Source : nytimes.com
Just a few years ago, the retail industry was deeply shaken by a growing trend in store browsing — shoppers wandering around the aisles with their cellphones, surveying the merchandise while looking online for somewhere else to buy it for less.
Some retailers explored blocking Internet service in stores. Others swapped out bar codes to make them incompatible with their competitors’. But ultimately, most major retailers decided that many customers would be on their phones regardless of what stores did — so they decided to get on their customers’ screens.
With online retail competition increasing, nowhere is that frantic embrace more evident this year than in the parade of partnerships and projects traditional retailers have formed with digital companies, many of them for the holidays.
“We want to be where the consumer is,” said Gregg W. Steinhafel, chief executive of Target, in an interview.
“I think it’s like anything that hits you with a ton of bricks, it requires you to step back and say, ‘O.K., it’s very sobering, now what does this mean for us?’ ” he said. “We ultimately concluded that if that’s the way the guest is going to live and shop, then we want to be a showroom. And we love showrooming — provided we can capture that sale.”
For Target and many other retailers, among this season’s favorites is Pinterest, which Casey Carl, president of multichannel at Target, described as “one of the social platforms where it’s actually not only about sharing.”
“It’s not just about, ‘Hey, look what I had for dinner!’ It’s about products,” he said.
There are holiday-party-planning boards for Target Red Card holders. Nordstrom, which already released its holiday catalog on Pinterest, says it will station signs in its 117 full-line stores that highlight some of its popularly pinned wares.
Pinterest itself is starting a new feature on Wednesday, a “Holiday Gift” category that will not only offer shoppers gift ideas but will give retailers yet another display window — this one online — for their items.
“Pinterest is a service about connecting with things, things you have, things you like, things you want,” said Steve Patrizi, head of partner marketing for the nearly four-year-old company. “So for retailers, it’s a no-brainer. Go where people are already looking for things.”
But as the title “multichannel” or “omni-channel” coordinator might suggest, most major retailers are not linking themselves to just one social media site.
Walmart is leveraging Facebook and Google. Toys “R” Us is pushing hard on YouTube. Sears is on Instagram and hosting holiday parties on Twitter.
According to comScore, a company that collects and analyzes online data, Pinterest has plenty of competition. Compared to its more than 43 million unique visitors in October, Twitter had 64 million, and Facebook towered over its neighbors with more than 178 million unique visitors.
And while shoppers referred from Pinterest to retailers spent more, according to IBM Digital Analytics Benchmark, those referred from Facebook were buying more frequently. During a four-week period in October and November, customers referred from Facebook spent an average of $54.64 per order, compared to an average of $123.50 per order from Pinterest, IBM found. Referrals from Facebook converted to sales at nearly four times the rate of Pinterest referrals.
“Last year we would’ve used three or four social platforms,” said Jeffrey J. Jones II, chief marketing officer at Target. “This year we’ll use seven or eight.”
Nicolas Franchet, head of retail and e-commerce for Facebook, said that while the company did not disclose what portion of their advertisements came from retailers, it was an important area for Facebook, which worked with retailers big and small.
“If you find somebody” we aren’t working with, Mr. Franchet said, “let me know.”
Walmart, for example, will use Facebook to announce its local store manager’s special on Black Friday. Those deals will vary by location, and will be posted on each store’s individual Facebook page, like Walmart South Boston, Va.
Walmart is also partnering with Google, and that too will have a local bent, incorporating inventory at nearby stores into Google search results. If you search for “Weber grill,” Stephen F. Quinn, chief marketing officer at Walmart explained, Google will tell you if your local Walmart has Weber grills in stock, and it will tell you that store’s location. Walmart started experimenting with this process earlier this year and has increased its efforts for the holidays.
“We have our own mobile app, but we’re also pursuing mobile with Google, we’re pursuing mobile with Facebook,” Mr. Quinn said. “For the local component, they’re really critical for us to be able to execute.”
Pinterest does not track how many retailers use the site — it is an open platform where users can set up boards however they like — but in addition to its focus on “things,” its appeal to those companies at the moment also extends to its price. It is free. The company has just started experimenting with promoted pins that might eventually be sold as ads, but Pinterest is not hurting for money. Last month, the company raised $225 million, which it will use to expand and build up a product advertisers will want to buy. Pinterest said its usage outside North America had grown 125 percent since January and its usage on mobile devices had grown 50 percent, becoming more than 75 percent of all usage.
As for its appeal, the site also has a heavily female user base, an important demographic for retailers. But with women making up 75 percent of the site’s visitors and 93 percent of total time spent on the site, according to comScore, it would make sense for retailers to broaden their partnerships beyond even one as fast-growing as Pinterest.
A recent survey conducted by Deloitte found that a huge amount of holiday shopping activities would be done on smartphones this year, if not the actual buying itself. The survey found that about two-thirds of smartphone owners planned to use their phones during holiday shopping, but primarily to find store locations, compare prices and look for product information.
Gartner, an information technology research company, does not envision a major shift caused by mobile purchases in the near future. It projects physical store purchases in the United States will still cover about 85 percent of all purchases in 2015.
“We see mobile more as an informational channel than a transactional channel,” said John Davison, an analyst at Gartner. “That will change over time, but it will take some time.”
For all the excitement and holiday glitter retailers are throwing into digital partnerships, Mr. Davison emphasized that these partnerships were still young. Like all experiments, he said, many of them will not last.
“Digital is held to a very high standard in terms of measurability,” said Julie Krueger, industry director of retail at Google. “If it doesn’t produce results, they’ll figure out another place to spend their money.”