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The Evolution Of Retail In 2014

  • Written by Marko Muellner, VP Marketing, ShopIgniter

Muellner

2014 will be a REALLY interesting year in the tumultuous evolution of technology’s impact on retailing. Note I said evolution, not revolution. Megatrends like social and mobile will enable a new set of challenges and opportunities for retailers. While some may be the beginning of revolutions, it’s too early to tell.

Key Consumer Trends Converge

eMarketer recently shared that a whopping 74% of purchases researched on mobile devices are completed in-store. While we tend to think of mobile consumers similarly to desktop consumers, but on different devices, this is just not true. Most of our mobile time, is, well, mobile. Not at home or at work, but out and about.

Digital marketing has always struggled to drive offline traffic to retail at scale, but this data suggests this is changing.

Over 80% of daily Facebook users are on a mobile device. Over 250M of Facebook’s users are mobile-only. That’s more than the total active users of Twitter. Social is mobile.

Flurry recently shared that on average, global consumers spend nearly 30 minutes of their daily 2 hours and 38 mobile minutes on Facebook, behind only “games” and more than twice as much as “browser apps”, which ranked third. Mobile is social.

The Holy Grail

Since the first person realized she could barter to get additional needed resources, we’ve been trying to figure out what makes people buy. But it’s always been a fragmented challenge.  Decisions made in our heads, influenced by friends and media, driven by convenience and proximity... Capturing the data at every step has been impossible, although we’ve made a lot of progress thanks to companies like Datalogix and others. We’re on the verge of the next evolution in our step towards truly understanding how we buy. We’ve almost completely wired the journey and the key, like most things in our modern world, is the smartphone sitting in our pocket right now.

Online, omnichannel retail will continue to gain momentum. Marketers’ ability to reach a single consumer across devices will emerge and quickly mature in 2014. This will enable marketers to better understand the “customer journey” and the patterns likely to drive discovery, exploration and consideration. While it’s unclear the implications of this data and reach, we are witnessing the sprouting of the future of online advertising.

Golden Tickets

While most marketers fear Snapchat — and they should, for now — this success story illustrates the power of social mobile convergence for retailers. If you don’t know about Snapchat, it’s a social mobile app that lets users send time-limited photos and videos to each other directly or to small groups. Once a “Snap” is viewed, it expires and is gone forever, supposedly even deleted from the Snapchat servers. 16 Handles, a New York City frozen yogurt shop, ran a brilliant Snapchat promotion. They asked customers to snap them a photo from inside a store location in exchange for snap coupon. They shared that the coupon was worth anywhere from 5% off to 100% off and could only be redeemed at checkout since after 10 seconds it would disappear.  Not only did they drive repeat store visits, they gave customers a golden ticket that could only be used at the cash register. The convergence of social, mobile and retail can be magic.

Mobile apps are the key bridge from digital to bricks and mortar. Look for major innovation in a few categories:

  • Digital “wallets” that store gift cards, coupons and more like Apple’s Passport or Google Wallet
  • Retailer-specific apps like Target’s Cartwheel that enable shoppers to manage and receive in-store redeemable mobile coupons from anywhere
  • Shopping apps that maintain persistent carts like Tourneau’s virtual watch tray and allow online research with pick-up in-store
  • Social shopping apps that enable consumers to “like” and manage products like Pinterest, Wanelo, Polyvore and ShopKick.

But the apps are only half the story.

In 2014, look for exciting in-store technology to get more competitive and interesting. “The last mile” will be focused on vicinity-based mobile notifications that pull info from the app categories above. If you have a gift card in your digital wallet and you get close to the mall, you will receive an alert. If you liked a dress on ShopKick, the next time you’re in Macy’s you’ll get an alert about where to find it.

Apple’s iBeacon (Bluetooth SMART), NFC and other location-based technology will finally begin to take hold. The best retailers in the world know that getting someone into the store is 90% of the challenge. Once they’re in it’s a matter of discovery and driving toward high-value/high-margin products. With Apple’s deployment of iBeacons at every store, they can now communicate with consumers and track everything from what gift cards or coupons they have to how many got close to the store, enter the store, which products they browsed and obviously, what they bought. For digital marketers, the long awaited online to offline closed loop reporting will finally be a reality.

Mobile-Optimized Websites Aren’t Enough

While many retailers have approached the new mobile reality by making ‘good-enough’ mobile versions of their websites, in 2014 this won’t be enough. Retail apps, mobile-first landing experiences, and paid social advertising will become standard parts of the retailer’s marketing mix. For brands that can deploy the best of in-store tech and solve the mobile coupon redemption challenges (many have or are making great progress) then digital marketing will look a lot different. Today we’re able to target high-value consumers on Facebook, drive them to a mobile-first experience that enables them to place a coupon directly into Passbook, for example. We’re then able to automatically tell Facebook the conversion has happened and to send us more people like those that are converting. This is the beginning of social “programmatic” media buying and it’s transformative. If we can set-up “conversion machines” that drop coupons into location-aware apps that then alert consumers when they are close to retail, the potential is massive.

Loyalty Über Alles

And since our mobile devices are inherently personal and soon individually addressable, digital marketing will continue to push more and more towards loyalty marketing. As the biggest eCommerce trend of the past few years has been about “membership”, this trend will begin to permeate offline retail too, and much more than refer a friend and mobile apps to track rewards, this might transform retail as we know it.

“The motivation I’ve had is to transform Sears Holdings from a company focused on running stores and selling products to a company more focused on serving members.” — Edward S. Lampert, Chairman and CEO of Sears Holdings to The New York Times

What About e-Commerce?

It goes without saying that all of this social mobile convergence and a focus on loyalty marketing is great for retailers with real investments and experience in eCommerce. While “social commerce” as imagined has continued to under deliver, “mobile commerce”, driven by tablets, has flourished. In 2014 we’ll start to see innovative retailers re-platforming to truly enable omnichannel commerce. Companies like Elastic Path, who are quickly moving to a fully web services architecture, will be very well-positioned for the new converged world of digital retail, and as we’ve seen every year for more than a decade, eCommerce will grow and grow.


Marko Muellner is the VP Marketing for ShopIgniter. As a performance-driven marketing executive with over 15 years in digital, Muellner has managed cross-channel, integrated and multi-touch marketing strategy, creative development and account management for MillerCoors Brewing, adidas America, Webtrends, ShopIgniter, Rent.com, Razorfish, Magnet Interactive, Digital Evolution and others. At ShopIgniter he leads all brand marketing and demand generation strategy, execution, measurement + optimization. He finds social product promotion a perfect fusion of his experience from brand marketing to e-Commerce to social media and mobile marketing and he loves the challenge of B2B marketing in a fast-paced start-up.