How Retailers Should Think About 2D Codes
Shopping is an interactive sport. While smartphone wielding consumers are the main players of the sport, retailers are the ones who set the field of engagement, both online and in the physical world. A variety of methods, tools and technologies exist for retailers to engage consumers, but few are as mature and easy to utilize as 2D codes.
The Rise of 2D Codes
2D codes are two dimensional (hence the name “2D”) images encoded with information. The information can be decoded with a camera-driven scanning application, which will perform a variety of functions including displaying texts, linking to a specific URL, or linking to video content. 2D codes are used for a variety of industrial uses, but 3 key types are used for consumer-facing uses: Quick Response Codes (QR Codes), Microsoft Tags (MS Tags, aka High Capacity Color Barcode) and barcodes. There are different reasons why retailers would use one type over another.
QR Codes and MS Tags in particular have risen in adoption among consumers, especially those that use smartphones. Smartphones provide consumers with the hardware (including the camera) and a platform for the software applications (i.e. ScanLife, ShopSavvy, MS Tag, others), making 2D codes easily accessible and practical for shopping like never before. Forrester estimates that adoption of 2D code reading applications have risen to 15% in 2011 among smartphone shoppers and is expected to continue to rise in the future. Indeed, it’s difficult today to walk down the street or into a store or open a newspaper or magazine without finding a 2D begging to be scanned. 
Uses of 2D Codes
2D codes are applicable throughout each stage of brand engagement with the consumer, which make them a great tool for retailers to create a more interactive shopping experience and connect the online and physical worlds. If applied properly, the benefits retailers can reap include greater brand recognition, greater online and in-store sales, an increase in average order value, greater customer satisfaction and repeat purchases, as well as reduced return rates and support costs. To realize these benefits, retailer should focus the application of 2D codes around four main uses, namely to:
1. Create brand awareness with consumers. 2D codes are a great tool for marketers to capture the attention of shoppers—particularly those on the go with mobile devices and those inundated with other information sources– to create market awareness and craft brand perception. Barney’s New York used QR codes as part of a “Back Stage Campaign” in early 2011 where they displayed ads in the New York Times and online that contained QR codes which linked to online, content-rich “backstage” stories of the products. This energized the approach to traditional advertising and helped drive brand awareness among consumers who may have otherwise not been reached.
2. Share information to educate consumers. 2D codes can guide potential consumers towards purchase by providing them information about products, services, events, and more. Columbia Sportswear produces world-class outdoor apparel for consumers who are interested in learning about how the product was produced, what materials were used to produce it, what conditions the products are meant to be used in and what additional features the product contains that may not be readily apparent. They use QR codes as part of in-store signage and hangtags on products in its company stores, as well as other retailers who distribute Columbia gear, to provide consumers with more information about products through video and other content while standing in the store aisle. Electronic Arts, a leading producer of video games, provides its distributors with in-store digital signage that contain QR codes for content samples of their products. For their game Dragon Age II, shoppers could scan the QR code and get a video demo of the game.
3. Drive consumers to purchase. 2D codes give retailers a unique opportunity to convert sales, especially when they help solve specific problems consumers face, such as cutting down on checkout time or offering immediate rewards. In addition to using QR codes to share information about how their coffee beans were produced, Ethical Beans Roastery and Ethical Bean Xpress Café give consumers the ability to scan QR codes on their products, allowing shoppers to skip waiting in lines and pick up the orders at checkout. Axis Salon, a trendy hair salon in Washington DC, uses QR codes in its storefront that link to videos featuring beauty icons and coupons for discount services—all helping to drive consumers to purchase.
4. Foster customer loyalty post-purchase. After the sale, 2D codes can drive foster customer satisfaction by providing extra services, support and personalized offers. Nike uses QR codes in its stores to allow consumers to “Like” a product on Facebook, enabling consumers to share their affinity for a brand through recommendations on Facebook. A logical extension to this concept would be to provide rewards (loyalty points, mobile coupons, immediate discounts, etc.) for shoppers who provide such feedback. Ikea entertained the idea of using QR codes to provide video instructions on how to assemble products, such as furniture, making the post-purchase process a more enjoyable one. Similarly, QR codes can serve as an easy way to locate product manuals online or warranty information, which could be a real benefit to consumers who often do not keep such information that come with the products, and need to locate them immediately when something goes wrong. This would help cut down on support costs for retailers, in addition to fostering customer loyalty post-purchase.
The Future of 2D Codes
While 2D codes have reached a level of maturity where they are an effective tool for retailers today, they still have a number of challenges to overcome– standardization of code technology (open QR codes v proprietary MS Tags), reader availability, and deeper level consumer awareness beyond where it’s at today– optimally reaching the same level of consumer awareness that UPC barcodes enjoy today. They also face long-term obsolescence from Near Field Communication (NFC), but that is a ways off in the future given NFC nascent state at the present. Bottom line is that 2D codes do not require a lot of time or money to implement and can have large potential returns, so retailers should experiment with them while the cost of learning is low.
5 Keys To Building the Store of the Future
The store of the future will allow consumers to shop how they want to shop: when they want, where they want, and how they want in a relevant, personalized way. Today retailers cannot deliver on this vision due to legacy retail systems that are not nimble enough to keep up with the speed at which consumer technologies are evolving. The store of the future will eliminate this gap and achieve the “multichannel nirvana” long sought by retailers.
To get there, retailers will need to do five things:
1. Allow Relevant and Real-Time to Become the Norm
Personalization is critical to the future of the store since shoppers will increasingly come to expect retailers to offer them what they want, not what the retailer wants. However, for the shopping experience to be truly personalized, it needs to be real-time and it needs to be relevant. Specifically, real time and relevant information about products, pricing, transaction history, inventory availability and status, loyalty program info, and social graph and profile data must become the norm for both shoppers and in-store associates. Real time means serving up data that is up to the second—not data that is a day old or even a few minutes old. Relevant means providing information that is intelligently filtered and served up in the context of where the shopper is in the cycle of interacting with the retailer’s brand.
2. Eliminate Channel Silos and Build on a Unified Technology Stack
Knocking down the walls that exist across different channels, particularly the one that exists between the two main systems in the retail ecosystem that drive commerce operations—legacy in-store systems and ecommerce—will be critical in building the store of the future. Organizational challenges are also a major obstacle, but are largely symptomatic of the technology divide. The store of the future will operate with truly integrated channels as well as be built on a unified technology stack, bringing together backend and consumer-facing systems. The ecommerce platform, with its natural connection to the online consumer who is increasingly shopping in physical stores, should become a natural platform for building this unified commerce management vision.
3. Build Intelligence into the System
The store of the future will be nimble and intelligent—able to adapt to shopper behavior with precision and speed. Retailers will need to build this concept into their retail operations, allowing for each channel to be optimized based on what the shopper is doing at the moment and expected to do in the future. Brick and mortar stores will be able to eliminate products that are not selling and replace them with those that are selling well or expected to sell well based on store intelligence— at the individual store level, and across stores. They will also be able to allocate inventory smartly, making sure shelves are filled and customers are happy, as well as conduct promotions based on the new real-time and relevant norm. Online channels will be as equally intelligent and nimble, fulfilling shopper needs “in channel” as well as tying the online world to the physical world in the store.
4. Revolutionize the Consumer Experience in the Store
The key enabler of the store of the future is the engaging consumer experiences that retailers can offer in the store. Retailers not only need to ensure they are building engaging consumer experiences, but are revolutionizing the store with engaging consumer experiences– the new consumer expects it. Every retailer will have a mobile-optimized website, which will be an essential buying tool of shoppers. Retailers will need to find ways to utilize this key shopping tool effectively, such as for consumer-driven comparison shopping, experiential shopping such as the use of augmented reality, quicker checkout– including self-checkout—and for providing location based offers and better customer service. Retailers will also need to provide devices in the store, such as tablet kiosks, mobile point of sale (mPOS) devices, tablet clienteling and digital signage. These devices should solve real shopper challenges in innovative new ways, such as avoiding stock-outs by offering an “endless aisle” of in-store and online inventory, cutting down on the amount of time shoppers have to wait for in-store help by a sales associate or to check out, processing returns and refunds no matter where or how the product was originally purchased and providing more intimate and personal one-on-one customer service between sales associate and the shopper.
5. Manage the Consumer Experience Across Digital and In-Person Touch Points
The revolutionized consumer experience in the store will require brand consistency across digital and in-person touch points for the store of the future to succeed. With real-time, relevant data and integrated channels on unified technology stack, management of the digital consumer experience will become more seamless and realistic. The in-store digital touch points– the POS system, sales associate mobile devices, and in-store consumer devices– should serve up consistent experiences to those found on the brand’s online sites, providing better customer service and reinforcing brand loyalty. The in-person touch points or shopping experience should be equally as consistent and powerful. Sales associates should be trained on the latest digital consumer experiences, ensuring they understand the shopper’s point of view, and understand how it integrates with store operations and store policies. The store of future will constantly manage the integrated consumer experience across digital and in-store touch points.
The Future is Now
The store of the future is not years away. The gap between retailer system readiness and consumer expectation are already being addressed by retailers like Apple, Nordstrom, House of Fraser, Tesco, Barnes and Nobles, and others, who are demonstrating today what the store of the future will look like. These retailers are focused on store systems that optimize existing brick and mortar stores, but also extend the store beyond its walls, allowing consumers to shop how they want to shop: when they want, where they want, how they want in a relevant, personalized way.
Note: This article originally appeared in Website Magazine in December 2011.
The world of multichannel commerce is a fast-paced, continually changing environment. Mobile and social in particular are expanding the number of ways you can reach consumers. Keeping the experience consistent and relevant across these touchpoints is your biggest challenge. Figuring out how to approach it can be an overwhelming task. Here are five keys to make it less overwhelming and help you navigate your way through multichannel commerce:
1. Put your shopper hat on. Shoppers don’t think in terms of “channels” and will seamlessly move from website to smartphone native app to iPad kiosk to your fixed point of sale terminal in-store, and expect you to know everything across your channels and have enough information about them to meet their needs in a timely and relevant way. Take some time to really understand your brands unique shopping experience. Put your shopper hat on, go into your stores, get online and shop like your shoppers would shop. Take notes on the good, the bad and ugly. Repeat frequently.
2. Understand what you mean by multichannel. Having a clear understanding of what you mean when you say “multichannel” is important. Define multichannel in terms of your specific business challenges so that you can develop solutions to those challenges. Having put your shopper hat on (see #1 above) will help greatly. For example, you may define multichannel as an ability to get a single view of the shopper across your website, in-store devices and social networks. It may also mean an ability to stop lost sales due to stock outs online and in-store. It could be keeping pricing and promotions consistent across different touchpoints. List them out. This is your definition of multichannel. It may or may not be same as someone else’s or be consistent with the latest term coined in the market. What’s important is that you know how to articulate what the challenges are to your business so that you can develop solutions.
3. Define what’s getting in the way of achieving multichannel nirvana. Each challenge you’ve listed in your definition of multichannel has a cause. Define what those are. For example, your inability to get a single view of the customer may be caused by lack of quality customer data. Or maybe it’s an inability to “mash up” and filter relevant customer data across your CRM, POS and ecommerce system. And/or it could be organizational, such as your in-store guys not talking to your ecommerce guys. Whatever they may be, define what the causes are that are getting in the way of achieving your multichannel nirvana.
4. Map out your pathway to success. Solving the “multichannel challenge” is not easy, but it’s not impossible. It will take time, resources and hard work. Once you understand the causes, take time to map out possible solutions. For example, achieving a single view of the customer may require you to start collecting more quality data on the customer, followed by mapping customer data feeds from your CRM, POS and ecommerce system to a common data warehouse, filtering that data and then serving it up to power the different touchpoints between your sales associates and consumers. There may be other solutions as well. Know what they are.
5. Don’t try to solve it all at once. Experiment & iterate. Some of the solutions will be “quick hits”, but most will take some time to address. The key is striking a balance between moving at the pace your shoppers expect you to move at and what’s realistic within the organizational constraints you face (i.e. budget, people, technology, etc.). A good way to do so is to experiment with some possible solutions, learn from them, and apply those learnings to improve your process. For example, mobile devices have revolutionized what’s possible in the store. New in-store apps that can address your multichannel challenges (such as getting a single view of the customer, etc.) are in the market today.
Is Your Retail Blog Ready for Social Commerce?
Social commerce includes a variety of tools and platforms to help drive a more personalized, interactive shopping experience for consumers. The lion’s share of the attention today is on social networks- particularly Facebook social commerce- but other social tools exist that can engage and ultimately help convert and retain customers. One of these includes blogging, which most retailers have incorporated as part of their web strategy in some way. Sustaining a blogging effort, including keeping it interactive for the shopper and tying it to the brand’s various touchpoints with consumers, can be challenging. However, if done right, it could help improve customer engagement as well as online revenue.
Online retailers should consider making blogging more social commerce ready in different ways:
Shoppable images and links
Blog content often mentions a product or multiple products, linking directly to the product details page on the commerce site or another page with rich information about the product. Making the product shoppable directly on the blog entry, whether it be a blog entry, a comment to a blog post or an image embedded in a post, will allow the product to be more easily shopped since the shopper would not have to leave the blog site itself.
We’ve prototyped an easy way for retailers to make blog content shoppable directly in the blog post itself by calling on product data, such as product images, product details, and pricing information within the Demandware ecommerce platform to enable a “hover over” on top of the product name or an image of the product:
Blogging SEO Boost
Blogging can assist with search engine optimization (SEO) by creating more crawlable content for search engines to index and serve up on results pages. However, the metadata associated with the product must be embedded as part of the blog page itself rather than being pulled in dynamically in real-time.
We’ve also prototyped a way for the product information to be injected into the page automatically when the product is tagged along with links using information from the ecommerce platform.
Integrating blogging “on-site” or on the ecommerce site directly also makes sense. A couple of ways this could be done include:
Sharing to blog
Social sharing includes not only sharing to Facebook and Twitter, but also to blogs. Making it easier for consumers to one-click publish from product detail pages to their blogging platform helps to encourage them to blog about your product or brand. Widgets such as Share This can be embedded on web pages and allow for easy sharing to different blogging platforms, such as WordPress, Blogger, Tumblr and others.
Blog reviews
User-generated content (UGC) is a powerful way to assist shoppers in understanding more about products, as well as increase the likeliehood of purchase. Just as ratings and reviews, number of Facebook Likes, Tweets, and other UGC is displayed on product detail pages, blog posts themselves that pertain to product could likewise be displayed. A link to the blog post, along with the blog title and even a description could be displayed:
Blogging + Mobile
Shoppers use social capabilities through mobile devices at a very high rate, so making sure the blogging efforts are ready for mobile devices is key. For instance, making sure your retail blog is mobile-optimized (most blogging platforms like WordPress supply templates that are already mobile web optimized), as well as can be shopped easily from the mobile device are things to keep in mind. Likewise, allow for mobile-optimized blog reviews and sharing capabilities on your mobile website in addition to ratings & reviews and social sharing to Facebook, Twitter and other social networks that you may already have enabled on mobile.
5 Technologies That Will Change How Consumers Shop
The pace of innovation and change within multichannel retail is breathtaking. At the same time, it can also be a challenge to understand which technologies will have the most impact with consumers and should be considered by retailers as part of a multichannel strategy. 
While there are many technologies that will change how consumers shop, five stand out:
1. Mobile couponing. Mobile couponing has been around for some time, but has seen limited effectiveness due to difficulty in making them relevant, personalized, and timely as well as a lack of consumer willingness to adopt them. However, mobile technology has changed what is possible and mobile couponing is now one of the top activities consumers who use mobile devices for shopping planned on doing. Retailers can now deliver coupons to shoppers on mobile devices based on location, past shopping behavior and preferences, moment of need, and that are paperless, making them convenient to redeem.
How to think about it: What will separate retailers who are successful with mobile couponing from those who are not, will be the approach they take to mobile coupons. Specifically, we believe that retailers who will succeed with mobile couponing are those who approach it differently. Consider integrating mobile coupons throughout the core mobile shopping experience, delivering them beyond traditional push approaches like SMS and rather through LBS, 2D codes, NFC as well as integrating mobile coupons through all touch points, including social networks.
2. 2D Codes. 2D codes suddenly seem to be everywhere—from billboards to magazines to in-store displays—mainly because they are a quick and relatively inexpensive way for marketers to connect the physical world to the online world. They are also effective. Retailers such as Barney’s New York have used QR codes to energize traditional media efforts, while others such as Columbia Sportswear have used QR codes to bring products to life to shoppers in-store.
How to think about it: 2D codes still have a number of challenges to overcome before reaching critical mass. Standardization of code technology (open QR codes v proprietary MS Tags), reader availability, and consumer awareness are the main challenges. They also face long-term obsolescence from NFC (see below), but that is a ways off in the future. 2D codes do not require a lot of time or money to implement and can have large potential returns, so experimenting with them while the cost of learning is low is worth considering.
3. Location based services. Utilizing location based services (LBS) to its fullest potential has eluded retailers mainly due to poor location technologies, cost, user experience, and consumer awareness and adoption. However, that is quickly changing with the emergence of mobile technology as an enabler (i.e. GPS, push technology, app multi-tasking), and the rise of consumer awareness (mainly led by the success of consumer apps such as Foursquare, Gowalla, and SCVNGR) as well as increased consumer willingness to receive location-based offers. Location-based services give retailers a way to take the in-store experience to a much richer, deeper level, which in turn increases brand loyalty and transactions. Examples include: using LBS to provide contextual and relevant offers as consumers are nearby or enter a location, greeting customers when they visit a particular location, informing them of in-store events (the Apple Store app is a great example of this), assisting in locating items (see Tesco’s Finder app), offering rewards for visiting a particular location and providing timely upsell opportunities so customers do not leave empty handed.
How to think about it: LBS is a reality today and will continue to grow in the future, so retailers should consider it part of the multichannel mix. LBS should be thought of in two buckets— third party services (or apps) and what can be provided in the retailer’s mobile shopping app. Third party services, such as Foursquare and Facebook Deals give retailers the opportunity to offer shopping incentives and should be viewed as a channel to reach consumers. Retailers should also seek to build LBS services directly into their own mobile shopping applications Also, looking for ways to integrate third party services into the retailers shopping app (such as ability to check-in on Foursquare directly in the retailers shopping app) represents another opportunity.
4. Augmented reality. We believe that augmented reality (AR) will be a disruptive technology that changes how consumers interact with their environments, being a primary conduit for connecting the digital world and the real world. While AR is in its infancy today, global revenue for augmented reality (AR) is expected to hit $1.5 billion by 2015, much of that coming from leading brands and retailers investing in AR apps and services. We’ve already seen some early successes with AR technology, such as Converse’s The Sampler mobile app, Ikea’s iPhone app, and Lego’s AR kiosk. Some have even yielded noteworthy results, such as Dabs Acer’s AR ad, where 70% of the users to the site chose the live experience and of those 13% converted—not bad results when compared to a normal low single digit conversion rate of most ecommerce sites.
How to think about it: Most early AR success is on mobile devices since it taps into the unique capabilities of mobile: personalization, context and immediacy. They also solve a practical problem for the shopper. Eventually, AR will propagate more widely to other multichannel touchpoints, including merging with other technologies such as LBS, 2D codes and NFC. Consequently, in the short-term, look for ways to use AR as part of your existing mobile native app while monitoring AR technology and consumer adoption for longer-term opportunities.
5. NFC. Perhaps more than any other emerging technology, near field communications (NFC) has the potential to be the most disruptive and have the biggest impact for retailers. NFC will impact much more than mobile payments. It will link together applications and services across different industries, including mobile commerce, mobile marketing, and mobile customer relationship management. For shopping, consumers will be able use NFC to check-in to locations, acquire and redeem loyalty points and coupons, learn more about products, and use it as a form of payment. However, NFC must overcome some challenges before it’s an every-day reality for consumers: standards must be agreed upon, the NFC ecosystem must be built out (device manufacturers including NFC chips in devices, merchants upgrading POS, financial institutions, network operators and others agreeing upon transaction flow and fees), and consumer awareness must be raised significantly. NFC is already used widely throughout Japan and increasingly in Europe. Device manufacturers will play the biggest role in pushing NFC forward in the US and into more wide scale use globally, along with mobile OS and payment providers, such as Paypal and Google. An early example of this is the Nexus S on Android being the first NFC-compatible device on the market. As more NFC devices ship and mobile payment providers push what is possible at POS in-store, NFC will start to realize its potential to transform how consumers shop.
How to think about it: While NFC has a ways to go before mass adoption, retailers should learn from other technologies, such as 2D codes and mobile point of sale (mPOS), as ways to learn consumer habits and apply those lessons to the NFC when the ecosystem matures. Also, thinking about NFC in terms of consumer interaction before driving transactions will help raise consumer uptake. For example, Google is using NFC-enables smart stickers with Google Places to help consumers learn more about local businesses as well as rate and review their products. Not only are local businesses providing valuable information to the consumer with the Google Places NFC stickers, but they are also helping consumers build trust of NFC technology and are paving the way for consumer trust of NFC for transacting in the future.
Photo credit: Jorge Gonzalez
Many retailers have launched a mobile strategy starting with a mobile optimized website, and for many, the big question is “Now What?”. That is the exact question Craig Shields, VP of eCommerce at Jewlery Television (JTV) and I answered during our live webinar on Thursday, entitled “So You’ve Got a Mobile Commerce Site, Now What?”. I’ve provided a recap of the main points we discussed along with the slides from the session below.
5. Look beyond the smartphone: tablets. Tablets are increasingly becoming adopted by consumers and should be considered a key part of evolving a mobile commerce strategy. JTV has seen a large amount of traffic from the iPad, and has introduced features that would appeal to iPad consumers, and has also placed a tablet specific mobile site and iPad native app as part of their mobile roadmap.With the proliferation and consumer adoption of connected TV devices, including internet TV as part of multichannel strategy makes sense, particularly as internet TV increasingly are designed to interact with other devices such as smartphones and tablets, rather than being perceived as standalone devices like laptops. For JTV, internet TV presents a unique opportunity to interact with their consumers, offering an opportunity to extend shopping directly into the living room. They’ve created a Roku channel, and are considering AppleTV and GoogleTV channels, including possible companion apps and building in ecommerce functionality.
Facebook represents an opportunity for retailers to build brand awareness, increase customer loyalty, improve getting found online, and drive in-store traffic. All of these activities ultimately help drive online revenue, mainly when retailers can successfully aggregate Facebook’s data with consumer data from their ecommerce environment in interesting and compelling ways. Facebook provides tools to help enable this, such as Facebook Connect, which retailers can leverage to make the “onsite” experience a much richer one.
The “on Facebook” experience is also an important one for most brands. Retailers have mainly used fan pages to connect with consumers, incorporating creative ways to drive deeper brand loyalty. Recently, setting up storefronts on Facebook has become another way to engage consumers, and one that potentially could drive additional online revenue.
Approaching a Facebook Store
When deciding whether to build a Facebook Store or not, retailers should consider 6 main factors:
- A Facebook Store should be one part of a larger Facebook strategy, not the end game. Retailers need to think about a larger Facebook strategy, one that will reach consumers both on-Facebook, but more importantly, “off Facebook” or on the retailer’s site. In fact, Facebook itself views storefronts as “one small piece” of the larger, burgeoning opportunity of social commerce. The real opportunity is the integration of Facebook into the ecommerce site. Facebook is also increasingly providing ways for retailers to reach consumers in-store, such as with Facebook Deals, which should also be part of a larger Facebook strategy.
- Integrate the Facebook Store as part of the brand’s main presence on Facebook. For most retailers, a fan page is the main presence in Facebook. Integrate the Store as part of fan page to take advantage of the critical mass of fans and activity that already exist there. Good examples of this are the 1800 Flowers and JC Penny, both of whom have made their Facebook Stores part of their main fan page.
- Apply ecommerce best practices without trying to re-create your ecommerce site entirely in Facebook. Facebook is not an ecommerce platform, so trying to replicate the shopping experience you’ve created on your website (or replace your existing website) should not be an end goal. Nonetheless, the Facebook storefront should be viewed as an extension of your brand, where ecommerce best practices still apply. For example, ensuring details about the product, such as care instructions, and size charts, as well as an ability to select size, color and view dynamic product images all apply in Facebook.
- Use Facebook social data as part of the Facebook Store experience. If you’re building a store in Facebook, why not leverage Facebook social data to make the experience even more compelling? The social data could be part of the shopper’s social graph (to gain greater personalization) or outside of the shopper’s social graph (useful if the shopper’s social graph is not active in that particular Store). An example would include an in-page activity stream of all the Facebook users who have visited that brand’s Facebook Store, revealing info such as what they’ve purchased, put in their cart, liked, commented, etc.. This would enrichen the shopping experience in the Facebook Store and increase the chances they would transact.
- Implementing a Facebook Store does not require a lot of time and resources. Most Facebook Stores can be up and running with little technical knowledge and a short amount of time. Since the cost of implementing a Facebook Store is so low and the revenue potential so immediate, the benefit of doing so outweighs the cost, thus making it a worthwhile investment.
- Be realistic about the amount of online revenue a Facebook Store will bring. View any revenue generated from a Facebook storefront as opportunitistic in the short-term. Setting up a Facebook Store is an unproven concept, so any revenue generated from the effort should be viewed as opportunistic in the short-term. Over time, more consumers may welcome the opportunity to transact through a Facebook Store, but until that time, a Facebook Store is largely a low-cost opportunity for incremental revenue.
Social and mobile will continue to grow in importance for retailers, serving as the main growth engines for ecommerce online sales. According to eMarketer, retail ecommerce online sales as a whole are expected to grow at a cumulative average growth rate (CAGR) of 10.3% between 2009 and 2015:
Most of this growth is expected to be fueled by mobile commerce and social commerce. Social commerce is expected to grow at a 93.4% rate over the same period in the US:
And mobile commerce is expected to grow at at 58.2% rate in the US:
Some other interesting points to draw out from the data:
- While overall online sales in the US is increasing, it’s doing so at a decreasing rate between 2010-15. Mobile and social driven ecommerce sales are doing so at an increasing rate in the same time period– evidence that mobile and social are fueling the overall growth.
- Social commerce will touch about 5% of all ecommerce sales in the US by 2015, while mobile commerce will drive almost 11%. In other words, about 16% of all retail ecommerce will come from mobile and social.
- Mobile commerce sales are growing at breath-taking pace (82.8%) from 2010-2011.
- Social commerce sales are expected to grow two fold in the US between 2011-12.
- Social commerce is driving more online sales internationally than in the US today, but that is expected to change significantly in the next few years.
What it all means for retailers
If you’re a retailer, understanding macro market trends is important for planning your overall ecommerce strategy. Mobile and social commerce are clearly increasing in importance and are something to include as part of your investment strategy, particularly how it drives word of mouth transactions and in-store traffic. However, how much and how to approach investing will be determined by the specific trends within your own segment of ecommerce and to what extent your consumers are using mobile and social as part of how they shop. Take the time to understand these trends and consumer behavior while mapping out your social and mobile commerce strategy.
Creating a More Social Shopping Experience
Shopping is an inherently social activity, with consumers enjoying to share with the world great products they enjoy, deals they’ve found, among other activities. It’s a natural part of human behavior and one of the reasons why we’ve seen the a huge interest in using Facebook as a platform for shopping.
Mobile devices make it even easier to be social while shopping by putting the devices capabilities directly in the hands of consumers and making it easier to do everything from creating videos to sharing experiences to Twitter and Facebook while shopping with mobile devices.
One of the most interesting evolutions in mobile social shopping is barcode or “object scanning”, which uses a mobile device to scan a product’s barcode or an entire object to get more information about the product from your social graph. We’re already seeing consumers using mobile devices to do competitive price comparing, and barcode or object scanning takes it to the next level. While some social shopping applications like Stickybits require a barcode to enable social shopping on a mobile device, others such as Moonstocks leave barcodes behind and scan the entire object. I had an chance to meet the Co-founder and business guy (that’s what his business card said) of Moodstocks, Denis Brule, at SXSW, and he gave me a demo of how it works:
The obvious benefit to Moodstocks is being able to just scan an object without relying on codes, which makes anyobject (in theory at least) become “socially enabled”.
It’s informative to understand what others, especially your own social graph, has to say about a particular product using these apps, but it’s also important to tie in incentives to purchase. Stickybits does a good job of doing this, providing offers, as well as a gaming layer, that leads to greater rewards. Moodstocks is still early on in the process, but has plans to get there.
What It All Means to Retailers
While these type of applications have yet to be adopted in mass, retailers should think about them as an opportunity to extend reach to consumers. Some ideas to do so include:
- Engage in the communities- Spend some time in these applications, particularly engaging community members who comment on your products or even your competitor products. Creating this level of engagement will demonstrate your brand is active and cares about feedback on your product.
- Provide offers within the communities- As the offer-based capabilities of these sites increase, experiment with providing offers. Just like Foursquare and Shopkick in the location-based shopping world, social apps such as these provide an additional channel to reach consumers and drive online and in-store transactions.
- Explore an integration- Most of these type of applications offer open APIs, so the possibility of leveraging the capabilties they offer in your own mobile strategy is possible. For instance, allow consumers to scan objects in your own shopping app to bring up product details pages or perhaps feed into an activity feed of consumers associated with your brand. Another option could be to allow for products to be shared directly from your product detail pages directly into the communities, and allow comments or reviews of the products to push back to your website and mobile app. These are just a few of the ways you could leverage these social shopping apps as a platform.
How have you considered working with social shopping applications?
SXSW 2011: 9 Sessions to Check Out on Mobile
Are you headed to South by Southwest (SXSW)? If so, you’re probably like me, trying to figure out where to spend your time in the mass of activity at the increasingly growing event. Whether you’re a larger retailer or a small online business trying to map out your mobile strategy, there’s lots to check out at the event. There are several sessions and other events on mobile, but here are a few you should check out:
Kiosks, Mobile and the Evolving Retail Experience
A very interesting discussion on how innovations in multichannel– from kiosks to mobile devices to digital vending machines is changing the shopping experience.
Social Shopping-The Future of Selling Stuff Online
Learn how to take advantage of the social web to drive sales, connect with your target community, and build a loyal following.
Mobile Payments: My Smartphone Just Bought My Beer!
This session will focus on how technology and the industry are moving forward to make sure consumers will use their mobile devices for in-store and online purchases.
Inclusive Mobility- Making Mobile Apps Accessible
A session focused on making the mobile web and mobile native apps accessible for all audiences- something online retailers should consider to reach all audiences.
Building Native Apps Across Platforms
Targeted at developers, this session looks at an alternative approach to developing native apps for iPhone and iPad devices.
Designing a Seamless Web to Mobile Experience
This session will examine how companies can design a seamless experience from traditional web to mobile devices, which helps drive mobile commerce.
Social Location Marketing
Location based services are one of the most important emerging trends today for retailers and this session will look at how marketers can use social location marketing effectively as part of their campaigns, including optimizing for mobile.
Interactive Patterns in the Mobile Space
A session dedicated to designing for the tiny space on mobile device screens.
Our Devices: How Smart is Too Smart?
This session will look at how mobile devices are driving consumer behavior and how the user experience is evolving.
If you’re at the event, please be sure to say hi.
