Servant of Chaos

How ClickFrenzy Became a ClickFizzer

It should have been a raging online success for Australian retailers – a pre-Christmas event bringing together hundreds of local stores to create an online marketplace unrivalled in Australia’s digital history.

The aptly named ClickFrenzy was designed to kick start the holiday purchasing season with an Australian flavour – with local retailers aiming for a greater slice of the estimated $16 billion spent each year online. It appeared to be a match made in virtual heaven – retailers with full warehouses and consumers waiting with wallets fattened off the back of low unemployment and stable economic growth. What could go wrong?

Like Any Failure, It’s Not About the Technology

When the ClickFrenzy servers went down minutes before the 7PM launch, Facebook and Twitter exploded with frustration. But the seeds of this failure go back years. 

For decades the retail sector has been under-investing in technology. Despite having international eCommerce startup superstar BigCommerce sitting on their doorsteps, most Australian retailers steadfastly resisted committing to the online purchasing experience. Some of the largest of retailers launched  poorly designed digital stores with clunky and outdated user experience, limited product lines and pricing models that were less than sharp. The excuses are many and varied, but at the heart I believe it’s a case of the The Innovator's Dilemma – retailers past success has created the obstacles preventing them from succeeding in the face of changing markets and technologies.

Retailers Were Blindsided by the Connected Consumer

Over the last couple of weeks I have been speaking a lot about the disruptive impact of technology. The Connected Consumer has transformed the landscape and outflanked most brands. They are discovering, debating and deciding what they will buy well ahead of the traditional marketing funnel.

Retailers may have seen this change taking place but have not undertaken the transformation in strategic thinking, execution and delivery that is required. They did not dig their well before needing the water. They did not follow the most basic of customer centric models (see below).

The Good News – Retail Now Has a Burning Platform

As I suggested recently, the under-investment in technology by the retail sector has been possible because there was no “burning platform”:

People still bought goods – especially appliances and larger items in stores, and “online” was considered risky, unreliable, and difficult to navigate when it came to returns, warranties and customer service.

Many retailers in the past have made many excuses for poor online execution, appalling digital strategy and non-existent or simplistic social media engagement. I am half expecting to see the same again.

But Australian retailers should wake up and smell the smoke. It’s time for a dramatic rethink from the ground up. It’s time to delve deep and understand the fundamental transformation that has taken place in consumer markets and to work with the disruption in a way that transforms the nature of retail. It’s time for digital marketing transformation.

Driving Retail from Digital to Destination

• The marketing funnel has imploded under its own inadequacy
• Marketers must respond to the shift to digital with the 5 Ds of consumer engagement
• Analytics is essential to understand the path to conversion

For decades, Australian retailers have under-invested in technology and online innovation. After all there was no “burning platform.” People still bought goods – especially appliances and larger items in stores, and “online” was considered risky, unreliable, and difficult to navigate when it came to returns, warranties and customer service.

But then consumers connected. Reviews helped identify quality products. Reputation management allowed online merchants to demonstrate their credibility. And web experiences improved. Prices were better.

People talked.

And kept talking.

Those conversations shifted from sites to platforms. They happened in places far away from the brand police and customer service teams. They proliferated on sites like Twitter, Get Satisfaction and Facebook.

But just as the connected consumer shifts digital channels in the blink of an eye, taking the conversation with them, so too can brands follow this consumer lead. Those with a considered and well executed strategy can connect the dots and drive retail from digital to destination.

Marketers should develop three practices to drive retail from digital to destination:

1. Understand the 5 Ds of Consumer Engagement: The marketing funnel has imploded under its own inadequacy. It’s time to understand the buyer’s journey from the outside-in. Following the 5 Ds allows marketers to understand, map and engage their connected consumers at key stations on the buyers journey
2. When it comes to content and channels, don’t think ONLY think AND: It’s time to break down the silos. Based on the 5 Ds, marketers must begin to work with strategic omni-channel (or multi-channel) formats. This means understanding how content, interactions and engagement work at each station – and where digital can extend or augment an experience (digital or non-digital)
3. Know and measure your path to conversion: Don’t fool yourself that all conversion must happen in-store. Make it easy to purchase anywhere – after all, mobile is the ultimate impulse device. But understand that in-store is now about controlling the brand experience. Ensure that the destination experience is worth the journey in. Use omni-channel analytics to measure and understand the path to conversion.

Now, take a moment to view this (now finished) campaign from Adidas NEO. What’s the customer experience? What’s the journey? And what’s the engagement strategy at play?

Now, how would you play this out with your brand? Be creative.

 

Mobile Disruption Catches Retailers Off-guard

We are now deep into the last quarter for 2012. Marketers are pre-occupied by two challenges – planning for 2013 and preparing to launch Q4 campaigns designed to close out the year on a sales high.

Innovation in the customer buying journey has, however, changed the game. We are all retailers now and the ground has already shifted from beneath our feet. Google Retail’s recent report on consumer shopping confirms what we have known for some time:

• The connected consumer sees no distinction between online and offline shopping
• The connected consumer discovers, debates and decides on purchase ahead of the marketing funnel
• Trust drives conversions

Marketers have failed to keep pace with consumer led innovation

While there has been some investment in digital technologies, and campaign experimentation over the last nine months, there has been precious little innovation where it counts – in marketing practice.

Six principles to transform your marketing efforts

Our recent big idea report on recasting the marketing funnel for consumer engagement identified six principles that must be addressed:

1. Fragmentation creates silos not synergies
2. The marketing funnel assumes a passive customer
3. The next-gen customer experience is owned from the outside-in
4. Next-gen customers purchase in their own time frame
5. Purchase decisions occur before consumers reach your marketing funnel
6. Trust is the currency of digital marketing

Marketers must prepare for the most social holiday retail season now

The 2012 holiday season is primed to be the most social ever. And in terms of “social”, read “mobile”. The Deloitte Dawn of Mobile Influence report on mobile retail reveals that mobile already influences significant in-store purchases and this is predicted to accelerate through 2016. This shift is a global phenomenon as our upcoming report 5 Lessons from Digital Asia Pacific’s Digital Trajectory shows, with mobile innovation efforts garnering 100 million+ audiences across the region.

To outcompete in your markets, retailers must move quickly to identify and fill gaps in the customer experience journey. To counteract this mobile disruption, retailers should:

1. Re-cast the marketing funnel in terms of the buyers journey
2. Look to software-as-a-service providers to fill the technology gap quickly and effectively
3. Consider whether your digital (mobile and social) marketing really does focus on customer need across the buying cycle (answer the WIIFM question – does it get me made, laid or paid) and recalibrate accordingly

Your POV

Are your retail efforts up-to-speed? Are you ready for the social holiday season? Add your comments or send us an email.

Please let us know if you need help with your digital strategy efforts.  Here’s how we can assist:

• Assessing social business/digital marketing readiness
• Considering new digital strategy
• Developing your social business/digital marketing  strategy
• Designing a data to decisions strategy
• Create a new vision of the future of work
• Deliver a new customer experience and engagement strategy
• Crafting a new matrix commerce strategy

What Your Purchases Reveal About You

The promise of big data is that it produces a win-win outcome for the customer and the business. As consumers, we relinquish our fears over (and some rights to) privacy, and in return receive a range of benefits – free access to networking tools, file and photo sharing, email and so on. It’s a well-worn path created by technology companies like Google and Facebook.

But who really wins in this big data exchange? For example, Dominos Pizza found that by analysing data, more pizza is ordered when it rains. This simple insight allows them to target offers to people in locations where it is inclement – using, of course, big data to do so. There could be a win-win here in that rainy weather may prompt us to seek warm, convenient food such as pizza – but we may also ask which comes first, the pizza craving or the suggestive sell?

This infographic from CamCode reveals some surprising statistics about the big data that is already out there and available to your favourite retailers. And while the advertising may suggest that you are important to retailers, it seems they don’t really want YOU. They want your data.

With Mobile Commerce, We Are All Retailers Now

The early days of eCommerce were a hard slog. The technology was cumbersome and unreliable, the gateways were expensive and the business community was sceptical. And the shoppers … well even the early adopters were hesitant – concerned about credit card numbers, identity theft and having to pay for goods in advance that may never arrive.

But over time most of those issues have been overcome. And even those that still concern us – like identity theft, security and so on – are traded for convenience. After all, we are generally happy to share our credit card information when a deal is ready to be done.

Mobile commerce – or mCommerce – however, has been able to ride the shirt tails of eCommerce. In many ways, the success of sites like Apple’s iTunes and Amazon have not only changed our sense of trust – they have changed our consumer behaviour. Just think, for example … when was the last time you bought a DVD or a music CD from a shop? For many of us, digital experience is at the core of our understanding and acceptance of so many brands.

And as we follow the bridge of convenience through our mobile devices, we will find ourselves using what businesses call mComerce (though we will just view it as convenience). And this makes me think again – that for the future of our brands, we need to think mobile first but with a social heart.

But our businesses challenges do not stop at the mobile gateway. In fact, they are just the start of a business trend that is going to transform our industries. A couple of years ago, well respected content marketing evangelist, Joe Pulizzi  urged us to think about EVERY business as a “publishing business” – but now in the same way – we have no choice but to consider ourselves RETAILERS too. We are always on, always connected and always SELLING as the infographic from BigCommerce, below, shows. The question is … are you ready?

Retail Innovation? Try Embracing Showrooming

You know what it is like … you see an item online. It’s a great deal – a special price and a coupon code. That credit card is burning a hole in your desk. But in the back of your mind is that one lingering doubt … will it fit.

So what do you do? You “showroom” – you go in-store to check the item for size, fit, colour or texture. You do your “shopping” in-store and you make your purchase online. This practice is known as “showrooming” and a recent article suggests that retailers have some work to do to avoid falling victim to this new shopping trend. Retail software vendor, CrossView, suggest that cross-channel retailing is the answer.

And there is big business at stake – with more than one in two Australian shoppers aged over 15 now shopping online. PwC and Frost & Sullivan predict that 2012 online spending levels will hit $16 billion – and will grow at a compounded growth rate of 14.1% through 2016. But these figures don’t include travel, events, financial services or media downloads.

This is backed up not only by spending but by brand awareness and customer engagement via social media. According to SocialBakers.com, Australians love online shopping – with Fashion, eCommerce and FMCG industries ranking the top three Australian Facebook pages in the year up to July 2012.

And it is this convergence of eCommerce and social media – in what we can loosely call “social commerce” – that is potentially a game changer for retail. For decades we have seen an entrenched refusal of Australian retailers to invest in the kind of digital experimentation required to lead to breakthrough innovation. This, in turn, left gaping holes in the market – which benefited companies like Apple and Amazon.

But if we look to emerging consumer behaviour we can see not only threat but opportunity. What if retailers were to embrace showrooming? What if, rather than discouraging it through restrictive in-store policies and management – retailers owned, encouraged and transformed the customer experience so that it was EASY for shoppers to showroom.

After all, if the social web has taught us anything in the last decade it is that consumerisation crushes all obstacles.

"Australia" is Australia’s Largest Brand on Facebook

Social media can seem to be all about “me me me” – with plenty of commentary on “personal brands”, “citizen journalism”, bloggers, Twitter celebrities and the like, but some brands understand the broader trend of which social media is an enabler. With the right approach, some brands can actually use social media to bring their customer-centric strategy to life – demonstrating that social BUSINESS is about “you you you”.

Recent analysis by analytics platform SocialBakers.com reveals that a massive 25% of total Facebook users reside in Asia. And that in Australia, fashion and eCommerce (yes, more fuel for my Social Retail crusade) are the clear winners – with one exception. Australia’s most popular Facebook page is See Australia with just over 3.3 million fans.

Another View on Retail - Rohit Bhargava’s 12 Big Ideas

Over the last couple of weeks I have been writing and thinking a lot about the future of retail. I’ve been interested in exploring the state of Australian retail and understanding why a sector that was once driven by innovation now seems so bereft of it.

In many ways, the seeds of the current retail malaise were planted during the dot com boom. At the time I was working in the IBM eBusiness Centre and can recall many meetings with retailers. There was confusion, hype and hubris (obviously a bad combination). eCommerce was still in its infancy – and was expensive to implement – back then we didn’t have the online shopping plugins for Wordpress, shopping cart modules or “cloud based” online commerce providers that we do today.

Effectively the problem was one of technology.

And as the dot com boom came and went, it seemed that most retailers breathed a sigh of relief. Talk of the “death” of the bricks and mortar shopfront had been over exaggerated, and in the washup, retailers felt justified and went back to business as usual.

But innovations never rests … and the retailers took their eye off the ball. And in the background, new innovations were sweeping the global marketplace. Recommendation engines, social proof and social networks were transforming our notions of trust and technology was becoming more robust and secure.

Those retailers with an eye on the future and a toe in technology experimented, learned and innovated. They created new markets and corralled new audiences. And the whole game changed.

Now here, in Australia, after decades of neglect, condescension and bloody mindedness, the scramble is on. It seems there is a belated recognition that “online” is somehow connected to “in-store”. But it’s hard to catch a market that has been evolving and experimenting for 20 years. What can be done?

Rohit Bhargava shares 12 trends that might just provide some direction.

12 Big Trends Changing Retail Marketing Today from Rohit Bhargava

Conscious Consumption - Andable and the Future of Retail

When What's Mine Is Yours – the groundbreaking book on collaborative consumption launched, it was at the crest of a newly emerging movement. Combining an awareness of our under-used or under-appreciated assets with online networks for managing reputation, collaborative consumption not only disrupts business models but creates new markets.

The poster child for the movement – AirBnB – showcased how the tourism/hospitality industry could be inverted – allowing travellers to stay in private accommodation and for individuals to create an income stream from by renting out their spare rooms.

Collaborative consumption, trust and human connectivity

One of the most interesting aspects of the collaborative consumption movement is that it impacts behaviour on both the buyer and vendor side of the equation – the thin veneer between public and private that we experience due to social networks becomes membrane-thin when you invite someone into your home. But the same holds true for the visitor. Think about it …

• Can you trust the visitor?
• Can you trust the owner?

Fundamentally, there is an intention to trust – or a willingness. And there is also a conscious decision to act. As Rohit Bhargava says, “in a world where we don’t trust institutions around us, the only real metric for trust is human connections”.

So what happens when you put a focus on this conscious decision – to purchase with a clear intention, but to do so with purpose?

Andable – retail with a social purpose

Sydney-based startup, Andable, are tapping this conscious consumption model with a globally unique online marketplace. Over the last few months, the Andable team have been working out of the Vibewire Innovation Lab in Sydney’s Ultimo, so I have had a number of opportunities to hear their story, understand their approach and see the site develop.

Featuring a wide variety of products across over 80 categories from independent retailers and individuals, Andable is allowing consumers to securely purchase while also supporting an overseas entrepreneur through micro-loan marketplace, Kiva. With each purchase 10% of the price is invested into a Kiva micro-loan.

So not only are consumers able to purchase directly from independent retailers (who often cannot afford the time or money, or do not have the confidence to create online shopfronts), they can do so in the knowledge that 10% of the purchase is performing a social good in another part of the world.

The nice thing is – is that Andable guarantee the repayment of the 10% in three months – so the vendors are not out of pocket. It’s just a slight deferral. And there is minimal risk on Andable’s side, after all, Kiva experiences a current  98.99% repayment rate for loans with all partners.

When business gets personal, consumption becomes conscious

The idea behind Andable is simple and was inspired by personal experience. The founders, Rupal Ismin and Melissa Dean, with backgrounds in media and advertising had a sense that online shoppers were wanting something more from their retail experience.

The 10% mission was inspired by Rupal’s grandfather, who, despite growing up as an impoverished boy in India, always donated 10% of his income to charity. By putting this mission at the heart of the business model – consumers are offered a conscious choice in the purchasing process.

And as the walls between our public and private identities continue to collapse, and as we continue to choose about where to invest our time, our consumption and our attention, a marketplace that offers a social and feel-good experience delivers a new dimension to our retail experiences. After all, we all want to do something good in the world – now perhaps we can have our cake and share it too.

Does This Get Me Made, Laid or Paid?

We tend to overcomplicate things in the marketing world. We dig down into motivation, intention and desire. We walk the murky depths of persuasion and influence and spend inordinate amounts of time trolling data points in the hope of extracting a grain of insight.

But, if we are honest, most of us are wondering about the WIIFM model – what’s in it for me.

As consumers we THINK we have a handle on the exchange – a purchase for a good or service. But branding takes us beyond this – tapping into deeper needs and urges. After all, a consumer purchase is never just a transaction – and branding done well will ensure that we weigh up three key points – does this get me:

• Made
• Laid
• Paid

The Social Retailer: what ‘social’ means for the future of commerce

Tara Hunt, founder of retailing startup buyosphere– explains this in more detail in this great presentation. Looking at the future of retail in a social context, she cuts through the social and marketing noise to concentrate on the most important thing. Not product. Not even design. But customers. And that’s why marketing really is sexy.

View more presentations from Tara Hunt