When you look at the profound changes occurring in both the retail and media spaces it's only logical to explore how they are going to impact each other. The first place to look is the technology that it is driving much of the change on both fronts. And the key to success in harnessing technology for marketing or sales is to realize that technology has to be focused on creating a better experience for the consumer, not for the retailer.
Audiences have come to expect dynamic environments in everything that they do. They watch content when they want to. They receive information when they want it. The have bought into just-in-time marketing. When they are bored with our content, they make their own. So as you look at the technologies on the retail horizon, think about how you could use them to create something more unique for the consumer. Dan Pink, writing for Yahoo Finance, recently had this to say:
"Today, utility is abundant. We have more products and services than we can handle, and most function just fine. To stand out in a crowded marketplace, sellers must make a dramatic leap in utility-or stand out in some other way. They can try to compete on price, but that usually ends in a downward death spiral. So the alternative is to compete not on left-brain attributes like price and functionality, but on right-brain qualities such as emotion, meaning, and look and feel. Case in point: Target sells toilet brushes and vegetable scrubbers designed by superstar architect Michael Graves. Even the most mundane, utilitarian objects in our lives have been turned into objects of desire."
At the Ralph Lauren flagship store in New York, you can actually purchase items right from the window, using a credit card reader and on-screen keyboard. If you don't want to purchase right then, you can send the information to yourself via email and complete the transaction at home.
And that applies to technology. Forget trying to just put technology into everything that you do to make your business run more smoothly. Consumers want something easier for them and a more unique environment to shop in. They are very comfortable shopping online, so they need more then just merchandise to bring them into the retail space. Today, it's about creating a compelling, authentic and relevant brand experience.
This is not about wish lists. Some of these technologies and new marketing strategies are already in use; many others we'll be seeing in the not-to-distant future. Here's a look at key developments today:
SOCIALIZATION OF RETAIL SPACE & ONLINE SHOPPING
The impact of socialization of the retail space and the impact of online shopping on retail is growing daily. With the growing impact of Internet shopping, it's critical that the physical retail space adapts to this trend. What is the value of real estate for retailers today? Does a record store really need to exist as it's been for the past 40-plus years? What about banks, grocery stores, fashion retailers? If, thanks to the Internet, people are much more comfortable getting their purchases sent to them, rather then getting them right away, do we need that much space dedicated to merchandise? If we could do away with the inventory portion of most retail spaces today, what else would you do with the space? How could you make it a much more social environment, rather then being a retail environment? After all, this is exactly why places like Starbuck's or the Apple stores have boomed: they created a social space, rather than a retail space.
While people look at Starbuck's or the Apple stores and say "Yea, that's great for them, but it doesn't apply to me," I think that they're missing a huge opportunity. We think there's a coming trend to socialize the retail environment instead of just merchandising the real estate space. One such retailer plans to open this fall, Epicenter, where not only will you be able to see samples, but purchase using a "Buypod" and have everything shipped to you. They won't carry a deep inventory and may even charge you extra if you want to buy the item in the store. It will be very interesting to see how this concept works.
MOBILE TECHNOLOGIES & RETAIL
We are significantly behind the rest of the world in using our cell phones for a wider variety of experiences and we are just beginning to see how they can be used here in the U.S.
Some uses currently deployed include:
Cell Phone Shopping. As described on its web site, SCANBUY Shopper enables cell phone users to have the best bargain-hunting tool at their very fingertips. Get the best prices and all the product info you need to make smart and fun purchases. But it does more then that. Type in the barcode for a book or movie and find out all of the reviews as well. Amazon Japan has a similar service that let's you scan the barcode and search through Amazon for best pricing. You can then purchase it directly through Amazon, should you want.
Several companies are developing payment systems using your cell phone, including Paymint, which allows parking meter payments via cell phone—maybe stores in the future will give people cell phone pay coupons to pay for parking in the future. Of course, in Japan systems for items not only in the store, but in vending machines as well. unlicensed short range radio fre
Bluetooth Technologies. quency. Bluetooth is an industrial specification for wireless personal area networks (PANs), also known as IEEE 802.15.1. Bluetooth provides a way to connect and exchange information between devices like personal digital assistants (PDAs), mobile phones, laptops, PCs, printers, digital cameras and video game consoles such as the Nintendo Wii and Sony PlayStation 3 via a secure, globally unlicensed short range radio frequency.
Several companies are starting to tion for wireless personal area net-deploy Bluetooth in retail, allowing the consumer to gather additional information about products. And right now, technologies like Bluetooth don't have the same privacy issues that are facing RFID, because they require the consumer to opt-in before anything else can happen.
Dody Tsiantar, writing in Time about the use of Bluetooth technology for billboards, had this to say: "Technology, in part, is driving the medium's rebirth. Consumers can now download music, play video games, watch movie trailers or cus-tom-design a pair of sneakers and purchase them-all by interacting with outdoor ads. Signs can send a digital coupon to our cell phones, and soon they may even start addressing us by name, as they did in Steven Spielberg's 2002 futuristic film, Minority Report. "We're almost there," says Stephen Freitas of the Outdoor Advertising Association of America, an industry trade group. "Outdoor advertising is evolving to a world of two-way advertising very, very fast."
Nokia came out with its Coolzone technology in 2005, allowing retailers to put a base station in the store and bring specific content to consumers with Bluetooth enabled phones. With CoolZone, retailers like music stores, phone shops and cinemas, can offer promotional or paid content, such as mobile games, wallpapers, videos and music, to consumers in their stores.
"For consumers, CoolZone is a new and easy way to get rich mobile content and information. Every time the consumer visits a store, which has CoolZone service, she or he can easily browse, preview and buy the latest content to his or her phone. When using the service for the first time, the consumer downloads a retailer branded application to the phone in the retail location based on instructions provided in the store. The payment for the downloaded content is done either over the counter using vouchers or using premium text messages," said Sakari Kotola, director, Nokia Ventures Organization. "CoolZone is a truly smooth content download tool for consumers."
U.K. music retailer HMV is attempting to play catch-up in the download market by launching Txt2Buy from July, a service that directs consumers from adverts in magazines to a web-site—accessed via their phone, allowing them buy on the move. The aim is to become a real multi-channel retailer, according to Gideon Lask, head of internet at HMV.
A 2005 Pew Internet study showed that six million consumers have downloaded podcasts and a visit to the iTunes Music store shows an very wide range of podcasts available for download. Retailers are just beginning to explore how podcasts can be used in the store environment as a marketing tool. Podcasting is the method of distributing multimedia files, such as audio or video programs, over the Internet using syndication formats, for playback on mobile devices and personal computers. (Note: Podcasting does not require the use of an Apple iPod or any particular playback device. The most common way to listen to/view a Podcast is with a PC.)
Ad Age recently reported that Vogue has embraced the podcast, and the first of the magazine's "Fashion on Demand" video podcasts—co-brand-ed programming that gives advice, often sprinkled with celebrity interviews, on everything from hair care to fashion—goes behind the scenes of Gap's new fall campaign in an interview with "Entourage" star Jeremy Piven. Future podcasts in the Gap series include interviews with other new Gap faces: actress Lou Doillon, musician Common and actress Mia Farrow. Old Navy and Redken also have developed Vogue podcasts for the fall, and other advertisers, such as Lexus and Jeep, plan to do so down the line.
NEW DISPLAY EXPERIENCES
From IBM's Everywhere Display to Jestertek's Holopoint, companies are looking to new technologies to create new visual tools to engage the consumer. Unilever recently launched an in-mall program for the launch of Sunsilk from Unilever. Using directional sound speakers, we were able to create a "sonic blanket" to bring a new dimension into the traditional mall advertising. Sex and the City co-star Mario Cantone, who played the sassy, raspy-voiced "gay friend" Anthony, is the voice of the effort. "The audio and the tone of the campaign is very distinctive, and we looked for a way to incorporate that audio into the media in ways that had never been done before," said Susan Noble, group marketing director at Unilever agency Mindshare. "We've also tested the speakers on billboards six stories up and we've been able to hit the street with a clear audio signal."
Ralph Lauren has received a great deal of press for a new interactive window installation at the compa-ny's flagship store in New York. One very unique aspect is that you can actually purchase items right from the window. They have a credit card reader and on-screen keyboard to handle that. And, if you don't want to purchase right then, you can send the information to yourself via e-mail and complete the transaction at home.
Lexus used a holographic projection system in Times Square to promote its new IS car. According to an article in MediaPost, Robin Pisz, national interactive and relationship marketing manager for Lexus, describes a busy target demographic that demanded a new approach. "This is an audience that is always on," she says, referring to Gen Xers who live on the grid with iPods, cell phones, BlackBerries and more. "They are multitaskers [who] have completely bought into the reality of media fragmentation. They understand that they can get and consume content in multiple platforms at almost any time of day."
Wowing the shoppers of Berlin, MediaZest, together with German media group Axel Springer brought the famous Kurfurstendamm to a virtual standstill with its brilliant holographic displays at C&A's flagship store, promoting a new range of lingerie. In the shop window of the Berlin C&A store in Kurfurstendamm a life size holographic image of a woman modeling the new "Seite 1 Girl" lingerie dances, gesticulates and appears to interact with passersby. MediaZest has used its display technology to create this holographic image and its Whispering Window devices to project sound outside of the store.
Working with Jung Von Matt a website has also been set up to accompany the window display. The model, the lingerie and the reactions of passersby can be viewed on the website and one can vote from a list of 30 options for what the model should do next— options include "blow a kiss," "play the air guitar" and "strip." The web-site periodically aggregates the votes and the model will then act according to the favorite request. The website allows the audience to influence the advertisement and the retailer to gauge interest and reactions in real time.
Multi-touch user interface systems are being developed at a number of research facilities. Microsoft demonstrated a system last year and this year, work being done at NYU has really moved the technology forward. As NYU describes its system:
While touch sensing is commonplace for single points of contact, multi-touch sensing enables a user to interact with a system with more than one finger at a time, as in chording and bi-manual operations. Such sensing devices are inherently also able to accommodate multiple users simultaneously, which is especially useful for larger interaction scenarios such as interactive walls and tabletops.
The opportunity to have multiple people engaging the system, rather then the one-on-one systems that are currently deployed, will greatly change the way touch screens will be used in the future. They can be larger and more interactive and will bring the technology of Minority Report to retail in the next few years.
We've also seen demonstrations of a "virtual dressing room," projectors that can project on any surface, fog screens and many other technologies that will help create a very different visual landscape. After all, now that you can buy a plasma TV at Wal-Mart, they're not much of an attraction in the store.
One of the most interesting things happening right now is the combining of the real world with the virtual world. Online environments like Second Life have seen a variety of companies create virtual copies of their businesses online. Studies have shown that people are spending approximately $5 million/ month in real dollars buying virtual items.
According to Activision CEO Bobby Kotick in an analyst call reported by Seeking Alpha, "We look at the amount of hours that are consumed by consumers and let's take 18- to 35-year-old males in the U.S. in front of a video game screen. So last year that was roughly 30 billion hours. Then you compare that to television watching which was to the same demographic roughly 30 billion hours."
According to the stats at Second Life today, there are 573,729 total residents and 257,850 of them have been on line in the last 60 days. More importantly, they've spent $358,699 online in the last 24 hours. One of the first companies to move into Second Life was Wells Fargo, which opened its Stagecoach Island last fall in Second Life. According to the press release disseminated by Wells Fargo:
"Wells Fargo today introduced Stagecoach Island, a free, multi-player, online role-playing game developed to teach young adults important lessons in financial literacy. Wells Fargo is the first financial institution to use an online game of this kind for both financial education and entertainment purposes. Young adults in San Diego and Austin, TX, are the first to experience the Stagecoach Island game in a pilot program that kicked off Labor Day weekend this year and will end in mid-November."
The Stagecoach Island game allows players to select a virtual character and participate in an "island adventure." Participants can choose to explore the virtual islandlush parks, hip cafes, dance clubs, trendy shops, amusement parks, hair salons and more. They can also interact in dozens of virtual, social situations—like skydiving, riding jets-skis or playing games like paintball with other participants. Many activities on the island are "free," but participants gain access to other experiences, such as dancing in a club or purchasing new clothes, by spending, saving and earning virtual money. Players can earn money by visiting the Virtual Learning Lounge and answering trivia questions about banking basics such as budgeting, saving and managing money. The Learning Lounge content is derived from Wells Fargo's signature financial literacy program, Hands on Banking®.
The popularity of online role-playing games is staggering-there are millions of people participating in roleplaying games worldwide and the typical college student spends nearly as much time playing video games (10,000 hours by graduation) as they do in class," said Dr. Rodney Riegle of Illinois State University, developer and teacher of the world's first online Role-Playing Course. "I think that young people who've grown up on computers and video games will embrace the Stagecoach Island experience, which is similar to a video game but actually provides a better opportunity to learn, explore and socialize in an immersive and interactive environment."
British band Duran Duran is creating a virtual island within online game Second Life, on which the musicians will perform actual live concerts. The band is the first major group to announce a virtual world presence in the game. "Since we opened in May, we've sold over 2,000 items to people outfitting their avatars," Raz At the Ralph Lauren flagship store in New York, you can actually purchase items right from the window, using a credit card reader and on-screen keyboard. If you don't want to purchase right then, you can send the information to yourself via e-mail and complete the transaction at home.
Schionning, director of web services for American Apparel, was quoted as saying in a recent article in Ad Age about this phenomenon. In addition, shoppers who buy virtual clothes get 15 percent off the same items in real life. We've barely scratched the surface about what's happening in the retail space. There's more to come.
I'll close with this: There's a big difference between the advertising model and the experience model in terms of making an authentic connection with your audience. It's relatively simple to get people to talk about you; it's much harder to get them to buy you.
Where does "create a better experience" fall on your list of reasons to create your processes and procedures? Remember, your audience is accustomed to using technology in their daily lives. To speak to them in their digital language, to delight them and engage them, you must find relevant new technology that helps tell your brand story more effectively.