BofA, Wells Fargo, and JPMorgan: Innovation where you least expect it

As Omnimarking grows in popularity, one of the most overlooked, interesting retail segments in terms of innovation is occurring in the world of retail banking. The industry is becoming increasingly anxious due to the services that technology companies can provide consumers for a fraction of the cost. You, the reader, are about to get your mind blown as we dive into the world of retail banking.

This innovation is apparent with the recent announcement that three of the four largest banks in America are introducing card-less ATMs in America’s largest cities. Customers of BofA, Wells Fargo, and JPMorgan will be able to access ATMs by entering a pin into their phone and selecting the amount of money to withdraw. The introduction makes sense as 90% of the consumers own a mobile phone. Moreover, the 35 year old magnetic strip technology is filled with security flaws. The enhanced security provided by mobiles results in the perfect addition to the banks multichannel-service platform.

As mind blowing as the technology is, the

magic really begins to shine when you begin to dive into the decision making process behind the introduction. In a 2014 PWC study, 55% of banking executives viewed non-traditional players as a threat to traditional banks. Moreover, 46% of executives perceive smaller banks as capturing a larger share of the market through increasing differentiation. The innovation we are seeing now in 2016 is the result that fear amalgamating into action by the executive teams.

Historically, non-traditional players such as Tangerine (previously ING Direct) have entered the market and taken a large chuck of the big banks market share. These innovative new players have kept executives up at night since the 90s. And, it should have. Banking executives witnessed their friends in the Hamptons lose their positions as their companies lost market share to Amazon and Apple.

In terms of the consumer life cycle, millennials are needed to sustain future growth among banks. Once a consumer starts a family, they possess the largest amount of investable assets and take on the most debt. They need to be innovative enough to prevent a technology company from entering the banking market. Like the old saying goes, the best defence is a strong offense, and their offensive strides in innovation are simply a way of defending their market share.

Finally, consumers are requiring a value proposition focused around a consumer-centric model of service. Old-banking was product-centric where consumers would engage with the products offered by the bank’s branch. Now, consumers want higher levels of service and more convenient methods of banking. Gone are the days where the banks’ trade area is created through strategically placed branches. The internet has become a valley for the consumer where their trade area can be any bank that best suits the customer’s needs. With this expanded area, the effort required to retain market share has intensified.

So don’t see retail banking as just another boring industry. Innovation is revolutionizing the industry, and the next four years will bring a lot more fierce competition.

Sources:

http://www.nasdaq.com/article/bofa-wells-fargo-jpmorgan-to-roll-out-cardless-atms-cm573274

https://www.pwc.com/us/en/financial-services/publications/viewpoints/assets/viewpoint-when-the-growing-gets-tough.pdf

http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Global-consumer-banking-survey-2014

http://www.wired.com/2016/01/cardless-atms/

http://www.latimes.com/business/la-fi-cutting-edge-cardless-atms-20160130-story.html

https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_United_States

Going Bananas for Bonobos: A Unique Omnichannel Experience 

With more individuals shopping online, it should be no surprise that many successful retailers are developing their online presence, and largely, retailers have been rewarded for their digitalization. However, what this post aims to show you is that it is not the fact that moving online is improving retailers’ businesses, but rather because retailers are interacting with consumers more than just in physical stores. Theoretically, then, a business can initially only be online, and improve itself by incorporating physical stores in its retail value proposition as well. A business that is actively practicing this is Bonobos.

From a business student’s perspective, and prior to doing much research, I did think of some jarring issues. The fun atmosphere it provides may not be suitable for the professional clothing its selling, Bonobos went the opposite direction of most big name retailers and started focusing more on brick-and-mortar stores, and I thought it to be slightly absurd that a firm that is focusing on online-selling, spends huge amounts of money to have its flagship store on 5^thavenue in New York City. However, much to my surprise, Nordstrom’s bought Bonobos for $350 million, and on top of that, McKinsey & Company suggest that the sales per square foot of Bonobos are rival to retail goliath Apple. 

Headquartered in New York City, Bonobos is an online men’s apparel company and has received critical acclaim as one of Advertising Age’s Hottest Brands, and named to have the “Best Men’s Pants" byNew York Magazine. On top of their success with their online focus, Bonobos has made strides in enhancing their retail value proposition by opening their Guideshops, or physical gallery stores. Their Guideshops work by offering 1-hour appointments with a Bonobos Ninja (fashion consultant) and aim to provide an experience like no other; Ninjas offer drinks upon arrival, and these sessions are one-on-one. The company has re-invented the entire retail store format and essentially developed the entire Guideshop to be an activity zone. By doing so, they have not only been able to position themselves as a customer-centric brand, but also as an engaging one. Additionally, through the use of their Equateur blog, where customers’ stories are showcased, or the special appointments for grooms and groomsmen, this distinctive retailer is interacting with its customers in personal ways and during cherished moments. As seen above, Bonobos is proving that it goes beyond providing a fashionable selection and comfortable environment; by managing customer relationships and by personalizing and customizing the experience, they are able to transform general plan or unplanned shoppers who traditionally may not be interested in this type of clothing or be too intimidated to buy from them, into loyal customers.

With Bonobos having its Guideshops exclusively in the U.S, I cannot give a firsthand account of my experience with the company. However, after conducting this research, I can safely say that stores like these provide an intriguing area of study and are definitely a trend to watch out for. I have read similar posts such as Amazon’s move to brick-and-mortar stores and Frank & Oak’s take on men’s fashion, and I am both surprised and fascinated by the direction that these retailers are moving. With the very early retail re-imagination like Piggly Wiggly starting the DIY grocery shopping, to stores like Apple and Restoration Hardware popularizing showrooming and gallery stores, its amazing to see that retail will never really stop evolving. Presently, with firms trying to intercept customers as many ways as they can, their success with these endeavours is mainly positive, but definitely has people talking, and more and more firms are trying to put their own spin on it. Thus, for a store providing such a unique omnichannel experience, it should come as no surprise that people are truly going Bananas for Bonobos.

Holt Renfrew vs. Burberry’s London Store

In my recent trip to London, I was fortunate enough to visit the Burberry store. When I compare my experience at Burberry London, I can’t help but recalling my shopping experience at Holt Renfrew, a prominent store that sells luxury brand products in Edmonton. I might not have come back from my London trip with an expensive Burberry product but whenever I purchase online items from their store I definitely remember my experience.

Some of the comparisons I made while comparing Burberry London with Holt Renfrew are: 

Difference #1 – Product Display

The sight that first greet any potential customers that walk through their doors are the dated glass cases that may have once drawn consumers to closely examine their contents. These glass cases now act as triggers to memories of similar displays found at The Bay or Sears that often house random disorganized trinkets. This connection that is made mentally in my mind dissuades me from investing any effort into investigating the contents, as I automatically assume they would house the low-cost and low quality products of the store.

Burberry London embraces open concept in their stores. They stray away from the classic department store display methods. I believe that by opening up their shelves it encourages consumers to explore all the products they have to offer, through touch, sight, and occasionally smell, barrier free. The trust that is indirectly conveyed to their customers by the openness of their display methods makes consumers feel less intimidated to examine a product because there is no hovering sales associate silently judging while waiting on the side. This makes the in store shopping experience enjoyable. This feeling is remembered and transferred when the customers shop online.

Difference #2 – Navigation and Lighting

In comparison to Burberry London, Holt Renfrew closely resembles the department store layouts we are more familiar with. Some displays are close in proximity and often form walkways and zones that are convenient for only one browser. I believe that this is purposely done so that people that are interested in the same display avoid entering into the display zone until the current viewer has left. In this manner, sales associates are able to provide the potential customer with excellent customer service and recommendations without being overwhelmed or having to split their attention between two clients. 

Entering Burberry London, I noticed that they played with open spaces and differing levels. The differing levels effectively separated their different fashion lines without causing wasted and empty areas within the stores.  I found that the open spaces that were provided gave me the opportunity to examine articles of clothes from a certain distance effectively allowing me to imagine myself in a particular piece. This gradually made me form an attachment to the product and a desire to purchase it. The lighting was used to highlight central pieces in a fashion line effectively displaying them to catch the eye of a potential costumer. This helped to direct consumers to the next product line in the store creating flow within the store.

In conclusion, I believe that the Holt Renfrew in Edmonton can benefit from adopting some of the in-store concepts of Burberry London.

Sources:

[1] http://readwrite.com/2012/09/14/digitally-integrated-burberry-flagship-store-opens-in-london

[2] http://pursuitist.com/inside-burberrys-london-flagship-store/ 

[3] http://www.retail-insider.com/retail-insider/2014/8/holt-renfrew-analysis

[4] http://www.yelp.ca/biz/holt-renfrew-edmonton

Daiso Richmond, B.C.

Daiso is a store made up of a large assortment of products categories. Majority of the products that can be found in Daiso are $2 (CND). They have anything from food, cutlery, stationary, cleaning supplies and the list could go on forever! Daiso is a generally a large Asian style dollar store.

Geographic location
Personally, I don’t think that Daiso was arbitrarily placed in Aberdeen Mall. I believe that Daiso has strategically located themselves in this mall. This is because the neighborhood that surrounds Aberdeen is filled with a demographic that would be highly interested in their products. I can safely say this because the majority of the population in this city is made up of Asian people.

Environment
When going into Daiso for the first time many people would not assume that they are at a dollar store. The is due to the fact that the store is generally a lot nicer, neater and bigger than a typical dollar store. The location in Richmond B.C. is a two storey 26,430 sq. ft. store. Which is bigger than any of the dollar stores that I personally have been to!

Daiso differentiates themselves by the store format. The store does not have the typical structures that run aisle to aisle. Instead, the store has many different displays. Depending on which department you are in the layout is a little bit different. For example, the food and beverage section looks a lot like a grocery store. The kitchen section on the other hand is not placed on the usual metal shelves that we see in the dollar stores but they are placed on wooden fixtures. It’s quite amazing how a store with such cheap inventory is able to make each department in the store feel like you are in a different store with their atmospherics.

Differentiation
There are plenty of dollar stores almost anywhere you go in North America. So, many would think that it would be quite difficult to differentiate yourself from the other dollar stores that are quite similar to one another. Daiso differentiates themselves by selling products that are in the same product category and price range as a Dollarama but the products are made by different brands that are not offered in a dollar store.

The selection categories in the store is generally the same as what you would expect in a dollar store. The part that I personally find value in is that they offer products that you would find in an Asian supermarket. For example, when going into a typical dollar store we would expect to see a section where we can get chocolate bars, potato chips, or sodas but at Daiso you would go for something more along the lines of Pocky, shrimp chips or green tea.

I must say personally I would be able to spend hours in the store and feel quite satisfied at the end of my trip! If you are in Vancouver anytime in the future I would definitely recommend going to check out Daiso.

Reference:
http://www.daisocanada.com/

The thrift trend

I recently took a trip to Value Village to look for ‘cheap’ items to put together a costume. Since it is easily one of the first stores that one thinks of for thrift clothing, I went in with the idea that it will be a good investment for something that I would only wear once or twice.  

Every since it’s inception in 1954, Savers (the parent corporation of Value Village) has grown on to become one of the best models for recycling reusable clothing, accessories and household items in the United States, Canada and Australia. Its model is very basic and niche. Value Village partners with various non-profit organizations to purchase and resell the items originally donated to those non-profit charities. This business model not only stimulates progress in the economy by bringing unwanted items for sale at a cheaper price, but also promotes the notion of charity and community service. Value Village boasts of its recycling and waste management initiatives. They claim that all products can have a meaningful after life even if are not necessarily used for their intended purpose. For instance, “textiles can be repurposed as insulation and metals from clothing and electronics can be sold for their raw value”, all the while, making alternate use of them and preventing it from reaching the landfills.

When it first started out, the concept of thrift shopping was targeted mainly towards shoppers on a strict budget or fixed income. Their competitive edge was that they could have pieces from any brand or shop, which were donated to them and were in a good wearable condition. Value Village too, centered its value proposition around price, since they are one of the stores that offer the lowest price in the market. 

The one thing I really liked about the store is the variety it provides. Everyone can find clothes (or other items) of their style and taste. It is not targeted towards one particular fashion stream. Instead, you can play around and experiment with different things, without feeling pressured to look at the price tag before looking at the item itself.

In the last couple of years, thrift market shopping has become a trend to some degree. Especially with the influx of YouTube popularized DIY (do-it-yourself) challenges, haul videos and Pinterest ideas put forth by various contributors, people have increasingly started investing in thrift store inventory. Instead of paying a premium price for a finished product at a high-end retail store, people have started looking towards product that can be repurposed and customized to suit their tastes. 

Various thrift stores have been reinventing their low-end image to a more up-scale shopping experience. The in-store displays have bright lighting, organized aisles of clothing, shoes, stationary, toys, and so on, which make it really easy to browse through. Value Village has started sponsoring fashion events in an attempt to re-brand the image of thrift items. They have also designed their website in a really easy to follow manner. Anyone can browse through get ideas about where to start or learn the “rules” on how to shop in a smart and economical manner. Since these stores don't have a set inventory, shoppers can really diversify and find unique products. The beauty of thrift stores is that it is a perfect place to splurge on things that you wouldn’t normally consider purchasing. I certainly walked out with multiple items that had nothing to do with my originally planned costume idea. 

If you are someone who frequents Pinterest (or any other social media site) wanting to recreate some ideas but doesn’t know where to start, perhaps a trip to a nearby thrift store can be of value. You never know what you might stumble upon!

Sources:

https://en.wikipedia.org/wiki/Savers

http://smallbusiness.chron.com/develop-thrift-store-secondhand-store-13069.html

https://www.valuevillage.com/shop/thrift-tips

http://digitalcommons.kennesaw.edu/cgi/viewcontent.cgi?article=1024&context=amj