Top Trends to Watch

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Top Trends to Watch

12/22/2009
Jeff Weidauer, VP of marketing, Vestcom International, a Little Rock, Ark.-based provider of specialized marketing solutions for retailers, spent three decades in retail marketing for Albertsons, Supervalu, and their associated banners. In this exclusive Q&A with Progressive Grocer, he offers his insights into how digital marketing will shape the near future of retail.



PG: Where does the industry stand with social media?

Weidauer: Social Media, clearly one of the biggest technology stories of 2009, has made shoppers better informed and more skeptical than ever. Big ideas, products, and changes from any retailer or CPG will be examined, supported, ridiculed, and so on, all in the unforgiving light of the Web. No matter what you do, someone somewhere is going to notice. Thirty years ago they might have written a letter to a newspaper editor, or called the company to complain. Today, we have blogs and Twitter and Facebook.

Social media is only growing at this point. According to Deloitte’s annual Holiday Survey of retail spending and trends, almost one out of five (17 percent) consumers plan to use social media during their holiday shopping, and among those, three out of five (60 percent) plan to use social media to find discounts, coupons and sale information.

A recent article in Ad Age claims that while 73% of Fortune 100 companies have Twitter accounts, 76% of them are infrequent tweeters. Meaning that while these companies understood that they needed a Twitter account, they didn’t really understand why or how to use the medium to build their brand. One of the challenges of technology is that it’s difficult to gauge if and how quickly new tech will become mainstream.

The net of this is that businesses need to have a resource that – if not dedicated to technology – has the responsibility for watching tech trends and how they fit into the overall strategy.
 

PG: What happened to biometric payments?

Weidauer:
Technology will continue to offer new ways to accomplish existing tasks, but it is important to be careful to keep the shopper’s needs at the forefront or the project will be doomed from the start. We have seen, for example, the implosion of “fingerprint” checkout. This technology had a number of problems, not the least of which was it offered a solution to a problem that didn’t exist for most shoppers. Telling shoppers they didn’t need their wallet or purse is pointless because, unless they forget them at home, it’s not like they’re going to leave them in the car. And since the technology wasn’t 100 percent reliable, it created more problems than it solved.

In addition, there’s a paranoia tied to using a “fingerprint” to make purchases. While the actual details of how this worked supposedly don’t include the ability to actually match a customer’s finger data points to a fingerprint, the explanation didn’t really allay anyone’s fears.


PG: We’ve covered a lot of retailers moving into the mobile marketing space. Do you see this trend continuing?

Weidauer:
As newspaper circulation declines, and free-standing insert distribution becomes ever more challenging, mobile phones are an obvious and effective way to drive purchases. As smart phones continued to evolve and grow in popularity in 2009, the focus with retailers so far has largely been on digital coupons, with some success. The downside of mobile coupons, however, is the back-end cost of redemption, which makes a successful promotion increasingly expensive. Coupons are also the most basic of triggers for shopper engagement, with little long-term loyalty benefit. The logical question then is: “what’s next?” How do we make the most of this pocket-sized kiosk and provide loyalty-building communications to shoppers?

The continued popularity of the iPhone started an industry focused on “apps” that will do more things than we ever thought possible from a mobile device: shopping history, reminders, offers, etc. But retailers in particular need to be careful about creating apps just to be in the game. Are you creating an app just to have one? Or is this a focused effort to use an existing technology and provide added value for your shoppers? Creating an app that gets you on the bandwagon without really understanding how, or if, it’s solving a problem for shoppers is an exercise in futility at best and can undermine brand equity at worst.

There’s a bigger question here as well: What is the future of apps? The computing world in general is moving away from dedicated applications to so-called “cloud computing,” which offers functionality via a Web browser from any location. Documents and the applications that create them all reside in the “cloud,” not on the device. There is good reason to believe this will happen with mobile as well. Offering a mobile-enabled website with dedicated functionality makes more sense than an app. No updates need to be downloaded, and the site need not be hardware-specific.

The catch here is bandwidth. Whether we go with the apps model, or go for the “cloud,” the bigger issue is how to get that content to a handheld device. Now that most of us are used to broadband speeds on our computers, the relatively sedate delivery of content to a handheld—even using the current 3G standard—feels ponderous. The next generation, fittingly called 4G, is on the way, but will require device upgrades and still won’t match SL or cable speeds.


PG: Where does self-service technology fit into the future?

Weidauer:
We continue to see retailer investment in kiosks in stores and efforts to make them work. They rarely provide enhanced value for the shopper, and the primary benefit is to the retailer. Initial results are always “positive,” but the novelty soon wears off and the offending hardware is quietly ushered out the back door.

At some point retailers will figure out that any new technology—kiosks, handhelds, whatever—must fit into the current shopping model. Self checkout was a slow starter, but after most of the bugs were worked out, it became a hit with many shoppers. Why? Because it fit into the existing overall trip habit: I still have to checkout, and doing it myself is often a better experience than watching some green-haired, pierced teenager throw my stuff into a bag and act like she is doing me a favor. I’m waiting for the day when RFID allows me to bag my purchases while I shop, and walk out without ever entering a checkout lane. Think of the effect that will have on the tabloid industry.


Prior to his current role at Vestcom, Jeff Weidauer spent more than three decades in retail marketing in grocery chains including Albertsons, Lucky Stores, Acme, Jewel-Osco, and Supervalu. He received his bachelor’s of science degree in business management from the University of Redlands and is a graduate of the University of Southern California Food Industry Management Program.