Seizing the SoMoLo opportunity
By Dave Bruno, RedPrairie
Facebook. Twitter. ShopKick. iPhone. iPad. Android. Foursquare. SCVNGR. Cityville. Instagram.
The list of social, mobile, and now local apps, gadgets, games, and networks that have become part of most consumers’ lifestyles is virtually endless and all of them have demonstrated their ability to affect shopping behaviors. Consumers have issued a “SoMoLo” imperative. The critical question is how has retail responded?
The short answer? Not so great.
A study of retailers conducted in December. 2011 found that there is a big divide between how customers want to engage and shop using social, mobile or local and what retailers are actually providing today.
The powerful capabilities of mobile devices, GPS, and social networking apps and sites have transformed the demands and expectations of consumers. Shoppers are increasingly looking to mobile devices, apps and social media as critical – and influential – elements of their shopping experiences as they interact with brands, browse products, search for available inventory, and transact.
As a result, retailers report that their customers’ expectations are dramatically shifting:
- 57% expect discounts sent to their phone;
- 50% expect to browse/shop/buy on their tablets;
- 46% expect to place orders via their phone;
- 42% expect product pricing & availability on their phone;
- 40% expect to be able to use QR codes to access product content on their phone;
- 38% expect to browse/shop/buy on social sites; and
- 28% expect department-specific messages and offers to be sent to their phones when they are inside a store.
The social shopping scene
For more than a century, social behaviors and shopping have been virtually inseparable. Shopping with friends; sharing opinions about brands, products, and stores; and seeking the opinion of our network before or immediately after purchases are all long-time fixtures of our shopping culture.
The last decade has seen those behaviors translated to all the screens in our lives. Shoppers today are constantly searching their small screens, big screens, and now medium-sized tablet screens for apps, networks, tools, and connections to help them shop more socially, more often, and with greater reach. It’s time for the industry to respond.
Social commerce is expected to reach $14 billion by 2015 but today there is still a significant gap between social “shopping” and “buying.” Thirty-eight percent of consumers shop within social sites, but only 21% of retailers offer the ability to search, browse and buy within those sites. Currently, 30% of retailers do not even have a specific S-Commerce strategy.
And when it comes to location, “Location, Location, Location,” may no longer be the exclusive rallying cry of real estate agents and mortgage brokers. Shoppers appear to be staking a claim in the location-based marketing arena, and so far, they like what they see.
It is reported that 65 million consumers have used social or mobile location-based services. According to our research, 40% of survey respondents reported that shoppers expect to use QR codes to access local mobile product content and 26% expect to receive localized offers on their phones when near a store. But only 33% of retailers are currently using QR codes to deliver mobile content and only 20% are publishing localized offers. In fact, 64% of retailers have no local commerce strategy at all. To harness the evident interest, retailers must figure out how to incorporate localized deals and marketing messages to increase engagement for on-the-go shoppers.
So why the disconnect?
It’s understandable that the multitude of social and mobile platforms is overwhelming for many companies. But the opportunity to tap into the evolving behaviors of SoMoLo shoppers to reach, engage, and transact with them on their terms outweighs that argument, surely. What I’ve discovered is that retailers and chain stores don’t know where to begin – often there is no corporate commitment at the top and they don’t know how to integrate the new channels.
But with the evolution of SoMoLo as a way of life for consumers, it’s now or never. Retail brands need to commit to strategies and solutions that keep up with shoppers -- or risk losing them to other brands that have SoMoLo figured out.
So what does it all mean?
As social, mobile and local technologies continue to develop, consumers are eager to tap into their smartphones and social networking sites to seek their friends’ recommendations, discounts, offers, loyalty rewards, and product information.
Retailers have an opportunity – some might even say an obligation – to tap into the evolving behaviors of SoMoLo shoppers. Connecting with consumers on a more personalized and localized level will only strengthen brand loyalty and increase sales.
With the evolution of SoMoLo as a way of life, it’s clear that retail brands have a lot of work to still do. Fortunately, there are three simple steps retailers can take starting today to answer the SoMoLo Imperative.
1) Put a strategy in place beyond just experimenting – It can’t all be trial and error. There needs to be a serious strategy and commitment to SoMoLo in order to succeed.
2) Devote resources to exploiting these channels, both human and financial. Once a commitment is made, devote a part of the marketing budget to making sure it is done right and assign the responsibility of the program’s success to a dedicated owner. If no ownership is taken for the project, it will not succeed.
3) Analyze – Be sure to see what is working and not working for you and your competitors. Listen to your customers’ feedback and take it into account when launching new campaigns.
Retailers and chain stores have certainly taken notice of these new behaviors, and indeed have plans to adapt their strategies and operations to this new breed of shopper. But, as of today however, they are a long way from clear, actionable roadmaps to fulfilling the SoMoLo Imperative.
Dave Bruno is marketing director for RedPrairie, a supply chain and retail technology company. As part of RedPrairie’s research into Commerce in Motion, the company conducts research and analysis of the ever-changing dynamics of global supply chains and the hyper-connected consumer.