Reflections on retail in 2011 and predictions for 2012

WHAT ARE THE KEY SOCIAL MEDIA TRENDS IN RETAIL?

The social shopper will come into focus as a potential customer, but also as critic, influencer and advocate. Smart use of personal data to refine communications – hitting the right person with the right message at the right time – will be key. Vouchers and group buying have been quite well pegged to social activity and will continue to grow. Location has been a slower burn but should start to really accelerate as Wi-Fi becomes more ubiquitous. While direct social purchase figures will remain fairly modest, social media will continue to perform very strongly as a purchase driver. The number of people who arrive at a retail site from a social media site and then make a purchase will continue to grow fast and everyone will be trying hard to understand that journey. Facebook is a large driver of such traffic and as such, a lot of retailers are looking to deepen their use and understanding of the platform to tap into the ‘social graph’. Expect more focus on retailers’ owned sites and joining up with Facebook on site and through apps. For bricks and mortar stores, Wi-Fi presents a massive opportunity. Sure, it’s a way for people to compare prices before buying, but like all perceived risks of internet openness, the prize is bigger, from presenting offers to enabling those close to purchase to read affirming product reviews. The words ‘utility’ and ‘influence’ will also crop up a lot in 2012, alongside ever more creative ways to engage consumers and tempt them to advertise on your behalf.

WHY HAVE SO FEW RETAILERS ADOPTED SOCIAL MEDIA?

It’s hard to find one that hasn’t at least dabbled. Even the likes of Tesco, who never leads the way, is jumping in. The entertainment industry is leading the way in terms of social media adoption but shopping, the other pursuit which eats up a comparable amount of our time and money, is hard on its heels. Next year online retail sales in the UK are expected to hit nearly £45bn, so it’s a sizeable pie, and focus will start to be on ‘deeper, smarter’.

WHO IS GETTING IT MOST RIGHT AND IN WHAT WAYS?

Amazon, Levis and Walmart have done some great Facebook integration as well as some great community building. John Lewis in the UK has shown the way by installing free Wi-Fi – a smart move sure to be followed.

IN FIVE YEARS TIME HOW WILL THE MARKET LOOK?

For bricks and mortar stores, local will become really important, much in the way personalisation will for those based only online. Things like personalised offers for people locally will help stores feels relevant and connected physically. Check-in will help drive this. I’m sure we’ll start to see collection points becoming more common on the high street and more and more clever uses of high street space to create socially engaging experiences. As for deals via mobile, this will be a smart affair and very selective. The idea of being bombarded with offers just based on your location is a bit simplistic.

WHAT ARE THE MOST COMMON QUESTIONS CLIENTS ASK?

1. How can we get more Facebook likes?
2. So we’ve got a community, what now?

AND HOW DO YOU ANSWER THEM?

1. Wrong question! First decide what it is you want people to do. Once you know that, you can then figure out the role of your Facebook page in the marketing mix. Don’t focus on likes, focus on quality and better understanding how to communicate.
2. Thanks to some of the new tools on the block, it’s possible to understand customers at an individual level: which kind of social media sites a customer uses and how they like to interact with you. By segmenting your community you can get better at targeting people with the right offers and content in the right place at the right time. If you learn to reward loyal customers you can start to turn them into advocates.

Dan Calladine, head of media futures, Carat Global Management

WHAT IS YOUR FAVOURITE MEDIA FUTURES STATISTIC AND WHY?

10% of UK e-commerce visits are from mobile devices. It shows the rise of mobile browsing, and the potential of mobile commerce.

WHAT IS THE MOST WORRYING STATISTIC?

Levels of noise-related hearing loss in US teens doubled between 1985 and 2008. It’s very likely due to the rise of personal audio, and it’s depressing, but it’s more worrying when you consider that hearing loss is easy to measure, while changes in brain activity and things like levels of concentration – which some fear are being damaged by computer use – are harder to track.

WHAT IS THE MOST SURPRISING ONE?

That TV viewing is going up. Everyone thought that internet use, catch-up TV etc would erode TV viewing, but in total, viewing levels are going up.

HOW WILL THE MEDIA SCENE OF TOMORROW DIFFER FROM THE MEDIA SCENE OF TODAY?

The biggest difference will be mobile. Media used to be something that you consumed at home, the internet made it something you consumed at work, and mobile is making it something you consume everywhere and anywhere.

IN WHAT WAYS WILL THE DEVELOPMENT OF NEW MEDIA CHANNELS AFFECT THE WAY PEOPLE USE RETAIL OUTLETS?

People still want to shop, and still want good service, convenience and good prices. New media won’t alter this, but it will bring new threats and new opportunities to the existing outlets. For example many of the top e-commerce sites are now from the major high street retailers – they learned to develop very good online offerings.

Dan Hagen, head of planning, Carat

WHAT ROLE WILL TRADITIONAL MEDIA PLAY OVER THE NEXT FEW YEARS?

A huge one. My colleagues have, and will talk about many incredible innovations in the use of social, mobile and in-store activities, but we still need to tell consumers about these things. And about our brand, the reasons to come to us above the competition and the sale we’re having this coming weekend. These things need to be delivered to a critical mass, and quickly. Not just to the hyper connected elite who have opted in and buy in to the data/reward value exchange, but also to the couch dwelling masses. Despite continual speculation and much hand rubbing over the demise of traditional media it still remains a huge part of consumers' lives and therefore, communications strategies. The case studies of the impact of traditional media on search and social engagement are numerous and compelling. The advent of digital, social and mobile has, in many cases, breathed new life into traditional media brands.

TELEVISION REMAINS THE PRIMARY MEDIUM - WILL THIS REMAIN THE CASE?

I believe it will. TV is in rude health – and that’s just linear, scheduled TV. Add to this, catch up TV, VOD, connected TV, etc and audio visual consumption is at record levels – both served up and sought out. As TV evolves more towards the Internet with full digital next year, connected set top boxes and products such as Sky Adsmart rolling out in 2013 TV’s capability to deliver big numbers as well as nichely targeted campaigns similar to behaviourally targeted campaigns in digital do today, will make it an even more powerful medium than it is today.

CAN SOCIAL MEDIA OFFER RELIABLE ROI RIGHT NOW?

Yes, but we’re struggling to measure it. I don’t think a Like is a particularly good measure of ROI as it is merely identifying existing advocates of a brand. Social commerce often struggles to show incrementality. I’ve seen a few econometric models which claim to place ROIs on social activity, and while I applaud the efforts in this space, the maths is a bit tricky at the moment. Intuitively I believe there is value there, but we need more case studies and more analysis before we can absolutely quantify the ROIs.

WHAT DO TRADITIONAL MEDIA OWNERS NEED TO OFFER IN ORDER TO PROVIDE A SUSTAINABLE SERVICE TO RETAILERS?

Data. We tend to swim in data within retail. Lots of information on sales, and usually lots of segmentations and consumer typologies. However, in order to buy media we inevitable water these rich profiles down to tradable audiences – ABC1 18-34, etc – digital is showing the way forward with cookie level targeting, but as digital principles invade traditional media environments media owners need to start looking at bringing their data to the fore and integrating it with ours and with our clients’ to find better targeting and more innovative trading models.