Smartphone Shift, Not #OptOutside, Key To REI's Sales Gains

The #OptOutside closure of REI brick and mortar stores on Black Friday got all the attention, but when the company looks back at 2015 sales, it will likely point to a consumer shift from tablets to smartphones as the more significant difference-maker.

Jeff Klonowski, REI’s Director of Mobile & Business Development, shared the retailer’s mobile insights and aspirations in an extensive interview for my The Art of Mobile Persuasion (artofmobilepersuasion.com) book.

He recently provided updated information during a Seattle Mobile Mixers event.

Klonowski said that, because of its ownership, REI was in a unique position when it considered closing for Black Friday.

“From the business side, in trying to look at the year-over-year comps now, because of #OptOutside, it makes it every difficult because the numbers are certainly thrown off, “ he explained.  “From our perspective, we’re less worried about this four or five day period of basically Thanksgiving through Cyber Monday. This is more about the aggregate for us for November and December. I would say with the current trajectory, we are pretty pleased with the performance.

“The #OptOutside program was a really interesting thing for us. This is new territory. Retailers don’t close on Black Friday. It just doesn’t happen. Being a co-op and not being publicly traded, we can get away with stuff like that. “

Klonowski would not reveal sales numbers, but said that the company is pleased with the effort.

“The interesting thing was, when we started doing some internal theories, was, ‘OK, if our retail stores are closed on Black Friday, but technically the web site is still open ... we’re not processing the orders, but consumers could go in and place orders, we asked, ‘Well, is this going to be a record day?’ Because maybe we’re shifting that traffic for people who are not opting outside and are still shopping and want to shop REI.

“I would say that it was still a big day. It exceeded our expectations from an online perspective. But we definitely saw that shifting away from the Thanksgiving and Black Friday moving a lot of that into Saturday, Sunday and Monday.”

REI said that more than 1.4 million people opted to be outdoors on Black Friday. Klonowski called it “super exciting”.

“It was a big bet,” he said. “We didn’t know how it was going to be received. It could easily go totally flat or it could be a total rocket ship and take off.  We were fortunate – we struck a nerve, somehow. So there was an inkling out there – this little rebellion against Black Friday. We collectively exposed a lot of that.

“It will be interesting to see what that means in the future. Granted it’s very much a unique place that REI can play in because it was very brand appropriate for us, maybe not so much for other retailers and other brands. But it fit in really nicely because it was very authentic. We’ve been very pleased with the performance thus far.”

As for the potentially more meaningful shift, Klonowski pointed to the October 2014 release of the iPhone 6 and iPhone 6 Plus as a game-changer.

“Looking back to 2010 and years after for sales via smartphones, our rate was still growing but that rate was beginning to tale off,” he said. “In 2015, it’s actually accelerating again which is really fascinating to me. One of the big drivers that we didn’t plan for, and a lot of retailers didn’t plan for, was this large shift from tablets to smartphones.

“iPhone 6 came out last fall and we saw almost an instant shift as those devices got into the marketplace. What people were saying is that, ‘ Now I have a bigger screen to work with, I don’t necessarily need that tablet.’ In addition, the experience is getting that much better.”

In years past, there was a belief – and the numbers backed it up – that tablets would yield more sales because of how and when they were being used, which was often at home in immersive experiences. But that’s all changed, according to Klonowski.

“It’s a net benefit overall,” he said. “It’s just a little interesting conundrum that we wouldn’t have seen coming.”

It also fits in with a more general trend.

In overall retail business, according to IBM, in 2014: smartphones drove 34.7 percent of all Black Friday online traffic, more than double that of tablets, which accounted for 14.6 percent of all traffic. Yet, when it came to mobile sales, tablets continued to win the shopping war – driving 16 percent of online sales compared to 11.8 percent for smartphones, a difference of 35.5 percent. Tablet users also averaged $126.50 per order compared to $107.55 for smartphone users, a difference of 17.6 percent.

This year, IBM reported that smartphones became more of a device of choice on Black Friday. Smartphones accounted for 44.7 percent of all online traffic, 3 and a half times that of tablets at 12.5 percent. Smartphones surpassed tablets in sales, driving 20.6 percent of online sales (up nearly 75 percent over 2014) versus tablets at 15.5 percent.

(article first appeared on imediaconnection.com - http://blogs.imediaconnection.com/blog/2015/12/07/smartphone-shift-not-optoutside-key-to-reis-sales/)

5 Ways That Brick and Mortar Businesses Need To Evolve To Cater To Mobile Users

The make-or-break holiday shopping season is upon us, spurring retailers to determine where they want to speak to would-be customers, how often, and with what messages.

If only the would-be shoppers were open to listening.

Sure, a meaningful segment of consumers are still reachable via mass mediums like television and print, and others do their purchasing on a desktop and brands and retailers get to them with ads and targeting. However, more and more live in a world of self-sufficiency, powered by a mobile device that provides everything from product information to the ability to read reviews. Mobile devices even enable a customer to “showroom” and find something offered by a competitor just as he or she is spending time in one retailer’s aisle.

How important is it for businesses to reexamine their definition of differentiated customer service to cater to the ever-increasing “self-sufficient” mobile shopper?

Very.

According to a report released by the Consumer Electronics Association, more 58 percent of shoppers who use mobile devices indicated that they prefer to look up information on their devices while shopping, rather than talk to store employees. This was especially true among men and shoppers aged 25-44.

Nearly two-thirds (62 percent) of mobile shoppers perceived the information they gather via their mobile device as more beneficial than the information available in-store via product displays or sales literature.

What is a retailer to do?

Through conversations with mobile and business pioneers interviewed for my new book, The Art of Mobile Persuasion (www.artofmobilepersuasion.com), there are five ways that brick-and-mortar businesses can evolve their operations to meet the challenges of the 2015 holiday selling season and beyond.

1. Embrace the mobile era rather than curse its very existence

If you are Lowe’s, a FORTUNE 100 home improvement company and Southeastern septuagenarian, you practice what you preach and “Never Stop Improving.”

Sean Bartlett, Director of Digital Experience, Product, & Omni-channel Integration at Lowe's, led an initiative by the chain to put 42,000 iPhones into the hands of sales associates as a way to help customers get a more satisfying experience from its iPhone app.

That was no small endeavor. Lowe’s serves approximately 15 million customers a week in the United States, Canada and Mexico. With annual sales exceeding $50 billion, Lowe’s has more than 1,830 home improvement and hardware stores and 260,000 employees.

The intent was to create a virtuous circle by enabling sales people to help their customers.

Lowe’s mission of innovation continued with the introduction of “product locator” mobile technology to make shopping easier. Lowe’s customers can find over 100 million precise, in-store product locations and store services via customized, interactive maps displayed on their smartphones.

“That's obviously a big nod to the in-store experience and making it more efficient,” Bartlett said. “Our stores are generally in the 100,000 square foot range with a couple of dozen aisles that are fairly long so to the extent that we can get people to the product that they want, we're going to push for it.”

2. Personalize the experience

My sister-in-law and I both shop in REI, but we couldn’t be more different.

An ideal hike for me is a walk to a pretty, quiet area that has a running stream and birds singing. The distance is secondary and could be so short that I can still eyeball my car in the parking lot.

My sister-in-law is a former triathlete and still is more active than 95 percent of people half her age. She hikes for full days.

I want REI to provide the basics so I don’t get mosquito bites or an itty-bitty blister. My sister-in-law wants to know how and where the hiking shoes were made, and whether they will withstand heavy use.

In-app, in-store and through messaging from REI that we may both opt-in to receive, each of us expect to be treated as individuals, not as part of some homogenized customer database.

3.  Rethink very the concept of customer service

In such retail establishments like REI, the human touch will always be emphasized. The company’s famed Green Vests know more about varieties of kayaks, climbing walls, and the like than one could possible imagine. And that has been a differentiator. Now REI looks at mobile devices as a complementary customer service tool.

Said Jeff Klonowski, REI’s ‎Director, Digital Retail - Mobile & Business Development. “When you look at the loyal users, say someone who has the retailer's app, in our case REI, based on preferences and what the customer has opted in to receive, and say we create some sort of in-store mode which a lot of retailers are looking at for their mobile app to work when someone is in the physical retail store, based on what the customer has opted in for that may be relevant based on that behavior.

“Then you are saying, ‘OK, you popped into the REI app in store. Here's a feature set. And by the way, you did look at this item, here's where it's at in the physical store. Do you want more information or can we lead you to it?’”

4.  Stay on the right side of the privacy line

Different types of information elicit different levels of sensitivity among Americans, according to a report by the Pew Research Center’s Internet Project.

Social security numbers are universally considered to be the most sensitive piece of personal information, followed by health information and content of phone conversations.

Media tastes and purchasing habits are among the least sensitive categories of data.

Still, there is a creepiness factor at play when an advertiser or retailer reaches out to someone with information that the recipient views as invasive.

There was large disagreement among those I interviewed about where the line is. Some thought reaching out to someone in store the day after that person viewed an item online is fair game. Others thought it becomes creepy if the outreach spans too much time.

The prevailing opinion was for businesses to practice a policy that falls well short of the invasion line.

5.  Rework the definition of fulfillment

Amazon has led the product delivery evolution, bringing such options as same-day delivery to only raise the expectations of many consumers.

The wise brick and mortar retailers will provide choice, even going so far as facilitating curbside pickup and alerts to opted-in mobile users when an item like a bicycle is built and is ready to go to its new home.

Conclusion

Smartphones make customers smarter. We’re not going back in time. The winning retailers will find ways to use the mobile device as a tool for better engagement that will drive loyalty and sales. Those who aren’t as successful will be as slow as I am in the latter half of my “strenuous” hikes.