8 Shopper Marketing Predictions that Might Even Come True

Crazy Future PredictorEveryone seems to have their obligatory list of predictions for the new year, so here are 8 things that I expect to see in the shopper marketing space over the next 12 months.  A few of them might even happen.

1. Mobile Shopping Becomes Relevant

The penetration of mobile phones is huge, and we are experiencing a major shift to smart phones.  60 million American’s already own a smartphone, and by the end of 2011, over half of all Americans will own one.  Add to that the 12 million iPads sold in 2010 and another 25 million tablets that will sell in 2011, and you have a large installed base of powerful mobile devices.  A significant portion of the hopping that currently happens on computer browsers is going to shift to mobile browsers.  No one is going to deploy a new eCommerce platform in 2011 that doesn’t cater to mobile shoppers.

But mobile commerce is going to pale in comparison to the amount of sales that will be generated by shoppers using mobile devices to help them make purchase decisions inside of brick and mortar stores.   Shoppers are going to use mobile devices to find out of if a product is in stock, if it’s offered at a fair price, if it has decent reviews, and they are going to download mobile coupons before they buy.  2-D barcodes are going to become commonplace.  In the US, mobile phones will become a primary shopping assistant for at least 1 in 4 shoppers.

Store employees are going to use mobile devices to help them sell, and provide customer service.  Look for wireless handhelds to replace ID badges for many retail employees.  Retail employees will use mobile devices to clock in, manage their daily tasks, communicate with co-workers, manage customer queues, perform inventory management, serve as their customer database, look up product info, and conduct transactions.

2. Mobile Phones Will Become Digital Wallets

Mobile Payments will be a major battleground in 2011.  Major financial institutions, credit card issuers, wireless carriers, Amazon, eBay, Facebook, Google, and many others are going to fight tooth and nail to own a piece of the the mobile payment ecosystem.  Mobile Web Payments (your wallet in the cloud) will probably get the early traction in 2011, but in the long run will probably lose out to direct mobile payments via some flavor of contactless technology (such as Near Field Communications/NFC).  Don’t expect to see a clear winner emerge by the end of 2011 but a majority of Americans will be conducting at least some in-store transactions from their mobile device by the end of the year.

3. Shopping meets the Social Graph

Peer recommendations have replaced brand as the number one influencer of purchase decisions.  In 2011 marketers will provide shoppers with the tools to connect with their social networks while they are making purchasing decisions.  Amazon already has a beta integration with Facebook, a handful of brands offer buy-now functionality on their Facebook pages (so called f-Commerce).   Shopping has been a social activity since the first market opened, and the integration of social networking and shopping is a logical evolution.

4. Reverse Commoditization

2011 is going to be the year that competitive pricing and product inventory information becomes ubiquitously available on the web.  Using your mobile device to find the nearest store that has an item in stock at a competitive price, is going to be as common by the end of 2011 as using your mobile phone to find a Starbucks was in 2010.

Thanks to efforts like Google Local Availability, and e-Commerce retailers syndicated data feeds, we’re all going to know the lowest available prices for anything we might want to buy.  This ubiquitous data is going to drive retailers to adopt a single pricing model across all channels (no more pricing variation between stores and the web).  Pricing variations amongst different channels from the same brand, are a source of major shopper dissatisfaction, so look for some retailers to try and win mind-share by aggressively promoting their move to a single pricing model in 2011.

This of course means that retailers are going to have to compete less on price and more on the overall shopping experience. This isn’t all bad for retailers however, as they will now have real time data on competitive pricing and availability.  Don’t be surprised to see some retailers adopting supply and demand strategies that rapidly optimize pricing based on local supply and demand.

5. Digital Coupons

Digital coupons are just too good to pass up for product marketers.  Instead of simply giving margin away to current customers, (as paper coupons do),digital coupons can be distributed with laser focus.  Deal-A-Day sites, location based marketing programs, social networked distribution, next generation customer affinity programs,  and much more.  There is really no limit to how creative marketers can use digital promotions redeemed from a shoppers affinity account or mobile device.  Mobile payments and location based marketing campaigns will allow brands to get into the affinity program business, we might even see some multi-level marketing tactics applied to digital coupons were your discount goes up the more you get your friends to participate.   With pricing information ubiquitously available, promotions will become the most important tool in the shopper marketing arsenal.

6. Ownership 2.0

Two generations ago, no one could have imagined leasing a car; today it’s the most common automobile financing model.  Why pay for the lifetime value of something when you only intend to use it for a portion of it’s useful life?  Some of us are going to always want to carry the latest shiny gadget (Verizon iPhone anyone?), while others will happily buy that 6 month old, one generation beyond device for a fraction of the original price.  Refurbished product has already become a significant part of the supply chain, and the reverse logistics necessary to capture previously owned products and put them back on the market are evolving rapidly.   Many retailers have quietly started offering guaranteed buy-back programs, through companies like www.techforward.com.  Add to the mix a large number of frugal post-recession and environmentally conscious shoppers, and the time is right for a major retailer to start promoting a leasing or guaranteed buy-back model.  I expect to see a back-back offer featured in at least one national campaign and  prominently in visual merchandising.

7. Shopping Environment Goes Digital

Physical retail stores are going to get a lot more interactive.  Many retailers will deploy 2D bar codes on fact tags throughout the store.  For the 2011 holiday season we’ll see pilots of NFC enabled fact tags to enable easier integration with mobile applications in the physical store.  Retailers will start to look at the huge labor cost of frequently printing and installing tens of thousands of fact tags every week (or every day) across thousands of retail stores, and will start to deploy digital fact tags based on some form of low-power electronic paper displays.

Retailers are going to continue taking products out of their packaging (product jail) and let shoppers try them in the store.  Displays will be designed to help shoppers see how well products interact with each other.  As physical retailers feel more pressure from increasing e-commerce and m-commerce sales, we are going to see a lot of efforts to improve the shopping experience and emphasize the fun and social elements of shopping in a brick and mortar store.

Retailers will start to deploy in-store technologies that enable micro-geo location capabilities, and thus be able to market to shoppers based on their specific shopping behaviors within the store.  ShopKick, Nearbuy, ZuluTime, and others are almost there.

Behind the scenes, 2D bar codes, camera based people meters, NFC solutions, and interactive displays are going to start collecting a huge amount of data that is going to enable physical retailers to analyze and optimize the conversion rate of their shopper traffic just as webstore marketers have been doing for some time.  We may even see retailers load their traffic and sales data into traditional web analytics tools. The mobile phone is going to become the equivalent of a websites “cookie”, to help personalize the shopping experience for individual shoppers.

8. Retail POS Enters the 21st Century

A surprising number of retailers are still running antiquated POS solutions.  Most of these DOS or Windows based systems consist of layer upon layer of patches and upgrades intended to enable antiquated architectures to support the latest business requirements.  As unwieldy as many of these system are, their hasn’t’ been a compelling ROI to upgrade, particularly given the economic uncertainty of the last few years.

2011 will bring a number of new justifications for retailers to upgrade to new POS platforms.  Mobile Checkout, Mobile Payments, Digital Coupons, and the need for accurate perpetual inventory systems will drive demand for new POS solutions.  Retailers that have a webstore and physical stores will want  to support cross-channel logistics (buy online / pickup in-store, ship from store, etc…) that require POS systems with more robust business logic.  And many retailers are going to want POS solutions that offer suggestive selling, CRM, and clientelling features to help differentiate their shopping experience.

As a result 2011 will see some retailers start to make significant new investments in POS solutions. These solutions will move the business rules from the local hardware to in-store (or centralized) servers and be based on web services.  Cross-Channel retailers will look to leverage the same infrastructure for their webstores and their POS solutions.

So those are some of the key trends that I’m looking forward to watching in 2011.  As you can see, I’m expecting it to be a pretty transformational year in Shopper Marketing.  Am I too optimistic?  Did I miss anything important?  What do you expect to see in the coming year?


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