Friday, August 31, 2012

Showrooming Data is Scary.

The Pew Research Foundation came out with a recent studycalled the Rise of In-Store Mobile Commerce calling out the impact of mobile smartphones on holiday 2011 shopping. The numbers speak to the scary impact of the showrooming phenomenon.
  • 52 % of shoppers with cell phones walked into retail stores and did at least some research by smart phone.
  • 19 % of them ultimately made their purchases online.
While they were in the stores:
  • 38 percent of cell owners called a friend while they were in a store for advice about a purchase they were considering making.
  • 24 percent of cell owners used their phone to look up reviews of a product online while they were in a store.
  • 25 percent of adult cell owners used their phones to look up the price of a product online, to see if they could get a better price somewhere else.

Can Retailers Halt 'Showrooming'?

Shoppers who scope out merchandise in stores but buy on rivals' websites, usually at a lower price, have become the bĂȘte noire of many big-box retailers.

The trend, known as "showrooming," hurts the bottom lines of traditional stores while benefiting online-only retailers such as, which have the advantage of lower overhead costs and mostly can skirt the collection of sales tax.

To thwart showrooming, Target, earlier this year pushed its suppliers to offer it exclusive products that can't be found elsewhere. It also has quadrupled the number of items available online and is sending special coupons directly to customers' mobile phones. Wal-Mart Stores meanwhile, is emphasizing in-store pickups for online orders—many available the same day they are purchased—allowing customers to avoid shipping fees. 

The real hurdle, though, is pricing. Lower prices are one of the main reasons people pick Amazon and other Internet-only emporiums over traditional retailers. If brick-and-mortar stores can't compete on price, it is unclear how successful they can be with tweaks to merchandising and customer service. 

Fight showrooming with omnichannel and digital signage.

Today's selling environment, whether it's in a big box retailer or a quick-service restaurant chain, increasingly calls for a consistent, omnichannel strategy that cuts across digital signage to mobile to online media and is consistent with the in-store experience, to engage with consumers.

According to a recent Wireless Ronin Technologies white paper, omnichannel retailing essentially means using a variety of communications technologies to maximize the customer experience — before it's too late:

International Data Corporation (IDC) defines an omnichannel retailing strategy as "enabling an organizational and technology framework for putting the customer at the center of a retail business strategy."
However, the growth of online/mobile information and commerce has many retail, auto and food brands finding challenges in maintaining a physical presence ... This strategy requires brands to embrace the various channels — both high-tech and no-tech — as part of the overall experience. The Harvard Business Review states that "...unless conventional merchants adopt an entirely new perspective — one that allows them to integrate disparate channels into a single seamless omnichannel experience — they are likely to be swept away."

IDC Finds “Showrooming” Trend Most Popular On Saturdays.

IDC and Onavo's joint report is based on Onavo Insights data, leading panel of iOS users, comprised of Onavo app users in the U.S. The uniqueness and scale of Onavo Insights data enable IDC and Onavo to draw valuable insights into real world usage of price comparison and retail branded apps. 

Key report findings include:
  • Comparison apps and retail apps may both aim at the mobile commerce space, but the two categories show dramatically different weekday usage patterns which reverse themselves on weekends.
  • Retail apps are used more than price comparison apps on weekdays, but that reverses on the weekends when price comparison apps soar in usage past retail apps.
  • The single biggest day of comparison app usage is Saturday, and the single biggest day of retail app usage is Sunday. This potentially implies that more mobile price checking and “showcasing” are done on Saturdays and more actual mobile purchases are being done on Sundays.
  • Counter to expectations, the second highest day of retail app usage is Monday. With Sunday as the number one day for retail app usage, it would have been expected that Saturday or Friday would be the number two day. This implies that Sunday retail app usage has a positive carry-over effect on Mondays.

How Retailers Can Benefit From Consumer 'Showrooming'

Showrooming, the practice of checking out products in a physical store and then buying them online, is a rising concern among retailers as smartphones and other mobile devices become ubiquitous. Various apps make it easy to scan a barcode to compare prices and buy a product cheaper online.

Robert is somewhat skeptical of the impact this has on retailers, in part because of his own anecdotal experience. He says "even more than I showroom, I research a product online–often at Amazon and other online retailers presumed to be the key culprits in showrooming–and then buy a product in a physical store because I need it now or simply want to touch a range of products, not just look at photos of them." In other words, it works both ways.

For Some Verticals, Websites Carry Most Research Weight

Power of websites in certain categories to deliver purchasing punch, Compete did some research looking at the grocery, health and beauty, household essentials and pet supply verticals and found the website reigns supreme (thanks toeMarketer for chart).
This is interesting but it raises a few questions.
The first one that comes to my mind is exactly how someone got to the retailer site in the first place. If they are familiar with the retailer and use them all the time that’s easy to understand. But what if the consumer was searching not only for products but also the best retailer to buy those said products from? Doesn’t that make search engines or social media even more important in this overall equation?
Attribution is a sticky subject for sure. We all want it to be clean and direct but it rarely, if ever, is. This is a reality of the current state of online marketing that we are going to have to either embrace or simply relax with as quickly as possible. The last thing we need to happen is that in a rush to provide some cause and effect reporting to appease people upstream we simply attribute a purchase to the most obvious, or nearest, channel. This could give too much weight to something that only played a small part in the full process that gets a prospect from research to purchase.

Half of online ads aren't viewed for even a second: report

Advertisers have more and more types of online ad inventory than ever, and thanks to technologies like real-time bidding, increasingly sophisticated ways to buy them.
But for advertisers actually hoping their ads will reach consumers, there's bad news.
According to a study by AdSafe Media, just half of all online ads meet the Making Measurement Make Sense (3MS) proposed viewability standard that calls for 50% of an ad to be visible for at least one second.
As my colleague Heather Taylor described earlier this month, one of the guiding principles behind 3MS is that the industry should move from measuing "'served impressions' to 'viewable impressions' to prevent the over-counting of impressions."
This makes sense for advertisers, but AdSafe Media's study, which looked at impressions served in the first half of the year, suggests that publishers, ad networks and ad exchanges could have problems living up to the standard.
Those problems could be particularly acute for the latter two groups. According to AdSafe Media, well under half (41.2% and 40.3%) of ads served by networks and exchanges met the proposed viewability standard, respectively. Ads sold directly by the publisher fared a bit better, but even for publisher-sold ads, advertisers may not be thrilled with the results: little more than a fifth of these ads (21.2%) remained in-view for 15 seconds.

When ad worlds collide

And it gets worse: in approximately 7% of cases, an advertiser had two ads on the same page. As Adweek's Tim Peterson writes, "While doubling up an advertiser's presence on the page could juice the likelihood of the brand's paid media being 'represents a pretty significant loss of value' because the likelihood of a user converting drops for both."
Assuming AdSafe Media's findings are confirmed by others, it would seem that the industry has a big question to ask: why adopt a viewability standard that is apparently going to be very hard to meet?
While advertisers have a natural incentive to push for measurement metrics that ensure they're not overpaying for what's being delivered, barring some fundamental change in online ad units and how they're positioned, it's questionable as to whether those in business of selling ad inventory will be able to do much to change the viewability of the ads they sell.


How does Amazon get away with it?

It's the world's largest e-commerce retailer, yet Amazon breaks all the established rules.
So just how does Amazon get away with it?
Let's examine this argument in more depth:
  • Amazon bids on irrelevant PPC terms where it can't fulfill the order. Sometimes the product is out of stock, sometimes it's no longer on sale.
  • The product reviews often display polar opposite opinions on the same page, often lacking justification. How does that aid the customer purchase decision? I'd argue that it doesn't.
  • Product information is almost always below-the-fold.
  • The horrific mega-drop-down navigation on the home page has only recently been replaced by slightly friendlier refinement-based navigation. Even so, it often takes four or five clicks before you hit your desired landing page via navigation.
  • Many products rely on their suppliers to provide descriptive content. Often this results in scant descriptions that are not optimised for SEO - let alone for the customer - and don't provide a consistent tone of voice.
  • Amazon allows its own customers to undercut their product prices in the Amazon Marketplace. What high street operation would put up with that?
  • The cross-sell recommendation engine demands significant tweaking before it starts to offer truly relevant results. Just because I bought a christening present last month doesn't mean I want to be presented with more christening presents every time I hit the site. And if I click into a product out of curiosity, I don't want it to be assumed that I'm interested in anything similar. But it's up to me to tell Amazon that.
  • The product returns process is complex and varies widely by supplier.
  • The checkout is text-heavy, looks complex and offers a break-out to return to the home page at the order confirmation stage - a real best-practice no no.
And remember this is from a company that claims to be the most customer-centric operation on the planet. 
So the question remains - how does Amazon get away with it?
  • The product range has enormous width. They've nearly always got what you're looking for. The core product range has a very simple message; if you're looking for books or dvds, we've (nearly) always got it.
  • For customers that know what they want, the internal site search is excellent and produces fast, relevant results.
  • Selling prices are low relative to the high street (though not always relative to web competitors).
  • The delivery message is easy to understand and the actual delivery of goods is extremely reliable.
  • It was first to market in the entertainment product field.
Next time you receive advice on best practices for ecommerce, rather than swallowing them wholesale it's worth remembering the Amazon example.
It's time to think 'is this change right for my customers?' Will the change disorientate long-term customers? Will the positive impact on new customers override this?
Sometimes breaking the rules is the right way to go...


Thursday, August 30, 2012

Getting physical with the digital customer.

Forty years ago, a marketing researcher named Edward Tauber set out to learn why people shop. His investigation led to a seminal article, “Why Do People Shop?” that has influenced marketers and retailers ever since.

Recently, the Minneapolis agency Little & Co. set out to see if Tauber’s conclusions remain valid in a society gone digital. As it turns out, the world may have changed a great deal in 40 years — but shoppers haven’t.

“A lot of the motivations from 40 years ago haven’t changed dramatically. But the expectations of how those motivations are met have changed dramatically,” said Mary Haugh, vice president of strategy and account management at Little.

Building on Tauber’s work, Little identified six categories of shoppers (load this PDF), each one seeking a different experience from her shopping trip.