Insightful articles, opinion and commentary about mobile and web.

NAB Online Retail Sales Index – January 2013

The retail industry is going through a period of dramatic transformation. While the bricks and mortar store continues to play an important part, it’s now just one of the many connection points between the retailer and the customer.

Indeed, looking at Australia’s online sales, the National Australia Bank’s latest Online Retail Sales Index shows sales grew by 27% to $13 billion over the year to the end of January and illustrates the strength in the online retail market. Approximately three-quarters of these online sales are from domestic retailers. As online sales become a larger proportion of retailer turnover, retailers must ensure their online offering complements and supports their core business.

Channels are blurring
Customers are using their smartphones to price check merchandise when they’re actually in the store. Shoppers jump from their smartphones, to tablets, to desktops to the physical store depending on the time of day to satisfy their immediate needs.

The experience has to be consistent
These days successful retail is about providing a fully-integrated customer experience that works across multiple customer touch points. It’s about delivering a connected and consistent retail and brand experience across all the places where the customers are – online as well as the bricks and mortar location. Successful retail is all about providing your customers with alternative ways to shop.

Just look at the digital prowess of Sephora, the cosmetics and beauty products retailer owned by Moet Hennessy Louis Vuitton. Overseas the retailer is successfully straddling the online and offline world, and making it easier, and more fun to shop for beauty. While Sephora is famed for its bricks and mortar stores that encourage customers to dip their fingers into pots of high-end makeup and luscious skincare, the retail brand is also something of a trailblazer in the digital space.

Mobile, social, and in store
Last year Sephora undertook a comprehensive upgrade of its web presence, added specialised search functionality, gave its mobile web and iOS app a makeover, and installed iPads in more than 100 of its bricks and mortar stores. The company also added “Pin It” buttons to all of its brand and product pages to streamline integration with Pinterest. Sephora sees it as an entirely new shopping experience with seamless mobile, social, and in store activity.

Interestingly, by integrating with Pinterest and its overwhelmingly female following, a great many of whom are young, well-educated and well-heeled, Sephora is capitalising on immediately measurable commercial returns from social shopping. As an early adopter, the retailer discovered that its Pinterest followers spend something like 15 times more on Sephora products than Facebook followers. With its website overhaul, it made sense to integrate its product pages with the social media site and provide their customers with alternative ways to shop.

While Sephora doesn’t see the same commercial returns from Facebook, its following of more than 4.7 million fans actively engage with each other on the platform by sharing beauty tips and advice.

In the bricks and mortar stores, Sephora gives customers access to iPads which are pre-installed with the Sephora app to give customers access to the rich product details that are available on the store’s website. Customers can scan QR codes to access product information, see ratings, and read reviews. This includes customer-written product reviews which can be filtered by location, skin colour, skin sensitivity, and age. So while you’re in store you can look up if a particular product is rated for your particular climate, age group and skin type. You can review your purchase histories as well, just in case you want to buy exactly the same moisturiser, lipstick, or blush as you bought previously.

In designing the iPad app, Sephora ensured that users were given a full experience, not a cut-down version of the website. The magazine style layout allows customers to browse beauty content in the form of articles, videos and images. The app is integrated with Sephora’s e-commerce platform, so that any of the products that feature in the content can be purchased directly from the online store.

Showcase of omni-channel retailing
While the Sephora experience for Australians remains distinctly off shore, the company still provides Australian retailers with a showcase of omni-channel retailing par excellence. It shows us that if you make shopping more fun, more shoppers will come. Sephora’s online offering complements and supports their bricks and mortar stores; the retailer provides customers with alternative ways to shop and ultimately Sephora allows shoppers to jump from their smartphones, to tablets, to desktops to the physical store depending on location and the time of day to satisfy their immediate beauty needs.

For more on omni-channel retailing, see our post The shift to omni-channel retailing.

This article was first published in Marketing Magazine

Until the Australian Bureau of Statistics begins publishing monthly online retail sales figures in November this year, understanding the real size and growth trajectory of online retail in this country will continue to be difficult to gauge accurately. According to PWC and Frost & Sullivan, Australian and New Zealand Online Shopping Market and Digital Insights, Australian online shopping expenditure will grow from $16 billion last year to $26.9 billion by 2016. Offline, what we can see with our own eyes on any high street or shopping mall in the country is that trading for retailers remains tough. Discounting continues to be the only strategy, especially for bricks and mortar retailers that have ignored ecommerce and building an online presence.

The death of traditional retail

If you listen to Marc Andreessen, the creator of Netscape, who is now partner of venture capital company Andreessen Horowitz, and an outspoken purveyor of online wisdom, the death of traditional retail stores is nigh. He believes that eCommerce stores will be the only way we shop in the future. Of course this sort of thing makes for a great headline but it is something of a considerable over-simplification. There’s no doubt that traditional retail continues to hurt, but the consumer switch to mobile everything has, curiously enough, breathed new life into bricks and mortar businesses. After all, channels blur when consumers use their smartphones to price check merchandise when they’re actually in the store. Consumers jump from their smartphones, to tablets, to desktops to the physical store depending on the time of day to satisfy their immediate needs. They want a consistent experience. Clearly the traditional bricks and mortar retail business model doesn’t add up any more, but for an omni-channel player, the future looks bright. eCommerce today is a very different beast than it was only two or three years ago. These days it’s about providing a fully-integrated customer experience that works across multiple customer touchpoints. It’s about delivering a connected and consistent retail and brand experience across all the places where the customers are – online as well as the bricks and mortar presence. Using an omni-channel approach you can track customers across multiple channels, and deliver a 360 degree brand experience, not one that changes with the channel. Adding an option to buy online and pick up at a store strengthens the value of the bricks and mortar presence. Just look at the humble US pharmacy Walgreens which now appears on a list of the 10 most innovative healthcare companies as a result of their e-commerce, mobile, online and in store prescription experience.

10% of its business in online sales

After dragging its heels on eCommerce for something like a decade, David Jones is racing to bring its grand plans to fruition. The goal is to deliver about 10% of its business from online sales, up from less than 1% today. To mirror the stellar performances of overseas retailers such as Nordstrom or John Lewis, David Jones has been fervently upgrading its online presence for both desktop and mobile users. The retailer has doubled the number of its online customers and has tripled its online sales. David Robinson, head of omni-channel strategy for David Jones told the Australian Financial Review in November last year that the group has completed “six years’ worth of work in six months” on its e-commerce system.  My own experience at Christmas suggests it was unfortunately the six years work just prior to getting the system working.  But that’s another story.

Omni-channel strategy As further signs of the company’s shift into the omni-channel space, earlier this month David Jones launched its first retail iPad app, and to build engagement and interest in its Autumn/Winter collection used online tools and technologies to stream its new season designer showcase to its biggest fans. Live footage of the Sydney catwalk show featuring Miranda Kerr, was streamed to selected card holders at special events at the retailer’s Melbourne, Perth, Brisbane and Adelaide stores.

Other customers could logon to the David Jones’ website from their computers, tablets and smartphones to enjoy an online front row seat experience and back stage pass. You could tweet your questions on fashion to host Jason Dundas, download music from the show and vote for your favourite designs. In addition you could capture and share images through social networking sites and add the garment of your desire to your shopping wish list, check the price and see when it would be available in stores. Alas the technology was not ready for you to actually buy it directly online through David Jones’ online store. There’s obviously much work to be done. Returning to Marc Andreessen’s assertion that traditional retail is dead, I would proffer a different point of view. While I agree that the traditional retail model is unsupportable, I am a big supporter of the omni-channel approach where the bricks and mortar stores plays an important part as one of the many connection points between the retailer and the customer.

This article was first published in Marketing Magazine.

Simon van Wyk, Founder of HotHouse thinks marketers can learn much from musicians.

I wasn’t surprised to see that the documentary Searching for Sugar Man picked up a BAFTA (25/02 update: as well as an Oscar at this year’s Academy Awards). If you haven’t seen it, Searching for Sugar Man is the story of the folk-rock protest singer Rodriguez who is as much of an enigma today as he was back in the late ‘60s and early ‘70s. It’s a true story of immense talent and missed opportunities.

At the time Rodriguez was hailed (prematurely as it turns out) as the finest recording artist of his generation. After a string of rousing social and political songs (in the style of Bob Dylan) on two albums that spectacularly failed to sell in North America, his record label unceremoniously dumped him. He disappeared into oblivion and all but gave up on his music career, turning instead to manual labour as a means to support his young family.

Curiously, he did enjoy some success here in Australia and in South Africa in the twilight years of the apartheid-era. Indeed in the late 1970s in South Africa he became as popular as the Rolling Stones or the Beatles. There, his disappearance from the rock scene took on mythic proportions. Remember, there was no web then, and South Africa was exiled from the West. Bootleg recordings of his prophetic songs stirred a generation of progressive white liberals. I grew up in South Africa and remember that when his albums were released there – every household had his first album “Cold Fact”.  In fact this album went Platinum, though Rodrigues was wholly unaware of his success and never received a dime in royalties from the sales.

Controversial lyrics

Listen to his soulful music today and it truly beggars belief that his music failed to sell. Even forty years after they were written, these songs resonate and stand up to the test of time. While some of his lyrics would have been considered more than a little controversial (especially in conservative South Africa) and unsuitable for general airplay, surely this would not have been a disadvantage. For teenagers and college kids, then and now, any whiff of controversy, or a general air of anti-establishment usually spells a sure fire recipe for success. This formula certainly didn’t stop the ballads of Bob Dylan, Joan Baez et al being purchased in their millions.

So considering there was a large market for Rodriguez’s style of music, and the songs are generally very good, (and were certainly risqué, and ahead of their time), we must assume that the record label failed to engage with consumers through the right channels of the day. Of course there were no websites, social media or YouTube, but a tried and tested formula to create media coverage, gain radio airplay, tastemaker support and gig bookings. But this just didn’t work.

It wasn’t until fans in South Africa, trying to verify rumours of his death, tracked him down through the web that the resurrection of his career began.

The web has changed everything

When you think about Rodriguez’s story in today’s terms, I don’t think we’ll ever see another quite like it.

Gotye’s Grammy-winning song “Somebody That I Used to Know” was no overnight success. It first became popular after being shared on social networks rather than from the more conventional airplay and promotion.

Something as unfathomable as Psy’s Gangnam Style which has driven more than one billion views on YouTube gained exposure from being shared on social networks, again not from mass media airplay.

The world wide web of course changed everything. Indeed, Sir Tim Berners-Lee, the inventor of the web, was in Sydney last week to wrap up his five city tour of Australia and New Zealand. While he did hint that the web was just part of an elaborate plan to disseminate cat pictures and videos around the globe, his invention has of course become much bigger than that!

Radical transformation

The music industry is not alone in being radically transformed by the invention of the web. As marketers, we can all learn from this industry’s public, painful, but eventually thriving transformation and rethink how we engage with our customers. Rethink your delivery mechanisms, charm and interact with your customers across a broad range of channels, and use mobile to keep connected with your customers any time anywhere. Remember your customers are individuals with diverse likes and dislikes who have a wealth of media options available to them to satisfy their curiosity and tastes. As social marketing evolves and further fragments the media landscape– using the right mix of technology, platforms and channels to connect, monitor, analyze, and engage your customers at different stages of the customer journey is more crucial than ever.

Fans of Rodriguez finally caught up with him via the web. His resurrection will surely be complete with widespread recognition in the US. While I’m not predicting video downloads of Rodriguez’s undemonstrative stage demeanour will reach the same heady heights as Psy’s Gangnam Style, there’s no doubting that the web has allowed us to uncover his immense talent.

This article was first published in B&T.

Simon van Wyk shares his view on Click Frenzy.

They billed it as the sale that stops the nation. But it turned out to be the sale that fails the nation. Click Frenzy’s claims to have taken every precaution to ensure their servers would not go down strike me as eerily familiar with claims by the White Star Line over one hundred years ago that they had built the unsinkable ship. You could say Click Frenzy was, for Australian retailers, a failure of titanic proportions.

Though not for the people behind Click Frenzy. I’m sure they have already cashed their cheques from the 150 or so retailers they signed up to participate in the promotion – some of whom according to Smart Company may have paid $30,000 or more to be involved. You would want to hope that there was a robust SLA in place that the retailers can now claim against.

But more than the upfront costs, there’s the issue of the lucrative affiliate traffic or the gift that keeps on giving to Click Frenzy. While I am not apprised of the actual details of the affiliate traffic deal, I would imagine that every consumer who signed up to the Click Frenzy site is cookied with a piece of code that indicates they are owned by Click Frenzy. So when they visit a participating retailer’s website and decide to buy something, this piece of code tells the retailer that they owe Click Frenzy a percentage of the sale. Ka-ching. Ka-ching. Ka-ching.

No wonder David Jones decided to go it alone. Indeed I thought David Jones’ stance to challenge Click Frenzy head on was not so much a brave decision but a sound business move. With the blanket media coverage Click Frenzy had generated, David Jones, simply slipstreamed into the publicity, created an event of its own, and opened its “Christmas Frenzy” a day before Click Frenzy clicks off.

In theory, it’s a beautiful move. In practice however what I experienced on the website on Tuesday was a woeful fail.

I know it sounds pernickety but the discounts on offer were hardly sensational. Indeed they were run of the mill. These days, 10%, 15% or 20% off retail is par for the course. But what made this worse from a user experience perspective was that as far I as could see many of these discounts weren’t highlighted on the prices displayed on the website. As a user, you weren’t entirely sure if the discount applied to that particular item. For example, David Jones was heavily promoting 15% off all fragrances, yet none of the prices displayed on the site showed the discounted price. So to find out, you had to click through to see whether you chosen perfume was actually on sale, and there, for me the website started to stutter. This was at about 10:30am and I never got any further down the path to purchase. Some of my colleagues tried and experienced similar frustrations.

Even as late as 3:30pm, the site was still displaying an error message:

So, alas David Jones’ move to go it alone may have been a sound business decision, but was so poorly executed that the only thing I think they achieved was to publicly demonstrate how their brand new website infrastructure is not up to the task.

So are there any winners here besides Click Frenzy? Sources in the industry tell me that the majority of the retailers’ websites in the Click Frenzy promotion suffered a similar fate as David Jones’ website. They were simply not up to the task. Westfield and Target websites were two notable exceptions and handled the traffic spike with aplomb.

While I totally understand the driver behind giving our retailers a push start into the holiday season, wouldn’t it be more beneficial to replicate the Black Friday foot traffic push into bricks and mortar stores with a Super Saturday promotion which is backed up with a Super Sunday online? Surely there’s a strong business case for retailers to invest in their own business and web infrastructure.

As technology drives new shopping patterns, without adequate investment in their own online infrastructure to support desktop and mobile uses, a retailer might as well shut up shop.

As we mop up the damage from our synthetic Super Tuesday, all the signs from the US are that the upcoming Black Friday and Cyber Monday are going to be big this year. Perhaps Australian retailers should take a leaf out of their book and get serious about supporting online infrastructure for web and mobile users.

This article was first published in Business Spectator.

Simon van Wyk discusses how pharmaceutical companies need to catch up to physicians’ and consumers’ shift to mobile.

We’re almost at the point where more people access the internet via their smartphone than they do on a traditional desktop or laptop device. In China and India, this is already a reality. The current speed of mobile adoption is about eight times faster than the internet revolution itself and Forrester Research predicts that there will be 1 billion smartphone customers globally in just four years’ time.

Retail up and running

Little by little, I am seeing marketers and decision makers starting to understand what this means to their businesses.  It’s not a call to apps. It’s a call to reinvent your business. When I looked at the state of Australian retail from a mobile user’s perspective earlier this year, I was dismayed to find too many of our big brand high street icons were not active in the mobile space, and were delivering a mobile experience that was sorely lacking.  Happily, I’ve noticed that many of these retailers have started to reinvent their businesses for the digital age and have now picked up their act somewhat and some are even delivering near optimal mobile experiences.

Pharma is a mobile non-starter

But if I thought the state of the Australian retail experience was lacking from a mobile device, I’m staggered to find that Australia’s $22 billion pharmaceutical industry is truly woeful. Not one of the twenty major league pharmaceutical companies’ Australian websites that I visited on my iPhone was optimised for a mobile user. Every one of the companies simply delivered a shrunken down version of their main site. Even Bayer in this market doesn’t deliver the mobile experience that it provides in other markets. Hardly the bleeding edge is it?

And this is an industry in which the members of Medicines Australia, the body which represents the innovative medicines industry in this country, spent $29.4m on “hospitality at educational events” for medical professionals in the year to March 2012.  These educational sessions are regarded by many as a “marketing exercise” for drug companies. Yet surely this is just old world marketing and thinking when Australian consumers and indeed Australian physicians have moved on.  As far as I can see, the industry is out of touch with the very people it is trying to educate. Mobile is an integral part of all our lives yet I wonder how much these same companies spent on their websites and mobile communications over the same time frame. Considerably less I am sure.

Indeed, Healthcare market research and advisory firm Manhattan Research has explored how physicians use digital media and devices for professional purposes and in their interactions with drug companies. The trends identified in its Taking the Pulse® Global series, show that physicians use of mobile devices mirrors that of the public at large in that they are using multiple screens for professional purposes.  The research shows that 84% of online physicians in Australia own or use a smartphone for professional purposes while 54% own or use a tablet for professional purposes.  Internet use is, not surprisingly, prevalent during the workday with 80% of online physicians in Australia accessing the Internet between patient consultations. The top digital resources used between patient consultations are online journals and drug reference databases.While 18% of online physicians in Australia already participate in online promotional programs from drug companies, 46% are interested in engaging with pharmaceutical companies through live or recorded webcasts, self-guided online promotional programs, or live one-on-one sessions.  Just think how the right mobile website and apps could facilitate all this.

Hello mobile

At the same time, patients who are prescribed the medicines could benefit exponentially from mobile access to information and apps to help them understand the importance of staying on their therapy. After all, by 2016, smartphones and tablets will put power in the pockets of a billion global consumers. Mobile is not simply another device for your IT department to support with a website that’s been shrunk to fit. Rather, mobile represents a much broader shift to new ways to engage.

By 2016 mobile search will generate 27.8 billion more queries globally that desktop search as consumers play out the mobile first thinking. If they search for a particular medicine on their smartphones and land on a poorly presented (read shrunk to fit) website then they’ll leave in a hurry, and won’t come back.

But by optimising your mobile presence and offering credible information about a condition, in contrast to leaving patients to find questionable content when they do their own search, drug companies could help patients manage their condition and understand why it’s important to continue with their therapy.  Using interactivity via SMS, mobile apps, and a mobile site, drug companies could ensure that patients would need to look no further for their primary information and support. Indeed, the social element of mobile allows companies to open up communities allowing patients to share their experiences with others who are dealing with the same condition and support each other.

Big opportunities

This explosion of mobile usage spells big opportunities for all pharmaceutical companies.  However, to appeal to mobile physicians and consumers alike, drug companies will need to provide mobile optimised websites at a bare minimum. Not simply shrunk-down versions of their standard website, but properly optimised, fully functional mobile websites that work on all mobile browsers, no matter what the device.

This article was first mobile in Business Spectator.

Brand marketers – join us as our guest at the sumptuous Ivy Room for a scrumptious breakfast with mouth-watering presentations and stimulating discussion on everything social and mobile.

We’re flying out US author and leading brand strategist, Jonathan Salem Baskin to give the keynote address which will focus on the truth in marketing. Jonathan asserts that as a brand marketer,  you should ask yourself how involved you are in contributing to truths, not merely “content” or engagement, whether about your brand, your industry or the world in which your business operates. What makes your social involvement necessary? How do you propagate truthful information that empowers and inspires your consumers to use P2P media to make better, more durable decisions?”

HotHouse Founder Simon van Wyk and Bill Kearney, Senior Sales Director at Oracle Corporation will join Jonathan on stage to explore how you can best optimise your marketing activities to seamlessly interact and engage with customers across mobile and social channels.

This event is fully booked.

Toyota’s website has been ranked among the top 10 business websites in Australia by the Australian Institute of Management’s Management Today Magazine.

The top 10 were selected for their use of online technologies and having an online presence that both enhances and expands their brand.

As well as the wealth of content, functionality and product detail presented on the Toyota website, Toyota’s vehicle comparison tool was singled out as market leading. Useful and easy to use, the tool provides users with the ability to quickly compare models based on a handful of specifications such as body and engine type, number of seat and fuel economy, power and towing capacity. There’s also a more comprehensive version which is also a cinch to use.

HotHouse has strategically managed Toyota’s online presence for more than ten years. As well as the car comparison tool, HotHouse also connected Toyota’s car configurator to the supply chain which was a world first.

Who isn’t looking to improve their bottom line performance and consumer engagement? The upcoming ADMA seminar on Wednesday, 22 June will be addressing exactly that. The seminar will feature a panel of five visionary marketers who will share their success stories and practical insights in regards to Email and Social Marketing. Simon van Wyk along with Christian Magel, the founder of amaysim, will be speaking specifically towards successful digital strategies for the launch of a new brand.

To register, and for more information, go to adma.com.au/events

Download seminar brochure

• The internet is poised to overtake newspapers as the second largest U.S. advertising medium by revenue behind television, according to PricewaterhouseCoopers (PwC).
• Search currently represents 50% of U.S. online advertising revenue with Google being the market leader strengthening the position they earned in 2006 as the largest media company in the world.
• Google earns the bulk of its US$24bn+ a year in revenue from paid search advertising which represents less than 10% of the clicks on search engines.
• SEO is about capturing the remaining 90%.

This seminar will be presented by Jeremy Tang, our Director of Search who has over 9 years experience in Search, most recently as Head of Search at Telstra Business. read more

By Simon van Wyk

Number one on Google – that’s the Holy Grail that search engine optimisation (SEO) was meant to deliver to savvy site owners.

SEO involves tweaking your website to appear in the first page of Google search results for the keywords your customers are most likely to enter and yes, it’s Google we care most about, because Google still reigns on the Internet.

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