London may be gearing up to celebrate the Queen’s Diamond Jubilee but here at RichRelevance UK, we’re still riding high on the momentum from last week’s Future of Shopping event!
With about 100 retailers (including Argos, Boots, Dixons, Harvey Nichols, John Lewis, Marks & Spencer, Net-A-Porter, Sainsbury’s, etc.) in attendance, the audience was held rapt by an energetic programme packed with key learnings and takeaways from RichRelevance CEO David Selinger and bestselling author and renowned retail expert Paco Underhill. The presentation was followed by an expert panel discussion featuring IDC’s Christine Bardwell, PwC Logan Tod’s Matthew Tod, and CEO of Firebox.com, Paul Zimmerman. Together, they helped to pull all the day’s thinking back to centre.
Below are just a few of the key insights that surfaced from our gathering:
- Technology’s role is to respond and resolve, not replace human interaction or be put in place for “technology’s sake.” When utilising any technology, we must preserve the human dynamic to keep the connection strong between customers and marketers.
We are in the midst of a technological revolution affecting everything about the shopping process: the simultaneous explosion of social, mobile and local technologies. It is in these transition points where our business decisions have the most impact—where companies are made and lost. Our true fundamental strengths—compared against our partners and competitors—must be considered in the context of an entirely new shopper: the Super Consumer.
With a multitude of resources at her fingertips, the Super Consumer can shop five stores at once through a multi-tabbed web browser. Smart phone in hand, she walks down the aisle of one store while teleporting a sales representative from another store, in order to shop competitively. She is fearless and opinionated, posting her shopping experiences to the blogosphere and social media channels. Thanks to the plethora of user-generated product reviews, recommendations and detail specifications already available, her knowledge is practically limitless. She knows much more than the store employee by the time she’s ready to buy.
Empowered by unprecedented access and connectivity, the Super Consumer has the unique power to redefine brands from the bottom-up, and drive the creation of new markets, new products, technological innovations, social media activities and general consumption.
It’s imperative for retailers and brands to understand the Super Consumer, how she shops and –most importantly – what makes her happy.
Beginning today in London and upcoming in New York (6/14) and Stanford University (9/18), Paco Underhill and I will be speaking about the macroeconomic and technological trends shaping this new Super Consumer and how we in retail need to hearken back to our roots in merchandising and marketing so that we can define our strategies on a battlefield increasingly shaped by rapidly growing players such as Groupon, Amazon, and even eBay.
Please join us as we discuss The Future of Shopping.
The birth of the internet shook the foundation of many markets, in particular our own media industry. Over the past decade and a half, online advertising has blossomed into the potential genius alternative to the more traditional media outlets — wooing media buyers with the promise of “real-time metrics” and the technology that allows better targeting capabilities. It’s all these promises of marketing capabilities that has propelled online media into securing a larger slice of overall budgets — stealing dollars from traditional media bucket. However, in order for online media to surpass traditional media budgets, the industry must further innovate in terms of scale and targeting. This will involve delivering value above and beyond what advertisers are currently capturing from TV.
One of the critical components that will enable the shift in budget allocation is in the one thing that makes online advertising so unique: the underlying power of ad-targeting data. As it currently stands, the digital industry is overrun with data: “Data, data everywhere, but no one has the means to truly leverage it.” The digital ad industry is still a ways off from being able to leverage “data potential” from ad context and consumer behavior.
When the movie “Minority Report” was released in 2002, it was pure Hollywood that depicted a world where personalized screens would follow a shopper’s every move — whether walking through a mall or entering the local Gap store. Fast-forward 10 years, and this world of personalized screens is actually a reality driven by the sheer number of mobile devices consumers have access to today. This “ubiquity of screens” combined with the untethering of shopping from physical stores, has created a highly fragmented marketplace making it a greater challenge for brands to engage with consumers in the right context.
However, with change comes opportunity. A consumer’s shopping mode can be turned on at any moment, not just when they’re in the store or watching TV, but when they see something that piques their interest (think of the rapid rise of Pinterest) and want to explore or buy at that exact moment. The smartest brands are shifting their media investments to be in direct alignment with the shopping actions of the consumer by leveraging new and unique marketing channels that directly intersect with the path to purchase.
In the last week, RichRelevance introduced the US and UK versions of our Shopping Insights™ Q1 Mobile Study to the market with some fascinating findings around the rapid adoption and usage of mobile devices in e-commerce:
In the US, for instance, mobile purchases as a percentage of overall e-commerce have doubled in the last year from 1.9% in April 2011 to 4.6% in March 2012. Interestingly, the iPad is driving nearly all shopping, browsing and purchasing in this emerging channel and iPad shoppers here in the US, in March 2012, actually spent more than desktop users—five dollars more per order than the AOV of desktop users of $153.
By comparison, UK shoppers are blazing the trail for mobile shopping. UK mobile shopping is double that of their American counterparts, with mobile shopping representing just over nine percent of all e-commerce sales. The bulk of that mobile e-commerce revenue (more than 80%) is from purchases made on the iPad. Interestingly, the highest average order values, in March 2012, originated from the iPhone—$24 more than iPad shoppers and nearly $28 more than desktop shoppers.
These numbers are not just interesting, but they are telling a story about the ways in which consumers are embracing the freedom that mobile devices provide them in the ability to shop anytime, anywhere. Our Shopping Insights team believes that the difference between the mobile shoppers in the US and the UK has a lot to do with how we “live” in these two countries.
In the US, we are a car-and-couch culture; the majority of us drive to work, so using our mobile devices to and from the office or school is not an option. But when we do get a chance to shop, it’s often a relaxing event often taking place in front of the TV or even later at night in bed (iPad evening usage, from 8pm to 11pm, account for 26% of all iPad shopping sessions). This is also suggested by products iPad users frequently purchase in the US: fitness equipment, home furnishings and outdoor supplies. These are “aspirational” purchases, no doubt influenced by what is being seen on TV and the ability to relax with the device.
In the UK, it’s a different situation; while the iPad is squarely driving the majority of e-commerce sales, the fact that, in March, the iPhone is where the highest AOV occurs is very telling of the culture that is even more mobile than the US (a recent Times article revealed that there are more mobile phones in the UK than there are residents—62.5M, to be exact). Britons order everything online, from groceries to electronics and (according to our study) that includes large-ticket items purchased on a smartphone.
What does this mean for online retailers? It’s rather simple—or complex—depending on how you look at it. Simple from the standpoint that we must recognize our customers are engaging with us in the channel that best suits their needs at that moment. So as we have always said, put the customer at the center of your thinking and the business strategies become ultra-clear. The more complex initiative is the mandate to maintain different versions of your ecommerce site for each platform that a shopper wishes to use. Shopping on a smartphone is vastly different than shopping from a desktop. It’s incumbent on retailers to think about screen size, the form factor, ease of use—all aspects of the customer experience. That’s equally the case with the iPad, but there is also an opportunity to more directly engage with customers via catalog-style presentation of retail goods and services.
As we approach mass adoption, retailers must adapt their strategies to build specific interfaces to meet the needs of this emerging segment and the capabilities of the technology. You know, Steve Jobs did a remarkable job in building a mobile platform that consumers have embraced—the more retailers take advantage of this opportunity, the more relevant and lasting their brand will be to today’s shopper.
I’m proud to announce that RichRelevance took another leap ahead today in bringing dynamic personalization to retail, this time focusing on promotions with the introduction of RichPromo™. RichPromo moves us one step closer to our vision for retail of optimizing every pixel on an e-commerce site, creating a truly dynamic shopping aisle for every customer.
RichPromo targets promotional campaigns to each individual shopper thanks to the intelligence of the enRICH platform, and leveraging the same single site integration that begins when we introduce our personalized product recommendations, RichRecs™ to the site. We call this a “segment of one” – which is a way to describe shoppers who will find each campaign relevant, and the platform does the rest. RichPromo watches for affinities shoppers express to specific categories, brands and even product attributes, to select the most relevant promotion available.
Our testing shows that campaigns personalized with RichPromo provide a 4x increase to sales when compared to manually merchandised promotions. As we continue to integrate this new product into our client base we’ll be sure to share success stories and best practices from these learnings.