Facebook and Retailers

At the core of the question lies the purpose and motivation for consumers participating in a Facebook experience. Or is it? One school of thought would argue that in order for a retailer to maximize the potential for engaging an audience on Facebook, the communication/marketing used needs to align with the critical elements of the Facebook community: who, why, and what. Who is there? Why are they there? What do they do while they are there?

Following this approach, a retailer must first seek to understand the community, which in and of itself is as useless a statement as "seek to understand their consumer". Yes, it's a good idea. But a retailer doesn't have "a" consumer, and Facebook isn't "a" community. It's a very large portal with what are rapidly becoming as many splinter communities are there are in the general population. So talking about a monolithic "community" is silly, and self defeating. That helps, because it limits the retailer to "why" and "what". The "who" is now the same sets of "whom" the retailer tries to reach with any and all of it's normal marketing messages.

The critical component of retailer activity on Facebook revolves around content. Content is driven by "why" and "what", made specific and appropriate for the platform in question. And make no mistake. Facebook is a platform (at least for retailers). So it comes down to content. Retail Facebook pages are going to attract fans, be sticky, and act in accordance with marketing strategic efforts to the extent that the content supports those things. So understanding the "what" and "why" become very relevant. Approaching Facebook from any other point of view is almost arrogant. Given the vast numbers of people on Facebook, if someone creates something, creates awareness that it exists, then some appreciable level of exposure will occur.

Next post will take a look at what some retailers are doing in the content arena, and analyze how Facebook-appropriate those efforts appear to be.

Facebook and eCommerce

The sheer size and reach of Facebook, as a portal or opportunity to influence consumers, is almost overwhelmingly compelling to brands and retailers. In addition to the number of visitors, Facebook streams the second most amount of video content on the net, behind only YouTube. Time spent on the site, number of visits per unique individual.....these are all enticing stats. So, as would be expected, brands and retailers are flocking to Facebook. With the usual wide spectrum of results.

One of the most common metrics used in number of fans. Here are a few interesting numbers for leading retailers:
Walmart has over 850,000 fans. Target has over a million. Macy's slightly more than 400,000. J. C. Penney has 800,000. Victoria's Secret almost 3.2 million (might be something else at work there!). Yet the dominant demo is young adults and teens. PacSun has 260,000 fans, Hot Topic 260,000. Aeropostale has almost 600,000, while one of the hottest brick and mortar plays, Buckle has only 54,000.

Putting these numbers into perspective, Walmart averages over 50 million monthly unique visitors to it's ecommerce site, and Target isn't too far behind. Most of the other retailers mentioned are in the millions or tens of millions of monthly unique visitors. So the "fan penetration" rate against online visitors is relatively low.

Why? Are retailers doing Facebook right? What's missing? What's working?

More to come.

The Web's Influence on Brick and Mortar

An article todaly in eMarketer Daily, which quotes a survey from e-commerce solutions provider ATG and conducted by MarketTools, ads some additional emphasis to the behavior of online consumers with respect to shopping.

Put simply, no matter which channel the end purchase occurs in, an enormous percentage of consumers research the purchase first online. Other studies have shown that shopping research activity often starts on retail sites. Put these two facts together. Now step back and look at how, what and whom makes decisions regarding the retail ecommerce site with your organization. Is it a group of people who understand marketing? Communications? Influencing the purchase cycle? Or is it a group primarily focused on transactional analysis and incremental improvements within the mechanics of the site itself?

If consumers research products prior to buying (and they clearly do in very large numbers) and if they often start that search on retail websites (and they clearly do in very large numbers) THEN the very low net conversion rates for these sites indicate that amongst other variables, large number of consumers are not getting the information they need to feel comfortable completing a purchase.

Which calls into question what type of information is being provided, and the format the information is presented in. At the top of the hierarchy is video. This is the Internet. Outside of email, the number one activity online is video consumption. Period. Yet retail sites insist on communicating with their visitors through pictures and text. Video on retail sites can and should be used to actively influence the researching consumer, engaging and informing, while simultaneously giving them the opportunity to act on the impulse being created.

Think about it. Millions of visitors engaged in research. Most of them leave without buying. Some of that is inevitable. Very little of it, anymore, is because of security concerns. Most of it, now, is because there simply isn't the information they need presented in a way they want to consume it.

Enable video commerce.

A M commerce experience Retail could create NOW!

During my morning reading, I came across another article about "mobile marketing", this one in AdAge. As with many such articles, the technology and adoption rates for that technology are a number of years in the future, and the consumer behavior which supports the value proposition hasn't actually developed yet. Interesting, but not applicable today. Particularly for retailers, specifically multichannel retailers.

Surprisingly, I have come across a type of M Commerce which exists today, relies on hardware already well established in the market, and leverages consumer behavior which already exists. What if we were to look at the "m" in mcommerce and say that it stands for a mobile bridge between the offline and online world? What is it? Using 2D or QR codes to link online content to off-line shopping behavior. What does that look like?

It looks like a consumer standing in front of a washing machine and being able to access the consumer reviews (text and/or video) which already exists online for that item. It looks like a consumer standing in front a television set and being able to access the Flat Panel TV selection tool the company has for it's ecommerce site, or the video buying guide also accessible online. Or receiving coupons and marketing information driven by the consumer's loyalty card history...all of which are stored online. These aren't things that require innovations in technology or changes in consumer behavior.

Consumer behavior: right now, one of the most common actions for consumers online is to research products before making purchases. Using net-linked devices to do that research isn't limited to laptops and desktops. Recent studies show that smartphone users do exactly the same thing with theirs. They look for information prior to making a purchase. One of the most commonly accessed bits of information is customer reviews. Videos are being consumed on smartphones at staggering rates. So none of the behaviors noted above requires that the consumer do something new.

The hardware which makes this possible are smartphones.....which have a pretty solid user base already and are projected to grow at over 8X the growth rate of the overall mobile phone handset market. The software are 2D or QR codes. See 2DCodeMe.com for both an overview and free generator for these codes. Essentially, all the consumer needs is a smartphone and a 2D code reader app.....which are free and take about a minute to download. Once on the smartphone, the apps use the camera function as an advanced scanner which recognizes the data stored in the code and tells the smartphone what to do. Like open a url linked to a video providing information about choosing flat planel televisions.

This post was just to say "hey....there's a form of M commerce you could be doing NOW".... the next one will tell you how easy it is to actually do it.

Hurry Up and Wait

I recently presented a technology and service at an ecommerce retail tradeshow. The technology is undeniably best in class and the service is unique and uniquely designed for retail. These were the prevalent comments from a satisfyingly long list of retail executives. The pricing is attractive, the effort required is minimal, and the application to their brand was clear.

However, one of the largest cultural issues impacting retail raised it's not so pretty head. This product and service, which enable real video commerce, do not represent an improvement or extension of something most retailers are already doing. At the time, no one was "already doing it". As a result, this innovation, like so many others before it, started to be relegated to the stack of "interesting but not immediately relevant". Put in perspective, two years ago, intelligent product recommendations were treated in a similar way. Now there are five or six major providers of the service, virtually every major ecommerce retailer either has it, is working on it, or is in the process of upgrading what they started out with. But if you talk to the people who first brought the innovation out....well, it was the same thing. Nice, we're focused on other things right now.

Well, retail executives: someone else HAS done video commerce. And they've done it, on their own, at enormous expense, implemented almost exactly the way the Future Merchants service and technology were designed to do. Here's the link: Ralph Lauren Shoppable Fashion Show

So it's been done. And by a reputable company. With lots of money, and one that decided to go ahead and figure out how to enable video commerce without waiting for it to become mainstream. Are you ready to reprioritize now?

This isn't just about video commerce. Retail must find a way to embrace innovation. Otherwise the industry, by and large, will continue to be characterized by one of two traits. Either it's a "last adopter" of already proven technology or strategy, OR it's too early in the game, long before the technology or strategy has been developed or adapted for retail (think mobile commerce).

What's Behind These Numbers?

An article published today in Practical eCommerce raises some critical points regarding evaluating the effectiveness of video on eCommerce sites.

Practical eCommerce Video Metrics

The initial statistics show a high adoption rate by eCommerce sites, and relatively low click-through rate for the content. Not surprising. As a study completed by Future Merchants (click here for the study) found, the technology used, type of video programming, online location of the content and several other measures may provide insight into WHY those statistics are so non-compelling.

Video for eCommerce sites, if limited to product demos, is going to continue to represent a small improvement to overall site metrics. And in order to have even that small improvement be measurable at the top line level, those product demos have to be applied to a significant portion of the SKU base. Which at the moment remains a difficult proposition, and unjustified when the 80/20 rule of SKU contribution is taken into consideration.

Effectively implementing video within an eCommerce site represents a strategic undertaking that can have an enormously powerful benefit for both the eCommerce metrics and on a multi-channel basis. Or it can be a waste of time and resources.

Open for Innovation?

Innovation for the sake of doing something different is a waste of resources and capital...both financial and human. With one caveat: sometimes doing something different is part of a larger corporate culture initiative, and then often the point simply is to do the different thing, not to drive a specific response from it.

However, in most cases, retail is careful and cautious in assessing innovation. Too often, the "downside" is measured and the "upside" is discounted. What if it doesn't work? What if the provider goes out of business? What if status quo (as mediocre as it was) would have been better?

And these are as detrimental to a business as "let's do it"! without careful consideration and balance. The real goal is to have a process in place, complete with resources and attention, to test innovation and place the organization in a position to take advantage of that test.

Does your company test innovations? Take a look at the IT plan for the coming twelve months. How many elements are set aside for testing projects or concepts with scale and leverage potential?