Will Apple and Google Rule Customer Loyalty in Mobile?
Smartphones have changed forever the information consumption habits of consumers. While those changes are most obvious in areas such as social networks, the news media and search engines, they have been perhaps most impactful in the retail industry. Read more...
Retailers Need More Than Fun When It Comes to Gamification
Consumers have been exposed to games when they shop for decades. As far back as 1896, grocers distributed Green Stamps that were collected to earn shopping rewards.Read more...
Is This the Death of Black Friday?
Black Friday is a week away, and the news is full of stories anticipating retailing’s version of New Year’s Eve. But this year will be different – a lot different, I think – so much so that I wonder if Black Friday as we know it is dying.Read more...
Augmented Reality: Beyond the Gimmick
Mikael Karlsson, mobile marketing manager for Volvo, shocked the audience at the 2012 Apps World conference when he described augmented reality as an overhyped marketing gimmick. Read more...
What Are Smart Retailers Really Selling?
Retail was founded on a very simple principle: to acquire and make available for people that which they could not easily or affordably obtain on their own. Thus, buying wholesale and selling retail was – and is today – a service to the community. Read more...
Projections for retail channel revenue were the basis of an article by ZDNet’s Larry Dignan, who declared today that “mobile just isn’t much of a factor for retailers.” He said, “Shopping via a smart device will be less than 2 percent of retail revenue in 2016. So what’s the hubbub about?” I think all the attention mobile retail is getting is about two things: The reality that even a small piece of the retail pie represents a huge opportunity, and the incredible growth expected for mobile commerce.
Dignan’s article includes a chart showing that by 2016 mobile commerce will represent 1.74% of global retail revenue. How much is that? Plenty, I would say. Let’s look just at the United States. The National Retail Foundation predicts that U.S. holiday sales this year will total $586.1 billion. If that prediction comes true and holiday sales continue to represent about a fifth of total sales annually, US retail sales should come in at about $2.93 trillion. What’s 1.74% of that? It’s more than $50 billion, and that’s if the U.S. has a merely average level of mobile commerce.
Retailing was founded on a very simple principle: to acquire and make available for people that which they could not easily or affordably obtain on their own. Thus, buying wholesale and selling retail was – and is today – a service to the community. Whether the true need of the consumer was convenience or access to something that made life better in some way, the retail business was never about the item for sale. In fact, I maintain that with just one exception, the real product in retail was, and always will be, one of two things: convenience or happiness. The exception, of course, is when it is both. If you can make life easier or more pleasant for your customers than your competition can, you will always win.
Despite the many improvements made to e-commerce websites over the past few years, shopping cart abandonment rates remain very high. But it turns out that customers who fill up their carts only to abandon them turn out to an online retailer’s very best customers. That’s because people who abandon carts are more likely to return and make a purchase. So shopping cart abandonment has really become just a part of the online shopping process.
According to SeeWhy the shopping cart abandonment rate in June 2011 was 75 percent, up from 71 percent at the beginning of 2010. Forrester Research has found that 88 percent of American online customers abandon at least one shopping cart each year.
What types of shopper abandon their shopping carts so readily? They are the ones whose incomes are above average, who are highly educated, and typically have more experience shopping online than those who do not abandon their carts. Women turn out to abandon their shopping carts more often than men.
Ian Kelly’s job is to help spread Best Buy’s formidable product catalog across the Internet, so please excuse him if he seems pressed for time. “We’re continually activating our new projects,” says Kelly, whose title is director of IT integration and service-oriented architecture. “So look at your watch. We just started a project. Look at your watch. We just finished a project. Something is continually being delivered in our organization for integration.”
Kelly and his team are charged with delivering more than 2,000 software integration products a year for the world’s largest retailer of consumer electronics. Among their challenges:
– The annual preparations for Black Friday, when systems need to handle 50 to 100 times the capacity as on a June weekday afternoon.
– The need to roll out services that help the company’s 180,000 employees be more knowledgeable about products and inventory.
– The demands of BBYOpen, the set of application programming interfaces Best Buy has made available to partners so they can provide Best Buy information in their own web presences. BBYOpen lets partners, affiliates and others display Best Buy’s catalog of nearly 1 million current and historical products, ratings, reviews, store locations and other information.
BBYOpen is critical to Best Buy. The key is turning around those software integrations – hundreds a year – quickly and accurately for this growing new customer base of about 5,000 developers.
At this summer’s Online Retailer conference and expo in Australia, the biggest attitude difference that I saw between Australian and U.S. retailers emerged during a panel session at the event. The panelists spoke about a brick-and-mortar executive attitude that apparently is prevalent right now in Australia. The attitude can be summed up like this: “If online is only 3% of my business (the number thrown around at the event), why would I want to invest in it? It’s just not big enough to command my attention.”
In the U.S. (and U.K., and increasingly western Europe), retail executives’ attitudes are the exact opposite. The thinking is, “If store sales growth is flat or negative and online is growing at 15% or more, why would I invest in stores? Why wouldn’t I take all that money and pour it into online where not only will it support fantastic growth, I have much more leverage because online isn’t nearly as asset-intensive as stores?”
Online retailers got an early Christmas present from the National Retail Federation, which for the first time in its history released a holiday forecast for online sales. The NRF predicted holiday sales online will grow 12 percent over last year to as much as $96 billion. News outlets picking up that story delved into the reasons for the increase, making it clear that when it comes to forecasts for the vital holiday shopping season, online retailing now merits a discussion all its own.
The NRF’s prediction for holiday sales overall was its most optimistic since the recession, an increase of 4.1 percent to $586.1 billion. Over the last decade, sales have grown an average of 3.5 percent annually. In making its announcement the NRF used words like “moderate” and “pragmatic.” But the group was more enthusiastic about online sales, and offered this assessment from NRF President and CEO Matthew Shay:
Online retail has been a bright spot for years and we don’t expect that trend to change anytime soon, especially with the growth in mobile. Aside from the convenience, shoppers look to the holiday season to take advantage of retailers’ increased digital offerings. In addition to enhancing the site experience, retailers have spent the year investing in optimizing their mobile and social platforms, just what holiday shoppers are looking for.
I had the privilege of spending a week this summer in Sydney, Australia, attending the Online Retailer conference and expo. I was really excited to go not least because it was my first opportunity to go to Australia, but also because I was very interested to get an on-the-ground glimpse of Australian retailing and how it compares to developments in the US.
First, some context. Currently, about 5% of Australian retail sales are currently online. However, Australia apparently also has the largest contingent of smartphones per capita – which tend to be iPhones more than anything. Amazon looms on the horizon, with as-yet-dormant plans to open a warehouse, somewhere along the eastern seaboard, where Australia has the highest concentration of population.
I first learned of augmented reality about four years ago when it started finding its way out of the research lab. Being quite excited about its potential I called a friend in California and asked him if he had heard much about this new technology. He laughed and said “Dave, I live in Los Angeles, I’m surrounded by nothing but augmented reality every day!”
The concept of building a bridge between the physical world and your web experience is now becoming far more common. You’ve probably heard of augmented reality, but beyond seeing a few examples like Google Glasses, you’re probably asking what’s this all about and how would I use this?
The explanation of how AR happens depends on the way you connect. It can be based on one of many ways to interact with the technology. But the one thing they all have in common is helping to erase that line between your real life and how you interact with the web. Right there, that’s where the potential of AR lives for the retailer. Any one of the variations that I’ll describe here can help you create a more compelling customer experience in the store and through your omni-channel presence.
Some of the news coverage of a recent BDO survey of retail CFOs indicates that while some retailers are feeling less threatened by showrooming, they still think of terms of fighting the trend rather than using it to their advantage.
Talking about customer relationship management in retail has been problematic for me for a very long time. I still get positive feedback, and reports from readers that it is still relevant, on research we published in 2007 on loyalty programs: “Getting Loyalty Programs Back to Loyalty.” CRM has long been a bad word in retail, ever since some retailers spent millions trying to implement it in the late ’90s and first half of the ’00s. There was a while when we tried desperately to avoid the term in our surveys, because it was a sure-fire way to scare away survey respondents.
Loyalty programs, too, have suffered a similar fate. I see two distinct types of retailers out there – those that hate loyalty programs and won’t have them, and those that hate loyalty programs but can’t figure out any other way to get the customer data they need. Thus, the enduring nature of a report about making loyalty programs more valuable – maybe even to the point where they actually drive loyalty!