Magazines Archives - 2008 March

Interactivity with shoppers: Big trend
Story 23

COMMUNICATING with shoppers via new interactive media is the future wave retailers will have to learn to deal with. That was the main point of Transparent Markets, a keynote presentation sponsored by Deloitte & Touche USA at NRF 2008. The key points in the presentation were virtual reality as a retail medium and the use of cell phones for multiple purposes.

Making the biggest splash at the annual convention was virtual retailing, and the creation of avatars to do virtual shopping, with the demonstration of sites such as Webkinz, Club Penguin, Habbo Hotel (aimed at kids and teenagers) illustrating the creation of virtual communities where kids connect.

Habbo now has some 83 million avatars on its site, with 90%of its revenue coming from virtual goods, said session speaker Giff Constable, general manager of Electric Sheep Company, a software business serving virtual worlds.

The presentation also showed shopping via cell phone beginning to take hold in the US, compared with Asia where it is a staple for multiple uses.

In a new Deloitte & Touche study, 61% of respondents wanted to be able to use the cell phone to scan bar codes to access other retailers’ product prices while shopping in a store, revealed the company’s vice-chairman, Pat Conroy. Currently, only 4% are doing so.

Another 57% in the study favoured receiving coupons from manufacturers or retailers on their cell phones while 45% said they would like to be able to receive a GPS-generated list of retailers selling specific items sought.

In a scenario painted by Conroy, the shopper in the store aisle could instantly dial up product reviews and do comparative shopping on a mobile device that gives access to many other retail sites where the same product is cheaper. While still in the said store, the shopper could even buy the item from a competitor. This scenario “opens a Pandora’s box”, hence the importance of product differentiation, Conroy pointed out. Seminar speakers also discussed mob shopping, another new idea to many.

The concept came about when some shoppers created websites inviting others to join them in seeking the best prices for products online. The ad hoc group, or ‘mob’, negotiates for better purchase prices and terms.

Speakers also drew attention to social networking sites such as Facebook, MySpace and YouTube, which have been gaining user share-of-mind at the expense of traditional media, altering the way people live and shop.

A big change in marketing tactics was illustrated by Coca-Cola’s approach. Back in the 1960s when pop artist Andy Warhol painted a mass display of Coke bottles, the soft-drink company’s lawyers ordered him to “cease and desist”.

Unthinkable today, said Michael Donnelly, Coke’s director of worldwide interactive media. In fact, the brand is trying to play in virtual communities such as Second Life through contests that encourage users to create a Coca- Cola Virtual Thirst vending machine of the future, Donnelly revealed. Instead of Coke, the machine is supposed to dispense virtual experiences that can be shared, he explained.

Today, the company is also quick to recognise the importance of interactivity on its website, which encourages consumers to contribute virtual ideas.

Donnelly recalled the tremendous consumer acceptance of “the two guys who created Espy.com, [which] produced videos on explosions of Coke bottles” filled with Mentos sweets. The videos triggered calls from the David Letterman TV show and delighted viewers around the world.

As a result, Coke is spending “a lot more time in consumer-generated spaces”, Donnelly said. “Our No.1 goal is to be where the customers are.” Another marketing tool rapidly taking hold is peer-provided consumerproduct reviews. Some 43% of the respondents in the Deloitte & Touche survey said such reviews confirmed their purchase decisions while another 43% said peer reviews changed their opinions, influencing them to buy products that differed from what they had originally wanted, and 38% who set out without any preferences admitted the reviews helped them decide.

Indeed, newer technologies are giving shoppers greater access to information that they use. Retailers who do not keep up with and adapt to new thinking may find their brands hijacked, Deloitte & Touche’s Conroy warned.