R3: Mobile Apps Will Matter in 2010

R3: REQUIRED RETAIL READING

January 22, 2009

With the online channel proving to be an important driver of sales in 2009, retailers are now looking to leverage mobile applications in much the same way in the year ahead.

TODAY’S CALL OUT

With the online channel proving to be an important driver of sales in 2009, retailers are now looking to leverage mobile applications in much the same way in the year ahead. The technology here is very much in its infancy providing first movers significant latitude and creative license. Case in point, the unveiling of Abercrombie’s new transactional m-commerce site and sexy new application.

While ANF’s m-commerce site enables consumers to purchase product anytime-anywhere along with handy functionality including a store locator, the company’s application is nothing more than a hot model gallery – brand relevant of course. What’s interesting to note here is that when the teen panel out at ICR was asked how many use mobile devices to shop, only one of the twelve teens raised their hand suggesting this channel is indeed in its infancy – not for long.

At NRF’s recent Retail BIG Show, several companies exhibited their mobile offerings including features such as accelerated checkout, personalized service, and inventory verification. One of the key hurdles for technology providers is consumer comfort with online/mobile payment, which many view as a compromise to personal security. Technology offered by mFoundry provides one solution to this concern with its mobile application designed for Starbucks that lets customers check their card balances, reload, view transactions, and even pay using an iPhone at 16 Starbuck stores in Silicon Valley and Seattle. With the company targeting retailers, expect to see more early movers launching apps in the months ahead. As online was for retailers in 2009, we expect mobile applications to be a key incremental driver in 2010 for those that get it right.

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LEVINE’S LOW DOWN 

  • A local New York news site is reporting that Costco Harlem store is laying off employees, just two months after opening. The article suggests that the layoffs are a result of disappointing December sales at the location. The article goes on to explain that it is not entirely clear if the layoffs are “seasonal” in nature or actually a cost cutting exercise.
  • After a successful Fall sale featuring Gucci product, DSW is back at it with a recent shipment of Gucci bags. The $200-$400 products are available in select stores and were briefly available online. We now wonder how much past season Gucci merchandise is sitting around to fuel a steady stream of product flows…
  • For those following the explosive popularity of Lady Gaga and her foray into fashion, design, and other non-music ventures this quote sums her efforts up best. When her personal costume designer, Zaldy Goco, was asked, “Can you tell me exactly what the Haus of Gaga is?”, the reply was, “I’m not even sure exactly what it is.”

MORNING NEWS 

Target to Bring Message Back to Quality; Unveils Store Growth Plans - Wal-Mart Stores Inc.’s positioning as the country’s rock-bottom low-price leader has put it in an enviable position during the recession, which left Target frantically scurrying to change its perception as the “upscale” mass merchant with an emphasis on great design and the price premium it implied. Target shifted its advertising message from highlighting the “Expect More” part of its “Expect More, Pay Less” brand promise, to playing up the “Pay Less” aspect. But virtues such as quality, sharp design and designer-driven fashion will continue to be the retailer’s raison d’être, Gregg Steinhafel, Target’s chairman and chief executive officer, told Wall Street analysts on Thursday, adding that “apparel and home have recovered.” The Minneapolis-based retailer, which operates 1,744 stores in 49 states, plans to invest about $1 billion in the renovation of approximately 340 existing stores this year, which will include expanded grocery content in general merchandise stores and boosting layout, assortment and in-store experience in beauty, home, electronics and video games. Target will also focus on opening no more than 10 new stores this year with further opening plans in 2011, as well as testing out a smaller store format concept with an edited merchandise offering. Finally, Target is eyeing expansion outside of the U.S., within the next three to five years, in Canada, Mexico or Latin America. <licensemag.com>  <wwd.com>

The North Face Names VP, Global Product - The North Face today announced the addition of Philip Hamilton, VP of  global product. Hamilton, formerly of Nike, will be responsible for leading The North Face global product strategy to continually drive and execute innovative products, contributing to the brand’s global and regional growth initiatives. “Philip brings 20 years of experience in product design and development within the apparel industry,” said Steve Rendle, president, VF Outdoor Americas. “Throughout his 18-year career at Nike, Philip held progressive product management leadership roles in Europe, Asia and the U.S. We are thrilled to bring his expertise and leadership to our global product organization.” Hamilton most recently served as VP of product merchandising with Nike Asia-Pacific in Hong Kong, where he was responsible for managing the multi-billion dollar footwear, apparel and equipment business and leading a team of over 200 associates. He holds an MBA from University of Oregon, Eugene.  <sportsonesource.com>

Macy's Might Turn to Outlet Stores - Macy’s might follow Bloomingdale’s in the industrywide push to open outlets, a sector surging in popularity among brands, retailers and consumers. “To me, Bloomingdale’s was the first priority and a natural opportunity,” Terry Lundgren, chairman, president and chief executive officer of Bloomingdale’s parent Macy’s Inc. told WWD, referring to the retailer’s move into outlets this year. “The upscale specialty department store group is well known in the outlet centers,” Lundgren added, referring to Nordstrom Rack, Neiman Marcus’ Last Call and Saks Fifth Avenue’s Off 5th chains. “Bloomingdale’s would be a natural addition. There is no plan for Macy’s outlets at the moment. As we learn the business with Bloomingdale’s, it could be something we consider.” Bloomingdale’s said Thursday it will open its first four fashion outlets this summer or fall, confirming a WWD report on Jan. 13 that the chain was headed toward the lucrative distribution channel. The outlets will be about 25,000 square feet each and will sell apparel, accessories, shoes and jewelry. They are opening in Bergen Town Center, Paramus, N.J.; Dolphin Mall, Miami; Potomac Mills, Woodbridge, Va., and Sawgrass Mills, Sunrise, Fla.  <wwd.com>

Steve Madden Adds Jewelry Partner - Lucas Design International is on board to design a women's fashion jewelry collection for the Steve Madden brand. The range will hit better department stores and fine retailers, as well as Steve Madden stores and Web site this fall. "We look forward to working with the Lucas Design team to offer a jewelry collection that will reflect the Steve Madden design image," says Edward Rosenfeld, chairman and chief executive officer of Steve Madden. "We believe that fashion jewelry represents a great complement to the portfolio of categories that carry the Steve Madden name and that Lucas Design's expertise in the fashion jewelry business makes them an excellent partner for this endeavor." <licensemag.com>

Jessica Simpson to Introduce Jeanswear Offering - Jones Apparel Group has tapped Camuto Group to develop and distribute jeanswear under the Jessica Simpson Collection exclusively for fall. The range will include jeanswear ($20 to $24), as well as woven and knit tops ($9 to $20). The Jessica Simpson Collection already spans 20 apparel and accessory categories. <licensemag.com>

"New Normal" Psychology Dominates Consumer Behavior - Consumer psychology continues to feel the aftershocks of the financial crisis, as the "new normal" still dominates self-reported spending behaviors. While it is encouraging that 48% of Americans say they are feeling better about their financial situations and 56% say they are feeling pretty good about the amount of money they have to spend, their behavior seems to reflect something different -- a new normal. Seven in 10 consumers (70%) say they are cutting back on how much money they spend each week and 22% say they worried yesterday that they spent too much money. Consumer "new normal" behaviors have remained largely consistent since Gallup began monitoring these consumer spending perceptions and behaviors on a daily basis since June 2009. The December 2009 results reported here essentially reflect the aggregated monthly trends. The degree of consumers' optimism about their personal finances has remained about the same across age and income groups. At the same time, so have consumer "new normal" behaviors. <gallup.com>