From Mashups to Mashops

In Web development, a mashup is a Web page or application that uses and combines data, presentation or functionality from two or more sources to create new services. The term implies easy, fast integration, frequently using open APIs and data sources to produce enriched results that were not necessarily the original reason for producing the raw source data. The main characteristics of a mashup is that it makes existing data more useful for personal and professional use.
Cisco Internet Business Solutions Group has recently defined Mashops as “Virtual Shopping in Physical Stores”. A mashop combines web-like and in-store shopping experiences and get their name because they "mash up" the virtual and physical worlds to create a new way to shop. Cisco views creating mashops as critical to the future success of retailers and will lead retailers to introduce technologies such as interactive digital displays, video assistants, social networking technologies and Wi-Fi networks that enable shoppers to remain connected with trusted people and information while they are in the store.

Through Cisco’s research involving 1,000 shoppers from the United States and United Kingdom, two distinct groups of technology-savvy shoppers emerged:
- Extreme shoppers (11 percent of the general population, with high representation from Generation Y) use the web and smartphones to find the lowest possible price.
- Calculating shoppers (56 percent of the general population) use the web to inform their buying decisions and has the greatest impact on retailers' revenues and margins
Among calculating shoppers:
* Most prefer to research products online rather than speak with store staff
* One in three use retailers' Facebook pages and coupon-sharing sites.
* One in four use web-based group buying sites such as Groupon.
* More than half (54 percent) wanted to try a mashop-type service in the store. Most of these (73 percent) preferred access to mashop-type services using a touch screen at the shelf edge.
* More than half (54 percent) wanted product and price comparisons, and peer reviews on touch screens in the store.
* More than four of ten (44 percent) wanted a virtual video adviser with web content on a large screen or tablet service in the store and expect to increase their value-seeking behavior over the next two years, further accelerating margin pressures.

According to Cisco, by combining the best of both worlds, mashops create a win-win situation. Shoppers receive the information and convenience of web-based experiences while, at the same time, being able to touch, feel, and see the products they want to buy. For retailers, mashops promise to preserve margins and increase sales. Shoppers are also more likely to upgrade their purchases and increase the basket size when factors other than just the best price influence their buying decisions.

Homeplus ups the Mashop Ante
Homeplus has taken mashop to the next level. Homeplus’, Korea's number 2 retailer, challenge was to become number one without adding a large number of new stores. Their solution, virtual stores in physical locations. They installed displays that look like physical stores in subways. Subway riders shop by using their smart phones to read QR codes on the products in the displays (View a video of this Mashop). Once their shopping cart is filled and paid for electronically, the purchases are delivered after they arrive home. For busy Korean families, this is a tremendous time saver and avoids what Korean’s consider to be an onerous task-grocery shopping. Using this Mashop, Homeplus’ online sales increased 130 percent and they are now the number one in online sales, although still the number two retailer.

The Research Needs Some Refinement
In their research, Cisco concluded that “by combining the best of both worlds, mashops create a win-win situation. Shoppers receive the information and convenience of web-based experiences while, at the same time, being able to touch, feel, and see the products they want to buy.” Homeplus has demonstrated that, at least for Koreans, being able to touch feel and see products comes in second to convenience and efficiency. The salience of convenience and efficiency is something retailers need to pay strict attention to as etailers increase their online offerings of CPG products, expand their distribution/delivery capabilities, and smartphone usage increases in the United States.

(Image from www.retailcustomerexperience.com)

Why Are More Consumers Going to the Web for School Supplies?

It’s a big market
Back-to-school represents the largest surge of consumer spending outside of the holiday season with U.S. Consumers spending more than $68 billion on books, apparel, paper, pencils, backpacks and other sundry classroom supplies. According to PriceGrabber, clothing and basic school supplies are at the top of online shoppers’ lists in 2011 with 79% of consumers indicated that they will shop for general school supplies such as notebooks, binders and pencils, compared with 76% in 2010. According to the National Retail Federation (NRF) a down economy will benefit online retailers over brick-and-mortar stores this back-to-school season.

Some interesting statistics
* Overall, 31.7% of consumers buying supplies for K-12 students will shop online this year, up from 30.8% last year (NRF)
* For college supplies 33.4% of consumers plan to purchase on the web, up from 28.6% in 2010 (NRF)
* Nearly 30% of consumers buying for K-12 students say the economy will lead them to rely more on comparative shopping on the web (NRF)
* Almost 31% of consumers buying college supplies will more often comparison shop on the web, up from 23.2% in 2010 (NRF)
* 50% of consumers say they’ll shop for sales more often to compensate for the economy and over a third will be using coupons more often (NRF)
* Foot traffic to retail stores during this year’s back to school shopping season will decline 2.9%, thanks to relatively high gas prices (ShopperTrak)
* 69% of shoppers say they will use online comparison shopping sites for back-to-school shopping, up from last year, when only 23% of consumers said the same ( PriceGrabber)

Why the trend?
It’s all about the deal and the cost of gas. With a slow economic recovery, many consumers are increasingly cost conscious and use the web more often to make sure they find the best prices and values. While they are performing price/value comparisons online, purchasing online becomes easier and a central strategy of their shopping process. In addition, retailers in general are beginning their back to school sales earlier with etailers leading the way because of their easier product setups and online displays.

According to a report released by MasterCard Advisors, the consulting arm of MasterCard Worldwid, e-commerce sales increased 15.2% year over year in June, the eighth straight month of double-digit growth, and the 23rd month in a row that online purchases have grown. According to Michael McNamara, vice president, research and analysis, for MasterCard Advisors, total retail sales—this includes purchase made inside physical stores—continued to be hampered by high gas prices and persistent unemployment. Also according to MCNamara, exceptionally wet weather in some parts of the country might also have kept consumers from travelling too far to make purchases. “On the other hand,” he says, “unfavorable weather and high gasoline prices appear to have helped e-commerce to its eighth consecutive month of double-digit growth.” Supporting MasterCard’s research are results from a survey conducted for Internet Retailer by Synovate, a global market research firm which found more than 28% of U.S. consumers say they are shopping online more because of rising gas costs.

No More Old School
It should be no surprise that the increasing trend for online shopping impacts purchasing school supplies and the important back-to-school shopping season. After all, shopping at brick and mortar stores is becoming “old school” for many internet savvy consumers.

New Player in Pet products online

Amazon.com bought the Diapers/Soap site in March. It is looking like a solid move in continuing to build business - expanding their portfolio of sites and expanding economies of scale in categories they already sell.

Last week Wag.com launched part of the Diapers/Soap.com site adding a tab dedicated to Pet products. My dog was very excited about this and appreciated my first order of dog treats, which came with products from the other parts of this site (snack bars, razor blades etc. ), allowing a convenient purchase across multiple categories.

This new entrant in the online Pet supplies category is another sign of the growth of Ecommerce and Pet products category online. This category had 3 dedicated Pet product sites in the top 300 Internet retailers in 2010*. Those sites sold $257MM in Pet related products in 2010, +10% over 2009*. In addition Etailing grocers, Amazon.com, Walmart.com & others are vying for their share of this growing market. While the Pet products sales are hard to quantify from those sites, this could easily be a half a billion-dollar business online and growing double digit.

Not hard to understand why Wag.com just launched!


* from Internet Retailer Top 500 Guide

Another Big Month for Etailing

Mastercard reported this week that Ecommerce sales for June 2011were up 15.2%.

Like we have been saying for many months “ the growth has left the building “.

Bricks and Mortar retail sale continue to show little if any growth as Etailing marches forward with double digit growth month after double digit growth month.

Gas prices have been debated in their impact on Etailing- at what point does the price of a gallon of gas impact consumer decisions about buying online ?

Well, gas have eased a little in recent weeks but consumers continue to shift purchasing habits, driving the 8^th straight month of double digit growth for Etailing.