It's all E-commerce: How the Social, Local, Mobile Web Affects Sales Online and Offline

Hi everybody, and welcome to today's Biznology digital marketing webinar. My name is Frank Reed. I'm one of the bloggers here at Biznology. I'm also the managing editor of the Marketing Pilgrim blog, which is currently number 11 on the Ad Age Power 150. And I'm also the director of sales for the EdgeWorks Group, which is a boutique interactive agency based in Irvine, California. Today, however, you'll be hearing from Tim Peter. He's also one of our Biznology bloggers, and he'll present It's All Ecommerce: How the Social, Local, Mobile Web Affects Sales Online and Offline. But before we get to Tim's presentation, I want to recognize our sponsors. We have BarnRaisers, which is a digital marketing and social media solutions company that builds brands using community and the proven principles of relationship marketing. Our next sponsor is Brick Marketing, full-service SEO solutions company that increases website visitors. Next, we have Marketing Pilgrim, which I've already mentioned, internet and social media marketing news blog. We like to say we cut through the bull so you don't have to. We have reputation.com. Don't let the internet scare off potential customers. Improve what people see when they search for your business. Lastly, Tim Peter and Associates. Internet Marketing and Ecommerce Strategy for the Social, Local, Mobile Web. So, as we wait for more attendees to join us here, let me review the format of the webinar. These Biznology webinars last just about 30 minutes, so you can easily fit them into your busy schedule. We record each webinar, and we'll email you a link for that later this week. During our speaker's presentation, you can go to your— you can use your GoToWebinar controls to ask a question, and we encourage you to do that. That orange arrow opens and closes your webinar controls. If you have a question, simply type it into the box labeled Questions at any time during the event and press the Send button. Then it will be up to me to select a few questions at the end of the webinar and pose them to Tim. Don't be bashful. Don't be shy. So while we're waiting for a few last attendees to join, I'd like to remind you that the Biznology newsletter and blog are available for free at biznology.com. So if you're not already a subscriber, we hope you'll sign up now. All right, so let's get rolling. Thanks again for all of you spending the next 30 minutes with us. We know how valuable your time is, so let's introduce today's speaker. Tim Peters is one of our Biznology bloggers, as mentioned before, has worked since 1995 developing innovative e-commerce and internet marketing programs across multiple industries. An expert in online marketing and e-commerce strategy, Tim focuses on web analytics, content strategy, and optimizing web channels for e-commerce. So if you've ever struggled with using the web to increase online and offline sales, this is the webinar for you. So Tim, take it away.

Thank you, Frank. I appreciate it. I want to start today's webinar with a key question, which is, how big is e-commerce? That's something that we want to get our arms around because we want to understand what What are we really talking about? What's the opportunity here? According to eMarketer and the United States Department of Commerce data, in 2012, e-commerce was about a $224 billion business. In 2013, it's expected to be about $256 billion in the United States alone. For many of the numbers I'm going to share with you today, and many of the things I'm going to talk to you about today, I am using U.S. data specifically. However, much of this does apply to places all around the world. So we are looking at about a quarter of a trillion dollars, except that number's a lie, and here's why. It represents 6% to 7% of all commerce, supposedly. And again, I say that that's a lie, and I say supposedly, and this is the reason why. Today, when we talk about online only, you're talking somewhere between 6% and 7%. You'll notice there's a slight difference in the numbers here, because these come from a different source. But you're talking 6%, 7% as we go forward, maybe 7.5%, 8%. But the key number to watch is what's happening on the bottom. Offline only is decreasing every year. Much of the growth in commerce, and much of the growth in e-commerce, and much of the growth in internet traffic is coming from mobile, and that mobile is being accessed in lots of contexts, including when people are standing in your stores, when people are standing in your restaurants, when people are standing in your hotels, when people are standing in your place of business, to the point where offline-only commerce is decreasing every year, and within the next couple of years will represent less than half of all commerce activity. Even more amazing is that roughly 60% of small businesses don't have a website at all today. So when you think about that percentage that's generated from online or online influence, actually among the businesses that have a web presence, the number is much larger than 50% today. And that's why I say that it's all e-commerce already. Of course, what this creates is a situation where customers use the web all the time to find the information they need, and it's creating an interesting reality. In 2010, customers typically visited somewhere between 5 and 7 sites before they made an e-commerce purchase. Today, that number is up over 12. In some segments— and I'm going to use travel as one. It's a segment that I work in very regularly. But in some, it has grown to almost 22. And the reason I point that out is because they seem to be on the leading edge of this. The numbers have been climbing for everybody over the last handful of years. Travel just happens to have gotten there a little faster. So because of this, it makes me want to ask a question. If customers are spending all this time looking for things and checking after site after site after site, It makes me wonder, why are they doing that? Why do they just keep looking instead of buying? Well, here's one possible answer. If I do a search for a specific product or service or experience that I'm looking for, look at all the things that I'm presented with. I get natural search. I get paid search. I get maps. I get ratings. I get reviews. I get prices. I get social information. So here's the number of people who've +1'd or followed this specific result. And I even get special offers right there when I search. The volume of data that people are presented with makes it easier and easier and easier for them not to buy, but to keep looking. And I would argue that the reason that they spend so much time looking at all these sites is because we've trained them to do that. Now it's easy to blame this on Google, but it's not just Google. Here's Bing, and you'll find we have the same experience. I'm searching for Galaxy S3, one of the hottest products last year. I get natural search. I get paid search. I get images. I get social information. I get reviews and ratings. And Bing actually recommends to me, why don't you go ahead and search for the price too? On Amazon, who's really, really good at this, right? I mean, Amazon is, we consider, one of the best at e-commerce. We see the same thing. We see images. We see ratings and reviews. We see social activity so that we can tell our friends about the things that interest us. We see the price that Amazon offers, but we also have them showing, here are places you can get it cheaper, admittedly through their platform, but it underscores the fact that we keep teaching customers to keep looking for a better deal. And of course, you get things like Google Shopping, which expose all of this. It creates pure transparency around all of the different places you can buy. And what everybody's selling it for. So you'll note, we're training our customers to keep looking until they find the right deal. When you get a situation like this, when all the prices are the same, that's when it starts to open up opportunities to say, why should somebody buy from you? Now, customers care about this information so much that when they can't find it, they'll create it themselves. This is an actual site. I didn't make this up, and I will not reveal the source of where I found it. But this is a site called Price of Weed, where here's a product that at least in most states you can't buy it legally, and consumers have gone out and they've said, well, let's go ahead and tell you what the quality is, what the prices are, where we get the best quality and who we can get it from, and my favorite part, how much law enforcement or social acceptance you have to worry about when examining this product. We've trained customers to be so creative at how they find their information that when they can't find information for the products and services and experiences that they want, they'll create it themselves. Now, in the old days, people used to go online. They used to pull up things like American Online. They used to wait for their little 28.8 or 56K modem to dial in. And they would go online. Customers don't go online any longer. They are online. They carry the internet in their pocket, and because of that, they have tons of information available to them everywhere they go all day long, whether it's natural— whether it's search, whether it's social, whether it's location-based services, whether it is ratings and review sites, whether it's traditional e-commerce or retail sites, vertical search and vertical commerce sites, photos and images both of their own and shared from their friends, blogs, and of course traditional online through the web, email marketing, the phone, and when in doubt, they can ask the phone itself to help them. Plus, you have new entrants into the marketplace with things like Apple Passbook, which extend the commerce experience deeper and deeper into the customer's day-to-day life. And outside of the music industry, the only thing we haven't figured out as a sales channel yet is music, and I suspect there are plenty of people working on that, too. As we move forward, you're going to see things like wearable computers. This is the Google Glass project, a heads-up display that puts information about the things you're looking at in front of you all the time. You want to know the price of something? It's going to show up on a little display right in front of you. Of course, you don't need Google Glass for that. You have it already. This is Field Trip, another Google app. The iOS version is called Wanderous, which gives you all the information you want right at your fingertips about what's around you right now. You'll note things like show me shopping and lifestyle, offers and deals, food, drinks, and fun. Along with ratings and reviews and information from consumers about how that works for them. Now, the other thing that used to happen is people used to go offline. The offline is dead. I want you to take that away from today. There's no such thing as offline any longer. 44% of all cell users sleep with their phones. At least you don't have to worry about lonely nights any longer. But 40% of those 35 to 44 do it. 50% of smartphone owners do it. And 60% of those 18 to 34 do it, because they don't ever want to be disconnected for that long. They have their phones right next to them so that they can check things in the middle of the night, or if it buzzes, they can check and see what's going on. That's an actual fact that just blows my mind. But it does tell you that offline no longer exists. People are so connected all the time that some clown this year, and I hope he is not on the phone, went ahead and named his daughter Hashtag. So clearly people care about this a lot and want to be connected continually. Now many of you are aware that there are billions of phones out there, and a billion or so smartphones. Don't worry about the fact that this data is from Q4 of 2011. It doesn't matter. The thing that you really should take away is that actually more people own mobile phones than toothbrushes. That is the telling thing about how important mobile has become in people's lives. Now what they do with it is the same things you would expect them to do with a regular desktop computer experience, with a tablet computer experience. They go ahead and they search. They use social media, things like Facebook, and Tumblr, and Instagram, and Twitter. And of course, they use videos. They watch things like YouTube. Those are your top 3 sites, Google, Facebook, and YouTube, just like they are on the desktop web. How they use them is different, but what they are doing is precisely the same. And what that leads to is what happens to the purchase funnel. Now, I'm sure many of you in Marketing 101 have seen this before, where people move from awareness through interest to desire and action. That no longer exists. Customers continually are on the search for what they need. They connect with their friends to understand what's interesting to them. They figure out what they desire, and they take action At any point in the process based on the fact that they are continually connected, because remember, we've trained them not to do things the old way. We've trained them to keep looking and take action when they're ready to. What customers really want to know are simply 2 questions. The first, am I going to enjoy myself? Am I going to enjoy your product, your service, the experience you offer me? And why in the world should I buy it from you? Everything that you do with your customers in your online marketing, your digital marketing, your customer engagement activities, your customer service should come down to how do I answer those 2 questions continually. So there are 4 keys to success in a world where it's all e-commerce. The first is put your customer first. Think customer, not channel. The next is plan for mobile first. The third is embrace price transparency. Customers can see prices all the time. You need to own that and embrace it. And finally, remember that content is king, but context is queen. So when we talk about the 4 Ps of marketing, as many of you learned in Marketing 101, people progress through product, price, place, and promotion. Your product is what you offer. The price is what you sell it for. The place is the channel through which people can buy it. And promotion is how you put it in front of them. I think that what you need to do first, though, is worry about the people at the middle. Do the products serve those people? Are the prices right for those people? Are the places correct for where the people are? And are your promotions correct for what those people care about? To do that, you need to know your customers. How do they make their purchase decisions? What matters to them? Do they focus on it logically? Or do they focus on it emotionally? Do they get there quickly, or do they get there slowly? Do they take their time and evaluate all the different options? When people talk about big data in marketing, this is really what big data is about. It's about learning more about your customers so you can answer their questions most effectively. For instance, this is Nike's FuelBand and Nike+. If you think about Nike, Nike used to be a product that you really interacted with twice a year. You bought it from a store, so Nike itself didn't get access to the customer directly. And then they'd go every 6 months and they'd get a new pair of shoes when they needed them. Now with Nike+ and Nike FuelBand, Nike collects data every single time somebody puts on the shoes. They collect data every single time somebody puts on the FuelBand. They are learning what their customers really do, so that they can actually interact with those customers on a more regular basis. It's gone from being a twice-a-year interaction, and one that was done through a third party, through a store, to one where they are connecting with the customer every single day. As you look to connect to customers, the channels that you choose need to be focused around what the customers do. You focus on that first. You'll notice in this diagram I have your website first, and I know many people say, well, in this era, shouldn't apps be more important, things like that? Shouldn't this lead to the end of brand sites? And I say no. Here's eMarketer data that shows the manufacturer brand website is actually trusted more by US online shoppers than any other source. Next, you've got to think mobile first. That does not mean that mobile is the most important channel, and it certainly doesn't mean that mobile is the only channel. What it does mean is it's not something that you add on later. Mobile has to be thought of right at the outset of your activities to say, how do we make this experience work in a mobile context for our guests and for our customers? The first of those is to think about mobile as a situation, not a device. A guy who is standing on a street corner looking for information on his phone is having a very different experience than some people sharing a tablet when they are sitting on their couch at home, which by the way, those tend to be the 2 most common cases for this. About 70% of all tablet use happens within the phone, and about 60% of all smartphone use happens outside the home. So you are thinking more in terms of the situation and less in terms of the device. You also need to be very task-oriented. For instance, this is Disney's new MyMagic+. It is a bracelet that people wear in the park that again allows Disney to collect more data about how consumers use it, but also fits the tasks that people care about. I don't have to worry about tickets. I don't have to worry about lines. I just go ahead and swipe my bracelet that I prepaid when I arrived at the park. Park, and I'm good to go. And you need to demand responsive, situation-focused, and task-oriented web designs, because your customers care about that. You need to think about how do people use it in a desktop environment, how do people use it in a tablet environment, and how do people use it in a smartphone environment in a way that works. One thing I would like to point out is anytime you are using a smartphone version of a site, Make sure the phone number is really clear right at the top, because the number one thing that people do when they're ready to make a purchase or ready to decide when they're on their smartphone is they call. Make it easy for them to do that. They're still holding a phone in their hands. The next tip, embrace price transparency. As we saw before, prices are available to your customers everywhere, all the time. Now, does that mean everything should be a special offer? Absolutely not. Price transparency simply means that your customers understand the various prices that they can pay for a product or service. They need to understand why they're paying that price, and if they're paying more, go ahead and make it understandable why it is they're paying more. I'll give you a recent example I've had with a client experience where they were getting their lowest prices through email offers. However, every price that they— every message within their email spoke to discounts. We removed the discounts from the email offers, and the prices that they received through that channel went up 30%. It was pretty simple for them to prove that. Remember, they trained their customer to look to the email for the lowest price. They removed that from there. And they suddenly got— they suddenly saw their revenues go up. Does that mean you should look at daily deal sites? Is that what we mean by price transparency? Again, no. You should use daily deal sites if they make sense to, and if they reach the customers who you can't reach through other means. But it really comes more down to making sure that you offer the right value to your customers. This is the vicious cycle. It's what I call the race to zero that many companies run, where they see soft business results. Because of that, they reduce their prices. Because of that, they need to reduce service and marketing to pay for the price reductions. They may see a short-term improvement in sales. Often they don't, though, because their competitors respond quickly. Customer expectations of what the price should be go down, right, they expect a lower price, the experience deteriorates, and that feeds back into creating further soft business results, creating this greater race to zero. You're just running it faster. Much like the movie WarGames, the best way to win this is not to play at all. Instead, you want to— oh, now I do get asked a lot about what about showrooming? You know, we see data here that says 14% of people purchased while in a store on their smartphone. We see that people say that, you know, price was better online, so I went there. To me, that's actually something where what they're not doing is showing the correct value. If people don't understand why they're buying from you, of course they're going to keep looking for a better price. Depending on the price point of your item, A couple of bucks difference isn't going to make a difference to most customers for the convenience of getting it while they're there in your store. If you're significantly different, you don't have a showrooming problem. You have a pricing problem. You haven't made the right products available to customers at the right price. As we all know, the American consumer's dollar and the worldwide consumer's money has taken a beating lately. It's gotten beaten up quite a bit. It's much more important that you show the value of what they are spending the money on than exactly what the price is. If you look at this example, what separates these stores from one another? And that's really going to be the key to how you expose your pricing. What I mean by that is that content matters. Content is king. Context is queen. From content, you've got to create likable, shareable content. A moment ago on the list of prices, one of the folks we saw was Moosejaw. Moosejaw creates a really engaging, friendly experience that is targeted at the needs of their customers. They do an excellent job of it. And you will notice here they have their about page, and they've gotten 45 likes on it because people get these guys. And they don't mind spending a couple bucks more, or when there is parity in pricing, buying from them because they understand who they are buying from and why they should buy from Moosejaw. You look at somebody like the Roger Smith Hotel. They use things like Instagram. Again, likable, shareable content showing their customers enjoying the product the way that most people do. B&H creates likable, shareable content on Tumblr that shows people how to use their products and services in a variety of ways, and actually features people who use it very well. And notice they get lots of likes and shares. Look at social integration. So here's Tiffany. Obviously, the number one thing, the number one source of Tiffany's business is gift giving. So they make it very easy for the people who want those gifts to share them with the people who give those gifts. And people like Great Wolf Lodge incorporating reviews and ratings right into their website from sources like Facebook, TripAdvisor, and Yelp so that people stay on the site. They've actually seen a 35% increase in conversion rate just by keeping people on the site. The context comes down to things like, as my kids would text it, where you at? Location, altitude, speed. Your past actions, your history, and selected preferences. Assumed attitudes and emotions based on actions and situations. So to look at that in practice, Foursquare. You look like you are near Staples. Why don't you check in? Or tools like Shopkick that say, here are deals you can get from going to specific places, or points you can get, loyalty points actually, based on what is near to you. Today, most context is location-based. Here is a great example from Yelp where it is very task-oriented and very contextual. It is helping people understand here is what is close by, and here is what— if we look first at task-oriented, here is what you are looking for, and here is what is close by. We make it very easy for you. Google is doing the same thing with their new Flight Explorer. It automatically knows what airport I'm near to. I tell it where I want to go, how long I want to stay, and it shows me where I can get the best deals. It's very context-heavy to expose the right information. Now what's next from a context perspective would be the distance you are from something, the floor in a building, the aisle you're in, or the direction. Lighting conditions, is it daytime, is it nighttime? Gesture-based controls like you'd see in an Xbox Kinect or on a Wii, and things from biometrics that say, are you excited, are you confused, are you getting the information you need? So what that would look like in practice is at home I get a store locator or a shopping cart function. If I'm on public transport, I can view a specific thing, scan a QR code, and actually make my purchase right there. That exists today, by the way. What you don't see are store locators by station stop. That'd be a great context to understand if I'm on a public transportation to say, where can I stop to get what I need? If I'm en route to the store, if I'm out on the road, parking information and in-store pickup. And again, here are examples of people who do this today. If I'm in store, a product locator or a store map, and streamlined checkout and payment options, such as the Apple Store Easy Pay, or Google Wallet, or Nordstrom's payment options. And if I'm in a competitor's store, price comparison, coupons, loyalty rewards, all of the different pieces exist today. What nobody's done yet, and where you really have an opportunity, is bringing many of these together, many of these contexts together to address the needs of your customers based on where they are. Finally, the real key question is, what do you want your customers to do? I hear many people say that I'm getting lots of likes on Facebook, I'm getting lots of shares on Twitter, I'm getting lots of friends on Facebook or fans on Facebook, but nobody buys. And I would ask the question of, are you asking them to buy in that context? Are you making it easy for them to do so? And are you making it easy for them to save things in one context, whether it be online, whether it be on mobile, so that they can they can actually complete the purchase when they move to a different context, such as on their computer, on their tablet at home, or when they're in your store. What do you want your customers to do? So to reiterate, the 4 keys to success are to think customers and not channels, plan for mobile first, embrace price transparency, and remember that content is king and context is queen. So when people ask, how big is e-commerce? I would say don't worry what the number is specifically. Just remember that it's all e-commerce. Thanks very much. Frank?

All right, thanks, Tim. Thanks, Tim. Appreciate it. I'm sure attendees have a much stronger idea now how to use the web to bolster their sales. He didn't answer every question, which happens at every one of our for webinars, which is good. So I've got a few questions that our audience teed up, actually one in particular, because we're running a little bit short of time. We want to be respectful of folks' time here. I'd like to remind our audience it's not too late to ask a question, and we can have Tim answer these via email later if you'd like.

Oh, definitely.

So it's no big deal. So send them along. But before we get to that question, we need to thank our sponsors once again, which is BarnRaisers, a digital marketing and social media solutions company that builds brands using community The Proven Principles of Relationship Marketing. Brick Marketing, full-service SEO solutions company that increases website visitors. Marketing Pilgrim, where you can get your internet marketing news every day. Reputation.com, don't let the internet scare off potential customers. Improve what people see when they search for your business. And lastly, Tim Dieter and Associates, internet marketing ecommerce strategy for the social, local, mobile web. Now, Tim, I've got a question here specifically about your your point about price transparency.

Mm-hmm.

And a question comes from one of our visitors. It says, my company sells online products that has different prices based on how many products you have in your subscription and how many users are going to use, meaning read/have access to the product. Showing the correct price can be difficult, but will it be a service people will expect us to give? It's a B2B play. Hopefully that's clear enough. Basically it's asking, showing correct pricing.

Yeah, and I think the answer to that is as long as you can make it clear why it is people get a better deal or a different deal, there's nothing wrong with that. People understand that there are discounts that come into play, or there are value adds that come into play when I purchase more of something, or when I purchase through specific channels. It doesn't mean that you have to charge the same everywhere. It doesn't mean that you have to charge the same to everybody. What it does mean is that you have to make it very clear why it is. You know, if I'm an individual who's buying, what do I need to do to get the price somebody else gets? What do I need to do to get that discount, and is that valid for me? And if I can't, then customers tend to understand that. That's really the key point about price transparency is It's not that you have to offer the same. You just have to make it very clear why it is that different prices exist in different contexts.

Okay, great. One real quick question here because I think it will help for those who are still on. I'm only seeing about 5% to 10% of my traffic from mobile. Is it too soon to start?

No, it's not too soon to start. You should already be thinking about mobile today. What matters about mobile specifically— actually, I heard a great stat from Google the other day. Almost all of the growth that they're seeing in search today comes from mobile. Most of the people who are online have been online for years, and most of the people who are going to be online are already there. The growth is all happening on mobile. If you're seeing 5% to 10% of your traffic today. I think it's entirely likely that you will see that double within the next handful of months to year. And mobile is growing, depending on segment, depending on industry, anywhere between about 40% and 150% every single year right now. So what you don't want to do is find yourself 12 months down the road not having done mobile and discovering that it's actually now 20% to 25% of your traffic, and you weren't ready for it, and you lost a lot of customers because they weren't getting the right experience for that situation.

So get ahead of the curve and don't get behind it.

Don't get behind it, right. Mobile is real, and it's real today.

Great. All right, well, that's all the time we have for today. So thanks, Tim, for these great ideas. And thanks especially to our audience for your participation and your questions. If you had any questions that we did not have time to answer, you can email your questions to Eileen. That's eileen@mikemoran.com. And she'll be sure to get it to Tim for the answer. Later this week, we'll send you all a link to the recording of this webinar to listen to again and to share with others. And we'll also invite you to mark your calendars for our next Biznology webinar, Engaging Employees to Share Corporate Social Media. And it's scheduled for 11:00 AM US Eastern Time on March 12th, and that will be with Glenn Gaudette. Thank you, Mike. So, thank you very much, everybody. We really appreciate you coming by and look forward to seeing you in March. Take care.