Tag Archives: Online shopping

July 15, 2013 · 11:07 am

Non-virtual Commerce Portals

I do most of my non-food shopping online and I think I might have made a mistake that’s all too common among business folks:  I assumed I was just mirroring that habits of the public at large.  I also figured that shopping malls would be on their last legs.  After all, if you never have to leave your house to go shopping or stand in a checkout line while some whiny baby serenades you, why wouldn’t you choose to do that?

Shopping mall

(Photo credit: pix.plz)

Not only am I way off base, but there is research that shows just how far wrong I am.  Despite some fairly big gains with respect to share of market by online merchants, 95% or shopping still occurs offline. According to a recent Nielsen report, in the fourth quarter of 2012, 5.4% of retail sales came from online channels, up from 3.6% in Q1 2008.  Big gains, a lot of dollars, but still a fraction of the retail world.  Why do I think this might be of interest to you?

Other than media, there is no other sector of business so dramatically affected by the grown of digital than bricks and mortar retail.  Since shopping malls have replaced the “downtown” in most places outside of major cities, they are sort of ground zero to feel the impact of this change.  Yet although many of them are suffering through high vacancy rates and others (as shown in this Dead Mall site) are dead and gone, something else is happening that is instructive.  As Nielsen found:

Malls are changing their focus and aren’t just places to buy things. They’re social centers, places for entertainment and employment hubs. They’re also transforming what consumers can expect from a shopping experience.  The line between shopping, entertainment, and community building has blurred. This blending of experiences has created an opportunity for retail to strengthen social ties within communities looking for communal experiences.

In other words, “Malls” are now non-virtual commerce portals.  I think they can go further.  Imagine a “guy” mall, for example.  Instead of Macy’s or Target as an anchor tenant, maybe it’s an indoor driving range, a shooting range, a bowling alley and a sports bar, surrounded by men’s shops, hardware stores, etc.  Why not stretch the thinking a bit and develop that property next to one that’s female oriented.   Combine each with an active social presence (Instagram and Pinterest will be very helpful here) and you’ve transformed the “mall” experience into something more akin to how people shop online.

We all need to think out of the box before they put our business in one to bury it.  You with me?

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January 21, 2013 · 12:35 pm

Social and Shopping

How do you think social media influences what people buy?  If you believe a recent report on the influence of social media on shopping this past holiday season, the answer is not much.  As the article said:

online shoppers mostly ignored social channels as purchase influencers,according to survey results from Baynote. Pinterest and Twitter influenced online and in-store purchases for just 1 in 10 shoppers surveyed, with Facebook garnering only slightly more interest. Instead, online ratings and reviews were most likely to influence both online and in-store purchases (33% and 24%, respectively), with Google search results including a pictured product available by the retailer coming in next for online purchases (26%) and paper catalogs (21%) second for in-store purchases. Not surprisingly, social channels were most influential among younger consumers (aged 25-34), while paper catalogs got the attention of the 45+ crowd.

This was accompanied by another piece which announced that “only 2% of traffic to retailers during the holiday season came from social networks, per figures released by Adobe Systems.”   The article then goes on to say “Adobe isn’t the first to detail social media’s rather small influence over the holiday season.”

I could be wrong about this but given that Adobe is the parent company of one of the large analytics firms, I’m assuming they looked for traffic into shopping carts from social media.  Their question – is social media converting into sales – isn’t the right one.  How about “does social media influence sales?”  I’m willing to bet that a large percentage of what’s on Pinterest is aspirational – something the user wants or acknowledges as desirable.  Maybe it’s a place people use to research gifts for friends?   You will have a hard time convincing me, just based on what crosses my Twitter stream and Facebook news feeds, that people aren’t researching purchases via social media.

The Baynote data is a survey – let’s always remember that what people say and what they do sometimes don’t align.  That said, I think taking “catalogs” as a whole while segmenting digital into pieces (search vs. social vs online stores) is a bit misleading.  It also doesn’t reflect how users may begin with a search, move over to social to check out their connections’ thinking on what they’ve found, and then their use of the online store to buy, perhaps several days (and sessions) later.

Given the continuing and impressive growth of online shopping during the last holiday season I’m a believer in social as a influence.  People spend more of their lives online and that includes shopping.  Maybe these folks are asking the wrong questions.  I’m sure they’d have just as hard  time proving that TV or print resulted in the conversions they’re discussing yet very few people deny those media have an impact.  What do you think?

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September 18, 2012 · 10:20 am

Love The One You’re With

One of the trends I hear discussed all the time is that of chasing the next shiny object.  As it turns out, that’s not something that occurs solely in the tech space.  A recent study from Adobe – The Adobe Digital Index – shows that online retailers are ignoring the 80/20 rule by ignoring current customers in favor of attracting new ones.  Maybe today’s screed should have been titled “You Always Hurt The One You Love.”  Their summary:

Online retailers spend nearly 80% of their digital marketing budgets acquiring shoppers (new visitors), but does this focus make sense? To find out, Adobe Digital Index analyzed 33 billion visits to 180 online retail website in Europe and the United States from April 2011 to June 2012. Our data indicates retailers should shift spend to returning and repeat purchasers, two existing customer segments that drive a disproportionately high share of revenue, exhibit higher conversion rates, and really step up in the Christmas holiday season and tough economic times. Migrating just 1% of shoppers to returning purchasers could generate as much as $39 million in additional revenue per retailer.

In other words, we’re spending way too much time and money chasing new customers while we ignore a lucrative user base that’s just waiting to be asked to the dance.  40% of revenue for online retailers comes from returning or repeat purchasers, who represent only 8% of all visitors, according to the study.  In other words, you have to attract five to seven shoppers to equal the revenue of one repeat purchaser.

Having run an online retail business I can tell you that the vast majority of our thinking was about attracting and converting new customers.  It wasn’t as if customer service was an afterthought and we did allocate a good deal of our marketing to up-selling our existing customer base.  However, this study opened my eyes to the fact that we probably could have done more with those who’ve already demonstrated a desire for our products and I’ll keep that in mind as I work with clients going forward.  How about you?

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