Harnessing the power of digital shopping

Lara Sinclair
THE AUSTRALIAN
MARCH 13, 2015
MORE than half of all retail transactions are influenced by reviews people read online, so retailers must find ways of bringing into brick-and-mortar stores the “social proof” that their products are worth buying.
Retailers who want to succeed in an age in which people increasingly shop with their smart phone need to move from the traditional “obfuscation” model, which relies on consumers not knowing if they can buy an equivalent product more cheaply down the road, to one of “transparency”.
Within a few years, according to Jason Goldberg, a retail expert at digital agency Razorfish, all transactions will be influenced by digital content and technology such as digital wallets, digital hangers and price tags that provide more information about a product, QR codes that enable people to read product reviews on their smart phone, iBeacons, and others.
“Ten smart phones are activated for every baby born in the world,” Mr Goldberg told an attendees at a digital marketing conference convened by Adobe in Salt Lake City this week.
“How can we win when the consumer knows everything?” Mr Goldberg said.
“When quality was hard to predict it made sense to stick with a familiar brand,” he said. “But when you can quickly assess the quality of things, loyalty doesn’t help consumers as much.
“What we think is that in many categories (online) reviews are more important than the brand name.
“Retail is moving from an obfuscation model to a transparency model.”
In the US, between 30 per cent and 40 per cent of customers start their search for product information on retail site Amazon, which includes review information, rather than on search engines.
“Primarily (it’s) because Amazon is going to have all this social proof that Google isn’t,” Mr Goldberg said. “It’s even better if I actually know that person that wrote that review.”
Retailers were beginning to scrape social networks such as Pinterest and Instagram that showed people wearing their clothes, or offering question-and-answer services about their products online, or putting interactive screens in stores to help answer consumers’ questions.
He said 50 per cent or more of the traffic to the websites of US retailers such as Wal-Mart, Best Buy and Target came from mobile devices, increasing to between 70 per cent and 80 per cent on big online sale days such as Black Friday and Cyber Monday.
“There’s one problem,” he said. “Mobile shoppers are four times less likely to buy from me.”
A “mobile gap” exists between research and purchase behaviours, with 92 per cent of all sales still made in physical stores, and just one per cent made on mobile devices, up from just 0.58 per cent six months ago.
“Customers just don’t like to pay for stuff on mobile phones,” he said, adding that retailers commonly required people to fill out 23 information fields in order to complete a purchase.
When that was reduced to eight fields, the completion rate doubled, he said, and it doubled again when it was reduced to four fields.
“(Retailers need to) reduce the friction at the check-out,” Mr Goldberg said.
* The author attended the Digital Marketing Summit as a guest of Adobe.