FIELD MARKETING ORGANIZATION TREND WATCH – 8.19.11

HEADLINE OF THE WEEK PSFK releases 2011 Future of Retail report The 2011 issue of the Future of Retail report is designed to inspire anyone involved in creating touchpoints that lead a customer through the purchase path. While there are tremendous changes happening across all aspects of retail, our focus is on the vibrant innovation revolving around the physical store. This 120-page report presents key trends and macro themes that retailers, service providers and product manufacturers can leverage to enhance the shopper experience in order to drive sales. Our research yielded 10 key retail trends that sit within 3 broad themes – Online Expectations Offline Experience, Shopper Know-How and Redefined Retail Cartography. A preview presentation of the report plus details on how to purchase the report can be found here: www.psfk.com/future-of-retail. Source: PSFK.com/Mary

RETAIL Major retailers raise outlooks, still hedge bets for rest of year Consumers may not be confident, but the stores that sell to them certainly seem to be. On Tuesday, Wal-Mart and Home Depot, two of the bellwethers of the U.S. economy, joined a string of other merchants that have raised their outlooks for the year despite a flow of bad economic news that suggests they have no reason to be optimistic. TJX — which owns TJ Maxx and Marshall's — Macy's, Kohl's and Nordstrom have all boosted their profit outlooks in the past week. The forecasts seem to fly in the face of other economic indicators. "It's cautious optimism. Retailers want to be optimistic but they know consumers can turn on a dime," said Wall Street Strategies analyst Brian Sozzi. "Retailers are still climbing a wall of worry." Merchants have plenty to worry about. They want to avoid the fallout from the financial crisis in 2008, when shoppers pulled back so much that revenue and profits suffered and some retailers were forced out of business. Merchants are better positioned to weather the downturn now, but Americans have continued to cut back during the painfully slow recovery. Consumer sentiment hit a 31-year low in August, according to a key survey completed last week, as turmoil in the stock market and political strife over raising the federal debt ceiling shook already nervous shoppers. The International Council of Shopping Centers-Goldman Sachs index, which tracks revenue at stores open at least a year at 27 major retailers, has shown three consecutive weeks of declines. Still, retailers have some reason for optimism. Consumers spent more on cars, furniture, electronics and other goods in July, and more in May and June than previously thought. Retail sales rose 0.5 percent last month, the best showing since March. Retailers also have learned from 2008, when they were stuck with piles of merchandise that had to be discounted

up to 80 percent or sold to liquidators for pennies on the dollar. Many that survived the Great Recession by cutting costs, keeping inventories lean and pushing a strategy of either low prices or high quality are reflecting confidence going forward. Stores are still looking at contingency plans, including re-evaluating their pricing strategies and holiday hiring, in case business falls off dramatically, said Walter Loeb, president of Loeb Associates, a retail consultancy. Macy's, for instance, said last week it is monitoring sales more closely going forward. "They're watching their inventory and are looking to readjust promotions," Loeb said. Source: AP/Seattle Times/Mary

The first virtual grocery stores open Tesco Ltd. created the first virtual grocery stores in subway stations throughout Seoul, South Korea that work solely using Smartphones. The stores were designed to make the dreaded grocery store trip more convenient for Korean workers by virtually bringing the stores to them. By opening product-less, virtual stores in subway systems cuts the time it takes from grocery shopping between work and returning home. The stores are made up of photo images identical to grocery shelves including fresh and perishable food products mimicking a real store. By scanning QR codes that relate to each food product, shoppers can upload their desired products to a virtual shopping cart on their smartphones. Once they have selected all desired products, they can purchase their items strait from their Smartphone and request a desired delivery time. By the time shoppers get home, they essentially can have a box with their grocery items waiting at their door. Source: Chain Store Age/Kate N.

Lady Gaga to decorate Barneys Christmas windows

Barneys via AP

In an image released by Barneys New York, artwork is shown from the Lady Gaga Holiday Campaign. Starting in mid-November, "Gaga's Workshop will be brought to life throughout the fifth floor of the Men's Store and the store's iconic Madison Avenue windows," Barneys announced. Gaga isn't just taking the reins on decor, but she's also designing a range of exclusive, small gift items, which will be sold in the workshop. Barneys will donate 25 percent of sales from all of those items to a charity of Gaga's choice. "Lady Gaga is a rare cultural phenomenon, not only because of her exceptional talents as a singer, songwriter and performer, but also with regard to her support of equality and individuality and status as a fashion icon ... As a New York City landmark, we wanted to

celebrate Lady Gaga as a fellow New Yorker and amazing talent," said Mark Lee, Barneys New York CEO. Source: todayshow.com/Mary

How Ralph Lauren's son is reinventing window shopping

Ralph Lauren is going digital in a bid to bring its $13 billion brand into the 21st century, outfitting flagship stores with high-tech interactive windows that let passersby view products and make purchases without stepping inside. The digital tricks, which also include online e-commerce projects and holographic video projections on storefronts, are the brainchild of Ralph Lauren's son David, the brand's global marketing and e-commerce chief. "Ralph Lauren ... has a vision when he walks into a store," says David. "That's the same vision I have when I go on the Internet." Source: Smartbrief/FastCompany.com/Mary

Nordstrom experiment opens in New York After flirting for years with a move into New York City, Nordstrom is opening a full-priced store in Manhattan. But the store will not have Nordstrom in its name, or even feel like a Nordstrom. Called Treasure & Bond, the new store will open Friday in Manhattan and will be less than a tenth the size of a typical Nordstrom department store. In fact, it is a big experiment that will not even contribute to Nordstrom's bottom line, as the profits have been committed to charity. That may seem odd for a public company, but retail analysts said it was sensible for the Seattle-based chain, which for years has been trying to figure out the New York market before formally opening a full-fledged department store. "They're probably trying to generate goodwill before they make themselves present in New York with a full-line store," said Ken Stumphauzer, an analyst at Sterne Agee. "This will essentially give them some perception or added insight into the New York consumer, and specifically into the more affluent full-priced consumer." If the regular Nordstrom stores go after the perfectly coifed, cardigan-wearing shopper, the Treasure & Bond concept stores seems to be aimed at her graphic-designer younger sister. The merchandise in the boutique is funkier than what a Nordstrom would carry. Though the company has always aimed upscale, the only Nordstrom store in New York City is a discount Nordstrom Rack store. While other retailers have tried pop-up shops to test the New York market, Nordstrom says that Treasure & Bond will not fit that mold and will instead be a permanent location. The company says its charity efforts will go further than competitors who team up with nonprofit groups for campaigns. And all proceeds from the rather expensive merchandise go to children's charities, Nordstrom says. It will change which charities it donates to every three months. The recipients in the store's first year include the New York Public Library's programs for youths and The Edible Schoolyard NYC. In addition, there are no plans to make it a for-profit store, said Peter Nordstrom, executive vice president and president of merchandising at Nordstrom. But he added that he remained set on opening a full New York store that would be more than 250,000 square feet, and that Treasure & Bond would

help Nordstrom figure out how New Yorkers shop until then. The Treasure & Bond name for the concept store gives Nordstrom leeway, he added. "It allows us to be way more nimble and to learn," he said. Source: The New York Times/Seattle Times/Mary

Facebook offers on-line pop-up shops mypopupshop is the creation of Vacant, a US company who have pioneered pop-up shops with brands large and small since 1999, and who are now enabling Facebook users to ―get in on the excitement of flash sales‖ by running their own mypopupshop on Facebook. First the Facebook user downloads the free mypopupshop application — developed by MicroMarketing in Sweden — and selects a brand for a limited period along with a custom theme for their shop. Users are incentivised to promote the brand to their friends and paid a commission for each sale, with the entire transaction managed by mypopupshop. After 30 days the user can decide whether to continue with the brand or select another. The application is due to launch imminently, with updates available on their Twitter or Facebook pages. Holding true to the F-Factor philosophy, Vacant believe that when friends of mypopupshop users ―like‖ or buy from their page, the product will become endorsed and therefore purchase decisions become easier for other friends. Website: twitter.com/mypopupshop. Source: springwise.com/Mary

Ikea plans EV charging stations at select US stores IKEA is partnering with ECOtality, Inc., a leader in clean electric transportation and storage technologies, to bring Blink electronic vehicle charging stations to 10 stores in 4 U.S. states: Arizona, California, Oregon and Washington. The project intends to foster their commitment to a smaller carbon footprint through technological opportunities that help protect the environment. IKEA plans to install operational charging stations by as early as fall 2011 and will remain responsible for keeping them orderly and reporting charging information to ECOtality. ECOtality will oversee and manage the ongoing charging stations at all 10 stores. Each store will have a minimum of two stations with the pilot program between ECOtality and IKEA lasting through December 2012. ECOtality is funded in part by a federal stimulus grant from the U.S. Department of Energy made possible by the American Recovery and Reinvestment Act. In addition, ECOtality is currently overseeing the installation of 14,000 commercial and residential charging stations in 18 cities and major metropolitan areas in six states including the District of Columbia. IKEA stores are in four of those states. Source: PR Newswire/Kate N.

Old Navy adds “Superfan Nation” to all U.S. stores

Old Navy announced the launch of ―Superfan Nation,‖ a new line of NFL and Collegiate clothing for the entire family. Old Navy will offer all professional football and 71 of America’s top colleges and university teams in their men, women, kids, baby and accessories departments to its 1,000 U.S. stores. However, each store will feature only the most popular collections that cater to the local community’s favorite teams segmented through careful research in each market. Customers can shop for items from socks to headwear and tees to fleeces with their favorite team logos. Apparel will start at $14.94 and all hard goods and accessories will start at $5.50. Source: PR Newswires/Kate N.

ECONOMY/CULTURE Consumer prices rose by the most since March More expensive gas, food, clothes and other necessities are squeezing consumers who are already struggling with stagnant pay and worried about a weak economy. Still, economists say they don't expect inflation to rise much further. Many forecast that it will peak sometime this year. Gas prices have declined this month and are expected to drop more. And with the economy still weak, consumers can't afford much higher costs, limiting the ability of retailers to raise prices. The Consumer Price Index rose 0.5 percent in July, the Labor Department said Thursday. That followed a drop of 0.2 percent in June. An increase in gas prices accounted for much of the swing. The core index, which excludes volatile food and energy costs, rose 0.2 percent. That's below the 0.3 percent rise in each of the previous two months. The Federal Reserve and private economists tend to focus on core inflation. It's seen as a better predictor of price changes than overall inflation is. Rising inflation reduces consumers' buying power. Average hourly pay, adjusted for inflation, declined in July and has fallen 1.3 percent in the past year, according to a separate report Thursday. Higher inflation could make it harder for Fed Chairman Ben Bernanke to rally support for any new program to buy Treasurys. The Fed's previous such purchases were intended to keep interest rates low and stimulate the economy. But critics said they raised the risk of higher inflation. Over the past 12 months, prices have risen 3.6 percent. That's equal to the 12-month increase in May and June. Core prices over the past 12 months have gone up 1.8 percent - the

largest increase since December 2009. Some inflation can be healthy for the economy because it encourages people to spend and invest rather than sitting on their cash. More spending drives corporate growth, which makes businesses more likely to hire people. Economists expect core prices will likely continue to rise this year, then fall back next year. With unemployment high and consumer demand low, "a sustained rise in core price pressures is just not possible," said Paul Dales, an economist at Capital Economics. Source: AP/Seattle Times/Mary

The slow, sure demise of paper money?

For years now, observers have been predicting the end of paper and coin currency thanks to the ascendance of debit and credit cards, as well as the persistence of personal checks. The US Mint reports that this is, in fact, the case; the Mint is printing less money than ever before. During the 2010-11 fiscal year, fewer $5 bills were printed than at any other point in the last 30 years, and for the first time in modern history there were no new $10 bills. Source: Iconoculture/Mary

Seniors band together to create retirement communities With no desire to leave their homes, a growing number of older Americans are banding together to create retirement communities in their existing neighborhoods. These communities are proliferating with the aging baby boom: About one in three Americans over 50 lives in one, according to a 2011 AARP survey. Source: Iconoculture/MSN.com/Mary

MEDIA/MARKETING Generations divide over mobile devices eMarketer estimates that more than 91 million US consumers will use the internet through a mobile device at least monthly by the end of this year, up from 77.8 million in 2010. While US consumers as a whole may be increasing their mobile internet activities, the devices with which they prefer to do so tend to vary by generation. According to a study by Affinity Research, generations are dividing in terms of mobile device preferences, with older consumers favoring tablets and ereaders and younger users adopting smartphones at rapid rates.

Although Affinity estimates that Generation X is 16% more likely than the average consumer to own a tablet, a study by GfK MRI indicates that when adding ereaders into the mix, the rate might be even higher. GfK MRI indicates that a Gen Xer is 25% more likely than the average US adult to own a tablet or ereader. Income may play a large part in this age group’s strong adoption of

tablet computers. Wealthier Gen X consumers are more likely to own the ―latest and greatest‖ gadgets—according to Affinity, Gen Xers with household incomes of more than $100,000 are 63% more likely to own a tablet PC than other Gen Xers. Tablet adoption also skews toward Gen X males. While millennials are less likely than both Gen X and boomers to own either an ereader or a tablet, the younger demographic surpasses both age groups in terms of smartphone adoption. Labeled as ―digital natives‖ in the technology and mobile device market, millennials are 28% more likely than the average consumer to own a smartphone; 46.5 million millennials already have one. Additionally, Affinity reports that more than 24 million millennials plan to purchase a smartphone in the next six months. Source: eMarketer: Digital Intelligence / April T.

The future of texting: GroupMe Mobil App Social media networks are not private by any means. New generations love being able to instantaneously communicate with friends and peers, while older generations are more skeptical to try new social media sites. GroupMe is a new application created by Jared Hecht and Steve Martocci, named in Bloomberg BusinessWeek’s ―Best Young Entrepreneurs 2011‖ list, which enables group messaging and conference calling only between users in a privately created group. GroupMe allows users to instantly be in touch with everyone in the group through a click of a button. Another perk is that the application works on all operating systems such as iPhone, Blackberry, Android and even generic cell phones using a phone number in which the entire group communicates through. Consider it the step-up from one-to-one text messaging. Although some view it similar to Google+ circles or Facebook groups, GroupMe differentiates itself by going through text messaging rather than the internet. Unlike Twitter, a text blast does not go out to everyone following you and the entire public; it stays among a

group you chose to be a part of allowing users to keep social circles private. In addition, the GroupMe app for smartphones works in 90 countries with 900 carriers. As innovative as it sounds, this app can drastically reduce the cost of international text messaging. Sources: PRSSA.org/The Wall Street Journal Online/Kate N.

Twitter battles to quell its critics It's among the most recognized brands on the Internet and a cultural phenomenon, with as many as 400 million monthly users and a new $800 million funding deal — one of the largest ever. It's also been the scene of recent high-level comings and goings and enough gossip to fuel a soap opera. And when it comes to users, estimated revenue and general buzz, Facebook is eating its lunch. So whither Twitter, the high-flying social media network whose legions of die-hard fans are nearly equaled by its skeptics? Can the microblogging site become a big business, or does the turmoil at the top reflect a company in trouble? Read the full article here: http://www.chicagotribune.com/business/ct-biz-0815-twitter-20110815,0,1058809.story?page=2 Source: Chicago Tribune/Connie B.

Coke pops new can design

Coca-Cola turns 125 this year and with that comes another design upgrade. The number one selling diet soft drink, Diet Coke, will sell its limited-edition can, designed by San-Francisco based design firm, Turner Duckworth, starting this September. While the bare-aluminum background of the can the will stay the same, the new design super-magnifies the ―D‖ from the existing logo placing it a top the ―k‖ of Coke. The brand is trying to go for a more mod and daring look by refusing to reveal the brand’s complete name. However, they also are not revealing how long the cans will remain on store shelves, yet have already sent out cases of the new Diet Coke to various trendsetters in the fashion and design world. Coca-Cola remains far from unsettled about the sneaky design. For a brand that is consumed 1.7 billion times each day and sold in 200 countries, Coca-Cola remains the best-selling diet soft drink in the world. Source: AdWeek/Kate N.

OREO launches new triple double cookie

The world’s favorite cookie revamped its crème filled status by adding another layer now available in stores nationwide. The newest OREO cookie combines the original crème filling with another layer of chocolate crème filling with a cookie

layer in between, creating a triple double OREO cookie. Retail prices for the new OREO’s are $4.19 per package. One serving (1 cookie) is 100 calories and a total of 4.5g of fat. The OREO brand also created an OREO Double Stuf Racing League (DSRL) TV advertisement with a-list sports stars Shaquille O’Neal, Eli Manning, Venus Williams, Apolo Ohno and Stufy, the DSRL team mascot. The advertisement is set to air in early September. Source: PR Newswire/Kate N.

HEALTHCARE First success stories for leukemia cure Monumental results in cancer research of three leukemia patients who volunteered to take part in experimental cancer treatments were published Wednesday. Of the three volunteers, doctors at the University of Pennsylvania say the treatment completely cured two patients of the most common type of leukemia, chroniclymphocytic leukemia, and reduced it by 70 percent in the third patient with as much as five pounds of cancerous tissue melting away after being treated for only one year. The only cure for leukemia to date is a bone marrow transplant, but it only works 50 percent of the time and can cause other life-threatening side effects. However, the three patients only experienced side effects and symptoms reflecting the common cold. The new treatment works by injecting a large batch of genetically engineered white blood cells that have a gene that makes them multiply by a thousand fold. Inside the body, these white blood cells track down and kill the cancer cells in the blood, bone marrow and lymph tissue. Volunteer Bill Ludwig, who was told he would die from leukemia within weeks, gets to one year later tell his story of cancer survival. Sources: MSNBC.com & The Today Show/Kate N.

FASHION/DESIGN Buzz builds for Portland collection from Pendleton Hear that? The chainsaw buzz is about Pendleton’s indie-designed, made-in-America line for fall/winter.

Photo: The Portland Collection SLIDESHOW: Check out a few looks from the Portland Collection, hitting stores as we speak. View Slideshow »

Get ready to start seeing more and more about the Portland Collection from Pendleton. The indie designed capsule collection, for fall/winter 2011, is landing soon all over. It’ll be in such Big Deal stores as Dover Street Market in London and Oak in New York. And, of course, some shops that are closer to home. But as this love letter from the LA Times indicates the media and press buzz has only just begun. Expect to see the Nathaniel Crissman-, Rachel Turk- and John Blasioli- designed (Portlanders, all) pieces in print and web editorials starting with the much-anticipated September issues. Source: Seattlemet.com/Mary

Fashionable excess Follow the link to see bold color, crazy collages, and more top trends for fall click for more › Source: style.com/Mary

Meeting Bowls NYC: Street furniture for spontaneous dialog

Wednesday a new urban furniture installation was unveiled on the pedestrian plaza in Times Square. ―Meeting Bowls‖ are three large semi-spherical capsules that seat up to eight people and will be in place through Sept. 16. The project is the work of Madrid-based mmmm… in partnership with the Times Square Alliance. We spoke with Eva Salmerón, one of the four members of the Spanish collaborative who described the project as an experiment to facilitate spontaneous interactions and dialog. The Times Square location, which is framed by enormous video screens, tall buildings, and dense crowds created an opportunity to design a street furniture piece which allowed people to experience an intimate space. Each of the Bowls rest on a base which gently rocks, giving

those seated a sensation of floating. Each of the three Meeting Bowls are made from CNC cut fiber board. Those visiting the project can record their dialog with others inside the Meeting Bowls on their smartphones and share the audio on the project website accessed by a QR code. Source: PSFK.com/Mary

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