“Even if you don’t build it, they will come.” Some years ago Barrowman (who has a development background as well) was so intrigued by the idea of mobile phones for retail that he actually created a prototype on his then-leading edge Treo 600. Gap didn’t pursue the idea further until the iPhone launched, at which point they realized that, with nothing else in place, customers were looking for Gap on their smartphones and simply “getting the desktop experience on the phone – and that had to change,” Barrowman said.

Customers want good functionality and clean design – but it may take several tries to nail it. With smartphone technology continuing to evolve rapidly, Gap decided to get serious about a mobile website. “In typical Gap fashion, we stepped back, talked to lots of customers [for input] and came up with the critical components for a smartphone platform,” he said. Number one on the customer wish list: a store locator. Barrowman noted that as the days get closer to Christmas, store locator usage can actually triple.

As for navigation, Gap focused on creating a “clean design – easy to read fonts, big buttons.” In the first iteration, Gap even went so far as to utilize Apple icons to indicate things like “more” and “fewer”. Turns out, customers didn’t always understand those icons, and instead wanted to see very literal messages. Gap responded by switching navigation elements such as a button with “more” spelled out, a button labeled “images only” for an images-only view, and a “menu” button to take the user to other parts of the site without having to back up through multiple pages.

Even on a small screen, you need a balance of product and marketing content. Customers told Gap that they wanted a very visual experience – meaning that even on the smartphone, they wanted access to the same alternative views, product catalog, zoom, product reviews, and all that they get while navigating the Gap website. When the initial Gap smartphone site launched in 2010, it featured an almost exclusively product focus – with no marketing content to speak of. By 2011, however, Barrowman said the team realized, “There was a disparity between the marketing content in emails and what was shown when the customer clicked through from the marketing email to the smartphone site.” In keeping with the need for a clean design and easy navigation, the Gap team had to get creative with presenting content such as offer details so the smartphone site now uses pop ups instead of separate pages for some non-product content to reduce the overall number of page loads needed.

You will need to manage across brands – and across markets. Another design and development challenge: How to let customers shop all five brands on one universal mobile site, since the more sites you have, the more you have to manage. Gap opted to give customers an easy to use menu to seamlessly move from one brand to the next, while keeping a universal cart across all five. Since that time, Gap also has launched smartphone sites for the Canadian and EU markets, with a few adaptations to local market needs – currency denominations, security verification seals such as Verified by Visa in the EU, a French-language site for Canada.

Just like the web, smartphone sites need continual review and revamping. Barrowman noted his personal observation that where we are with mobile today is much like early web days – except that consumer adoption is already through the roof. Everyone, and as Barrowman quipped, “and their mother – literally” has ideas and opinions about mobile design and development. In the vein of continuous improvement, Gap last year added order status and “suggested sells” to its smartphone site. Apps designed to give consumers in-store functionality such as product scanning and ordering out of stock items were initially outsourced but have since been brought back in-house.

What’s next for Gap? Addressing mobile performance, to which Barrowman added, “Most sites are frustratingly slow, but performance is critical.” Also on the horizon is simplifying management of multiple sites across brands and markets, optimizing email for mobile devices when different devices render the same email differently, and “bridging the gap from the virtual and physical” to find a common thread across devices and the store.

Parrish feels that geosocial apps dominate when compared to Internet location features, incorporating location as an integral feature and making privacy key. “Despite these promising features, few people – about 5% of U.S. online users who own a mobile phone – are actually using these apps today,” Parrish noted. That’s not to say that that 5% isn’t worthy of a retailer’s attention –they skew younger (75% of these geolocation app users are between ages 23 and 45) and male; are very active on their mobile devices and online; and are twice as likely than the average U.S. online adults to share product information, reviews, and offers or discounts.

As such, Parrish thinks that defining “local” solely in terms of geolocation apps simply doesn’t paint the whole picture. In the course of their ongoing consumer research, Forrester analysts have seen another online consumer pattern emerging – the rise of the “always addressable customer.” This is a consumer who fits the bill on three fronts simultaneously:

• Owns and personally uses at least three connected devices
• Goes online multiple times throughout the day
• Goes online from at least three different physical locations

Another attribute of this group, Parrish continued, is that these customers are highly educated, tend to be high-earning, are sophisticated mobile users and very socially active. This consumer approaches technology as the tool that helps him or her accomplish whatever the task at hand.

Last year, Forrester found some very telling data when they took a closer look at the always addressable customer. Their research found that 37% of North Americans were ‘always addressable customers,’ a significant leap from 17% in 2010. It’s safe to say that this segment of consumers is likely to become the norm rather than an anomaly – and for some generational groups, it already is. In 2011, approximately 3 out of 5 Gen Z (18 to 22 year olds) and Gen Y (23 to 31) fell into the category; along with close to half of Gen X and a quarter of Younger Boomers. Older consumers aren’t sitting on the sidelines – one in five older boomers (56 to 66) and one in ten 67 years or older fall into this category as well.

So where does “local” fit in to this data? For a retailer, the “Lo” part of SoLoMo is simply that wherever your customer goes, you must be there. “Don’t think technology first – think about what your customer needs,” Parrish emphasized. Unfettered by preconceived ideas about which device to use for a specific purpose, consumers increasingly turn to whichever device is at hand and that suits both the task and the location (commuting on the train, at home in the evening, waiting to pick up the kids, standing in a store researching a product – and even on vacation). I would add that this untethered consumer wants to interact with you – so make sure product information, emails, social media integration, even the cross-channel cart all render seamlessly across devices. And that term “connected device”? Likely soon one for the history books – as Parrish concluded, consumers increasingly just think of them as plain old devices or tools – the “connected” bit is entirely a given.

Online consumers expect to spend 53% more on Mom than all shoppers across categories. Of consumers who plan to shop online for some part of their Mother’s Day shopping, almost one-third (31.7%) expect to spend more this year than last – that’s compared with about half that number for all adults 18 years and older. In all, online Mother’s Day shoppers expect to spend a combined net average of $233.67 – or 53% more than the average for all adults.

Which products will catch the eye of the online consumer in emails, search, online ads and in social media? 4 out of 5 will spend close to $9 on greeting cards, three-quarters will spend an average of $32 on flowers, and 3 out of 5 will splurge on a special outing such as dinner or brunch, at an average of $56.75. That said, online Mother’s Day shoppers also have their eye on bigger ticket items such as consumer electronics, jewelry, gift cards, clothing and accessories, and books and CDs. For example, an impressive 44.5% of online Mother’s Day shoppers expect to spend an average of $116 on jewelry alone. As a retailer, have you updated your Pinterest presence to showcase your best products in these must-buy categories?

Online shoppers will research and buy across channels… This inclination to treat Mom is evident also in where online shoppers plan to buy their gifts – while one quarter will buy something in a discount store, that’s actually less than all adults 18 and older (30.2%). Instead, expect online Mother’s Day shoppers to not only buy online, but also to head to department and specialty stores. About twice as many online shoppers (15.7%) as all adults (8.2%) expect to shop in specialty stores.

…with smartphones and tablet devices firmly in hand to locate, research and buy. Among online Mother’s Day shoppers who own a smartphone, 2 out of 5 will use their smartphone to research products and compare prices, almost one third will look up retailer information (e.g. location, store hours, etc.), and one quarter will actually buy via their smartphone. Not surprisingly, online Mother’s Day shoppers who own a tablet device will use the tablet to even greater degree: over half will research products and compare prices on their tablet, close to a third will look up retailer information, and one quarter will redeem coupons. Close to half expect to use their tablet device to actually buy – and why not, with all that rich imagery and content to entice shoppers to hit the “complete purchase” button.

Online retailers should milk the week leading up to Mother’s Day. Google notes that MasterCard SpendingPulse last year (2011) found that online sales hit their crescendo the Tuesday before the big day (this year, that’s May 8), while in-store shopping peaked the day before Mother’s Day (i.e. that Saturday).  Retailers should harness email, search, site and social marketing to tout online shopping in the 5 to 8 days before Mother’s Day, then switch to messages about buy online, pick up in store service and/or in store specials, events and associates’ gift picking expertise.

Utilize cart remarketing to get consumers to commit – even if not on the first round. With cart abandonment rates continuing to rise, I would point retailers again to some highlights of the recent Shop.org webinar on shopping cart abandonment and cart remarketing. Per SeeWhy’s research, one quarter of one percent (you read that right) will complete their purchase in their first visit to your site. Instead, focus on visitors who put something in their cart as hot leads who are unlikely to buy during that first visit, but are likely to buy – somewhere – within the next 12 hours. Timing (think 2, 4 or at most 6 hours after the cart is abandoned), tone, and personalization (greeting the customer by name, naming the product(s) in the cart, etc.) are the keys to effective cart remarketing . Considering how few retailers do much of anything to remarket carts in the first place (also per SeeWhy), you have every chance of capturing that sale – and cementing further your relationship with that customer for the long term.

Behind this powerful, digital, luxury brand are two fascinating and glamorous women. Alexis Maybank and Alexandra Wilkis Wilson, authors of By Invitation Only: How We Built Gilt and Changed the Ways Millions Shop.

I was proud to recently chat with Alexandra, one of our key presenters at our upcoming Digital Retail Marketing 1/2 Day Workshop in New York City on May 1st, to discuss all things mobile and social, innovative retailers on her radar, and what’s next for Gilt Groupe.

Alexandra Wilkis Wilson, CMO, Gilt Groupe

Before founding Gilt Groupe, you worked in the luxury retail business. What lessons from the world of high fashion have helped you succeed in your current role?

I was very fortunate to have worked for two of the most prestigious luxury brands, one French (Louis Vuitton) and one Italian (Bulgari). My years working for these companies helped teach me the luxury mindset of old world European brands which recognize the need to modernize in some ways yet are not willing to compromise or change in others. Both these brands are incidentally staunchly opposed to discounting, so that also prepared me well for the hundreds of reasons why brands might not be receptive to partnering with Gilt Groupe, at least not initially when we launched in 2007. I am proud to say that over time, we have convinced over 6,000 of the world’s most illustrious brands to partner with Gilt. I had many doors slammed in my face and unanswered calls and emails, but I never backed down and continually pushed forward with our vision and how I believed that partnering with Gilt could positively impact diverse brands for a wide range of reasons.

Gilt Groupe was an early pioneer of the flash sale model, but more and more companies are crowding the space. How has the tough competition affected your strategy? What have you learned from your competitors?

I am a tennis player and I always like playing with people who are better than I am. It makes my game stronger. We face competition from all sides, and that is actually a good thing for Gilt. It has forced us to continue to innovate and to surprise and delight our customers as quickly and effectively as possible. Our members have high expectations for what we introduce them to on Gilt. Our team works as hard as we can so that we don’t let those customers down.

With the growing popularity of social media and mobile technology, the way people shop has already evolved since Gilt Groupe emerged in 2007. How has your strategy evolved to engage the social shopper?

Our business is constantly evolving to keep up with our consumer demand, our offerings and the world around us. We are having fun experimenting with various partnerships such as with Klout where for a limited time only customers discovered that the higher their Klout score, the higher their discount to shop on Gilt. That was fun and rewarded our customers with the greatest social influence. We also recently had a fun initiative called Pin it to Unlock It with our Gilt Kids business and Pinterest. We at Gilt have fun engaging with the social shopper and we learn from him and her every day. Our Gilt Customer Support team actively engages with customers via Facebook and Twitter. You don’t believe me, try tweeting to @GiltSupport and see what you discover!

Everyone is opening email on phones these days. How important is mobile to your business? How has your strategy evolved to attract the mobile, on-the-go shopper?

Mobile has come to play a huge role in our business and that was certainly not the case when we launched in 2007. On weekends and holidays, revenues can be as high as 30% from mobile. Our engineers have developed award winning apps for iPad, iPhone, Android and m-commerce. Our customers are on the go, but that doesn’t mean they need to miss out on what we have on sale at any particular moment on Gilt Groupe.

A company like yours must require a rock star marketing team. How do you keep your team ahead of the curve? What do you do to find, keep and cultivate good marketing talent?

We have an A+ marketing team, that is for certain, but in addition to that many of our employees, whether they are engineers, merchants or customer support representatives, have an inherent sense and understanding of marketing and its importance. To stay ahead of the curve, we eat, drink and breathe innovation. We all love to experiment and value internal creativity at all levels. Our company has grown to become a tech company, a powerful retailer and a robust marketing engine. Often people ask me, which of the three are you? My best answer would be all of the above.

You’ve seen amazing success, growing into a billion-dollar company in just four years. For you personally, what has been the biggest surprise along the way?

I never imagined how much fun and yet how emotional it would be! I feel like Gilt is my child, but then again many of us even beyond our team of five co-founders feel that way. Lucky for Gilt, it has many parents!

Which retail companies do you find most fascinating to watch?

I watch so many retail companies. I can’t help it. Even if I didn’t work for Gilt, I would watch them. It’s what I love. I keep my eye on the department stores. I keep up with the luxury outlet malls in the U.S. and overseas. I need to know what’s happening at the bricks-and-mortar off-price companies like: Century 21, Loehmanns, TJ Maxx, Marshalls, etc. I pay attention to what the other flash sale and group buying sites are up to, because I have to. I pay attention to QVC and HSN. But what I find most fun to watch is the retailers whose businesses are 100% focused online including the larger established ones like net-a-porter, ShopBop and Zappos, and then the newer and more innovative ones like Bonobos, and Warby Parker. The subscription world from Birchbox, to Shoedazzle, to Send the Trend is very exciting right now and I follow it closely. There really is so much innovation happening today, and much of it is in New York City which is fantastic. It is amazing and at the same time it is hard to keep up. It is a lot to take in everyday but it’s fun and doesn’t feel like work!

What’s next for Gilt Groupe?

Improved personalization so that all customers who visit Gilt will feel that the site is personalized just for them.

Just a few years ago, the shopping experience didn’t involve the same technologies it does today. We’re going through a revolution of sorts filled with disruptive, marketing-powered technologies allowing us to truly enhance the socialized, localized shopping experience for the always-connected, mobile consumer. But which retailers have made the best efforts to optimize their marketing, merchandising and customer service for this empowered shopper?

At the recent Retail Business and Technology Expo in London, I presented my top ten omnichannel, SoLoMo-embracing retailers. My list included Apple, Gilt Groupe, Tory Burch, American Eagle Outfitters, Express, PacSun, Nordstrom, 1-800-Flowers, and one of my favorites – Guitar Center.

While many of us have heard or read about how innovative some of these retailers are in terms of all things social and mobile, there was one particular example that the High Street retailers in the UK seemed to embrace from my presentation. That retailer was Guitar Center.

Most recently, we were proud to feature Guitar Center executives Steve Zapf and Kirit Sarvaiya, on the Shop.org First Look Track stage at Retail’s BIG Show to share how they harness the power of 220 stores and over 4,000 store associates to win web shoppers in a local market. In their presentation Guitar Center discussed how they differentiate and thrive in the competitive retail environment. Going one step beyond added features including pick up in store and return-to-store for online purchases, Guitar Center used their number one asset: their knowledgeable, local store associate (4,000+ of them) to marry all things digital to the in-store experience.

To compete in this new age of retail, Guitar Center launched store microsites for stores all over the country. These sites featured store information, maps, local event calendars, local store ads and spotlights, and most importantly – a feature to “Find an Associate” within a specific store. Not only did Guitar Center feature all of their associates with individualized profiles, but they went to the next level to categorize them as an expert within product categories. These store associate profiles highlighted musical interests, favorite instruments, gear recommendations and more.

Why did this literally rock? These store associate profiles can be viewed by customers looking to complete product research, ask specific store associates questions, and can help drive traffic to the store AND to the site. Utilizing their number one asset all over the country, Guitar Center has married the in-store experience and e-commerce for the social, on the go consumer. They were my ideal example of omnichannel differentiation at its finest.

Omnichannel? It’s not just another buzzword. It is the word that encapsulates what retailers should aspire to be for their customers. Omnichannel is all about letting customers experience a brand, not a channel within a brand. Omnichannel at its best? You can find it at Guitar Center, where they have given a microphone to the influential voice of their store associates… at local stores all over the country.

What’s the connection? In two words – cart remarketing. SeeWhy did some research and found that:

• On average, 8% of customers return to a site to buy if the company does no remarketing. With a remarketing program in place, however, that average jumps to 26%.
• Yet – incredibly – just 37% of the retailers do “something” as follow up to a customer visit (though usually something like asking customers to sign up for a newsletter). Only 12% did some cart remarketing of any kind, and even fewer truly personalized that follow up.

All in all, that’s some serious money left on the table.

We gathered several experts – Charles Nicholls of SeeWhy, Charlie Cole of Lucky Brand Jeans, and Nancy Miller of Woodcraft for the latest Shop.org Webinar, “Shopping Cart Abandonment Research and Insights”, broadcast on March 28, 2012. While I couldn’t possibly capture in one blog post all the great information and lessons that the panelists shared, here are a few highlights to whet your appetite and entice you and your team to listen to the playback today.

Cart abandonment may be at an all-time high… At first glance, the industry benchmarks aren’t encouraging: the current average shopping cart abandonment rate is 72%, according to Nicholls. Brace yourself: that number is only likely to increase as consumers continue to change. Among brand new (first time) visitors, their research revealed that a mere quarter of one percent (that’s 0.25%) “…will go through and actually complete their purchase on the spot in that first visit.” Put another way, more than 99% of first time visitors will “fall off your single track.”

…but now is actually “part of the purchase journey.” Before you despair, consider this: Nicholls characterized shopping cart abandonment as both a problem and an opportunity – and, no, that’s not marketing spin. Retailers tend to think of “conversion = good; abandonment = bad”, Nicholls noted, but – as with many issues – it’s not remotely as “black and white” as all that. Why? Consumers are fundamentally changing. Likening the purchase path to a multi-stop vs. single trip rail pass, Nicholls explained that many consumers now stop and start multiple times – and in multiple venues (web, smartphone, tablet, in store) – on their path to buying a given product. In other words, that old single track purchase funnel is obsolete.

Why consumers abandon carts: price *and* unique attributes. Per a Forrester Research study, when a consumer abandons a cart, the leading reasons reflect either a price objection (e.g. shipping costs) or a timing objection (the consumer wants to do more research, they aren’t ready to buy yet, etc.). Between August 2011 and March 2012, SeeWhy analyzed over 600,000 visitors and 250,000 transactions to dig deeper into this issue. The study confirmed that cart abandonment can, in fact, “be part of the purchase cycle” – especially for carts that are quite small or once the value jumps to between $100 and $150. “$100 is a psychological mark where everything changes,” Nicholls noted, so, for example, retailers should consider setting their free shipping promotion at the $99 – vs. $100 – threshold.

Cart remarketing benefits the whole business. A well executed cart abandonment strategy provides additional benefits to the business overall, among those: helping retailers learn more about their business, products and customers along the way. For example, while price can have a significant impact on cart abandonment rates, every item has a unique abandonment rate depending on its (unique) attributes. By examining more closely products that have high abandonment rates, retailers can adjust those product detail pages to perhaps direct customers to stores to see the product in person, and/or put in place shipping options (e.g. free returns shipping) to assuage customer concerns about making the “wrong” purchase.

The first 12 hours after a first visit (and abandonment) are critical for remarketing. SeeWhy found that, among consumers who didn’t buy initially, the average elapsed time between that first visit and actual purchase is 19 hours – but that 72% of those who ultimately bought did so within the first 12 hours after that first visit. “Leads do go cold pretty quickly,” Nicholls underscored. Beware launching a quickly-hatched blanket email remarketing program. There are three secrets of success to cart remarketing: timing, tone, and personalization. The panelists also discussed the role of emotion as well as potential pitfalls in a remarketing strategy: how frequently should you follow up via email? How can you use a return site visit to remarket a cart? When – if ever – should you include an offer as part of a remarketing campaign? What’s the right way to personalize? What are the right goals for each email in a remarketing sequence?

Invest and reap the rewards. To learn more about how to best set up and execute your cart remarketing strategy, you’ll have to listen to the webinar playback. And if you’re still not convinced a cart remarketing strategy is worth your time, consider this:

• Charlie Cole of Lucky Brand Jeans emphasized that remarketing accounts for 3% of their $40MM business – that’s $1.2 million, just for executing their remarketing strategy in a smarter, more timely and personalized manner.
• Nancy Miller of Woodcraft reported that, “The abandoned cart campaign is number 1 in terms of conversion rate, ROI and per visit value. Comparing this campaign to all other direct email campaigns, the conversion rate is 618% higher, and the per visit value is 675% higher.”

With stats like that, what are you waiting for?

So where should retailers focus their attention to capture the attention of online consumers?

Almost one in five (18.7%) of those consumers celebrating Easter will be going online for some part of their Easter shopping this year, a good leap even from last year (14.8%). In line with online shopping trends, online consumers will be spreading their Easter shopping activities over the web, across smartphones and tablet devices and – the omnichannel shoppers that they are – in traditional brick and mortar stores such as discount stores (63.5%), department stores (42.6%), and specialty stores (25.4%). Cross-channel marketing and promotions (such as promoting in-store specials online and via mobile, matching in-store specials online, offering access to customer ratings and reviews in the store, and so on) will appeal to consumers who move quickly and effortlessly from one customer touchpoint to the next.

Approximately half of online consumers who own a smartphone and/or tablet device will be reaching for those as part of the shopping process. Smartphone owners will use their device to research products and compare prices (28.8%) and look up retailer information such as location, store hours, etc. (22.3%). They will also use their smartphone to redeem coupons (17%) and to purchase products (14.4%). It’s a great opportunity to make sure your mobile-optimized site is working seamlessly; that the retailer info is clear and easily accessible from the first screen the consumer sees; and you are clearly communicating your messages about Easter and spring offerings, both textually and visually.

Similarly, over a third of online consumers who own tablet devices will use those to research products and compare prices (38.4%), find retailer information (28.4%), purchase products (27%) and redeem coupons (18.9%). See how your tablet presence measures up – and where you can fine tune – using the advice of Resource Interactive’s Stephen Burke who gave these primary tablet device design principles: make the tablet shopping experience engaging, share-able, shoppable, and extendable.

Most online retailers, of course, are really focused on the upcoming gift giving occasions of Easter, Mother’s Day, Father’s Day, even Graduation, all of which signal sales and conversion opportunities. We’ll be publishing consumer survey insights for each of these holidays in the coming weeks and months, but with a bit of lead time on our side, I asked Ryan Gibson, VP of Marketing at RKG – The Rimm-Kaufman Group and member of the Shop.org Research Committee, for advice on preparing now for these upcoming shopping events.

What’s the first thing a retailer should do when planning for the upcoming gift-giving occasions coming up – Easter, Mother’s Day, Father’s day, Graduation?

Determine what you, the retailer, already know about your customers! A promotion or the immediate time period leading up to a holiday will typically change the behavior of the shopper. In their historical data around gift giving occasions, retailers see that behavior manifest itself in an increased conversion rate as shoppers are pressed by deadline to buy a gift or are incented by a promotion. Retailers can evaluate historical data to understand how to best take advantage of the phenomena in a few ways:

• Look at similar promotions or holidays in the past and evaluate the increased conversion rate. By understanding the increased conversion rate, the retailer may be able to proactively push bids for online channels to take advantage of the increased likelihood that the shopper will buy, thereby driving more top line revenue at the same ROI.
• Be sure that marketing initiatives align with timeframes when people are buying. If the deadline for “free shipping” has passed for getting the product there by Mother’s Day/Father’s Day/Easter, conversion rates won’t be as good as they are before that deadline.
• For Graduation specifically, make sure you know how graduation timeframes vary across the country, as the season will vary as dictated by regional graduation dates and parties.
• Seasonality and promotional effectiveness may all may vary by product category, so don’t forget to watch for some products and categories to take a bigger jump than others.
• Of course, all of this marketing is for naught if you don’t have the inventory in stock to deliver on the promotion or the gift that your customer needs. For any channels that you can push or pull marketing based on available inventory, it’s important to make those adjustments so that you don’t create a less than optimal customer experience.

In the vein of “what you already know about your customer” – is this a time for some focused customer retargeting and remarketing?

Absolutely! Our Director of Innovation, David Kennedy, notes that using products or categories that the shopper has viewed in the past always helps to improve the conversion rate and relevancy of your ads. However, be sure that any remarketing near a holiday is timely, particularly for seasonal items that may be given as gifts. Ensuring that the most updated promotions are present in those ads will also help to boost conversion rate.

Gift-giving occasions are also likely times when consumers are doing a lot of comparison shopping. Any advice for managing comparison shopping engines?

Todd Bowman, RKG’s Comparison Shopping Product Manager, suggests that retailers optimize their feed now, especially for seasonal products and for recent product descriptions. Check your titles and, when applicable, make sure they include helpful product traits such as manufacturer, color, size, year, etc. You have up to 70 characters to use for Google, so use as many as you can fit. Also, make sure that all of your products have descriptions and images and that they are properly categorized. If your product selection is heavily seasonal, you may want to consider increasing the frequency of your feed updates during the time leading up to the holiday to make sure the most accurate and relevant information is presented.

And paid search continues to be one of the true workhorses of e-commerce, correct?

Indeed – and RKG’s Senior Analyst Adrienne Raynor has some specific advice for paid search on Google. If you haven’t already taken advantage of them, a seasonal period is a great time to start using Product Listing Ads (PLAs). For retailers who already have a product feed set up under their Google Merchant Center account, there are just a few steps required to be eligible for Google’s rich ad format, which includes product names, prices and images. These ads appear in the top right of the search engine results page and they are a distinct auction from other paid search ads on the page.

Retailers with more visually appealing products may see the best results – some RKG clients see PLAs account for more than 10%+ on non-brand sales. Splitting bids by product category allows for smarter bidding and more traffic on the products with the best performance. Since our findings suggest this traffic isn’t just cannibalized from other campaigns, PLAs can be an efficient way to boost volume.

We can’t overlook mobile marketing – what are the basic tenets that retailers need to keep in mind right now?

Mark Ballard, RKG’s Senior Research Analyst, suggests that if you have a mobile friendly version of your site, make sure that you manage your mobile marketing channels effectively, especially for products that may be evaluated at bricks & mortar locations via mobile devices. Evaluate the traffic, the price you’re paying for it, as well as how it converts. You’ll even see variances by device type. Additionally, retailers should expect to see a spike in tablet traffic after this week. When the Kindle Fire came out, we saw a spike in traffic as new users spent more time than usual on their new devices. With the next generation of the iPad coming at the end of this week, we expect to see a similar lift in traffic.

What lessons can be learned from European retailers or those that have expanded internationally already? Specifically, retailers should consider six principal issues (or opportunities) related to international expansion.

• Operations and organizational structure. As retailers expand across borders, what does the structure of the organization look like across business units and teams? What type of local, regional teams and support are necessary and how do they integrate and compliment the structure at corporate headquarters?
• Product assortment and branding. Retailers are working to determine what product assortment to offer in different countries. Additionally, we know that brands that truly want to have a global reach must balance how they develop and translate their brand for new, local markets.
• Regulations. Going global means paying  attention to different rules and regulations within every country, region and city where they operate (or hope to operate.)  From privacy rules to laws around labor, tax and trademarks, every country in the world operates differently.
• Currency and payments. Varying payment methods need to be considered. How do you manage the currency types and exchange rates around the world? As mobile adoption continues to increase and mobile technology continues to advance, retailers must be ready for groundbreaking changes in how we pay for goods and merchandise worldwide.
• Shipping and fulfillment. Retailers are struggling with how to best tackle shipping and fulfillment in markets with varying standards and regulations on things including shipping and returns. For global growth, retailers must determine best practices for each channel to enable seamless geographical growth.
• Marketing and social engagement. Retailers understand that one-size-fits-all marketing and communications strategies do not work. All companies, regardless of their maturity in global expansion continue to struggle because of the change within their own organization and the changing face of the socially empowered and always-connected, mobile consumer.

These are just a few of the many issues, questions and considerations out there related to globalization of a retail brand. What we do know is that there are a limited number of companies that understand the key to translating a retail brand to new markets across the world. Most importantly, we understand that a retailer’s international strategy is heavily dependent on operations, technology and marketing partners and systems to prosper in a fierce and changing global marketplace.

To compliment all of the discussions and research we have about global branding, technology and marketing at all of our NRF and Shop.org events, this week NRF will be hosting a pavilion at Europe’s fastest growing retail event, Retail Business Technology Expo (RBTE) on March 13-14 in London. NRF’s Pavilion will feature thought-leadership and technological innovation from two NRF communities: Both ARTS Executive Director Richard Mader and Artemis Berry, Senior Director of Content and Community at Shop.org will be featured speakers on the educational program at RBTE, presenting on the NRF Social Blueprint, a guide for social media strategies in Retail, and Omnichannel Retail: Socializing, Localizing and Mobilizing, respectively.

In addition to meeting with members of the NRF, ARTS and Shop.org teams, our Pavilion will feature technology innovators and integrators from our generous Pavilion sponsors, including ADC, Bizerba, NCR, PCMS and Starmount. These partners will join us to help share their technology expertise on for global retailers looking to optimize their mobile, social and local technologies.

Our NRF communities are proud to bring some of our own insights and expertise to the RBTE event. We’re also proud to be representing our global retail membership at this great industry event. And most importantly, we are proud to be a voice and key partner to retailers all over the world as they invest their time and resources into growing their businesses in the U.S. and the evolutionary and immense global marketplace.

Retail companies around the world have utilized social media as a major piece of their marketing communications strategies, including word-of-mouth marketing, brand management and engagement, and advertising. Retailers such as One Kings Lane, Ticketmaster, American Eagle, and ModCloth have shared with us right here on the Shop.org blog how they use social media to integrate their customer service and marketing communication platforms in their own unique ways. And at Retail’s BIG Show in New York City earlier this year, retail executives from Warby Parker and Under Armour spoke to hundreds of their retail colleagues about some of their most successful campaigns utilizing social media for 2011.

Warby Parker: This trendy, NYC-based eye-wear company focused on a key challenge for their company (and the eye-wear industry as a whole) to make shopping for their products a social experience. Co-founder Dave Gilboa shared with attendees that over 99% of customers have never bought glasses online. But that does not mean you will find their Facebook page filled with discounts and promotions. Instead, you will see customers posting pictures of themselves posing in different types of eyeglasses. In 2011, they had an average of 33 photos per day posted on their Facebook wall from customers; 56 mentions on Twitter every hour; and saw nearly 700 tagged photos with the hashtag #warbyparker posted in four months on Instagram.

Their win? Warby Parker succeeded at creating high-touch customer service and engagement on extremely noisy platforms in a fiercely competitive market. They created a new kind of retail vertical for their industry that is typically driven by the in-store experience, enabling consumers to turn eye-wear shopping into a social sharing occasion from the comfort of their computers and digital devices. And it’s worth noting that they are revolutionizing the eye-wear industry beyond the social space – Warby Parker also gives away a pair of glasses to a person in need for every pair they sell.

Under Armour: Under Armour was represented on stage by their Director of Digital Media, Dan Mecchi. Dan explained that the company used their core marketing principles to guide a new campaign strategy to get people involved.

Under Armour embraced the power of their brand among a core target audience of 13 to 24 year-olds and enlisted companies to participate (and talk about) the UA brand. They utilized social media to drive an “Ultimate Intern Program” where two finalists – out of more than 10,000 inquiries and over 5,000 applicants on Facebook and Twitter combined – were selected to join their marketing team to help communicate brand messages and values with an emphasis on digital engagement. While the campaign was created to find to college interns, it also generated positive buzz about the brand. The Ultimate Intern Program brought more than 120,000 new Facebook fans and over 4,000 new Twitter followers, eclipsing the one million follower-mark for Under Armour on Twitter.

Their win? The numbers speak for themselves. In fact, the campaign was such a great success that Under Armour is now expanding the Ultimate Intern program in 2012. Not only will they continue to build on their fun, powerful brand, but they will get five new and motivated interns that will earn the opportunity to share the Under Armour experience with people all over the world.

You’ll notice in both of these examples we didn’t mention the direct impact on sales. Both of these culture-rich, innovative brands focused on engagement – either directly with the products or with the brand itself. Warby Parker and Under Armour built the core strategy of these extremely different campaigns around encouraging, listening and embracing consumer interaction with their products and brand. Both companies were successful because they utilized the social platforms where their consumers are spending a large amount of time. Both brands are receiving thousands of hours of user-generated content and word-of-mouth marketing that you can’t buy with traditional advertising. Bravo to the Warby Parker and Under Armour teams for winning with social.

What is Pinterest?

The millions of people using and visiting Pinterest everyday are there to do one of two things: users can share their favorite things, people, thoughts, or ideas from all over the web on virtual “boards”; and a person can monitor their board’s activity or “repin” from the people or brands that they follow. Thanks to a beautiful, constantly refreshing interface, each visit to Pinterest can be equally memorable as it is unique.

What does this mean for retailers?

I was still figuring out the proper pronunciation while I started to create boards dedicated to my favorite things.  It’s drawing users in with its simple, yet stunning web design – all empowered with beautiful products and impactful imagery. And, most importantly, it’s the talk of the digital world. CNN and Mashable have given the online pinboard a ton of coverage and praise already. As new data continues to emerge showing who is using it and how, Pinterest has quickly developed into the latest-darling of our online world.

For retailers, it’s time to watch what users are doing - especially if you are a home improvement, bridal, or high fashion apparel retailer – and then create your first boards. How do Pinterest users want and expect brands to share with them? The power behind Pinterest is the ability to share merchandise with the simple power of visual imagery. I believe that a presence on Pinterest is not about having a particular strategy, but rather all about how we effectively listen and engage with all of our consumers across all kinds of social platforms – from Facebook to niche social bookmarking, such as wish list or web discovery sites like Pinterest, Discoveredd, Svpply, and Nuji.

Pinterest itself has identified a number of “best practices” that brands should follow, including pinning on their boards from various sources. Think of complimentary products or design inspiration, repinning from other boards and brand followers, and create multiple boards to cover different topics, interests, products, and inspirations. To jump start your efforts, check out Mashable’s list of five ways brands can use Pinterest to boost consumer engagement.

Which retailers already have a presence on Pinterest?

Take a peek at how these 13 retailers are using the platform in unique ways for their brands:
American Eagle
Etsy
Gilt Groupe (Gilt Home)
Gap
ideeli
Lowe’s
Nordstrom
Rue La La
Threadless
Urban Outfitters
West Elm
Williams-Sonoma
World Market

How will sites like Pinterest impact e-commerce specifically?

According to Experian Hitwise data shown in an infographic from Shop.org member Monetate, this social “pinning” website is driving more traffic to U.S. e-commerce sites than Google+. And earlier this month, Mashable posted a study which said total referral traffic from Pinterest now beats YouTube, Reddit, Google+, LinkedIn and MySpace – combined. Pretty impressive for a website that launched and closed beta less than 11 months ago.

For niche markets of curators, bakers, brides, home decorators and designers and fashionistas, Pinterest is all the rage. I believe we will continue to see a blending of social sharing and e-commerce sites all over the world – which will push marketers to think beyond the walls of of their website to engage consumers and bring our brands to life. Retailers should be asking:

• Are we selling products worth sharing? Do we make it easy to share products on sites like Pinterest?
• Do we have complimentary content like design or decorating tips, fashion inspiration, and/or recipes if we sell products that compliment those products categories?
• Do we know what our customers like to share online?
• And most importantly, are we listening - and eventually responding – to customers who post about our products?

The nearly instant (and for now, consistent) growth of a site like Pinterest is another reason for retailers to have their social engagement and e-commerce brand messaging in sync. It’s only a matter of time before a retailer creates a dynamic and engaging online pinboard - and the next social sharing darling helps reinvent the way we think about engaging customers. And lastly, retailers should consider taking risks to be where your community is even if those new, niche communities don’t become the next Facebook or Twitter. Take risks and make the investment as a part of the cost of doing business in this social, crowdsourcing world we live in.

Following the recent holiday rush, I’m counting on retailers to have taken the month of January to fine tune or even overhaul entirely their smartphone and tablet offerings and marketing strategies for this occasion. Luxury brands such as Swarovski and David Yurman are pulling out all the stops to entice us to indulge our loved ones next week. In the process, these brands are raising the bar for the smartphone and tablet experiences that all retailers provide their customers.

Among online shoppers who plan to celebrate Valentine’s Day this year, almost half (46%) own a smartphone, and almost one in five (17%) own a tablet device. Not surprisingly, quite a few of these online shoppers will be using these devices as part of their shopping process:

• One quarter of smartphone owners expect to research products and compare products on their phone, and about one in ten figure they’ll purchase products and redeem coupons. Of course, the smartphone shines as the go-to reference for anyone, well, on the go, so one in five will be looking up retailer information such as location, store hours, and the like. Lacoste has found that close to half of their store locator visits originate with mobile devices, which, they add, is aided by integrating social media on every mobile page.
• One-third of tablet device owners will research products and compare prices, and one in five anticipates actually purchasing their gifts on the device, as well as looking up information about the retailer.

If you think your mobile strategies - one for mobile and another for tablet devices, of course - could use some revamping, start planning now for upcoming retail holidays to test various elements and tactics. Easter this year is April 8 – only 8 weeks away – with Mother’s Day, Father’s Day and all-important Back to School in rapid succession thereafter. Agile retailers – whether they’re your direct competitors or not – are only continuing to invest for yet better customer experiences. Survey other retail mobile sites and apps and resolve to learn, test and fine tune. Analyze what each device is really good for – and thus what your goals are for each. While some goals may overlap, we were surprised last year when retailers we surveyed told us that, at the time, their objectives for these two very different devices were largely the same.

For some terrific ideas on optimizing your tablet format, you can learn some useful tips from Resource Interactive’s tablet design expert Stephen Burke, who recently spoke at the Shop.org First Look Track. His observations are critical to sharpen the tablet experience for your customers. Enjoy the mobile ride this year!

Our industry was reminded last year that site launches and re-launches in 2011 are no less immune to problems than in early e-commerce days ten, even fifteen, years ago. Anyone who has replatformed empathizes entirely with the huge amount of work involved before – and also after – relaunch. What can we learn as a community from these recent experiences?

Tuning a platform, and even more importantly the integrations with your other systems, is a challenge. Testing methodologies and technology have advanced – there is a lot of rigor there – yet we continue to see new challenges. We need to realize that the traffic is massive, relative to where we were just a few years ago. Customers can now react immediately to an email, a TV ad, or a viral campaign on Facebook on their phone, their tablet, etc. Target’s problems with their Missoni event caught them off guard because the test cases did not anticipate the very high number of items customers put in the cart, together with high conversion rates, and that on top of the spike in traffic from a very successful marketing campaign. By the way, their stores were also ill-prepared, which exacerbated the website’s problems as those customers who lined up at the stores hopped on their smartphones. Hindsight may be 20/20, but it is easy to see how smart people could have missed it. Bottom line – you need to limit the variables in a replatforming project launch, including testing and tuning with modest traffic before peak season. The timing of a launch is important here, but there will be unexpected problems. Plan on them happening and prepare your organization and management for it.

Of course, the $6 billion Cyber Week last December also proved trying for a number of retailers. Are site outages simply a function of too many good deals attracting too many customers – or is there something more fundamental going on?

I think it is difficult to generalize here, but I do think we are at the point where customers are interacting with companies in different ways and we have to adjust how the systems that support web, mobile, and digital interactions and transactions are built. Commerce technology must be hosted in an elastic and scalable environment. How we engineer and test these systems has to evolve, and how we plan and execute our marketing campaigns, has to get much smarter. Blasting your email file, texting all your SMS opt-ins, posting on Twitter, and using a press release to announce some amazing deal may bring down your site. What if Amazon did that with Lady Gaga’s latest album? Well, they did, and their site could not handle it. You need to test, measure, and adjust something like that to carefully monitor the sites ability to handle the traffic. That level of coordination is critical between marketing and the teams who are ensuring the technology is performing as designed.

So, if it isn’t just a matter of load testing, which are some of potential “weak links” that retailers need to find and tune to stabilize their sites?

It is certainly not a matter of just load testing. Everyone has their forecasts and have an idea of what they need to support. Sites get load tested at three to five times the peak forecasted traffic and order volumes. But like the Target Missoni example, it is difficult to account for all the variables in an annual test. Certainly smart business analysts and engineers can anticipate most of the test cases. But if it were just a matter of that, sites would not go down. Everyone needs to own site up-time and performance. Marketers, merchants, web developers, engineers all need to have an eye to what can happen based on their decisions and communicate and work with their hosting support and quality assurance folks.

What’s the best way to diagnose those weak spots in one’s e-commerce system?

Monitoring tools both within the data center and out on the edge are critical to understanding the performance of the commerce systems and integrations. API monitoring tools also have improved and will become increasingly more important. Companies should budget for the analysts and developers to actively debug and tune the system and environment for 2 months after a launch, and schedule regular monitoring times thereafter. Do not make the mistake of doing the big load test with test traffic and orders, launching your site and mobile applications, and then assume everything should be good. The integrations, processes, configurations, and customizations make for a lot of complexity which may not appear immediately or be tested with your test cases.

Overall, what’s your site platform advice to retailers for 2012? What must retailers do – and, perhaps, what should they leave alone – if anything?

From a stability and performance standpoint, retailers need to budget for site performance and stability optimization. Budget for disaster recovery services, infrastructure, implementation, and testing. And do not be so aggressive on project launches so close to your critical sales and marketing events. I have advised clients to wait to launch their new site until after the holidays and January clearance sales. This is hard to do when you want to drive the new car instead, but if you have not driven that car and know how well it can perform, you may be better off driving the old one instead until you have a better opportunity to test and tune the new one. Your metrics may actually be better since you are not throwing your customers a curve ball with a redesign during your biggest and most important sales period.

Since it is likely that every retailer at some point may encounter site downtime – for whatever reason – what’s your advice for managing that time period while the site is down? 

If you run the business, educate yourself on the issues, the what-ifs, and be prepared to be the commander-in-chief if something goes wrong. Have a plan for how you will communicate with your vendors, your internal stakeholders, and of course most importantly your customers. Your customer contact center may be the first to know there may be an issue, or maybe today it is your social media marketer who is monitoring Twitter. Heaven forbid it is the CEO who calls up and says “it looks like the site is down.” That really happened to me once – don’t let it happen to you. Be prepared with a plan for how you discover, validate, communicate, delegate, and resolve these problems.

Your colleague, Carrie Johnson, last year noted in her “Benchmark Your eBusiness Strategy and Results” report five key metrics with which e-businesses should guide and track their progress. Two of those – annual e-business budget, and number of staff dedicated to the online division – likely have a big impact on the operations and IT part of a retail business. Are you finding that retailers are devoting a large enough budget and enough dedicated people to developing, maintaining, testing and fine-tuning e-commerce systems to avoid problems?

E-commerce budgets are increasing, though e-business leaders feel they still fight the perception that the Web should be a lower-cost and lower-overhead operation. The real dollars are becoming meaningful and team size has grown, but budgets are still often below where they need to be to invest in the core technology capabilities and build their teams to support a growing multichannel business. And even if they have the money they find it hard to hire the talent, especially in technology and analytics roles. To mitigate these challenges and increase business agility, we see more e-business leaders relying on outside services teams and cloud-based technology solutions to augment their teams and fill in the gaps in capabilities they need to compete.

For perspective, Eisenberg gave the audience a “super duper condensed history of marketing, commerce and connectivity”, first juxtaposing images of a Roman coin with a credit card and payment by phone (my, how far we’ve come). The logistics and communications evolution has been rapidly evolving, too, of course – think of the path from the Gutenberg press to catalog retail to Amazon’s first home page, through online ads and social media, for example.

With this condensed history in mind, Eisenberg examined how marketing has been redefined. With increasingly demanding consumers, marketing is now much more about pull than old-style marketing push. Some companies such as Amazon and Zappos are foregoing classic marketing altogether, instead making an optimal customer experience their marketing strategy and plan instead (talk about culture convergence).

So, if this means “the end of business as usual”, what’s ahead for retailers? Eisenberg cited a number of evolutions that retailers need to keep an eye on, but the overarching theme is “Interactive Communications + Data = Increase in Relevance”. Eisenberg detailed what the future shopping experience might look like:

• Smartphones will synch up with a set top box in your house. The point here is expressly about utility – it is not about having hundreds of channels to choose from. Rather, the set top box knows what we like, as well as what we actually use and need.
• Webcams that give consumers “touch and shop” functionality, especially as webcams themselves become more sophisticated.
• “How will you MS Kinect?” Eisenberg asked the audience, then demonstrated the “connect and share” scenario of two friends simultaneously in front of their screens at home, trying on and discussing various dresses for an upcoming evening out.
• Paper ads going interactive. Eisenberg demonstrated how “all media is digitizing” with a video of an I-Ad in magazines, whereby the reader places his smart phone on top of a specific spot on the magazine ad (in this case for insurance company Axa), at which point part of the ad comes to life via a rather entertaining video. (“Think [also] about kids who try to use touch screen motion on a paper magazine,” Eisenberg added, underscoring the idea that future consumers will likely ignore entire a static ad, altogether.)
• Mobile. Already impacting the online retail world, Eisenberg emphasized that mobile is all about relevance to the individual user. “It doesn’t matter if mobile isn’t driving revenue directly,” he noted, adding “Up to 50% of all purchases in a store are influenced by a mobile phone. [And] 65% of mobile consumers say they want to see more personalized ads.” As for those in-store searches consumers conduct, Eisenberg asked retailers if they’re leveraging the search data that people are using when they’re in one’s store? Think of the nuggets and insights waiting to be discovered so that you can learn and adapt store offerings and information to meet customer needs that they’re voicing via search. “The truth is inevitable,” he stated emphatically, “You can’t block information or access in-store without people just leaving your store and going elsewhere.”

So what should retailers do next? Eisenberg lamented that, “the future is almost here” – and yet so many companies are in “wait and see” mode, wondering whether they should test or not, should they start a mobile strategy or not, dive into analytics or not?  Instead, take a hint from Google, which is already operating in “future state” mode: “We can suggest what you should do next, what you care about. Imagine: we know where you are, we know what you like.” (Eric Schmidt’s IFA Keynote, September 2010)

Per Eisenberg, here’s what retailers need to be doing right now:

• Think cross-channel. Consumers don’t care about channels, so forget channel vs. channel. For example, Best Buy includes customer ratings on price tags in stores. Ratings and reviews are popping up in store displays and on packaging everywhere.
• Start testing and adapting. Two examples that Eisenberg cited to inspire the audience to think “future state” now included CScout in Japan and Tesco in South Korea.  Example 1:  Within the CScout in Japan, the consumer picks up a hangar with a specific pair of jeans, which starts a video relevant to that particular product (so, a customized in-store experience relevant to you and the product in which you’re interested).  Example 2:  On the theme of “Will you take risks?”, Tesco (renamed “Home Plus” locally) in South Korea decided to let the store come to the people, rather than opening more physical locations. How so? The company developed virtual stores in everyday life, like in subway stations, by using QR code technology on billboards designed to look like a grocery shelf stocked with many household staples. People waiting for the subway could shop the billboard with their smartphone, pay for their purchase, then have the groceries delivered to their home. Online sales increased 130%, and the number of registered users grew significantly also.

Are you motivated by these fascinating examples of the future shopper? If so, what will you be testing and trying next?

Watch the video below for Vicki’s full remarks including her advice to digital retailers at all level for preparing for the future of the industry.

Retailers reported generally favorable key performance indicators (KPIs) for the November and December period, compared to the January to October 2011 period leading up. While it’s not entirely surprising that nine out of 10 retailers surveyed saw increased average daily site traffic, site conversion increased significantly for almost half and increased somewhat for almost another third. Three-quarters also reported increases in email conversion, and almost half saw increases in average order value. Shopping cart abandonment rates actually decreased for almost half (are shopping cart remarketing strategies perhaps starting to hit their stride?).

Despite largely positive indicators for the just-concluded holiday season, retailers aren’t sitting on any laurels, and many have mapped out a busy year of investments and improvements to make the best of 2012. What did retailers learn that they will do differently for the Holiday 2012 season – and what are they investing in this year to improve those capabilities?

• Planning & Assortment. Improved forecasting, better inventory allocation for the Web channel, and general inventory management top the list of things that some retailers plan to do differently for Holiday 2012. To that end, many expect to invest in better inventory management in the coming months.
• Infrastructure & Operations. Retailers shared that site performance continues to be an area that needs attention, so this year they plan to invest in additional server capacity, site stability measures, and additional infrastructure improvements.
• Marketing & Promotions. Retailers this year are investing in, among other areas, all things search – both site search and SEO / SEM.
• Shipping & Fulfillment. “Fulfillment improvements,” “operational capacity” and “finding a way to extend the shipping cut off to Canada – lots of missed opportunity” were some of the comments retailers shared about what they will do differently for Holiday 2012. Retailers surveyed noted that logistics and operations will see investment this year, along with investments in drop ship management processes and related measures by which to extend shipping deadlines overall.
• Mobile. Not surprisingly, smart phone and tablet device optimization will likely see much work this year. (For tablet device design tips, please see also “Proof that tablets are here to stay”.)
• Customer Experience. Several retailers feel that the customer experience is something they particularly want to improve in time for Holiday 2012, from “end to end customer experience” to the overall multichannel shopping experience. Bravo to retailers who plan to focus on this area, particularly as shopping channels increasingly converge.

Please see the Shop.org site for full results of the 2011 eHoliday Study Post-Holiday retailer and consumer results.

Given the burgeoning tablet device user base, companies are clamoring to give these customers a great tablet experience: Burke noted that Resource Interactive delivered 65 tablet device-related projects just in the last year, serving CPG and retail clients such as Kohl’s, Sherwin-Williams, and Limited Brands. Burke cited research showing that:

• 7% of total online sales on Christmas Day 2011 came from Apple iPads specifically, according to IBM Coremetrics. iPads also drove 6% of all mobile online traffic the very next day (December 26, 2011). Their purchase conversion rate? A whopping 4.6% – “almost double the average mobile conversion rate of 2.8%.”
• Looking ahead, 20% of US consumers say they intend to buy a tablet device in the next six months. For men and adults aged 31 to 40 years old, that’s more like 23% and 24%, respectively. Even among US consumers aged 51 to 60, that’s 21% (just try prying the iPad out of the hands of Burke’s 63-year-old relative who never used her smartphone for anything but phone calls).

What’s interesting about the tablet device, Burke also noted, is that – with the exception of older users – the tablet device is not a replacement for other devices such as the computer at home. Also, Burke pointed to research showing that a high percentage of people who read e-books prefer to use a tablet device for that purpose, prompting Burke to somewhat tongue in cheek characterize e-books as “the gateway drug to tablet dependence.”

“Couch commerce” is really here.  According to Equation Research for Zmags, 70% of tablet usage is at home – specifically, either on the couch or in bed. Consumers use the smart phone and computer to get specific tasks done quickly, whereas tablet device users are “couch browsing” (attributable to Fred Cavazza of Forbes). Ultimately, the tablet is a “leisure device” – albeit one that is starting to drive real commerce.

4 Primary Tablet Device Design Principles.
“Smartphone design is more like fitting a size 12 foot into a size 10 shoe,” Burke joked. By contrast, tablet design is about using the depth and breadth of what a tablet offers – so much so that, “the conversation between agency and client is different.” Overall, Burke isn’t convinced that there’s a vast difference between a good tablet device design and good Web site design – but there are some key tablet design principles to observe:

• Make it engaging. Realize it must be a fun, engaging, immersive experience. “It’s like touching a stained glass window and watching it come to life,” Burke explained. In general, tablet consumers will engage repeatedly before making their considered purchase. Overall, you’ll want to use less text on a tablet, and instead use more imagery and short video.
• Make it share-able. The tablet device itself is often shared within a family. Tapping social media, the tablet also “makes it easy to share ideas, thoughts, and even products” with others.
• Make it shoppable. “The tablet is with people for an extended period of time in a low pressure way.” In traditional web design, “you limit the number of available windows and doors” in order to get people to the cart and to check out quickly. As a highly visual medium, retailers can offer lots of content to “engage and woo” the customer while still (gently) leading him or her to the actual purchase.
• Make it extendable. “The tablet provides a vehicle for brand stories and product immersion.” Retailers should think about digitizing and then making available on the tablet all kinds of analog content that they already own, such as assets such as circulars, a video highlighting a designer that the retailer is launching – the possibilities go on.

As one example of tablet design, Burke pointed to the Sherwin-Williams “ColorSnap” product and how that evolved from the initial smartphone (iPhone) app to the iPad app that features large, rich imagery that allows users to explore and interact.

Burke suggested that retailers also look into the concept of “Responsive Design”, by which the company uses a universal codebase and set of logic to automatically adapt the content to recognize the device and operating system that the customer is using (for example, the system would perhaps remove two or three items from a tablet design in order to render a good smart phone display).

So, let’s start with the age-old e-commerce question: in a multichannel organization, whom should the e-commerce team report into? The panel agreed: directly to the CEO. The CEO provides the cross-silo solution that cuts across all the divisions within the organization. If the e-commerce team is part of another group – marketing, merchandising, licensing, retail, or the like – it will inevitably be overly oriented toward the agenda of the silo into which it reports. What about the idea of having e-commerce report into the retail (stores) division? No, the panel said: retail and e-commerce need to be on par with one another organizationally. Or the idea of having different parts of the e-commerce team report into functional areas? The panel was clear: don’t break up the e-commerce organization – keep it whole, and, oh yes, have it report to the CEO.

Jared Blank, Vice President, E-Commerce at Tommy Hilfiger

As it turns out, this is how Bob Myers has set up his team at Sheplers. Taking it yet a step further, Bob has also implemented a single P&L within Sheplers, thereby allowing everyone within the company to unify around the consumer, versus individual silos. Sheplers has taken specific measures to make this a reality. For example, stores get credit for online sales that originate in their region or zip code, and e-commerce is tasked with driving sales in stores. As Kevin noted, “It’s about [shared] incentives.”  Furthermore, every employee hired – no matter what their job – has to have digital experience, thereby spreading shared digital sensibility through the organization.

The panelists all emphasized, however, that the most important tenets of classic retail remain: the traditional adage of “retail is detail” is as true as ever, but now it’s a matter of organizing around the customer (or, perhaps, “retail is detail plus digital”). E-commerce in 2012 simply isn’t like the online retail of 10 or 15 years ago – this is true retail, with “real retailers” running the business who understand the importance of factors such as inventory turn. “You have to be voracious about being in stock,” Bob noted as one example – retailers can’t just rely on the idea that the website is the infinite warehouse and that customers will be satisfied if you offer to order their size / color combination for them online, especially now that anyone with a smartphone in hand can do that on their own. (In the out-of-stock situation, Bob advised simply saying to the customer, “Let me get that item for you” – like we used to decades ago! – and then tracking that item down from other stores or even a competitor, simply to deliver on one’s promise to that customer.)

So, how about that other age-old e-commerce question: where does the retail IT team fit into the organization? Retail IT is generally used to build employee-facing tools – tools for employees to learn and use, maybe with training and manuals and on-site help. Consumer software and applications, of course, are very different and thus require a very different approach to development, implementation, and ongoing evolution. The panel agreed that it’s likely prudent to work initially with a third party development team to develop e-commerce solutions, as they know how to design and build for the consumer. As Sally noted, however, no one wants to use external resources indefinitely, so the ideal situation is to bring in and enable the internal IT team over time, gradually transitioning to make IT a true e-commerce partner.

How about e-commerce leadership? Gone are the days of “bright young things” coming in as generalists to run an e-commerce business, the panel agreed. Now, retailers need e-commerce specialists with deep expertise and experience to lead the e-commerce team. Jared described that he spends a lot of time with his merchandising and marketing teams (among others) “getting into the weeds” to understand in great detail what’s going on, how the team is doing, whether the right skill sets are in place. Sally added that understanding whether the right people are in place takes attention and time. E-commerce leaders need to invest in their team by giving them opportunities to develop their understanding of the market and to deepen their skills through venues such as Shop.org events (her words, not mine!). Also, some CEOs may not understand some of the specialized skills needed for e-commerce that are different from more traditional retail roles – for example, a usability expert, whose skills can increase site conversion and otherwise improve the customer experience.

With the e-commerce market developing so rapidly, how do organizations manage budgets? Some things in a budget, panelists noted, are must-haves like “air conditioning – you can’t not have that.” On other things, Bob explained that he listens carefully to his direct reports, and that if they all feel that something on the table needs to be included in the budget, he takes that input very seriously. What about the “shiny new keys” – emerging technologies that may not yet have proven track records? For those, Bob noted, “You place your bets.”

As Kevin pointed out, “Defending the status quo kills companies.” But if your organization isn’t yet quite as future-state as Sheplers, Sally summed up a few key steps towards the retail organization of the future: do ensure the e-commerce team reports into the CEO; focus on integrating *processes* first (i.e. integrate the organization further only once the processes are in place); and ensure that you have the right people for the job.

Amy Africa, CEO of Eight by Eight talks about the human brain and shopping.

So back to that unusual opening question. Amy used that – and a series of follow up “what if” scenarios – to get the audience to think about how we make decisions. Turns out it has a lot to do with our “reptilian brain” (I hadn’t heard of it, either). Forget the more common “right brain / left brain” categorization – Amy explained that we in fact have three brains: the neocortex (rational data processing), the mid-brain (emotions and gut feeling processing), and, finally, our reptilian brain. The latter is the arbiter or tie breaker between the first two and triggers decisions, as its primary concern is one’s survival, and, as Amy described it, “deciding what’s safe and what isn’t”.

And this has what to do with retailing? Quite a bit. Amy next outlined a raft of 21 factors about human beings and how those impact your customer’s decision to whether or not to visit your site, stay or flee, and – hopefully – actually buy. Lots of food for thought – think of it as a reality / sanity check for you and your business. Herewith some of Amy’s points:

• We are self-centered. Translation for your site: does your site really speak to your customers? Does it resonate with them, do they identify with what the site displays, talks about, exudes? Does your site speak the same “language” as they do?
• We process best in “black and white” – that is, contrasts. In fact, Amy noted, contrast is “efficient” for our brains; we’re programmed to notice differences and changes in our environment (again, a survival technique). Translation for retail sites – “what are your pattern interrupters for your customers on your site?” Amy pointed out that most people vow they can’t stand pop up ads – but, they do make people take notice. The home page carousel (rotating images or content) is also effective, engaging the user to linger a little longer and see what comes next to make sure they haven’t missed something.
• We are visual. As Amy noted, “You only think you think. You really just see.” Don’t “over SEO” your site, Amy further exhorted, forgetting that the user coming to your site from Google “doesn’t see words as much as he sees pictures.”
• We look for patterns. Translation for retail sites: customers like to see patterns, as they feel safe and familiar. In Amy’s experience, navigation accounts for 40% to 60% of the success of a site (that’s more like 80% for a mobile site). Why? “Because 80% of [the customer’s] attention goes to the first screen; the top and left hand are patterns and [therefore feel] safe.” Among patterns, human beings particularly look for faces, as they are reassuring. Amy suggested that by adding a friendly-looking picture of a customer service rep on your product and check out pages, you will increase your chances of improving conversions (sounds like a great A/B testing candidate!).
• We like things that we can touch. Translation for retail sites: are you using words on your site that are meaningless to your customer? If they don’t understand and cannot visualize easily terms like “revolutionary product” or “flexible approach” that you use on your site, they won’t warm to the product or service (or your company).
• We like beginnings and ends. Translation: are you using deadlines and creating a sense of urgency? Use short deadlines – they help customers focus. Amy pointed out that two years ago the average life span of an email was 48 hours – now it’s 9 hours at best, and likely really more like 4 hours.
• We respond to emotion. For a retail site, this is all about the story you tell (versus simply selling a product) – again, not just in words, but in your imagery and the overall look and feel of your site. What’s the first impression the customer gets? What are his or her takeaways from interacting with your site?
• We create false memories. “What do you remember? Our memories are terrible,” Amy noted. “So, how do you compensate for your user’s terrible memory?” For retailers, it’s about putting some action directive (or, a reminder to the customer to take the action you want them to take) on each and every page to compensate.
• We have inattentional blindness. As Amy notes, “We see what we want to see – and we don’t see what matters, often. Are your action directives clear and on every single page? What’s important to you and does the user know it?”
• We like what’s first. Customers who do a search will look at just the first two results presented – at best. For retailers, that means making sure your bestsellers are among the top two results.
• We respond to status. And, Amy posited, “Status and reputation are more important than money.” This is a key underpinning to social media – how many likes or connections, one’s rank as a contributor to customer reviews, and so forth.
• We respond to scarcity. As we all know, “If it’s rare, we want it,” Amy notes. For retailers, this means thinking about scarcity and how it affects your cart and your check out – are you conveying urgency and scarcity so the customer has incentive to finish the check out process?

Zia Wigder, Pricnipal Analyst and Research Director at Forrester Research moderates the discussion.

While I don’t want to overwhelm with data, to understand why there is so much interest in two markets in particular – China and Brazil – a few numbers provide perspective:

• In Asia, 41% of all online users live in China. Similarly, in Latin America, 41% of all online users live in Brazil. According to CNN Money, China and Brazil rank as the world’s two largest emerging economies in terms of GDP: China at $7 trillion (second only to the U.S., at $15.1 trillion), and Brazil at $2.5 trillion (that’s on par with the U.K.).
• Forrester expects the Chinese online retail market to grow from $94.6 billion this year to $159.4 billion in 2015 (this includes both the business to consumer and the consumer to consumer markets). While smaller than China, the Brazilian online retail market is the largest by far in Latin America, and will grow from $11.9 billion this year to $22 billion by 2016.
• In both countries, online consumers across all age groups are shopping online, though on average tend to skew younger than in the U.S. Most online buyers live in major metropolitan areas. Mobile penetration is very high in both markets – though shopping via mobile phone is not yet common practice. Non-local retailers entering China and Brazil will face markets dominated by local players – global retailers have yet to become a major contender in either. Furthermore, consumers are accustomed to cheap or free shipping (so much for that as a differentiator!). And while multichannel shopping is not really in place yet, Zia’s take is that there is much growth ahead on that front.

So – sounds like lots of potential for retailers exploring e-commerce opportunities outside their home markets? Panelists Angela Kapp of Shenzen, China-based Hui She Shang (The Luxury Club) and Gastao Mattos of Braspag in Brazil say yes – but it’s important first to understand the local market, customer preferences, culture, payment systems, logistics, and regulatory issues in order to succeed long term. While I cannot do justice in a single blog post to the wealth of information that the panelists provided today, herewith are a few highlights:

How do Chinese and Brazilian consumers shop online? Gastao noted that Brazilian shoppers are driven by promotions, and that free shipping is common practice. Brazilian online retail for now tends to be dominated by categories such as consumer electronics and computer-related goods. Brazilian consumers mostly use credit cards to buy online, and installment payment plans are a “promotion driver, but with a high negative impact on margin,” per Gastao. Social media is very popular in Brazil, but so far has had a low direct impact on online sales.

Angela emphasized that in China, price comes first and foremost, and competition on price is “fierce”. Chinese consumers buy a wide variety of products across categories: fully 25% of online sales in China are for apparel and footwear, including children’s apparel. In terms of customer service, consumers mostly use online chat, with only 20% of consumers using email (or “EDM – electronic data mail”, as it’s referred to in China). Union Pay estimates credit card usage in China at just 15%, so third party payment systems dominate the market: Alipay leads with over 200 million accounts. Social media is very popular (even without Facebook!) but tends to be more content sharing sites such as market leader Sina Weibo, as well as Qzone and Tencent.

How about the competitive marketplace? As noted earlier, local players dominate both markets, and even for global players such as Amazon (newly entered in Brazil), competition will be high. With prices for goods in mainland China 30 to 50 percent higher than in other markets (even Hong Kong), Angela sees international brands succeeding partly via their expanding network of stores around China, allowing them to develop a multichannel experience.

What about fulfillment logistics? Gastao pointed out that e-commerce sales are growing more than 25% annually. There are only seven logistics companies in Brazil involved in e-commerce, and the trouble is that their growth is not keeping up with that 25% market growth. In China, local courier players dominate outside Tier 1 cities. Angela noted that 360Buy “has perhaps the best system, with more than 14 warehouses, covering 200 cities and 120 collection stations.” The Chinese government also has laws in place to let consumers easily make returns.

As Angela remarked at the very outset of this session, “We [US businesses] tend to want to drive the agenda. [Instead,] listen first, learn first.” Wise words, indeed.