Out of the app and into the store with KakaoTalk

First posted with Econsultancy

People have been talking about social commerce for some time now. The idea that shopping behaviour can be directed and informed by social networks is intriguing to retailers, but its application has been clunky.

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However developments by South Korean instant messenger app KakaoTalk point towards social becoming much more ‘shoppable’.

KakaoTalk is the dominant messaging app in Korea, used by more than 90% of smartphone owners. It is a near ubiquitous part of daily life for people who use it to make free calls and texts, share content and take part in group chats.

It is a hybrid app, half instant messenger, half social profile, whose development in some ways mirrors how Facebook has evolved to cover more bases.

Of particular interest to retailers is KakaoTalk’s capabilities for driving shoppers in-store. Its Plus Friend feature enables users to follow brands and receive communications and shopping vouchers via IM. Recipients can then redeem the voucher in a given store.

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Shoppers can also use the feature to buy and virtually send gifts to their friends and families. They could for instance buy a t-shirt from Uniqlo via KakaoTalk and then ‘gift it’ to a friend who could then go in-store and pick up the t-shirt. With today’s shoppers expecting a new level of convenience, this feature provides it in spades as recipients would be able to try on the item and swap the size or colour there and then.

As well as tying physical retailers back into mix of channels, it would also provide additional benefits in savings on postage. Imagine also the boon for last minute buying at times such as Christmas when even the most laggardly of us would have no excuse for making a purchase and sending it to the right person.

The emergence of instant messaging as a shoppable channel is another example of how retailers need to consider a wider array of channels for their marketing efforts.

In fact shoppers no longer care about channels, they just want to be able to move seamlessly between platforms, media, devices and environments to achieve their shopping mission.

Crucially this is affecting how marketing is perceived by shoppers. It is no longer enough for ads to create desire, they must also be able to satisfy it there and then.

Hence online retailer ASOS has introduced the hashtag #asseenonme as a way of encouraging users to share pictures of their outfits. Anybody searching the hashtag can buy what they see, because ASOS ensures every image is then linked to the relevant product pages.

US beauty website Joyus.com has developed shoppable content through its how-to videos. Any make-up products featured can be clicked on at any time and purchased. Meanwhile H&M customers with Samsung smart TVs were able to buy David Beckham’s underwear straight from its Superbowl ad spot.

It’s all part of the drive towards the everywhere, instant and personal shopping experience that smartphone wielding consumers expect. And with its IM capabilities, KakaoTalk demonstrates how retail can move shoppers out of the app and into the store.

 

Using mobile to boost the in-store experience

First posted 1 July 2014 | econsultancy.com

When it comes to looking for hints on where mobile commerce is heading, marketers should look towards South Korea.

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Not only is the country home to Samsung, the world’s largest supplier of smartphones, but Koreans have shown themselves to be rapid adopters of mobile technology.

Seoul is the eleventh biggest city on the planet with more than 25m people in the greater metropolitan area, most of whom have a smart device. Increasingly they look to use those devices to shop.

In 2013 62.6% of Koreans used their smartphone to shop, up from just 11.9% two years previously.

Fast adoption of 4G and in-store WiFi opportunities are driving this new approach to retail and offer businesses the chance to engage with shoppers in different and really exciting ways.

This was seen most clearly in the much-lauded Tesco Homeplus virtual store in a Seoul subway that became the benchmark of multichannel retail. Commuters were able to virtually shop for goods through a phone app and have the goods delivered to their homes.

Tesco is not the only retailer to spot the possibilities for mobile commerce. South Korea’s largest player, Emart, has used mobile as a way to expand its core business, improve the shopping experience and deepen its relationship with customers.

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When Emart launched its own Mobile Virtual Network Operators (MVNO) business, it wanted to offer customers cheaper mobile service, but also help shoppers find deals in its huge stores and make the in-store experience more fun.

Emart initially looked to use WiFi as a way of interacting with customers, however testing soon proved that it lacked precision when spotting exact locations indoors, making indoor-navigation impossible. GPS has similar limitations. So Emart turned to VLC (Visual Light Communication).

VLC utilises the LED lighting in the store to create an accurate in-door navigation system that smartphones respond to. Customers downloaded an app, settled their smartphone in a cradle on their shopping trolley and followed the directions. When they reached a promotional hotspot an electronic coupon displayed on their device.

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As shopping apps improve, retailers are starting to realign their loyalty, promotion and even payments through the mobile device. This in turn is driving the use of mobile as a primary device for purchasing.

Research by the Korean Chambers of Commerce found a decreased ‘fall-out’ ratio of people who search product information using smartphones but purchase via computer or in-store.

It fell from 70.5% in 2012 to 66.4% last year. Those who bought at offline shops after searching with smartphones also fell, from 38.5% to 29.0%.

It is a trend that can only continue, and another reason why the eyes of the global retail industry are on Korea to see what it does next.

 

In the future all media content will be shoppable

First published in Retail Week, 19 June, 2014 | By Simon Hathaway

It’ll be cold comfort to Asos right now, coming off the back of a third-quarter profit warning, but its recent launch of #asseenonme is the precursor of a change in how retail perceives advertising.

The #asseenonme initiative takes TKMaxx’s Me by Me TV ad concept one step further to create a social solution that drives sales.

It gives the online retailer’s customers the opportunity to share pictures of themselves wearing items bought from Asos. Anybody searching the hashtag can buy what they see, because Asos ensures every image is linked to the relevant product pages.

Asos has cleverly made this customer-generated social content shoppable. 

Indeed, shoppable ads are the latest manifestation of how the retail experience is being transformed by technology.

We know that mobile devices and big data mean that retail is now everywhere, instant and increasingly personal. Total retail, omnichannel – call it what you will, the phraseology is shorthand for our understanding that people don’t care about channels, they just want to be able to move seamlessly between platforms, media, devices and environments to achieve their shopping mission. In fact some of us have stopped using the word channel all together.

“Soon we’ll expect to be able to buy any image we click on – and be frustrated if we can’t”

This convergence is also happening in advertising. People don’t care about media. They also want to be able to move between channels as they manage their relationships with brands.

That’s meant that some smart brand owners have stopped budgeting by media and marketing discipline and started allocating their marketing money by business challenges.

To be commercially successful in this new world of converged channels and media, retailers and their advertisers must inspire three human behaviours: searching, shopping and sharing.

During the Super Bowl this year H&M ran a TV spot featuring David Beckham promoting the ‘real’ footballer’s range of underwear. Beforehand it had run a social campaign to get the US sharing its views by voting on the state of undress David would find himself in at the end of the spot, a tactic now widely used by advertisers. No surprise, it was naked.

But perhaps more intriguing was that viewers with certain models of Samsung smart TVs could buy the Beckham underwear immediately through their TV. This was a shoppable ad.

Technology is resetting expectations of retail and transforming shopping behaviour. We are getting used to being able to click on a product image and go into the buying process. Soon we’ll expect to be able to buy any image we click on – and be frustrated if we can’t.

In turn, retail will need to be a single application programming interface that can plug into every ad, image, film, tweet or post, because people will expect everything to be shoppable. The consequence is further convergence of retail channels, and advertising.

So next time you are sitting in a presentation from your ad agency, don’t forget to ask: “Is it shoppable?”

Time, money & frustration

First published by Retail Week, 24 April, 2014 | By Simon Hathaway

Next posted £695m pre-tax profit to the end of January, bucking the trend of flat or declining growth faced by many retailers.

Retail analysts reading the runes of the high street future were quick to pounce on Next’s recent profits increase.

The figure was particularly notable given that profits had outstripped high street bellwether Marks & Spencer for the first time. But beyond the headlines is an even more pertinent fact: for the first time, Next generated more profits from online and catalogues than from its stores.

Specifically, its retail profits grew 5% to £348m, but Directory profits rose 19% to £358m.

A long-time exponent of catalogue selling alongside its physical retail portfolio, Next is now in a perfect position to benefit from consumers’ demand for an omnichannel retail experience.

We all know technology is changing shopping behaviour at a faster pace than ever before. You’re never alone with a smartphone and this modern-day shopping partner is informing our decisions on how, where and when we shop. The result? Retail is now in the age where selling has to be everywhere, instant and personal.

In South Korea where Cheil is headquartered, the change in shopping habits offers a salutary view of where the UK high street could be heading.

In 2011, according to a Korean Chamber of Commerce and Industry survey, only 11.9% of Koreans shopped using their smartphones. By 2013 the figure was 62.6%.

Smart players like Next realise we don’t shop like we used to. They’re starting to understand that real people – you and I – are constrained by not one, but three budgets when we shop.

Of course there’s the financial one but there’s also the time budget. And increasingly, most of us have a frustration budget – if it’s not easy and straightforward, we’ll move on.

These elements add another layer of complexity to what is no longer a linear path to purchase. Today, shopping is an intertwining journey of searching, shopping and sharing – fuelled by mobile.

To cut through the complexity, we must deliver simplicity in our retail experience. If we don’t, we exceed the shopper frustration budget.

Technology is simplifying shopping, with a corresponding shift in the price/quality value equation. Whereas once it was limited to price x quality, now it is (price x quality) ÷ convenience. And technology is constantly resetting our expectations of convenience.

Every time we experience something new that makes our shopping experience more convenient or personal, it resets our expectations of what other retailers should be doing for us.

The customer is still king and is a more demanding ruler than ever before.

Layering search, shop and share with the new budgets – financial, time and frustration – to deliver change is what could make part of an agile future-facing retail landscape.

Smart data is the core of modern retailing

First published by Retail Week, 24 February, 2014 | By Simon Hathaway

Big data has always been one of retail’s greatest strengths – after all, the Tesco Clubcard is arguably the predecessor of big data as we know it today. It is also one of the biggest challenges retailers face.

Ian Cheshire, Kingfisher chief executive and chair of the British Retail Consortium, has labelled big data “a game-changer”. He went on: “Many big names have already disappeared from the UK high street and there will be many more to come if retailers fail to address the big data challenge, understand their customers and adapt to their needs.”

Meanwhile, IBM chief executive Ginni Rometty predicts that thinking strategically about big data “will determine the winners and losers” of retail. Ironically, the biggest hurdle around big data is data itself.

This seems absurd when Amazon, arguably the world’s most successful retail experience, is built on understanding and using data. The etailer uses collaborative filtering technology to develop automatic recommendations for customers based on their purchase data. But introducing such a process with reams of pre-existing data is no mean feat.

“When it comes to data strategy, retailers must ask themselves what it means to be relevant today”

Data is a rich vein to tap and is relevant to nearly every discipline and industry. Where once the aim was to collect as much information as possible, the emphasis now is on turning this into customer-focused intelligence, helping retailers to deliver the shopping experience today’s agile consumer expects.

Much has been written about big retailer failures and the slow death of the British high street. The reality is that both the way we shop and the way we want to live our lives is changing and, as a result, many retailer offerings are no longer relevant.

Retailers should provide customer-centric experiences. Loyalty will always be defined by how brands make people feel. Retail is no different, and experience is everything.

Today’s agile consumer is tech savvy and as mobile as the devices they use. Most of all, they expect their retail experience to be personal and relevant. Data enables retailers to deliver both.

This is the year some of the UK’s biggest retailers should make headway in their use of data. Much of this will come from new data tools. Asos, for example, has been using a start-up fashion data tool called Editd to access insights into consumer fashion retail trends. Editd’s information on pricing has reportedly helped push the etailer’s sales up by 33%.

When it comes to data strategy, retailers must ask themselves what it means to be relevant today, define their experience and understand how best to deliver value to their customers.

They can also use data to help them decide whether a customer is worth keeping – the power balance hasn’t shifted entirely into the hands of the consumer.

Both Cheshire and Rometty are correct that data enables business agility and getting smart with data is at the core of modern retailing.

What they’re fundamentally missing is the how. Every retailer will find their own way, but for those brave enough to face the data challenge, there are many rewards to be reaped.

Technology, Retail and the Agile Consumer

First published by Contagious Magazine 17th February 2014

Today we’re all agile consumers – we search broadly, shop anywhere and anytime, and will share the ideas that feel meaningful to us. We think in the now, are open to novelty and innovation and will change easily if bored, frustrated or enticed.
We expect to move seamlessly between platforms, channels, media and devices to search for entertainment, products and services, shop for brands and share experiences. And we want to do this at home, in-store or walking down the street – a deep-rooted behavioural shift that’s largely based on the explosive growth of the smartphone.
At the end of last year Cheil carried out the Agile Consumer Survey 2013 among 1,000 UK smartphone owners. It revealed that half of these people bought their smartphone with shopping in mind, and that almost as many (42%) have bought something using their phone. 70% admit that they research and compare prices on their phone, more evidence of the growth of ‘showrooming’, and almost three-quarters (72%) say that they’d be more likely to shop at a given store if it sent personalised promotions to their device.
The agile consumers’ expectations of retail are that it must be Everywhere, Instant & Personal. That is a challenge for retailers and means many have had to adapt to survive. For example, Tesco’s Homeplus ‘virtual grocery store’ on the walls of a Seoul subway station became the poster child for the anywhere and everywhere transformation that is going on in retail.
But when that work was done in 2011, only 11.9% of South Koreans shopped with a smartphone (Korea Chamber of Commerce and Industry (KCCI), May 2013). Last year, it was 62.6%. Seoul is the eleventh biggest city on the planet with more than 25 million people in the greater metropolitan area, most of whom have a smart device that enables them to shop anywhere. So it is no surprise that many retailers who want to engage today’s agile consumers are looking East for inspiration.
Emart, South Korea’s biggest grocery retailer, is one that understands how the traditional battle for location is just as important on the mobile device as it is in on the high street. It created Flying Stores, remote controlled floating balloons that were flown around shopping centres in Seoul offering free wifi. They instantly land every shopper that connects in the Emart mobile store, where they’re offered discounts and coupons.
Meanwhile, its Sale Navigation uses smartphones to guide shoppers to the best deals and direct to the aisle with items on promotion, redefining how to deliver navigation, education and inspiration in-store.
But to deliver ‘Personal’ you need to know your customer. Arguably the most successful retail experience in the world today is Amazon, a thriving retailer built on understanding and using data. Data enables business agility and getting smart with data is the core of modern retailing, as is Relevance and Experience.
Much has been written about big retailer failures and the slow death of the traditional shopping locations like the British high street, but the sad reality is that they are no longer relevant to the way agile consumers want to live their lives. Loyalty will always be defined by how brands make people feel, retail is no different, experience is everything. Retailers must ask themselves what it means to be relevant today, define their experience and understand how best to use technology to deliver value. After all, technology is transforming our expectations.
What’s more, the idea that Consumers and Shoppers are different, perhaps even different people, has long been a fundamental of traditional shopper marketing. That’s still relevant for much of the world’s big box retail, but today technology means agile consumers want to be able to buy everywhere and instantly and retail can no longer be the last thought or even the last mile.
P&G was on the money with ‘store-back’ a few years ago (where marketing efforts start with how they will be executed at retail, and work back from there) but in Korea, 42% of people claim to shop online while watching TV (TNS South Korea Digital Life Research, 2011). Brands, retailers and agencies must all take note: technology is realigning consumer and shopper, and agility, delivered via the mobile device, is their beating heart.

What the world can learn from Korean retailers

First published in Business Korea 7 February 2014 | 사이몽 (思理夢)

The way that convenience retailers operate in Asia, using customer insight to shape their offer to a level unprecedented in the Western markets, is starting to make businesses in the latter economies really sit up and take notice. Asian retailers’ assortment and adjacencies are all driven by the lifestyle needs of the shopper – unlike many of their European counterparts – with legacy pricing models that prioritize cost and efficiency in store operations.

Cheil Worldwide works extensively in South Korea, where convenience grew by 15.6 percent in 2012 and is shaping up to have had another bumper year in 2013. That’s significantly faster than direct retail, including online, which grew by 12.5 percent in the same period. Why?  Primarily, because these retailers are delivering real convenience for their customers. They understand what customers want and how much they’re prepared to pay.

But perhaps more interesting is their eye for the future, based on the changing shopping habits and expectations of retail.  More than 20 percent of Koreans in their 20s now shop via smartphone, and that’s where some of the most interesting work is being done: to unite the mobile device with the store.

Korean retailers are starting to deliver for a customer who sees the smartphone as the primary tool for shopping, and therefore now expects retail to be three things: Everywhere, Instant, and Personal.

For example, virtual stores in Seoul subway stations have become the global benchmark of Everywhere retail. The store is indicative of how South Korean retailers continue to redefine the shopping experience, and the idea has since been borrowed by businesses across the globe.

But when that virtual store was started in 2011, only 11.9 percent of South Koreans shopped with a smartphone according to a Korea Chamber of Commerce and Industry (KCCI) study in May 2013. Last year, it was a colossal 62.6 percent.

Seoul is the eleventh biggest city on the planet with more than 25 million people in the greater metropolitan area, most of whom have a smart device that enables them to shop anywhere. So it is no surprise that many retailers who want to engage today’s agile consumers are looking to South Korea for inspiration. Fast adoption of 4G and in-store wifi opportunities are driving this new approach to retail, and offer businesses the opportunity to engage with shoppers in different and really exciting ways.

For one, people now have access to endless information to answer any questions they might have – and that means they’re making more educated choices about brands and products. Mobile is all about searching, shopping, and sharing.

Retailers are also starting to realign their loyalty, promotion, and even payments through the mobile device. And finally, the mobile has replaced the land bank in the retail space race. Location is no longer about a store in every community, but a shopping app on every phone.

For example, Emart’s sales navigation tool enables shoppers to locate the best offers in-store with their smartphones: they just set their phones into a shopping trolley and are navigated to the aisle containing the product they were after. Smartphones genuinely enhance the in-store experience.

Emart also offers the Flying Store – helium-filled balloons that float around malls offering free wifi to shoppers (plus, of course, easy access to Emart’s own online retail site).

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KCCI research in 2013 showed decreased fall-out ratio in Korea, the ratio of people who search product information using smartphones but purchase via computer or at offline stores. The number of people who searched for product information using smartphones but bought using computers was 70.5 percent in 2012 but fell to 66.4 percent last year. Those who bought at offline shops after searching with smartphones also fell, from 38.5 percent to 29.0 percent.

According to the Chamber, this is mainly due to improved shopping applications, simpler payment processes, and various discount offers for smartphone shoppers.

Through mobile, Korean retailers are able to offer shopping in any location, at any time, with a level of personalisation that, up until recently, most retailers could only dream of. It’s truly becoming Everywhere, Instant, and Personal, and that’s why the eyes of the global retail industry are on Korea to see what it does next. In a very real sense, this market is shaping the entire world.

– See more at: http://www.businesskorea.co.kr/article/3208/leading-retail-what-world-can-learn-korean-retailers#sthash.Tmtihhfe.dpuf