Thursday, May 7, 2009

Charlotte Russe Takes Social Shopping A Step Further with ShopTogether App

Written by Amanda Ferrante

Social media has emerged as a must-have for retailers. While many retailers are cultivating a presence on social networking sites, like MySpace and Facebook, Charlotte Russe has created in-store signage directing customers to their MySpace page for the latest fashion, accessories and even the option to shop. Taking it a step further, the retailer has added a component to its e-commerce site giving visitors the option to ShopTogether. Created by DecisionStep, the technology is designed to allow online customers to share synchronized shopping sessions with friends and family. The integration allows shoppers to share and compare items as well as communicate via a chat feature. GNC and Lillian Vernon are currently using this technology.

Consumers trust friends above experts when it comes to product recommendations (65% trust friends; 27% trust experts), according to Yankelovich Research. Social or collaborative shopping is not only helping retailers boost sales, but it has many short and long term benefits for online retailers, creating the opportunity to impact the shopper mindset and increase lifetime value:
  • Influence consumers at the point of decision. Customer reviews and recommendations are widely regarded as one of the biggest elements of a shopper’s decision.
  • Increased Web traffic- One of the selling points for retailers of collaborative shopping is just that—it’s collaborative. Shoppers can invite one or more friends, increasing the number of site visitors. The more time people spend—the more likely they are to buy.
  • Driving Immediate Purchases- While some online shoppers may only research products but not necessarily buy, positive reinforcement from a friend or family member could convince them to make the purchase at that moment.
  • Increased Conversion Rates/Multiple Purchases- Friends often share common denominators and preferences. If a shopper shares their prospective purchase with another, both may be likely to buy the product.
Come Together…And Shop!
While technologies like ShopTogether seem like a perfect fit for teen and young adult shoppers, a similar application is helping Art e-retailer Novica gives its more sophisticated customers the ability to share their artistic insight and preferences. Novica has partnered with Sesh, a technology providing group Web browsing and visual communication. Novica Sesh enables customers to view the same Web page, at the same time, from different computers. “Offering some sort of discount to current shoppers for bringing friends to shop with them online makes a lot of sense,” says Jarrod Rogers, CEO, Sesh. “Shoppers are likely to spend more time and while doing so they will share their excitement firsthand about the products, turning their friends into buyers.”

Customers can share and discuss products with each other by drawing or chatting on the page. From a prompt directly below a shopper’s name on the upper left of the home page, the technology launches a system through that frames the web site, allowing a shopper to invite another registered Novica shopper to discuss products in a chat box, write notes on top of any section of a web page, and use pen tools to draw on the site. Co-browsing functionality also enables shoppers to navigate the site together, each taking turns guiding one another to different pages.

Sesh is in the early stages of creating a Facebook application that users can download to their accounts. The application will enable a user to invite a Facebook friend (within the walls of the closed social network) to a “sesh.” If the friend accepts, the application will then take both users out of through to the retailer’s home page for co-browsing. Further, the company foresees tying this functionality to retailers’ social network display advertising. Recent research indicates that women over 55 are the fastest growing group of users on Facebook, with a 550% increase in the past six months alone, according to Andy Lloyd, CEO of Fluid, Inc.

Fluid developed an innovative, user-friendly social shopping platform, Fluid Social, with real time chat and the ability to solicit the opinions of friends in the buying process. Fluid Social is used by Vans, Jansport and Chaparral Motor Sports, who reported a 15% increase in online sales and an increase in conversion rates since replacing their previous interactive imaging solution with Fluid Experience.

Give Customers Something to Shop About
Although Charlotte Russe has adopted the ShopTogether platform, it is not widely promoted. For optimal results, these efforts should be paraded in-store, and most importantly, on the homepage. “Email the user lists and feature it on Facebook fan pages,” suggests Lloyd. “We also expect in the future that Fluid Social will be a mechanism where brands push promotions to users, to reward their most dedicated consumers. For example, when someone invites their friends to comment on a product using Fluid Social, which draws new shoppers to the site. It makes sense for retailers to reward this behavior with special promotions such as offering 10% off to both shoppers when one arrives via Fluid Social.”

Lloyd says there is great value in friend-based merchandising. “Using the Facebook integration, it is trivial to invite specific friends to comment on a product,” he says. “This is much easier than the current standard, which is email to a friend, since you can simply click on a friend's picture and invite them to comment without needing to manually enter their email address. Further, unlike email to a friend, those comments are stored and available on the site forever.”

Click here to view Fluid’s recent white paper sizing up the opportunity for retailers in social shopping.

Solution Spotlight: Paymo Brings Mobile Payment To Consumers Sans Credit Card

Written by Amanda Ferrante,

Founded in 2007, Paymo is a mobile payment system designed to allow consumers anywhere in the world to buy online and pay with their mobile phone. Tending to the online population without credit cards, Paymo is designed to give customers an alternative payment method, ultimately helping online retailers expand their customer base.

The Team:
Headquartered in San Francisco, CA, Paymo was founded in 2007. The company provides an international mobile payment network for merchants designed to simplify and streamline the e-commerce process for virtual goods, online games and applications for social networking allowing consumers to buy online and pay with their mobile phone. With 20+ years of senior management experience, CEO Paul McGuire, along with CFO/COO Margaret Mackenzie, envisioned mobile payment systems transforming the market for digital content and services. Before founding Paymo, both Paul and Margaret had senior roles at mBlox—a leading mobile transaction network. Jon Prideaux, a former VISA executive who helped develop many of Visa’s Internet products—including the Verified by Visa program for securing Internet transactions—serves as a senior advisor to the company.

Market Relevance:
“In today’s challenging global economic environment we can’t afford to exclude 70% of consumers from participating in the online marketplace,” says McGuire. There are more than four billion mobile phones worldwide, but only one billion bank accounts. By giving anyone with a mobile phone the opportunity to buy online, Paymo hopes to dramatically increase the customer pool for online retailers. The global network that Paymo has built currently touches 50 markets with one million customers. McGuire anticipates the company will expand to 2 billion consumers later this year.

If an online merchant is set up to accept mobile payments via Paymo, the customer can simply click on a Paymo icon at checkout, and enter his or her cell phone number. A text message asking for verification of the payment is sent to the number, and after the customer replies to the message, the purchase is complete. The amount will either be deducted from the customer's prepaid account or charged on their next phone bill. Paymo eliminates the need for log-ins and passwords, remembering credit card numbers or setting up separate accounts to facilitate online transactions that are linked to a bank account or credit card. Consumers only need a mobile phone to shop online and add purchases directly to their mobile phone bill.

Because Paymo won't work without the user confirming the receipt of a text message, the application is more secure than traditional methods for online shopping. Paymo's cut of each transaction is going to be about 3% to 5%. The transaction amounts are typically small, under $30, and the carriers set the limits for individual users—for example, at $100 per month.

Proof Points:
Juniper Research predicts that North American mobile payments will grow from $5.3 million in 2008 to $54.9 million by 2013, and that global mobile payments will exceed $300 billion by 2013. Infiltrating the social media scene, Paymo and social network hi5 have partnered to enable members in 24 countries to use their mobile phones to purchase the social network’s virtual currency, hi5 Coins. The U.S., Canada, France, Hong Kong, Thailand, Russia and Colombia are among the countries where Paymo will be made available to hi5 users.

Friday, May 1, 2009

Strategies For Adjusting To New Shopping Patterns Of Cross Channel Buyers

Though cross channel retailing has become a priority retailers cannot ignore, implementing the cutting edge technology and tactical measures seems to leave companies at the starting gate. To address these and other business challenges, several new research studies were presented as part of a recent Retail TouchPoints webinar titled “Cross Channel Retailing for the Anytime/Anywhere Consumer.

Fusing together the latest cross channel trends and challenges, thought leaders from IBM, RSR Research and Manhattan Associates shared insights and data on how retailers must understand the shopping patterns of the cross channel consumer.

“When we talk about cross channel retailing, we really need to start with the customer first and what the customer expectations are as they interact with retailers via any touch point: the Web site, the retail store,” said Craig Stevenson, Global Portfolio Leader, Consumer Experience Solutions, IBM Global Retail Industry. “In the future it will be mobile devices, along with call centers and digital worlds.”

Stevenson suggested mobile devices will emerge as a fourth channel, pointing out that 1 billion users globally will use their mobile phone to browse the internet by 2011. “What we’ve seen in the 90s with the internet is what’s happening with the mobile phone,” Stevenson says. “This will be the dominant channel to interact with consumers both in-store and outside the store.”

Because the mobile phone has infiltrated the retail environment, consumers are increasingly informed, empowered and demanding. Stevenson referred to “super shoppers” as more informed and knowledgeable when entering the sales cycle. Their desires and expectations of value have been increased as a result of the information at their fingertips. “Consumers are really expecting more and we have to provide more to them if we want to have a loyal customer over time,” he says.

Consumer Insight
Stevenon shared the findings from IBM’s Cross Channel Shopping Study which found that 78% of consumers are engaged in online research and in store transaction. The study, which surveyed over 4,000 consumers in the US and UK, indicates that 34% of US shoppers say the reason they move from online to in-store to shop is because they wanted to see, touch/ smell and experience items before purchasing—while 17% wanted the product immediately.The study found that the features most frequently valued were:
  • 46% say the ability to check if an item is available at a local store while browsing online is a must have
  • 45% say an online store locator feature is a must have
Top reasons shoppers move from store to online are related to price, convenience and assortment. 30% of US consumers said “I could buy the item for less online than in store, compared to 46% in the UK. “If you can keep a customer within a given channel so they don’t have to change the channel, that’s probably ideal,” noted Stevenson. “The way to do that is to figure out why they changed channels.”

While most retailers realize the need to better address the needs of cross channel shoppers, Paula Rosenblum, Managing Partner with RSR Research, pointed out organizational inhibitors are often keeping them from taking advantage of opportunities.

Retail Winner Insight
According to recent RSR data shared by Rosenblum, retail winners are seeing year-over-year comparable store sales outperform the market. They not only sell more “stuff;” they also think and act differently than their competitors, like working multiple channels, according to RSR Research.

The RSR Research also found there is a significant difference when you institute and implement enterprise buying along with channel forecasting. 31% of laggards do their planning and forecasting enterprise wise but they don’t actually pull the trigger on buying, whereas 64% of retail winners do enterprise wide planning, forecasting and buying, which, Rosenblum notes is one way to gain efficiency and ultimately, gain more sales. “In this economic climate, operational efficiencies have eclipsed customer considerations,” noted Rosenblum. “We need to improve operational efficiencies.”

Rosenblum said it is imperative for cross channel retailers to create a single brand identify across channels. 85% or retail winners understand the value of a consistent and clear explanation of product features and benefits, cross channel delivery and product returns. Winners are starting to move more toward customized, unique product offering based on customer segments—not necessarily one to one marketing, but segmentized offerings, which is a critical difference between winners and laggards. These efforts have found winners enjoying stunning quantifiable benefits:

  • 85% reported improved customer satisfaction from ensuring product information and pricing is up to date and consistent across channel.
  • 40% report a 3-5% increase in ecommerce profitability
  • 29% report a 5-10% increase in overall return on inventory investment
Like Stevenson, Rosenblum emphasized the mobile phone’s role in retail. “Clearly our industry is under investing in mobile commerce,” she says. “Companies like Amazon are taking that opportunity and they will just lengthen their lead.” She also noted that smart phones are really disruptive technologies and retailers can expect customers to be walking stores like a show room if retailers don’t have some kind of mobile commerce enabled offering.

Order Lifecycle Management
To illustrate how leading retailers are benefitting from aligning their cross channel capabilities, Brian Kinsella, Senior Director at Manhattan Associates shared examples from David’s Bridal and other successful cross channel retailers.

Addressing one of retailer’s biggest cross channel challenges -- inventory segmentation—Kinsella said Manhattan Associates partnered with the IBM WebSphere team to proide retailers with a complete end to end solution from the time a customer wants to research a product online, through building a shopping cart, and picking up in store. “We know those are the problems retailers are trying to understand,” Kinsella said. “So we have built the integration to offer the best in class capabilities in the WebSphere commerce application for order acquisition and cart conversion, as well as the best in class fulfillment inventory visibility and fulfillment capability of warehouse management and supplier enablement.”

Manhattan recently worked with David’s Bridal to expand their sales channels. Saddled with older systems which were not scalable or configurable, Kinsella said David’s Bridal utilized the WebSpere Commerce solution and Manhattan’s Distributed Order Management application to eliminate seven legacy order management/allocation/visibility systems. The consolidation accelerated new business processes by automating store to store transfers. Because of the nature of bridal retailing, the need for real-time automated processing of special order is critical.

“It’s not enough just to be able to pull up the inventory in one place,” said Kinsella. “You have to understand that at any given time, at each stage, or lifecycle of the inventory, how much has been allocated and how much is net available.”