The Digital Commerce Opportunity

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CONTENTS HELLO 3 GOODBYE ECOMMERCE 4 THE CHANGING CONSUMER JOURNEY 5 AWARENESS TO PURCHASE IN ONE CLICK

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CASE STUDY: PURINA SPAIN 7 THE MOBILE CONSUMER 8 MAKING CONSUMERS FEEL SPECIAL 10 SMARTER TRANSACTIONS 11 SO WHAT’S NEXT? 12

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HELLO FusePump is an award-winning technology agency. Basically, we are digital marketing geeks.

We believe that digital will soon play a role in every single transaction, making sales from any channel attributable to marketing activity. Through our data, software and people, we help brands and retailers make the most of this “digital commerce” opportunity.

But what do we mean by “digital commerce”?

And why is it so important?

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GOODBYE “ECOMMERCE” “Ecommerce” is no longer a useful term. “Ecommerce” implies transactions that take place on websites, following the old view of the marketing funnel. It ignores the myriad digital touch-points involved in a buying journey, and the huge changes that have occurred in the consumer’s path to purchase.

Today, almost every purchase involves at least one digital interaction, but these don’t always happen on a merchant website, or at the transaction stage, or on a desktop computer.

At FusePump, we believe we need to start using a new phrase: “digital commerce”.

Digital commerce encapsulates the countless ways that today’s always-on, cross-channel, savvier-than-ever consumer engages with a brand, wherever they may make the final purchase. Digital commerce relates to any digital interactions involving consumers and products that ultimately results in a sale, either online of offline.

Deloitte claims that 64% of purchases will be digitally influenced in 2015. We believe that 100% of purchases will soon involve some kind of digital interaction – that every transaction will be impacted by digital.

Marketers are certainly beginning to understand that transactions alone (and the “final click”) don’t tell the full story – and that the smart application of technology can help to create a better and more measurable consumer experience.

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THE CHANGING CONSUMER JOURNEY The traditional ‘marketing funnel’ or ‘path to purchase’, if it ever really existed, is long gone. The new purchase journey, moving away from a linear Awareness > Consideration > Purchase > Loyalty pattern, is more complex, more ‘selfservice’, more consumer-driven, and taking place upon more and more platforms, channels and devices. And it’s certainly not always a funnel.

Every purchase journey is now littered with digital interactions, and this is only going to escalate as we enter a world of ‘wearables’, digital vouchers, contactless and mobile payment, scanning technology and, let’s be honest, plenty more that we haven’t even thought of yet. The digital marketing channels we know and love are also changing their models to make the purchase process faster – think of the updates to Google Shopping to enable one-click buying; social media channels getting in on the commerce action; affiliate marketing becoming smarter and slicker.

In terms of adopting digital commerce, 73% of respondents in Salmon’s recent study said that digital commerce is important to their industry now and even more so in the future. Indeed, the luxury sector predicts an average of 61% of all sales will be attributed to digital channels by 2020.

There are more opportunities for retailers to innovate, connect more deeply with consumers, and transform the way retail operates. Savvy retailers are looking to digital opportunities as a way to “widen the funnel” – to focus more attention on the pre-transaction stage. For example, the creation of shopping list apps that allow customers to build a digital basket before they set foot in a store.

“We’re officially in a world where the largest retailers will also become massive media platforms – both as a way to optimize the experience for the shopper as well as capture additional share of brand spend. This will completely change the dynamic of the FMCG industry when retailers behave more and more like technology companies than a traditional customer. With so many options for conveying your brand’s narrative across multiple consumer touchpoints, a sub-standard non-seamless experience is simply no longer acceptable. Innovation at the point of decision is crucial as consumers continue to have high expectations on frictionless experience… getting whatever they want, whenever they want it.”

STEVE MADER VICE PRESIDENT – DIGITAL RETAIL INSIGHTS, KANTAR RETAIL

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AWARENESS TO PURCHASE IN ONE CLICK Social and lifestyle websites and apps, such as Polyvore, Grabble and The Net Set, are combining content (often editorial, sometimes visual) and commerce by letting users click to purchase, or share and save featured products from third party retailers. Consumers can now discover and buy products through platforms that also offer personalised recommendations and communities around brands.

Indeed, ‘shoppable content’ and ‘social commerce’ have drastically reduced the proverbial distance between ‘awareness’ and ‘purchase’ – whether through ‘Buy’ buttons on Twitter, Pinterest or Facebook, or connecting the dots between Instagram and product pages. Brands can now monetise their presence on social sites rather than just using them for branding opportunities.

Similarly, understanding the behaviour of your consumers – and having a handle on your product inventory – means you can present recommended items at many points during a website visit. The ‘You may also like’ suggestions, which can be added in the right size in one click, form a great example of how consumers can be taken from ‘awareness’ to ‘purchase’ extremely quickly.

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CASE STUDY: PURINA SPAIN Many brands don’t have ecommerce websites, but that doesn’t mean they can’t capitalise on the shoppable content trend.

Nestlé brand Purina, for example, has added call to actions to its product pages to shorten the purchase funnel – without selling directly. Using FusePump technology, they can deploy lightboxes across their site, showing relevant Purina product offers from retail partners.

Instead of visitors leaving the site to shop (and potentially buy from a competitor), Purina closes the loop by tracking them through to a partner site to complete the transaction.

Brands that do have ecommerce capabilities must ensure that, once a consumer is ready to purchase, they can do so easily. We have been consulting with some top FMCG brands on how to improve the checkout process and the mobile user experience.

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THE MOBILE CONSUMER When we look at all the powerful ways that consumers can use digital throughout their purchase journey, it’s not all new stuff. Remember showrooming? Giving people the internet on their phones meant they could stand in a shop, looking up a product on the internet – often to see if they could get it cheaper somewhere else.

Fact: 84% of smartphone shoppers turn to their mobile phone to help them shop while in a store. And a third of shoppers use their smartphones to find information instead of asking store employees (Google). Apparently we now trust our phones more than the people employed by the company to help us.

But this mobile revolution presents a great opportunity for marketers. Mobile communications are personal and intimate (it stays in your pocket, after all). Indeed, a study by Toluna found that 48% of the online shoppers in the UK buy stuff while in bed; 11% do so from the toilet. 11% admitted to shopping online whilst dining or drinking out. Apparently, 70% of UK smartphone users check their phones as soon as they wake up. In the US, 2% have purchased online at a funeral, according to eMarketer and Mastercard.

However, targeting the ‘always-connected’ consumer is difficult: retailers are not just competing with each other, they are competing with all the other activities that mobile and tablet users engage in. The shopping experience on mobile is still not great from many retailers – making this a rewarding and straightforward process for consumers is a crucial task. The rewards for getting it should be obvious. Salmon’s recent study found that 89% of organisations have experienced benefits as a result of mcommerce, with 57% agreeing that it will be vital in driving revenue in their organisation.

“The growth in mobile device (smartphones and tablets) usage for online shopping has been remarkable – the penetration of mobile sales as a percentage of overall online sales rose from 0.9% in 2010 to 37% in 2014. This helped to revive growth rates for online retail – which appeared to be in steady decline until mobile sales took off and pushed them up again – providing easy web access for greater numbers of people as well as extending the contexts in which they were able to browse and shop. Our latest mobile penetration data (Q2 2015) revealed that 42% of online sales are completed through mobile devices and 60% of visits.”

ANDY MULCAHY EDITOR, IMRG

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Could retailers help customers find products - and enjoy a ‘scenic’ walk?

As mentioned, the buying experience on mobile must be quick. It’s worth designing landing pages not only with different screen sizes (breakpoints) in mind, but use cases. People checking deals on the move may not have time for the finer details, so brands could trial using different calls to action – instead of ‘more details’ on a mobile device, users are presented with ‘click to call’.

Finally, mobile offers the chance to be creative with different data sources, combining information on location, preferences and shopping behaviour to offer a unique (and entertaining) user experience. If you are showing local stock information, for example, why not display the quickest or most pleasant route to your store for your mobile customers?

With moves towards using the mobile phone as a form of payment, marketers should be assessing how they can make this technology work for them in terms of joining up online and offline behaviour, browsing versus buying behaviour, and customer loyalty schemes.

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MAKING CONSUMERS FEEL SPECIAL ‘Targeting’ and ‘personalisation’ are buzzwords that aren’t new to 2015 (or the decade). But it’s ever easier (the technology exists if you know where to look – and you have a handle on your product and customer information) to target the right people with the right product adverts – increasingly, at the right time, thanks to programmatic media buying.

And this is possible not only while they are browsing online, but while they are in your shop and logged into Facebook, or Googling something else, or using your app or your free in-store WiFi. Think of the power of offering loyal, highspending customers their favourite coffee as soon as they walk into the store.

Perhaps you can let them check-in to win prizes, scan barcodes with their phone to see more information about products (such as reviews, ingredients, spec or high-quality editorial content from the brand or retailer), maybe even using a virtual browser to actually see information come to life in front of them… and then pay for their digital basket at the checkout without going to the effort of actually filling a real basket with stuff. Of course, they can also be targeted with marketing when they are out and about, perhaps near the shop in question, thanks to iBeacon technology.

Coffee chains could enhance their loyalty offerings by letting consumers pre-order their favourite

Digitised loyalty cards and referral schemes also help with the post-transaction phase, when you hope to lure them back in. And with NFC (near-field communication) technology built into the consumer’s new trainers, the digital journey may never really end.

Salmon’s Head of Grocery Tim Reay agrees, and sees digital channels providing the perfect platform for customising the customer experience in a way physical stores cannot facilitate. “Online represents a return to the days of the corner shop where the shopkeeper knew what you liked and pushed your favourite products to you as and when you visited.

Personalisation is also supporting operational sophistication, using customers’ shopping history data to dictate how much time and space are allocated per delivery vehicle, encouraging significant cost savings.”

Of course, there are still challenges. The holy grail of a ‘single customer view’ may be hard to find, but surely a workable solution cannot be far off.

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SMARTER TRANSACTIONS Most transactions in a shop usually rely on EPOS – electronic point of sale. Digital is involved, just in a very basic and not very joined-up way. It’s a bit strange that this isn’t properly connected with other digital touch-points, although huge strides are being made in this area. For example, online payment processers such as PayPal, Stripe, Square (started by Jack Dorsey of Twitter) and iZettle are growing in popularity.

Meanwhile, innovations such as ApplePay, SamsungPay, AndriodPay and GoogleWallet are letting customers pay with their mobile phones (or watches) at a growing number of retail locations. According to Gartner, the market for mobile payments will be worth $720 billion (in transactions) globally by 2017, up from roughly $235 billion in 2014.

Worldpay predicts that more payments will be made via digital wallets than via credit cards by 2019.

As payment becomes inextricably connected with consumers’ mobile devices and wearable gadgets, retailers can start to marry up voucher codes, product recommendations and basically loads more data than traditional point-of-sale – expect to see more iPads than pin pads in your local high street very soon. All of this information taken together should help retailers better understand their customers, and use these insights to create that all-important hyper-personalised shopping experience.

Opted-in customers of a restaurant could receive offers from partners that they can buy via the same method.

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SO WHAT’S NEXT? Using your heartbeat to identify yourself at a bank? Paying for stuff with your FACE? Certainly TV, with the on-demand consumption model taking off, will be serving up ads that are as relevant and targeted as online ads.

Technology has allowed brands and marketers to be MORE creative, if anything. While old-fashioned advertising was driven largely by the creative alone, today’s complex marketing landscape and smart adverts – served dynamically, personalised, optimised for specific users, and appearing on a whole host of new channels – are being dictated by what’s possible technically. But the most successful messaging will be where creative ideas meet the intelligent application of technology.

ROB DURKIN CEO, FUSEPUMP

“Over the next 10 years there’s going to be more change in retail than in the last 50,” David Roth, chief executive of WPP’s shopper marketing arm The Store, told delegates at the “10 innovations that will revolutionise retail” SxSW panel.

In order to move with the times, brands need control of their data, so they can use it in any marketing application – quickly. The ability to be agile is key, allowing brands to stay up-to-date and take advantage of new consumer channels and innovations. The more data you have to hand, concerning your consumers and your products, the better able you will be to use it in an efficient way.

The Direct Marketing Association found that revenues generated by data-driven marketing grew for 45.7% of US marketers between Q1 and Q2 2015, with 9.0% saying they grew significantly.

eMarketer predicts that £8.1 billion will be spent across digital platforms in 2015, accounting for 50% of the year’s £16.2 billion total ad spend.

More and more transactions are digital or digitally influenced. Understanding the importance of digital interactions will let you acquire more customers, increase sales, improve brand loyalty, gain better insights on your consumers, and enhance customer satisfaction.

The important thing to remember is that “digital” doesn’t mean “through your website” – the way your marketing channels, selling partners and bricks and mortar stores work with emerging technology will be just as important as any improvements you may make to your brand website.

Good digital commerce means using creative in a data-driven way and data in a creative way, to make shopping easier and more fun. And who doesn’t want that?

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About FusePump FusePump is a strategic partner to brands, helping them understand and apply technology to succeed in digital commerce. Our core area of expertise is data extraction. We gather product information from retailer websites, and then create validated, optimised data sets, which brands can use in a variety of ways across their business.

We work with around 70 clients – from retail, travel, fashion and telecoms to FMCG and luxury goods – to help them use this data wisely and creatively. Whether we provide optimised product data feeds for paid search or affiliate activity, to display real-time product offers in marketing assets or for pricing intelligence, our focus is on using this data and the appropriate software to help brands make sales.

FusePump is based in London but we work across more than 30 markets worldwide. We were recently acquired by WPP though the Wunderman network, which has 170 offices in 60 countries worldwide.

About WPP WPP is the world’s largest communications services group, with billings of nearly US$76 billion and revenues of nearly US$19 billion. Through its operating companies, the Group provides a comprehensive range of advertising and marketing services. The company employs over 188,000 people (including associates and investments) in more than 3,000 offices across 112 countries. WPP was named Holding Company of the Year at the 2015 Cannes Lions International Festival of Creativity for the fifth year running. WPP was also named, for the fourth consecutive year, the World’s Most Effective Holding Company in the 2015 Effies, which recognise the effectiveness of marketing communications.

TO FIND OUT HOW MORE ABOUT OPPORTUNITIES IN DIGITAL COMMERCE, SPEAK TO US TODAY

© FusePump January 2016

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