Mobile matters: Gary Schwartz on how your brand keeps up with shoppers

 I had the pleasure of speaking to Gary Schwartz about his book Fast Shopper, Slow Store about perhaps the most transformative trend on the horizon – the impact of smartphone technology on business and retail. Here’s what he said.

In your book, FAST SHOPPER, SLOW STORE, you discuss how the store has lost its relationship with its shopper. Why?

The love is gone. It used to be the case that a new store would open its doors, the shopkeeper put up an OPENING SALE sign and shoppers would obediently file in. Now many shoppers are at home in their living room surfing their tablet. The shopper is not attached to your store anymore. This is increasingly the case with commodity products that are found in department stores, electronic stores, and bookstores. There is more “couch commerce” in the near future than “store shopping”.

Is this problem specific to stores?

No, it’s not. You can substitute the word SHOPPER for the word CITIZEN, USER, STUDENT and substitute the word STORE for GOVERNMENT, ENTERTAINER, SCHOOL. The consumers of technology have become faster and the incumbent institutions have not caught up.

How do you solve this problem?

Well, it is not a problem per se. In the retail world it is a change in shopper behavior and some companies will suffer by not adapting and new companies will emerge to capitalize on this shopping behaviour. The key for any retailer is to understand their consumer and their “screen” activity.

This is the same in many verticals. We need to ask where do our users their connected screens? When do they use them during the narrative of the day? How do you engage on one screen and move to another screen? I would say that the spaces between the connected screens are more important than the screen content itself. It is in these spaces that consumer intent is interrupted and abandoned.

Answer these questions and you can start to develop a business model around the shopper.

I find it interesting that in a book on retail you spend time discussing the American presidential race.

Voting and Shopping go hand in hand. To succeed in mobile shopper you need to understand how to influence shopping behaviour. What makes a consumer buy? What makes a citizen vote?

The 2012 election has many lessons that an astute mobile market can learn from. The key takeaway is that LIKING a candidate and VOTING for the candidate are two separate (and in many cases isolated activities). The goal of Obama was to convert “intent” to vote to an actual election. In nearly all elections in the US over the past decade, a considerably high number of supporters said they would vote to the actual numbers on election day.

This is the shopkeepers dilemma! How do you get your loyal consumer to buy your product. Between the intent to buy and the purchase there are so many predatory mobile services to win over your customer’s basket. Mobile marketing is about developing services to connect to that consumer and drive tonnage.

How did Obama win?

Obama expanded his analytics war room that he built for the 2008 election fivefold.  Interestingly, he hired supermarket sales promotions “Chief Scientist” to head one of the war rooms. This was a serious pillar of the 2012 election: Obama separated out the data war room and these number crunchers worked to measure one key factor: the consumer “persuadability” . . .

The contention was: “Why spend money on a citizen that will not ever vote “blue.” Find the loyalist and drive them to the voting booth. Find the swing population and drive them to vote blue. Obama’s team: targeted TV, phone calls & direct mailings, door knocks and social media.

The result was $1 billion in micro-donations and huge success in driving turnout in the swing states.

How does this translate for the retailer?

To counter “showrooming” behaviour the retailer has to learn how to establish a relationship with his loyal shoppers. He has to work out a strategy to connect to these shoppers and grab their basket. This involves developing a trusted direct-marketing channel on their connect-device. The shopkeeper needs to understand how to move the consumer from the PC to the tablet to the handheld and curate the conversation so that ultimately the purchase is made in their store or in their cloud.

This is challenge and goes far beyond scatter-gun media buying. The retailer needs to analyse his shopper behaviour and segment and target accordingly.

I like to quote the LA Times blog titled, “The Incredible Shrinking Barnes & Noble.” It speaks volumes to the future of the mall. Entertainment centers for browsing shoppers are shutting down.

Barnes & Noble sees 30% fewer stores in the next decade. The bookseller had 726 stores in 2008, 689 stores in 2012 and in 10 years this will drop to 450? Perhaps this is optimistic? The certainty is that there will be much shuttering. Barnes & Noble’s projected closings and Target’s  new price-matching policy are all signs of retail in distress. The trend toward mobile shopping is likely to have a lasting impact on the retail landscape. The physical bookstore could become a thing of the past.

Barnes & Noble executives are undoubtedly aware – as Borders executives before them – that the 2010’s are eerily reminiscent of the music industry in the 2000s. Books, reading, and commerce behaviour has changed.

The relationship between shopper and store has changed.

You focus on relationships with the consumer but also the data or BIG DATA behind this relationship.

Yes. Big Data is key to unlocking revenue for anyone in the commerce ecosystem.

Look at this past Thanksgiving in the US. At 5:23 p.m. eBay starts to blast out deals (not 5:00, not 5:30)  Thanksgiving Day ends and the cloud shopping begins.

From personal work with brands and retailers over the course of 2012, it is clear that mobile messaging complement traditional direct marketing channels. Add a mobile message to an email blast and the conversion rates jump 10 – 15 per cent.

Black Friday is the not the first mobile shopping season but it is the first sign of Big Data and smarter targeting across all the shoppers connected screens. The winners are the folk with the mobile reach and frequency to scrap enough data big to drive smart segmentation: Facebook, Amazon, eBay, Google, Apple are the main players and often the CPG’s and retailers are unwittingly feeding them the shopper intelligence necessary for them to grow fat and happy.

Brands and retailers have to take this data back. The retail Merchant Customer Exchange in the US, or MCX, is an example of retailers getting ahead of the game. A group of more than 14 brand name retailers and merchants have formed a new company called MCX, a mobile payment network that will let customers pay by mobile phone application at participating gas stations, retail stores, supermarkets, and restaurants.

Last thoughts?

Establish a mobile relationship with your loyalist base. Understand their screen consumption and adapt your content and commerce to their daily activity. Own the data from any interactions and use this data to better target these consumers.

To follow Gary’s writings, click here and to get his book, click here.

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