ETD: 809 Toys R Us may sell toy business; Technology News;
What Every Marketer Needs to Know about the Luxury Consumer
E-Tailer's Digest
etd_post at gapent.com
Thu Aug 12 11:00:50 GMT 2004
E-Tailer's Digest --- Everything for the Retailer
Issue #0809 August 12, 2004
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Toys R Us may sell toy business
[3] Technology News
[4] What Every Marketer Needs to Know about the Luxury Consumer
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[1] Greetings.
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Hi All:
I heard on the news that Toys R Us may be selling it's toy business, which
is a shame. Whenever we think about toys, we think Toys R Us, even though
WalMart (#1 toy retailer now) is nearby. Unfortunately, IMHO, Toys R Us
has not kept up with the times. While their HQ in Wayne, NJ is very
impressive (and very secure), their stores are old and stale and need
drastic make overs. Their venture into the online world was a disaster -
first spending $80 million on a site that crashed the first day, then going
with Amazon, which ended in a suit on both sides. How can a company like
Toys R Us let themselves fall apart like they did? And when they make an
announcement this soon before Christmas, you can imagine what it will do
for holiday sales.
Technology advances always fascinate me, mainly because I strongly believe
that's what makes or breaks a retailer (WalMart is a prime example). Last
week I was in BJ Wholesale for the first time, and was intrigued with the
Symbol VS4000 scanner that also took my picture for the ID card. The
picture was lousy, but the concept was fascinating. So, I was searching
for what retailers are doing and found a couple of interesting ones. What
are you doing? What do you believe will be the next hot wave in retail
technology?
If you want to sell to the luxury market, heed the advice of luxury market
guru Pam Danziger. It seems to be a higher profit market, so why doesn't
everybody enter this arena?
Tell us about your business which will remain for posterity at
our "Members: Who Are You?"
site. http://etailersdigest.com/resources/members/index.htm And we have a
form there for you to tell us about you. As I said when I first proposed
this idea, we have "known" each other for a long time, yet we often don't
know anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] Toys R Us may sell toy business
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Toys "R" Us said today it will separate the operations of its toy and
baby-product businesses and may sell the toy business entirely.
Shares of the company fell as much as 6.1% in morning trading on the news
but recovered some of their losses by midday. At 12:27 PM, they were down
2.6%, to $16.
The Wayne, N.J.-based company says the restructuring, which may include a
spinoff of Babies "R" Us, is planned for fiscal 2005, ending in January.
The move is aimed at helping it cut operating expenses by more than $125
million by fiscal 2005. The company says it will take about $150 million in
markdowns in the second quarter in markdowns, primarily to liquidate
toy-store inventory.
Toys "R" Us has more than 1,200 stores worldwide, including its Times
Square flagship, and 200 Babies "R" Us stores. Last fall, the company began
shuttering all its Kids "R" Us and Imaginarium outlets.
The company says it will not be making a decision to close any of its
stores before the end of the 2004 holiday season.
http://crainsny.com/news.cms?newsId=8575
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[3] Technology News
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Circuit City and IBM Launch Technology Transformation
Circuit City Stores and IBM launch a technology transformation of the
retailer's more than 600 stores, designed to update its POS systems and
other in-store technology to where it is one of the most advanced in the
retail industry.
The transformation includes new IBM SurePOS 300 POS systems and secure
wireless handheld POS systems based on the IBM Store Integration Framework
and the open-source Linux operating system. Circuit City also will use IBM
Business Consulting Services to help plan the transformation.
"This new technology initiative, a vital part of our store revitalization
effort, will move our store systems from customized, proprietary systems to
a system based on open standards," said Michael Jones, chief information
officer of Circuit City. "Our current POS systems, which contain a feature
set designed in the mid-1980s, are overly complex and restrict our business
expansion. The new systems will allow us to adopt leading practices and
improve store systems integration while optimizing store infrastructure costs."
The systems include POS software applications from 360Commerce and an
integration engine from Yantra. 360Commerce's POS application offers a
consistent and comprehensive solution that will support Circuit City's
complex selling environment. Its Java-based application suite includes POS,
Back Office, Central Office and Workforce Management. Yantra offers a
process engine and application suite, complementing Circuit City's core POS
application. The Yantra applications will be used to create enterprise
services for order management and to support Circuit City's Express Pickup
order fulfillment, store inventory control, product repair processing and
product delivery and installation. Both 360Commerce and Yantra are IBM
Business Partners.
These in-store systems will be coupled with new data warehousing
capabilities, based on IBM eServer pSeries hardware and IBM DB2 database
software. The new data warehousing capabilities will improve internal
processes, streamline applications, and allow Circuit City to better view
and analyze data from all parts of the company, including POS and
Circuitcity.com, empowering the company to create a better customer
experience.
The rollout to all stores is scheduled to start in March 2005 and is
expected to be complete by the end of February 2006. Circuit City expects
that the POS changes will not result in any material write-offs, nor will
it materially affect planned spending on store systems.
http://www.imakenews.com/edgellris/e_article000290738.cfm?x=b3pn2Mh,b1PJcv1q
--- Next Post ---
METRO Group Installs World's First Hybrid Self-Checkout
METRO Group installs a self-checkout from NCR that reads RFID tags, as well
as bar codes, in the newly opened METRO Group RFID Innovation Center. The
NCR FastLane installed at the Innovation Center is the world's first
self-checkout solution with an integrated RFID reader. In its current
implementation, the hybrid self-checkout deactivates the merchandise
security function of the RFID tag during the scanning process, thus
enabling the customer to exit the store without triggering a security alarm.
http://www.imakenews.com/edgellris/e_article000290947.cfm?x=b3pn2Mh,b1PJcv1q
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[4] What Every Marketer Needs to Know about the Luxury Consumer
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Insights for Developing Marketing Strategies
The luxury market is gaining much attention these days as sales are on the
upswing among leading international luxury brands. New research conducted
by Unity Marketing (www.unitymarketingonline.com) provides insights to help
marketers develop strategies for luxury consumers.
"Today we tend to equate the luxury market with international badge-value
brands, but affluent consumers are just as likely to shop with the 'masses'
at Wal-Mart or Target as they are to frequent tony Madison Avenue boutiques
with the 'classes,'" says Pam Danziger, president of Unity Marketing and
author of Why People Buy Things They Don't Need.
"One of the most important things about the luxury consumer is that he or
she is not that different from anybody else. They just happen to have a
little more money."
A new Unity Marketing study, Luxury Market Report 2004 - Who Buys Luxury,
What They Buy, Why They Buy, based on focus group research and a
quantitative survey of 500 consumers (average income $152,000) who
purchased one or more home luxuries, personal luxuries (fashion or
jewelry), or experiential luxuries (travel, fine dining or spa/beauty
services) uncovered key insights into the new luxury market.
Luxury consumer is driven experientially; it's not about the money
The luxury consumer primarily interprets and participates in the luxury
market experientially. "Luxury just isn't about the thing any more. It is
about the special experience one feels buying or owning that thing," said
Danziger. "For these consumers, luxury is about achieving a comfortable
lifestyle, having those things that make life easier and more
satisfying. But the real meaning in the luxury life comes through family,
friends, and experiences that deepen one's understanding and appreciation
of life. The luxury lifestyle is not necessarily about money but about the
experiences and feelings that money can buy." Almost 90 percent of luxury
consumers agree with the statement "Luxury doesn't have to the most
expensive thing or be the most exclusive brand."
Consumers are democratic in their approach to luxury; American's value
individuality over exclusivity
While much is made in the luxury goods industry about maintaining product
exclusivity, usually through high price and limited distribution, luxury
consumers Don't particularly 'buy' the idea that luxury is better when it
is something exclusive. Rather they have a democratic view of luxury, as
77 percent of luxury consumers agreed, "Luxury is for everyone and
different for everyone."
Exclusivity, in and of itself, brings little luxury value to today's
democratically-attuned luxury consumer. Still, luxury consumers yearn for
"specialness" in their experience. Rather than exclusivity, the American
luxury consumer values the ability to express a personal point of view, an
attitude and one's uniqueness. The challenge for luxury marketers is to
make their customers feel special, but never let it morph into class
snobbishness.
Luxury goods are better; Quality counts
One of the primary experiences luxury consumers expect in luxury items is
superior quality, finer details, superior workmanship and
materials. Nearly 90 percent of luxury consumers agree with the statement,
"When you buy a luxury item, you expect it to be a cut above the
average." It's this expectation of quality that makes luxury consumers
willing to spend more to buy that extra feeling of confidence. But extra
quality need not necessarily cost more.
Luxury consumers are bargain shoppers always looking for a good deal
While these consumers appreciate superior quality, they also get an
experiential thrill from paying less for the best. Over 80 percent of
luxury consumers agree with the statement, "I enjoy the feeling of buying
luxuries on sale and usually search out the lowest price or the best
value." Today's luxury consumers demand more value with their
luxury. Consumers who can readily afford to pay full price are hesitant to
do so as they actively shop for luxuries at a discount. They get a kick
out of buying on sale, finding a bargain, winning at the shopping game.
The luxury consumer is highly invested in their lifestyle; They risk little
The luxury lifestyle is something that consumers are heavily invested in
maintaining. For luxury consumers once they have experienced luxury, they
can't go back. It's a divide that says, "I have made it." Because luxury
is tied up with creature comforts, consumers who achieve a luxury lifestyle
are unwilling to make do with less or give up continued luxury. They
continue to buy luxury because they appreciate the enhanced experience, but
are not buying luxury to impart status or social advancement.
Luxury consumers exhibit differences of degree, not of kind
The differences we find within the luxury market are primarily behavioral,
not motivational. Behaviorally, different consumers might buy more or less
of a certain type of product, for example the more affluent buy more and
spend more on luxuries. But as far as the motivations for buying luxuries
goes, the differences are slight. All luxury consumers, up and down the
income scale, gain their greatest luxury thrills from experiences.
Visit http://www.unitymarketingonline.com/reports2/luxury/luxury1.html for
more information
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