Since Double Eleven Shopping Festival is coming, most retail brands are so prepared to join this year’s event. Brand owners not only offer discounts in ecommerce sites to attract consumers, but also set up experience areas in physical stores where people can feel the products in hands and purchase online/offline at special prices set for the event. It’s big sales holiday for most famous ecommerce platforms in China.
Below is the ranking of top 10 ecommerce sites in China in 2015 published by China e-Business Research Center.(中国电子商务研究中心) The new study indicates that Tmall was number one among all Chinese B2C retail websites for 2013. The site accounts for a 50.4% share of the B2C online retail market in China, followed by 20.7% of JD and 5.7% of Suning. Following No.4 to No.10 are Tencent (5.4%)、Vip(2.6%)、Amazon China(2.3%)、Dangdang (1.9%)、Gome(1.7%)、YHD(1.6%)、Vancl(0.8%).
The goal of the marketing is always to send the right message to the right people at the right time on the right spot. Location-based marketing or geo-marketing seems trendy now but it is not a new idea at all. Traditional billboard ads at “selected” locations, or “regional local” TV commercials are also applying “location-based” concept in marketing campaign since it is broadcast the message to certain target audience by selected areas.
In the earlier web era, marketer used email or other web site to do promotion electronically but had not much choices on location or target segments. It was just a transformation from printed format to electronic format and was still a blind and massive way to push “unappreciated” message out to consumers.
Location-based marketing helps target consumers more precisely
Sending out the “right” message to target consumer is always the challenges to the marketers. With new technology and mobile device wildly adoption, it is now possible to capture where and when the consumer is, which presents consumer’s lifestyle as well as the product preference or interests. In short, location-based marketing can be more precisely target the potential clients to raise the campaign success rate. There are two main technologies used in location-based marketing currently:
Geofencing – It is the application or software that use GPS technology to establish a virtual perimeter or boundary around a physical geographic location, which requires satellites and cell phone towers to communicate with mobile devices. It is used in outdoor and larger areas to identify consumer’s proximal location.
Beacon – It is a device by using bluetooth technology to constantly emitting a signal to the receiver (mobile device) within a very short distance to trigger an application. It is usually used indoor to know more precise location of the consumer.
With those two technologies, marketers can track the consumer no matter they are indoor or outdoor, and hold different marketing activities to consumers based on the locations and time.
Nowadays Location-based marketing usually involves the four elements:
Smart phone/ tablet device – It is the central media to interact with consumers. Without the device, it is impossible to make the campaign happen.
Proximal location identification technology – As described above, it is to get where the consumer are in real time.
Campaign APPs – All the promotion idea and objective of the campaign are delivered through the APPs, which is the most critical part of the marketing activities.
Consumer’s behavior database/ model – No matter it is real time analysis or pre-set model, marketer needs to know what the consumer is interested or care, so that the appropriate message/ actions can then be brought to consumers.
More and more retailers are using location-based marketing campaign and getting good results from it. It is not just the trend but seems like an essential element to involve location component on all service to bring customer with better experience on shopping.
Below are some interesting and successful location-based marketing cases:
The Montana Bureau of Tourism, USA, winter of 2013-2014 : Pre-setting targeting consumer and analyzing demographics, sending out the relevant ads to those people who have visited ski-related store or locations in that season. This campaign combined consumer analysis in-advanced.
American Eagle, USA, 2013: Shopkick roll out 100 AOE stores with iBeacon trial plan. Customers will get message of the specific promotion of the store righter after they walked in the door.
Macy’s, USA, 2013-2014: in 2013, Macy’s applied iBeacon with opt-in app to track customer in store for promotion, and it seems play a big role for the 2013 black sales. In 2014, Macy’s combined the Apple pay to enhance customer’s shopping experience and convenience in store.
Will online shopping squeezes brick-and-mortar stores?
Traditional retailers need to select the best sites for stores, determine the optimal number of locations for each market, keep up with consumer expectations of what the in-store experience should be. However, consumer aren’t coming to stores for the prices or the selection as they can usually find better alternatives to both online.
China’s online retail market, which has surpassed that of US as the world’s biggest, and will continue to grow rapidly to a level threatening brick-and-mortar stores in next few years. According to the official government data, Chines consumer spent US$300 billion last year, 13% per cent more than the US. This figure makes China the biggest market for online retail in the world.
Based on getchee market research, online sales now accounts for approx. 10 per cent of total retail sales but anticipates it will grow 30-40 per cent a year in China market. However, that means that 90 per cent of retail sales are still happening where sales have taken place for hundreds of years: Physical stores, retailers have physical presence to engage with consumers.
Why personalized retails is the future of brick-and-mortar stores?
Consumers prefer to shop in physical stores as it allows them to have a sensory experience – they can touch and feel product, immerse brand experience, and interact with sales associate. Many retailers are taking a page from their traditional compositors by offering an in-person shopping experience that can’t be mimicked on a tablet or smartphone. This heightened focus on in-store experience could be a sign that the retail industry definition of successful store is changing.
Key benefits for retailers and customers
1. Discover customer preference to offer the right product mix, reduce inventory distortion and raise brand awareness.
2. Draw attention to products using catalysts, like mobile payment, phone apps, or special promotion program; increase retention of existing customer and get customers to try new products.
3. Give customer a reason to shop in-store by surpassing the online experience with more relevant product information, interactive self-service stations, and expert insights from sales staff – delivering an immersive brand experience.
4. Allow customer to shop the way they want, using a combined channels (in-store, online, mobile and self-serivce) accommodating their busy lifestyle.
5. Making personal connection by sending an email or SMS wishing them a happy birthday, congratulation on an anniversary, or gifting a beverage 0 making them feel special.
The future of retail stores
So instead of concentrating solely on one channel, retailers need to be focusing on optimizing store portfolios, while simultaneously improving their online presence.
Retailers also need to adjust the way they view the value of their physical stores. When online shopping exploded, retailers determined the impact to performance of a store based on its sales numbers. Brick-and-Mortar stores need to be viewed and help consumers discover new products and test ones they have seen online – regardless of where the actual transaction takes place.
Brick-and-Mortar stores capture sales, but they also create value by driving online sales. This means the value of a store for both consumers and retailers is greater then the sales captured within them.
Partnering with Australia’s fashion retailers, Westfield introduced the Searchable Mall westfield.com.au to better connect digital shoppers with physical stores.
The digital innovation aims to evolve Westfield’s digital strategy from an e-commerce site to an online destination which helps shoppers find what they want in their local shopping center and helps them buy their way – either in-store or online.
I spoke at ICSC’s Repositioning to Realize Potential conference last week in Hong Kong. You can find my presentation here. I learned a lot about market trends as I prepared for the event. More importantly, I learned a lot from the other presenters at the event. Here are a few things I’d like to share with you. Read the rest of this entry »