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Near Field Communications (NFC) Usage in Retail

By Todd Cripe

February 22, 2012

RetailNOW

NFC was included in the content of several presentations at the 2011 RetailNOW conference. Much of the dialogue revolved around NFC and payment, but those attending my presentation on “Retail Stores of the Future” learned that payment is but one of many pieces of the Retailer-Consumer ecosystem where NFC will play a role. By the way, if you didn’t go to RetailNOW this year, you missed an excellent conference. Whether you are a technology provider or a local reseller, I highly recommend that you attend the next RetailNOW conference so you can successfully navigate the sea of change taking place in retail and retail technology.

NFC Essential Attributes

• Short range RFID, typically less than 4cm, triggered by proximity

• Invented by Phillips and Sony about 10 years ago

• Three genres: Card Emulation, Reader Mode, & Peer to Peer

• Tags may be powered or unpowered

• Any MIME data can embedded on NFC tags

• Relatively slow speed, not suitable for transferring large amounts of data

NFC Usage in the Retail Vertical

NFC will become the Consumer’s preferred method of communicating with the physical world because it possesses attributes which Consumers demand: fast, simple, transparent technology, and so easy that it requires no thinking. Usage cases include:

Passive tags. Passive tags are tiny, inexpensive, unpowered, and can be affixed to any physical object. When tapped by an NFC-enabled phone, the physical object becomes virtualized and information appears seamlessly on a Consumer’s phone.  The information displayed should aid the Consumer in making a purchasing decision, and could include: connection to the merchant’s social media site of choice (Twitter, YouTube, Facebook, etc.); product reviews; or attributes of the item like size, color, etc.

Identification. Tapping a phone on a check-in poster at a store informs the Merchant that the Consumer is here. Once identified, personalized communication begins between the merchant and Consumer using Peer to Peer NFC dialogue or Consumer receipt of a cloud-based message sent by the merchant. Examples include: limited time offers; award of loyalty points; daily menu specials; and VIP greeting from the manager.

Stored Value and Payment. NFC in card emulation mode allows a phone to function as a credit card. But, there is some turbulence surrounding regulation and approval of usage of Mobile Wallets with PCI data resident in a handheld device.  An alternative approach leverages NFC to use a cloud-based Mobile Wallet for redemption of stored value, loyalty-based currency or conventional payments. The potential for NFC to facilitate payment outside of the POS, where PCI relevant data never makes it into the store, is an interesting but controversial and disruptive evolution. Equally controversial is the potential for the merchant to change Consumer behavior at the point of purchase by sending incentive messages to the Consumer to entice them to change their intended method of payment to one that the merchant pays less to process.

Business Intelligence. Presuming the Consumer opts-in to allowing their activities to be tracked, holistic data about Consumer buying habits becomes available to the merchant.  The potential exists to provide the Holy Grail of marketing:  where a consumer shopped; what they looked at; which marketing incentives they paid attention to; what they purchased; and how they paid. Business intelligence applied to the aggregated data allows merchants to make better decisions regarding the content and timing of personalized messages they send to their loyal customers.

When NFC will be in Common Use in the U.S.

Although he U.S. has been slower to adopt NFC, the NFC tide is rising rapidly in North America. NFC is already in common use in Japan, Western Europe, South Korea and Australia, with NFC initiatives underway in 20 additional countries this year. Reasons why the U.S. has been slow to adopt NFC are numerous, with a detailed explanation being beyond the scope of this article. The first NFC-enabled phone, the Nexus S, appeared in the U.S. earlier this year, with additional NFC phones from Nokia and RIM available by the time this article is published. Global experts vary in their projections, but they all agree that NFC usage will increase at phenomenal rates over the next 3 years leading to hundreds of millions of NFC-enabled handsets in use by 2015.

When to Get Involved

It is still pretty early in the NFC game in the U.S. and it is no secret that fragmentation exists as a result of NFC turf wars occurring between competing members of the U.S. retailer-consumer ecosystem. The current fragmentation will be resolved and some trail-blazing multi-unit operators and retail technology providers already have NFC initiatives in place. I predict that most retail technology companies and multi-unit retail operators will begin to include an NFC initiative in their executive strategies in 2012, so if you haven’t already given thought to where NFC fits in your world, now is the time to start thinking about it. My advice is to be aware of the struggle for NFC control that is taking place, and choose your NFC partners wisely. Your NFC initiative can have a foundation built by one of the large stakeholders in the consumer-retailer ecosystem, or you can pour your own foundation using universal SDK and NFC chips with no strings attached to them.  There are compelling value propositions that support both positions, but be aware of limits on your freedom of action or your customers’ freedom of action that may accompany closed systems offered by some NFC stakeholders.

Know What They Want Before They Do

By Jim Dudlicek

February 21, 2012

Are you as smart as your shoppers?

After all, most of them apparently know what they want before they come through your door. Savvy grocers will make it their business to know what they want, too.

More than ever, consumers are turning to social networks, smartphones and tablets to meet their shopping needs. This trend is making for smarter, more precise and increasingly prepared shoppers.

According to Deloitte’s American Pantry Study, which polled more than 4,000 people last October, consumers consider themselves to be:

- Better prepared: 90 percent of shoppers know what they’re buying before they arrive at a store.
- Smarter: 75 percent assert that that they are smarter shoppers than they were a year ago.
- More precise: 86 percent believe they are getting more precise in what they buy.

“With the proliferation of online shopping, smartphones and social networking, it’s vital that consumer product companies consider the use of highly targeted pre-store shopper engagement programs, which could include constant communication through new technology mediums,” asserts Pat Conroy, Deloitte’s consumer products sector leader.

That goes for retailers, too. There’s no reason that grocers – either on their own or in partnership with branded companies – shouldn’t be reaching into their customers’ kitchens to be there when shopping lists are born. Put bluntly – if retailers keep talking to shoppers in their parents’ language, they’re going to lose a whole new generation of consumers to whom social networks and smartphones are second nature.

Deloitte makes these suggestions for brands, and they’re relevant to retailers, too:

- Become part of the planning process: Grocers that embrace personalized mobile applications aimed at enhancing the pre-store planning process – and utilize personalized mobile advertising and promotions that provide a route to consumers considering products – can help bolster banner loyalty as measured by repeat visits and higher basket rings.

- Enhance the in-store mobile/social networking experience: To increase consideration near to the point of sale, grocers should also seek to connect with shoppers in-store, via mobile with location-based promotions and links to video content using product bar codes. If this is how to reach shoppers while they’re preparing their lists, it ought to be effective at influencing impulse purchases or reminding them about items they may have forgotten – they’re probably paying more attention to their smartphones than the shelf tags anyway.

- Extend involvement: A mobile and social networking presence can serve to maintain post-purchase conversation, helping consumers plan their return visit and grocers to better meet their needs when they come back.

The late Whitney Houston was right: The children are our future. The future is here, and the children have money now. And they have smartphones.

For retailers, too many choices leads to 'just looking'

By Bob Phibbs

February 20, 2012

I was intrigued by an article in the Los Angeles Times entitled "Too Many Choices Can Tax the Brain Research Shows." It said in part, "Americans have come to expect a wide array of choices, and most companies, be they car companies, clothiers or coffee shops, have been more than willing to pony up.

But more choices do not always equate to happier consumers. In fact, some studies show that having to make too many decisions can leave people tired, mentally drained and more dissatisfied with their purchases."

This was detailed in Matt Haig's 2003 book Brand Failures. He noted that "Procter & Gamble's brand strategy in the 1980s seemed to be: why launch one product, when 50 will do? However, increased choice equaled increased confusion.

As a result, Crest lost market share... as soon as there were 50 Crest toothpastes, its market share dipped to 25 percent and fell behind Colgate." When they had one product they captured above 50 percent of the market.

I would add because it was easy for the customer.

The LAT story said as much in their helpful tips, "Sometimes it's good to rely on habit — 'put the blinders on and get the same toothpaste you always get,' says Barry Schwartz, a professor of psychology at Swarthmore College."

How this impacts your retail business

What is so deadly about this for retailers is that we think giving our customers more choice is better. But if the customer can't quickly get why one product is better than the other, they become overwhelmed and put blinders on.

That's because it's easier to settle.

If there is no one there to help whittle down their choices or find out what they are trying to do and then matching product to their use, you lose the sale.

And the higher the ticket, the higher your stakes.

That's why you need salespeople, not clerks.

The evidence is overwhelming that customers are over-choiced, from the menus in restaurants, to the products on the sales floor. We just don't want to make the wrong choice. Salespeople, true salespeople can make the difference.

Yes, Paul Schottmiller and I recently discussed the customer survey by Cisco Systems that found 68% said online reviews were one of their top three influencers whereas only 13 percent indicated store associates.

But I believe that says more about the quality of the store associates in many stores than customers' proclivity to seek solutions from store employees.

What to do to drive conversions

You want to get your store sales up? Do the hard part of hiring people who can sell, who can funnel down hundreds of choices of paint, of carpet, of furniture, of black dresses, of whatever, into what customers can easily decide on. Salespeople are out there looking for work, whittle down your resumes to those who have proven they can sell the merch.

Your competitors are "putting blinders on" and hiring whoever will fog the mirror, work the hours and be grateful for a job.

To get your store moving, take the time now to whittle down your choices of who you allow on your sales floor, train them how to sell and you'll be able to help customers choose, not settle – or worse, walk out the door empty-handed.

eBay wants to partner with large retailers, not compete with them

By Rachel King

February 16, 2012

If there is one thing that eBay executives want to make clear to large retailers, it is that eBay is their friend, not a competitor.

Both eBay CEO John Donahoe and CFO Bob Swan sat down for a keynote discussion at the Goldman Sachs Technology and Internet Conference on Wednesday.

Donahoe started off by asserting that retail and e-commerce are going through a “profound change.” He pointed out that last year, the e-commerce was worth $5 billion. Now, he asserted that there is a $8 trillion to $10 trillion opportunity.

“What’s happened over the last 12 to 18 months is that the line between e-commerce and retail is coming down,” said Donahoe, “It’s not just blurring. It’s falling down like the Berlin Wall.”

Arguably before 2011, eBay was a competitor for larger retailers. But with several notable acquisitions in the last year that has formed eBay’s X.commerce platform (comprised of primarily mobile commerce startups and their technologies), eBay is going from what Donahoe described as from “defense to offense.”

“We want to become the partner of choice for retailers of all sizes to compete in this new commerce world,” Donahoe affirmed. Donahoe admitted that eBay has primarily focused on promoting relationships with small and medium-sized businesses in the past, but now eBay should be considered a platform that larger retailers can utilize.

Donahoe explained that eBay is getting the following requests from retailers:

• A multi-channel platform because customers want a seamless experience between online and offline shopping
• A way to handle demand generation (stemming from sources such as Facebook, LivingSocial and Groupon) and also drive traffic into stores (again, online and offline)
• A way to go global

Most notably, customers want a better of idea of who is going into their retail stores — a request much harder to accomplish in person than online.

“We are positioning the company as a technology partner for those retailers and we will not compete with them,” Donahoe asserted. “We’re positioning to help provide data for them.”

Swan concurred with the example of the GSI merger, which he posited represents the shift from the connection between the e-commerce and offline worlds, but rather a “web-enabled” market.

“This gives us a dramatic extention of our offering to large merchants in a multi-channel world,” Swan said, adding that the size of the market has grown 10 times over in the last year as the e-commerce market evolves.

PayPal has also gotten a significant push with its new mobile commerce and digital wallet solutions, with a Facebook Connect-like integration seen on online stores and then mobile apps for shopping in brick-and-mortar locations. Thus, eBay is working to cover all bases of the commerce scene going forward.

Why User Experience Is Critical To Customer Relationships

By Brian Solis

February 16, 2012

User experience is a priority that should, in some way, find a home within the design of any new-media strategy.

With the explosion of social media and smart devices, customers are becoming incredibly sophisticated, elusive, and empowered. As a result, the dynamics that govern the relationship between brands and customers is evolving.

But even in this era of engagement and “two-way” conversations, the reality is that the relationship businesses hope to have with customers through these new devices, applications, or networks and their true state are not one in the same. In fact, it is woefully one-sided, and usually not to the advantage of customers, which for all intents and purposes still affects businesses. 

Rather than examine the role new technologies and platforms can play in improving customer relationships and experiences, many businesses invest in “attendance” strategies where a brand is present in both trendy and established channels, but not defining meaningful experiences or outcomes. Simply stated, businesses are underestimating the significance of customer experiences.

Some of the biggest trends today--mobile, geoloco, social, real-time--are changing how consumers discover and share information and connect with one another. Technology aside, consumers are driving the rapid adoption of technology because of the capabilities that are unlocked through each device. From self-expression and validation to communication and connections to knowledge and collaboration, new opportunities unfold with each new device and platform.  

As smart and connected technology matures beyond a luxury into everyday commodities, consumer expectations only inflate. As a result, functionality, connectedness, and experiences emerge as the lures for attention. For brands to compete for attention now takes something greater than mere presences in the right channels or support for the most popular devices. User experience (UX) is now becoming a critical point in customer engagement in order to compete for attention now and in the future. For without thoughtful UX, consumers meander without direction, reward, or utility. And their attention, and ultimately loyalty, follows. 

The CrUX of Engagement Is Intention and Purpose

Brands as a whole suffer from medium-alism, where inordinate value and weight is placed on the technology of any medium rather than amplifying platform strengths and ideas to deliver desired and beneficial experiences and outcomes. Said another way, businesses are designing for the sake of designing, without regard for how someone feels, thinks, or acts as a result. 

Thankfully, there’s a cure for medium-alism. UX is the new Rx for most new media deployments. From social networks to mobile apps to commerce to digital, experiential strategies form the bridge where intentions meet outcomes. By starting with the end in mind, UX packages efficiency and enchantment to deliver more meaningful, engaging, and rewarding consumer journeys.

It’s easier said than done, however.  

UX is an art and science, and it is all but ignored in the development of new media channels where customers control their own fate. If the appeal of an app diminishes, it’s removed from the device. If a brand page in a social or mobile network no longer delivers value, a customer can effortlessly unlike, unfollow, or unsubscribe. If the rewards for taking action on behalf of a brand--think check-in, QR, barcode scans, or augmented reality plays--are intangible, or gimmicky without intent, customers will simply power off. And, if a consumer cannot take action in your favor, within their channel of relevance, with ease and elegance, value or ROI will forever escape your grasp.

Agencies, brand managers, developers, consultants, and anyone responsible for any element of customer engagement can learn from the art and science of UX. To that end, UX is a role that should, in some way, shape or form, find a home within the design of any new media strategy today. So I ask:  

• Who’s your mobile design expert?
• Who understands the engagement dynamics of Facebook, Twitter, Google+, and other new networks?
• Who on your team is a master of the psychology to better understand engagement, behavior, and expectations?

Often, creative strategies are driven by a clever idea and not necessarily an idea supported by an engaging design or experience. At the same time, many campaigns are developed for a medium or an event where the platform takes precedence over sentiment or desired results. Of course, when considered, the formula of experiences and outcomes is incredibly potent. But when deployed without directions, everything that results is left to happenstance. Why risk it when you can design for it?

The Experience RedUX

Certainly many brands are guilty of deploying technology strategies without designing a holistic experience. It’s the reason the result of a QR scan is a web page that’s--unsurprisingly--not optimized for mobile devices or the enthusiasm that precedes an AR activation is usually met with an unimpressive digital diorama, only to dwindle in disappointment or novelty.  

Intent or desired outcomes are often thwarted by their very design or lack thereof. 

The primary function of UX is the development of an architecture that creates a delightful, emotional, and sensory experience. This is why it’s vital to customer experiences and engagement. UX is, among many things, designed to be experiential, affective, useful, productive, and entertaining. And, most importantly, it’s devised with an end in mind where the means to that end is efficient and optimized for each channel.

Let’s take a look at the point of origin for the moment. Your smartphone, computer screen, and tablet open a window to a new experience that is unique to that device. It’s a looking glass into your world that goes beyond usability. Successful UX evokes engagement or purpose, affects sentiment, and influences behavior. And this is why UX is so important. 

As Marshall McLuhan once said, “The medium is the message.” Now, the medium is not only the message, the medium is the experience. And that is why we cannot simply design for the medium, we must design the experience where the medium becomes an enabler to the journey and the end as devised.  

Two words come to mind here: mission, and purpose. Jesse James Garrett, author The Elements of User Experience, once observed, "An information architect makes information work for people."  If we use his perspective as a springboard for new media, what businesses need now are new CEOs--Chief Experience Officers. But in all seriousness, brands must employ experience architects, as it is they who will carry the responsibility of designing the customer journey so that it is engaging, worthy of sharing, and unified regardless of platform.

Engagement is not a campaign, it’s a continuum where technology is merely an enabler for a greater vision, mission, and purpose. And as such, the attention, engagement, and outcomes that result are indeed reflective of what is both earned and deserved.

For Retailers, 2012 All About Customer Interaction and Experience, NRF/KPMG Report Finds

By Kathy Grannis

February 15, 2012

For Retailers, 2012 All About Customer Interaction and Experience, NRF/KPMG Report Finds
-Growing mobile capabilities, web personalization tactics top strategic priorities for retailers-

In an effort to build customer engagement, capture wallet share and accelerate sales growth, retailers in 2012 will focus on a number of customer-centric functions, including IT and ecommerce investments, enhancing customer service initiatives and, building on their mobile platforms. A new report from the NRF Foundation and KPMG LLP, Retail Horizons: Benchmarks for 2011, Forecasts for 2012, which surveyed 247 retail executives from various sectors, outlines retailers’ top strategic initiatives for 2012 including merchandising, ecommerce, store and field operations, supply chain and human capital, among others.

“Retailers are poised to enter 2012 with a renewed focus on building up and building out many of their most important operations, hoping to establish a new sense of brand loyalty with all of their customers,” said NRF President and CEO Matthew Shay. “Though customers are always a company’s top priority, customer satisfaction will get a huge facelift this year. From increasing their brand visibility through cross-channel initiatives to providing unique, personalized shopping experiences through every channel, retailers have indicated 2012 is all about the customer.”

According to the survey, nearly 67 percent of companies rank customer satisfaction as the top strategic initiative for 2012 and, similarly, 82 percent say customer service strategies will be their top priority in the coming year, up from 75 percent last year.

For the first time in the survey’s ten-year history, retailers’ websites or online channels eclipsed physical stores as the top channel for marketers (81% for brick-and-mortar vs. 86% online). As such, retail executives say they will invest in programs that directly resonate with today’s shopper. According to the survey, 85 will emphasize  increasing online sales, up from 83 percent in 2011, and 38 percent will have a greater focus on increasing mCommerce sales over the next year, up from 29 percent in 2011. Additionally, more than half (53%) of those surveyed say they will specifically focus on web personalization engines in the coming months, which includes such enhancements as location-based services and tracking methods unique to shopping habits.

To better serve mobile-savvy shoppers in their stores, retailers also stated enhancing handheld technologies, such as mobile point-of-sale, will be a core focus over the next 18 months. While 17 percent already use mobile POS technologies in their store, an additional 33 percent indicate they plan further POS investments during that timeframe.

“Compared to the past few years, retailers have turned their attention to growth acceleration, with an emphasis on improved customer engagement strategies and tactics,” said Mark Larson, KPMG’s global head of retail. “Harnessing the vast amounts of customer data they have at their disposal to create unique consumer interactions will be critical, especially as digital sales grow. Clearly the retailers who master the one-to-one customer approach, and who also leverage the full potential of e-and-mobile commerce platforms, will be in a much stronger position to gain wallet share.” 

Aiming to grow that customer interaction, 45 percent of companies are actively developing widgets, gadgets or advanced links that can be incorporated with their social media pages, and another 41 percent are planning to develop these items over the next

How to Choose Restaurant POS Software

By Honey  Silvas

February 15, 2012

How do you go about selecting restaurant POS software?  We spoke with several experts about this.  Jim McMahon, of Epic POS Marketing has been selling restaurant POS systems for 11 years and offered a lot of advice.

Here are questions and considerations a restaurateur should make when considering a Restaurant POS software or system:

Before setting up a demonstration with any vendors, a restaurant owner should do his due diligence and research. Sources for information include: 

·         friends

·         searching on the Internet

·         talking with other restaurateurs and any of your favorite current salespeople about what other restaurants are using for restaurant POS software.

Purchasing a Restaurant POS system is an investment in your business and should be treated like any investment, so determine what system gives you the best return on your investment.   That will almost certainly not be the POS software that is the least expensive.  

After completing your research and narrowing the scope of Restaurant POS software,  call your chosen vendors and ask for a face to face meeting with  3 – 4 vendors.  (There are dozens of POS vendors so narrow the list.)  If they don’t call you back within 24 hours you should scratch them off the list because if they won’t call back quickly when you want to buy something, they will really take their time to call you back when you need support.    When they show up, ask the following:

• How long has the vendor been in the restaurant POS industry?
• How many local technicians does the vendor have?
• How do they address after hour and weekend support?
• How many installations of the Restaurant POS software being offered has the vendor performed?
• Ask for a listing of the last 5 clients the vendor has sold to with contact names.
• How many other vendors are there in the United States for the Restaurant POS software being offered.
• Ask the vendor to describe their installation and “Go Live” process in detail.
• Show the vendor around your business and communicate the top priorities that the Restaurant POS software you choose must address.
• Schedule an initial demo if you feel comfortable with them and tell them they only get 1 hour of your time to address the priorities you described.
• Tell the vendor that depending on how the demo goes they will either be eliminated or go on to your top 2 list.

If you are not comfortable with them, ask them to leave info and tell them you will get back to them if you are still interested

Hopefully a couple of the vendors will take some time during your first meeting to really understand your priorities and will ask the right questions to really understand your needs. When you have determined who you feel the most comfortable with, ask to see a demo at their offices and ask for a tour of their facility.  When you sit down for the demo be sure to ask them to show you exactly how the Restaurant POS software will address the priorities you communicated to them. I can’t stress this enough…make them show you exactly how the system will address your priorities because a vendor can say their system will do what you want but if they have taken the time to set up the demo to address the needs you communicated to them, then you know they are listening to you. That is the best start to a relationship that is jokingly referred to as a marriage with no divorce clause! Then if there is any time left you can let them show you anything they feel is important.

When you have chosen your top 2 then it is time to schedule a 2 hour demo with each vendor and this time make sure the person doing your accounting will be in attendance. Have your accounting person come up with a list of priorities with you and communicate those to the vendors so they show you how their Restaurant POS software will deal with those priorities during this demo. Any interfaces or 3^rd party software  that you either currently use or want to use should be addressed at this meeting. It is important to ask the vendor to show you that the all the sales, receipts, discounts etc., numbers on the server/bartender checkouts actually match the end of day reports from the back office. Then it is time to talk about number of terminals, stations, iPads, modules, and whatever cabling or infrastructure is needed and the associated pricing. A rule of thumb is to determine the amount of hardware and software you need to be able to handle your busiest times. Ask for a line by line proposal of every item the 2 vendors feel you need to best accomplish the project and then schedule a time to go over the proposal with them line by line.

This process will give you the info you need and a great feel for how much the vendor really cares about you and how professional they are.

John Giles, President of Future POS, Inc., made these points:  “Sometimes there are POS software features that a restaurant owner might consider 'basic'. Often they will find that the software can't do what they assumed, or there is an additional charge for that functionality.”  Technical support is also crucial. Giles said, "Bad software can absolutely cripple a business, and when hardware breaks, you absolutely need a reliable reseller who will come out and fix it, especially on evenings and weekends."

Retail: How to Manage Teenage Employees

Jennifer Gregory

February 13, 2012

Having teenagers work for you can be a positive experience not only as a business owner, but also for your teenage employees. However, teenage employees can also bring challenges that aren't typically found in adult employees. Many times the difference is simply in how you approach and manage.

Here are five strategies for bringing out the best in your teenage employees.

Set Expectations and Teach Professionalism

One of the most important parts of having teenage employees is setting clear expectations for every aspect of their job. “I find that the most difficult thing about working with teenagers is ignorance about professionalism. Some of the most motivated and intelligent teenagers undermine themselves with an overly casual approach to work,” said Allen Koh, CEO of Cardinal Education, an educational consulting company based in Silicon Valley.

Before they begin work, discuss punctuality—showing up for work when scheduled and what to do if they are unable to work because they are sick. If they will be working with customers, explain exactly how to treat the customers and walk through many different scenarios. Talk about things that they should not do while on the clock, such as texting, talking on the phone and chatting with friends that stop by. Ask them if they have any questions when you show them something new and let them that if they are not of something that they should ask.

Explain Your Reasoning

In addition to setting expectations, it is important to explain your reasoning for decisions and expectations to your employees. Next time you explain a policy or procedure, tell your teens how you came to this decision and why you want the task done this way. This helps the teenagers learn decision-making and also gets their buy-in because they know that your respect them.

Kenny Moore, owner of North Carolina based Andy's Burgers, Shakes & Fries, tries to treat his teenage employees like adults. “They have spent their entire lives being told what to do. At Andy's, we tell them why we do what we do,” said Moore.

Be Flexible With Scheduling

Many business owners find that they can have very loyal employees in teenagers by providing them with flexibility in schedules, especially around school functions and school work.

“It is important to remember that their birthday and circle of friends/school activities are some of the most important things in the world to them,” says Kris Rogers, co-owner of St. Louis Spirits Gymnastics Club. She said that if they don’t give them time off for important events that many of the teenagers will quit by simply not showing up.

Ask Their Opinion and Ideas

While there are many skills that teenagers are still learning, they typically have strengths that adults don’t have and are often full of good ideas. By taping into their positives, you can help them develop both their skills and confidence while growing your business.

Ann Connelly, co-owner of Sweet Sixteen Café in New York, asks her teen employees their opinions especially in areas they are more up-to date than adults, such as social media, products and window displays. “They don't have the concerns and responsibilities that adults do, which frees them up to be more creative in their input,” said Connelly.

If an employee shows a talent or interest in a specific area, you can even give them tasks them develop. For example, a teenager who wants to be a Web designer can help with your restaurant's website and you can invite another who plans to go into public relations to sit in on your marketing meetings.

Help Them Grow and Learn

While your primary role is to help train your teenagers to be good employees, many employers also try to help them learn more skills and grow as people. Connelly said that her staff will often advise their teen employees on resumes, job interviews and college selection. “We are a different resource than their own parents. It gives them someone else to talk to as a sounding board,” she said.

Another important skill to help teen employees learn is how to accept and handle constructive criticism. “Teenagers have particular trouble being graceful in the face of constructive criticism and tend to take it extremely personally,” said Koh. He said he tries to teach his employees that constructive criticism helps make people better and is not a condemnation of who they are as people.

Teenagers can be a wonderful asset to your business and can be very effective employees. By taking the time to teach them how to be professional and catering to their strength, you will train a valuable employee for yourself and help the teenager be successful in their future ventures.

How to Mainstream Your Niche Market

By Shira Levine

February 10, 2012

If you find a new, small business without a super niche and some kind of uber-nuanced element to it, you're likely looking at an all-in-one corporate chain.

Today, businesses specializing in something very specific are attractive to mainstream consumers looking for something more in their less. Stick&Pop is one of those businesses. Cupcake, meatball, PB&J and macaroni & cheese stand-alone shops abound. So do specialty paper shops, wool and yarn shops and boutiques that carry items where a hip designer has simply put a bird on a collection of reclaimed wood pieces.

The TV show Portlandia parodies and celebrates this kind of consumer demand. Popular niche markets may be amusing, but they are more than a trend with these demanding buyers.

Twenty years ago consumers weren't buying perfectly crafted balls of cake on a stick. Today, we see incarnations of the delectable bite-sized petite dessert treat behind the display windows of darling cafes, and even Starbucks.

I spoke with Stick&Pop founders, Jacki Caponigro, the baker, and Christy Nyberg, the marketer the week they transitioned from being an online delivery shop to opening a brick-and-mortar store in New York City.

You're not the cake pops many people know from Starbucks. Is the cake-pop-ownership confusion good or bad?

We actually were making them for several months before we saw there was something similar being sold in Starbucks. It was scary at first for us to see our product elsewhere. But being part of a niche market with other players has helped better expose us to the market.

We were able to sample and learn how to be better by looking at our competitors. It saved us lots of time. We were able to improve, and remove what we felt didn’t work. We didn’t have to educate the public about what a cake pop was. We turned that scary reality into a positive. It helped us realize who we are and who we don’t want to be.

What do you want to be and not be?

We would rather be a business that specializes and make a high-quality item. Cake pops are one of many things Starbucks sells, so taste and freshness can more easily be compromised. We tasted the cake pops of other companies and found a sameness. So we focused on creating a taste, a flavor variety, a presentation of our own, establishing a standard we felt was the best in the industry.

We don’t keep ours on the shelf as long as our competitors. We want fresh. Our stick is wider, so it feels like a more substantial treat. We put a lot into our presentation, too. That really made it ours. Being small, it’s easier to maintain the quality—we’re not producing the quantities our competitors are. This makes it easier for us to keep our customers happy.

Freshness aside, why should consumers buy Stick&Pops over the competition?

We appeal to customers who are focused on taste rather than decoration. We've remained true to our menu of flavors. While we do love adding beautiful or fun touches and we want the pops to look great, we believe food is to eat more than to look at.

One key to competition is knowing where it's coming from, so we did conduct our own market research by ordering pops from a few companies and even buying the Bakepop Cakepop maker. You have to know what's out there and view your product and marketplace as your customers do.

Why do you think people are so attracted to this kind of niche purchasing?

It seems that the common thread with niche products is a response to one-stop shopping, big box stores or predictable entertainment. There's a growing momentum around supporting small businesses.

People want to get maximum quality out of the dollars they spend. Owning a small business opened our eyes to wanting to work with and buy from other small businesses. [Our store is] located on a block full of other small, niche companies run by business owners who are so supportive and helpful.

How does an entrepreneur determine if they have a viable niche product the public will respond to?

Certain things just appeal to certain people. As a basic guideline, success is probably largely driven by passion for the product. It doesn't hurt to get a healthy reality check from sample markets—even if that means starting with friends and family.

When our orders started to come from people we didn't know, we felt good. When those people re-ordered again and again, we felt great.

It is a big move to go from online sales to having a store? How else are you expanding?

We've existed only online until now. We need to make sure our walk-in customers get great service and pops they want more of, while continuing to build our web business.

In the long run, we'd like to expand by opening other locations and continuing to develop our relationships with event and wedding planners. We have a few products that are ideal for wholesale, like our dough kits. We think they'll become more marketable as our brand grows.

Niche products tend to be more expensive than they should be. How did you price Stick&Pops?

This required a bit of market research, along with calculating our costs per pop. We jumped into the market on the low end, but that may have benefited us. People were willing to take a risk on a new product and company.

We started way under price at $1.75 when we were refining the size of the pop and calculating cost. We didn’t have it down yet with materials and packaging. We raised it to $2.50 a pop. Now, with the store opening, it is $3. A lot of work and time goes into each bite.

Are you looking for investors or managing this for now out of pocket?

We've invested our own money because we want to maintain control. Building out a store has been our biggest investment. Right now, we don’t want investors. We’re being cautious. Hiring a bookkeeper helped us a lot.

We’ve tried to cover our basic costs (rent and health care), so if no one walked into the door we can stay afloat for a few months. We have no idea how to forecast walk-in traffic. There is no great model unless you are a Starbucks.

We’ve lightly invested in PR and have leveraged relationships where we realistically know we can’t do something ourselves. It’s about return on investment. Participating with flash-sale sites didn’t work for us. As an online store, there was no up-sale opportunity or much opportunity for repeat sales.

Where do you hope to be in five years?

We have our sights set on being a destination for visitors to New York, as well a place New Yorkers visit again and again. Our seasonal and specialty flavors keep us on our toes for now and offer ample opportunity for creativity and fun days in the kitchen. More immediately, we want to celebrate weekends with a breakfast box of pops—we're thinking cinnamon bun, oatmeal raisin and blueberry muffin pops.

What has been the most niche item you’ve ever seen in the consumer marketplace? What niche product does your business sell? Is there such a thing as too niche?

Why Aren't Small Businesses Hiring?

By Courtney Rubin

February 9, 2012

Nearly two thirds of small businesses think the nation is already in another recession, says a new study.

Irvine, Calif.-based Sage North America, which makes business software, surveyed some of its 3.2 million customers for the Sage Small Business Perspective on Economic Recovery. (View the full report, which allows you to click and view by company size: companies of one, two to five, six to 10 or 11 plus employees.)

Nearly two thirds (65 percent) also said the economy has had a negative effect on their business in the last six months; 45 percent say it will have a negative impact in the next six months. The size company most likely to be affected by the economy: six to 10 employees, with 71 percent of that size firm saying the economy had brought their business down.

Both Republicans and Democrats agree that small businesses hiring could jump-start the economy. "Everyone here knows that small businesses are where most new jobs begin," President Barack Obama said during his September address before Congress. "Small businesses have historically fueled the vast majority of job creation, generating nearly 65 percent of net new private-sector jobs over the past decade and 98 percent of the nearly two million private-sector jobs created since January 2010."

But the survey provides scant hope that small businesses will grow. More than three quarters (77 percent) said they don’t plan to hire any workers. Just seven percent think they will hire; eight percent think they will reduce their company’s number of employees. Nearly half (48 percent) said they would like to hire, but cannot. The survey breaks down the results by company size, with lack of revenue being the number one reason for the smallest companies. Economic uncertainty is tops for bigger businesses, including 71 percent of companies with six to 10 employees.

"Despite positive job numbers for the month of October, it is clear that business owners have a differing view of the economy," said Connie Certusi, executive vice president and general manager of Small Business Accounting Solutions, a division of Sage North America

The report also found that more than three-quarters (77 percent) of small firms have sought financing this year. Two thirds (67 percent) found it more difficult to get than they have in the past; 61 percent were able to get the money they needed.