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The Future of Shopping is Social

The Future of Shopping is Social

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Published by Kate Carruthers

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Published by: Kate Carruthers on Nov 11, 2010
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05/12/2014

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 Kate Carruthers|www.katecarruthers.com| Nov 2010
These are some thoughts that I presented at the AMP Social Media Cafein Sydney on 11 November 2010, the slidesand references follow below.
 
The Future of Shopping is Social
by Kate Carruthers, Nov 2010The future of shopping is social. But that is nothing new – shopping has always beensocial. The difference is that now we are seeing social interaction on ahyperconnected scale and the emergence of new competitors. It is still shopping, butsocial shopping is on steroids.Firstly I want to give you a sense of the broader shopping landscape in the digital age.There is a growing body of empirical research on retail effectiveness and the statisticsare quite scary. As Sorenson notes “The shopper comes to the store to buy things. Theretailer creates stores to sell things. Manufacturers create products to sell. Yet most of the shopper’s time in the store is spent not buying.” And he notes further that “asingle item in a store might attract only 300 seconds [of attention] from all shoppersin an entire week, about five minutes [in total]”.This means that not only are shopping centres fighting to get and maintain traffic, butalso that the traffic is not necessarily being well used by the retailers to sell productseffectively. And this leaves each of them vulnerable to competition.Yet the work we have been doing in the shopping business over the years can besummarised quite nicely by this
 
diagram by Robert Kozimets. And the model worksequally well for retailers or for shopping malls. We have been building spaces forbrands that cluster around either the transactional (think supermarkets) or the iconic(think of one of the new high fashion shopping centres).But all of this is happening in a broader context. The economy is changing around us.We are moving into what I have come to call the
 
engagement economy. But there areso many competitors how for a share of that attention (as well as for a share of wallet)that it is important to be able to grab attention and then to drive ongoing engagement.We’ve had social shopping for a long time – since commerce began. But the nature of competitors is changing. Before it was the other mall or the retailer down the road thatwe had to worry about. Now competitors include farmers’ markets in grocery andfresh food; virtual goods like digital video and music from iTunes; large onlineaggregators like Amazon (who perform many of the functions of a department storeand are often cheaper); and new entrants such as online shopping clubs (of whichmore later).This competitive landscape has evolved very fast – just look at this
 
timeline fromSean Carton
 
to see how fast. Two and a half thousand years ago we were writing onclay tablets and in the last decade the digital revolution has changed our lives. Manyof us cannot imagine a world without the internet anymore.Also media has been changed by this digital revolution too. Marketing and advertisingare being reborn in this new digital world; while many newspapers around the globe
 
 Kate Carruthers|www.katecarruthers.com| Nov 2010
cling tenuously to existence. Thisdiagram by David Armanoillustrates thisphenomenon very well. He nicely illustrates the fact that we are moving from lowerengagement traditional media to higher engagement online social media. After all notmany people check their newspaper first thing in the morning, but some recentresearch indicated that many people
 
check Facebook 
 
(or Twitter) before they go to thetoilet or brush their teeth in the morning.And the tools of the digital revolution – web 2.0, social media, social networking andmobile devices – have changed the way people interact with each other and withbrands.Facebook is probably the best example of this change (although there are other similarservices such as Twitter that are gaining ground). Facebook is important because it ischanging what real people are doing with real time and attention every day all aroundthe world.But let’s consider some other trends and have a brief look at the evolution of shoppingin the digital age.There are a number of trends here:
 
Rise of mobile devices
 
Word of mouth via social networks
 
Social shopping
 
Collaborative shopping
 
Geo-social services (location based)
 
Putting geo-social into perspectiveSocial and collaborative shopping is reshaping the power relations betweenconsumers and sellers. New intermediaries are arising, ones who aggregate consumerdemand via shopping clubs. The fight for better value by consumers is shifting ontonew territory. And this shift will begin to manifest as changes in share of wallet fortraditional retail channels.The growing role of mobile devices also means that the shopping dynamic ischanging. Consumers can share realtime information and collaborate while they areon the move. In the past we had to connect online via fixed PCs, but now the devicesare always on and in our pockets and handbags.Sites like Facebook are picking up on this trend with their adoption of Places - a geo-social application that enables users to share their physical location with friends (thereare other contenders in the geo-social space too). And now the interesting thing is thatwe are seeing the merging of online and offline social activities with shopping and theintegration of micropayments - for example Facebook's relatively recent additionof Buxter
 
to enable peer-to-peer payments between friends.It is very early days yet. We do not know where these trends are heading in particular.However, it is clear that geo-social applications have the potential to close the loopbetween online social networks and real world activity, especially when these areconnected by online micropayment capabilities.

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