Brands Under Siege:The Rise of SoMoLo ShoppingPresented to the Students at the Fashion Institute of Technology#CommerceInMotion

SOMOLO

What is a

Shopper?

SOCIALMOBILELOCAL

SoMoLo Behaviors and Expectations

+1 DiscussOn Social Sites

CompareProducts

ReviewRead a

________ Shopping Lists

Review

Group DealsShare

A

BFind StoresUse Maps toi About

thisitem

Product InfoInvestigate

Inventory&PricesLook for Nearby

off25% Local

OffersReceive

SOCIAL

SocialGamesShop through

MOBILE LOCAL

Where Are These “SoMoLo” Shoppers?

They’reEverywhere…

Barriers to Entry for New Competitors are Very Low

“Tools of the Trade”The Latest SoMoLo Trends and their Impact on the Store

#CommerceInMotion

9

Smart Devices are Everywhere

50%of Americans now have a

Smartphone*Nielsen

50Bworldwide by 2020

*Cisco

10

(35M and Counting) Tablets Emerge

of tablet owners say they have used their tablet to make a purchase

68%48%

of Smartphone owners

vs.*e-tailing Group

11

Apps, Apps& More Apps

17Bdownloads in 2011

*Forrester

12

Cracking the Code

14M US mobile users scanned a QR code in June 2011*Comscore

6.2%of total mobile

audience

65MAmericans use mobile or social location-based services*Pew Research

55%of Smartphone users

Location, Location, Location

Augmenting Reality

1937photo circa

16

Increasing Traffic

12.2MShopping Reviews

17Bringing The Store to Life

creates “infinite” shelf space

18

The Games People Play

62MUS Internet users play at least one game on a social network monthly

*eMarketer27%of the online

audience

Countless ConversationsSwirl…

…on a Plethora of

Platforms

BRAND

THECONVERSATIONPRISM-Brian Solis & JESS3

BRANDS

Brands AreUnder Siege

m-Commerce: Relentless Growth

2010 2011 2012 2013 2014 2015

U.S. m-Commerce Sales ($US Billion)

$2.9 $5.3 $8.8 $14.0 $21.0 $28.7

58.2% CAGR

Sour

ce: B

arcl

ays C

apita

l

By th

e N

umbe

rs

t-Commerce: Compelling Early Numbers

7xthe average iPad conversion rate is

that of smartphone devices 50%iPad shoppers purchase

more than traditional web usersBy th

e N

umbe

rs

*Shopatron

*Shopatron

Dual owners buy on mobile twiceas often as single owners.“Duals” made >20 mobile purchases in the last year.

s-Commerce: Explosive Growth Looms

2011 2012 2013 2014 2015

U.S. s-Commerce Sales ($US Billion)

$1.0 $3.0 $5.0 $9.0 $14.0

93.4% CAGR

Sour

ce: B

ooz &

Co.

By th

e N

umbe

rs

Daily Deals: Here to Stay

2010 2011 2012 2013 2014 2015

U.S. Daily Deal Revenues($US Billion)

$.87 $1.25 $1.73 $2.34 $3.08

Sour

ce: B

IA/K

else

y

$3.93

35.1% CAGR

By th

e N

umbe

rs

Social Gaming: Already a $1B Business

AdvertisingLead GenVirtual Goods

By th

e N

umbe

rs

$653M $248M

$192M

*eMarketer

2010: $856M2012: $1.32B

2011 Social Gaming Revenues

The Bottom Line? Share of Wallet Will Continue to Shift Online

2010 2011 2012 2013 2014 2015

U.S. Online Retail Forecast($US Billion)

$176 $197 $218 $240 $259

Sour

ce: F

orre

ster

$279By th

e N

umbe

rs

11%12%

13%14%

15%15%

(% of totals exclude grocery)

The International LandscapeA Quick Look at the State of SoMoLo Around the World…#CommerceInMotion

Europeans Embrace M-Commerce

Source: comScore

Mobile Actions in the EU Store Heat Up

Source: comScore

QR Codes in the EU Gain Momentum

Source: comScore

31

Middle East/North Africa (MENA) Report

13% Of all searches are mobile

200% Growth last year in mobile searches

36,000 New Facebook users every day

100M YouTube views a day

Source: Google

32

Mobile Activity in MENA is Diverse

Source: Spot ON PR | Effective Measure

33

Asia: The World’s Most Prolific Online Shoppers

35% Of Asian consumers make >11% of monthly purchases online

27% Globally

Source: Nielsen

59% South Korea

34

Asia: Mobile Penetration Outpacing Internet Access

35

Asia’s Mobile Love Affair with m-Commerce is Blossoming…

76% China

75% India

56% Korea

47% Japan

Favo

rabl

e on

m-C

omm

erce

?

Source: Nielsen

36

69% Prefer using mobile phone for payment

47% Of “tech forward” consumers in Chinahave shopped on their phone in last 6 months

38% Have scanned a barcode while shopping

31% Have purchased an item from a “Smart Poster”via QR code or bar code

Asia’s Mobile Love Affair with m-Commerce is Blossoming…

47% Welcome mobile ads sent to their phone when they are near a store

Source: Nielsen

37

Asia, Social Media, and Shopping

800,000,000Asian Social Media Users

1/3Have Liked a Brand Page or Product

Source: Wikipedia

38

Source: Burson Marstelier

39

LATAM: Growth is Looming

215,000,000Internet Users today

(37%)

Source: Internet World Stats

285,000,000By 2015

40

LATAM: Commerce is ComingArgentina: 71%Chile: 71%Uruguay: 70%Venezuela: 68%Mexico: 61%Costa Rica: 56%Ecuador: 53%Colombia: 47%Peru: 47%Paraguay: 42%Dominican Republic: 40%El Salvador: 36%Guatemala: 30%

59%of Internet users purchased products online in the last

12 months

Source: Tendencias Digitales

41

Conversions in LATAM are High

Source: comScore

% of e-commerce website visitors that made purchase online

94% 89% 84%82% 71% 63%

Brazil Argentina Columbia

Mexico Chile Peru

42

LATAM: Mobile is Alive and Well…

630Mmobile phone connections

597Mpeople

Smartphones to hit 60% by

2016

43

m-Commerce is Still a NoveltyBrazil Considered Likely “Hot Spot” for m-Commerce Growth

2% access via mobile phone

7% sales via mobile site

Exclusive Research:Consumers Have Issued a SoMoLo ImperativeHow Is Retail Keeping Up?

#CommerceInMotion

45

Research Approach

Specialty Electronics Grocery Big Box CPG Other

Study ConductedDecember 1 - 18, 2011282 Respondents

To pinpoint the expectations of today’s SoMoLo shopper, and how B2C and B2B businesses are responding and adapting to these wants and needs

Objective

Revenue Breakdown$100M - $500M: 59% Greater than $500M: 41%

#CommerceInMotion

46

We WantSocialIntegration!I Yshopping on my iPad!

GotLocal???

Shopper Demands Keep Escalating…

ScanThis!!

#CommerceInMotion

47

57%expect discounts sent to their phone

46%expect to place orders via their phone

#CommerceInMotion

Mobility Matters

48

40% expect to use QR codes to access content on their phone

#CommerceInMotion

49#CommerceInMotion

50%expect to shop via tablet

Tablets AreTriumphant

50

38%expect to use social

sites to browse, shop, and buy

(Only)

#CommerceInMotion

Social: Sizzling, Or Fizzling?

51

28%expect department-specific messages and offers to be sent to their phones when

they are inside a store

#CommerceInMotion

Locking In on (Micro) Local

52#CommerceInMotionThe Great Divide

RETAILERS

SHOPPERS

53

Retail Has a Long Way to Go to Meet SoMoLo Demands

Place Orders via Smartphone46% 38%

CustomersExpecting

RetailersDelivering

Availability and Pricing on Phone42% 30%

Order Status Updates on Phone44% 30%QR Code Access

to Product Content40% 33%Browse/Shop/Buy

via Social Sites38% 22%Location-SpecificOffers via Phone26% 20%

Dept-SpecificOffers via Phone28% 12%

#CommerceInMotion

A Long Road…

13%average

gap

54

33% Lack of Corporate Commitment

36% Limited Inventory Visibility Across ChannelsStores Unable to Support New Challenges25%

Inability to Integrate New Channels36%

SoMoLo Roadblocks#CommerceInMotion

55

Good Intentions…

Order on Phone----------------------------------------------Product Availability/Pricing on Phone---------------Order Status and Updates on Phone-----------------QR Code Access to Content on Phone--------------Push Local Offers to Phone When Near Store----Department-Specific Offers Inside a Store---------Browse/Shop/Buy App via Social Network---------

#CommerceInMotion

38%30%30%33%20%12%22%

56

Strategic Shortcomings?

Currently have no specific mobile commerce strategy and/or are just experimenting50%

30%64%

Currently have no specific social commerce strategy and/or are just experimenting

Currently have no specific local commerce strategy and/or are just experimenting

#CommerceInMotion

57

Study Conclusions & Takeaways

1. Retailers must adapt to meet the escalating demands of the increasingly social, mobile, local shopper

2. As a whole, it appears that the industry feels the pressure to react

3. Executive commitment, clearly defined strategies, and technology plans need to evolve quickly to close the gap

The Good News:A SoMoLo ShowcaseInteresting and Successful Examples from Around the World

#CommerceInMotion

Shopkick: The Store’s New Best Friend?

• Users see a list of nearby participating stores

– “Kickbucks” earned just for entering(no check-in required)

• Inside, stores offer rewards for specific shopping behaviors

– Scanning a poster or product bar code– Special discounts on specific products– Time-based promotions  

How Shopkick Works

Shopkick: The Store’s New Best Friend?

Active Shopkick UsersSince August 2010 Launch

August 2010 October 2010 January 2011 July 2011

110,000

750,000

2,000,000• 2.3M active users• 700M product views in year one• 7M product scans in store• Users open the app 14 times a month

– Review products from 16 stores each time • Once a Shopkick user is in a store,

conversion rates are high

*Sho

pkic

kin measurableincremental revenue

$50MOne retailer reports

*Mashable

61

Kactoos: LATAM’s Answer to Groupon?

If a user finds a product that interests them, they can create a purchasing group or join an existing one

The more people join, the lower the price each will pay.

Similarly, users can initiate purchasing groups for products that are not yet available through Kactoos

MyTown: Fun, Games, Impressions

• 4M users build their own virtual towns from actual buildings & businesses

– Checking in earns virtual cash• Cash buys virtual properties & products

• Property owners collect rent from users who check-in

– Properties and products– 35M Branded virtual items

consumed every week

How to Play MyTown

“Real-World Monopoly”

H&M on MyTown: Brand Impressionsand Store Traffic• Whenever near an H&M

store, virtual goods from the Blues collection appeared

– Players earned points for product check-ins

• Players also received offers for real goods available in nearby stores

– Points for scanning in-store product bar codes

10.6M Impressions · 350,000 Store Check-ins · 700,000 Product Scans

64

Souq.com:The Arab’s World’s Largest Online Market

• Marketed to Saudi Arabia, UAE, Kuwait, Egypt and Jordan

• 1.5 million unique users every month• Top categories: cosmetic and beauty,

electronics, and fashion• On Souq.com, one item is sold every

30 seconds

Instagram Makes Phone Cameras RelevantWildly Popular Photo Enhancing and Sharing App for iPhone

10Mactiveusers

1.3Mpics sharedevery day

one-tap sharing

66

Bergdorf Goodman Makes Instagram Relevant to their Store

• Photo sharing campaign– Consumers use Instagram to

take/edit/post photos of BG shoes in various locales throughout the city

• Geotags map each photo to “Shoes About Town” site

• Primary goals:– Promote newly expanded shoe salon– Brand awareness

Share Your Shoe Obsession“Isn’t that the secret to the absolute perfect pair? You never know what adventures they hold.”

67

Customers haveembraced the campaign…

First 2 Weeks650 Photos8,000 Followers

Snapette: Merging Instagram and Yelp?

• Puts the crowd to work with Social, Mobile fashion finding

– Shoes and accessories

• Users share pics, commentary on looks they love

– Including where to buy it

• Feeds within the app sort hot, nearby, new items

– Virtual closets, retailer profiles

69

Vogue Turkey Anniversary Campaign

Non-branded ads piqued interest and paid it off with QR code access to mobile site

Mobile site delivered exclusive “behind the scenes” content Contests, Content, Texts,

Location-based Giveaways

70

Uniqlo’s Social Look Book

• Uniqlook contest encourages shoppers to upload photos of their own outfits made up of Uniqlo items

• Other shoppers vote for their favorites

71

Badgeville: Defining Social Loyalty?Rewarding Shopping Behaviors with Badges and Social Status

• Adds game play and badges to loyalty programs

• Encourages social behaviors through rewards

– Reviews, Likes, Feedback

Bluefly: Making a Game of e-Commerce

• Rewarding specific shopping behaviors

– Watching videos, reading blogs, writing reviews, creating wish lists

• Shoppers earn badges that call out their fashion style

– Based on shopping history

• Badges = rewards– Exclusive/early access to products,

discounts, badge-holder specials

Moxsie: Crowdsourced Design

• 105,000 Twitter followers go “behind the scenes”– Photo shoots, meetings with designers, trade shows

• Participation earns points toward Badges– Buyer-In-Training, Head Buyer or Celebrity Buyer, etc.

74

Brazil’s Fiat Mio: A Crowdsourced Car

• Fiat committed to realizing the ideas of users in a futuristic concept car

• Set up a social site for ideas, feedback, and designs to be shared

• 17,000 people submitted 11,000 ideas

75

Luminate: Content for 3 Trillion ImagesAds, content, social tools overlay online images

“image apps" turn static images into dynamic and interactive experiences

The Dawn of i-Commerce?

The Dawn of i-Commerce?Tag Shop

4,000 publishers150M visitors/month30B image views/year

*TechCrunch

Publish

>100 different merchants: Macy’s Zappos, Nordstrom,

Gap, Piperlime, etc.

78

Pinterest Brings Bulletin Boards to Life

Board topics range from cupcakes to bathrooms

Retail images dominate

Women outnumber men 4.5-1

Users simply “pin” images they like to interest “boards”

79

Fashion’s Formidable Footprint…

80

Tesco’s (Virtual) Subway Supermarkets

• Large billboard installed in South Korean subway stations

• Supermarket shelves• Display images/prices of products

• Users scan the QR code of products• Products delivered home within the day

Layar Vision: Object Recognition A/R

• Recognize real world objects and display digital AR experiences on top of them

– Posters, magazines, billboards, rack signs

• Combines location and image-recognition A/R

82

Blippar: More than a Blip on A/R Radar

• Image recognition-enabled augmented reality at the shelf

• Design product packaging to engage consumers without compromising designs with awkward tags and markers

A new augmented reality app – with an intriguing twist

83

Cadbury Brings “Eye Candy” to the Shelf

• Chocolate bars become an interactive, 3D game on the shopper’s Smartphone

• “Qwak Smak” is played directly on product packaging

– No markers, no shelf tags

• Just point the phone at a Cadbury product and Qwak Smack will ‘blipp’ from wrapper to screen as if stuck to the bar

Players submit game scores into

a drawing for prizes

84

SCVNGR: On the Hunt for Engagement

• Virtual scavenger hunts – Utilizes LBS to push contextual treks,

questions and challenges to game players

• Businesses and brands can design custom scavenger hunts catered to their customers and locations

– Ongoing– Promotional– Special Events

“A Game Layer on Top of the World”

TopShop: Hunting Back to School Bargains Across the U.K.

• Anyone within a 500-meter radius of a Topshop store can play

• Players choose desired reward and complete challenges to earn points

– 20% in-store discount, £500 shopping spree, etc.

– Challenges designed shoppers more thoroughly engaged with merchandise

• Snap photos of their favorite “back to college” outfits

• Find items corresponding with trends

Game On! At Buffalo Wild Wings

• 12-week March Madness campaign

• Numerous store-based challenges– Photos of friends, trivia, games

• Social integration throughout– Rewards for completing

• Extremely popular with customers– 184,000 players at 730 locations

• 1,288,000 challenges completed• 30% returned to play multiple times

– 100M social impressions– 3.6 years brand engagement in stores

“Home Court Advantage”

*Mashable

eBay Adds “Buying” with QR Codes

• Shoppable windows on 5th Avenue

• Collections curated by 30 “tastemakers”

– Justin Bell, Liz Lange, Coco Rocha, Lake Bell, etc.

eBay Adds “Buying” with QR Codes

• QR Codes link to mobile optimized site

• “Always Open” Windows capitalize on impulse shopping

– Nearly half of all shoppers enjoy window shopping

– Want to make an immediate purchase when they spot something they love

SHOPBOX: Redefining Local and Mobile?

• A repurposed bright green shipping container

• Completely unattended

• Visitors browse items from the giant automat’s plate glass window

– They register on iPads attached to the sides of the container

• To purchase, customers text message their order and the products are shipped to their homes

The Far Reaches of Pop-Up Retail

Intriguingpotential for event

marketing?

90

StyleLiner: Pop-Up Goes MobileFormer potato-chip truck now a mobile style gallery

Next? Motion Gesture Window Shopping?• Putting the “shopping” into after-hours window shopping

• Microsoft Kinect-like sensor recognizes common gestures– Window shoppers learn more products simply by pointing at them

Summary and ConclusionsKey Lessons Learned…

#CommerceInMotion

Key Objective for SoMoLo? InteractionIntegrationNotificationTrafficEducationRelationshipsAccessCommunityTransactions

Seamless, collaborative online and offline experiences

Alert customers of offers, opportunities, product lineup changes

Relentlessly seek opportunities to improve store traffic

Inform shoppers about products, features, programs

Engage, entertain and add value to bring them back

Be available when, where, how, and on the devices THEY prefer

Identify and embrace local influencers and advocates to build networks

Arm each channel (and every salesperson) with conversion tools

“Mashops”: the Store’s Best Weapons?

Retailers must fight back by creating a mashup of the best Web-based and in-store shopping experiences

– Interactive digital displays– Video assistants– Internet devices– Social networking technologies – Location-based services– Salesforce empowerment tools– Wi-Fi networks 54%

of shoppers surveyed want to try a mashop service in the store

*Cisco

“Always On” Consumers Require “Always On” Marketing• New paradigm: Marketing = Media

• The relevance of Fire and Forget campaigns executed through traditional media will continue to diminish

• More and more of marketing’s time, resources and energy need to be managed in “Always On” mode

– Persistent customer engagement– Regularly nurtured relationships– Constant community building– Tireless new customer acquisition

Whatif?

(Outside the Box)

What if…Polaroid had created Instagram?

*Jon Thomas, Storytelling

What if…Dole had created Fruit Ninja?*Jon Thomas, Storytelling

What if…Whole Foodshad created FarmVille?*Jon Thomas, Storytelling

About Commerce in Motion

A thought leadership program developed by/targeted to supply chain and retail executives

CommerceInMotion.com

101

Full Study Now Available OnlineEMEA Study Coming in Late April!

#CommerceInMotion

CommerceInMotion.com

Thank YouDavid.Bruno@RedPrairie.comLinked In: http://www.linkedin.com/pub/david-bruno/1/392/70 Twitter: @RedPrairieCorp (#CommerceInMotion)Pinterest: http://pinterest.com/redprairiecorp/commerceinmotion/Scoop.It: http://www.scoop.it/t/commerce-in-motion