Swimming in Amazon Shopping — for the Exotic and Different

Amazon shopping is its own beast. When I moved to Brazil, any mention of “Amazon” immediately conjured up visions of this great river teeming with hungry piranhas, surrounded by nearly impenetrable jungle; one of the last truly wild places on Earth, a great place to visit. But, as the expression goes, you wouldn’t want to live there. That was 19 years ago.

Walking in the Amazon
Credit: Peter J. Rosenwald

Amazon shopping is its own beast. When I moved to Brazil, any mention of “Amazon” immediately conjured up visions of this great river teeming with hungry piranhas, surrounded by nearly impenetrable jungle; one of the last truly wild places on Earth, a great place to visit. But, as the expression goes, you wouldn’t want to live there. That was 19 years ago.

Say “Amazon” today and the 24-year-old behemoth that comes to mind is the largest online retailer in the world, a direct seller and digital marketplace with a piranha’s aggressive appetite. It is said to have chosen its name because the Amazon was “exotic” and “different.” It is both. This year, Jeff Bezos, Amazon’s founder and boss, reported that the company had achieved 100 million Amazon Prime subscribers, or 64% of households in the U.S. If any company can be said to have disrupted the retail landscape, Amazon is the one.

Swimming in Amazon
Credit: Peter J. Rosenwald

The unbroken growth of Amazon shopping worldwide demands the answer to the difficult question: which came first, a consumer desire to be able to conveniently purchase a wide range of goods with the convenience, price and choice offered online by Amazon and its principal competitors? Or Amazon’s brilliant marketing, which seduced the consumer away from brick-and-mortar retailers — even shopping malls — to the computer screen and convenient home delivery?

Amazon River
Credit: Peter J. Rosenwald

There is no doubt that sophisticated online shopping appeared at just the right moment in the digital revolution. Whether it will doom retail shopping is an open question.

A recent article in eMarketer Retail provides some clues to the direction where consumers are driving the online business model.

“According to ‘eMarketer’ forecasts, the gap between U.S. first-party sales on Amazon and third-party sales is widening. In 2017, direct sales grew 20.9% to reach $70.40 billion. By 2019, that total will climb to $95.08 billion. By comparison, marketplace sales jumped 41.4% to $129.45 billion last year. And marketplace sales are expected to log growth topping 30% this year and next. “

What is the “marketplace,” other than a digital shopping mall in your home or in your pocket? Why endure the traffic, parking problems, store clerks who frequently know less about the merchandise than you do and all of the bother that comes with it?

The answer would seem to be that consumers still find “shopping” fun, and welcome the live interaction with like humanoids. (What was that great one-liner? Christmas is the time people stop shopping and start buying things.) Last weekend, a visit to a nearby shopping mall found it teeming with happy families, kids and canines in tow, enjoying the experience.

But shouldn’t the generous loyalty programs offered by some online marketers overcome the temptation to go out and shop? It appears not always. Another recent article, also from eMarketer, said:

“Loyalty programs have a serious retention problem. Consumers are quick to sign up, but quick to forget about a loyalty program once they get their initial discount. Members, overloaded with points, miles and free shipping offers, are not necessarily consolidating purchases with one brand in order to accrue rewards.”

There is no simple answer, which is good news for resilient retailers. The many benefits of the Amazon marketplace model appear not to always outweigh the entertainment value of physical retail shopping. Social media is not really very social and you can’t buy the kids ice cream cones on your iPhone.

The piranhas may have to go hungry for a while longer.

humanoids on the Amazon
Credit: Peter J. Rosenwald

Top Holiday Season Digital Trends

The holiday season is nearly in full swing. How will it be different than past seasons? The most striking difference is not in what consumers are buying, it’s how they are shopping. Consumers have been gravitating toward digital over the past decade, but this year, shoppers have indicated that they will pass a new threshold.

The holiday season is nearly in full swing. How will it be different than past seasons? The most striking difference is not in what consumers are buying, it’s how they are shopping.

Consumers have been gravitating toward digital over the past decade, but this year, shoppers have indicated that they will pass a new threshold. For the first time, they anticipate making the majority (51 percent) of their holiday purchases online, according to a study by Synchrony Financial*. This has been steadily increasing over the past three years, up from 47 percent in 2015 and 49 percent last year.

Synchrony Holiday Season Shopping StatsWhich devices will they be using to make these purchases? Consumers indicate that one in five holiday purchases will be made on their mobile device. So, not only is shopping trending toward online purchases, many shoppers are planning to do it on-the-go.

Shoppers like mobile because, quite frankly, it’s easy and always around. The mobile device is with the shopper continuously. Whether riding on a bus, waiting in line for coffee or binge watching your favorite Netflix show. If you think of the perfect gift for Aunt Helen, you can order it immediately. And, not to worry about keeping track of your purchases — half of mobile shoppers say they use mobile because they can easily view the confirmation in their email.

And, discount hunting via mobile is ubiquitous. More than one-third (36 percent) of shoppers say they will shop via mobile during the holiday season because they can more easily link their email offers and coupons to their purchases. So, bargain hunters don’t have to worry about missing out on a good deal. The ability to scan available coupons and download offers gives shoppers confidence that they are getting the best price.

With the ease of shopping online and the widespread availability of next-day shipping, consumers may be less rushed to get their shopping done early this holiday season. Only 44 percent of consumers say they will be shopping earlier this year. Last year, 53 percent said they would be shopping earlier than in the past.

And, shoppers are less likely to be “hunting for a deal” on specific days like Thanksgiving, Black Friday or Cyber Monday. This is perhaps due to the prevalence of deal hunting throughout the season. Consumers have been less hooked on shopping on specific days, if they are certain they can find the best price on any given day.

How are retailers responding to these trends? One way is having websites that are optimized no matter which device consumers use — laptop, tablet or mobile. Retailers are spending time and resources building websites that are easy to navigate and intuitive. The experience is important — the top reason shoppers delete a retailer app is due to poor functionality, according to the Synchrony Financial 2017 Digital Study.

Also, shipping will be a big element of the online shopping experience this year. Many retailers have graduated from two- to three-day shipping to one-day, or next-day shipping. And, since shoppers say they will be shopping later in the season, this will be a big deal this year.

Finally, and perhaps most important, bargain hunting remains a key ingredient in the shopping habits of consumers, whether they are early bargain hunters or last minute deal seekers. The ability to check product reviews, compare prices and use coupons is a key part of the holiday shopping experience. If the consumer can do it all on one website, great! If not, off they go to the next retailer.

* Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents from the Synchrony Financial 2017 Pre-Holiday Study unless otherwise noted.

Amazon Aims to Shut Down ‘Showrooming’

First off, I’m a fan of Amazon. I can order everything from cat litter to sequined gowns, from dried blueberries to external hard drives. And I love that. So when I found out Amazon was granted a patent that prevents in-store price checking, well, let’s say there was a bit of a record scratch.

Amazon shopping memeFirst off, I’m a fan of Amazon. I can order everything from cat litter to sequined gowns, from dried blueberries to external hard drives. And I love that.

I’m a loyal Prime member, as well, and appreciate that when I’m too busy to make it to the store, I can order cat food for Apollo and have it delivered two days later.

So when I found out Amazon was granted a patent that prevents in-store price checking, well, let’s say there was a bit of a record scratch.

From The Washington Post:

Amazon was awarded a patent May 30 that could help it choke off a common issue faced by many physical stores: Customers’ use of smartphones to compare prices even as they walk around a shop. The phenomenon, often known as mobile “window shopping,” has contributed to a worrisome decline for traditional retailers.

But Amazon now has the technology to prevent that type of behavior when customers enter any of its physical stores and log onto the WiFi networks there. Titled “Physical Store Online Shopping Control,” Amazon’s patent describes a system that can identify a customer’s Internet traffic and sense when the smartphone user is trying to access a competitor’s website.

Trust me, there has been MANY a time in which I pulled out my iPhone while standing in the middle of a Target aisle, unable to find the item I’m looking for so I give up and look on Amazon. While still in Target. Why? Because I don’t want to forget that I need to pick up whatever the item is (and can’t get at Target). And yes, I’ve also done some comparison shopping, because that’s the norm nowadays.

This patent is a little scary. Sure … it’s for use in Amazon’s own brick and mortar stores, on the store Wi-Fi, so it’s not widespread — yet —  but it seems a bit hypocritical. I mean, Amazon is the company that’s benefited wildly from showrooming!

But here’s the deal: This patent is the foot in the door for more of this to occur. Who’s to say Target wouldn’t be next, keeping me from searching online for houseware items I can’t manage to find in their store?

I understand that showrooming has been a real punch in the gut for some brick and mortar retailers, but it’s the new reality. You can either adapt and evolve, or you can do shady things like block someone’s online search … causing consumers to get ticked off and go elsewhere.

What the Hell Is Happening to Retail?

Retail is having a moment right now. Since the calendar flipped to 2017, we’ve seen more bankruptcies than all of last year. What’s going on?

Retail is having a moment right now.

Since the calendar flipped to 2017, we’ve seen more bankruptcies than all of last year, including some consumer electronics chains like RadioShack (again), hhgregg and Sears. Just recently, hhgregg announced it was going a step further, closing all of its remaining stores and liquidating all products.

The doom-and-gloom news has, of course, extended well beyond the CE industry. Some major stores — JCPenney, Macy’s, Payless, Lululemon, Urban Outfitters and more — have all announced either store closures or seen their stocks tumble to new lows. Ralph Lauren even announced that it was closing its flagship Polo store on Fifth Avenue in New York.

Mind you, all of this is happening at a time when the economy is very much out of the recession phase, consumer spending and confidence are up and the economic outlook has been nothing short of rosy.

So What Gives?

So what the hell is going on? Is this the end of retail? Is the apocalypse upon us?

The answer to any of those questions, as you’d expect, isn’t so straightforward.

Yes, this is a very dark time for retail. A lot of things are up in the air. Brick-and-mortar stores are facing some incredibly difficult times. But that doesn’t mean the entire industry is about to go kaput.

The Atlantic recently published a deep dive into the current state of the retail industry, and its explanation couldn’t have been more accurate — it’s probably the closest thing to a complete answer we’ll be able to find. The analysis points to three main causes for the “Retail Meltdown of 2017”:

  • The rise of online shopping,
  • the existence of faaaaar too many malls,
  • and a major shift in how consumers are spending money.

All of those make perfect sense. No industry understands the impact of online shopping better than the consumer electronics space, which has seen billions of dollars in business go to Amazon. Since 2010, the e-commerce giant’s sales in North America have quadrupled from around $16 billion to more than $80 billion last year. And in 2016, Amazon’s growth alone accounted for more than half of all online sales growth.

There’s also the mobile wallet affect. Since 2010, The Atlantic pointed out, mobile shopping has grown from less than 2 percent of digital spending to 20 percent last year.

As for the declining footprint of malls, there are roughly 1,100 in existence today. That’s down from the peak of about 1,500 (all of which were built between 1956 and 2005). So nearly a third have closed in the last decade. Further, while all of those malls have closed, not a single new one has been built.

Whereas malls used to serve as the cornerstone of local communities, the era of expansion resulted in an oversaturation of malls. When you take into account the number of malls and outdoor shopping centers throughout the U.S. — which brings the total up to more than 7,500 — and break it down by “gross leasable area,” as one research firm did, the U.S. far outpaces the rest of the world.

shopping center study

Lastly, The Atlantic hit on consumer spending trends. Here, it notes that Americans have shifted from a materialistic mindset to one where we’d rather spend money on going out with friends for food and drinks. A fair point.

A Shifting Retail Paradigm

The message in all of this is really geared toward the larger national retail chains. The downturn in physical retail square footage goes to show that, in the era of omnichannel retail, there’s no need to expand your brick-and-mortar footprint in order to boost sales. Rather than needing more locations, companies need a stronger e-commerce strategy. Easier typed out by a blogger than implemented by a retailer.

But what about the smaller stores?

If anything, all of the mall closures are positive for the specialty guys out there. With less competition in those local markets, consumers who still prefer to shop in-person are more likely to turn to you.

But that doesn’t mean you can continue to operate as you always have. Just like we wrote about in our analysis of Staples’ new strategy to drive foot traffic, local shops need to continue to drive home in consumers’ minds why their stores matter. You have to find that personal touch, something that separates you from the national chain, and can entice consumers to come walk through your showroom. It doesn’t have to be a co-working space. Maybe it’s free delivery if they live within so many miles, or same-day installation for orders over a certain price threshold. Heck, maybe it’s even just outstanding personal service from your salesfloor team.

Retail isn’t going anywhere. There’s always going to be a need for a physical place where people can come in and experience a product. The only difference today is that consumers need a little more enticing to get out from behind their computers. The onus is on the retailer to prove its worth in its communities. If you can do that, the “Retail Meltdown of 2017” will mean absolutely nothing to you.

A Turnaround Idea for Slow 4Q Sales

Only about 30 days or so are left in the holiday season for 2013. Black Friday and Cyber Monday are around the corner. And if you’re looking at your early Fourth Quarter results and can see you need a jolt of energy to turn things around, keep reading. Today we reflect on a shopping trend that began a year ago, and we you offer an idea you can implement

Only about 30 days or so are left in the holiday season for 2013. Black Friday and Cyber Monday are around the corner. And if you’re looking at your early Fourth Quarter results and can see you need a jolt of energy to turn things around, keep reading. Today we reflect on a shopping trend that began a year ago and we you offer an idea you can implement yet this season.

A year ago, early online holiday shopping broke sales records. While forecasts for this year appear to show modest overall growth over last year, there will be winners—most likely online direct marketers ready for the growing number of consumers who purchase via mobile devices. Even if you didn’t plan for mobile marketing, it’s not too late to move into action to help your organization take its place in the winner’s column.

The migration of online shopping will most likely continue its shift from desktops to mobile. Last year it was the Apple iPad making headlines. Consumers used iPads by a factor of nine-to-one over any other mobile device, doubling the year before. With Apple’s 52 percent market share, their users accounted for 88 percent of online shopping traffic, according to IBM’s Digital Analytics Benchmark Report.

Of course, that was then, and this is now. Recent data tells us 170 million iPads have been sold. A substantial number of people have them, and use them.

As direct marketers, you have an opportunity to take advantage of the sheer number of iPads, and the trend toward using it for shopping, by optimizing your website for mobile applications (if you haven’t done that, make it a 2014 priority). In addition, when you use tools that work well on iPads and hold your prospective customer to the screen longer, your odds for success improve.

One of tool that works great on iPads, and has proven to lift sales, is online video.

Consider these stats:

  • Video is a driver of consumer confidence. Consumers are willing to watch videos 60 percent of the time they are found, and 52 percent of consumers report that they are less likely to return a product after viewing a video (Website Magazine).
  • 52 percent of consumers say that watching product videos makes them more confident in their online purchase decisions. When a video is information-intensive, 66 percent of consumers will watch the video two or more times. (Internet Retailer).
  • Shoppers who viewed video on product pages were 144 percent more likely to add to cart than other shoppers (Internet Retailer).
  • Shoppers who viewed video were 174 percent more likely to purchase than viewers who did not (Retail Touchpoints).
  • Looking for higher email click-through rates? Link to a video. About half of marketers who use video in email campaigns see increased clickthrough rates, time spent reading the email, and more sharing and forwarding. (eMarketer).

So what do you do today to test online video in the remaining days of this shopping season?

  1. Conduct a competitive analysis of what your competition is doing with online video. Look at competitor websites for video, search on YouTube and social media. Check the length, and examine their format.
  2. If you don’t have a video, record one (or more)! If you don’t have expertise inside your organization, there are multitudes of creative resources that can help you out. The fact is, an inexpensive camera, and someone with editing skills, can create a video for you in no time. While a bootstrap approach may not be ideal long-term, it’s a place to start.
  3. Load the video on YouTube (10 ways to optimize for search here and 12 overlooked ways to help your video rank higher here). Place it on your website or a landing page.
  4. Send an email to your customer list to promote it. Use the word “video” in your subject line—testing shows your open rate will increase. Since we’re talking mobile here, make sure your HTML emails are using responsive design. If they aren’t, readability on smartphones is challenging, so readership and clickthrough rates go down. Most email portals—e.g., ConstantContact, iContact, Mailchimp, and others—offer responsive design email templates.
  5. Include a link to your video on social media. After about 24 hours, check your social media metrics and you should see a spike in engagement with your followers.
  6. Mail a postcard. You have time. Make it graphically obvious on the postcard you have an important video (story/product demonstration/testimonial) and direct your customers to your landing page. Use an oversized “Play” symbol on a thumbnail that you create of your video. Use a QR code or a PURL to more closely track response.
  7. After bringing prospects to your landing page, you’ve got them started at the top of your sales funnel. Now it’s time for marketing automation software to takeover (more about this topic in a future blog) and convert the lead to a customer before the books close for 2013.

If you haven’t tried video, especially when it’s proven that customers love mobile devices like iPads, now is your time. It’s proven that consumers watch videos, confidence is lifted, and they’re more likely to add a product to a cart and purchase after watching a video. Now is the time to test your organization’s ability to be an agile direct marketer.

Which is Better for Mobile Shopping, Tablets or Smartphones?

Are you wondering whether it’s worth providing your online retail offering on tablets, particularly the iPad? Are you also facing the challenge of how to get your mobile strategy on track? Before you decide which course to follow, here’s some data to consider:

Are you wondering whether it’s worth providing your online retail offering on tablets, particularly the iPad? Are you also facing the challenge of how to get your mobile strategy on track? Before you decide which course to follow, here’s some data to consider:

Although only a small percentage of users, tablets are poised to more than double their U.S. installed base penetration in 2011 to 7.6 percent of the population, or 24 million devices, according to eMarketer. Two out of five consumers considering purchasing an iPad cited shopping on the device as a reason for their interest, according to research from Vision Critical in November of last year. This isn’t surprising since online shopping is a visual experience and tablets are content-consumption devices.

Early results show that targeting tablet owners rather than smartphone users may be the wise choice, according to the e-tailing group. One in 10 tablet owners used their device to browse or buy online every day versus 6 percent of smartphone owners. The research also shows that once owners start buying via a tablet, they return. Nearly 25 percent of tablet owners made at least six purchases during the past six months, compared to 15 percent of smartphone users who did the same.

Furthermore, tablet owners tend to be gadget-buying early adopters. iPad owners tend to be young, educated and affluent, an ideal target market, according to the Pew Internet & American Life Project and Forrester Research.

Due to the tablet’s larger screen and better user functionality for browsing, consumers preferred the tablet shopping experience (88 percent thought it was satisfactory or very satisfactory) to that of a smartphone (73 percent thought it was satisfactory or very satisfactory).

While smartphones are great for shopping in-store or gathering information on the go, they’re not user friendly for extended research activities. In part, this is attributable to the fact that less than 5 percent of retailers have a mobile site, according to October 2010 research from Brand Anywhere and Luth Research.

Here are three tips to consider when planning your company’s mobile strategy:

  1. Take advantage of the tablet’s visual presentation (but avoid using Flash).
  2. Check how your content is formatted and renders on different tablets.
  3. Make sure that shoppers can easily purchase once they’ve seen enough.

Now is a good time to start testing tablets to enhance your customers’ shopping experience, especially if your products are highly visual in nature or need to be seen in the environment in which they’ll be used. Bear in mind that tablets and smartphones fulfill different shopping needs for consumers, therefore you shouldn’t choose one option over the other.

Finally, Online Shopping With Friends

Don’t you just love shopping with friends? I do. I love getting opinions from them about what items of clothing look good on me, what would be considered a good value, what would
make a great gift and so on. When shopping with friends, I bet I also spend
more.

Don’t you just love shopping with friends? I do. I love getting opinions from them about what items of clothing look good on me, what would be considered a good value, what would
make a great gift and so on. When shopping with friends, I bet I also spend
more.

That’s why I was
interested in a new, free widget called Shoplication
that I received a press release about recently.
Placed in the checkout areas of
online retailers’ websites, the widget — which says, “Shop With Friends”
— enables shoppers who click on it to shop and share products with their
friends in real time. And online retailers can drive more sales.
The widget is the brainchild of Josh Bochner, CEO of Boston-based FriendShopper, a social platform that allows web shoppers to chat with their friends while shopping. The chat function docks to the right side of browsers to create an interactive shopping environment, and the dialogue feature allows users to converse and share with multiple friends simultaneously.

To use the tool, shoppers add the FriendShopper bookmark into their browsers’ toolbars, surf any
online storefronts and click the bookmark button whenever they find items
they’d like to save or share with friends.

The Shoplication widget takes this experience to the e-tailer.

Here’s how the widget
works: After FriendShopper members click on the Shoplication widget, they see a
pop-up featuring that product’s data that can be used to save the item, share
it with friends or both. If they’re currently shopping with a FriendShopper
member, that product data is added to the conversation. Users can also share
the online merchant’s store with FriendShopper friends by clicking the
“Add New Store.”

If consumers who aren’t members click on the widget, they see a co-branded pop-up window that
says the online retailer’s store has partnered with FriendShopper to bring them
a new shopping experience. Consumers can then sign up. Then they’re offered the
option to have the item be discussed in their “My Items” pages so
they can share it with their friends.

There are also some cool search options available for retailers. When they add the
widget to their sites, for example, they’re listed on the FriendShopper portal.

I thought this was a great way to allow friends to shop together and help online retailers expand
their reaches.
What do you think?

Retailers Need to Step Up Online Shopping Experiences for Consumers

The impact of identity theft and a fear of online shopping caused retailers to miss out on $21 billion in online sales in 2008, according to a recently released study by Javelin Strategy & Research, which was co-sponsored by eBillme and First Data.

That’s a whole lot of lost revenue, which could’ve been avoided had retailers paid a little closer attention to online customer service. Check out these other figures:

The impact of identity theft and a fear of online shopping caused retailers to miss out on $21 billion in online sales in 2008, according to a recently released study by Javelin Strategy & Research, which was co-sponsored by eBillme and First Data.

That’s a whole lot of lost revenue, which could’ve been avoided had retailers paid a little closer attention to online customer service. Check out these other figures:

  • 12 percent of fraud victims no longer shop online;
  • 25 percent said the frequency of their online purchases has decreased; and
  • 19 percent said they now spend less money when shopping online.

What’s more, just 45 percent of consumers are satisfied with their online shopping experiences — especially when it comes to on-time arrivals and quality expectations.

Online customer service is tricky stuff, and there’s still plenty to learn and lots of room for improvement. Here are the study’s top five motivating factors that would convince consumers to shop more frequently:

  • assurance that information is being processed securely (83 percent);
  • offering zero liability against identity theft (81 percent);
  • stronger security at the store Web site (80 percent);
  • a guarantee that the purchase will match quality expectations (80 percent); and
  • a guarantee for the best price online (79 percent).

The survey also included the following findings:

  • Of consumers surveyed, 39 percent believed online stores would sell their information, and 50 percent believed they would receive junk mail and spam if they shop online. To address these concerns, retailers need to clearly communicate their data privacy policies.
  • 40 percent of online identity theft victims now only purchase from well-known sites such as Amazon.com. By highlighting security and customer service commitments, smaller retailers can counteract this trend.

So online retailers beware: Consumers are still very concerned about how they’re treated with regards to privacy and security. To keep customers happy — and coming back for more —make sure your practices are up-to-speed in this area.