By adaptive - November 23rd, 2015
Mobile will be a driving force for in-store holiday sales. Susan Kuchinskas looks at how retailers can reap m-commerce gains with an integrated, omnichannel approach.
Once again, Saks Fifth Avenue will kick off the holiday season with a gala unveiling of decorations at its flagship New York City store. This year's theme, The Winter Palace, includes a theatrical lightshow, a transformation of the façade of the physical store in addition to its window decorations, and recorded choir singing.
Saks has also upped its mobile hoopla. For those on the street for the big unveiling, Saks will hand out Xyloband wristbands that flash in time to the music. Those farther afield can “Saksify” their holiday via the retailer's social-media content hub, SaksHoliday.com. They're encouraged to share photos of destinations, enter holiday-themed contests, and download an app, YourEmoji, that lets people include Saks emojis in texts, as well as in posts on Twitter, WeChat and Facebook.
2015 is the year of mobile sales: digital interactions are expected to influence 64 cents of every dollar spent in retail stores by the end of 2015, amounting to $2.2 trillion, according to Deloitte Digital.
Other retailers may do better by dialling up their own mobile connections to the in-store experience.
Target released a digital storybook called "The Holiday Odyssey," with the visuals and themes from the book carried out in physical stores. It will also open a pop-up store in New York City. Meanwhile, the promotion, created by 72andSunny, includes 12 TV spots tied to important retail occasions, including Thanksgiving, Black Friday and the premiere of the new Star Wars movie, “The Force Awakens”.
Joe Megibow, who recently left his post as chief digital officer of American Eagle Outfitters, found the campaign creative but not necessarily productive for sales. "There's a tension among retailers on the sexy digital versus the practical digital," Megibow said. "You'll get some good PR, and it will probably drive some engagement."
However, he didn't see Holiday Odyssey as doing much to improve Target shopping, in-store or on mobile. "Instead of thinking of mobile as competition," he said, retailers should enable part of the digital experience in the store. Product information, he said, was a key driver of sales, no matter where consumers are shopping.
Yoram Wurmser, retail analyst at eMarketer, was more positive. He said, "The advantage of mobile is that you can take some of these iterative, engaging stories and merge it with physical experience to amplify both. Any time you create an omnichannel experience, it boosts sales across all channels."
In an attempt to help retailers understand how Facebook advertising is impacting store traffic, Facebook now includes anonymized data on the percentage of people walking by a retail location who have seen that retailer's ads. The information is based on location data from Facebook users' mobile phones. "That lets retailers better optimize their advertising by timing it better to correspond with traffic bumps, by targeting it better, and by customizing it by location," Wurmser said.
Facebook is also providing beacons to small businesses, allowing them to enable Place Tips for Business. Place Tips are shown to people who check in and to people who are in a store and have given Facebook permission to access their location on their phones. It began testing in January and rolled out nationally in June. Wurmser thinks this is a good way for merchants to send push notifications to shoppers in the store.
While consumers have taken a while to warm up to push notifications – which are basically interruptive ads – they're successful when targeted this way. RhythmOne's 2015 survey of holiday shoppers found that the majority of holiday shoppers who recall receiving an in-store push notification featuring a coupon or promotion eventually redeem it.
In-store still matters
RhythmOne, an advertising technology provider, also found that half of holiday shoppers use their mobile devices while in a physical store location to assist in the shopping process. This reflects an important change from a few years ago, according to Lokesh Ohri, senior manager of Deloitte Digital's retail practice.
Retailers used to complain about showrooming – customers picking over goods in the store and then using mobile devices to find a cheaper price. But Deloitte has found that these days, shoppers are doing the opposite. In 2015, 69 percent of shoppers researched products online and then headed into a store to purchase. This year, digital and mobile will influence 64 percent of in-store sales in some way, contributing $2.2 trillion overall. During the holiday retail season specifically, Deloitte forecast that holiday sales will increase 3.5 to 4 percent, with digitally influenced sales affecting 64 percent, or $434 billion, of in-store retail sales.
"People already in the store are highly qualified," Ohri said. "Seventy-five percent of people have already done their research; they want take a product home. Price isn't that important any more. They already have that information."
Therefore, he said, retailers must provide an excellent digital experience that offers inspiration and product information in order to attract shoppers in the research phase.
A majority of brands are now using digital channels to get feet in stores, according to Altimeter’s 2015 Digital Strategist Survey. But they still do not have a unified, omnichannel strategy. The survey of CPG and retail companies found that 60 percent created digital messages to drive in-store purchases, but only 37 percent said their strategies provided a unified experience from online info to in-store purchase.
Only 51 percent agreed with the statement, "Our mobile strategy helps customers bridge the online to offline shopping experience."
Rebecca Lieb, an analyst and author who wrote the Altimeter report, noted, "Change in this space is very rapid." While brands understand that they need to invest in mobile to drive in-store traffic, she said, "They are not necessarily using the digital channels to drive it."
According to the Altimeter Group study, while mobile is a gateway to the customer at all times, marketers must make sure they send consumers meaningful messages at the moment when they're most likely to take action instead of turning them off with too many messages.
Omnichannel shoppers are more valuable, according to Deloitte Digital, spending 75 percent more than store-only shoppers. "Retailers that have these omnichannel experiences are the ones that are succeeding," Ohri said.
Lieb is promoting a new strategy she calls, "Let's Get Phygital." The idea is to move toward a truly integrated, omnichannel strategy. She explained, "It's one seamless whole, and consumers aren't differentiated between different channels or media anymore."
Getting phygital means erasing the whole concept of channels. As Megibow, the former American Eagle Outfitters exec, said, "Who cares where they're buying, as long as they're buying!"