RETAIL FUNDAMENTALS FOR MOBILE-SOCIAL COMMERCE
Retailers have always observed people in their stores to gain insight into how to create a better shopping experience. Where does the customer go upon entry? Can she find the right aisle? Does she read product information or does she grab-and-go? These insights were critical to “winning the customer at shelf” – for both retailers and brands alike.
But while these insights are still relevant today, they don’t provide nearly enough value—or context—to truly bond with today’s socially-connected, location-aware shopper.
Whether it’s for electronics or egg whites, power has completely shifted to the consumer.
Industry wonks have playfully labeled this trend MoSoLoCo. That is, the effects of mobile devices, social media, and location-awareness on all forms of commerce. It’s driven by three things:
- Smarter, faster technology (mobile devices)
- Access to information and trustworthy opinions about anything (social media)
- More relevant contexts (location-aware)
Commerce is mobile (mCommerce)
The ability to initiate or complete transactions via mobile is still in its infancy, but usage is already widespread. Oracle reports that 48 percent of consumers research and browse products and services from their handheld. And comScore says 38 percent have used their smartphone to make a purchase at least once.
When consumers are able to learn about, find, compare, buy, and review products and services without breaking a sweat—and when they’re able to perform these actions from any location, at any time, that creates challenges for brands and retailers.
For example, The New York Times recently characterized Best Buy as a “showroom” for Amazon. And Target, incensed by mobile-social research in their stores, sent a stern message to suppliers:
“What we aren’t willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices without making investments, as we do, to proudly display your brands.”
Adding fuel to the fire is eBay, who created TV ads that embrace showrooming as a way to drive their own business:
Commerce is social
Peer-to-peer conversations about products and services are more common than ever. And because people trust the advice of other people more than they trust brands (12 times more, says eMarketer) unlocking those conversations is key to understanding today’s consumer journey.
What’s more, purchase decisions are influenced by social media at the point of sale. PEW Research (January 2012) finds these in-store behaviors are on the rise:
- 25 percent gather price comparisons in the store
- 24 percent look up reviews in the store
- 19 percent were showrooming
To make matters worse for retailers, people are spending less time “shopping” in the actual store (search is the number one spot where shoppers begin their journey). And typically, those searches are met with social content that rank higher up in search engines. Google's "Zero Moment of Truth" illustrates these behaviors.
Commerce is location-aware
Social and mobile are inextricably linked. Add location to the mix and the commerce connection becomes downright potent. Location-based commerce has evolved as GPS, consumer multitasking (apps for everything) and the ability to push messages to shoppers in the right place at the right time all converged.
To be sure, adoption by brands and retailers has been slow. But services like ShopKick—which rewards customers for simply walking into a store—has three million active users and drove $110 million in revenue for brands and brick-and-mortar retailers in 2011. Collier’s Retail Outlook 2012 cites “exclusives and mobile-specials” as a key trend to watch in 2012. Stay tuned.
So what’s a brand to do?
Start with your consumer. Brands and retailers are up to their ears in insights about customer mindset, but know little about how mobile-social media impact their decision-making process. Let digital insight guide your approach.
Integrate with retailers, digitally. Yesterday’s Target circular is today’s Target eCommerce site, Target Facebook page, Target mobile site, and Target mobile app. Retailers are now highly-trafficked, multi-media channels, and should be treated as such. Ratings and reviews, advertising, email sponsorships and creative content partnerships are new opportunities that should be explored during communications planning. Brands are in a great position to deploy content in these channels.
If you’re not already selling online, get thinking about your eCommerce options in a way that minimizes channel conflict. Forrester Research reports that 90 percent of manufactures don’t sell online, and that two-thirds identify channel conflict as their single biggest issue. While few brands want to be in the fulfillment business, it is appropriate to explore options for the future—including online retail integration, online retail partnerships with Amazon and the like, and selling directly.
Shaun Quigley is Digital Practice Director for Brunner, an independent agency and Top 75 Interactive firm. Follow him @squigster.
