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Guthrie DolinPrincipal, Director Of Brand & StrategyOdopod |
For well over a decade, e-commerce has been a cornerstone in the growth and development of the Internet. In that time, e-tailing has matured, the experience has been refined, and consumer usage has grown rapidly. In fact, online sales in the US are projected to be over $170 billion in 2010. Nonetheless, while online retailing has experienced phenomenal growth, the lion's share of consumer transactions still take place out in the physical world. In 2009, that share was 72 percent.
E-commerce is now ubiquitous, and new digital technologies have shifted consumer behaviors and attitudes, encouraging the brick-and-mortar retailers to find digital means to enhance and augment the customer's in-store experience.
We've seen a great deal of experimentation in this arena in the last two years, much of it in the form of conceptual prototypes. But now, with the proliferation of Web-enabled, geo-aware mobile devices and state-of-the-art display technology, many new concepts are starting to take shape that are directly applicable to physical retail experiences.
So, this guy walks into a store with the Internet in his pocket
With shoppers, stores, and merchandise all perpetually connected to a dynamic cloud of information and services, it's clear that retailing in the physical world is undergoing a seismic shift. In fact, the digital landscape has overlain just about every aspect and touchpoint of the consumer shopping experience, from previsit research and in-store consideration through the purchase process and beyond. Moreover, the shifting landscape is also promoting entirely new behaviors in the world of physical retailing.
Shopping with the Network
Shopping with friends and soliciting opinions about potential purchases is nothing new. However, with over 150 million people accessing Facebook on mobile devices, they're not just shopping with a select few, they're shopping with their entire network. And new social-shopping experiences such as GoTryItOn.com are giving people the opportunity to socialize purchases beyond their immediate networks.
Some retailers are leveraging these new behaviors by installing connected screens in dressing rooms and at cosmetic counters so that sharing with social networks is baked into the in-store experience. Implementations such as Macy's "Magic Mirror," BP Photobooth for Nordstrom juniors, and the Diesel Cam have the ability to both influence and amplify the individual consumer decisions made at the point of sale.
While sharing images of oneself trying out products to a massive network for feedback may be fun for some, surely it would be mortifying for others. That said, it appears social retailing is here to stay.
Location, Location, Location
2010 saw a tremendous uptick in the usage and proliferation of location-based social platforms, such as Foursquare and Gowalla. And now, with Google and Facebook Places in the mix, the idea of "checking in" is even more commonplace. However, the Promised Land for the category is far beyond users gaining check-in supremacy -- it's about delivering contextually relevant services.
There are three key ways location-based systems are shifting the retail experience. First, they connect consumers to products and locations available in their immediate vicinity. Second, products themselves can deliver detailed information, as well as opinions and reviews from trusted sources. Third, these applications give retailers the ability to deliver highly tailored incentives when consumers are most likely to redeem them: at the point of decision.
Similar to SEM, location-based marketing delivers consumers highly relevant and timely incentives, which significantly increase response and drive conversion. Additionally, because it is a dynamic platform, it can be measured and optimized in near-real time.
Next: Facial recognition and the end of cash
