Retailer Daily: Retailers See Digital Media Value Outside Store

Discussion
Sep 01, 2010
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Through a special arrangement, presented here for discussion is a summary
of an article from Retailer Daily, an online publication of Watershed
Publishing.

Retailers are more inclined to see digital media as providing value
in driving store traffic than in improving the in-store experience, according
to a new study from RSR Research.

Results from The Customer-centric Store
2010
indicate that a majority
of retailers view new digital media (i.e., social networks and smartphones/PDAs)
as helpful in driving store traffic. Twenty-five percent of retailers see having
a presence on social networks as providing a lot of value in driving traffic
to the store, while 57 percent see it as providing some value. Only 18 percent
see a presence on social networks as providing little or no store traffic value.

Retailers
are less enthusiastic about the value smartphones and PDAs provide to driving
store traffic, but almost half still see at least some value (48 percent),
while 17 percent see a lot of value. One-third (35 percent) do not see any
significant value from smartphones and PDAs in driving store traffic, however.

On
the other hand, retailers are far less likely to see new digital media as offering
value once the customer is in the store. Only 10 percent of retailers see having
a presence on social networks as providing a lot of value in the store, with
33 percent seeing some value. Almost six in 10 (57 percent) see little or no
in-store value from social media for the store.

Retailers are only slightly more positive
about smartphones and PDAs once a customer enters the store. Twelve percent
see smartphones and PDAs as providing a lot of value, while 37 percent see
them as providing some value. More than half (52 percent) see no value
from smartphones and PDAs in the store.

RSR Research advises retailers that
both social networks and mobile devices provide substantial in-store value.
Customers already regularly use mobile apps to reference product information
and price, and as these apps become more refined, low-cost retailers in particular
will find themselves even further squeezed in price competition.

In addition,
RSR Research says as the proliferation of social networks enables shoppers
to preview what a particular purchase might mean in their particular social
circle both before and during the shopping process, a brand’s
ability to connect with that shopper may make the difference in converting
them to a loyal customer.

Discussion Question: Ultimately, will digital media prove more valuable as
a traffic driver or as
a means to improve the in-store shopping experience?
Do you see retailers currently emphasizing one area over the other?

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10 Comments on "Retailer Daily: Retailers See Digital Media Value Outside Store"


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Len Lewis
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Len Lewis
10 years 8 months ago

All I hear are people saying how valuable social networks are to retailers. Show me! Show me numbers on how much a grocery retailers’ sales have gone up specifically as a result of social network sites.

Of course it needs to be used. But let’s get real and keep the shelves stocked, the floor clean, perimeter departments appetizing and employees motivated. Social media is a tool much like a circular or FSI. It’s not going to replace the in-store experience.

Gib Bassett
Guest
Gib Bassett
10 years 8 months ago

One way to look at this research is to consider that, all else being equal, it’s a bit easier to implement new technology enabled marketing and demand creation efforts than it is to change the operational design of a retail store to accommodate new technologies. I think that is probably at the root of this distinction between excitement and interest around mobile “outside the store” versus “inside,” but there’s no doubt retailers need to begin considering how to integrate mobile into the in-store experience. Those who do will be better able to cope with consumers armed with product reviews and price comparisons in the palm of their hands.

Paula Rosenblum
Guest
10 years 8 months ago

Len, the respondents that formed the basis of this report (which I co-authored) were only 18% grocers and a total of 38% fast moving consumer goods. So the recommendation was really for retailers across ALL segments, not just grocers.

BUT…we do maintain the creating offers within the body of the store only improves the customer experience. It’s not a distraction. And we do believe that is true across all segments.

Dan Berthiaume
Guest
Dan Berthiaume
10 years 8 months ago

While this is purely speculative, I believe that short-term, mobile tech will mainly serve as a traffic driver, but will inevitably become a major source of in-store customer service and convenience. Watch anyone under 18 with a PDA and you’ll realize the generation(s) coming up live their lives in the digital space. As they become the dominant consumers, they will be surprised by any retailer that doesn’t offer substantial in-store mobile services.

Odonna Mathews
Guest
Odonna Mathews
10 years 8 months ago

We all have a lot to learn about digital media value and this research from a cross- section of retailers is interesting. It seems that having a presence on social networks is becoming more common but I don’t know that they equate to sales but rather to developing a relationship with the customer. Wegmans and Whole Foods are two examples of supermarkets using social media where consumers can share information and staffers can post tweets on various topics.

I am not as sure about the use of smartphones and PDAs to drive store traffic as it seems many consumers can’t keep up with all their emails and other communications as it is. But there is lots of experimentation yet to come as we learn about consumer preferences and habits.

Gene Detroyer
Guest
10 years 8 months ago

Dan Berthiaume, Editor, Retailer Daily is right. He says, “Watch anyone under 18 with a PDA and you’ll realize the generation(s) coming up live their lives in the digital space. As they become the dominant consumers, they will be surprised by any retailer that doesn’t offer substantial in-store mobile services.”

However, it follows that these future dominant consumers and heavy users of Social Media and very tech savvy are also the ones that focus their retail purchases on line rather than in store. While the Social Media tool for retailers will have great value because it establishes a one-on-one relationship, it will not drive the users to the store, but to their internet portal.

Herb Sorensen
Guest
10 years 8 months ago

Digital media outside the store is way advanced, ready to move to third or fourth generation implementations–and power. In store digital media (personal/interactive) is in its infancy, relatively. One part of the problem is, it’s obvious what needs to be done outside the store–get them to come to the store. It is a lot less obvious what to do with them after they have arrived. But that’s where the real gold is–but it may not happen right away.

John Bajorek
Guest
John Bajorek
10 years 8 months ago

Digital media has the ability to both drive traffic to the store and enhance the store experience. Based on recent mobile phone enhancements and the continued permanence of geo-based social media, in-store media will have an expanded role that ultimately will help to enable a more dynamic and customized experience for the shopper.

Social media will help to drive activity both to the store and in-store. However, retailers need to be careful that the digital media that they are leveraging truly provides the shopper/consumer with a benefit–not just another blinking light or annoyance in-store.

Gary Ostrager
Guest
Gary Ostrager
10 years 8 months ago

I believe we have to take the long view on this issue. As such, I doubt we’ve even considered likely digital apps that will enhance the in-store shopping experience. Therefore, if this were a question on an SAT exam, the right answer is “we don’t have enough information.”

What we do know is that new digital technologies and applications are exploding. I’m of the opinion that shoppers will not only be driven to the store through these applications, but will eventually be using the apps to improve and enhance their in-store shopping experience.

John Crossman
Guest
John Crossman
10 years 8 months ago

Every effort with digital media is worth it. Younger consumers are all about it and it is growing.

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