Showrooming – Why It Isn’t as Bad as Retailers Think

Despite all the media hype about showrooming cannibalizing in-store sales, a new study from Deloitte Digital suggests otherwise. The study, “The New Digital Divide,” urges retailers to encourage digital interactions within the store environment.

Contrary to previous reports of in-store shoppers making purchases from Amazon or another e-commerce sites right from their smartphones, the Deloitte study reveals that these connected shoppers actually convert at a 40% higher rate than people not consulting devices in store, and 22% of them spend more as a result.

While that sounds like good news in theory, this does present a problem for retailers that are not integrating digital into the store experience. Kasey Lobaugh, Deloitte’s chief retail innovation officer, explains:

“Retailers that narrowly focus on digital commerce, rather than the full journey that leads to a purchase, often fail to recognize how their customers shop and make decisions in the store. The result is a digital divide between what consumers do and what retailers deliver. This gap not only threatens overall revenue, but requires retailers to reset the way they measure and invest in digital efforts.”

The explosion of smartphone adoption has proved to be a major advantage to brick-and-mortar sales growth. From 2012 to 2013, Deloitte estimates that the smartphone’s influence on in-store purchases tripled – from $159 billion in sales to $593 billion. The hurdle for retailers now is to align their strategies with how these always-on customers think. Connected shoppers no longer view stores and e-commerce sites as two separate channels, and retailers need to rethink their strategies to understand what relevant information shoppers want at every touch-point along the path to purchase. According to the report:

“An effective digital experience has to be pertinent to the moment – whether at home or in the shopping aisle. The more the digital experience and information match the shopper’s needs at a given moment, the more likely she is to buy and the higher the conversion rate.”

This is something we talk a lot about – understanding your customers and what they want at every interaction with your brand. Deloitte underscores the importance of personalization in reaching shoppers and influencing them to buy more, calling it “vital to cross-selling” and providing “an important platform to drive order size.” We see it as the underlying technology that will help you “connect the dots” about how your customers shop and how you can leverage digital technology both in and out of the store to drive traffic, conversion, order size and loyalty.

As we’ve said before, the brick-and-mortar store is far from dead. In fact, it’s an incredibly powerful asset if used to create unique and engaging omni-channel shopping experiences for your customers.

Original post by Graeme Grant of CQuotient.


Could These 5 Technologies Change Ecommerce?

Five emerging technologies could change eCommerce in just the next few years, giving shoppers new access to products and the ability to customize some items for their particular needs.

Mobile computing, crypto-currencies, autonomous vehicles, 3D printing, and augmented reality each have the potential to dramatically change how, when, and why shoppers make Internet-enabled purchases.

Each technology’s impact could touch, if you will, a different part of the eCommerce business model.

1. Mobile Computing

It may seem odd to describe mobile computing as an emerging technology given the number of tablets and smartphones in use or, as predictive analytics firm Custora, points out, perhaps 37 percent of eCommerce site traffic now comes from mobile devices.

Nonetheless, mobile still has the potential to grow significantly in at least two ways: form factor and functionality.

At the moment, most mobile devices are rectangular bricks of various sizes. These candy-bar shared interfaces give shoppers access to just about anything on the web and millions of applications. But smartphones and tablets will have to make room for other shapes of mobile devices including products like Google GlassPebble Smartwatches, or even automobile-based mobile computing.

These new form factors will mean that shoppers may have a greater ability to shop, and could lead to new purchase patterns that impact how products are sold.

For example, think about what would happen when you combine a new mobile form factor like Google Glass or similar with an emerging mobile functionality, mobile image recognition. In theory, a person could be walking along a busy street, see a fashionably dressed person, touch the Google Glass, and instantly have the ability to buy the outfit that person was wearing from a favorite eCommerce retailer. If that doesn’t represent a change to eCommerce, what does?

2. Cryptocurrencies

Bitcoin was the first cryptocurrency, and it is almost certainly the best known. While many online retailers are concerned that the electronic money may be too volatile, those stores that do accept it find it to be “a viable, preferable alternative to credit cards that don’t carry the same risk of fraud and have lower transaction fees,” according to Mashable.

Adding Bitcoin to an ecommerce site is very easy, and retailers that are nervous about Bitcoin’s rapidly changing value can instantly exchange Bitcoin for other currencies, like dollars. Perhaps the least-known benefit of using Bitcoin, as Mashable pointed out, is that there is almost no fraud — from the merchant’s perspective — or chargebacks, making it safer for ecommerce merchants to sell internationally even to nations with relatively high rates of credit card fraud.

3. Autonomous Vehicles

Google and Amazon have both been experimenting with same-day delivery services in select markets. This same-day delivery trend is likely to have a significant impact on Internet retailing.

Of course, one of the greatest challenges to same-day delivery is cost. It is expensive to put a driver in a car and drive to someone’s house every time they place an online order.

There are ways to help reduce the cost of on-demand delivery, including optimizing delivery routes or distributing pick-up locations. Autonomous vehicles could also help to reduce the cost of offering same-day delivery. And while the technology may be some number of years off, the ability to deliver products to customers in hours instead of days will change ecommerce.

4. 3D Printing

Recently Amazon announced its new 3D printing store, which features items made on 3D printers.

Amazon’s approach to 3D printing technology seems to focus on the technology’s ability to decrease the time required to take a product from design to market. The supply chain is almost unchanged in this approach. There is a manufacturer, perhaps a distributor, and a retailer. The major difference is that the manufacturer can come up with new designs in hours or even create custom products for individual shoppers.

It would also be possible for some retailers to become manufacturers. An online shop selling drawer pulls could easily add a line of 3D printed pulls that could be customized and made to order.

It is also possible that some shoppers will have their own 3D printers, and that they may wish to buy downloadable designs. To further the drawer pull example, a shopper could have the option to order the product or download it for a slightly lower rate.

Finally, some are predicting the rise of 3D printing centers where consumers could bring a downloaded 3D design and print it out. This trend, if it happened, could also create new eCommerce opportunities.

5. Augmented Reality

If you trust Wikipedia’s definition, “augmented reality is a live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics, or GPS data.”

Put simply, augmented reality adds data to what we see around us. Similar to mobile image recognition, augmented reality has the potential to turn everyday activities like commuting to work or going to the park to play Frisbee into an opportunity to discover products that we might like to buy.

If augmented reality becomes a reality, it will certainly impact ecommerce.

First published by ARMANDO ROGGIO on Practical Commerce

What to adopt ‘wolf culture’ in a company

Giant Interactive is making some changes. It’s going to be hungry like the wolf, says chairman Shi Yuzhu, and it may have Alibaba’s Jack Ma to thank.

Giant is one of China’s largest game developers and publishers, and its chairman Shi Yuzhu is one of the country’s most well-regarded entrepreneurs. But you could be forgiven for not having heard of it, as the company has stagnated somewhat in recent years, with competitors like Tencent and Netease having clearly surpassed it in China’s PC gaming market.

Shi Yuzhu wants to change things at the company, and he began last year with a shakeup that saw Giant’s upper management hierarchy simplified, a number of leaders fired, and pay raised significantly for crucial R&D staff. Now, he’s announced to the company that it will be implementing “wolf culture.”

There are four aspects of wolf culture, at least as Shi tells it:

  • First, the company must be risk-aware but not risk-averse (wolves move fast and burn a lot of energy, so they’re always on the brink of starving).
  • Second, the company must have a strong nose for market opportunities (like wolves smell prey).
  • Third, employees at Giant have to be capable of spontaneous attack when the moment is right, like a pack of wolves can attack in a coordinated fashion without needing instructions from their leader.
  • Fourth, the company must work together as a team naturally, just as wolves do (wolves help and support each other without needing to be asked or ordered).

Why Jack Ma hates rabbits

The opposite of “wolf culture” is “rabbit culture.” And apparently Shi came by this whole idea after a conversation in which Alibaba founder Jack Ma convinced him that “rabbits” are the biggest internal threat to any company.

Here’s what Shi told his company about it:

“I’ve talked to Jack Ma several times about the question of rabbits and wolves, with the focal point of our discussion being: which is worse for a company to have internally, rabbits or malicious saboteurs? In the end, Jack Ma convinced me that rabbits pose the greatest threat to the company. Saboteurs will reveal themselves through their behavior, so the people around can observe them, report them, and defend against them. When everybody’s defending, a saboteur can’t do too much damage, or at least their damage will be a limited, one-time thing.

“So why are rabbits the greater danger? Rabbits get along well with everyone and people like them, but they don’t produce results. Rabbits like reproducing more than anyone, so they’re always looking for others of the same sort to create more rabbits and create a rabbit nest that will occupy a department’s resources and opportunities. If core departments at a company are rabbit nests, then you get ‘rabbit culture,’ and you lose your fighting strength and market opportunities.

“Rabbits aren’t attack-minded like wolves. They live day by day, and they’re easily satisfied, casually eating grass. There’s no strength of spirit [with rabbits].”

So, any “rabbits” still at Giant Interactive can blame Jack Ma when they’re let go. And firings are likely to happen. As part of his address Shi said, “I want to get rid of all of the rabbits” and “we’ll get rid of as many rabbits as we find” because a small number of wolves will do more for the company than a large number of rabbits.

It’s rabbit-hunting season at Giant Interactive. But after hearing about Shi and Ma’s rabbit discussion, many other entrepreneurs may also be left wondering: are there any rabbits at my company?

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