WHYZ Insights

WHYZ Insights

It started with We Hear You.

That became WHY.

We added the ‘z’ to create WHYZ.

Here you’ll find insights based on our years of experience as well as additional wisdom from our strategic alliance partners and others in the industry.

Industry Observations on the Trends and Challenges Retailers Face Today

1. The customer is in the driver’s seat

Everything about today’s customer is changing: the products they want, their habits and behaviors, how they engage with you, and when and where they want to buy. Keeping pace means looking at your business in a completely new way. It means making EVERY decision with the customer in mind, Putting the customer at the center of that process is key to success in today’s competitive landscape.

With an increasing adoption rate of Voice of Consumer Analytics, the industry is increasingly moving towards customer-centricity. Understanding what the customer wants and expects enables retailers to have a full picture of their customer, and take the actions needed to compete effectively.

2. The customer expects a seamless experience

The customer that shops multiple channels is far more valuable and loyal than a single channel shopper. And given that today’s customer wants the same products to be available online and offline, they want and expect their experience to be seamless.

That puts increased pressure on the retailer to recognize their most valuable customers, regardless of the channel they choose to shop.

A robust CRM tool can help retailers centralize data and provide a seamless fluid customer experience. Additionally, many retailers are tapping into robust loyalty programs, recognizing that rewarding customers and building fans are an integral part of optimizing their relationship with their best customers.

3. Brick and mortar isn’t dead

There are more store openings than closings in 2019. According to IHL Group’s recently released report, Retail Renaissance – True Story of Store Openings / Closings, 5-times as many retailers are opening stores as those closing them.

Additionally, as store concepts continue to evolve – more and more retailers are experimenting with technology, location, size and customer service to enhance the customer experience.

Online stores are moving into physical retail, allowing customers to try on products. Warby Parker, Bonobos, and Amazon are great examples.

BOPIS is expanding its reach, enabling retailers to drive store traffic and leverage their inventory across their system.

Forrester Research has estimated that ecommerce will account for 17% of total retail sales with an additional 41% of offline sales influenced by digital.

4. Product innovation as a differentiator

One of retail’s biggest challenges is also a great advantage for consumers – in that consumers have never had more choices or easy access than they have today.

For retailers, the bar has never been higher, and never has it been more important for retailers to truly differentiate themselves through product innovation.

Private label continues to grow at a faster pace than branded product. Successful retailers need great product that is special and differentiated, backed by innovative and differentiated service and marketing. An example is the home textiles industry, and industry innovating by leveraging fabrics designed for the athleisure world for more comfortable sleep.

Creating products that are unique isn’t enough to gain the competitive advantage of product differentiation — the buyer needs to also recognize the value.

5. Sustainability is the new focus

Fashion is the second dirtiest industry in the world next to the oil industry.

Sustainability issues in the supply chain are an increasingly important consideration in shopper purchasing decisions. There is now an active war on waste…resulting in a series of efforts to re-distribute leftover products to where they are needed.

 New ways to recycle and reuse products are being developed throughout the industry to reduce what goes into landfills.

Today’s customers are far more aware of the packaging materials used. They are increasingly rewarding retailers who are working on initiatives to reduce packaging waste, eliminate plastic and move towards goals of 100% recyclable, reusable or compostable packaging. 

6. The growing importance of storytelling in content marketing

Stories share a real experience – you can inform your audience about the way they will benefit from your products through a story. They will understand why they need your product.

To communicate their unique selling proposition, brands and retailers must focus on storytelling that is authentic and understandable.

Storytelling makes you unique…distinguishing you from your competitors. Storytelling adds a human element to your content…they share the same problems and want the solutions. Storytelling helps you create an emotional connection with your customers.

When you promote your brand through a story, you’re not trying to convince the customer to buy your products…you’re sharing an experience and leaving the decision to them.

7. Personalization is key to retail success

Customers are seeking a retail experience that is tailored to their own personal shopping preferences.

An Accenture study shows that 75% of consumers are more likely to buy from a retailer that recognizes them by name, recommends options based on past purchase and knows their purchase history.

Personalization also impacts how a customer views a brand….63% of customers reward brands that gives them content that is more valuable, interesting and relevant.

Digital personalization is relatively easy with the right CRM tools. For brick and mortar stores, understanding their customers and utilizing targeted advertising and reward programs is key to success.

8. Building a diverse and engaged team

Research shows that diversity and inclusion across leadership, the workforce, the workplace culture, and marketing are critical to business success.

A recent study by Deloitte found that companies with an inclusive culture are twice as likely to exceed financial targets, six times more likely to be innovative and agile, and eight times more likely to achieve better business outcomes.

Customers shop based on their own values and needs. A diverse workforce has a better understanding of an increasingly diverse customer base, ensuring that the products and services your company delivers are the right one to meet your customer’s needs.

The need for diverse teams extends across all departments and functions, including merchandising and marketing. Hiring diverse teams to design your products, market your campaigns and manage your online presence ensures that your company values are well represented to your customers.

Managing Through Record 2019 USPS Increases

Last week the USPS proposed a record price increase. The proposed hike must first be approved by the Postal Regulatory Commission. If approved, which is expected, the higher rates will go into effect on Jan. 27, 2019. This will be the biggest increase in USPS history.

Here’s just a few of the significant proposed 2019 USPS Shipping rate changes: Changes include the elimination of Commercial Plus Pricing (CPP), where now Priority Mail pricing will match Commercial Base Pricing (CBP). Many Ecommerce & Subscription Trade shippers will be facing a painful price increase with the elimination of CPP programs.

A conservative 5.9% Priority Mail increase is expected while First Class Flat Pricing will change to zone-based pricing with an expected 11.9% increase. For shippers with high proportion of outer zone shipments, the increase will be appreciably higher to as much as 21%.

Most concerning is the pending reaction of UPS and FedEx as they re-evaluate their “hybrid” postal delivery products that use the USPS for final delivery. Buried in the postal rate change are increases ranging from 9% to 30% on the workshare rate structures used by UPS and FedEx. For eCommerce and Subscription trade organizations, steeper shipping prices have a direct impact on operating income and profitability. Beyond the obvious impact to bottom line, shipping costs are a key factor for driving shopping cart abandonment.

There’s been a lot of talk about Amazon. Amazon.com’s retail operating income wo uld take a 5% hit from shipping cost inflation if the new rates take effect,according to predictions by Barclays analysts. The bigger issue is what the market is going to do. The average through 35 lbs (not weighted just straight) is over an 18% increase. No one knows what rate cap UPS and FedEx have with the USPS but two things are for sure:

  1. They are going to pass through a portion in January 2019
  2. They are going to look at passing through more than their cap as the USPS is “raising the roof”

So how then, can e-tailers protect current profitability and customer satisfaction with shipping costs perpetually on the rise? Here’s a few solutions to activate today:

Negotiate NOW for 2019

No doubt we’re approaching the height of the retail season, but you don’t want your shipping rates left out in the cold come January. It’s crucial to take back control of your shipping agreements by studying your shipping data in detail and developing custom requirements that best meet the service and price needs for your business. Organize a request for service and pricing response based on specifics of what is meaningful to your business. Remember that every element of your carrier agreements are negotiable. Be proactive with including all carriers that meet your service requirements in your RFP process, as a competitive process undoubtedly yields incremental savings. Model proposed rates & surcharges to your specific distribution footprint, which is the only way to measure the precise value of any proposal.

Vendor & Supplier Alignment

E-tailers receive inventory from many suppliers, and in most cases the e-tailer pays for shipping. Requiring your vendors/suppilers to directly bill your account helps your organization in multiple ways. First, it allows you direct visibility to these shipping fees which are often hidden or “included” in vendor handling fees. It eliminates the possible padding of any shipping fees. Second, the additional revenue may for allow deeper shipping discounts. In addition, direct billing these shipments to your account number allows for simplified accounting and invoice reconciliation as carrier billing systems will subtotal these charges for you upon request.

Data, Audit, Analytics

Every year billions of dollars in guaranteed service claims and rating/charge errors are never recouped as carriers don’t make it easy for shippers to audit parcel invoices. No shipper is exempt from carrier billing errors. Consistently performing invoice audits not only lend to 3-7% cost recapture, but also lead to better understanding of your company’s distribution footprint and service highlights/areas for improvement. Having command of your shipping data through detailed analytics and management reporting puts you in a position of strength when negotiating with carriers and controlling your bottom line. This is a historic postal increase in both size and complexity to the market. If there was ever a time to get the upper hand, it is now.

Reach out to see how an expert at Platinum Circle Partners can help you today.

Balancing Profit and Purpose in Business Today

By Laura Hall

Whatever you call it, it’s still business – although we also believe that in the 21st century it is the role of business to be a force for good. However, let us not forget that the number one responsibility of a ‘responsible’ business is to return profits to shareholders. This simple fact is sometimes lost in the ‘purpose sector’ – thus the reason for the existing social enterprise spectrum. Some businesses are high on purpose and low on profit – other businesses are low on purpose and high on profit. What is needed are businesses that balance the two.

More and more businesses today are asking themselves what they can do to move their organization towards a more meaningful, purposeful business model – without losing out on the profitability requirement. We believe there are six tactics businesses can consider to begin to balance their business model between profit and purpose.

  1. Develop a higher sense of self-awareness. Understand the problems you are solving for in the world and who you are solving them for – and most importantly ‘Why’.
  2. Define your purpose. Understand your ‘why’ as much as you understand yourselves and your customer – and the measurable and positive impact they create.
  3. Have a belief system central to the day-to-day processes that influence the behavior, tactics and decision-making across your organization and ensures that ethical practices are the norm – not just some immeasurable ‘nice to have’.
  4. Embrace leadership that respects the past and inspires the future – and a leadership narrative that communicates strategic intent with purpose as much as it tells stories that inspire.
  5. Have a human identity with a relatable human voice and symbols that together build an eco-system that lives and breathes the business’s higher purpose.
  6. Be passionate about a meaningful customer and product experience that is intrinsically linked with the business’ purpose and identity.

The flood of information and unprecedented transparency is dramatically reshaping today’s business model. We are now in the Era of Behavior and the rules of the game have fundamentally changed. Now is the time for all good businesses to come to the aid of their customer and find their higher purpose.