Retail Reinvention Day 2 Recap: Changes in Technology Leads Changes in Retail
On the second day of Retail Reinvention 2015, conversion of payment methods, Pinterest, the evolution of consumer path to purchase, and the future of mobile wallet were key topics of discussion. The day featured multiple panel discussions engaging thought leaders from various industries. Here are summaries of a few discussions that I found most interesting.
Ahalogy: 2015 Pinterest Media Consumption Study
Bob Gilbreath, co-founder and CEO of Ahalogy, announced findings from the organization’s second annual Pinterest Media Consumption Study. Gilbreath introduced Pinterest as a retail game changer, a new form of marketing for retailers and a planning machine and search engine for consumers. Pinterest now offers both paid and earned media through two features: Promoted Pins and Buyable Pins. Promoted pins are a form of paid advertising. As native ads, they show up on users’ Pinterest feeds along with other pins. Promoted pins allow retailers to target their ads to specific groups and therefore are proven to be more effective than organic pins. Buyable pins allow users to immediately and seamlessly make purchases directly from the pin within the mobile app.
Findings of the study include basic demographics information of Pinterest users and types of media Pinners are shifting away from. Men are now the fastest growing group on Pinterest, and Hispanic membership is growing at 9%. The study also revealed that active Pinners access Pinterest while shopping in different channels, including mass merchandisers, online retailers, and grocery stores (“reverse showrooming”). Furthermore, since 2014, Twitter membership showed a slight decline among active Pinners. In light of the study’s findings, Gilbreath believes that brands can use Pinterest to win in the marketplace through the correct use of product images and description inserts. Using Abercrombie & Fitch as an example, Gilbreath illustrated how two pins of the same product—one with a single photo and a basic description of the product, and another with multiple photos from different angles and a more intentional description with key words—vastly differed in the number of clicks received and the number of times they were re-pinned, with the latter pin outperforming the former.
Additionally, a goal of Pinterest will be to drive Pinner engagement by increasing its presence in physical stores. A possible concept is placing Pinterest logos and QR codes on end-caps and freezers in stores. For example, California Pizza Kitchen could partner with Pinterest and place the Pinterest logo and QR codes on freezers in which the brand’s frozen pizzas are placed. Pinners can scan the QR code to lead them to the Pinterest app to find wine pairings for different pizzas.
The Consumer Path to Purchase—Turning Shoppers into Buyers
As the consumer path to purchase evolves, retailers are interested in how consumer decision making will also evolve. Panellists agreed that discovery (think Pinterest), inspiration, personalization, and understanding and using the right data will be the keys to cutting through clutter to get the right message to evolving consumers.
Stephanie Farsht, Target’s Senior Group Manager of Innovation and Strategy, pointed out that the days in which retailers try to keep its customers in stores browsing are now gone. With the rise of e-commerce giants (particularly Amazon), ease, immediacy, and convenience are key demands of the consumers that retailers must meet to succeed.
Gene Alston, Head of Business Development of Pinterest, emphasized the importance of m-commerce in the evolving consumer path to purchase. Although stores are not going away, mobile is also here to stay and retailers will have to learn how to serve customers the way they want to be served. Accordingly, Target will be experimenting with beacons in the upcoming months, although panellists from a previous session agreed that beacons will be distractions for now, and as was the case with RFID, in five years, the discussion around it will involve what it enabled rather than the technology itself. These panellists believe that in the near future, the beacon technology will become so ubiquitous that it will blend into the background, such as RFID when it comes to discussions on supply chain.
Panellists unanimously agreed that social media will play an increasingly influential role in consumer purchasing behaviour. Consumers highly value conversations with brands as it creates authentic relationships and humanizes the brand. Companies can utilize social media to connect with its customers and to create an amplification effect of messages that cannot be gained via email.
On the topic of the future of couponing and targeted marketing, panellists agreed that consumer concerns over privacy will depend on the generation and the value exchange between merchants and consumers. Millennials and younger generations are not as concerned with privacy as long as merchants provide value. As long as there is a logical association for the consumers and the use of data is permission based, privacy is a cost most consumers are willing to pay.
InfoScout: The Future of Mobile Wallet
A discussion on the future of mobile wallet was preceded by a presentation by Jared Schrieber, co-founder and CEO of InfoScout. He unveiled new data on ApplePay adoption and showed that an increasingly smaller percentage of iPhone 6 users are utilizing ApplyPay.
Unsurprised by the findings, leading providers of mobile wallets (Samsung Pay, Android Pay, Paydiant) agreed that eventually, mobile wallets will become the go-to choice for payments. For now, though, a major obstacle for the adoption of mobile wallets is that it is competing with muscle memory—asking people to “tap for swipe” is only a marginally faster option. Providers of mobile payment will have to provide additional, more attractive incentives for consumers to adopt mobile wallets.
Offering examples of merchants who successfully adopted mobile wallets such as Starbucks (which alone accounts for 95% of mobile wallet usage in the U.S.) and referring to the phenomenal adoption rate of mobile wallets in South Korea, panellists predict that that the U.S., too, will see a rise in the use of mobile wallets once providers start to offer a sufficient solution. Although the move will be led by both merchants and consumers, ultimately, consumers will be the ones determining how successful mobile wallets are.
For a recap of the first day of the conference, please refer to Tim Barrett’s “Retail Reinvention Day 1 Recap: Consumer Experience Takes Centre Stage”.