A visit to the head office of Cisco - smack bang in the middle of Silicon Valley - revealed just how much and how fast technology has advanced and also provided us with a preview of the future. The massive impact of the first transistor radio 55 years ago seems almost forgotten. With 4 “transistors components” (today’s Intel Core 2 Duo has 291 million), it meant for the first time you could take music with you. Parents no longer controlled the radio dial and teenagers expressed their freedom via rock and roll. But as revolutionary as it was, it took 38 years for this “amazing” product to reach an audience of 50 million. Some years later it took television 15 years to reach sales of 50 million boxes. In the 1990’s the internet reached 50 million in 4 years, face book hit 50 million users in just 2 years and for Twitter it was less than 12 months.
The first video to be posted on YouTube was in April 2005. Six years later we have 1.2billion videos viewed per day (that’s more views per week than there are people on the planet). For retailers the critical message from all of this is the impact on how we communicate with our customers. If you’re riding this ultrahigh speed technology wave, there are huge opportunities for multichannel retailing but for many there is the real risk of being left behind.
Have you ever wondered about who’s writing what about your business on Facebook? Are people endorsing you to their friends, or spreading the word about a bad experience? With 9.7 million Aussie facebook profiles (46% of the population) and with an average of more than 8 hours connected per month, Australia is now number 1 in the world in terms of time spent on Facebook. In terms of the under 25 market, 1/3 of users check facebook before getting out of bed of a morning – and importantly they do it on a smart phones. It’s the emergence of smart phones rather than just on-line internet that will really change tomorrow’s shopping habits. Amazingly it was only 4 years ago that the first Apple Iphone was released and now everyone seems to have one. 2011 is the first time the world has seen more sales of smart phones than PC’s. In fact 43% of Australians already have a smart phone with 48% of 16 – 29 year olds stating they shop using their mobile device (40% also use them to compare price while in store).
This 'millennial generation' (born 1977 to 1998) will soon be the number 1 consumer demographic. They spend 30% less time reading newspapers and magazines and have the highest % ownership of personal technology - including smart phones. They want to be connected, they are certainly mobile and they believe transparency equals authenticity. As such there are 4 major implications for retailers who sell to them:
I) Their expectation is that stores of the future must exceed the experience of internet shopping – otherwise why do it? They expect endless availability/selection (as that’s what they get on the internet). They expect your store to be easy to find (just like on Google). They expect your staff to be fast, knowledgeable and interactive when needed (just like on the internet or smart phone), and they expect to be able to take a photo and get the advice of their peers - like they do on Facebook. (Interestingly I noticed that on this year’s Westfield study tour, nearly all overseas stores now allowed us to photograph their stores with a smart phone). Finally they want to have access to all relevant information on you and your products as they equate transparency with authenticity.
II) The most valuable real estate in future retail will be measured in centimetres and to be fully utilised will have a “six screen life”: (1) Mobilescreens – sms, M-commerce, social media, location find, (2)Home – smart TV, (3) Computer – PC’s, E-commerce, (4) Media – social media and rich media (Internet advertisement that contains animation, audio, flashing colours, and other enhancements, (5) Public – rich media communication and (6) Dashboard – location based with recommendations e.g. shopping malls.
III) An omni-channel future should be created now to ensure there is a “single source of truth” spread across 3 disparate channels; In-store, E-commerce and M-commerce. The data will be about product, inventory and customer, while the functions include Merchandising, Operations, and Fulfilment. Customers want to shop anywhere, anytime, and on any device. And they prefer to shop with retailers that provide seamless, customised experiences. Those retailers that display only a small sample of product on their website will have very limited appeal.
IV) How long before your business becomes a “Mashop”? Some retailers are already “mashing up" the virtual and physical worlds to create a new way to shop. They allow shoppers to receive the information and convenience of a web-based experience while at the same time being able to touch, feel, and see the products they want to buy. For retailers, this combination promises to increase sales through conversions at the shelf edge as customers gain more access to product information through more cross-channel sales. Creating mashop experiences will lead retailers to introduce technologies such as interactive digital displays, video assistants, social networking technologies and Wi-Fi news and alert networks that enable shoppers to remain connected with trusted people and information while they are in the store.
How you communicate with your customers continues to change at a staggering speed as technology advances. The prolific use of mobile devices (smart phones) by the millennial generation almost demands you have an omni-channel strategy to fully communicate with them. Finally, technology may save bricks and mortar as the introduction of mashops creates the theatre or instore experience needed to make your customers walk back in the door.
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