderful balance of cool and warm, of rustic and refined, of classic and modern.”


A beautiful partnership

Ask consumers for the biggest downside to online shopping, and the answer is probably “returns.” Happy Returns is hoping to change the face of online returns forever. Founded by veterans of HauteLook and Nordstrom Rack, Happy Returns has the ambitious goal of “making returns beautiful” via a network of physical Return Bars located in premier shopping centers and other highly accessible locations, staffed by trained “returnistas.”

Late last year, the company announced a partnership with Macerich, one of the nation’s leading owners, operators and developers of retail properties in top markets, to expand Happy Returns’ presence to three high-end properties: Chicago’s The Shops at North Bridge and Fashion Outlets of Chicago, and Tysons Corner Center in McLean, Va.

Return Bars will be integrated into existing mall concierge locations at shopping centers, offering convenient returns and immediate refunds on products from online retailers currently participating in the Happy Returns program, including Tradesy, Eloquii, Shoes of Prey, Ribbed Tee and Machines for Freedom.

“We’re very pleased to grow our presence … at outstanding retail destinations in the Chicago and Washington, D.C., areas,” David Sobie, co-founder and CEO of Happy Returns, said in a press release. “We are focusing on high-profile settings that already are magnets for shoppers. Survey data suggests that many shoppers returning online purchases through Happy Returns are making incremental purchases when they visit the mall.”

Photo courtesy of Paul Markert.

Photo courtesy of Paul Markert.

An appetite for books

As Amazon continues its foray into bricks-and-mortar bookstores with locations in Seattle and San Diego, you can’t help but wonder if that makes bookstore stalwart Barnes & Noble increasingly nervous. While the traditional retailer has managed to remain relevant as peers like Borders closed their doors, the brand is clearly looking to the next big thing.

If its new concept is any indication, Barnes & Noble is hoping consumers will put their money where their mouths are: The retailer rolled out a new concept, the Barnes & Noble Kitchen, late last year, combining a best-in-class bookstore with a restaurant. The bookstore side of the business includes a variety of seating options to attract guests and keep them in the store, whether they’re seeking solitude or community. The retailer has added technology to enhance the shopping experience, including giving customers the ability to text questions and comments to store staff, as well as check inventory and pay for purchases at self-serve kiosks throughout the store.

The 2,600-square-foot kitchen has seating for 100 patrons and goes beyond previous bookstore coffee shop offerings with an all-day menu touting seasonal, local ingredients and “flavorful, shareable dishes with something for everyone” as well as a large selection of premium wines and locally sourced craft beer.

The Edina, Minn., store is the second of four locations, joining Eastchester, N.Y., with Folsom, Calif., and Loudoun County, Va., to follow. The retailer expects as many as 100 of the chain’s 638 locations could be relocated or revamped to accommodate the new concept. It remains to be seen if getting into the notoriously fickle restaurant business will be the magic bullet that sets Barnes & Noble apart.