Shopper Culture

The Cosmetic Worlds Collide

It used to be that one had two options for cosmetics and skincare - the drugstore or department store. Both had their advantages and disadvantages. At the drugstore, you had a multitude of choices, all at reasonable prices. But, there was no opportunity for experimentation or exploration. If the lipstick shade you bought was within three shades of what the picture looked like, you considered yourself lucky.

On the other hand, department stores were just waiting for you to come in and try. Unfortunately, they were crawling with pushy, overdone sales people committed to their lines, not to you.

Enter Sephora. The current Mecca of cosmetic retail, Americans are absolutely spellbound by endless rows of testers, hard to find products, and unbiased staff. It's like the Super Bowl of makeup. Each store is a mad house during every single business hour. They're opening new stores across the country like they're going out of style.

But there's still something missing. What happens when you do need advice? You can stick your hand in that shiny gooey stuff, but where the heck do you put it on your face? And what is the difference between that $100 eye cream and that $100 eye gel? Even if you can find a staff member who's not running around like a chicken with their head cut off, he or she's probably not going to be much for education. It's high-end product with low-end experience - like shopping Neiman's at Target.

If you're a lipstick whore (meaning you know your stuff), this is your spot. If you're a novice, god speed.  I still think there's opportunity in this market for a different kind of retail. Space NK, a British upscale Beauty retailer, is opening 4 stores in the Tri-state area by the end of the year. They have 60+ stores in the UK, and are bringing their unique retail approach to the US. Hallmarks of Space NK are hard-to-find lines, education and trial, makeup-trained sales staff (that aren't commissioned by line), and a chic, upscale atmosphere.

According to Space NK,

"We provide a highly edited selection of the best products from true innovators within the industry and this offering caters to many different lifestyle choices. We employ highly educated sales associates and expert make-up artists who enjoy working with customers."

While my guess is that nothing about this store is a bargain, you do get to test the products with trained, unbiased staff in the kind of environment you'd expect when you drop $250 on 12 oz of goodies. Here you can escape the madness that is Sephora, and the stuffiness that is (enter favorite department store here).

While we wait for the right balance of self service vs. trained staff, of get-in-get-out vs. stay-awhile, and of try vs. don't try, I can't wait to see how Space UK does. It's about time the beauty market went boutique.

Consumer Electronics Shopper Study

Our Dallas office recently completed a very interesting study on shopper behaviour in the consumer electronics segment.  Topline findings were posted on adage.com yesterday.  The original article can be found here.   

The study takes an interesting look at the decision making process and the impact of various stimuli on the purchase decision in this category.

For more information you can contact Lisa Deatherage in the Integer Dallas office at [email protected].  Or check back soon for more on this.

(Photo credit: AP)

Customer Choice meets the Coffee Shop

Coffee shops have become remarkably innovative over the past 10 years, offering everything from decaf soy chai lattes to bestsellers, music, and coffee-paired food items. But the cup of coffee itself hasn't really changed since Starbucks and other chains perfected their proprietary brewing methods several years ago. Until now.

Meet Clover. Following a visit to the Denver Art Museum the other day, I stopped for a coffee at Novo, a new-concept coffee shop in the Museum Residence complex. While most coffee shops generally feature two or three daily brews - a dark roast, a light roast and a decaf - Novo features individually-brewed servings of a dozen or so rare beans from around the world. Exotic varieties like Aricha from Yiragaffe, Ethiopia and Esmeralda Geisha from Boquette, Panama. Daily selections are presented at the counter in green, roasted and ground states for discerning drinkers to feel and smell before they choose. Whole bean and ground coffee can also be purchased for home brewing at a rate upwards of $15 - $40 for an 8-ounce bag.

The ingenious Clover machine enables the barista to brew one cup at a time in about 1 minute per cup. The barista told me the required training is minimal: you grind a small amount of roast beans, drop the grind into a cylinder in the top of the device, set the cup size and flip a switch. The cylinder fills with boiling filtered water, the barista stirs, and (the really cool part) the water is pulled through a reusable filter at the bottom of the cylinder. The cup is filled, a piston in the cylinder rises to the top, and the barista uses a squeegee-like device to clean the used grounds from the filter.

Novo in Denver and other independents are among the first, but a recent article in The Economist hinted that larger national chains may soon be next.

What we love about Novo is the emphasis on coffee, not accoutrements. What we love about Clover is its ability to enable smaller coffee shops to compete with larger ones - and its ability to offer coffee customers a wider range of choices.

Verizon and the Open Telephony movement

I recently reported on Google vs. Apple mobile technology, speculating whether Google's announced plans to open their OS platform to independent developers would alter Apple's closed-technology position.

The answer remains to be seen, but today Verizon announced their plans to open their mobile network to a variety of hardware providers, not just those models Verizon sells, the New York Times reported.

This move marks a major shift in the industry that we speculate other carriers will have little choice but to follow. If Sprint, AT&T, T Mobile and the others follow suit, people will soon have the ability to select  the device of their choice and link it to their chosen carrier, and take the device with them if they decide to change carriers.

This is very, very good news for mobile phone users at large. There will be technical limitations at first: not every device will synch with the Verizon network initially. But it could nevertheless lead to a U.S. mobile market more similar to Europe and Asia, where hardware and telephony services are largely unbundled and individuals benefit from greater choice and competition.

Verizon's move also underscores a significant difference from Apple's iPhone, which is currently only available through contract with AT&T, to the dismay of legions of iPhone users who complain of inferior connectivity compared to BlackBerry and other mobile networks.

Verizon's move has won praise from Google, Microsoft and the FCC, all of who understand that greater choice will inevitably lead to greater innovation and cost competitiveness. Still, many questions remain unanswered, and many technical challenges remain unsolved. But we can all agree that Verizon's move is a step in the right direction, where consumers and companies may plan an equal role in shaping the future of mobile telephony.

* by invitation only

It seems our desire for exclusive shopping knows few bounds.  A new service launched in Europe at the start of 2007 called Claseo aims to bring exclusive fashion retailing for men and woment together with a social network environment of like minded people. 

You can only gain access to the site, and therefore the brand's clothing, if you are invited by an existing member.  It's the ultimate in audience direction of a brand.  As well as an ultimate in bragging rights and social one up man-ship.

As the public area of the site states:

Claseo offers uniquely designed fashion which is not available to the public. We want to connect outstanding and like-minded individuals around the world – both online and offline.

Claseo fashion items are strictly limited and equipped with a visible identification code that makes each item unique. The exclusive design makes Claseo bearers stand out in any crowd. In order to be able to purchase Claseo apparel, you need to be invited by a current member of Claseo. This means that Claseo members choose the people who are eligible to wear Claseo designs. Invitations are limited.

After you have ordered a product at our online store, you automatically become a member of our lifestyle-oriented online portal. Here, you can reconnect with your friends, get to know interesting people and find valuable information about lifestyle oriented topics. Furthermore, community members decide about the looks of every new collection and also hand in their own design suggestions.

This way the members of Claseo actively particpate in the development of the brand.

We think this is a neat Disruption in the category.  Of course  social exclusivity has been around for eons, but we find the combination of an on-line and off-line element of the experience, along with the ability to let the audience direct the development of the brand, really interesting and smart.  We have always been able to identify people in a crowd who have the potential to be PLU (people like us) by their overall attire. It's easy to spot the people you think you're most likely to hit it off with when at a social gathering, but this kind of 'special hand shake'  is an interesting twist that converges these two worlds.

As with all things exclusive, someone eventually tries to take it a little more mainstream.  So where does something like this go?  Would we see this at Gap or Banana Republic in the US?  Could we see Nordstrom or Selfridges launching an exclusive service in this way that helps their shoppers identify each other in a crowd? What about Top Shop in the UK would be interesting. Where else could we see this concept going? Who could you see doing this in your market?
   

Shopping cart media: two visions of the future

The recent Springwise newsletter shares a new breed of smart shopping cart that displays text ads on a small screen right on the handle.  Its simplicity allows retailers to run messages for one store or for a whole chain, and the retailer can easily change messages for dayparts and clearance items.  It's manufactured by Modstream, a New York based company that claims:

Modstream’s messages are so powerful that national retailers have reported sales lifts of featured products up to 35%! These extraordinary sales results are possible because Modstream requires no change in shopper’s behavior.

No buttons to push or screens to navigate — shoppers push their cart and see your messages! And, since Modstream resides on the shopping cart handles, retailers and advertisers have 30-40 minutes to engage customers every time they shop.

This innovation seems a bit like Google text ads to me.  Low-tech text - but located where it counts.  As both a supporter and critic of new media placements in our lives, I am mixed about this one as usual.  But as long as it's quiet and shoppers can choose to ignore it, Modstream could be a win-win for both shopper and retailer.

Compare Modstreams' cart to one at the opposite end of the spectrum: the beautifully redesigned shopping cart with ad space on the side.  It looks exactly like a Volkswagen Beetle - if the Beetle were wrapped in a giant ad.  It's called the MarkitCart.

Two polarized examples in the evolution of mobile shopping containers. 

What do you think?  Are cart handles like the Internet search dashboard - best used for fast and readable low-concept messages?  Does Modstream's technology hit the sweet spot somewhere between interruption and engagement?  Does the MarkitCart take it too far?

More coupons

How many shoppers actually have the time or the motivation to work such math out is an unanswered question (and maybe we should, what do you think?) but it shows what is possible given the right kind of motivation.

And how do the manufacturers feel if there are scenrios where-by the shopper is basically paid to take away their brand? (We'd love a comment from a manufacturer if you are reading this).  Different for retailers, as we don't know the impact on this shoppers overall basket size, but still, for a premium brand it has got to feel pretty yuk to find the shopper is paid to take it home with them. 

Nice idea - let down in execution

In London at the moment Nike are running a small outdoor promotional event that lets you jump the queue at Nike ID.  Apparently, there is currently a three month waiting list for appointments at the Oxford Street store. These cubes create a countdown and when it gets to zero, creates a Bluetooth broadcast that announces if you are a winner or not.  So the promotion is a reward for simply being in the Bluetooth broadcast area of one of these cubes.

Or at least it is supposed to be, as when I stood there it didn't seem to be working.

According to the promotion guy there have been a number of problems.

Firstly, when it was working, they broadcast every 15 minutes.  Lots of people were eagerly waiting and very few actually won.  So they dropped the time to every 3 minutes.  And there have been problems in the Bluetooth broadcast (like I experienced). So it's a neat idea but it falls down when it doesn't actually work.  Given the popularity of the ID studios, this is a simple and effective idea - the cube pops up in a few high traffic areas (this was in Soho Square on November 13th) and some lucky people get to jump the queue.  It was visually stunning on a drab winter afternoon (although these pictures don't really do it justice) and there were a fair few people around waiting.

Apple vs. Google, or, Open Source as a Competitive Advantage

Leading up to the 1994 Winter Olympics, Tonya Harding's ex-husband, Jeff Gillooly, tried to break competitor Nancy Kerrigan's knees, and the incident pitted the two against one another like Good vs. Evil:  Nancy, tall and beautiful, dressed in white, vs. Tonya's thin-lipped trailer-trash demeanor. Nancy went on to win Silver that year and an all-American heroine was made. Then she stepped in it, insulting her $2MM sponsor Disney when she said, regarding a promotional appearance she was obligated to make, "This is dumb. I hate it. This is the most corniest thing I have ever done." America was shocked. Nancy retired from competition. David Letterman quipped, "what if it turned out that Nancy was the evil one after all?"

During the PC wars of the 80's and 90's, Microsoft and Apple were similarly pitted: Windows for PC black boxes, closed technology, apparently run by malicious, greedy men who wanted nothing less than to crush the competition and dominate the world; and Apple, brave, noble, enlightened, light-colored, toiling to free mankind from software bondage. To many Americans, the rivalry was on the level of Darth Vader vs. Luke Skywalker.

Fast forward to present. Bill Gates, alongside wife Melinda and Bono, TIME’s People of the Year. A visionary, a great man, the most generous philanthropist the world has ever known. Who could have predicted it? Things change quickly.

Google recently announced that its phone will be based on open-source technology, right down to the OS. Any programmer will be able to create applications, from social-networking applications to photo-share programs to multi-player games.

iPhone by contrast? Closed technology. Applications by Apple. Look at the thing: there's no apparent way to open the device short of smashing it. What happened to the Apple of 1984?

What if it turned out that Apple was the evil one after all?

Apple's reaction to Google's announcement remains to be seen. Will they break down the walls? Or will Open- vs. Closed-source be the key difference between these new competitors? Do the best programmers Apple has stand a chance against a worldwide legion of independent developers?

Whether Apple prevails or consumers choose an open-source platform like the Google Phone will be revealed early next year, at the cash register.

- Andrew Morse

Go Shopping with Facebook

Initial information is already coming out of Facebook's big advertising event this week in New York. The addition of a Shopping application will evolve word of mouth in the online shopping arena. Discussed in an Ad Age article, the application will allow users to ability to add recent online purchases to their Facebook profile. This instant word of mouth creates an interesting addition to such successful tactics as "People who purchase X also bought Y", which have become popular on many e-commerce sites.  However, now instead of seeing what strangers are purchasing, users can be influenced by what their circle of friends are buying.

As stated in the article, according to a recent Deloitte survey, family members' or friends' comments about a product are the second-biggest influences on consumer purchases of new products or brands (after the reputation of the manufacturer or supplier).  As marketers are all trying to figure out authentic ways of creating the ever-coveted word of mouth buzz, applications like this are enormously exciting.

However, as also discussed, a potential challenge could be the online only nature of the app. With a good number of purchases researched online but still bought in the real world, how can this app be expanded to be more inclusive of broader shopping behaviors?  Seems like the addition of a "considering" feature could be a useful plus-up.  For example, if a user is on bestbuy.com looking at flat screen TVs, maybe they can add categories or specific products to their considerations.  For users this could be a useful tool to gather intelligence from a network of friends.

With more announcements sure to come, we're very excited about the the future of social networking and the ability of marketers to harness its power in authentic ways. Our VP of Digital/CRM is currently in NY at the conference and we anxiously await his return with more details.