In late 2010, at Web 2.0 Summit Google VP of Product Management Susan Wojcicki spent just under 15 minutes presenting new services that Google had recently released (video here) to make the upcoming holiday experience a more enjoyable experience both for shoppers and advertisers. Although much of what she demoed was very interesting, the most telling bit of information was what she shared to set the stage.
According to her research, 42% of in-store sales are influenced by online shopping searches. I think you would agree that’s a pretty significant number, but even more surprising was what followed. Susan shared that 7% of purchasing is currently done online while 93% is still done at physical store locations. That number is quite staggering. Considering the billions of dollars spent online each year, there is still plenty of pie left for brick and mortar businesses to have their fill. That is why Google, Facebook, Apple, Paypal and others are lining their crosshairs on not just one target, but three!
The worlds of mobile, social, and location based technology is on course to converge into a powerhouse platform for businesses to use online to drive consumers to local businesses. Last year, Google alone says they say a 30 x increase in mobile shopping queries. As Susan subtly mentions, internet enabled phones enable shoppers to be both online and offline at the same time. This is why, in October 2010, Google made an important move by moving one of their savviest executives, Marissa Mayer, into the lead role as the Vice President of Location and Local Services. With Google since 1999, she filled the important role of Vice President of Search Product and User Experience. That move alone shows how important Google sees that 93% of the pie.
Last January Facebook, the name probably most closely associated with social, made a statement that mobile would be their focus for their platform during 2011. This of course ins’t to make it easier for us to update our status on the go. It is because they understand that, with such a strong social presence, their vulnerability lies in their ability to quickly enhance the location based services. This can only be done by making a rockin’ mobile platform that goes way beyond simply mimicking what the website does.
There are a number of influence points that the previously mentioned companies are trying to become your go-to resource for:
- Availability: Is the product available in the store right now?
- Proximity: How close is the desired product/service?
- Price: Which store around me has the best price?
- Transaction: Which option provides me the easiest, quickest shopping experience?
Social will play an ever increasing role in how guyers spend their money within that 93%. The influence that friend and families have to sway purchasing decisions is immense and grows proportionately as social media penetrates into mainstream society.
Here is a taste of what social can add to the equation:
- Social Recommendations: What do my friends have to say about this business, product or service.
- Social Reviews: What does the crowd have to say about the product or service I am interested in.
- Social Incentives: Get perks and discounts for social interactions like checking in, becoming the mayor, etc.
- Social Discovery: The experiences of my connections and others with similar interests become visible when I interact with things around me.
Much of what social can do to influence buying decisions has been happening for at least a couple years, but on your desktop/laptop computer. Always connected, location aware, mobile devices open the playing field in ways that marketers are only recently starting to understand.
Learning to be “Social-Loco”
So what’s next? Well today, May 5th, I will be attending “Social-Loco: the convergence of the social web, mobile and local-business“. Some of the best and brightest in the industry will be speaking including the previously mentioned Marissa Mayer from Google as well as executives from Groupon, Facebook, Microsoft, Foursquare and more. I am also happy to be participating as a panelist during the session titled “Back to the Future: reinventing brand loyalty”. I look forward to sharing some of the most insightful findings from the event. Stay tuned.