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Google VP Of Commerce: Merging Online, Offline Experiences Is Top Priority

Since it’s inception in 1998, Google has maintained its reputation as an innovator and thought leader. Following announcements of its newest venture into mobile commerce with the Google Wallet, the industry powerhouse has made a strong foray into the retail industry.

During her keynote at the Shop.org Annual Summit in Boston, MA, Stephanie Tilenius, VP of Commerce for Google, provided industry research and case studies honing in on the newest retail trends and shopping behaviors morphing the industry. The retail industry is going to see more payment and commerce innovation in the next 10 years versus the last 20 years, according to Tilenius. “This is largely because the lines between online and offline are going to blur and become one,” she noted. “The addition of the smartphone and new technology like geo-targeting and Near Field Communication (NFC) technology is going to enable new dialogue between retailers and their customers — much more of a one-on-one dialogue.”

To highlight the vast changes the retail industry has experienced in the last two decades, Tilenius noted how industry personnel once believed e-Tailers such as Amazon and eBay would be “the death of the retail industry.” Currently, online is only 7% of retail, Tilenius noted. “That’s really astonishing when you think about it,” she said. “It should be much bigger — why isn’t it 25% or 30%?”

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Local & Mobile Grab Consumer Attention
Daily deal sites and localized outlets such as Groupon and LivingSocial are generating more buzz among consumers, specifically because they are designed to connect offline, local services to online, tech-savvy consumers. Currently, a majority (80%) of spending is done locally, Tilenius said. This equates to nearly $14 trillion globally and approximately $1 trillion in the U.S. “We’re seeing local services become another huge market in commerce, online and offline,” she noted. This new trend coincides with the persistent growth of mobile, which is a necessary facet in the next generation of retail. 

Tilenius emphasized the importance of developing a mobile strategy by commenting on a number of industry statistics. Nearly 80% of smartphone users are tapping into their mobile devices in-store to compare prices, search product information, and find promotions and sales, she said. With mobile subscribers checking their phone up to 40 times a day, the handheld devices are dramatically changing the way consumers interact with brands.

“Twenty years ago, you walked into the store, you found a product, came in with your wallet, and you would actually go home and look on the Web to research items and then go buy them in the store,” Tilenius said. “Now, people are walking in the store with the computer, essentially in their mobile phone, and shortly your phone is actually going to replace your wallet. So you’re going to see a whole new level of customer experience.”

Blurring The Lines Between Online & Offline Behavior
To showcase the potential for retailers who create a seamless and engaging cross-channel experience, Tilenius highlighted how Tesco became the leading grocery retailer in South Korea by thinking innovatively and integrating online and offline strategies.

The company rolled out a virtual supermarket in the South Korea subway system, which allowed people waiting for a train to purchase products by scanning QR codes with their smartphones. Following checkout, the items are delivered in real time to customers’ homes or designated addresses via Tesco’s preexisting delivery service. “This innovation really demonstrates the power of multichannel,” Tilenius said. “The mobile connection they had with consumers actually propelled consumers to actually only buy at Tesco, they became so fond of it.”

By leveraging other tactics such as flexible shipping options including “buy online, pick up in-store,” and “mobified” sites for smartphone and tablet, customers can obtain a rewarding shopping experience that will drive them to point of sale. “You need to make sure your entire web site is seamless when you go from a mobile phone or tablet to the browser,” Tilenius said. “It needs to be a great experience. It sounds obvious, but you’d be surprised when you go to some of these different web sites. The experiences are subpar from where they should be.” Flash site retailer Gilt Groupe was the top example Tilenius provided as a retailer that has rolled out an exemplary iPad application. Its media-rich site drives nearly 25% of its total sales, she explained, showcasing potential growth within mobile and native applications across devices.

In order to develop closer connections with consumers, Tilenius recommended that retailers develop a strategy focused on personalized offers based on past transactions and browsing behavior to cash in on the ever-growing daily deal audience. “What you’re going to see is a whole new set of formats where you’re able to talk to your loyal customers with personalized offers,” Tilenius said. “You’ll be able to do a direct communication, which is much different than a daily deal.”

By leveraging a fully integrated, cross-channel strategy teamed with mobile payment and social engagement, retailers can create a memorable shopping experience. “This push-pull connection is very important,” Tilenius explained. “You don’t want to overwhelm the consumer. You want to push them very targeted, personalized information. But when you always have your phone and you’re checking it 40 times a day, and you walk into a retailer and they push you something very personalized and targeted, it’s a great experience.”

In response to the growth of a new tech-savvy and empowered shopper, Google is rolling out multiple solutions including:

– Google Catalog
– Google Offer and Google Shopper
– Google Wallet
– Google+ and Google+ Business Pages

“It’s still early days for mobile commerce and social commerce,” Tilenius said. “But you can see that it’s going to transform retail. You’re definitely going to see more innovation in the next 10 years because of all of the technology within mobile phone penetration, and you’re also going to see the connection between online and offline create a whole new experience for consumers and for retailers.”

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