Tuesday, September 9, 2008

Web Developments Retailers Should Watch

TechCrunch released its agenda last week for the TechCrunch50, which starts today. They have helpfully grouped the companies into categories, which they will run through over the next couple of days. The companies are all fascinating, and I encourage you to check them all out. But what was really interesting to me was the categories themselves:

  • Youth and Culture - basically a bunch of social networking sites that are targeted at the younger crowd. If they succeed, they will bring together a juicy group of targets for retailers and marketers. But brands will have to be careful how they approach these sites - if you think there was an uproar over Beacon, think about the privacy implications of advertising or diving in to sites that cater to tweens. That's going to be laden with a lot more landmines.
  • Memes and News - the theme here is filtering or aggregating content in some way or another so that it's easier for people to wade through - either by creating a niche of some kind ("news about your friends instead of news by your friends"), or using the crowd to surface the most popular stories from within a world of "TMI". Product reviews kind of do the same thing, but ultimately I can see this kind of functionality melding in with another category - "Vertical Social Networks" - one of which creates a social network around shopping and fashion.
  • Finance and Statistics - a bunch of sites that put analytics around either information on the web that relates to people or topics, or information specifically about a person or topic. For retailers, this could be turned inward to employees (especially frontline employees where it's hard to really do a thorough check on the person before you hire them), or turned outward as a service to customers. Safeway's FoodFlex program is a good example based on "closed" data (Safeway's clubcard purchases - Safeway offers to analyze the nutritional value of your past purchases and recommend ways to create a healthier diet), but as more of people's lives end up captured online, someone's going to think of a way to take advantage of it - including purchase or shopping/browsing history.
Also interesting to me was that the list of commerce-based topics and companies weren't really that interesting. The session on Advertising & Commerce Monetization had companies that create new ways of targeting (or ways to avoid getting targeted). The most interesting of that lot was Adgregate Markets, which promises to "turn banner ads into shop ads", basically by turning a banner ad into a widget that gets you closer to purchase from the first click.

Retailers have never been keen to be on the cutting edge of technology adoption. It's one of RSR's fundamental "Paradoxes of Retail" that retailers must manage a heavy load of legacy technology infrastructure at the center of their business while consumers are adopting technology at an unprecedented rate - and forcing retailers to speed up or be left behind. The TechCrunch50, to me, shows that the pace of change isn't letting up at all.

Thursday, September 4, 2008

How Will Consumers Respond to Suddenly Targeted Ads?

This week, RetailWire posted a story on Infosys' new "ShopperTrip360" for comment, and got back a lot of negative comments (myself included, I guess). You can read the description on RetailWire for what it is and what it does (registration is required). But the topic got me thinking, because a lot of the negative reaction came from people worried about privacy and consumer reaction to an invasion of privacy. Someone commented to me that if people only knew how much data is collected about them already, they would probably freak out about it - let alone the degree of tracking that the ShopperTrip360 proposes.

But the thing is, no one really does anything with the data - so no one REALLY notices how much data is collected. So what would happen if retailers really started earnestly using the masses of information they collect about consumers? For example, I get coupons in the mail from Target. For a long time, I just tossed them. 90% of what was in there didn't appeal to me. Then all of a sudden I got a coupon book that I thought was just great - about 2/3 of the offers were for things I buy. I was pleased - "They're paying attention to me!" I thought. But I also realized that it probably meant that Target was actually mining my purchase history to determine what offers to send me.

That's not too disturbing. Anyone who doesn't realize that this is what that loyalty card is really for is only fooling themselves. But if retailers started acting on data that customers didn't really realize they were collecting. If, for example, Target suddenly started sending me offers based on my online browsing history, the suddenness of that relevance might come off as creepy.

Am I really going anywhere with this? Only to say that despite an overwhelming desire to get more relevant with consumers, it probably doesn't hurt that we seem to be moving at incremental speed. Moving from mass to 1:1 overnight would probably just scare everyone away.