How can offline retail deal with ‘content to commerce’ problem
In my first article of this series, I mentioned that of the five phase of purchase (Search, Discovery, Order, Payment, Collection/Delivery), it is the search & discovery where offline retailers are losing consumers, and this exodus can be reversed to some extent by bringing back local inventory data on our mobile.
Here, I am not presenting any case for a binary outcome of any one side as winner and the other side as loser. Binary is the language of computers, real business outcomes are full of infinite possibilities.
Desktop web brought the far away world at our doorstep. Smartphones have the capability to bring the immediate world around our doorstep back in contention. Smartphones have some in-built tools like push notifications, geo-fencing capability which can make us interact more with the immediate world around us. There are also other consumer technologies which are built on top of mobile,and if used strategically they can complement services offered by offline retailers.
Livestreaming + Mobile + Social Discovery: the holy trinity of online retail
Most of the e-commerce sites have an integral relationship with blogs, affiliates, review sites (Amazon owns IMDB and Goodreads). The goal is to improve the online discovery experience. Even if these online tools are not directly integrated with main e-commerce site, most of it can easily be accessed online on another tab.This is an advantage which online retailers have by basic design of internet browser. Less the friction/time lag between discovery and delivery stage, more are the chances of transaction getting done. Offline retailers are struggling to provide this kind of seamless experience at discovery stage. In the words of NYU Marketing Professor Scott Galloway, offline retailers have ‘Content to Commerce’ problem to deal with.
Now, let us take a step back and think around present social discovery platforms. In this context, Pinterest is the one which occupies top-of-mind recall. Pinterest tastemakers have online celebrity status. Some of them have been enlisted by one of the biggest offline retailers, Target, as creator of their party merchandize. It is the starting of a trend where social discovery site stars are being lapped up by an offline retailer for its contents and promotion.This is one obvious way to relate content to offline retailers. But this is just the starting of linking online discovery with offline retail.
The beauty of the ever-changing technological landscape is that incumbents keep getting their version of Jon Snowmoment exactly when they are not expecting it at all. An old technology, sitting on top of a new platform, armed with a fast dissemination method stares at incumbents’ face and screams, “You know nothing, Jon Snow,” and incumbents keep looking in blank not knowing how to react. The technology which is staring at offline retailers’ face right now is livestreaming, while the platform is mobile, and the dissemination tool is social discovery app.
Livestreaming industry has long faced the problem of finding a perfect use case. Just like the reel version, where PiedPiper of Silicon Valley sitcom, the fictional data compression tech company, is presently looking to find a partner for its livestreaming product, and in the process straying to the left-hand path. The focus of livestreaming industry has always been on broadcasting live sport/music events, where issue related to piracy crops up every now and then.
In the last few months, integration with social messaging apps (Meerkat, periscope, InstaLively) has made this technology more democratized. Now the time is to take another leap forward and to link the mobile livestreaming technology with social discovery platform. Imagine a social discovery app with mobile livestreaming as a feature. Further integration of it as an API with hyper local discovery mobile app of offline retailer will suddenly open up the floodgate of content. Daily Deals, New Products, Limited time offers, Expert review, and User review -- all will be broadcasted live from a store by consumers & retailers. Commerce will get its content; content will get its commerce.
The Odd Couple: Goby Fish and Pistol Shrimp
We want the finest wines available to humanity. And we want them here, and we want them now!
This is a declaration made by Withnail during one of his drunken bout in British cult classic, ‘Withnail & I’. It also represents the requirement of new age consumers and millennials. We want it here and want it now is the chorus. In part 1 of this series, I had mentioned that just due to proximity, delivery/collection is the only leg where offline retailers come out as natural winner. But there is a huge difference in being in a winning position and winning.
Let us talk about another consumer tech innovation: On-Demand Delivery. In the deep sea, there is an odd couple: The Goby fish and The Pistol Shrimp. Pistol Shrimp builds the fixed asset that is, the burrow in which both of them live, and Goby Fish provides protection as Pistol shrimp is a blind creature. On-Demand Delivery startups and offline retailers have a similar kind of symbiotic relationship. In the US, Instacart and Postmates are partnering with Whole Foods and other retailers to make most out of this symbiotic relationship. On the other side of the Atlantic, Ocado and Waitrose both are prospering together in partnership since more than a decade.The ownership of consumer will always remain a subject of dispute but the mutual beneficial relationship will go on. Ocado and Waitrose, both sparred many times, but they are prospering together since 2002.
Between FDI (Foreign direct Investment) and FPI (Foreign proxy Investment), there are APIs
The next step for on-demand delivery startups like Grofers and livestreaming-based social discovery app will be to integrate their API to offline retailers. The only impediment is that offline retailers in India are not technologically ready to link these APIs with their mobile app. First, they need to bring inventory feed on mobile and then only integrating these APIs can become a possibility. All these integrations will create a seamless experience across purchasing funnel.
There is another advantage of API integrations. Indian retailers have long been dissatisfied with FDI restrictions. When foreign direct investment (FDI) is a constraint, other available option is foreign proxy investment (FPI). Bharti-Walmart tie up was an attempt in that direction. Offline retailers need to be more imaginative while thinking about FPI. Most of these on-demand delivery companies or social discovery livestreaming apps are being funded and also will be funded in the future mostly by foreign capital. If offline retailers can do ingenious partnership, these API partnerships will be their FPI. A large portion of FDI raised by e-commerce is getting spent on marketing and last mile reach. In that context, API of social discovery livestreaming app and on-demand delivery app funded by foreign players is a worthwhile FPI to aspire for. The only technical requirement is to develop capability to feed real time inventory data to main discovery app.
It is time for offline retailers to piggyback on less expensive consumer technologies to make every stage of purchasing funnel more engaging and efficient. They need to eschew their Zugzwang mindset where the only viable move is not to move. They need to move fast and adopt more consumer facing technology to remain relevant and competitive.
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