Brands Under Siege:The Rise of SoMoLo ShoppingPresented to the Students at the Fashion Institute of Technology#CommerceInMotion
SOMOLO
What is a
Shopper?
SOCIALMOBILELOCAL
SoMoLo Behaviors and Expectations
+1 DiscussOn Social Sites
CompareProducts
ReviewRead a
________ Shopping Lists
Review
Group DealsShare
A
BFind StoresUse Maps toi About
thisitem
Product InfoInvestigate
Inventory&PricesLook for Nearby
off25% Local
OffersReceive
SOCIAL
SocialGamesShop through
MOBILE LOCAL
Where Are These “SoMoLo” Shoppers?
They’reEverywhere…
Barriers to Entry for New Competitors are Very Low
“Tools of the Trade”The Latest SoMoLo Trends and their Impact on the Store
#CommerceInMotion
9
Smart Devices are Everywhere
50%of Americans now have a
Smartphone*Nielsen
50Bworldwide by 2020
*Cisco
10
(35M and Counting) Tablets Emerge
of tablet owners say they have used their tablet to make a purchase
68%48%
of Smartphone owners
vs.*e-tailing Group
11
Apps, Apps& More Apps
17Bdownloads in 2011
*Forrester
12
Cracking the Code
14M US mobile users scanned a QR code in June 2011*Comscore
6.2%of total mobile
audience
65MAmericans use mobile or social location-based services*Pew Research
55%of Smartphone users
Location, Location, Location
Augmenting Reality
1937photo circa
16
Increasing Traffic
12.2MShopping Reviews
17Bringing The Store to Life
creates “infinite” shelf space
18
The Games People Play
62MUS Internet users play at least one game on a social network monthly
*eMarketer27%of the online
audience
Countless ConversationsSwirl…
…on a Plethora of
Platforms
BRAND
THECONVERSATIONPRISM-Brian Solis & JESS3
BRANDS
Brands AreUnder Siege
m-Commerce: Relentless Growth
2010 2011 2012 2013 2014 2015
U.S. m-Commerce Sales ($US Billion)
$2.9 $5.3 $8.8 $14.0 $21.0 $28.7
58.2% CAGR
Sour
ce: B
arcl
ays C
apita
l
By th
e N
umbe
rs
t-Commerce: Compelling Early Numbers
7xthe average iPad conversion rate is
that of smartphone devices 50%iPad shoppers purchase
more than traditional web usersBy th
e N
umbe
rs
*Shopatron
*Shopatron
Dual owners buy on mobile twiceas often as single owners.“Duals” made >20 mobile purchases in the last year.
s-Commerce: Explosive Growth Looms
2011 2012 2013 2014 2015
U.S. s-Commerce Sales ($US Billion)
$1.0 $3.0 $5.0 $9.0 $14.0
93.4% CAGR
Sour
ce: B
ooz &
Co.
By th
e N
umbe
rs
Daily Deals: Here to Stay
2010 2011 2012 2013 2014 2015
U.S. Daily Deal Revenues($US Billion)
$.87 $1.25 $1.73 $2.34 $3.08
Sour
ce: B
IA/K
else
y
$3.93
35.1% CAGR
By th
e N
umbe
rs
Social Gaming: Already a $1B Business
AdvertisingLead GenVirtual Goods
By th
e N
umbe
rs
$653M $248M
$192M
*eMarketer
2010: $856M2012: $1.32B
2011 Social Gaming Revenues
The Bottom Line? Share of Wallet Will Continue to Shift Online
2010 2011 2012 2013 2014 2015
U.S. Online Retail Forecast($US Billion)
$176 $197 $218 $240 $259
Sour
ce: F
orre
ster
$279By th
e N
umbe
rs
11%12%
13%14%
15%15%
(% of totals exclude grocery)
The International LandscapeA Quick Look at the State of SoMoLo Around the World…#CommerceInMotion
Europeans Embrace M-Commerce
Source: comScore
Mobile Actions in the EU Store Heat Up
Source: comScore
QR Codes in the EU Gain Momentum
Source: comScore
31
Middle East/North Africa (MENA) Report
13% Of all searches are mobile
200% Growth last year in mobile searches
36,000 New Facebook users every day
100M YouTube views a day
Source: Google
32
Mobile Activity in MENA is Diverse
Source: Spot ON PR | Effective Measure
33
Asia: The World’s Most Prolific Online Shoppers
35% Of Asian consumers make >11% of monthly purchases online
27% Globally
Source: Nielsen
59% South Korea
34
Asia: Mobile Penetration Outpacing Internet Access
35
Asia’s Mobile Love Affair with m-Commerce is Blossoming…
76% China
75% India
56% Korea
47% Japan
Favo
rabl
e on
m-C
omm
erce
?
Source: Nielsen
36
69% Prefer using mobile phone for payment
47% Of “tech forward” consumers in Chinahave shopped on their phone in last 6 months
38% Have scanned a barcode while shopping
31% Have purchased an item from a “Smart Poster”via QR code or bar code
Asia’s Mobile Love Affair with m-Commerce is Blossoming…
47% Welcome mobile ads sent to their phone when they are near a store
Source: Nielsen
37
Asia, Social Media, and Shopping
800,000,000Asian Social Media Users
1/3Have Liked a Brand Page or Product
Source: Wikipedia
38
Source: Burson Marstelier
39
LATAM: Growth is Looming
215,000,000Internet Users today
(37%)
Source: Internet World Stats
285,000,000By 2015
40
LATAM: Commerce is ComingArgentina: 71%Chile: 71%Uruguay: 70%Venezuela: 68%Mexico: 61%Costa Rica: 56%Ecuador: 53%Colombia: 47%Peru: 47%Paraguay: 42%Dominican Republic: 40%El Salvador: 36%Guatemala: 30%
59%of Internet users purchased products online in the last
12 months
Source: Tendencias Digitales
41
Conversions in LATAM are High
Source: comScore
% of e-commerce website visitors that made purchase online
94% 89% 84%82% 71% 63%
Brazil Argentina Columbia
Mexico Chile Peru
42
LATAM: Mobile is Alive and Well…
630Mmobile phone connections
597Mpeople
Smartphones to hit 60% by
2016
43
m-Commerce is Still a NoveltyBrazil Considered Likely “Hot Spot” for m-Commerce Growth
2% access via mobile phone
7% sales via mobile site
Exclusive Research:Consumers Have Issued a SoMoLo ImperativeHow Is Retail Keeping Up?
#CommerceInMotion
45
Research Approach
Specialty Electronics Grocery Big Box CPG Other
Study ConductedDecember 1 - 18, 2011282 Respondents
To pinpoint the expectations of today’s SoMoLo shopper, and how B2C and B2B businesses are responding and adapting to these wants and needs
Objective
Revenue Breakdown$100M - $500M: 59% Greater than $500M: 41%
#CommerceInMotion
46
We WantSocialIntegration!I Yshopping on my iPad!
GotLocal???
Shopper Demands Keep Escalating…
ScanThis!!
#CommerceInMotion
47
57%expect discounts sent to their phone
46%expect to place orders via their phone
#CommerceInMotion
Mobility Matters
48
40% expect to use QR codes to access content on their phone
#CommerceInMotion
49#CommerceInMotion
50%expect to shop via tablet
Tablets AreTriumphant
50
38%expect to use social
sites to browse, shop, and buy
(Only)
#CommerceInMotion
Social: Sizzling, Or Fizzling?
51
28%expect department-specific messages and offers to be sent to their phones when
they are inside a store
#CommerceInMotion
Locking In on (Micro) Local
52#CommerceInMotionThe Great Divide
RETAILERS
SHOPPERS
53
Retail Has a Long Way to Go to Meet SoMoLo Demands
Place Orders via Smartphone46% 38%
CustomersExpecting
RetailersDelivering
Availability and Pricing on Phone42% 30%
Order Status Updates on Phone44% 30%QR Code Access
to Product Content40% 33%Browse/Shop/Buy
via Social Sites38% 22%Location-SpecificOffers via Phone26% 20%
Dept-SpecificOffers via Phone28% 12%
#CommerceInMotion
A Long Road…
13%average
gap
54
33% Lack of Corporate Commitment
36% Limited Inventory Visibility Across ChannelsStores Unable to Support New Challenges25%
Inability to Integrate New Channels36%
SoMoLo Roadblocks#CommerceInMotion
55
Good Intentions…
Order on Phone----------------------------------------------Product Availability/Pricing on Phone---------------Order Status and Updates on Phone-----------------QR Code Access to Content on Phone--------------Push Local Offers to Phone When Near Store----Department-Specific Offers Inside a Store---------Browse/Shop/Buy App via Social Network---------
#CommerceInMotion
38%30%30%33%20%12%22%
56
Strategic Shortcomings?
Currently have no specific mobile commerce strategy and/or are just experimenting50%
30%64%
Currently have no specific social commerce strategy and/or are just experimenting
Currently have no specific local commerce strategy and/or are just experimenting
#CommerceInMotion
57
Study Conclusions & Takeaways
1. Retailers must adapt to meet the escalating demands of the increasingly social, mobile, local shopper
2. As a whole, it appears that the industry feels the pressure to react
3. Executive commitment, clearly defined strategies, and technology plans need to evolve quickly to close the gap
The Good News:A SoMoLo ShowcaseInteresting and Successful Examples from Around the World
#CommerceInMotion
Shopkick: The Store’s New Best Friend?
• Users see a list of nearby participating stores
– “Kickbucks” earned just for entering(no check-in required)
• Inside, stores offer rewards for specific shopping behaviors
– Scanning a poster or product bar code– Special discounts on specific products– Time-based promotions
How Shopkick Works
Shopkick: The Store’s New Best Friend?
Active Shopkick UsersSince August 2010 Launch
August 2010 October 2010 January 2011 July 2011
110,000
750,000
2,000,000• 2.3M active users• 700M product views in year one• 7M product scans in store• Users open the app 14 times a month
– Review products from 16 stores each time • Once a Shopkick user is in a store,
conversion rates are high
*Sho
pkic
kin measurableincremental revenue
$50MOne retailer reports
*Mashable
61
Kactoos: LATAM’s Answer to Groupon?
If a user finds a product that interests them, they can create a purchasing group or join an existing one
The more people join, the lower the price each will pay.
Similarly, users can initiate purchasing groups for products that are not yet available through Kactoos
MyTown: Fun, Games, Impressions
• 4M users build their own virtual towns from actual buildings & businesses
– Checking in earns virtual cash• Cash buys virtual properties & products
• Property owners collect rent from users who check-in
– Properties and products– 35M Branded virtual items
consumed every week
How to Play MyTown
“Real-World Monopoly”
H&M on MyTown: Brand Impressionsand Store Traffic• Whenever near an H&M
store, virtual goods from the Blues collection appeared
– Players earned points for product check-ins
• Players also received offers for real goods available in nearby stores
– Points for scanning in-store product bar codes
10.6M Impressions · 350,000 Store Check-ins · 700,000 Product Scans
64
Souq.com:The Arab’s World’s Largest Online Market
• Marketed to Saudi Arabia, UAE, Kuwait, Egypt and Jordan
• 1.5 million unique users every month• Top categories: cosmetic and beauty,
electronics, and fashion• On Souq.com, one item is sold every
30 seconds
Instagram Makes Phone Cameras RelevantWildly Popular Photo Enhancing and Sharing App for iPhone
10Mactiveusers
1.3Mpics sharedevery day
one-tap sharing
66
Bergdorf Goodman Makes Instagram Relevant to their Store
• Photo sharing campaign– Consumers use Instagram to
take/edit/post photos of BG shoes in various locales throughout the city
• Geotags map each photo to “Shoes About Town” site
• Primary goals:– Promote newly expanded shoe salon– Brand awareness
Share Your Shoe Obsession“Isn’t that the secret to the absolute perfect pair? You never know what adventures they hold.”
67
Customers haveembraced the campaign…
First 2 Weeks650 Photos8,000 Followers
Snapette: Merging Instagram and Yelp?
• Puts the crowd to work with Social, Mobile fashion finding
– Shoes and accessories
• Users share pics, commentary on looks they love
– Including where to buy it
• Feeds within the app sort hot, nearby, new items
– Virtual closets, retailer profiles
69
Vogue Turkey Anniversary Campaign
Non-branded ads piqued interest and paid it off with QR code access to mobile site
Mobile site delivered exclusive “behind the scenes” content Contests, Content, Texts,
Location-based Giveaways
70
Uniqlo’s Social Look Book
• Uniqlook contest encourages shoppers to upload photos of their own outfits made up of Uniqlo items
• Other shoppers vote for their favorites
71
Badgeville: Defining Social Loyalty?Rewarding Shopping Behaviors with Badges and Social Status
• Adds game play and badges to loyalty programs
• Encourages social behaviors through rewards
– Reviews, Likes, Feedback
Bluefly: Making a Game of e-Commerce
• Rewarding specific shopping behaviors
– Watching videos, reading blogs, writing reviews, creating wish lists
• Shoppers earn badges that call out their fashion style
– Based on shopping history
• Badges = rewards– Exclusive/early access to products,
discounts, badge-holder specials
Moxsie: Crowdsourced Design
• 105,000 Twitter followers go “behind the scenes”– Photo shoots, meetings with designers, trade shows
• Participation earns points toward Badges– Buyer-In-Training, Head Buyer or Celebrity Buyer, etc.
74
Brazil’s Fiat Mio: A Crowdsourced Car
• Fiat committed to realizing the ideas of users in a futuristic concept car
• Set up a social site for ideas, feedback, and designs to be shared
• 17,000 people submitted 11,000 ideas
75
Luminate: Content for 3 Trillion ImagesAds, content, social tools overlay online images
“image apps" turn static images into dynamic and interactive experiences
The Dawn of i-Commerce?
The Dawn of i-Commerce?Tag Shop
4,000 publishers150M visitors/month30B image views/year
*TechCrunch
Publish
>100 different merchants: Macy’s Zappos, Nordstrom,
Gap, Piperlime, etc.
78
Pinterest Brings Bulletin Boards to Life
Board topics range from cupcakes to bathrooms
Retail images dominate
Women outnumber men 4.5-1
Users simply “pin” images they like to interest “boards”
79
Fashion’s Formidable Footprint…
80
Tesco’s (Virtual) Subway Supermarkets
• Large billboard installed in South Korean subway stations
• Supermarket shelves• Display images/prices of products
• Users scan the QR code of products• Products delivered home within the day
Layar Vision: Object Recognition A/R
• Recognize real world objects and display digital AR experiences on top of them
– Posters, magazines, billboards, rack signs
• Combines location and image-recognition A/R
82
Blippar: More than a Blip on A/R Radar
• Image recognition-enabled augmented reality at the shelf
• Design product packaging to engage consumers without compromising designs with awkward tags and markers
A new augmented reality app – with an intriguing twist
83
Cadbury Brings “Eye Candy” to the Shelf
• Chocolate bars become an interactive, 3D game on the shopper’s Smartphone
• “Qwak Smak” is played directly on product packaging
– No markers, no shelf tags
• Just point the phone at a Cadbury product and Qwak Smack will ‘blipp’ from wrapper to screen as if stuck to the bar
Players submit game scores into
a drawing for prizes
84
SCVNGR: On the Hunt for Engagement
• Virtual scavenger hunts – Utilizes LBS to push contextual treks,
questions and challenges to game players
• Businesses and brands can design custom scavenger hunts catered to their customers and locations
– Ongoing– Promotional– Special Events
“A Game Layer on Top of the World”
TopShop: Hunting Back to School Bargains Across the U.K.
• Anyone within a 500-meter radius of a Topshop store can play
• Players choose desired reward and complete challenges to earn points
– 20% in-store discount, £500 shopping spree, etc.
– Challenges designed shoppers more thoroughly engaged with merchandise
• Snap photos of their favorite “back to college” outfits
• Find items corresponding with trends
Game On! At Buffalo Wild Wings
• 12-week March Madness campaign
• Numerous store-based challenges– Photos of friends, trivia, games
• Social integration throughout– Rewards for completing
• Extremely popular with customers– 184,000 players at 730 locations
• 1,288,000 challenges completed• 30% returned to play multiple times
– 100M social impressions– 3.6 years brand engagement in stores
“Home Court Advantage”
*Mashable
eBay Adds “Buying” with QR Codes
• Shoppable windows on 5th Avenue
• Collections curated by 30 “tastemakers”
– Justin Bell, Liz Lange, Coco Rocha, Lake Bell, etc.
eBay Adds “Buying” with QR Codes
• QR Codes link to mobile optimized site
• “Always Open” Windows capitalize on impulse shopping
– Nearly half of all shoppers enjoy window shopping
– Want to make an immediate purchase when they spot something they love
SHOPBOX: Redefining Local and Mobile?
• A repurposed bright green shipping container
• Completely unattended
• Visitors browse items from the giant automat’s plate glass window
– They register on iPads attached to the sides of the container
• To purchase, customers text message their order and the products are shipped to their homes
The Far Reaches of Pop-Up Retail
Intriguingpotential for event
marketing?
90
StyleLiner: Pop-Up Goes MobileFormer potato-chip truck now a mobile style gallery
Next? Motion Gesture Window Shopping?• Putting the “shopping” into after-hours window shopping
• Microsoft Kinect-like sensor recognizes common gestures– Window shoppers learn more products simply by pointing at them
Summary and ConclusionsKey Lessons Learned…
#CommerceInMotion
Key Objective for SoMoLo? InteractionIntegrationNotificationTrafficEducationRelationshipsAccessCommunityTransactions
Seamless, collaborative online and offline experiences
Alert customers of offers, opportunities, product lineup changes
Relentlessly seek opportunities to improve store traffic
Inform shoppers about products, features, programs
Engage, entertain and add value to bring them back
Be available when, where, how, and on the devices THEY prefer
Identify and embrace local influencers and advocates to build networks
Arm each channel (and every salesperson) with conversion tools
“Mashops”: the Store’s Best Weapons?
Retailers must fight back by creating a mashup of the best Web-based and in-store shopping experiences
– Interactive digital displays– Video assistants– Internet devices– Social networking technologies – Location-based services– Salesforce empowerment tools– Wi-Fi networks 54%
of shoppers surveyed want to try a mashop service in the store
*Cisco
“Always On” Consumers Require “Always On” Marketing• New paradigm: Marketing = Media
• The relevance of Fire and Forget campaigns executed through traditional media will continue to diminish
• More and more of marketing’s time, resources and energy need to be managed in “Always On” mode
– Persistent customer engagement– Regularly nurtured relationships– Constant community building– Tireless new customer acquisition
Whatif?
(Outside the Box)
What if…Polaroid had created Instagram?
*Jon Thomas, Storytelling
What if…Dole had created Fruit Ninja?*Jon Thomas, Storytelling
What if…Whole Foodshad created FarmVille?*Jon Thomas, Storytelling
About Commerce in Motion
A thought leadership program developed by/targeted to supply chain and retail executives
CommerceInMotion.com
101
Full Study Now Available OnlineEMEA Study Coming in Late April!
#CommerceInMotion
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