Welcome To The Future Of Retail – Part 3

In previous posts we have highlighted some of the recent changes to bricks-and-mortar landscape: increasing vacancy rates, reduced consumer spending and lower footfall.These trends are contributing to the rise of short-term “pop-up” retail both in the UK and internationally. However, We Are Pop Up also think this is the beginning of a structural change in the way we use space, rather than just an economic cycle which will fade in time.

Some of the social and technological forces that are changing consumer activity will have profound consequences for both shop space and brands, and offer a great opportunity for those that can capture the imagination of a new audience. For facts and figures about the Rise Of The Mobile Audience, see our overview here.

MAKING YOUR STORE YOUR STAGE

There are an increasing number of retailers seeking to enhance engagement, from Levi’s Craft Of Music campaign, to Westfield’s Future Fashion events, exciting fashion start-ups like TheEdit @wearetheco and the Vogue-sponsored Fashion Night Out across London’s West End. Even pure-play online retailers like Capital One or eBay are increasingly experimenting with physical spaces and pop-ups to build engagement.

It may seem obvious, but physical engagement with a brand or community or product is the core advantage that a ‘shop’ – or increasingly ‘pop-up’ – enjoys over an online experience. Mobile computing is an agent in this physical to digital (or vise versa) journey.

The number of ways in which we can participate in a shopping experience is multiplying. We can share our experiences with our social media audience and are provided with digitally enhanced forms of service in-store. Just see how John Lewis bridges this gap with digital kiosks and incentives that cross platforms. For a new generation of retail, these steps are the key to engagement and profitable loyalty.

Hot Tub Cinema – a traveling theater and hot tub experience in London.

How To Engage In The Digital Age

It is estimated that the Vogue Fashion Night Out, for instance, increased footfall across Bond Street by a remarkable 92% – and a recent conversation with Caireen Wackett at Yellow Door reminded me what Mary Portas said back in September 2011:

“The only way for bricks and mortar retailers to compete with online is brilliant real life shopping experiences. Retail is no longer about number of units on the shop floor – it’s about offering a playground for your customers. Throwing big exciting events is one way to draw a crowd – but I believe the High Street should invest in better experiences for their customers every day.”

Big exciting events – the “theatre” of the retail world – don’t scale particularly well on the marketing and PR budget line. But mobile is a channel that can deliver personalized and exciting engagement everyday (remembering the late Steve Jobs’ caveat to “start with the experience, then work back to the technology”). A solution that can combine someone’s recent search history and preferences, the time of day, a particular location or even the last thing they bought, opens up the potential for far more nuanced and meaningful business-to-consumer journeys.

This more nuanced engagement delivers a more ‘authentic’ experience that all parts of the retail spectrum are currently seeking; from a start-up’s first steps into retail – like those working with Pop Up Britain – or an online retailer taking seasonal space, and even fully fledged independents and brands. A new generation of retailers is thinking not only about what they can provide to augment our lives, but also what kind of self-contained experience might captivate us most meaningfully. This indicates an exciting move away from old advertising models that told us what we wanted, and instead is built around what we actually do and care about.

Deloit predicts that over the long-term we will see a significant downsizing of store portfolios:
“This will vary markedly depending on the retailer’s category but reductions by as much as 30-40% are foreseeable over the next 3-5 years.” However some retailers, notably Apple and Nike, have led the way by showing that brand only stores can deliver great customer experience and provide a physical corner-stone to their consumer engagement. As vacant retail space grows more and more flexible, it is only a matter of time before the capacity and liquidity problems in the market are resolved. We can imagine a platform where all retailers have the opportunity to create active digital communities around the physical in-store experience, however short-term or permanent their presence.

This is where We Are Pop Up can play a vital role – enabling great physical experiences, reducing transaction costs and making the process of having a shop as easy as paying for a product online using PayPal.

Kellogg’s Ran A ‘Pay With A Tweet’ Campaign at a Soho, London shop in 2013

The CBRE (the world’s largest commercial real estate firm) observed that in the 1970’s, a retailer needed approximately 200 stores to access 50% of the UK’s population. Today it only needs 90 – sometimes less (assuming, of course, they are optimally located). Let us stretch the theatre analogy further to that of a traveling troupe – how many stores are required globally, over what locations and which time periods, to make sure a significant percentage of the world’s population enjoys your show?

–

I was recently asked to attended a meeting of the Small Business Statistics group at No. 10, hosted and chaired by Lord Young. The group was discussing the fragmentation of parts of the economy as an increasing amount of trade is transacted by e-commerce platforms like Ebay – and what challenges that this poses for measuring activity and productivity – in the first recession in living memory where unemployment has gone down! The conversations in the room were enthusiastic, and focused on new ways to transact and how to make the most of current market shifts.

Capturing mobile audiences represents an unparalleled opportunity for brick-and-mortar retailers. From start-ups to independents to brands – those that embrace mobile platforms in an intelligent and timely manner have the chance to create and sustain real competitive advantage.

Perhaps with the rise of the mobile audience are we about to see the rise of mobile retail itself.

Further Reading

The Changing Face of Retail – Deloit

M-shopping: Final nail or final hope for the High Street? – Sponge

Other parts of our Future Of Retail installments

This post kicks off a weekly series where each of We Are Pop Up’s team members will take a turn applying their expertise to the concept of pop-up. This week features Alastair Moore – COO and Co-Founder of We Are Pop Up. You can ask him questions on Twitter @latticecut.

The Rise Of The Mobile Audience

Eric Schmidt of Google said, “If your company doesn’t have a mobile strategy, it doesn’t have a strategy.” This is a prescient observation but one that really rang true this year as London played host to the 2012 Olympic Games. Among the 430 million visits to Lonond2012.com, the 4.7 billion page views and 4.7 million social follows, the number that stands out is that 60% of this occurred from mobile devices. To visualise the growth rate of smart phone adoption and use, here’s a chart:

Figure 1. Smartphone penetration per capita by country. Source: VisionMobile

If charts aren’t you’re thing, here’s a summary: The US and UK have the most engaged smart phone users, which comprise between 30% – 40% of people in either given country. In real numbers, over 150 million people in America and 24 million in the UK download roughly 20 apps-per-phone today. Some reports indicate that over half of UK residents now have smart-phones, which would make that 24 million closer to 35 million. The challenges of data accuracy aside, the point is that this rise in the mobile audience undoubtedly influences our retail spending behaviour. Online sales now represent around 12% of the UK’s annual retail spend. Research by Barclays Corporate in 2011 predicts that mobile will come to represent around 5% of retail spending in the UK by 2020. Between now and 2016, they predict compound annual growth of 55% for mobile-based commerce (mCommerce) vs 8% for eCommerce (shorthand for online sales) and just 1.6% for in-store sales. But the attention of new mobile audiences is still notoriously difficult to capture.

Around 80% of branded apps get less than 1,000 downloads – and its very far from the simple case of replacing the online desktop experience. To quote Matt Biddulph @mattb, co-founder of Doppler, “mobile gives everyone superpowers!” Its always with us, and there are signals, and more signals, AND MORE SIGNALS telling us about what’s happening in the world. We can see what’s around the corner in the same feed next to what’s happening in Mumbai. And with a couple clicks we can see both points on a map, and chart a journey via bus. Mobile allows us to see, find, explore, share and transact in ways that we simply couldn’t previously: faster, with better curation and with limitless connections to like-content.

More on this later, but anecdotally, this week heralded my first time paying at an US coffee shop where the only pos system was an iPad using Square! Mobile has arrived.

LIVING IN THE AGE OF ENGAGEMENT

In 2000, £50 out of every £100 we spent went to High Street retailers. Today, it’s just £42.50. But mobile isn’t about replacing a pound for a pound, and it is one of the “channels” by which customers and retailers engage. Deloitte estimate that for every £1 of purchases made via mobile, the channel will directly influence £23 of spend. The challenge is finding the best ways to influence a mobile audience.

I was inspired by a recent talk by Alex Meisl, co-founder of Sponge at the Mobile Academy about living in the “age of engagement”. I found the following statistics particularly engaging:

– 81% of smart-phone users search for local data

– 34% of US smart phone users have cancelled planned purchase in stores due to information they got from their mobile phone;

– 25% claim to intentionally carry a smart phone when shopping to compare prices and find information (an activity commonly referred to as “showrooming”);

– 46% say research conducted on their phone led them to make a specific purchase at specific store.

Where previously a retailer would have had us captive once we crossed the threshold of a shop, now they are in constant competition for our attention – locally, nationally and globally – an observation that Simon Forster of Debenhams described in June 2012 as “effectively heralding the end of online versus in-store shopping”. It is not about which of those you are, but how soon you will be both – something that the UK’s 150k online-only retailers should take note of.

So what do people currently do on mobiles? Here is another chart. This one shows a recent breakdown of behaviours from Google:

Figure 2. User journeys from discovery to purchase. Source: thinkwithgoogle.com

Understanding this complicated journey of conversion is not only the key to understanding mobile – and channel conversion – its key to understanding the changing role of bricks-and-mortar.

Notice that 4 out of 6 journeys involve the physical store in relation to mobile. The temporal aspects of this engagement are also important, but not captured by the figure. For example, there is the immediacy of mobile, as Ashley Highfield @ashleyhi observers: “On average, the time difference between first search and purchase is one month on the web and one hour on mobile”.

However the main point is that the biggest opportunity lies in leveraging mobile AND the physical store AND online to shape the overall shopper journey.

The potential of journey and engagement was highlight at a presentation from Hellicar & Lewis that I attended recently at WhiteLable’s Future Gallery. They gave some wonderful examples of how people are willing to interact with different digital installations to enhance the emotional and social aspects of engagement. And it is the role of social advocacy and endorsement that is critical to the journey of conversion.

Unsurprisingly, Amazon research shows that 83% of us won’t buy having been exposed to critical comments. But much more interestingly, their research also found that 75% of us are unlikely to buy if there are no reviews.

Only one journey in the figure above ends in an in-store sale – but bricks-and-mortar plays a critical role in creating a platform for engagement to support discovery.

This is part of an ongoing series on The Future Of Retail. You can read the continuation of this supporting data here.

#SMWPOPUP

“How Social Media Powered The Pop-up”

For Social Media Week (September 24th – 28th in London), Eventbrite

As part of Social Media Week, EventbriteUK (@briteuk) hosted 60+ attendees at Engine to discuss why pop-ups use social media, how to market big new ideas and what growth really looks like in a world gone digital. We heard from a great panel composed of major London pop-up entrepreneurs:

Andrew Swain – social media consultant at Boxpark (@boxpark),

Alice Hodge – co-founder of The Art Of Dining (@artofdiningldn)

Max Bergius – founder & editor of Art Wednesday (@artwednesday)

Sam Michel – founder of Chinwag (@chinwag)

Daniel Young – founder of Young and Foodish (@youngandfoodish)

For pop-ups, the problems with promotion and consumer traction are obvious: they are intrinsically ephemeral, underground, inconsistent, and often invisible to the naked eye (read: invite only). They are projects built from scratch by courageous and inventive individuals keen to bring something new into the world. Conversely, they’re often unable to afford the luxuries of promotion, mass-marketing, or any paid advertising whatsoever. We heard from the panel that proper (paid) promotion can actually damage reputations if the goal is to find an authentic and authentically engaged consumer base.

Enter Social Media.

“Everyone on Twitter Is Into Crochet”

The consensus in the room was that user/consumer/fan-generated content is the most valuable to both identifying and growing a dedicated base of customers. Rather than filling Facebook with every little announcement, or feeding Twitter with flippant information, success comes from re-posting Instagram photos, sharing positive consumer feedback and reinforcing messages of gratitude. While these strategies seem fairly obvious, we were given plenty of counter-examples where Pinterest had been used to mask commercial interests, verbose blogs fell on deaf ears and scattershot over-use of Facebook and Twitter isolated everyone.

As Daniel Young put it, “Everyone on Twitter is into crochet.” This doesn’t mean that any crochet business will de-facto succeed through Tweets alone, but rather that the challenge is to bring new and useful information and projects to the platform. Take the time to tell the right people about them, and then take them on a journey. Daniel found a collaborator in Edible Experiences, and they often share and support each-other’s content.

For Alice Hodge, the journey starts with ‘being real’, which is facilitated primarily through Twitter and Instagram. The accurate buzz word here is “oblique.” Tweeting about mis-steps and antics, coupled with Instagram photos of what happens behind-the-scenes can do a lot to bring humor, life and humanity to a new business. Andrew and most of the panel echoed the value of re-posting Instagram images and other user-generated content as a way to build a reputation directly through relationships, rather than ‘pitching’ anything at all.

Email = Workhorse

So how do you connect directly with your base to promote events, sell tickets, generate a buzz or announce a new feature? And how to do you measure retention vs. interest when social network stats are only as good as the last week’s activity?

For Max Bergius, email equivocates best. Because it is so direct, Art Wednesday sees the most monetization come from direct emails. MailChimp is the favorite tool for scheduling and building email campaigns (we use it at WAPU for our mailing-list and love it). As social networks grow larger daily, getting a signal through the noise can be quite the challenge. But email – set apart from networks and inherently personal – is a great way to find and keep your ‘sticky’ supporters.

Quality, not G+

Of the many platforms supported and praised for their ability to help connect and network users, Hootsuite and Tweetdeck were praised as tools to manage and schedule social updates (they focus on Twitter and Facebook). Path, Highlight and Banjo were mentioned as good personal networking tools. Drupal and WordPress were the blogging favorites.

We would like to throw in Shhmooze as an up-and-comer which helps you find people from your networks at events hosted by Shhmooze, Eventbrite and MeetUp.

The consensus was that Google Plus and the complicated integration of Google Plus Local and Google Plus Groups makes it more of a headache than a tool. When resources are already stretched across development, outreach and service, convoluted software that changes frequently is the most likely to drop off.

“If corporates can get out of the way… we’ll have a great time”

The most poignant question of the session came at the end of the event, when Sam Michel had a chance to discuss the role of big brands amidst the pop-up phenomenon. The title quote is his, issued after explaining the potential and exciting opportunity for entrepreneurs and brands to partner around offering large-scale, authentic experiences. Brands can bring financial support and capability, where entrepreneurs bring authenticity and a true connection to consumers.

This is most likely to work if the brand is just barely visible. We imagine meaningful or quiet product-placements, rather than big noisy ad-campaigns. Most brands now don’t seem to cop to the idea, so maybe they just need to be taught. Connecting with true pop-up entrepreneurs is a great opportunity for brands to authentically connect with their consumers – as we see in The Art Of Dining’s new Tradicional project.

Many thanks to Katie McPhee and Eventbrite for facilitating this fascinating conversation. (And for not forcing everyone in attendance to wear big orange shirts.)

—

Watch the live stream

Event overview and speakers: http://eventbriteatsmwldn12.eventbrite.com

Host: http://www.theenginegroup.com