Alternative Sales Models Emerging To Target Changing Shopper Patterns

Brick and mortar expansion may have grinded to a halt during the “Great Recession,” but innovative new shopping mediums are still emerging across various distribution channels. With mobile commerce emerging the Web becoming more prevalent as a driver of purchase decisions, a new group of alternative sales models are emerging.

“Retailers looking to connect with customers via new marketing vehicles and media—(including in-store networks, new digital sign technologies, mobile marketing and m-commerce, and pop-up, temporary retail stores) –is among one of the most prevalent retail trends,” says Mary Brett Whitfield, Senior VP with Retail Forward. “The current economic environment is a powerful motivator for retailers to develop and test new business models that provide added value for customers.”  Whitfield says these new models are especially important in an environment when retailers should be looking for ways to add value other than by instituting across-the-board cost cuts.

Analysts point to the changing media landscape as another driver of more innovative models popping up on online. “With traditional advertising vehicles like printed newspapers drying up and retailers increased desire to connect with consumers directly and more effectively, there is great interest in finding winning approaches to attract new and retain/grow existing consumers,” says Kevin Sterneckert, Research Director, Consumer Centric merchandising at AMR Research.

Here is a look at some of the more innovative new mediums and models analysts identified:
•    Shop It To Me: Launched in 2005, Shop It To Me acts as a personal shopper. Tired of finding out about online sales too late and being inundated with multiple emails, Charlie Graham decided to launch a service that would give shoppers targeted sale offers based on their preferences. Users put in their favorite brands and individual sizes. Shop it To Me currently has relationships with over 100 different retailers. After scouting out sales items, subscribers are notified via email with a list based on their size and brand choices.



“It’s actually been a win-win for everybody,” says Graham. “It’s a benefit for both consumers and retailers. Retailers may have excess inventory that they have to get rid of, which is dead cash, and it’s hard and expensive to blast everybody generically with sale information. This allows them to show their inventory to only those consumers who are really interested in it. From the consumer’s perspective, it’s a great way to find out when the things they like go on sale.”Boasting well over one million subscribers, Graham says the weakened economy has actually been really good for Shop it To Me. In Q4 alone, the site acquired 50,000 subscribers.

“We’d love to think of this as a totally new way to shop,” he says. “When you think about the market right now, more companies are online, and more items are online, and it’s become more confusing for consumers to find the things they want. I think you’re going to see more of these instances where there needs to be a way to filter for a customer to say ‘here are the things I want, just let me know about them’. We focus on having people tell us what they want and provide a way to give them just that.”

The site’s primary target audience is women who love to shop mid to high-end brands. The site offers over 600 designers. Under each item offered in emails a “forward to a friend” button enables shoppers to find out what friends think of a particular item and give a thumbs up or thumbs down vote.  A Web site companion called Sale Spot allows shoppers to look for a specific item, which will show things that are limited to the shopper’s size.

•    Ideeli:  An invitation-only shopping community where shoppers can enjoy daily online events to optimize their experience, often at privileged prices. Ideeli offers products not yet available in stores, “finds” from abroad, giveaways and prizes, Ideeli offers members a forum for discovery, selection and engagement.  Ideeli strikes the affluent and aspirational customer at the core with exclusive products and pre-season products offered to members before anyone else.  Spotlighting brands like Dior, Estee Lauder, Oscar de la Renta, Christian Lacroix, and others, Ideeli holds online charity events with various charity organizations, during which a portion of the proceeds from  these sales goes to a particular non-profit organization.

•  A new go-to market strategy,  Woot is an online store and community focused on selling one item per day until it is sold out, or until 11:59 central time, when the item is replaced. Capitalizing on the shopper’s urgent mindset, each product is discontinued at 11:59 p.m. central time, offering no opportunity for backorder or waiting/notification lists.  You snooze, you really do lose.
Another item is not offered until midnight, unless the site is in “Woot-Off” mode, during which a new product is launched immediately after the sellout of the previous deal. There is a half-Woot-life of 12 hours maximum on any product within a Woot-Off that does not sell out. The number of Woot-Off items, sequence, and quantity will not be announced. When Woot-Off mode is over, normal schedule will resume. Depending on the success, this may be a mode the site would go into once or twice a month.

•    Slifter is a popular mobile shopping tool that enables millions of mobile users to search and share products and promotions, straight from their cell phones. It is accessible for free via, wireless web, or java application on almost any mobile device. Slifter was the first to offer iPhone users an application that allows consumers to search and share products and promotions at local retailers. Slifter enables users to search over 350 million products at more than 200,000 retail stores across the country, and makes real-world shopping as interactive as the iPhone.

AMR’s Sterneckert expects to see a flood of these applications over the next seven months leading up to the 2009 holiday season.  “Winners will be those that offer more than just item and price,” he says.  “I believe the mobile platforms that exist today will foster an influx of new channels that consumers will have available to them to identify and purchase items that they want from the retailers that present the best offers.”

He advises that, although cool, innovated interfaces will drawn in the masses, those who offer social networking aspects, exclusive offers, comparative information, and other features that represent a different experience will have true staying power.

 Retail TouchPoints readers can experience the invite-only Ideeli shopping community at this link using invite code “touchpoints” until May 1.

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