2010 Retail Outlook Review Series – Part 2

This series will outline retail trends, innovation and best practices for retailers in 2010. To view part 1 click here. Look for Part 3 next week. Please engage! What are your thoughts and strategies for these new retail platforms?

Mobile commerce is creating a buzz as smart phones and mobile devices are dramatically changing shopping habits. Retail sales for m-commerce in 2009 grew 117%, up from 57% in 2008, according to Mobile Commerce Daily.

M-commerce allows customers to compare pricing on the fly

Value is everything. The social sphere is rapidly expanding. Customers are connecting – either ranting or raving – your product assortment is now in the scrutiny of the public. The customer now has the power to compare product price points and access reviews on the fly – posing a new challenge for retailers.

The following survey was released on 3/12/2010 by Wireless and Mobile News. Statistical data comes from Compete.com – a researcher of web and mobile activity, consumer interest in mobile advertising, coupon use and barcode scanning. The survey showed the following:

Consumers were most interested in receiving grocery coupons (36%), scanable barcodes (29%), offers to save and pursue at leisure (26%), movie theater offers (26%), and ads via SMS when going by a retailer with a promotion / coupon (21%).

Compete expresses that over 1 in 5 smartphone owners would be interested in the top-5 is very promising for the mobile marketing industry, considering that it is still in its early stages.  Brands need to focus on engaging and driving behavior of these ‘early adopters’ in order to help bring these concepts to mass market.

Consumers are using mobile devices to do their research on high priced items

In a recent interview on Mobile Commerce Daily, Nicola Smith, supervisor of emerging trends at Moxie Interactive, Atlanta, expresses her insight into what today’s new market will mean for retail.

“Mobile commerce will continue to increase in 2010,” said Smith. “Fifty-one percent of mobile commerce users have purchased consumer electronics via their mobile phone, and we continue to see that trend grow.”

“Some of the highest purchase items on mobile are technology-based items such as PCs and laptops,” she said. “Look at Amazon—one of their highest selling items via mobile phones are flat-screen televisions.”

“People go into the store to see the models, but then they go onto Amazon.com on their handset to compare prices—there’s an interesting cross-section between the brick-and-mortar and digital shopping environments.”

Social ratings give visibility to product quality

Product ratings weigh heavily on shopper decisions – they are putting trust into the opinions of their peers – especially when making purchases online. If a customer cannot see the product in person – they will definitely want to see how others have rated the value. If you stock lower quality products – your ratings will let customers know.

Why Best Buy Loves Mobile

Mobile is growing at an enormous pace – retailers need to develop a plan now. The following video debuted at the National Retail Federation’s 2010 Retail Innovation & Marketing Conference which occurred March 2-4.

Wetseal: Innovating the way we shop through social networking and e-commerce

In an article published on 3/17/2010 in Apparel Magazine, entitled “Building a Social/Mobile Strategy - One Outfit at a Time,” Jon Kubo, Wet Seal’s CIO, who also heads up e-commerce and direct marketing explains the success of their social networking and marketing strategies:

In December 2008, Wet Seal launched in-store kiosks, which allow shoppers to scan an item’s price tag and then view the full range of item-specific outfits created online.

In the two years since Fashion Community launched, users have combed through Wet Seal’s hip merchandise, creating and posting nearly 400,000 outfits on its web site at an average now of roughly 20,000 new outfits each month. Wet Seal places this user-generated content directly into the online and mobile purchasing processes. Search for a pair of skinny jeans, for example, and the top-ranked user-generated outfits containing those jeans pop up. One skinny-jean-and-cowl-neck-tunic combo posted in February was viewed 665 times with 62 positive rankings.

The customer appeal of Wet Seal’s social and mobile applications is obvious, and the benefits for the company are enormous, starting with data collection. Recording all user sessions from the Shop With Me tool helps the company garner a trove of information including what products users circled, what pages they linked to, whether they made a purchase, and whatever product feedback they shared with friends during the chat session.

The user-generated outfits themselves are a great source of insight, adds Thomas. “I can’t think of a better tool to get immediate feedback from a customer on how she is dressing,” he explains. “Before, we had to wait to see what customers purchased to know what was going to sell well. Now we know instantly. It is a great tool for us to develop our own business internally.”

By analyzing the online outfits and ranking data, the company can also discern trends -which can impact its merchandise and assortment planning. For example, Kubo sensed that customers were not dressing up as much to go out because they were all creating outfits using skinny jeans and fashion tops. “We can see consumer sentiment about our products much earlier than we’ve ever been able to do, and it translates very well into what we do on the business end,” he explains.

These tools have also translated very well into the bottom line, boosting e-commerce sales by some 20 percent, according to Kubo, who says that Wet Seal has long since recouped the money it spent to develop its various mobile and social media applications.

The company does not plan to rest on its laurels, however. Fast-fashion is a fast business, after all. “We know we’re ahead of the game now, but our competitors will catch up to us at some point. Hopefully we’ll be on to the next thing by then,” says Thomas.

By Amy Roach Partridge, a New York-based free-lance writer specializing in business and technology.

Now more than ever – retailers need a plan to reach their customers on a personal level. Mobile commerce and e-commerce present a pressing opportunity to do just that. Feedback and reviews let consumers assess the value of what they are buying. Social networks build trust for brands and reveal the pitfalls of products that do not perform.

No matter the retail vertical, be it fashion, grocery, department stores, or specialty merchandise, these new platforms for marketing and product promotion rest in your hands. So get off your laurels and innovate. Hire young, socially aware, employees that can lead your business with a sense of urgency or you will be left behind.

Get back in the game

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