In the halcyon days of Mad Men, the consumer decision journey was a straight line from a billboard or TV advertisement to the store, with possible detours through radio and print. With the advent of mobile devices, e-commerce, and the Internet of Things, that journey is starting to resemble a random walk, and it will become more so as technology evolves.
Today, the consumer decision journey includes stores, showrooms, retailer and manufacturer websites, consumer websites, and social media (at least). Given the vast amounts of money spent on these locations physical and virtual, it’s remarkable how little attention is paid to the quality of product information provided to the consumer. You can’t possibly get the value of that enormous spend unless you are offering effective product information online.
Retailers need far more than a basic product description to make virtual shopping as compelling and easy as going to the store. They also need much richer product information if they are to exploit the unique opportunities of e-commerce, such as endless aisles. Authoritative product information is the fundamental element that ties these complex interactions between consumers, retailers and manufacturers together. E-Commerce is growing explosively in a number of very large markets – but if it is to achieve its full potential, electronic product information badly needs be optimized.
In the real world, the shopper has almost perfect, multi-sensory knowledge of the product they are buying. They can see it, smell it, touch it, pick it up, and in some cases, taste it. The physical world is also a great place for the unplanned discovery of new products. Until immersive virtual reality becomes standard consumer technology, an online shopping trip will never be the same as going to the store. In the meantime, retailers have to make the virtual shopping experience as compelling as possible.
In order to do that, it’s not enough to remove the negative aspects of physical shopping – having to go to the store, getting your goods home, queueing at the checkout, as well as sometimes forgetting the shopping list and rushing up and down crowded aisles as the store is about to close. Retailers need to offer compelling alternatives to the positive experiences of real world shopping such as sensory engagement, meeting friends, and the ability to ask assistants or other shoppers for help and advice.
Why do bricks-and-mortar retailers do so poorly when there are examples such as Amazon and Alibaba to hand? Largely because e-commerce is still a modest fraction of their total sales. Unfortunately, this is a catch-22. If they don’t invest more until e-commerce becomes a much larger part of their business, it will be a long time before e-commerce becomes a much larger part of their business.
Retailers that fail to address these challenges and do not cultivate a stronger digital relationship with their customers may one day not have a relationship with the consumer at all, but with their fridge, or another intelligent assistant that puts its humans’ wants out into the market place to be bid on and fulfilled.
Bridging the digital / physical divide
Effective solutions to these problems will allow retailers not merely to catch up with but to go beyond the physical world to the creation of virtual souks of specialty and niche products.
The first step in bridging the digital divide is for retailers to require manufacturers to create compelling digital “packaging” for their products. Obviously, manufacturers are working on this already – it is entirely to their advantage – but not all manufacturers are created equal in this regard. How important is it? Sixty-seven percent of shoppers are put off choosing a product if no image is available. Multiple images of a product can generate a 40% lift in sales, and out-of-pack shots that provide shoppers with images of the product in use can deliver a 33% uptick. Interactive images (with zoom, pan, tilt, etc.), advertising shots, serving suggestions and videos and other media (product preparation, recipes using the product, podcasts, etc.) are rapidly becoming entry-level requirements for product listings.
In addition to images, retailers should require that a manufacturer provide a full array of electronic marketing copy ready to be deployed as needed: “How Tos,” FAQs, “Why buys,” information on awards and accolades, along with the now-standard information such as nutrition, safety and regulatory compliance.
When making purchasing decisions, consumers increasingly listen to what others have to say. Nielsen’s Global Trust in Advertising survey identified recommendations by friends and family as the most trusted source of product information (83% of respondents), and consumer opinions posted online as the third-most trusted format (66% of respondents). A consumer’s electronic due diligence for a purchase will increasingly include consulting peer groups on social networks and consumer and manufacturer websites, as well as the e-commerce site itself. Retailers need to recognize that social media is now, effectively, a kind of advanced product information, and they should make it possible, as the online “pure plays” have, for customers to have the easiest possible access to it, as well as to write reviews on their own site. This is a must for less well-known retailers.
Digital Opportunities – and the challenges they bring
It’s not all about problems. But even the opportunities the virtual world offers come with their own challenges. Sixty-six percent of consumers are willing to consider a broader range of products for purchase than they were 10 years ago. This represents a significant e-commerce opportunity for retailers, but to exploit it they need to improve the discovery capabilities of their websites. Even fully digitizable products, such as books, films and music, need to be both findable and discoverable by consumers with access to an essentially boundless catalogue of products.
This is a delicate balance. The temptation is to create an effectively endless aisle that will allow consumers to explore their newfound open minds. However, for hyper-assortment to work, the consumer has to be able to find the product they want, whether they were looking for it or not. Simple-to-use product taxonomies, backed by sophisticated treatment of synonyms and disambiguation, good search capabilities and some form of recommendation engine are critical. All of which, needless to say, is based on rich, high-quality product information.
There are huge opportunities in online retail, but legacy retailers looking to move online face significant issues. One of the largest is of their own making. For understandable reasons, legacy retailers set up dedicated e-commerce arms independent of their bricks-and-mortar organizations. Unfortunately, their efforts have been governed by Conway’s law, which states that organizations design software systems that reflect their own structure. As a result, most legacy retailers have separate e-commerce and bricks-and-mortar product information systems, containing different product codes and descriptions. As noted above, the lack of product information consistency is a major source of dissatisfaction for consumers. It’s crucial that retailers have a single system for managing products both on- and offline. Some retailers are already making great strides in bringing disparate product information systems together in an omni-channel way. The Association for Retail Technology Standards’ industry data group is also extending its models to cover both e-commerce and bricks-and-mortar representations of products in a single system, though adoption is currently limited. There is more to do.
The omni-channel marketplace has come a long way from its origins in the e-POS revolution, when a barcode plus a 40-character description was an acceptable digital representation of a product – but for most retailers not far enough. Any discrepancy between the electronic and real world product experience is a major cause of customer dissatisfaction. Poor or absent information is pretty much the equivalent of an out of-stock-in the physical world. And comments such as “product not as described” or “it’s not the same packaging online as in the store: Is it the same product?” can be the death knell of sales and reputations.
In the virtual world electronic product information is the avatar for the product. In a sense it is the product. It is solving the challenges of representing products effectively in the electronic world that holds the key to the success of commerce in the future.
Acknowledgements: Thanks to Mike Nickituc, Karen Worton Steve Jones and the members of the Brandbank team for their input. John Naduvathusseril, Ken Rabolt and Paul Smith contributed technical insights and helped in drafting this document.