The early part of this week saw the mainstream media more or less ruled by three basic topics: Joe Biden, the movie “Back to the Future II” and the Chicago Cubs. And while two out of three of those things make sense, at first glance there isn’t a lot there that looks like it has a lot of retail relevance.
Luckily, appearance can be deceiving — there’s been a lot more going on in retail over the last few days than a quick scan of headlines might have initially let on.
Worried that you might have missed something because you accidentally spent 45 minutes on Kickstarter yesterday trying to figure out if anyone is building a hoverboard you can buy sometime soon? (Yes, you can; no, you probably shouldn’t.) Here’s all you need to know before hitting the sales floor.
Slow And Steady Snags The Spend
The research is becoming increasingly clear: Speed is the enemy of retail spending, and small changes that slow down the shopping experience can cough up some pretty drastic results.
For example, customers who sit down in an Origins store while they shop spend as much as 40 percent more than they would have if they had remained standing, reports The Wall Street Journal. It is the latest in emerging data that indicates that experiences – not just the physical goods — are attracting customers’ spend of late, and retailers are reconceiving their showroom spaces around those new attractors.
“We made a conscious decision to have fewer products and more storytelling in stores,” Origins SVP and general manager Stephane de la Faverie noted.
That “more storytelling focus” of Estee Lauder-owned Origins includes adding specially lighted “selfie walls” and long communal sinks to test soaps and lotions.
Origins is not alone in adopting this sort of strategy. Lowes Foods, a North Carolina-based grocery chain, offers customers the chance to clip their own herbs; Ralph Lauren-owned Club Monaco features coffee and whiskey bars, bakeries, libraries and even a year-round farmers’ market across its various international locations; Urban Outfitters is designing its newest store in Austin to feature an entire “lifestyle center.”
“We want our stores to be a place where customers love to spend time,” Urban Outfitters spokeswoman Oona McCullough said. “Our shoppers are asking us for more.”
“It’s like a Disney experience,” concurred Lowes Chief Marketing Officer Michael Moore.
And it’s an experience that is getting increasingly important to offer as physical retailers look to draw customers in a digital age. Stores are focused on building a buying experience that’s desirable independent of the purchase.
“The core of slow shopping is to make it interesting and engaging, versus online shopping, which is quick and easy,” Candace Corlett, president of consultancy WSL Strategic Retail, told WSJ.
Plus, by attracting customers to the store — and keeping them there — retailers have a form of indirect but powerful marketing, noted Origins’ de la Faverie.
“Traffic attracts traffic,” he mused.
Yep, no one wants to enter a restaurant with no patrons — and the same goes for retail.
YouTube Goes Subscription
It seems the wars for streaming dominance (which up until now were most actively waged between Amazon and Netflix) may be getting another big name competitor: YouTube.
After some early indications that it was probably coming sometime this week, YouTube has officially popped the cork on its upcoming subscription service, YouTubeRed. Dubbed “Fancy YouTube” by some, the new and improved YouTube — which comes with a price tag of $10 a month — offers users ad-free content, access to Google Play Music, and the ability to download videos for offline consumption.
Those services roll out starting next week. Next year, the YouTube elite will reportedly have access to exclusive and professionally produced content from a stream platform that heretofore has been the Web’s preeminent spot for funny cat videos.
The ultimate goal for Google is to transform YouTube from an ad-funded social media video-hosting hub to a media platform.
And while advertisers may initially have mixed feelings on the announcement, Robert Kyncl, YouTube’s chief business officer, assures that the ad business will still have a home at YouTube.
“We believe in the advertising business. Ninety-nine point nine percent of the content on YouTube will be free, as it always has been,” Kyncl explained in an interview with The Verge. “So the world that all of our advertising partners are used to remains alive and well and [watch time] continues to grow at an astonishing 60 percent year over year. There is nothing we are taking away from there, merely adding onto it.”
The cat videos are safe and will remain free. Society breathes a collective sigh of relief.
Additionally, Fast Company reported that while the news of a YouTube paywall might seem out of the blue to some, YouTube CEO Susan Wojcicki said in 2014 that her company had been looking at funding and monetizing new content for quite some time.
“We have all these pretty nascent creators,” Wojcicki said. “What do they look like in five years? Do they have longer shows? Can we help them economically to grow their shows? I don’t think we need new creators. All that content is original content, but how do we make it even better?”
And, it seems, not just a little better, but notably better and different enough that users add (yet another) monthly charge to their cord-cutting a al carte entertainment bills.
Pinterest’s High Hopes For Payments And eCommerce
Included in figures found in documents used by Andreessen Horowitz to solicit investments for the social media startup through a special fund, were $169 million in revenue in 2015. The prediction comes with a three-year forecast of 329 million active monthly users, more than doubling the 151 million active users Pinterest expects to have at year end.
Pinterest is currently valued at $11 billion according to the Andreessen fund, with around $1.3 billion from investors such as Bessemer Venture Partners, SV Angel and Rakuten.
The documents also note Pinterest is “striving to build a platform with the scale and engagement of Facebook and the purchasing intent of Google.”
The firm’s revenue run rate, based on an extrapolation of Q4 results, was about $90 million, meaning the firm brought in less than $25 million in sales during the entire year. Promoted Pins debuted in 2014 and are designed to allow users to buy while they browse.
More recently, Pinterest introduced Buyable Pins, a feature which allows users to buy items directly through the site (and help push Promotional Pin buying).
Andreessen documents further indicate that the social media firm generates around $1.44 per active user, a figure they are looking to grow rather steeply to $9.34 by 2018. Pinterest is also pursuing partnerships beyond its current agreement with Target, as talks are reportedly underway with Burberry and Nordstrom. And Neiman Marcus just advertised that its Pins are now shoppable.
Finally, the leaked docs give a sharper picture of just who is using Pinterest — and for what. Half of U.S. women between the ages of 18–54 use the service, with most of its new growth (60 percent) coming from abroad, particularly Japan, France, Germany and the United Kingdom.