A guest lecture delivered to International Marketing students at the Fashion Institute of Technology February 28, 2012. Topics include the state of SoMoLo shopping, how businesses are responding, and examples of winning attempts to leverage these new technologies to engage the new breed of shopper.

1. Brands Under Siege:
The Rise of SoMoLo Shopping
Presented to the Students at the
Fashion Institute of Technology
#CommerceInMotion

2. What is a
SO
MO
LO
Shopper?

3. SOCIAL
MOBILE
LOCAL

4. SoMoLo Behaviors and Expectations
SOCIAL MOBILE LOCAL
Read a Look for Nearby
Discuss Review Inventory
On Social Sites
&Prices
Compare
Products
i
Investigate
A Use Maps to
About
this Product Find Stores
Share item Info B
Group
Deals
Review Receive
Shop through __
__ Shopping 25% Local
Social __
__ Lists off Offers
Games

5. Where Are These
“SoMoLo” Shoppers?

6. They’re
Everywhere…

7. Barriers to Entry for
New Competitors
are Very Low

8. “Tools of the Trade”
The Latest SoMoLo Trends and
their Impact on the Store
#CommerceInMotion

9. Smart Devices
are Everywhere
50B
worldwide by 2020
*Cisco
50%
of Americans now have a
Smartphone
*Nielsen
9

10. (35M and Counting)
Tablets Emerge
68%
of tablet owners say they have used
their tablet to make a purchase
*e-tailing Group
vs.
48%
of Smartphone
owners
10

11. 17B
downloads in 2011
*Forrester
Apps, Apps
& More Apps
11

12. Cracking the Code
12

13. 14M US mobile users scanned
a QR code in June 2011
*Comscore
6.2%
of total mobile
audience

14. Location, Location,
Location
65M
Americans use mobile or social
location-based services
*Pew Research
55%
of Smartphone users

15. photo circa
1937
Augmenting Reality

16. Increasing Traffic
12.2M
Shopping Reviews
16

17. creates “infinite”
shelf space
Bringing The Store to Life
17

18. The Games People Play
62M
US Internet users play at least one
27%
game on a social network monthly
*eMarketer
of the online
audience
18

19. Countless
Conversations
Swirl…
BRAND
THE
CONVERSATION
PRISM
…on a
-Brian Solis & JESS3
Plethora of
Platforms

20. Brands Are
BRANDS
Under Siege

21. m-Commerce: Relentless Growth
U.S. m-Commerce Sales
($US Billion)
Source: Barclays Capital
$2.9 $5.3 $8.8 $14.0 $21.0 $28.7
2010 2011 2012 2013 2014 2015

22. t-Commerce: Compelling Early Numbers
the average iPad conversion rate is
7x iPad shoppers purchase
that of smartphone devices
*Shopatron
Dual owners buy on mobile twice
as often as single owners.
“Duals” made >20 mobile
purchases in the last year.
50%
more than traditional web users
*Shopatron

23. s-Commerce: Explosive Growth Looms
U.S. s-Commerce Sales
($US Billion)
Source: Booz & Co.
$1.0 $3.0 $5.0 $9.0 $14.0
2011 2012 2013 2014 2015

24. Daily Deals: Here to Stay
U.S. Daily Deal Revenues
($US Billion)
Source: BIA/Kelsey
$.87 $1.25 $1.73 $2.34 $3.08 $3.93
2010 2011 2012 2013 2014 2015

25. Social Gaming: Already a $1B Business
2011 Social Gaming Revenues
Advertising
Lead Gen
$192M
Virtual Goods
$653M $248M
2010: $856M
2012: $1.32B
*eMarketer

26. The Bottom Line? Share of Wallet Will
Continue to Shift Online
U.S. Online Retail Forecast
($US Billion) 15%
15%
14%
13%
12%
11%
Source: Forrester
$176 $197 $218 $240 $259 $279
2010 2011 2012 2013 2014 2015
(% of totals exclude grocery)

27. The International Landscape
A Quick Look at the State of SoMoLo
Around the World…
#CommerceInMotion

28. Europeans Embrace M-Commerce
Source: comScore

29. Mobile Actions in the EU Store Heat Up
Source: comScore

30. QR Codes in the EU Gain Momentum
Source: comScore

31. Middle East/North Africa (MENA) Report
13% Of all searches are mobile
200% Growth last year in mobile searches
36,000 New Facebook users every day
100M YouTube views a day
Source: Google
31

32. Mobile Activity in MENA is Diverse
Source: Spot ON PR | Effective Measure
32

33. Asia: The World’s Most Prolific
Online Shoppers
35% Of Asian consumers make >11%
of monthly purchases online
27% Globally
59% South Korea
Source: Nielsen
33

34. Asia: Mobile Penetration Outpacing
Internet Access
34

35. Asia’s Mobile Love Affair with
m-Commerce is Blossoming…
76% China
75% India
56% Korea
47% Japan
Source: Nielsen
35

36. Asia’s Mobile Love Affair with
m-Commerce is Blossoming…
69% Prefer using mobile phone for payment
47% Of “tech forward” consumers in China
have shopped on their phone in last 6 months
38% Have scanned a barcode while shopping
31% Have purchased an item from a “Smart Poster”
via QR code or bar code
47% Welcome mobile ads sent to their phone when
they are near a store
Source: Nielsen
36

37. Asia, Social Media, and Shopping
800,000,000
Asian Social Media Users
1/3
Have Liked a Brand Page or Product
Source: Wikipedia
37

38. Source: Burson Marstelier
38

39. LATAM: Growth is Looming
215,000,000 Internet Users today
(37%)
285,000,000 Source: Internet World Stats
By 2015
39

40. LATAM: Commerce is Coming
Argentina: 71%
Chile: 71%
59%
Uruguay: 70%
Venezuela: 68%
Mexico: 61%
Costa Rica: 56%
Ecuador: 53%
of Internet users purchased Colombia: 47%
products online in the last
12 months Peru: 47%
Source: Tendencias Digitales
Paraguay: 42%
Dominican Republic: 40%
El Salvador: 36%
Guatemala: 30%
40

41. Conversions in LATAM are High
94% 89% 84%
Brazil Argentina Columbia
82% 71% 63%
Mexico Chile Peru
% of e-commerce website visitors that made purchase online
Source: comScore
41

42. LATAM: Mobile is Alive and Well…
630M
mobile phone connections
Smartphones
to hit 60% by
2016
597M people
42

43. m-Commerce is Still a Novelty
Brazil Considered Likely “Hot Spot” for m-Commerce Growth
2% access via
mobile phone
7% sales via
mobile site
43

44. Exclusive Research:
Consumers Have Issued a
SoMoLo Imperative
How Is Retail Keeping Up?
#CommerceInMotion

45. Research Approach
Objective
To pinpoint the expectations of today’s SoMoLo shopper, and
how B2C and B2B businesses are responding and adapting to
these wants and needs
Study Conducted
December 1 - 18, 2011
282 Respondents
Revenue Breakdown
$100M - $500M: 59%
Greater than $500M: 41%
Specialty Electronics Grocery Big Box CPG Other
#CommerceInMotion 45

46. Scan
This!! Got
Local???
Shopper Demands
Keep Escalating…
#CommerceInMotion 46

47. 57%
expect discounts sent to their phone
46%
expect to place orders via their phone
Mobility Matters
#CommerceInMotion 47

48. 40% expect to use QR codes
to access content on
their phone
#CommerceInMotion 48

49. 50%
expect to shop via tablet
Tablets Are
Triumphant
#CommerceInMotion 49

50. (Only)
38%
expect to use social
sites to
browse, shop, and buy
Social: Sizzling, Or Fizzling?
#CommerceInMotion 50

51. 28%
expect department-specific
messages and offers to be
sent to their phones when
they are inside a store
Locking In on (Micro) Local
#CommerceInMotion 51

52. The Great Divide
#CommerceInMotion 52

53. Retail Has a Long
Way to Go to Meet
SoMoLo Demands
A Long Road… Customers
Expecting
Retailers
Delivering
46% Place Orders
via Smartphone 38%
42% Availability and
Pricing on Phone 30%
44% Order Status
Updates on Phone 30%
40% QR Code Access
to Product Content 33%
38% Browse/Shop/Buy
via Social Sites 22%
26% Location-Specific
Offers via Phone 20%
13%
average
28% Dept-Specific
Offers via Phone 12%
gap
#CommerceInMotion 53

54. 33% Lack of Corporate
Commitment
36% Inability to Integrate
New Channels
36% Limited Inventory Visibility
Across Channels
25% Stores Unable to
Support New Challenges
SoMoLo Roadblocks #CommerceInMotion 54

55. Order on Phone---------------------------------------------- 38%
Product Availability/Pricing on Phone--------------- 30%
Order Status and Updates on Phone----------------- 30%
QR Code Access to Content on Phone-------------- 33%
Push Local Offers to Phone When Near Store---- 20%
Department-Specific Offers Inside a Store--------- 12%
Browse/Shop/Buy App via Social Network--------- 22%
Good Intentions… #CommerceInMotion 55

56. 50% Currently have no specific mobile commerce
strategy and/or are just experimenting
30% Currently have no specific social commerce
strategy and/or are just experimenting
64% Currently have no specific local commerce
strategy and/or are just experimenting
Strategic Shortcomings?
#CommerceInMotion 56

57. 1. Retailers must adapt to meet the escalating
demands of the increasingly
social, mobile, local shopper
2. As a whole, it appears that the industry feels
the pressure to react
3. Executive commitment, clearly defined
strategies, and technology plans need to evolve
quickly to close the gap
Study Conclusions & Takeaways
57

58. The Good News:
A SoMoLo Showcase
Interesting and Successful Examples
from Around the World
#CommerceInMotion

59. Shopkick: The Store’s New Best Friend?
How Shopkick Works
• Users see a list of nearby
participating stores
– “Kickbucks” earned just for entering
(no check-in required)
• Inside, stores offer rewards for
specific shopping behaviors
– Scanning a poster or product bar code
– Special discounts on specific products
– Time-based promotions

60. Shopkick: The Store’s New Best Friend?
• 2.3M active users 2,000,000
• 700M product views in year one
• 7M product scans in store
• Users open the app 14 times a month
– Review products from 16 stores each time
• Once a Shopkick user is in a store,
conversion rates are high
One retailer reports
750,000
$50Min measurable
incremental revenue
Active Shopkick Users
Since August 2010 Launch
*Shopkick
*Mashable
110,000
August 2010 October 2010 January 2011 July 2011

61. Kactoos: LATAM’s Answer to Groupon?
If a user finds a product that interests
them, they can create a purchasing
group or join an existing one
The more people join, the lower the
price each will pay.
Similarly, users can initiate purchasing
groups for products that are not yet
available through Kactoos
61

62. MyTown: Fun, Games, Impressions
How to Play MyTown
• 4M users build their own virtual towns
from actual buildings & businesses
– Checking in earns virtual cash
• Cash buys virtual properties & products
• Property owners collect rent from
users who check-in
– Properties and products
– 35M Branded virtual items
consumed every week
“Real-World Monopoly”

63. H&M on MyTown: Brand Impressions
and Store Traffic
• Whenever near an H&M
store, virtual goods from the
Blues collection appeared
– Players earned points
for product check-ins
• Players also received offers
for real goods available in
nearby stores
– Points for scanning in-store
product bar codes
10.6M Impressions · 350,000 Store Check-ins · 700,000 Product Scans

64. Souq.com:
The Arab’s World’s Largest Online Market
• Marketed to Saudi
Arabia, UAE, Kuwait, Egypt and
Jordan
• 1.5 million unique users every month
• Top categories: cosmetic and
beauty, electronics, and fashion
• On Souq.com, one item is sold every
30 seconds 64

65. Instagram Makes Phone Cameras Relevant
Wildly Popular Photo Enhancing and Sharing App for iPhone
10M one-tap
1.3M
pics shared
active
users sharing every day

66. Bergdorf Goodman Makes Instagram
Relevant to their Store
Share Your Shoe Obsession
“Isn’t that the secret to the absolute perfect pair?
You never know what adventures they hold.”
• Photo sharing campaign
– Consumers use Instagram to
take/edit/post photos of BG shoes in
various locales throughout the city
• Geotags map each photo to
“Shoes About Town” site
• Primary goals:
– Promote newly expanded shoe salon
– Brand awareness
66

67. Customers have
embraced the
campaign…
First 2 Weeks
650 Photos
8,000 Followers
67

68. Snapette: Merging Instagram and Yelp?
• Puts the crowd to work with
Social, Mobile fashion finding
– Shoes and accessories
• Users share pics, commentary
on looks they love
– Including where to buy it
• Feeds within the app sort
hot, nearby, new items
– Virtual closets, retailer profiles

69. Vogue Turkey Anniversary Campaign
Non-branded ads piqued interest and paid it
off with QR code access to mobile site
Mobile site delivered exclusive
Contests, Content, Texts, “behind the scenes” content
Location-based Giveaways
69

70. Uniqlo’s Social Look Book
• Uniqlook contest encourages shoppers
to upload photos of their own outfits
made up of Uniqlo items
• Other shoppers vote for their favorites
70

71. Badgeville: Defining Social Loyalty?
Rewarding Shopping Behaviors with Badges and Social Status
• Adds game play and badges to
loyalty programs
• Encourages social behaviors
through rewards
– Reviews, Likes, Feedback
71

72. Bluefly: Making a Game of e-Commerce
• Rewarding specific shopping
behaviors
– Watching videos, reading
blogs, writing reviews, creating wish
lists
• Shoppers earn badges that call out
their fashion style
– Based on shopping history
• Badges = rewards
– Exclusive/early access to
products, discounts, badge-holder
specials

73. Moxsie: Crowdsourced Design
• 105,000 Twitter followers go “behind the scenes”
– Photo shoots, meetings with designers, trade shows
• Participation earns points toward Badges
– Buyer-In-Training, Head Buyer or Celebrity Buyer, etc.

74. Brazil’s Fiat Mio: A Crowdsourced Car
• Fiat committed to realizing the
ideas of users in a futuristic
concept car
• Set up a social site for
ideas, feedback, and designs to
be shared
• 17,000 people submitted
11,000 ideas
74

75. Luminate: Content for 3 Trillion Images
Ads, content, social tools overlay online images
“image apps" turn static
images into dynamic and
interactive experiences
75

76. The Dawn of i-Commerce?

77. The Dawn of i-Commerce?
Publish Tag Shop
4,000 publishers
150M visitors/month
30B image views/year
*TechCrunch >100 different merchants:
Macy’s
Zappos, Nordstrom, Gap, Pip
erlime, etc.

78. Pinterest Brings Bulletin Boards to Life
Users simply “pin” images they like to interest “boards”
Board topics range from
cupcakes to bathrooms
Retail images dominate
Women outnumber
men 4.5-1
78

79. Fashion’s Formidable Footprint…
79

80. Tesco’s (Virtual) Subway Supermarkets
• Large billboard installed in South Korean
subway stations
• Supermarket shelves
• Display images/prices of products
• Users scan the QR code of products
• Products delivered home within the day
80

81. Layar Vision: Object Recognition A/R
• Recognize real world objects
and display digital AR
experiences on top of them
– Posters, magazines, billboards, ra
ck signs
• Combines location and image-
recognition A/R

82. Blippar: More than a Blip on A/R Radar
A new augmented reality app –
with an intriguing twist
• Image recognition-enabled
augmented reality at the shelf
• Design product packaging to engage
consumers without compromising
designs with awkward tags and
markers
82

83. Cadbury Brings “Eye Candy” to the Shelf
• Chocolate bars become an
interactive, 3D game on the
shopper‟s Smartphone
• “Qwak Smak” is played directly
on product packaging
– No markers, no shelf tags
• Just point the phone at a
Cadbury product and Qwak
Players submit Smack will „blipp‟ from wrapper
game scores into
a drawing for to screen as if stuck to the bar
prizes
83

84. SCVNGR: On the Hunt for Engagement
“A Game Layer on Top of the World”
• Virtual scavenger hunts
– Utilizes LBS to push contextual
treks, questions and challenges to
game players
• Businesses and brands can design
custom scavenger hunts catered to
their customers and locations
– Ongoing
– Promotional
– Special Events
84

85. TopShop: Hunting Back to School
Bargains Across the U.K.
• Anyone within a 500-meter radius
of a Topshop store can play
• Players choose desired reward
and complete challenges to earn
points
– 20% in-store discount, £500 shopping
spree, etc.
– Challenges designed shoppers more
thoroughly engaged with merchandise
• Snap photos of their favorite “back to
college” outfits
• Find items corresponding with trends

86. Game On! At Buffalo Wild Wings
“Home Court Advantage”
• 12-week March Madness campaign
• Numerous store-based challenges
– Photos of friends, trivia, games
• Social integration throughout
– Rewards for completing
• Extremely popular with customers
– 184,000 players at 730 locations
• 1,288,000 challenges completed
• 30% returned to play multiple times
– 100M social impressions
– 3.6 years brand engagement in stores
*Mashable

87. eBay Adds “Buying” with QR Codes
• Shoppable windows
on 5th Avenue
• Collections curated by 30
“tastemakers”
– Justin Bell, Liz
Lange, Coco Rocha, Lake
Bell, etc.

88. eBay Adds “Buying” with QR Codes
• QR Codes link to
mobile optimized site
• “Always Open” Windows
capitalize on impulse shopping
– Nearly half of all shoppers enjoy
window shopping
– Want to make an immediate
purchase when they spot
something they love

89. SHOPBOX: Redefining Local and Mobile?
The Far Reaches of Pop-Up Retail
• A repurposed bright green shipping
container
• Completely unattended
• Visitors browse items from the giant
Intriguing
automat‟s plate glass window
potential for event
marketing? – They register on iPads attached to the
sides of the container
• To purchase, customers text
message their order and the products
are shipped to their homes

90. StyleLiner: Pop-Up Goes Mobile
Former potato-chip truck now a mobile style gallery
90

91. Next? Motion Gesture Window Shopping?
• Putting the “shopping” into after-hours window shopping
• Microsoft Kinect-like sensor recognizes common gestures
– Window shoppers learn more products simply by pointing at them

92. Summary and Conclusions
Key Lessons Learned…
#CommerceInMotion

93. Key Objective for SoMoLo? Interaction
Integration
Seamless, collaborative online and offline experiences
Notification of offers, opportunities, product lineup changes
Alert customers
Traffic
Relentlessly seek opportunities to improve store traffic
Education about products, features, programs
Inform shoppers
Relationshipsand add value to bring them back
Engage, entertain
Access when, where, how, and on the devices THEY prefer
Be available
Community local influencers and advocates to build networks
Identify and embrace
Transactions (and every salesperson) with conversion tools
Arm each channel

94. “Mashops”: the Store’s Best Weapons?
Retailers must fight back by creating a mashup of
the best Web-based and in-store shopping experiences
– Interactive digital displays
– Video assistants
– Internet devices
– Social networking technologies
– Location-based services
–
–
Salesforce empowerment tools
Wi-Fi networks
54%
of shoppers surveyed want to
try a mashop service in the store
*Cisco

95. “Always On” Consumers Require
“Always On” Marketing
• New paradigm: Marketing = Media
• The relevance of Fire and Forget campaigns executed
through traditional media will continue to diminish
• More and more of marketing‟s time, resources and
energy need to be managed in “Always On” mode
– Persistent customer engagement
– Regularly nurtured relationships
– Constant community building
– Tireless new customer acquisition

96. What
if?
(Outside the Box)

97. What if…
Polaroid had
created
Instagram?
*Jon Thomas, Storytelling

98. What if…
Dole had
created Fruit
Ninja?
*Jon Thomas, Storytelling

99. What if…
Whole Foods
had created
FarmVille?
*Jon Thomas, Storytelling

100. About Commerce in Motion
CommerceInMotion.com
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developed by/targeted to supply
chain and retail executives

101. CommerceInMotion.com
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Available Online
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#CommerceInMotion101

102. Thank You
David.Bruno@RedPrairie.com
Linked In: http://www.linkedin.com/pub/david-bruno/1/392/70
Twitter: @RedPrairieCorp (#CommerceInMotion)
Pinterest: http://pinterest.com/redprairiecorp/commerceinmotion/
Scoop.It: http://www.scoop.it/t/commerce-in-motion