The Future of Retail Fits in the Palm of Your Hand
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The future of retail is not e-Commerce or 1-channel or pop-up shops or geo-fenced flash sales, the future of retail is palm-sized.
As social media consumerism cultivates and nurtures a growing number of cool, in your face brands, these retail entrepreneurs are starting to skip the computer altogether, instead displaying and selling products exclusively via Smartphone.
The phenomenon is accelerating.
The 2 Key reasons for this business shift are Video & Instagram, and Video on Instagram. In recent years, both have had an increasingly outsized impact on how consumers shop, and it is a phenom that shows no signs of abating.
Big retailers have grown wise to it, as more of them are lured away from a traditional focus on desktop transactions.
Back in August 2016, Facebook (NASDAQ:FB) owned Instagram began letting its users click through the phone app to a brand’s retail site.
It added “Stories,” a Snapchat-like feed of temporary posts better suited for Video. A few months later, Instagram let 20 select companies, including J. Crew and Macy’s (NYSE:M), tag products in Instagram posts and route people to a store link where they could “Shop Now.”
And the virtual shopping mall hatched.
Unlike the old mall, Instagram does not have any problems generating “foot traffic,” given the 800-M people actively scrolling through its portal every month.
In May, the company took the next Key step, enabling a feature for users to add credit or debit cards. Soon, Insta-crowds may not have to leave the platform to make a purchase.
Salesforce.com (NYSE:CRM) says 5% of digital retail traffic now flows through social channels. And we have found that, of people who use social media, 33% makes a purchase every month through a platform such as Instagram, Facebook, Pinterest or Snapchat.
At companies that sell to young buyers, the numbers are way higher.
Digital platforms that cater to aspiring e-Commerce titans are working to design their products for iPhone-only use.
Tictail, the do-it-yourself marketplace, overhauled its platform to allow vendors to post directly to Instagram’s Story forum.
Also, it lets retailers add text “stickers” and links that make it easier for shoppers to click through to purchase or figure out their shipping costs. When Tictail rolled out a feature allowing sellers to directly post video product listings, the platform promptly saw engagement on those items almost 4X, according to its CEO, Carl Rivera.
“It’s very Snapchatty,” he explained.
Tictail made the shift toward handheld retailing after noticing that mobile purchases had jumped from being 40% of its transactions to 70% in the span of 18 months. Mr. Rivera decided that if shoppers were switching to Smartphones so fast, sellers would quickly follow.
The transformation has everything to do with how mobile technology enables visuals to dominate Internet retail.
Shopify, which hosts digital stores for some 600,000 merchants, has made similar moves, launching its deep integration with Instagram in October 2017.
Fully 50% of Shopify’s clients are actively using a mobile app it built exclusively for merchants. Over the past year, the shopping site has seen a 3X increase in retailers who do business entirely by Smartphone, according to the data.
These young consumers are not necessarily on the go. They just want the flexibility to do whatever they need to do when they want to do it. It is time pressure that is pushing a lot of this.
The Big Q: ‘How can I do things faster?’”
Social shopping platforms are demolishing yet another of retail’s barriers to entry.
In the 1990’s, e-Commerce sites such as Amazon.com (NASDAQ:AMZN) declared war on department stores. Recently, drop-shipping services (3rd parties) began to take hold, empowering the digital disruptors.
A would-be snappy brand no longer has to hustle for capital and retail partners, all they need is buzz and followers.
So, with the rise of handheld retail, a virtually unlimited commercial space has opened, it is one in which marketing, shipping and catalogs cost the retailer virtually to nothing, the real overhead is the price of a Smartphone.
The wave is growing.
Of the almost 2-M people selling items on Etsy’s (NASDAQ:ETSY) online marketplace, about 50% are using the company’s purpose-built vendor app.
Meanwhile, Intuit (NASDAQ:INTU) says 50% of the nearly 700,000 self-employed entrepreneurs using its Quickbooks accounting software are tracking their income and expenses via its mobile platform.
These are very experiential sellers (something we read about 30+ years ago, now here) they care a lot about building a brand.