Brownstone Blog

Monthly Archives: May 2012

App Attack! The Retail Revolution Continues

Last year just before Christmas, Amazon the world’s biggest on-line retailer, sent a winter’s chill down the spines of retailers across the world when it called on its millions of customers to take to the shops with their smartphones and use the Amazon barcode scanner app to scan the prices on any three toys, electronics, sports equipment or music.

The Christmas present offered by Amazon was five per cent of each Amazon product in return for the bar scan. Their mission – to produce a competitor annihilating database of prices in the battle for the billions spent on retail goods every year.

Apps such as Amazon’s Price Check have been dubbed ”killer” mobile apps because they deliver real-time pricing information from other competitors whether they are a few doors away or on-line. For retailers, these phone and tablet apps mean they have to respond and offer similar prices to Amazon and other on-line retailers.

This can turn into a killer when you are supporting an actual bricks and mortar store and paying VAT or other taxes which many of these on-line retailers are exempt from,’ says Dave Jabbie. ‘With smartphone apps continuing in popularity, retailers have to respond.’

Price is of course the biggest fight-factor. ‘It will become intense as mobile apps continue their take-up,’ Jabbie predicts. Stores are launching mobile apps where customers can scan an item in a competitor’s store and get the comparable price at their own. ‘What we are looking at is something that can and will forever change the face of retailing.’

The problem is, as Jabbie explains, this creates an unstable environment in a market already under pressure from the global economic downturn. So, what can retailers, especially small to medium-sized businesses, do to respond?

‘First you have to take the fear out of these apps,’ Jabbie says. ‘Look at them as just one more way you can communicate with your customers. People’s phones are always with them. This presents us with a significant opportunity.’

‘If we look at how some retailers are responding, their mobile apps strategy isn’t about competing on price. If you are going to slash prices there is always someone prepared to go lower. There are emerging trends from the US where retail mobile apps already have a higher market penetration where retailers have declined to compete on price and instead use these apps to better their relationships with their customers. These are specialist retailers who understand their market and above all, what they have to offer. The result is they can make better use of their inventory because it can be varied across their channels – both on-store and on-line. These are where the opportunities lie.’

‘Retailers need to see these apps as a way of merging commerce with your social media. Contrary to popular opinion and many people’s fears, they open up the door to an old-fashioned personal relationship with your customers. The retailers who realise this will be the ones who emerge ahead of their competitors ten years down the app track.’

So – don’t fear the app. Embrace it. For more about the Brownstone Approach – call us.


What Social Media Means for Retailers – On Line and Off

Let’s face it, or should we say Facebook it – nowadays no matter what your business is, social media is an integral part of your business strategy – or should be. The result of all this liking and Twittering is of course that brands and their retailers not only have to compete for popularity in their stores – but also on the web.

There are five key social networks available to businesses – namely Facebook, Twitter, YouTube, Google+ and the newcomer on the social media landscape, Pinterest. So, who are the major social media success stories when it comes to retailers, which networks are they using and most importantly, why are they successful?

The number one retailer on Facebook is Victoria’s Secret which boasts 18.5 million fans. They are closely followed by US retail giant Walmart with about 15 million. Of the top 250 internet retailers, 97% of these are on Facebook.

‘If we look at a brand like Victoria’s Secret there is bound to be a high level of appeal across both sexes and all demographics,’ Brownstone’s Dave Jabbie explains. ‘Facebook continues to dominate social media and Victoria’s Secret lends itself to likes and shares. Even in tough economic times lingerie is a feel-good item and Victoria’s Secret understand their audience. You’ve only got to check their Facebook page to see that.’

When we look at Twitter, it’s another US retail brand – Major League Baseball which dominates with 1.9 million followers. It’s also the brand leader on Google+, boasting more than 600,000 followers. Retail channels on YouTube do not show numbers as large as the other social platforms, but Nike boasts the most subscribers with more than 200,000. Pinterest is still relatively new to the social media game, and it may be a format which is better suited to niche and specialist retailers. So far Nordstrom dominates the Pinterest landscape with more than 14,000 followers.

‘The interesting thing about retailers on social media is that certain industries dominate on each platform,’ Dave Jabbie reveals. ‘From the stats we know that apparel and accessories brands average 100,000 followers on Twitter yet computer and electronic retailers average only about 60,000. Yet – computers and electronics retailers dominate on YouTube.’

‘If you’re a retailer thinking about how best to utilise social media then what you have to bear in mind is that not all the platforms may be suitable. This is where an agency adept in social media strategy can help by directing you towards the ones that are – thus saving time and resources in the long term.’

Of course, successful social media for any business requires more than just choosing the right platform(s) to use. ‘For retailers it boils down to two things,’ Jabbie believes. ‘First, understand your audience or customer base. Second, think of your social media as an extension to your retail space – be that space virtual or the shop floor. When a customer enters that space you want them to have a good experience. Even if they don’t buy on this visit – if they enjoy the experience they will return to buy on another.

‘The same rules apply to social media. If you give them an experience they enjoy they will like you and keep re-visiting. Keep your posts engaging and above all – upbeat. The simple fact is that more posts get shared by users that put a smile on their faces than those that don’t. Showcase your good news –  product launch, special offers, sale and above all, invite people to become engaged with your brand – special offers for subscribers and people that share or like you may sound obvious but often it’s the obvious that gets overlooked. The fact is these things work.’