Tag app

Showrooming, Webrooming, and the New Reality of Omni-Channel Retail

Photo credit: Jason Howie on Flickr.A few years ago, some retail experts speculated that mobile phones and online retailers would put many brick-and-mortar stores out of business.

They thought that these brick-and-mortar stores would become nothing more than showrooms where customers would go to check out and try on merchandise, only to purchase the items online at a better price. Thus, brick-and-mortar stores would become less profitable, forcing some to shutter their doors.

Fast forward a few years and we now know that brick-and-mortar stores are not going anywhere anytime soon. In fact, it is estimated that over 90% of current retail sales still take place in a brick-and-mortar store.

As I have pointed out in the past, Forrester Research predicts that online sales will rise in the next 10 to 15 years to as much as 25 percent of total sales. However, that means 75% of retail sales will still take place in a brick-and-mortar store.

While the prediction of the demise of the brick-and-mortar store was premature, changes in the way that many customers shop often resembles the definition of showrooming, or at least a slight variation of it.

Therefore, even though many sales still take place in a brick-and-mortar store, retailers can’t rest on their laurels.

What Is Showrooming and Webrooming?

According to Wikipedia, “Showrooming is the practice of examining merchandise in a traditional brick-and-mortar retail store or other offline setting, and then buying it online, sometimes at a lower price. Online stores often offer lower prices than their brick-and-mortar counterparts because they do not have the same overhead cost.”

“The reverse phenomenon is webrooming,” says Wikipedia. “In webrooming customers research a product online and buy in a store.”

A Broader Definition of Showrooming

In his book, “Mobile Infuence: The New Power of the Consumer,” Chuck Martin, author and CEO of the Mobile Future Institute, examines showrooming and its effect on retail.

In the book, Martin highlights the results of a 2012 study conducted by ForeSee.

This study provided insights that slightly change the way that we look at showrooming.

“Many retailers that focus on dealing with showrooming, discussed in an earlier chapter, tend to view it as an in-store-only phenomenon,” writes Martin in his book. “A key finding in the ForeSee study is that a large percentage of the mobile usage related to retail is being done at home while preparing to visit a store. This is precisely the pre-buy phase of mobile influence. This means that the actual showrooming may not be as significant in scope at the physical store, since the activity of shopping via mobile is not location-dependent. It can be done anywhere.”

Larry Freed, president and CEO of ForeSee is quoted as saying, “Showrooming is happening, but it’s not happening at breakneck speed. Retailers need to be aware of it but realize it’s just another method of competitiveness.”

In a post on the K3 Retail blog, Chris Donnelly, head of global retail practice at Accenture, is quoted as saying, “The first thing I’d note is that retailers have been showrooms for centuries… If you can’t close the deal when someone is in your store looking to buy, then shame on you. But that aside, what we’re actually finding is that the trend is increasingly the inverse. We call this ‘webrooming’, where a product is researched at home, then consumers go into the store to buy… Yes, online is the side of retail growing the most in the next five years, and we expect 10 to 20 per cent of sales to be online. But that means 80 to 90 per cent are still occurring in-store.”

According to the K3 Retail post, “Research by Accenture found that 73% of shoppers engaged in “showrooming”, while 88% of consumers used “webrooming” as a shopping strategy.”

The New Reality of Omni-Channel Retail

Study after study is proving that customers are researching the products and services that they intend to buy through multiple channels. This includes at a brick-and-mortar store, on a desktop computer, on a smartphone or tablet, via the telephone, in mobile apps, and in any other way imaginable.

And, while most sales are taking place in brick-and-mortar stores, customers do buy products via other shopping channels.

Therefore, because customers can now research products at any time that is convenient to them and are using multiple channels to do it, every transaction that includes an interaction with the customer in a brick-and-mortar store and an online or mobile store has the potential to be classified as an instance of showrooming or webrooming. The only difference is when and if the retailer closes the sale.

To complicate this further, a customer in a brick-and-mortar store could check out merchandise at one brick-and-mortar store, research prices online, and then go to another brick-and-mortar store to buy the item because the other store is selling the product for less.

Is this showrooming? It could be classified that way.

However, who really cares about how we label it?

The reality is that retailers shouldn’t care if their customers buy from them in a brick-and-mortar store or if they buy from them online. What they need to worry about is whether or not customers are buying from them or if they are buying from the competition.

Therefore, they should be making sure that they are offering the best possible shopping experience to their customers at every touch point and giving them the ability to purchase the product quickly and conveniently from wherever and whenever the customer wants to.

Final Thoughts

Retailers should be worried about showrooming and webrooming.

But, not because they care about how the customer is buying from them.

It shouldn’t be a battle between brick-and-mortar stores and online retailers. The real competition is the other retailer, not the medium or channel that customers are using to interact with the store.

As Brian Eisenberg, chief marketing officer at IdealSpot, is quoted as saying in an Click Z article, “Retail doesn’t exist without an online component and online retail isn’t as cost-effective if you don’t have a brick-and-mortar component. We’re connected all the time through the phones in our pockets, but we live in a physical world.”

Therefore, retailers should offer customers a consistent and seamless shopping experience across all shopping channels, from the brick-and-mortar store to the online and mobile store and everything in-between.

They need to optimize for conversion and customer experience in every channel so that the store is the best place to shop no matter how or when the customer wants to.

By focusing on what customers need and creating a better shopping experience than the competition everywhere customers shop will eliminate the need to worry about showrooming, webrooming, or whatever you want to call it.

Photo credit: Jason Howie on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

User-Generated Content Is Fuel for Recommendation Engines

Photo credit: Andri Koolme on Flickr.By now, most business leaders have heard that word-of-mouth recommendations from friends and family play a large role in the decision making process for many consumers.

With this in mind, many of these same business leaders have also accepted that social media should be leveraged, and have thus established a presence on the most-used social networking sites. Many have even gone the extra mile and actually engage with their customers on these sites.

But, what is often most important is what customers do and say online.

The beautiful product photos, positive reviews, and check-ins that customers post spread awareness about the businesses, products, and services that they use and hopefully like.

What they also do is leave a permanent record of a positive (or negative) interaction that a customer had with a brand.

As you know, if it is posted on the Internet, it can possibly live on forever.

What we don’t often think about is that these posts can lead to future sales by helping recommendations engines provide more targeted and accurate suggestions to future customers.

What is a recommendation engine?

In the context of what I am referring to, it is an information filtering system that helps a business recommend items to customers that they might be interested in. For additional information, Wikipedia has a good explanation.

If you want to see an example of a business effectively using a recommendation engine to help its customers find products, visit Amazon.com. The Amazon.com recommendation engine uses a combination of several input data, including past purchases, product ratings, and social media data.

Social Networking Sites Offer Suggestions

Several social networking sites understand that the data that they collect can be very useful and have harnessed it to offer recommendations to users directly within the site.

Foursquare is a great example.

In his book, “Mobile Influence: The New Power of the Consumer,” Chuck Martin describes how Foursquare is using its data to offer better suggestions to its users.

In the book, Eric Friedman, director of sales and revenue operations at Foursquare, states, “From the very first check-in, we get smarter at what we recommend. If you check in to a series of places, we will make a better guess at what you are looking for. If you love small coffee shops and you go to a city and type in ‘coffee shop,’ guess what we are going to recommend? A small, independent coffee shop. If you are a guy that loves a big coffee house and you go to a different city or country and type in ‘coffee,’ we are going to give you recommendations based on your history. If we were friends on Foursquare and I was in downtown Boston and I saw Chuck had been to a cheeseburger place five times, that is a great signal for me to go to the same place for lunch because I know Chuck and he knows good cheeseburger places and I like Chuck.”

The book goes on to explain other ways that Foursquare is using its app and the data it collects to give its users targeted and relevant suggestions based on their location, past check in history, and the check in history of the people who they are connected to.

If you want another example, check out Yelp.

As you are probably aware, Yelp is an online review site that allows users to review businesses that have a brick-and-mortar location. This data can be used directly within the site to find a specific type of business based on its location and the reviews that it gets from Yelp’s users.

Yelp has an algorithm that that helps surface the most trusted reviews from the most reliable sources.

It is also noteworthy that Yelp reviews often show up in the results that users get when they search for information on Google.

Every Post on a Social Networking Site Could Potentially Be a Source of Data

The examples that I gave demonstrated how social media can be used to help users find businesses based on data collected within the social networking site itself.

However, everything that users post on social networking sites can be used by a third party to help consumers make purchase decisions. (As mentioned, Yelp reviews show up in Google SERPs.)

To illustrate this further, think about all the photos of the delicious meals that users post on Instagram.

A photo posted by Chad Thiele (@chadjthiele) on

Knowing that people often post photos of their food, the app MyFab5 encourages users to use these Instagram photos to rank the five best places for a specific type of food in a specific city.

The concept is rather simple (i.e., use food photos to rank the five best places for a specific type of food in a specific city.) The app then uses an algorithm to surface the best places to get a specific type of food based on users rankings. For example, according to MyFab5, here is a list of the best places for burgers in Minneapolis, Minnesota.

While this data again leads back to a brick-and-mortar location, it shows that anything that users post is fair game.

Given the vast amount of data out there, there will be other businesses that will harness other types of user-generated content to help make recommendations to other consumers based on hashtags, keywords, geotags, or other data that are included in posts on social networking sites.

Therefore, it is important that businesses find ways to ensure that these recommendation engines find more positive posts than negative ones.

Final Thoughts

As I have pointed out, the product photos, reviews, check-ins, and other posts on social networking sites not only work to influence the people who are connected to the users who create the content, but they also can have a larger impact on future sales when they are used to fuel recommendation engines.

So what can businesses do to help encourage customers to create user-generated content that displays the brand in a positive light?

The answer to that question depends on the situation.

However, the most important thing is to provide great products and services to customers.

Providing excellent customer service is also key.

In the end, businesses not only want customers to use their products and services, but they want the experience that they have with the brand to be positive. So positive that customers can’t help but share the love of the brand online.

Because what is posted online can live on forever and we can’t predict how other businesses will use that data in the future.

Photo credit: Andri Koolme on Flickr and chadjthiele on Instagram.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Five Basic Things Retailers Can Do to Integrate Social Media into the Offline Shopping Experience

Photo credit: Lisa @ Sierra Tierra on Flickr.A majority of consumers in the United States own a smartphone.

That means that they have the ability to research products, compare prices, and share their experiences on social networking sites while they shop in a retailer’s brick-and-mortar store.

While there are retailers out there that are doing some very cool things to take advantage of the fact that their customers are talking about their shopping experiences on social networking sites, many businesses are missing out on some of the most basic opportunities to leverage the power of social media.

And, by basic I’m not talking about using social media monitoring tools to engage with customers and meet their needs while they are in a store or even a competitor’s store. By the way, this is something that retailers should be doing.

What I am talking about are some of the even more basic things that retailers could be doing to encourage interactions and social sharing that would involve very little effort on the retailer’s part. That said, I have noticed that many retail stores just aren’t taking these basic steps.

Tell Customers Where They Can Connect on Social Media With Point-of-Sale Displays

No matter how efficient the retail store is, it is inevitable that customers are going to have to wait in line for a few minutes at the check-out counter.

Many of these customers are already using their smartphones while they wait.

This makes it the perfect time to mention the store’s social media presence, as they could instantly connect with the store online.

A simple way of doing this would be to have a sign located near the check-out counter that mentions where to find the store on social networking sites. This could also be a place where the store could encourage customers to leave a review on one of the online review sites. (I know waiting in line sounds like a bad time to ask for a review, but customers do expect to wait for a few minutes.) Retailers could also mention the store’s mobile app, if applicable.

It should be noted that if the retailer’s sales staff are providing horrible customer service or there are excessive wait times, this signage could encourage customers to vent their frustrations. However, even bad feedback can be considered a gift if it helps the store identify problem areas and allows them to make corrections.

On the other hand, if the store is providing great customer service, public praise on social networking sites can be some of the best advertising a business can get.

Mention Where to Connect Online in the Mobile App and Mobile Website

If the retailer’s customers have taken the time to download the store’s mobile app, they already have an interest in the store or the store has given them a good enough incentive to do so.

By using the store’s mobile app to let customers know how they can connect with the business on social networking sites, there is a good chance that the store will be able to build relationships with some of its most loyal customers, many of whom have the potential to become brand advocates online.

It is important that retailers test to make sure that their customers find this information useful.

That said, with the right design, the mobile app can be a great way to help increase awareness of the store’s social media presence.

And, given that customers are already using their smartphones makes it possible for them to connect to the store on social media with only one or two taps of a finger.

The same is true for customers who are visiting the retailer’s mobile website.

It is important to note that the mobile website is a great place to be able to connect with customers who might be visiting a store for the first time. By providing them with other ways to connect to the business online can help encourage repeat business and possibly help turn them into brand advocates in the future.

Furthermore, whether it is on the mobile app or the mobile website, if your business provides product information or the option to purchase items online, making it easy for customers to share this information with their network on social media by including social sharing buttons is highly recommended.

Mention the Social Media Presence in Brochures, Flyers, Print Ads, and Other In-Store Signage

If the business uses print advertising, there is a good chance that copies of it will find their way into the store and onto the sales floor.

Therefore, providing information about how to connect online is also a must for many of the same reasons mentioned above.

Encourage the Sales Team to Mention the Mobile App and How to Connect on Social Media

The sales team not only has the opportunity to sell the products the store has on its shelves, they also have the opportunity to create awareness of the store’s online presence, including the mobile website and mobile apps, as well as how to connect on social media.

While it might not be appropriate to talk about how to connect with the business online with every customer, there are definitely times when this knowledge could lead to positive mentions online. This is particularly true when the customer is really happy with their shopping experience.

Therefore, the sales team should be trained about the importance of the mobile website, mobile apps, and social media so that they can educate customers when appropriate.

Photo credit: Simon Yeo on Flickr.

Remember Hashtags are Important

As anyone who has spent any time using social media knows, people like to share photos and information with their network when they find something interesting or get a really good deal. This is particularly true when a customer is a huge fan of the business.

Because customers are probably already sharing photos and information about the products that the store sells, it would be a good idea for the retailer to create a hashtag that allows customers to connect with other like-minded individuals. This will help create a community and possibly increase the demand for the products that the store sells.

Final thoughts

Many consumers are already using social networking sites to share photos and information about the products that they find in their favorite stores.

Therefore, it is in a retailer’s best interest to help create awareness of the store’s online presence and to make it easier to share information about the store and the products it sells.

While there might be business reasons not to do all the things mentioned in this post, many would take very little effort and could help encourage customers to share the love of the store, create a community, and connect customers with brand advocates and other like-minded individuals.

Many retailers are already investing in social media marketing. By taking these small steps they could help increase awareness and get folks sharing the love of their store online.

Photo credits: Lisa @ Sierra Tierra and Simon Yeo on Flickr.

 

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Why Inventory Management Systems Are So Important to the Future of Digital Marketing

Photo credit: Garry Knight on Flickr.

When consumers shop online, they are often given recommendations based on some criteria (e.g., past purchases, reviews, similar items searched and viewed, etc.)

These recommendations often help consumers find the items that meet their needs and ultimately lead to increased sales.

When a brand or retailer recommends a product to a consumer online, they usually follow it up with a link to a website that allows the consumer to purchase the item. Furthermore, online retailers use remarketing strategies to target advertising to consumers who visit a particular product page on their website, but don’t make a purchase.

By targeting consumers on their mobile devices, brands and brick-and-mortar stores can use similar marketing tactics that will help connect consumers to the products that are sold offline.

However, customers will be frustrated if they are told that an item is available at a specific location offline only to find out that the item is sold out when they arrive at the store.

If this happens enough, customers will lose faith in the reliability of the source that pointed them to the store in the first place. It can also have a negative impact on the reputation of the brand and the retailer.

Therefore, in order for this to process to be most effective, customers need to feel confident that an item will be available for sale when they make the trip to the brick-and-mortar store.

This is why having an accurate inventory management system in place is going to be so important to the marketing efforts of retailers and the brands that they sell.

As I mentioned in an earlier post, retailers can now use RFID technology to help accurately track inventory levels and locate particular items in the brick-and-mortar store. This is true even with difficult-to-track products.

Brands Are Looking to Target Customers Based on Geolocation

As I wrote about in the aforementioned blog post, Steve Madden’s website gives customers the ability to check for items in the brand’s brick-and-mortar retail stores based on geolocation.

However, Steve Madden also partners with other retailers to sell its products. It hopes that, in the future, customers will be able to search for its products in all retail locations—wherever they are sold.

Photo credit: T van Herwaarden on Flickr.“As Steve Madden continues to grow, we are faced with a variety of issues that affect sales, marketing, fulfillment and the delivery of consistent brand messages, product information and exceptional customer experiences,” states Andrew Koven, president of e-commerce and customer experience at Steve Madden, in an article on Forbes.com. “We decided to focus our mobile strategy to help build more sales of Steve Madden products and deliver great service, whether through our own stores or a retail partners such as Macy’s, Nordstrom or Zappos. It would not be uncommon for a customer of a retail partner to view Steve Madden’s mobile site while in their store or to compare prices and we recognize the value add we can provide. Mobile is both financially viable and the optimal way for Steve Madden to offer a brand centric benefit to the entire business. Ideally, we want to ensure that all of our partners do well. Perhaps we could make all retail inventory universally visible to consumers and collaborate with our partners to ensure that consumers can find our products easily while at the same time supporting everyone’s success.”

No doubt, Steven Madden is not alone.

Retailers Don’t Want to Be Left Out When Brands Advertise

There are already companies that are trying to meet the needs of brands that want to drive consumers to nearby stores to purchase their products by reaching these consumers on their mobile devices.

In episode #346 of the Mobile Commerce Minute, Chuck Martin explains that by tracking inventory levels at more than 100,000 brick-and-mortar stores, Retailigence is helping connect the consumer to products at nearby retail locations.

As Chuck Martin explains, Retailigence allows a consumer packaged goods (CPG) company to reach a consumer within a geofence around a store by helping it purchase all the ad inventory from the ad networks that partner with the Retailigence platform, thus driving consumers into only the stores that have the product the customer is looking for. This allows brands to link consumers directly to products.

In the future, many more options are going to be available that will help brands connect consumers directly with their products that are sold in brick-and-mortar stores. This would include, but would not be limited to, adding product availability data to online and mobile search, social media, display, and video advertising to reach customers and prospects on the go.

Adding the product availability information layer to the advertising could make the difference in the conversion process.

However, again, if the a retailer doesn’t have a database with accurate inventory levels, customers could lose faith in the whole process and the reputation of the brand, the retailer, and the source that drove them to the brick-and-mortar store in the first place could all be tarnished.

This could force some brands to not include a retailer in the recommendation process.

And, as Chuck Martin points out, brands are the ones with the advertising budgets.

Therefore, not having an accurate inventory management system could cost a retailer more than it had in the past because a brand’s advertising for a particular product would point customers to other brick-and-mortar retail stores.

Final Thoughts

Technological advancements in retail inventory management systems are going to impact sales in many different ways.

As I pointed out in the last post, the use of RFID technology can help give retailers the confidence to sell items online that it would have had to markdown and sell at a drastically discounted price. It will also save the retailer time and money by making other processes more efficient, including the buy online, pick up in-store option.

Furthermore, as I elaborated on in this post, the increased accuracy that RFID technology brings to a retailer’s inventory management system will be useful in helping brands and retailers connect consumers with the products that best meet their needs by adding product availability information to the brand’s online and mobile marketing campaigns.

If a retailer can’t provide accurate inventory data that can be used in a brand’s digital marketing efforts, there is a good chance that the retail store would not be listed as a possible location to buy a particular product. This will hurt the retailer’s bottom line.

However, when a retailer can provide accurate inventory data that brands can use in their marketing efforts, it will help the brand link the customer to the product.

And, as Chuck Martin points out, “…that’s sort of the holy grail of this whole thing.”

Note: The Mobile Commerce Minute Episode #346 with Rob Woodbridge and Chuck Martin is embedded in this post. For additional information, visit the UNTETHER.tv website. 

 

Photo credits: Garry Knight and T van Herwaarden on Flickr.

Video credit: MCM #346: Is inventory the new location for retailers? on UNTETHER.tv

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Macy’s “Pick to the Last Unit” Program Is Great News for Mobile Marketing

Photo credit: advencap on Flickr.Earlier this month, Tyco Retail Solutions announced that its TrueVUE RFID Inventory Visibility platform is being used to power Macy’s “Pick to the Last Unit” (P2LU) program for omni-channel fulfillment of customer purchases. While this is great news for Macy’s, the brands it sells, and its customers, it might be even better news for the future of mobile marketing.

By utilizing item-level RFID technology, Macy’s is now confident enough to say that an item is available in its inventory, and is thus able to list the last item of a stock-keeping unit (SKU) for sale online.

This is not only going to allow the retailer to sell more products online, it should save them time and money by making it easier for employees to find the products customers request in the brick-and-mortar store.

It is also bringing us one step closer to the future of mobile marketing.

For example, if more retailers start to use this type of technology, it could allow them to efficiently and effectively offer the buy online, pick up in-store option to customers via the mobile web or a proprietary smartphone app. (For some retailers, the buy online, pick up in-store option would now be feasible. For others, the turn-around time could be significantly decreased.)

Having the ability to confidently let customers know that a particular item is available at a particular location also opens up many additional marketing opportunities for the retailer and the brands it sells.

What Exactly Is Macy’s P2LU?

According to the article on the Tyco Retail Solutions website, “As a customer-centric retailer, Macy’s omni-channel strategies are focused on providing a smart combination of iconic brands and assortments for customers to shop anywhere, anytime, and anyhow they choose. The retailer realized that brick-and-mortar stores could be their greatest asset for single unit orders, essentially functioning as robust and flexible “warehouses” to utilize the full assortment of owned inventory. With item-level RFID, Macy’s can focus on product assortment and service while using existing inventory to address fulfillment demands. Changes to inventory management supporting this omni-channel strategy have enabled Macy’s to reduce $1 billion of inventory from its stores.”

“Furthering that effort, Macy’s launched its unique P2LU program for omni-channel fulfillment,” the article continues. “P2LU attempts to ensure that the last unit of an item in any store is made available for sale and easily located for order fulfillment. Typically, retailers don’t expose the last item of a SKU to online purchasing because they don’t have enough confidence in their inventory accuracy or ability to find the item to make every unit available for customer orders.”

This point is really important to the future of mobile marketing.

As the article explains, “Macy’s now has confidence to fulfill customer demand even if only one of an item is left in stock.”

For additional details, you might want to check out an article written by Claire Swedberg that was posted on the RFID Journal website. It has additional insight as to how Macy’s P2LU program will help the retailer improve its bottom line.

Photo credit: Judit Klein on Flickr.What Item-Level RFID Can Do for Marketers

Being able to tell a customer that an item is available for purchase at a particular brick-and-mortar store is huge.

As already mentioned, it gives the retailer the ability to secure additional online orders by giving customers the option to buy online, even when there is only one item left in the retailer’s inventory.

Retailers would also be able to tell customers if a specific item is available for purchase at a specific location by making the inventory searchable on the retailer’s website.

A few retailers have been doing this already.

In his 2011 book, “The Third Screen: Marketing to Your Customers in a World Gone Mobile,” Chuck Martin points out that Steve Madden’s website has given customers the ability to check for item availability in its brick-and-mortar stores by geolocation for a few years now. (Note: From the information in the book, it is unclear whether or not Steve Madden is using item-level RFID to accomplish this. Given the fact that the retailer primarily sells shoes, some other process might be in place.)

However, other retailers couldn’t offer this option because it just wasn’t economically or logistically feasible. Item-level RFID technology has the ability to change that.

It could also help secure additional sales as more customers shop via their mobile devices.

Offering customers the option to search the mobile web or use a smartphone app to find a particular product in a nearby brick-and-mortar store can possibly be the deciding factor in making a sale.

Being able to target digital advertising to customers based on their need and location and then being able to tell them that the item that they are looking for is actually available for purchase at a nearby store is a potential game-changer.

And this is just the tip of the iceberg.

Final Thoughts

As time goes on, innovative marketers will find additional ways to incorporate the ability to check for particular items in a brick-and-mortar store’s inventory in ways that we haven’t even thought of yet.

And, all this is made possible by using item-level RFID technology.

The fact that a major retailer like Macy’s is testing this technology is paving the way for other retailers in the future.

As the cost of this type of technology continues to decrease, other retailers will no doubt follow Macy’s lead.

As mentioned earlier, while this is great news for the retailer, the brands it sells, and its customers, it might be even better news for the future of mobile marketing.

Photo credits: advencap and Judit Klein on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Why Sales and Customer Service Staff Should Be Trained in Marketing

Wonderlane on Flickr.Marketers and management know the effect that marketing has on the bottom line.

However, if the sales and customer service staff are not trained in marketing, the business could be missing out on opportunities to increase sales, now and in the future.

The Importance of a Strong Email List

A strong email list is very important to the bottom line.

Marketers know this.

In fact, as a recent eMarketer article points out, a study conducted by Ascend2 in January of 2015 found that email list growth remains a top focus for many marketers.

However, the same study found that 43% of the surveyed marketers said that list growth expertise was an obstacle to email list growth. A similar percentage (39%) said that problems forming an effective strategy hindered the growth of their email marketing list.

The study also examined which tactics marketers thought were most effective and which ones were most difficult for marketers who are looking to grow their email marketing lists.

It is interesting to note that only 11% said that getting customers to opt-in to receive emails while talking to the call center or via in-store capture was the most effective tactic for list growth.

Furthermore, about one in five surveyed marketers said that getting customers to opt-in while talking to the call-center or via in-store capture was the most difficult email list growth tactic.

There are many reasons why call center or in-store capture might be a difficult way to get many customers to opt-in to receive marketing emails.

However, part of the problem here might be the fact that while marketers and management know the value of the email list, sales and customer service staff are not always trained to know the positive effect that each email opt-in has on the business’s bottom line.

Mobile Marketing

Mobile marketing is already very important to the success of many businesses today. And, it will only play a larger role in the future.

Therefore, it is important that marketers and management continually look for ways to meet the needs of customers who are using mobile devices in many different settings.

Keep in mind, there are a lot of ways that customers can interact with your business via a mobile phone, including SMS, MMS, QR Codes, the mobile web, and proprietary mobile apps. The business might also partner with third party apps to help drive sales.

If customer service and sales staff are not trained on the latest ways mobile phones are being used to increase sales, the business will be missing out on an opportunity to educate the customer and possibly get an opt-in.

Furthermore, as I pointed out in a post last year, having sales and customer service employees who are not trained properly in the different ways that customers are interacting with the business via a mobile device can lead to frustration and delays in transaction time, which can lead to decreased customer satisfaction and fewer sales.

Some Possible Remedies

The most important thing is to provide proper training to your sales and customer service employees.

This will allow them to provide knowledgeable answers to questions about your mobile and email marketing campaigns. It will also give them the knowledge needed to “sell” customers on the value of downloading your mobile app or opting in to your email or SMS marketing campaigns.

Keep in mind, the hard sell is not needed and may end up backfiring.

More subtle techniques such as educating and showing customers all the ways that they can save money might be better.

For example, if the business offers discounts or coupons on their proprietary mobile app, have staff mention it to customers and educate them about how to use the app, if needed. If the brand is partnering with third-party apps, suggesting that customers use them might also be a good idea.

Furthermore, some stores offer discounts when customers opt-in to receive marketing emails at the cash register. This is something that your business might want to consider.

Final Thoughts

Marketers are trying to reach their customers in some very innovative ways in order to provide them with value that will lead to a sale.

Sales and customer service staff have a great opportunity to educate customers about the value that these marketing campaigns can provide.

However, this is only possible if sales and customer service staff are properly trained on the different ways that your business is marketing its products and services to customers and prospects.

Photo credit: Wonderlane on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Narcissism and the Secret Sale: Using Specialness, Secrets, and Exclusive Offers to Increase Retail Sales

Photo credit: thekirbster on Flickr.

In her book, “Decoding the New Consumer Mind,” Dr. Kit Yarrow explains that there are increased levels of narcissistic thought and behavior among consumers in modern society.

Savvy retailers that know this can use this knowledge to their advantage in order to increase sales in their stores by providing exclusive offers that make their customers feel special and appreciated.

We All Have Narcissistic Qualities

“Narcissism is a personality style with powerful emotional components that drive interactions and purchasing needs,” writes Dr. Yarrow in her book. “Most people are not narcissists in a clinical sense of the word, but everyone has some narcissistic qualities. That is, we all exhibit some degree of superficiality, self-focus, a sense of invisibility, emphasis on the individual rather than the group, and high expectations of individual specialness.”

According to Dr. Yarrow, “Narcissism activates particular consumer needs to feel special and appreciated. These are obvious needs that are familiar to marketers. But more subtle factors come into play when we operate out of narcissism: most notably anger and competitiveness. Marketers need to understand the real roots of narcissism both because it’s on the rise and because it activates some of our deepest, darkest emotions. Understanding narcissism means better understanding what consumers want and need.”

Retail and the Narcissistic Consumer

Dr. Yarrow points out that given the fact that narcissism exists in all of us to some extent, marketers would be wise to harness the allure of specialness, exclusivity, secrets, and social rankings.

CatnipExamples given in the book include the “secret” menu at the fast-food restaurant In-N-Out Burger, early access to sales for department store credit card holders, and exclusive coveted offerings for Facebook fans, special consumers, and Twitter followers.

Dr. Yarrow also suggests that by intentionally leaving sale price items unmarked, a retail store could increase sales for some high-priced items.

This “secret sale” that associates let customers know about can make customers think that they are getting special treatment.

In my opinion, this gives the sales associate a chance to create trust with the customer that could also increase sales in the future. There is also an opportunity for the retail store to use mobile technology to deliver value to the customer if the information is delivered via the store’s mobile app.

As Dr. Yarrow points out, secrets are exciting and create a bond between the shopper and the store. She also points out that this tactic works for all consumers, not just the more narcissistic shopper.

Final Thoughts

Knowing what motivates consumers to take action can help businesses make better decisions and create situations that increase sales.

As this post explains, the rise of narcissism in society has made it more important for brands and retailers to create experiences that make the customer feel like he or she is getting something that other customers are not aware of.

This can help the business reach short-term sales goals. It can also lead to future sales by strengthening the bond between the customer and the business.

Photo credit: thekirbster on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Is SMS Marketing Still Effective? The Answer Is YES!

Photo credit: Patrik Nygren on Flickr.In March of 2015, an eMarketer article asked, “Are we watching the death of SMS?”

The author’s case is based on the fact that while the total number of SMS messages worldwide is projected to decrease in the near future, the total number of messages in over-the-top (OTT) mobile-messaging services such as WeChat is projected to skyrocket.

In the past, other experts have also suggested that SMS has peaked and will decrease in value as a marketing vehicle as time goes on.

However, others have made a case that the shear increase in messaging volume does not mean that consumers are getting more value from OTT mobile-messaging services than from SMS.

In fact, Michael Becker, Co-Founder and Managing Partner at mCordis, makes the case that consumers may be more concise in getting their point across when using SMS. He also points out that SMS has no fragmentation, it has reach, it can be used for a wide variety of purposes, and marketers can control the timing and content of interactions when they get their customers to opt-in to receive SMS messages from the business.

Jeff Hasen, founder and president of the mobile consultancy Gotta Mobilize, is also an advocate of SMS marketing.

In a Mobile Commerce Daily article, Mr. Hasen is quoted as saying, “The most savvy marketers have decided this is a quality game and not a quantity game.”

The article goes on to point out that SMS is proven to drive business results.

The article also points to the fact that the average texter is older than 40 years old and 80 percent of consumers who have a mobile phone text on a regular basis.

Furthermore, one of the most interesting stats out there comes from the recently released Modern Marketing Essentials Guide to Mobile Marketing. It states that, “90% of SMS messages are opened and read within the first 90 seconds of receipt.”

The Modern Marketing Essentials Guide to Mobile Marketing also states, “In recent years, mobile SMS marketing has pushed forward to become one of the most desirable forms of marketing available. The number of people with cell phones capable of texting has grown rapidly in the past few years and so it makes sense that texting is swiftly becoming the best way to reach a customer. The low cost and flexibility make it great for businesses, while its ability to deliver offers instantly leaves customers wanting more.”

Research sponsored by SAP confirms these findings.

Their report, titled “The SMS Advantage: How enterprises can leverage the power of SMS,” is based on a survey that looks at how consumers respond to mobile engagement and explores which mobile technologies are most effective.

According to this report, “Three-quarters of respondents state that SMS serves to improve the overall brand experience when communicating with businesses.”

The report also finds that “64% of consumers believe that businesses should use SMS to interact with customers more often than they do currently.”

Final Thoughts

There are many ways that consumers can communicate today.

While the projected volume of SMS messages is not has high as the projections for OTT mobile-messaging services, it doesn’t mean that SMS has lost its value.

In fact, SMS traffic is still at near record highs and most likely will continue to be used on a regular basis by many consumers in the years to come.

Furthermore, not only are many consumers still using it, but many think of it as a great way for businesses to communicate with them.

If businesses deliver quality and offer value to customers via text messages, SMS will continue to drive business results, now and in the foreseeable future.

Photo credit: Patrik Nygren on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Overcoming Choice Overload in Brick-and-Mortar Stores

Photo credit: Miwok on Flickr on Flickr.

In the classic book, “The Long Tail: Why the Future of Business Is Selling Less of More,” Chris Anderson makes the case that offering customers more choice will lead to more sales, at least in an online environment.

However, there have been studies that show that more choices can potentially lead to fewer sales in brick-and-mortar stores, because customers get too overwhelmed or get hung up on weighing opportunity cost.

This is often referred to as “choice overload.”

Recent advancements in technology, including the invention of the smartphone, have created a possible solution to this problem.

Choice Has You in a Jam

One of the most famous studies that demonstrated that offering too many options can actually decrease sales was conducted by Dr. Sheena Iyengar, a professor of business at Columbia University. In the study, Dr. Iyengar and her research assistants set up a booth that offered samples of Wilkin & Sons jams in a California gourmet market.

As an article in the New York Times points out, “Every few hours, they switched from offering a selection of 24 jams to a group of six jams. On average, customers tasted two jams, regardless of the size of the assortment, and each one received a coupon good for $1 off one Wilkin & Sons jam.”

“Here’s the interesting part. Sixty percent of customers were drawn to the large assortment, while only 40 percent stopped by the small one,” the article states. “But 30 percent of the people who had sampled from the small assortment decided to buy jam, while only 3 percent of those confronted with the two dozen jams purchased a jar.”

The results of this study and others like it have lead experts to suggest limiting the number of choices you offer customers is the right thing to do.

However, Chris Anderson offers different advice in his book.

The Long Tail

Before we go any further, I need to first briefly explain the concept of the “Long Tail” to those of you who haven’t read Chris Anderson’s book.

In the book, Anderson points out that, in the past, retailers were only able to offer the products that they thought would be most successful, largely due to the high costs associated with offering a variety of products to their customers. In other words, they were making the choice for their customers by offering fewer options to them.

However, as the costs associated with creating the products decreased, the costs of distribution decreased, and the increased ability to connect supply with demand were created, the opportunity for businesses to offer more options to customers became not only economically feasible, but it made some businesses flourish.

The invention of the Internet had a lot to do with all three of these forces.

In his book, Anderson uses Amazon.com as one of the main examples of a long-tail retailer that has thrived as a result of these changes.

Choice Overload

So, how does this help traditional brick-and-mortar retailers overcome the problem of choice overload?

The key to that may be in the third force mentioned above (i.e., connecting supply with demand.)

As Anderson points out, one of the ways that makes online retailers so successful is their ability to offer personalized recommendations to customers in the form of online reviews, product rankings, lists of items frequently purchased together, price and product comparisons, and best-seller lists. Google searches, blog posts, social networking sites, and other online word-of-mouth recommendations also play a big role.

In the book, Anderson points out, “The problem with the jam experiment is that it was disordered; all the jams were shown simultaneously and to guide them the customers had only their existing knowledge of jam or whatever was written on the labels. That’s the problem on the supermarket shelf, too. All you have to go on is your domain expertise, whatever brand information has been lodged in your brain by experience or advertising, and the market messages of the packaging and shelf placement.”

“Most of the information that online retailers use to order their massive variety and make choice easy—popularity, comparative prices, reviews—is available to supermarket owners, too,” Anderson continues. “But they typically don’t share it with you, the customer. That’s because there’s no good way to do it, short of a mini-screen on each shelf. The paradox of choice is simply an artifact of the limitations of the physical world, where the information necessary to make an informed choice is lost.”

The Smartphone as a Possible Solution

Keep in mind, Chris Anderson wrote “The Long Tail” in 2006. And, as forward thinking as it was, even he wasn’t able to predict the options that would be available to marketers after the iPhone was first released just one year later.

Now the “mini-screen on each shelf” is actually in your customers’ hands.

Every person with a smartphone who walks into a brick-and-mortar store has the ability to access the same information that is available to consumers who are shopping an online retailer.  Now, they too have the ability to compare prices, access reviews, get product information, search the mobile web and more.

The key to success for brick-and-mortar retail stores is to make that information accessible to consumers in the easiest way possible for them.

As Jeff Hasen often points out, choice is important here, too.

This means giving customers the ability to access product information in as many ways possible, including SMS, MMS, QR codes, the mobile web, or any other way that makes it easier for the customer to get the information that will help them decide what product is best suited to meet their needs. And, don’t forget to offer Wi-Fi to your customers, because if they can’t get their smartphones to work in your store, everything else is irrelevant.

Final Thoughts

While retailers still have other factors to take into account, including limited shelf space and other merchandizing considerations, giving customers the information that will help them make a more informed choice could potentially solve the problem of choice overload.

And, in the end, can lead to increased brand loyalty and more sales, now and in the future.

Photo credit: miwok on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Why Proximity Mobile Payments Are Good for Business (Part One)

For a few years now there have been experts recommending that businesses invest in the equipment that allows customers to use their smartphones to make point-of-sale payments for goods and services at restaurants and brick-and-mortar retail stores.

However, given the many potential roadblocks, it is not surprising that many businesses took a wait-and-see approach before making any investments in this type of technology.

That was, until last month.

When Apple announced that the new iPhone 6 would include near-field communication (NFC) and Apple Pay, in my opinion, one of the biggest obstacles to proximity mobile payment adoption was eliminated.

This doesn’t mean that it is a given that proximity mobile payments will be embraced by a majority of consumers right away. But, there are several reasons why now might be the time to make the investment, particularly if the business is located in an urban or suburban area. These reasons include:

The number of smartphones with NFC is increasing.

According to comScore, 174 million people in the U.S. owned smartphones (72 percent mobile market penetration) during the three months ending in August 2014.

What is of particular interest is that at the end of August, 42 percent of the U.S. smartphone subscribers used a device that was made by Apple. That means that at the end of August at least 42 percent of smartphone users in the U.S. couldn’t make NFC enabled proximity mobile payments, even if they wanted to.

Last month’s announcement doesn’t mean that all 42 percent of Apple smartphone users will now have access to NFC technology. It is going to take some time for customers to make the transition to the iPhone 6 or iPhone 6 Plus. However, according to Forbes.com, Apple has sold over 21 million new phones in the first two weeks, 10 million of those in the first three days alone. And, with the holiday season just around the corner, that number is bound to increase sharply by the end of the year.

When combined with the fact that many of the other smartphone manufacturers offer some NFC-enabled smartphones, the percentage of consumers who will be able to take advantage of proximity mobile payment options is much higher today than it was not too long ago, and that percentage will only continue to increase.

The number of mobile wallet options is increasing.

There are several Android mobile wallets (e.g., Softcard, Google Wallet, etc.) out there. Now that Apple has introduced Apple Pay, consumers will have more opportunities than ever to take advantage of proximity mobile payments when a restaurant or retailer makes the option available to them.

Major brands are working together to increase awareness.

As usual, Apple has done a great job introducing Apple Pay to consumers.

But, they are not the only brand trying to create awareness of proximity mobile payments.

In a recent article on eMarketer.com, Matthew de Ganon, Senior Vice President, Product and Commerce at Softcard, reports that Softcard currently has about 20,000 activations per day. This success is due in part to the fact that Softcard was created under a partnership with AT&T, Verizon Wireless and T-Mobile.

“We’ve had great success with consumer education through our partner stores, the carriers: Verizon, AT&T and T-Mobile,” states Mr. de Ganon. “They educate consumers on the mobile wallet, what it means and how they can tap to pay.”

“A majority of consumers assume at some point they’re going to have a mobile wallet that will allow them to pay for goods and services, but only a very small percentage actually knew that it was already here,” Mr. de Ganon continues.

More consumers are moving to 4G smartphones.

Having access to high speed wireless data is very important to the adoption of proximity mobile payments.

If it takes too long for a transaction to process, there is a good chance that the customer will abandon the transaction or choose an alternative payment option. If this happens with frequency, the consumer will most likely lose interest in using proximity mobile payments altogether. That is why having access to 4G is going to be crucial to the success of this emerging technology.

The good news is that according to Ovum research, 4G connections in North America are quickly rising.

Citing the Ovum research data, an article on cellular-news.com reports, “With 127 million LTE connections, of which 15 million LTE connections were added in the second quarter alone, North America leads the world’s regions in the number of connections, market share and penetration of LTE, with a 33 percent market share of all 391 million mobile connections.”

Again, with the holiday season right around the corner, this number should increase even higher by the end of the year.

Final Thoughts

As shown, there are many factors that are coming together to make proximity mobile payments a viable and smart business decision.

Just the fact that Apple has entered the market is a great signal that now is the time to look into this technology. As Lance Whitney points out in a February 2014 article on CNET.com about NFC-enabled cell phones, “…Apple typically likes all of the pieces to be in place before it dives into a burgeoning technology.”

Still not convinced? In a future post I will explore how offering proximity mobile payments can benefit your business beyond the obvious convenience of offering an additional payment option.

Photo credit: Omar Jordan Fawahl on Flickr on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Copyright © chadjthiele.com
Every interaction with a consumer IS marketing.

Built on Notes Blog Core
Powered by WordPress