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Connected RetailerNSB’s

Magazine

Expertise Innovation Execution

Winter 2006

Mobile CRM improvesservice and salesCasual Male empowers store associateswith better customer information

StoreXpress andEnterpriseXpressNew packaged solutions deliver ConnectedRetailer quality affordably and fast

Overpromise andoverdeliverThe secrets of unshakable customer loyalty

Casual Male boosts the power of CRM

Introducing StoreXpress

Complying with PCI DSS, with helpfrom NSB

A Web for the wise: Your online tool forbetter loss prevention

Build-A-Bear Workshop On Tour

Overpromise and overdeliver — thesecrets of unshakable customer loyalty

EnterpriseXpress: the packaged ConnectedRetailer for SMEs

Retailers and Baby Boomers:boom or bust?

Meet the Millennials, the arbiters of cool

Stay connected with NSB!

adidas Retail takes the .NET initiative

In the news: moving forward with newclients, partners, and resources

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contents

Nikki BeckettChief Executive Officer, NSB Group

© 2006 NSB Retail Solutions Inc. All Rights Reserved. ConnectedRetailer, NSB, the NSB logo, and certain other marks are trademarksor service marks of NSB Retail Solutions Inc. and/or another NSBcompany. Other marks are the trademarks or service marks of theirrespective owners.

NSB Retail Solutions Inc.2800 Trans-Canada HighwayMontreal, QuebecH9R 1B1CanadaPhone: 514-426-0822Fax: 514-426-0824Email: [email protected]

Editor: Doug CampbellWriters: Doug Campbell, Mark Wallinger, Melanie Tabet Design and layout: Alan RussellContributing photographer: Vadim Chiline

®Proven solutions for connected retailers

The view from the topReduced to its most essential ingredients, the recipe for success inretailing might seem almost foolproof: provide value by offeringrelevant products with good service on attractive terms. In reality, ofcourse, relying only on those basics would be nothing short offoolhardy. Today’s shoppers have more choices and higher expecta-tions than ever before, so today’s retailers must do more than everbefore to connect with customers, maintain their interest, and earntheir trust.

In this issue of Connected Retailer we present ideas and strategiesfor meeting these challenges, plus innovative examples of how theyare being applied. A feature contribution by marketing specialist RickBarrera explains how to align your brand promise with your criticaltouch points to raise your profile and results. Since a major portion ofyour customers are likely drawn from either the youth or “boomer”markets, we have also included contributions from experts on each ofthese important demographic groups, to help you understand theircharacteristics and needs.

Market research and technical innovation have been importantsuccess factors for Casual Male, which is profiled herein. Afterlearning that their customers value confidence as much as greatclothing, this purveyor of plus-sized men’s apparel turned to NSB fora mobile CRM system that would enable highly personalized serviceon the sales floor while supporting well targeted, multi-channelmarketing programs. Similarly, our article on Build-A-Bear Workshopoffers another example of creative retailing with portable solutions, intheir case using a fully equipped store on wheels.

As a company at the forefront of the retail solutions industry, NSBis also on the move, developing new ways to bring you from whereyou are to where you need to be with expertise, innovation, andprofessional project executions. These qualities have been combinedin our latest products, StoreXpress and EnterpriseXpress, whichbring the proven advantages of the Connected Retailer® to small- andmedium-sized retailers quickly and affordably.

After all, Connected Retailer is more than just a name; it is our ownbrand promise to you. It is the essence of who we are, the value weprovide, and what we are dedicated to helping you achieve.

3NSB’s Connected Retailer Magazine - Winter, 2006

Casual Male boosts the power of CRMWith help from a groundbreaking mobile CRM solution from NSB, Casual Male Retail Group istransforming an underdeveloped brand into a robust category leader and demonstrating the valueof putting the customer first.

When the company formerly known as Designs Inc. purchasedCasual Male Corporation in 2002, they acquired an establishednational retailer, a highly recognized brand, and a great deal ofwork.

“Casual Male had been around for more than 30 years and waswell known as a purveyor of large-sized men’s clothing,” saysDennis Hernreich, COO and CFO of the renamed parent compa-ny, Casual Male Retail Group (CMRG). “We believed that thecompany had great potential, but we also thought it was improp-erly focused, over-expensed, and under-infrastructured. Ourobjectives were therefore to bring it up to date, operate itefficiently, cut costs, and merchandise and market moreeffectively to our particular customer base.”

To do this, CMRG embarked on an ambitious program tooverhaul Casual Male’s technology, better understand theircustomers, and meet their needs. They replaced aging systemsfor merchandising, planning, allocation, and distribution. Theyremodeled most of the chain, re-merchandised their products,and added top brands such as Reebok, Izod, and Calvin Klein.They also worked to raise the profile of their own private labelclothing under the George Foreman band.

With these fundamental improvements in place, CMRG wasready to pursue opportunities in two of the most important andpotentially lucrative areas of its business: marketing and in-storeprograms. For that, they turned to market research and tosolutions from NSB.

Sizing up the “big and tall” market“We began by researching our market,” says Ric Della Bernarda,Casual Male’s Senior Vice President of Marketing. “In simpleterms, it includes men over 6’ 2” with waist sizes between 40and 70. This currently represents about 11% of the overall malepopulation.”

“But Casual Male customers come from all walks of life and alllocations,” continues Della Bernarda. “And it’s not a simplechallenge to market effectively to men of all ages, incomes, andlifestyles, especially since we also want to offer a variety offashion levels and styles. We needed to understand and focus onwhat our customers had in common based on their coreinterests, mindset, and needs.”

“The research showed that Casual Male customers are notlooking to be fashion forward, but neither do they want to looklike Joe Sixpack,” adds Hernreich. “In other words, they’reregular guys who want the same range of choices that areavailable to everyone else, and who have trouble finding com-fortable clothes in sizes that fit.”

More surprising was what Casual Male learned about theattitudes of the men in their target market. When asked in asurvey to describe “big and tall,” many customers said “over-weight,” but also “strong,” “fashionable,” and “confident.” Theoverall impression was generally positive. But when those samecustomers were asked how others typically characterized the“big and tall” male, the responses were much more negative:They focused on words such as “fat,” “sloppy,” and “unstylish.”

What’s in a name?To address these negative connotations and to reduce theperceived stigma associated with being “big and tall,” CMRGdecided to redesign their logo and signage so the Casual Malebrand was clearly dominant. They’re also planning to use “CasualMale XL” to communicate their coreidentity in a more generic way.The bigger challenge, however,was to transform the shoppingexperience to address theircustomers’ needs as bothplus-size consumers andindividuals.

“The research told usthat we’re not just sellingclothing; we’re sellingrespect and self-esteem,”says Della Bernarda.“To do that, and tobuild our brand, wewant to combine theright product mix withhighly personalizedservice and to main-tain outstandingrelationships witheach customer.That’s why weneeded excep-tional Store andCRM systemsthat wouldhelp us targetour commu-nications andimprove ourin-store service,and why weselected ConnectedRetailer solutions from NSB.”

4 NSB’s Connected Retailer Magazine - Winter, 2006

Improved data collection and analysis“One of our objectives with CRM is to reach out to the massesby appealing to the individual,” says Hernreich. “We want to iden-tify customer communities through historical purchase patterns,and we want to target our messages to each community in atimely, relevant manner. To do that, we’re using CRM to collectdetailed customer data from all channels, then using the data ininnovative ways.”

Connected Retailer CRM enables retailers to build rich customerprofiles. Each customer record can have hundreds of fields torecord a vast amount of contact, demographic, and transactioninformation that can be tracked and leveraged. Casual Male doesthis by applying clustering techniques to their multi-channel,multi-brand customer database of 2.6 million active names andpurchase histories (plus 3.5 million inactive names), to identifynine different customer segments. These range from high-end,“top jock” customers who shop most frequently and spend sixtimes more than average on active styles, to “Cool J” customerswho spent modestly and mostly on urban styles.

With Connected Retailer CRM, the company will expand andrefine this database to enhance their existing email, direct mail,and voicemail marketing programs. “We use voicemail marketingthree or four times each year to promote special store events,”says Della Bernarda. To improve our results, we’re going to addpersonalized greetings with references to each customer’s pastpurchases.”

Growth through innovationCMRG is also using Connected Retailer CRM to develop severalnew marketing programs. One of these is a three-tiered loyaltyprogram that will be supported by messaging targeted to eachdifferent type of consumer in each different location. Their goalsfor this program include increasing store sales, market share,and guest lifetime value. Both points-based and discount-basedversions of this program were tested in the fall, and will be intro-duced this spring.

Another of CMRG’s marketing innovations is their Web-based“PURL” program, which stands for personalized URL. Within fourdays of making a purchase, the customer will receive a postcardfeaturing his name and a picture of the item he bought. The post-card directs him to a Web page that also displays the purchaseditem, plus a selection of related merchandise and links to thelarger CMRG catalogue.

“With this system, we’ll have not just one active website but, ineffect, hundreds of thousands of customized sites,” says DellaBernarda. The PURL program will be launched later this spring.

Bringing the power of CRM directly to thesales floorIn addition to reaching out more effectively to their customerbase, CMRG wanted to leverage the power of customerknowledge within each store by putting it directly into the handsof their associates on the sales floor. To do this, the companyworked with NSB and our partner Symbol Technologies® todevelop a fully mobile CRM solution — the first of its kind to bedeployed in a North American retail environment.

The system integrates In-Store CRM with Symbol handhelds.Complete customer and purchase information can be called upby entering any variable (such as the customer’s name andphone number) or by scanning the loyalty card. Associates willalso be prompted by “triggers” from the database to remind thecustomer when he is close to achieving a loyalty benefit, whenone of his favorite brands is on sale, or even just to wish him ahappy birthday.

“NSB’s mobile CRM system will give our sales associates theright information about each customer to help them find the rightmerchandise and choose the right colors and styles,” saysHernreich. “Because of that, our customers will feel much moreconfident and catered to. In our market, that’s a real competitiveadvantage. It will help us attract and retain more customersand enable our sales associates to create more effective cross-selling and up-selling opportunities.”

CMRG’s head office marketing department will control theinformation store associates can access. It will include all thevariables that are available at the point of sale (right down to theactual transactional level), complete purchase histories, as wellas known personal information such as key dates and evenfavorite sports teams. However, associates can also help keepthe database growing and current by entering or updatingcontact information such as postal and email addresses andphone numbers.

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Hernreich says he would like to eventually make the mobile CRMapplication available without the register component, drivendirectly by the CRM database on the in-store extensions server.For now, CMRG associates are being thoroughly trained to takeadvantage of the new system, which will continue to be rolled outacross the chain this spring.

Huge market potentialBy using innovative Connected Retailer solutions to focus on theircustomers, Casual Male is in an excellent position to grow itsbusiness for years to come.

“Right now, we have roughly 8% of a six billion dollar market-place,” says Hernreich. “With help from Connected Retailer Storeand CRM, we’re able to better serve our customer base, to meettheir expectations, and to move our market share well beyondthat 8%. NSB and their Store and CRM solutions are playing animportant role in our success.”

Adds Hernreich, “We’re proud of what we’ve accomplished sofar, and we’re on track to achieve what we set out to do when wepurchased Casual Male three years ago: take an under-serviced niche market and turn it into a very profitable one forour business.”

For more information about NSB’s Mobile In-store CRMsolution, contact Jerry Sumner at [email protected] 508-660-3905.

Connected RetailerMobile In-Store CRM Building positive and productive customer relationships is a toppriority for most retailers. To do that, your sales associates needto fully engage your customers with in-depth knowledge and apersonalized approach.

NSB makes it happen. With our wireless, handheld CRM solution,your associates will have the tools and information they need togive your customers a richer, deeper in-store experience. MobileIn-Store CRM lets you…

Boost conversion rates by enabling your sales associates tospend more time on the sales floor providing personalizedservice

Enhance gift buying and cross-selling by ensuring yourassociates know what your customers are most likely to wantand buy, and advising them of relevant promotions and availableloyalty rewards

Improve your customers’ experience by using one-to-onemessaging at the point of service, not just the point of payment

Build your customer database by updating information in realtime as your sales associates serve each customer

Prepare your stores for additional mobile services byleveraging your handheld devices for other critical in-store taskssuch as line busting, stock location, price checking, and more

Implement and benefit immediately by easily integratingMobile In-Store CRM with your existing IT infrastructure. CRMdata from your POS, Web, catalog, call center, or other sources ispassed directly from your head office through your corporateWAN to the handheld device so your other store systems are notaffected.

Introducing StoreXpressNSB’s new packaged Store solution offering puts you on the fastest path to successTake NSB’s Connected Retailer Store solution. Pre-configure features that retailers need most. Addhardware and handhelds. Then add something unique to the mix: an implementation approach thatcombines the pre-configured software, hardware, and peripherals with streamlined implementationservices from the industry’s experts.

That’s the formula for StoreXpress, a new offering that NSBlaunched at the 2006 NRF annual convention in New York. As atrue pre-configured package, StoreXpress significantly reducesthe initial timeframes and costs required to implement a newstore system. StoreXpress is the perfect implementation solutionfor retailers who want to experience the benefits of today’sleading-edge POS technology, but who don’t have the sametime, resources, or budget available as many larger retailers.

Meeting your needs on your terms“Our research indicates that there is pent-up demand formigration to innovative solutions based on .NET technology,”comments Stuart Mitchell, NSB’s CFO and Senior Vice-President

for the Store Business Unit. “With StoreXpress, we’re making ouradvanced .NET POS available to all retailers.”

Duncan Taylor, Director of Product Management for NSB’s StoreBusiness Unit, says, “Connected Retailer Store is, by necessity,a sophisticated and highly configurable solution; it must bescalable to meet the demands of some of the largest retailers inNorth America and Europe. However, this sophistication can beboth cost- and time-prohibitive for some of our clients. WithStoreXpress, NSB retail experts addressed their needs bystreamlining the Store offering so we could implement it in afraction of the time.”

Retailers have been quick to realize the value of this approach.

StoreXpress offers:

• Point of Sale (POS) including a robust “bestpractices” transaction set

• Payment authorization, order capture, customercapture, cash management, time and attendance,electronic journal, store reports, and employeemanagement

• Communications, electronic payment switch,polling, and monitoring

With StoreXpress you can also add:

• Centralized returns management

• Store-level inventory tracking

• Mobile services including line busting, mobilecustomer, and stock management

• Host- and store-based customer relationshipmanagement

• Sales audit, loss prevention, flash sales, creditsettlement, and gift card management


In late 2005, StoreXpress was selected as the solution of choiceby Dallas-based Harold's Stores, Inc. (AMEX symbol: HLD), whichoperates 41 upscale ladies' and men's specialty stores in 19states. The Harold's implementation of StoreXpress was kickedoff in December after an exhaustive review and selectionprocess. The goal of the implementation project is to achieve acomplete store rollout before October 2006. "We wanted aleading technology solution, but we also needed to control costsand minimize risk," says Brian Brunk, Director of MIS. "NSB'sStoreXpress will allow us to meet those objectives, and it givesus the future flexibility we desire.”

Worry-free implementationSpeed is of no value unless both the software and the imple-mentation are of the highest quality. NSB is focused on quality,and StoreXpress delivers. Connected Retailer Store is alreadywell established and proven. Complementing thesoftware is NSB’s 30-year track record of implementing solutionsfor some of the biggest names in retail.

With StoreXpress, NSB has created a pre-configuredpackage comprising software, hardware, and services, andcompleted rigorous testing cycles upfront to greatly reduce theamount of configuration and testing time required to implementthe solution.

Fast ROI, long term valueNSB builds solutions to provide long-term value, andStoreXpress is no exception. StoreXpress simply gets the Storesolution from concept to the store as fast as possible.

Faster, worry-free implementations mean faster ROI. This spring,a second StoreXpress implementation will go live, enablinganother NSB client to experience the benefit of a new POS just afew months after purchase. In fact, clients who purchaseStoreXpress at the NRF conference in January will startseeing the return on their investment later this year.

Because it’s still our same proven Store software, these clientswill have all the same benefits of flexibility and agility after initialimplementation as those clients who opt for the traditionalimplementation approach. This equates to long-term value.

A sure path to success“Retailers expect NSB to come to the table with a plan that’ssimple but effective,” says Mitchell. “That’s StoreXpress: Itbrings together the essential elements of our Store solution andincorporates all the good ideas and experiences we’ve gainedthrough hundreds of implementations. Quite simply, nobodyknows retail POS like we do.”

For all these reasons, StoreXpress customers can now getexactly what they need from NSB’s acclaimed Store technology,faster than ever before. “Retailers trust us with their challengesbecause we execute our plans thoroughly and fully realize theirvisions,” Mitchell says. “We always have. StoreXpress just doesit faster and more affordably than ever before.”

For more information on NSB’s new StoreXpress solution, con-tact Candice DeLuca at [email protected],or 614-840-1448.

Why StoreXpress?

• Retailers of all sizes can experience thebenefits of leading-edge .NET technology.

• Retailers will also experience the otherbenefits available to all Store clients, up frontand long term.

• Pre-configured software, hardware, andperipherals, combined with thorough upfronttesting, greatly streamlines theimplementation.

• Faster implementationmeans faster ROI.

the fastest path to success...


The Payment Card Industry Data Security Standard:meeting your obligations with support from NSBThe Payment Card Industry Data Security Standard (PCI DSS) is designed to prevent fraud byprotecting sensitive cardholder information. Although it is the responsibility of each retailer to complywith the PCI’s requirements, NSB offers enhanced solutions to help you meet them.

With cards now rivaling cash as the preferred payment method,data security has become a paramount concern for issuers,consumers, and merchants alike. Issuers must be able to limittheir financial liabilities, while shoppers must have confidencethat their personal information will not be exposed unintentional-ly to third parties, whether the transactions take place in-store oronline. Retailers and service providers must therefore ensure theintegrity of their customers’ data at all times.

The PCI’s “digital dozen”Credit card issuers have responded to these challenges by devel-oping the PCI DSS, a unified approach to safeguarding sensitivedata for all card brands. Its 12 key directives require retailers andservice providers to:

• Install and maintain a firewall to protect data

• Develop and maintain secure systems and applications

• Use and regularly update anti-virus software

• Encrypt transmissions of cardholder data and sensitiveinformation across public networks

• Protect stored data

• Restrict access to data by using a need-to-know protocol

• Restrict physical access to cardholder data

• Use proper system passwords instead of vendor-supplieddefaults

• Assign a unique ID to each person with computer access

• Track and monitor all access to network resources andcardholder data

• Regularly test security systems and processes

• Maintain a policy that addresses information security

Compliance is overdue!Retailers must now comply with the PCI DSS to ensure datasecurity in all payment channels: in-store, mail order, andeCommerce. Moreover, as of June 30, 2005, any retailer whoprocesses more than 20,000 eCommerce transactions eachyear must be certified. For most merchants, this involvesquarterly network scans performed by an independent auditorand the completion of a detailed self-assessment. Retailers whoprocess more than six million transactions annually through anychannel (so-called “Level 1” retailers) must get an independentassessor to conduct a more thorough, onsite assessment andprepare a compliancy report.

In the event of data theft, penalties for non-compliance can besevere. Retailers are subject to a minimum fine of $50,000for the first offence and much more for subsequent securitybreaches. Card transaction or processing privileges may also berevoked. (Visa announced its intention to take this action againstCardSystems Solutions after a security breach at the paymentprocessor left 40 million cardholders at risk.) The impact ofnegative publicity and the loss of your customers’ trust could beequally damaging to your business.

Number crunching• Credit and debit card transactions

processed by Visa, per second: 3,000

• Banks who transmit cardholder datato Visa every day: 14,000

• Merchants who transmit Visainformation daily to these banks:Five million

• Transactions processed per year:35 billion

Source: A Matter of (Fading) Trust; Banishing One PaymentProcessor Was Just the Start for Visa, by Eric Dash, New York Times,August 25, 2005


Despite the PCI DSS mandate and the potential costs of non-compliance, fewer than half of all mid-sized retailers were ableto meet last year’s June deadline, and many who did not are stillassessing the best ways to proceed. For example, retailers needto “protect stored data,” but to what degree and how? The PCIDSS is supported by detailed protocols, but the specific require-ments of each business will vary according to its establishedpractices, systems, and configurations.

Complete and implement your compliance planMany retailers have turned to consultants to help them under-stand the PCI DSS in depth (beyond the aforementioned “digitaldozen”) and to prepare compliance plans. A qualified consultantcan perform a business-wide audit of your existing process andtechnology environment, confirm the locations of cardholderdata, prepare compliance strategies and plans, and work withyour key departments to specify and document what each groupneeds to do.

A wide range of steps may be recommended. In additionto enabling card encryption (either across your system, byapplication, or on demand), your compliance program mayinclude everything from automatically limiting data lifecycles tohardening servers and setting up firewalls. Even companypolicies can be affected, such as those governing howbackground checks are conducted on employees who collect orprocess credit information. Qualified consultants can evendesign and run attacks on your systems to test their integrity andidentify vulnerabilities.

Security-enhanced solutions from NSBIt is the responsibility of each retailer to take whatever steps arenecessary to comply with the PCI standards. However, NSBrecognizes the challenges you face and, as your retail partner, we

are working to help you meet them. Specifically, we are develop-ing enhanced versions of relevant Connected Retailer solutionsthat will:

• prevent the storage of any sensitive track data or CreditValue Verification 2 data

• encrypt stored credit card numbers

• support on-demand decryption

• restrict access to decryption routines

Connected Retailer Foundation will provide all relevant NSB hostproducts with encryption and decryption functionality and willcontrol access to it. All databases where credit card informationis stored will be expanded to accommodate the larger, encrypt-ed data. Other features are specific to each security-enhancedConnected Retailer solution or application, including:

An investment in your successIf your organization still does not fully meet the PCI standards, itis in your best interest to accelerate your compliance programand complete it as soon as possible. Fraud that occurs on yournon-compliant systems could result in tens of thousands ofdollars in fines from card issuers and even greater penalties interms of lost customers and sales.

Investing in the security of your customers’ credit card data paysdirect dividends to your business. Properly implemented, the PCIDSS forms the foundation for a secure environment that betterprotects all your data, including financial and employee informa-tion. The PCI DSS will strengthen not only payment systems butalso the culture of trust that is vital for your success and for thehealth of the retail industry as a whole.

If you have questions about our enhanced Connected Retailersolutions, PCI DSS compliance, and how NSB can help, visit the“Contact us” page of nsbgroup.com. Alternatively, if you arealready an NSB client, contact your Client Services Manager.

• Store 6.1• Store 5.5 • Communications 4.2• Customer Payment 5.7

• CRM 5.2 • Sales Audit 4.1 • Loss Prevention 4.7• Credit Settlement 4.7

Protect your profitsThe cost of PCI DSS compliance can seem small when comparedwith the potential cost of data theft. Think you’re not vulnerable?Think again! If your business fails to meet the new standards,criminals, hackers, and employees who steal your customers’credit card information can cause you to lose:

• hundreds of thousands of dollars in fines

• card acceptance privileges

• time and expenses associated with fraudinvestigations

• your customers’ trust

• the reputation of your business and brand

PCI DSS locks in your data and profits


A Web for the wise:online support for retail loss preventionThroughout North America, losses from shoplifting, fraud, and dishonest employees cost retailersbillions of dollars each year. A loss prevention intranet can help you control shrink.

The numbers alone are huge: $4.7 billion in annual losses and750,000 arrests of shoplifters and employees — but thesefigures seem staggering when you consider they came from just27 leading retailers! These were among the findings of the 17thAnnual Retail Theft Survey conducted by Jack L. HayesInternational. Released in October 2005, the survey also reported:

• Total apprehensions of both shoplifters and dishonestemployees in 2004 increased 4.78 percent over 2003.

• The value of employee theft exceeded shoplifter theft byseven to one.

• Approximately one in every 28 employees wasapprehended for theft from their employer (based onmore than 1.7 million employees).

• The number of dishonest employees apprehendedincreased in 2004 by four percent, reversing a three-year trend.

• Only 2.74 percent of total retail theft losses resulted ina recovery. For every $1.00 recovered, $36.47 was lostto retail theft.

Similar studies have estimated the overall impact of theft atupwards of $30 billion each year, and confirm that employeetheft is the single biggest source of larceny in the retail sector. 1

No enterprise is immune; losses are shared by every retailer —including you. They’re eating into your profits. What can you do?According to Ernst and Young, “…what's needed is a combina-tion of analytics that better identify deviations from the norm,better in-store procedures, and corporate policies that foster astronger anti-theft culture." 2

An easy, online solutionOne way to improve the impact of your procedures and policiesis to create a dedicated loss prevention site on your company’sintranet. Speaking at our 2005 Client Conference, NSB’s SallyMcQueen, a Professional Services Consultant specializing inSales Analytics, explained why it’s a simple and effective tool forconsolidating and disseminating information while motivatingemployees.

“A loss prevention website can make your company policiesreadily available to every employee,” she says. “Properlydesigned, the site will also keep your managers and associatesactively engaged with the loss prevention process and makethem more aware of the need to be vigilant, day to day.”

To help you meet both of those key objectives, your loss preven-tion website can include a wide range of content, including:

LLoossss pprreevveennttiioonn ppoolliicciieess,, ssttaannddaarrddss,, aanndd eexxppeeccttaattiioonnss

AA lloossss pprreevveennttiioonn aanndd sseeccuurriittyy ttoooollkkiitt with information on how tominimize risks by engaging customers, how to recognize fraud,and what to do in the event of a robbery or an alarm

GGeenneerraall nneewwss oonn lloossss pprreevveennttiioonn gathered from retail industrypublications, websites, or other news sources (remember torespect copyrights by properly citing all sources)

PPeerrffoorrmmaannccee iinnddiiccaattoorrss, including loss prevention statisticsacross your chain or by region (such as sales by department forthe past 12 months versus total shrink, or top ten performersin categories such as immediate voids or cash refunds), pluslocation-specific statistics made available via a password to eachindividual store

LLoossss pprreevveennttiioonn ““TTiipp ooff tthhee wweeeekk”” such as reminders for cashiersto change their POS passwords regularly, with information onwhy this is important and how to do it

IInntteerraaccttiivvee iitteemmss such as a weekly survey or loss prevention quizwith questions suggested by employees

AAwwaarrddss oorr ccoonnggrraattuullaattiioonnss to recognize attentive employeeswho may have prevented a potential loss by noticing somethinginconsistent with standard practices (whether intended orincidental)

“Loss Prevention is too often associated with policing, so try toensure your content is positive, informative, motivational, andfun,” says McQueen. “Focus on what every employee can do tomaximize revenue by minimizing shrink, not primarily on catch-ing unscrupulous employees. Ask your employees what informa-tion they would like to see and encourage their contributions.”

Tackling employee theftAAccccoorrddiinngg ttoo EErrnnsstt aanndd YYoouunngg’’ss Study of Retail Loss Prevention,,eemmppllooyyeeee tthheefftt iiss tthhee ssiinnggllee bbiiggggeesstt ccoonnttrriibbuuttoorr ttoo iinnvveennttoorryy sshhrriinnkkaaggee..

“The dollar value of employee theft on a per incident basis is much higherthan that of shoplifting. But… apprehensions of shoplifters far outpace appre-hensions of employees. Though employees accounted for only one out of every10 apprehensions, the average value of merchandise recovered was nearlyseven times that of the average shoplifter ($1,525 and $223 respectively).

These numbers should raise a red flag for retailers. If 47 percent of dollarslost to shrinkage are attributable to employees, there should be lesssatisfaction with the ability to catch shoplifters and more emphasis onefforts to identify and deter in-house theft.”

Keep your employees coming backRegardless of what content you include, good design andmaintenance will ensure your site is used regularly and maximizeyour results. With this in mind:

PPllaann tthhee pprroojjeecctt aanndd aallll yyoouurr ccoommmmuunniiccaattiioonnss.. Assign responsi-bility for the site to a small team who will develop it, manage it,and keep it fresh. Design the site on paper first to determinewhat you will include and how each element will fit together.

SSttaayy wwiitthhiinn yyoouurr eexxppeerrttiissee aanndd aavvaaiillaabbllee rreessoouurrcceess.. Design thesite so it can be easily updated without a lot of support from yourIT or other personnel.

KKeeeepp eevveerryytthhiinngg uusseerr ffrriieennddllyy.. Narrow text columns are easier toread than wide ones. Don’t overdo effects such as bolds, under-lines, caps, and colors. To simplify navigation, keep your naviga-tion bars in the same format and position on all pages.

TTeesstt yyoouurr ssiittee eexxtteennssiivveellyy bbeeffoorree iitt ggooeess lliivvee.. Make sure it worksin all types of browsers your staff may use.

PPuubblliicciizzee yyoouurr ssiittee.. Generate interest with emails or other com-munications to explain why the site is important and what it willoffer. Promote it as an exciting opportunity, not as an obligation.

RReeffrreesshh aanndd uuppddaattee iitt rreegguullaarrllyy to encourage employees to visitit as part of their routine. However, don’t include any weekly ormonthly features you can’t actually maintain. Also, avoid using“under construction” pages for any content in progress;employee interest and the site’s overall value will be diminishedas a result.

IInncclluuddee ccoonnttaacctt iinnffoorrmmaattiioonn so viewers can make suggestions ornotify you of bugs.

Use the right loss prevention toolsEffective loss prevention takes more than just informed andmotivated employees. To address the other key part of Ernst andYoung’s shrink reduction formula — analytics to identifydeviations — NSB offers Connected Retailer Loss Prevention aspart of our Sales Analytics solution.

Loss Prevention analyzes a central database of store-leveltransactions provided by Connected Retailer Sales Audit. Itautomatically detects patterns of fraudulent activity and identifiesprocedural violations that may signal the need for additionalemployee training.

The application’s flexible, exception-based reporting featurescontribute to a quick ROI. They improve the productivity of yourloss prevention analysts by allowing them to focus on the worstcases, identify more cases, and reduce the time and effortneeded to develop cases of internal theft.

Connected Retailer Loss Prevention lets you:

• View exceptions that are automatically collected andorganized hierarchically according to three levels of severity

• Choose from more than 75 system-defined exceptionsapplied to different types of transactions

• Build your cases of internal theft or shoplifting and maintainall case information in one location

• Use multiple investigation tools including graphs, scoringschemes, reports, ad hoc queries, and a transaction locator

• Choose from many predefined reports or create your ownqueries

• Access commonly used functions over the Internet

Together, this powerful functionality gives you faster fraudidentification, better case management, greater staff awareness,and improved profitability across your chain.

Get up and running fastNSB has prepared a sample website you can use as a visualguide to designing your own loss prevention intranet. For a freecopy on CD or for information on Connected Retailer LossPrevention, contact Ben Sherren at [email protected] or514-426-0822, extension 2792.

Sources: 1. 2004 National Retail Security Survey, University of Florida 2. Ernst and Young, Retail News, spring 2003


Welcome to Build-A-Bear Workshop On TourBy creating a heartwarming, hands-on experience to draw guests to their mall-based stores,Build-A-Bear Workshop® has developed one of the great retail success stories of our time.Now they’re writing a new chapter in that story by delivering the experience at events nationwide,through Build-A-Bear Workshop On Tour.

Step into any Build-A-Bear Workshop location and you’ll knowright away why it’s not just another store. Instead of ready-to-buymerchandise, guests are offered the opportunity to make theirown customized, plush friends. With guidance from speciallytrained Bear Builder™ associates, young visitors and their parentsselect a bear or other stuffed animal friend, proceed to an inter-active stuffing station, then choose from a huge array of clothingand accessories, including merchandise manufactured underlicense from the major sports leagues and fashion partners. Atthe Name Me station guests register their new stuffed animal inthe unique Find-A-Bear® ID system, which allows lost friendsto be scanned and returned to their owners. There’s even asignature Cub Condo® carrying package that protects the newfriend on its trip home while reinforcing the brand.

The whole process is an engaging interactive experience that notonly turns toys into treasures; it also turns guests into customersfor life.

Growing the business by building the brand“From day one our strategy has been to build a strong, interna-tionally recognizable brand focusing on furry fun for kids of allages,” says Dave Finnegan, the company’s Managing Directorand CTO of In-Bearmation Technology. “To support this strategy,we’ve developed a highly integrated marketing program usingmany different marketing tools. They include email and directmail; in-store events; parties that can be booked in-store, online,or through a call center; a website that is tightly linked to ourstores with shared promotions and themes; as well as televisionadvertising.”

Public relations efforts, such as their float in the Macy’sThanksgiving Day Parade®, also support company brand build-ing. “We estimate that we had 400 million impressions frompublic relations efforts in 2005 alone,” says Finnegan.

Together, these marketing and brand awareness programs havetaken the company from its first store opening in October 1997to more than 200 company stores in the US and Canada, plusfranchise stores in the United Kingdom, France, The Netherlands,Sweden, Denmark, Japan, South Korea, Taiwan, and Australia. Todate, Build-A-Bear’s guests have made more than 33 millionfurry friends.

Moving up by reaching outTo extend this impressive growth record, Build-A-Bear Workshopdecided to take its retail-entertainment experience outsidethe mall to places where families go to have fun: at ballgames,race car tracks, and local fairs. The program is also based on a

coherent strategy that is being progressively implemented andmeasured for results.

The first step was to open a number of non-mall stores in high-traffic tourist locations such as Downtown Disney® in Anaheim,California and Broadway at the BeachSM in Myrtle Beach, SouthCarolina.

Next, beginning in 2004, Build-A-Bear Workshop made arrange-ments with Major League Baseball and the National BasketballAssociation to set up small-scale stores during selected events,including MLB™ All-Star Fan Fest® and NBA All-Star JamSession. Build-A-Bear Workshop immediately saw the potentialof reaching out to a broader audience to expand their own baseof fans.

That potential was realized in 2005 when the company createda mobile store, known as Build-A-Bear Workshop On Tour.

A complete store on wheelsThe full-featured, 600-square-foot mobile store is an 18-wheeled transport with a 53-foot trailer that pops down in frontand expands at the sides. It contains all the elements found in aBuild-A-Bear Workshop mall-based store, from the stuffer to theapparel and naming stations, plus a photo booth where guestscan have their picture taken with their new furry friends. Thephotos can be downloaded later from www.buildabear.com witha unique, assigned password.

Build-A-Bear Workshop On Tour also uses tried-and-true infra-structure: It is run by the same NSB systems that Build-A-BearWorkshop depends on throughout its mall-based chain, includ-ing Connected Retailer Store, and is supported at Build-A-Bear’sWorld Bearquarters in St. Louis, Missouri by Connected RetailerMerchandising, Planning, Sales Analytics, and CRM. There aretwo POS machines, four kiosk machines, and a manager’s work-station connected to the company’s exception-based intranet.

“Using NSB’s solutions and our regular hardware means we canstaff Build-A-Bear Workshop On Tour with associates from ourlocal mall stores with no retraining,” says Finnegan. “It alsomeans we can offer our guests the same high level of customerservice they have come to expect, including fast payments usingcredit cards, check cards, and gift cards.”

To ensure Build-A-Bear Workshop On Tour has the right productson hand, the main truck is supported by a smaller truck thatserves as the back room. It collects and transports all themerchandise during the daily set-up period, which is thenreceived into NSB’s back office system.

Creating great impressionsBuild-A-Bear Workshop On Tour can make about 60 bearsan hour. However, Finnegan stresses that the main objectiveof Build-A-Bear Workshop On Tour has been to generatebrand awareness. From that perspective, it’s been a resoundingsuccess.

“In 2005, Build-A-Bear Workshop On Tour visited more than 25locations. The truck itself creates a lot of attention; we estimateit has given us at least 20 million marketing impressions sofar. We’ve taken almost 20,000 pictures of guests with theirBuild-A-Bear Workshop furry friends — which means 20,000potential visits to our website and 20,000 opportunities forour guests to learn more about the Build-A-Bear Workshopexperience and merchandise. We also hand out promotionalcoupons that help to drive guests back to their local Build-A-BearWorkshop stores.”

“We’re still learning a lot about what works best, butBuild-A-Bear Workshop On Tour has proven itself to be avaluable part of our marketing program” continues Finnegan.“The same is true of NSB. They’ve always been one of our keystrategic partners. Their Connected Retailer systems have provento be just as robust and effective in our mobile store as they havethroughout our mall-based chain. Together, NSB’s technology

and professionals are continuing to help take us fromwhere we’ve been to where we need to go.”

Staying connected via satellite — and NSBBuild-A-Bear Workshop On Tour technology is connected toBuild-A-Bear Workshop World Bearquarters by a sophisticatedyet very easy-to-use satellite system provided by Houston-basedSkyPort. A dish pops up from the roof of the truck then automati-cally rotates and locks on at the touch of one button.

“Connecting NSB’s systems in Build-A-Bear Workshop On Tour viasatellite to those in our World Bearquarters enables efficient cardauthorizations, plus trickle polling of all key data,” Finnegan says.“We upload sales and inventory numbers to plan our replenish-ments, and we can even meet the challenge of creating differenttax files for each location, since tax requirements vary from placeto place. The fact that we can do all this over the network makes ahuge difference for us.”

If there’s a problem with the satellite connection for any reason,Build-A-Bear Workshop On Tour maintains a back-up cell phonenetwork. They can also be connected to a landline.

Selecting the right venue and merchandisePlanning is a critical success factor for each event. Part of this isjust logistics: Build-A-Bear Workshop focuses on family events withdesirable merchandising opportunities, but those seldom occur inany straightforward geographical sequence. “Build-A-BearWorkshop On Tour has one driver and two full-time staff, so we puttogether a playbook that details our schedule, each venue, ourspecific on-site location, and which of our local stores andassociates are going to participate,” Finnegan says.

“Merchandising is equally important,” he continues. “We not onlyhave to get the truck in the right location, we also have to stock itwith merchandise that’s tailored to each event. If we’re going toBoston, for example, we’ll have to be well stocked with RedSox uniforms. If we’re going to a NASCAR event, we’llneed lots of drivers’ outfits on hand.”

• Interactive experience retailer,founded in 1997

• Public company listed on the New YorkStock Exchange (October 2004)

• More than 200 stores, primarily inmajor malls

• Build-A-Bear Workshop On Tour bringsthe Build-A-Bear Workshop experienceto sporting events and fairs nationwide

• NSB solutions: Connected RetailerMerchandising, Planning, Store,Sales Analytics, CRM

Build-A-Bear Workshop®

The bear facts...


Overpromise and overdeliverThe secrets of unshakable customer loyalty are well within your grasp. Aligning your brand promisewith your critical touchpoints will drive your business to new heights — and keep you on top.

Every retailer wants and needs a powerful brand: A strong iden-tity based on a distinctive, relevant advantage. A brand is, afterall, the essence of what any company offers, the core valuesand attributes it represents, and what sets it apart from itscompetitors. Your brand is therefore also shorthand for all thethings your customers want in your products and services; it is acompelling ideal based on your customers’ expectations andyour commitment to fulfill them.

Building your brand in the post-advertising ageRetailers often assume that building a powerful brand takes timeand resources that are beyond their reach. While that may havebeen true in the past, when companies routinely spent tens ofmillions of dollars trying to build their brands from the top-downthrough the mass media, the rules of that game have changed.

Where we used to have broadly defined target groups servedby a limited range of mainstream media, today’s highly diversemarkets are dialed into 200 cable networks, 2,000 radiostations, 500 magazines, and 3 million websites. This makes itharder than ever for you to locate and reach your customers.

What’s more, those customers are no longer very receptive totraditional advertising. Average North Americans are now

exposed to 86,500 ad messages each year. As a result, they’reeasily turned off and, with the click of a button, will quickly tuneyou out. Of those who do not, 60% will doubt your message.Advertising may therefore help more people to recognize yourname, but it typically does little to convince them of your prom-ise or to change where or how they shop.

The power of word of mouthThere’s a huge difference between a recognized name and a welldifferentiated brand. For example, Maxwell House is a highlyrecognized name, but most people will spend much more timeand money to enjoy a Starbucks — even though Starbucksinvests very little in traditional advertising. How did that happen?

Chances are, you learned about Starbucks through word ofmouth (WOM), from someone who had been there and loved theexperience. And if you then became a regular Starbuckscustomer, it’s probably because that initial WOM was validatedby your own positive, first-hand experience. What’s more, youprobably then talked about your experience to someone else andchanged their coffee-buying habits as well. When thousands ofcustomers do this simultaneously it creates “buzz”, and the buzzin turn attracts media attention.

Every retailer can learn from this example because most oftoday’s strongest brands are now being created from the bottomup, by companies that provide the kind of extraordinary value andexperience that generates conversation. When you do thingsdifferently and consistently better than your competitors, in a waythat is aligned with your brand promise, your customers talk inways that leverage the value of your efforts exponentially, ten toone. Through the internet, a single customer experience canactually be shared thousands of times. Either way, the words ofyour customers have a real impact: Studies prove that more andmore people seek out and rely on WOM before making all typesof shopping choices. WOM is typically seen as being morecredible than advertising because it comes from an independentsource.

How to get people talking about what makesyou greatPositive WOM doesn’t happen — and powerful brands aren’tbuilt — by under-promising or being average. In today’s market-place, that’s a one-way ticket to oblivion. Today’s most success-ful brands overpromise. Yours should, too.

Overpromising does not mean promising something you can’tdeliver, because that’s just called “lying!” Instead, it meansoffering an advantage that is radically differentiated from yourcompetitors and highly relevant to your customers. And that onlyhas value when you also overdeliver: when you provide that

By Rick Barrera

Rick Barrera is the president and founderof Overpromise Inc, a consulting firm thatdesigns and executes differentiating mar-keting strategies. A dynamic presenter, heis also the author of Overpromise andOverdeliver, Collaborative Selling, andNon-Manipulative Selling.

As one of the keynote speakers at NSB’s2005 Client Conference, Rick explainedwhy most people who see names suchas American Express, Google, andHummer get a clear and instant impres-sion of what each one represents, andhow retailers can use the secrets ofsuccessful branding to help them to standout, be remembered, and keep customerscoming back.

For more information, visit www. Overpromise.com.Rick’s books are available at www.amazon.com

About the author

page 16

Every touchpoint is a chance to buildyour brandAs a retailer, you have many points of interaction withyour customers and many opportunities to fulfill yourbrand promise — opportunities to transform ordinaryexperiences into extraordinary experiences that will getpeople talking and drive business to your stores.

PPrroodduucctt ttoouucchhppooiinnttss are critical. Harris Interactive has found thatcustomers’ personal experiences with a store’s products had the mostinfluence on subsequent purchase decisions. If a customer tries yourproduct once and finds it lacking, she will find it very hard to trust youagain. Consumers have more choices than ever before, so you only getone chance to make a good impression.

Your products can be differentiated through functionality (what they do andhow well they work), technology (how they are made), and aesthetics (howthey make the user feel). Consider the iPod: It both functions and looks likenothing else. The same can be said of the Hummer. Because these prod-ucts represent something radically different, they have caused tremendousconversation in the marketplace and, in turn, tremendous sales. Look forproducts — and ways to refine your products — that distinguish yourcompany in comparable ways. Even your giftwrapping or packaging canbe a critical touchpoint: consider the cache of Tiffany’s blue box!

SSyysstteemm aanndd pprroocceessss ttoouucchhppooiinnttss are also important. As with products,these include functional elements such as store locations, hours, and yourPOS, CRM, in-store, and Web-based systems, as well as aestheticelements such as your windows and displays, signage, lighting, and eventhe scent of your store. Your direct marketing programs, telephonegreetings, customer engagement and sales methodology, and speed ofdelivery and store transfers are also key systems touchpoints that reflectand reinforce the quality of your brand. Align all these elements in relevantways with your customers’ interests to create a superior and morememorable shopping experience.

Equally important are all your hhuummaann ttoouucchhppooiinnttss — the ways yourcustomers interact with your staff. Your associates may be prepared to goabove and beyond to provide great service, but you shouldn’t have to relyon heroics to create a great customer experience. Heroics aren’t scalable;products and systems are. If you get those things right you create hugeconsistency, and you enable your staff to focus on being attentive,personal, and available to more of your customers, more of the time

Every employee is an ambassador for your brand. As such, it’s importantto hire to the brand: to be crystal clear about what your brand promise isand to hire people who will fully represent it in everything they do — fromthe way the way they approach and respond to your customers to theway they dress and speak. Toward this end, you should have a writtendocument for employees that describes in detail the role they are to play,their style, how they should behave and, most importantly, what emotionthey should try to elicit in each customer interaction and what behaviorswill most likely produce that outcome.

EEvveennttss, such as in-store shows (or even sponsored, external events) areanother type of touchpoint that can be superb drivers of conversation.

DDeevveelloopp aa cclleeaarr ssttrraatteeggyy.. Ignore conventional boundaries.Be willing to make significant investments to win. Stay excep-tionally close to your customers: learn who they are, what theybuy, and what they want. Own and manage your customerrelationships. Change faster than your competitors, and usetechnology in ways that are important to your customers toenhance their experience.

GGoo tthhee ddiissttaannccee.. You can have everything in place, including theright products, systems, and staff, but if your displays aren’tset up properly or there are long lines in your stores, all yourinvestments may be wasted because people will turn away. Payattention to the details. Follow through so there is no chance thatyour brand promise — and the powerful impression you want tocreate — will be compromised in any way.

See your business through your customers’ eyesUltimately, defining your brand and fulfilling your brand promiseat all critical touchpoints is about being able to answer onecritical question: Why should your customers drive past yourcompetitors to shop at your store?

Walt Disney had the answer to this question when he said: “Dowhat you do so well that people will come back to see you doit again, and they will bring others with them.” In other words,overpromise, and overdeliver.


promised advantage consistently through your most criticaltouchpoints.

How is it done? How can you identify the most distinctive andrelevant advantages, then align your key touchpoints witheffective fulfillment strategies? How can you spend your moneyin such a way that it makes people talk about your business inthe best possible terms?

CCoonnffrroonntt rreeaalliittyy:: DDoo yyoouurr rreesseeaarrcchh.. Ask hard questions abouteverything your customers like and, more importantly, do not likeabout your company, products, and services. Accept what yourcustomers actually tell you, instead of relying on conventionalwisdom or what you might otherwise want to believe.

DDeeffiinnee yyoouurr oovveerrpprroommiissee.. Based on what your customers reallycare about, how are you going to meet their needs differently andbetter than your competitors? What do you want your customersto think, feel, and tell others about your business? Deciding howyou will answer these questions is essential to defining yourbrand and your mission.

IIddeennttiiffyy ccrriittiiccaall ttoouucchhppooiinnttss.. Once you have defined your differ-entiators — the unique and compelling things you want yourcustomers to experience and remember — determine how andwhere you will deliver them. These are your critical touchpoints:the ways your customers experience your company, products,systems, and people. Retail touchpoints can include everythingfrom the brands, styles, and sizes you carry to the various waysyou enable your customers to locate, try, and purchase yourproducts or even access your stores (inconvenient access killstraffic!).

FFeeeell tthhee ppaaiinn.. Focus on any touchpoints that that are a clearsource of customer dissatisfaction and that you can radicallyimprove to change your customers’ experience. In particular,focus on touchpoints that people get emotional about: theaspects of your business that may generate real frustrationfor your customers. That way, your improvements will be moreeasily remembered and passed on through great word of mouth.

What’s an overpromise?Google overpromises by offering anythingyour want to find on the Web… andoverdelivers with an average search timeof 0.2 seconds.

TiVo overpromises by saying it will totallytransform the way you watch television…and overdelivers by introducing you toshows you never even considered.

Hummer overpromises a vehicle that’s“like nothing else”… and overdelivers witha design that turns heads on any street.

What can your companyoverpromise — and overdeliver

— to elevate your brand?

Develop a clear strategy and get everyone on board


EnterpriseXpress: the packaged ConnectedRetailer for small- and mid-sized enterprisesTo complement our new StoreXpress offering, NSB has also introduced EnterpriseXpress. Thisintegrated package of pre-configured solutions is ideal for retailers seeking to implement advancedsystems across their enterprise, more quickly and cost-effectively than ever before.

NSB’s feature-rich Connected Retailer solutions are designed toenhance all key retail operations, from sourcing merchandiseglobally to interacting with customers in all channels, and toperform smoothly in the most demanding environments.However, our regular, best-of-breed versions may provide morescalability and options than some retailers require, especiallythose who need to upgrade all their systems quickly and on alimited budget.

To meet this challenge, NSB is proud to introduceEnterpriseXpress. This new packaged edition of our acclaimedConnected Retailer suite includes streamlined versions of ourcore solutions, as well as hardware and services, integrated as acomplete bundle that is easier than ever to acquire, implement,and maintain.

Proven solutionsThe Connected Retailer solutions in our EnterpriseXpressoffering deliver the same powerful functionality and robustperformance as our full-scale, best-of-breed versions. WithEnterpriseXpress, you’ll get:

SSttoorree, which combines innovative applications for POS and storeinventory with the superior integration capabilities of .NET toenable exceptional customer service, maximize cross-selling andup-selling opportunities, and ensure operational excellence

MMeerrcchhaannddiissiinngg, which automatically synchronizes and integrateskey functions such as purchasing, pricing, receiving, inventorymanagement, and allocation and replenishment to streamlineoperations, improve decisions, and unify asset management

PPllaannnniinngg, which provides rich visual tools for developing theinventory model that ensures you can identify what’s sellingwhere, get the right merchandise in the right place at the righttime, and respond quickly to consumer demands

SSaalleess AAnnaallyyttiiccss, which gives you a central repository of accuratetransaction data from all channels and devices that can berelayed throughout your enterprise, and an all-in-one datavalidation tool that improves store operations and auditing

This EnterpriseXpress offering can also be packaged withstreamlined versions of our CCRRMM and WWaarreehhoouussee MMaannaaggeemmeenntt(WMS) solutions, which are available as optional add-ons.

Lower cost, faster implementationEnterpriseXpress delivers powerful functionality quickly andaffordably. According to David Henning, Senior Vice-President ofNSB’s Enterprise Business Unit, “EnterpriseXpress solutions

include most of the applications from our standard ConnectedRetailer suite. However, because they are pre-configured andpackaged, the EnterpriseXpress versions can be licensed at afraction of the normal cost and implemented in a fraction of thenormal time.”

Pre-configuration means that our software can be pre-loadedonto the hardware that is included with your EnterpriseXpresspackage. The ready-to-run units can then be shipped directly toyour stores and head offices, where NSB’s team will help youbring everything online.

Equally important, pre-configuration does not impose limitationson your resources or ability to adapt. “EnterpriseXpress requiresminimal on-site IT support (NSB provides 24/7 assistance), andother applications can always be added to address your evolvingneeds,” Henning says

The smart choice for smart retailersBy packaging the Connected Retailer, NSB brings you more thanadvanced functionality and a rapid implementation. WithEnterpriseXpress, you also get 34 years of best practices andour commitment to help you achieve your retail vision. We willwork with you and train your staff to take full advantage of yoursolutions, as well as emerging market opportunities.

For all these reasons, if you are struggling with outdated retailtechnology and processes, the high cost of full-scale solutions,and the need to upgrade all your key enterprise systems, NSB’sEnterpriseXpress represents a superior approach to migrationthat will minimize your investment and maximize your results.

To learn more about how EnterpriseXpress can accelerate yoursuccess, please contact Ben Sherren at:[email protected], 524-426-0822, extension 2792.

NSB’s Connected Retailer Magazine - Winter, 2006

Retailers and Baby Boomers: boom or bust?

America’s largest and most wealthy demographic segment, Baby Boomers, are growing old. Shouldyou try to stay focused on them? Can you afford to ignore them?

Every day, 10,000 Baby Boomers turn 50. This demogaphic shiftwill continue at that pace for ten more years. Since most retail-ers focus on the 18-49 demographic, what should you be doingto stay relevant to this group? What physical or psychologicaldevelopments have they gone through that need to be addressedin your retail environment?

Here are five things Boomers want out of a retail experience andtheir implications for retail marketing:

11.. BBoooommeerrss wwaanntt aann iinn--ssttoorree eexxppeerriieennccee tthhaatt wwiillll bbrriinngg tthheemmbbaacckk aaggaaiinn,, iinncclluuddiinngg::

• Signage and printed information that is clear, understand-able, and easy-to-read, with font sizes large enough to readwithout their “cheaters” (reading glasses)

• Lights bright enough so they can see what they’re buying(or eating)

• Sound management that helps them distinguish separatesounds — which gets harder to do with age as backgroundnoise becomes a foreground nuisance

Boomers over 50 are now more about “experiences” than any-thing else. Deliver an outstanding in-store experience andBoomers will return. Deliver anything less and you’ll risk losingthem. Look at how Best Buy has beaten Circuit City in recentyears: both offer the same merchandise at the same prices, butone provides a better in-store experience. Younger shoppersmight tolerate a less-than-ideal experience to get particularproducts or prices, but older consumers won’t. Which do youwant more of? Who has the money?

22.. BBoooommeerrss wwaanntt aa ssuucccceessssffuull sshhooppppiinngg eexxppeerriieennccee.. Boomers look for merchandise selection and choices that makesense for them, with sizes that fit their current figures and lives.This applies to everything from clothes and shoes to electonicsto portion sizes at restaurants.

Time is a valuable commodity, and Boomers won’t waste muchof it in a store where the products aren’t right for them or wherethere aren’t many choices. This is especially true among Boomerwomen shopping for clothes. Finding the right merchandise for a50-year-old body is very difficult these days. What should you bedoing to make your products or services more appropriate for aBoomer over 50?

33.. BBoooommeerrss wwaanntt ttoo mmaakkee ssmmaarrtt ppuurrcchhaasseess.. An educated consumer is a happy consumer. Give your cus-tomers enough information about products and options to makethe purchase, but let them add it all up and make up their ownminds.

Boomers over 50 have been marketed to more than any othergeneration, and by now they know all the tricks. They don’t wantto be fooled — or ignored. They want choices, and they wantinformation to make smart choices. You need to provide both.

44.. BBoooommeerrss wwaanntt vvaalluuee.. According to a recent AARP/Roper study across allages, most consumers (91%) care primarilyabout value — not brand name. Moreover,when deciding on a brand, the mostimportant thing is that it gives goodvalue for the money, say 66% ofAmericans (at any age).

The decades-old myth thatpeople select brands early inlife and never switch has nobasis in fact. To wit, Boomersover 50 are no more brandloyal than any othersegment. New brands andnew choices are the norm, sowhat’s important is the valuedelivered by the brand — notthe brand itself. That meansyour message must have some“value” elements built in.

55.. BBoooommeerrss wwaanntt rreessppeecctt,, aatttteennttiioonn,,aanndd ggoooodd mmaannnneerrss ffrroomm sseerrvviiccee ssttaaffff.. To a Boomer’s way of thinking, the retailworld has always revolved around them. Theydon’t expect it to stop just because they’re nowolder.

Train your non-Boomer staff to show respect to oldercustomers. They must never be ignored. One bad experience willturn a Boomer off of your business forever. Train your staff to payattention and use good manners. Good service isn’t a commod-ity these days, it’s a point of difference.

18

By Matt Thornhill, The Boomer Project

Matt Thornhill is president of the Boomer

Project, a Richmond,Virginia-based marketing

research and consulting company. They conduct

national research among Boomers and share

their findings at conferences, seminars and

company events. Learn more at

www.boomerproject.com.


Millennials, today’s youth generation, represent an enigma forretailers. They are difficult to reach and understand and,

compared to their Baby Boomer parents, their buyingpower is moderate. Nevertheless, they are a

potent economic force. Millennials exert$233 billion of spending power annually

and boast a “power of influence” manytimes that figure. Youth influence is

pervasive: U.S. youth culture is per-haps the country’s most signifi-cant export, and it is difficult towin over any consumer group ifyour store isn’t seen asappealing to this group.

Millennials also represent thenext great consumer genera-tion; they are poised to takethe baton from their boomerparents in a few short years.

As such, investments made byretailers to connect with

Millennials will pay dividends foryears to come.

For all these reasons, retailers arejustifiably fixated on achieving success

with the youth demographic. However,retailers who view youth simply as “mini-

adults” are fundamentally missing the mark. Aswith each generation, Millennials have their own char-

acteristics and values, which must be clearly understood.

Diverse, loyal, and influentialMillennials are diverse — and they appreciate diversity. In NorthAmerica, 64 percent of today’s under-18 population isCaucasian, and that number is expected to decline to 55 percentover the next 20 years. Almost half of children aged 8-18 tell usthey have a close friend from a different racial background. Fourin five (82%) teenagers tell us they would consider interracialdating. They listen to music from a broad range of genres.

The Millennial generation holds a Ph.D. in consumer savvy, butthey are not fickle. In fact, many Harris studies show they can bemore loyal to brands and stores than adults — especially tostores that have connected with them. We recently asked a largesample of teenagers to think about their favorite mall store, and

to assume that they went to this store and had a terrible cus-tomer experience. Four in five of our teen respondents said thatthey would still go to this store the next time they visit the mall.They will tolerate mistakes if you have connected to their needs.

Young consumers are also more likely than adults to discuss thepros and cons of visiting your store with their peers. However,their influence extends beyond their own peer groups, as othergenerations also take style cues from Millennials. Boomers, forexample, are not graying gracefully (or at least not willingly); theyview themselves as much younger than their true age, and theyare influenced heavily by the needs and culture of their children.Boomers agree that trends are sparked among the young andthat today’s teenager is the arbiter of “cool.” This is an importantconsideration for almost every brand and retailer in America —even those not traditionally thought of as youth-oriented.

From afterthought to primary concernIt is interesting to look at the history of marketing over the pastcentury from a youth marketing perspective. The post-war boomof the 1950’s and 60’s begat the birth of brand management inthe U.S. Advertisers had mass media at their disposal, and therewas so much growth that children were an afterthought for mostmarketers and retailers.

In the 1970’s, as many brands began to mature, marketersbegan to pursue growth by focusing on children. But this was theera of Generation X, a group that was individualistic, untrusting,and pessimistic, and who grew up with the parent at the top ofthe household organization chart. In that parent-centric world,marketing to children was really accomplished by marketing totheir moms.

All this has changed in the past 20 years. The children of the1980s and 90s — the Millennials — were born during thelongest economic boom in history. “Baby on Board” signsstarted appearing in mini-vans — vehicles parents disliked but

As consumers, today’s highly influential youth don’t just want it all, they’ve come to expect it all. Yetretailers who want to reach them must connect with their parents as well.

Retailing to the arbiters of cool:meet the MillennialsBy John Geraci, Vice President of Youth Research, Harris Interactive

page 20


NSB does more than develop and implement outstanding retail solutions. As partners in your success,we are also pleased to share the benefits of more than three decades of experience through our casestudies, eSeminars, eNews, and Connected Retailer magazine.

bought for the protection of their children. Kids became cher-ished and sheltered by adults, empowered and confident. Yetyouth were also respectful of authority and structure; typically,they looked to their parents as role models and even heroes.Children rose to the apex of the family organization chart,became consumers, and gained tremendous economic power.

As a result, while companies, universities, advertisers are nowclamoring over themselves to compete for Millennials’ attention,many marketers have concentrated on youth to the exclusion ofparents, believing that marketing to the two groups at once willmean failing with both.

This isn’t quite right, and successful youth marketing isn’t quiteso simple. These days, kids and their parents form collaborativedecision-making units, and they work together to make shoppingdecisions in a complex way. Marketers who want to be success-ful with youth must also be successful with their parents.Retailers must not only engage today’s young consumers butalso guide them to intelligent buying decisions that their parentswill approve of.

Millennials thrive in a next-generation, digital world, in which acacophony of advertising media is vying for their attention. Howcan a retailer cut through this clutter?

The simple answer is: be relevant. Teens constantly tell us infocus groups that they want brands to “be real” — not preten-tious. Millennials don’t want retailers and products to try to makethem something they are not. In this sense, their tastes can besurprisingly conservative. Yet, paradoxically, they want to standout. As the saying goes, a teen wants to be different, just likeeverybody else.

CCaassee SSttuuddiieess NSB regularly interviews retailers about the strategies andsystems they are using to address their challenges and takeadvantage of emerging opportunities. Review our growingcollection of 35 case studies to learn how Doneckers marketsmore effectively with CRM, Liz Claiborne improves profits withPlanning, K&G Superstores runs a better business with SalesAnalytics, and how you can boost your own retail results.

eeSSeemmiinnaarrss Our free, online seminars bring together NSB’s professionals,industry experts, and leading retailers to exchange ideas on awide range of topics. These interactive discussions will help youaccomplish more by learning more about .NET, store systems,customer service, data security, merchandising, sales auditing,planning, and sourcing and product development.

eeNNeewwss Keep up to date and in the know! Every six weeks, our eNewsdelivers snapshots of NSB’s latest solutions, recent and currentevents, and retail success stories right to your PC, with links tomore in-depth information.

Connected Retailer mmaaggaazziinnee Our flagship publication contains insightful, original articles youwon’t find anywhere else! Each issue is packed with information,ideas, analyses, and techniques you can apply directly in yourown business to address your current challenges and capitalizeon emerging opportunities.

Sign up today!All these great resources are available through our website.Just visit nnssbbggrroouupp..ccoomm and click on News and Events to reviewand download individual items. Better yet, go to our subscriptioncenter to make sure you receive our latest materials,plus advance notifications of upcoming events.

Our website is also your source for moreinformation on our company, solutions,and services. Stop back often tostay connected — with NSB,your industry, and yourpath to success.

Stay connected with NSB!

John Geraci is responsible for all surveyresearch conducted by Harris Interactiveamong parents, kids, teens, and young adults,as well as on education and parenting issues.He has overseen more than one and a halfmillion interviews on behalf or organizationsthat target the Millennial demographic.

For more information, visit www.harrisinteractive.com

adidas Retail takes the .NET initiative…… with Connected Retailer Merchandising

What’s new in Merchandising

The short storyWhen adidas Retail added NSB’s Connected RetailerMerchandising system to its portfolio of Connected Retailersolutions, it did so in short order by following the vendor’sproprietary Solution Implementation Methodology (SIM). Basedon lessons learned from its large install base, SIM employs bestpractices throughout the implementation process.

“With SIM, everything is documented and properly scoped,” saysadidas Retail Director of Retail Information Systems VinceJackson. “It’s well formalized, and we have a good understand-ing of where we are at all times.”

adidas found that the standardized methods, along with organi-zation of team members from both adidas and NSB, had a pro-found impact on the implementation. “We have an executivesponsor who has been very involved in ensuring the projectmoves along. Having one primary point of contact on each sidehas made the process much smoother,” Jackson confirms.

The key components of Connected Retailer Merchandising —Allocation and Replenishment, and Purchase Order Management— are written on Microsoft’s .NET technology. NSB was one ofthe first vendors to market a .NET-enabled merchandisingsolution. “As far as I’m concerned, .NET is one of the easiestmethods of integration and one of the thinnest systems outthere,” says Jackson. “It gives you a lot of flexibility, and it’s agreat tool for the future. Based on its adoption rate and thereputable vendors who are building solutions on .NET, we knowit’s here to stay, and that it’s just going to continue to improve.”

Excerpted from “adidas Retail takes the .NET initiative” in Integrated Solutionsfor Retailers, October 2005. Reprinted with permission.

For the complete story on how adidas Retail is usingConnected Retailer Merchandising to boost its productivity, visitwww.ismretail.com and select Recent issues > October 2005.

Connected Retailer Merchandising is an adaptable, scalablesolution that synchronizes all functions within the retail cycle tooptimize ordering, pricing, allocation, replenishment, and inven-tory management. NSB continues to build on its proven powerand value by adding new features and functionality. Our nextrelease will provide:

SSaalleess ffoorreeccaassttiinngg,, incorporated into the .NET Allocation andReplenishment module

IInntteerrnnaattiioonnaalliizzaattiioonn,, with support for multiple currencies and taxstructures

SolutionThe retailer upgraded to NSB’s.NET-based Connected RetailerMerchandising to complement itsmany other Connected Retailerapplications. The solution shares acentral SQL-server database with theretailer’s SAP Financials system andhas improved efficiency and dataaccuracy.

Problemadidas Retail was operating NSB’slegacy R12 merchandising system,which hampered integration ofmerchandising with other criticalsystems such as SAP financials.

Technology useradidas Retail, a divison of $8.2 billionadidas-Salomon.

Total stores70

GeographyHeadquartered in Portland, OR; storesthroughout North America.

Resultsadidas Retail merchandisers areexperiencing 50% productivity gainsand maintaining control of theirdynamic inventory with a .NET-basedmerchandising system.

For further information and case studies on Connected Retailer Merchandising, visit the solutions section of nsbgroup.com orcontact Ben Sherren at [email protected], 514-426-0822, extension 2792.

IInntteeggrraatteedd AAssssoorrttmmeenntt PPllaannnniinngg that harmonizes visualand numeric planning

AAllllooccaattiioonn aanndd RReepplleenniisshhmmeenntt eennhhaanncceemmeennttss includingsize ownership, comparable sets, and a new allocationmethod that facilitates the distribution of collections andassortments

… and much more! Watch for the launch of Merchandising4.1 at Retail Systems this spring, and check the next issue ofConnected Retailer magazine for complete details.



In the newsMoving forward with new clients, partners, and resources...More retailers sign on for Managed Services!With recent agreements with Windsor Fashions and Metropark, NSB continues to build on the successof our exciting new Managed Services offering.

WWiinnddssoorr FFaasshhiioonnss, a longtime NSB client focused on apparel forjunior and contemporary women, has selected ConnectedRetailer Managed Services to support its 36 stores in 10 USstates. According to Leon Zekaria, the company’s CEO, “Windsorwill become a better company through the use of NSB’s cutting-edge technology. As NSB successfully pioneers its ManagedServices model, it cements its role as an industry leader.”

Windsor offers everything from distinctive separates, footwear,and accessories to special occasion clothing such as bridal wearand ball gowns. The company currently runs legacy versions ofour Store, Merchandising, and Sales Audit solutions. WithManaged Services, they are looking forward to upgrading thesesolutions and to adding CRM.

MMeettrrooppaarrkk,, a mall-based, lifestyle retailer inspired by the fusionof fashion, music, and art, has also chosen Connected RetailerManaged Services as the technology foundation for its growingchain. The 2004 creation of Orv Madden, founder of theHot Topic chain, Metropark offers multi-brand apparel andaccessories for image-conscious men and women in their 20sand 30s, and currently has locations in Austin, Minneapolis, LasVegas, plus several cities in California. Their implementation iscurrently underway, and we are working our way toward go-livein early spring.

With Managed Services, both these retailers will get our latestConnected Retailer solutions delivered directly to their storesand head offices via high-speed, persistent networks, plus POShardware, payment services, network services, and Client Care— al l for a for a fixed, quarterly fee. As such, our ManagedServices package will reduce their up-front and on-site technicalrequirements, lower their TCO, and let them focus on runningtheir businesses instead of their retail systems. Other retailersare expected to sign on soon, so stay tuned for more details!

GoRemote teams up with NSBGoRemote Internet Communications, Inc. and NSB Group haveannounced a strategic partnership to deliver Connected Retailersolutions directly to NSB’s retail clients via GoRemote’s highspeed virtual business networks. Under the agreement,NSB Group will bundle GoRemote’s secure managed broadbandservices with our Connected Retailer Managed Services solution.

The agreement reflects NSB’s commitment to work with leadingenterprises that best complement our company, resources, andclients’ needs. David Henning, NSB’s Senior Vice President ofthe Enterprise Business Unit, says, “GoRemote brings superiordelivery capabilities to our Managed Services solution and is anintegral part of our offering.”

Go Remote’s Tom Thimot, President and CEO, agrees. “NSBGroup possesses over three decades of success in deliveringoutstanding retail solutions,” he says. “GoRemote is pleased tobe a strategic partner with NSB to revolutionize the delivery ofenterprise retail applications.”

GoRemote Internet Communications, Inc. (NASDAQ: GRIC),provides a comprehensive portfolio of secure managed broad-band network solutions for branch office and retail environments,home offices, and mobile workforces. The company enablesits customers to achieve best-of-breed network security andto increase critical business application performance whilereducing capital and operating expenses. The GoRemote GlobalNetwork™ includes more than 60,000 wired and wirelessaccess points in more than 150 countries.

More information about GoRemote is available atwww.GoRemote.com or by calling 408-955-1920.

FFoorr mmoorree iinnffoorrmmaattiioonn oonn MMaannaaggeedd SSeerrvviicceess, visit nsbgroup.com andselect “NSB-hosted” under Connected Retailer Solutions, or contactClifford Perlman at [email protected].

NSB purchases existing Montreal headquartersPermanent location facilitates growthFollowing the fulfillment of lease obligations NSB assumed whenwe entered the North American marketplace in 2000, wedecided to purchase the Montreal-based headquarters we haveoccupied since that time. The transaction was completed onSeptember 8, 2005.

The building is located at 2800 Trans Canada Highway in theMontreal suburb of Pointe Claire, Quebec. From its initial designand construction in 1989 through substantial expansions in1994 and 1998, the building has been devoted exclusively to thedevelopment and marketing of advanced retail solutions. Assuch, it is well suited to our operations and well positioned tosupport our regional offices in Columbus, San Diego,Indianapolis, and the UK.

Our integrated facility currently provides close to 126,000square feet of office and working space to 600 employeesfocused on the development of our Connected Retailer products;

on Client Services, including professional services and 24/7technical assistance; and on the strategic management of ourbusiness. The building is also home to the Connected RetailerShowcase — a state-of-the-art demonstration and conferencefacility — as well as meeting and training rooms, a centralatrium, and a staff gym.

We look forward to enhancing our headquarters withselective renovations during 2006 to better serveand support our valued clients.

NSB’s 2005 Client Conference a huge hitBuilding success by “talking shop”For our 21st annual Client Conference we returned to our homebase in Montreal, Canada to welcome clients and partners fromall over the U.S., Canada, and Europe. As always, the Conferenceprovided a lively forum for NSB to gather direction and commenton the products and services we deliver, to foster networkingamong our community, and to examine the trends and technolo-gy that are influencing retail around the globe, particularly inNorth America.

The Conference, which took place from September 25 throughthe 28th, featured a wide range of in-depth sessions focused onCRM, Legacy/Migration, Merchandising, Planning, SalesAnalytics, Store, Supply Chain, and Technology. In addition,attendees enjoyed inspirational presentations from outstandingkeynote and guest speakers, including global sailor TonyMowbray, branding guru Rick Barerra, and marketing expertsMatt Thornhill and John Geraci, plus the opportunity to learn

about the latest offerings from numerous exhibitors in our VendorShowcase.

We balanced all this shop talk with our renowned entertainmentevents, including golf, CFL football, a jazz-and-cocktailsreception on the opening evening, and our “night on the town”dining experience on Monday showcasing two of Montreal’srenowned restaurants. The final full day of the Conferencewas finished in high style with great dining and dancing at aspectacular closing party.

NSB thanks all participants for making our 2005 Conference aresounding success. We offer special thanks and recognition toour sponsors, including: Microsoft, our Diamond Sponsor; IBM,our Gold Sponsor; and our Silver SponsorsGoRemote, Paymentech, SymbolTechnologies, and Intel.

Proven solutions for connected retailers

www.nsbgroup.com

Microsoft is a registered trademark of Microsoft Corporation in the United States and/or other countries.

Connected Retailer is a registered trademark of NSB Retail Solutions Inc. and/or another NSB company.

© 2006 NSB Retail Solutions Limited & NSB Retail Solutions Inc. Connected Retailer, NSB logos and certain other marks are trademarks or service marks of NSB RetailSolutions Limited & NSB Retail Solutions Inc. or another NSB Group company. All other trademarks and registered trademarks are owned by their respective companies.

The contents hereof are confidential and proprietary to NSB. Any unauthorized reproduction or disclosure, in whole or in part, is strictly prohibited.

få=êÉí~áäI=ÅäçëÉ=ÇçÉëåÛí=ÅçìåíKIf your retail systems don’t perform superbly throughout your enterprise, you’re missing your mark and

falling short of your goals.

NSB can help. Backed by more than 30 years of experience, our expertise, innovation, and consistent

execution of advanced Connected Retailer solutions will equip you to go the distance and drive your

business to new heights.

With NSB, you’ll find exactly what you’re looking for in a retail technology partner: professionals who will

bring you to the top of your game.

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