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Is ShopThis another nail in the coffin of traditional retailers?

October 23, 2013 by Chris Petersen — Owner, IMS

Before the proliferation of digital media, a primary way of learning about new products was through magazine articles and ads. To remember the cool stuff or great offers, people literally tore out the ads and coupons. The traditional Sunday newspaper was shredded into scraps of the good stuff to remember and shop for. Increasingly, many now read magazines and news online. What if you see something cool on your tablet and you could literally click for immediate purchase? A whole new wave of technology is being unleashed for you to instantly purchase what you see and like. What will this new era of instant purchase mean for traditional retailers?

"ShopThis" – New technology for immediate purchase of magazine items

The New York Times reported on new technology being rolled out that will enable you to instantly indulge and satisfy your impulse by purchasing an item you see in a digital magazine. Imagine flipping through your favorite magazine on your tablet and seeing an ad for something that catches your eye. Or, what if you read a feature article and said wow, I "need" one of those! Very soon you can simply click on the photo or icon and directly make a purchase of the product, without having to go search a website for that product, color or style.

ShopThis

Image: MasterCard

According to the NYT, MasterCard is announcing a partnership with Conde Nast who publishes Vogue, Vanity Fair, as well as Wired. Readers of these magazines will be able to tap a shopping cart icon on the page to immediately purchase any of the items showcased in an ad, as well as those described in an article. This new partnership is called "ShopThis" and will begin with the November publication of Wired magazine. It is the beginning of a series of new developments for brands to directly reach consumers while they are "in the moment," and have an impulse to purchase.

What digital ad purchases could mean for brands and marketers

Ever since the first ad was printed, there probably has been a debate as to the effectiveness of print ads in driving sales. While marketers have been able to use traditional metrics of "reach," "frequency" and "share of voice" to measure the dynamics of executing advertising, few have been able to effectively measure immediate consumer purchase response to specific print ads or promotions.

With the launch of ShopThis, marketers have to be salivating at the potential. The click-to-purchase technology parallels what happens on e-commerce sites. Marketers can literally track "click-through" on the page, as well as conversion rates. This enables a new richness and depth of data by magazine type, readership, and could even be analyzed by region of the country. With the continued decline in readership of newspapers and printed magazines, the ability to offer immediate purchase and tracking of consumer behavior is a major opportunity for savvy marketers. It also enables a direct path for brands to reach consumers … without having to sell through retailers, and incur all of the associated channel marketing costs.

Disintermediation retailers … Another nail in the coffin or opportunity?

Imagine for example, Sony's opportunity to market its high-end TVs. Instead of paying for store merchandising, and ads at the likes of Best Buy, Walmart or Amazon, Sony could focus on feature articles and ads in Wired magazine highlighting their newest TVs. If the message and ads are compelling, brands can reach consumers with the impulse to purchase, or at least interest in clicking to learn more. In fact, a brand like Sony or Samsung could choose to offer special promotions direct to consumers as incentive for direct immediate purchase.

ShopThis is just the latest in a series of technology advances enabling brands to directly reach and market to consumers. The omnichannel world has created consumer expectations of choice, convenience and immediate gratification. Why even go to the store at all if I can click right now to purchase and have it delivered to my door?

The trend toward capitalizing on immediate purchase is not limited to digital magazines. According to the NYT article, Paydiant has created a technology for consumers to scan QR codes off a television screen in order to redeem coupons or make a purchase of items shown in a television show. Want a purse or dress exactly like the actress is wearing in the movie? Simply click the code or icon. Interactive immediate purchase is going to become available from a variety of digital media very soon.

What does all this mean for retailers? Is disintermediation inevitable?

It is probably a safe bet that not many consumers will act on impulse to make immediate digital purchases immediately. However, ShopThis is yet another sign of the growing trend to reach omnichannel consumers any time and everywhere. When traditional retail stores were the only game in town, they could simply put out merchandise and consumers would come.

Traditional bricks and mortar retailers have a choice:

Either cling to the past heritage of passive, product merchandising, or
Evolve in new ways to proactively engage today's omnichannel consumers.

The passive merchandising "wait till they come" approach is a path of being disintermediated. That's a fancy term for becoming "cut out" of the chain when you become irrelevant. To remain relevant and profitable means retailers must engage consumers where they are, on their terms, even if it means digital impulse buying in digital magazines or catalogs.

To survive, traditional retailers must actively change to meet consumers, rather than longing for the good ole days of passively waiting for them to come in the doors. There are many ways for retailers to proactively reach consumers, starting with the retailer's own smartphone apps and location check-in.

In fact, I'm waiting to see which retailers will launch their own ads in digital magazines and catalogs. My guess is that the first retailer to do so might just start with a vowel of "A" or "E."