The Official Fluid Blog

It seems like you can’t open The New York Times lately without seeing Vic Gundotra touting Google’s latest innovation or acquisition (disclosure: Fluid worked with Vic when he was at Microsoft — we’re fans).

In addition to Google dominating all-things-mobile, some recent significant announcements:

•    Goggles
•    Acquiring Yelp (almost)
•    Selling direct to consumer (beginning with the Nexus One)
•    Real-time search

Any of the above looked at individually are significant and innovative but not a game changer in their own right.

But when you look at them as a coordinated whole, what begins to emerge is that Google is assembling a new breed of multi-channel ecommerce platform with the potential to deliver consumers a complete shopping experience without ever needing to interact with a retailer’s website, app or social presence.

Whether this is master plan or strategic by-product is up for discussion. But add to the above list the foundation that Google already has put in place:

•    Search UPC codes
•    Shop Savvy
•    Package tracking
•    Google Checkout
•    Google Analytics
•    Catalogs
•    My Shopping List, Gallery View, parametric filtering, etc. etc.

It’s an easy leap to envision this scenario:

A consumer searches Google for “spring trenchcoat belt.” Google returns her a product grid of trenchcoats in interactive merchandising displays allowing for zoom and multiple views across a range of brands. More interesting is tagged user-generated content (e.g. my colleague Vanessa’s twitpic of herself trying on a red Ledstone Trench at Burberry on Spring Street). Real-time results deliver relevant posts/tweets from other similarly focused shoppers. User reviews (courtesy of Yelp or similar) deliver a trove of ratings and geo-located user opinions including the best places to buy online and the best local stores in your area.

Sound familiar? Sounds like your ecommerce site except with more choice, more functionality, and more options making it better for the consumer. Sounds like a pretty awesome digital shopping experience to me – one that decidedly shifts the balance of power to the consumer and turbo-enables the digital shopping patterns we all saw emerge this holiday.

Perhaps most interesting is that Google is not bound to the need to convert. Instead, they benefit most by embracing a new paradigm of the shopping funnel as a non-linear, cross-brand, multi-branched journey. What makes this so powerful is that this is what consumers want and, most often, is in opposition to what individual retailers want to control.

The scenarios get more interesting and paradigm-bending:

• Find the perfect chair while browsing a home design magazine in airport lounge at JFK  >  use Goggles to identify the product  >  mobile search for best prices online + local availability in Seattle  >  share my shopping list to my wife who goes to see them in person and buys from our local design store.

• A Patagonia brand loyalist is shopping in a Patagonia store  >  decides on the jacket he wants but wants to make sure he isn’t overpaying  >  mobile UPC search returns not only best prices but comparable jackets from other outdoor brands  >  even more relevant is the user-generated content, specifically one outdoor enthusiast’s tweet linking to a mobile video where he demonstrates the advantages of The North Face Mercurial Jacket  >  former brand loyalist is now comparison shopping.

There are many more scenarios, all plausible, readily possible and direct outgrowths of consumer behavior patterns that are already happening (brands and retailers are catching up).

The most interesting thing here is that consumers are driving this. They want this new shopping paradigm to fuel their rapidly evolving digital lifestyles. Google’s genius is their relentless commitment to a user-centric strategy and ultimately leading consumers to a vision of their own creation.

Last year Alicia Keys asked American Idol watchers to text-to-give. It yielded $450K – the largest portion of the $4M total donated via mobile texts in 2009.

That record has been broken. As of last week, the Red Cross alone has received over $25M in text-to-give donations for Haiti. $3M in the first 24 hours. 25% of the overall Red Cross funds donated.

A devastating event + human generosity + mobile technology equals:

- A broad base of in-the-moment givers
- A momentous moment for mobile

The money raised to positively impact Haiti relief efforts is the biggest win. The implications for e/mCommerce though are incredibly exciting.

Here are the top five things I see text-to-give teaching us:

1. The power of “virtual” currency
Disney has Disney Dollars. Facebook and online games have their own currency. Chuck E. Cheese has tokens. Casinos transact in chips. Credit cards aren’t the same as cold hard cash. Whether we like it or not, these all leverage the fact that people are likely to spend more money when they’re not transacting in actual dollars. Text-to-buy via mobile creates this same sense of distance.

[Haiti donations efforts were focused on $5 and $10 donations. My colleague smartly asked, what if they’d allowed text codes with varying cash amounts (HAITI25, HAITI50, etc.)? Would donations be that much bigger?]

2. Mobile providers as payment systems
Text-to-give means that providers become the payment method. The $10 donation goes on our mobile bills and the providers reconcile with the non-profits to ensure that the donations reach their end destination. This puts providers in a powerful position.

It’s not a big leap to think about facilitating mCommerce purchases via text messaging. Mobile providers could become the next PayPal – taking a percentage on the pass-through before the order is delivered to a retailer.

3. Social sharing after an action
Companies are consumed with how to make their commerce and brands more social. Much of it is focused on sparking purchases through the power of social networks. What about making them social post-purchase?
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A bronze to be exact. Or for those of you who once swam on a summer league team, a white ribbon. (Just for the record: In 2010 we’re going for gold!)

Social Commerce Today ranked the top 10 Social Commerce Highlights of 2009. In a list showcasing stiff competition, Fluid Social tied with Facebook Connect for allowing shoppers to shop together in digital commerce – quite nice company on the podium.

We edged out GroupOn. Which, in my opinion, is one of the smartest, most compelling companies currently gaining volumes of buyers. Commerce is now content and I’m cheering it on.

What’s particularly smart about this blog list? It markets the blog as much as it showcases the winners. If everyone on the list writes about being written up marketing is amplified by 10. Seth Godin recently showed the power of this tactic for the collaborative eBook What Matters Now.

We at Fluid hope your new year is off to a great start. We like the looks of what 2010 holds.

Side note: According to a Marist Poll, 48% of Americans say they are likely to make a #newyearsresolution this year. 33% remember making one last year. The delta may mean that the mind is quite forgiving of what slips.

Public accountability helps make resolutions stick. Writing on this blog every Tuesday is one of my resolutions. Now you know. More importantly, now I know you know. Bring on the Tuesday Musings…

I finally got a chance to read Forrester’s “US Interactive Marketing Forecast, 2009 – 2014”> (being trapped on planes does have its benefits). Overall there were no big surprises that differed from what we’ve all experienced anecdotally over the last five years: the shift to digital and the focus on experiences continues to build momentum. The usual notables:

• Consumers expect and value interactive branded experiences and punish those who don’t deliver
• Marketing groups are emerging as “strategic leaders” within their organizations (i.e. setting strategy vs. merely executing)
• Interactive marketing’s effectiveness is universally proven and acknowledged and marketing spend is shifting accordingly

Though we’ve seen the above in many articles recently about digital agencies taking the lead, I recommend reading this study for the interesting (occasionally surprising) details embedded in the research. My short list:

Search marketing will dominate because of consumers.
Evolving consumer behavior = more inventory to sell. Think longer multi-word search phrases vs. keywords of the days of yore. Equally important is the rapid adoption of consumers searching on mobile = more volume. All this demand begets more search engines and more innovation in advanced tools for marketers.

Social media will overtake email marketing.
It was no surprise to see social media as the fastest growing digital marketing category (projected 34% compound annual growth rate in spend). What surprised me though was the projection that social media spend would catch up with email marketing spend within two years (projected $1.6B in 2012) and then effectively double in the two years to follow (projected $3.1B in 2014).

Mobile app consolidation.
It was equally no surprise to see mobile marketing as one of the fasted growing categories (projected 27% CAGR). What was interesting is the prediction of fewer applications that are more strategically founded, better targeted, and more meaningful to the consumer. Expect some backlash and a correction from paralyzing consumers with 40,000 + micro-apps, many of which are not built on meaningful ideas.

5 takeaways for what this means for digital retailers and brands forging direct relationships with their consumers:

1. Business-as-usual is a dead notion.
Successful brands will look inwardly both critically and creatively to continually re-structure themselves and their budgets in alignment with consumer behavior

2.  Better understanding your consumers.
Personas of even two years ago need to evolve to better capture evolved and divergent consumer behavior patterns and their digital lifestyles.

3.  Mobile shopping is now standard best practice.
The holiday reports of consumers price-comparing in store armed with mobile scanning and searching apps shows a rapidly evolved digital behavior that will only grow. Whether or not retailers expect a direct ROI from developing mobile site and app experiences, the savvy ones will consider them standard elements of their ecommerce foundations.

4.  Embracing the shopping funnel as a (not necessarily linear) consumer journey.
The brands that win will take a multi-faceted approach to delivering meaningful shopping experiences where consumers wish to spend their time. Consumers in turn will connect with brands and products but on their own terms. It’s no longer (only) about the fewest clicks to cart or conversion per visit.

5.  It’s not about mobile or social media – it’s about ideas worth talking about
(credit: Amy Lanigan, colleague at Fluid @lanigan). Retailers will need to shift from “we need to do something on facebook” to spending more time developing winning strategies that can be executed context-appropriately across channels.

Damn. Should I be concerned?

Bacon currently has 379,844 fans on Facebook. Kevin Bacon has 5,985. With six degree of separation that likely equals an amount that exceeds the number of Facebook fans for your brand.

Unless you’re Coca-Cola (4,007,785 fans), who let two fans keep running their page or Starbucks (5,116,222 fans) who frankly, is Starbucks.

Free shipping for becoming a fan wasn’t enough for JCrew (164,848 fans) to unseat bacon. Although kudos to them for their simple implementation of a proven ecommerce winner.

A brand’s number of fans has become the stuff of bragging rights and for some, night sweats. Rivaled only by the quest for viral video views on YouTube.

My opinion: Kick the leader board to the curb and don’t let bacon get your brand down.
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Diapers.com has had quite a year. Recently, Inc. named it the fastest-growing retailer in the U.S., online or off, and Ad Age just added the niche retailer to its “America’s Hottest Brands” list. As a long time agency partner, Fluid knows that Diapers.com walks-the-talk and, from top to bottom, believes passionately in delivering unmatched customer service and a great online shopping experience (check out the new registry tool). Their success is no surprise.

An article in The New York Times this morning headlines that luxury brands, once wary of the web, are now embracing it. The most interesting piece is on Christopher Bailey, Burberry’s chief creative officer: “…high-end brands should go further in trying to give Web stores the rich texture of physical stores. ‘Whether they are walking into our store on Bond Street or tapping in from India or China, it’s about making sure the consumer is getting the same experience…’”

This resonates. Fluid’s philosophy on designing customer experience is that sometimes it’s good to go outside.

When you do, stop by REI’s Seattle flagship store in Seattle. A 3-story high climbing wall dominates the entry. There’s a rain room, a bike trail, a hiking boot test course, and a JanSport play treehouse swarming with marauding children. The interior design and finish details are rustic and rough-hewn, evoking a carefully architected outdoors experience.

Virgin Megastore in Hollywood has 100+ interactive kiosks that offer as much entertainment value as they do access to inventory. And it’s a great place to see bands. And, of course, there’s always Apple. You get the idea.

The point: these elements of the in-store experience are not about thrusting product at the consumer at every opportunity.

Rather, the objective is to create an “emotional moment” with the customer — immersive, uniquely branded and entertaining. Experiences designed to meaningfully connect with the customer. And, by doing so, foster a deeper relationship with the brand, a gratifying experience, and eventually more sales.

Most online retail sites aren’t especially fun. They are usable, clean and bright. Super functional, searchable, and safe. But compared with real-world shopping, they are sterile. Today’s e-commerce sites are like retail spaces 25 years ago: white boxes, bad lighting, uninspired fixtures. Products are well organized and findable but there’s not much retail therapy happening.

The evolution of the in-store experience will absolutely be echoed in the digital realm in one form or another and then taken further than it can be in the physical world. It is inevitable. The online store will soon be the ultimate “full price” flagship, a store experience fueled by interactivity and media, free from the constraints of square footage and physics.

Proof points: Fluid’s recent launches for Vera Wang Princess and Craftsman Customizable Tool Storage

Whether or not brands are ready to embrace this point of view, consumers are demanding it.

We, as brands, are no longer guaranteed to scroll across the walls of our fans. High school prom dates, former colleagues, people who came out of the woodwork from 4th grade and my mom aren’t guaranteed that placement either.

Facebook’s decision to split the wall into Live Feed and News Feed is having an impact. Vitrue determined that on average there are 57% less interactions and 30% less clicks on wall posts.

According to Inside Facebook, the algorithm takes into account:

- How many people comment on and like content from Pages you fan
- Which Pages you visit frequently
- Which Pages you interact with frequently

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The dollar is making a comeback. I don’t mean in international currency. I’m talking virtual chocolate cake, garden growing and accountability. Two mind racing ideas from last week:

1. Inside Network and Serious Business released a report projecting U.S. virtual goods to hit $1B this year. It’s a twist on nothing for something driven by Facebook apps like Farmville – which gained a mind bending 18M users in the last month to hit 51M monthly uniques.

Or the goods can be as simple as a $1 virtual birthday gift. Adding $1 seems to make it mean more than when it’s free.

[From an ecommerce perspective: What are you selling that people would want in a virtual form? Or where could we be selling it?]

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Hard work met celebratory fun for Fluid last Wednesday. And one of us ended up bald because of it. Channel 5 News was there to share our exciting news with the whole Bay Area.

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