Paths to Purchase RUN THROUGH A MAZE

Everyone involved in the digital retail supply and information chains,including retailers, brands, payment platforms and social media providers, needs to sort out the implications of multichannel sales for many different varieties of shoppers and shopping occasions.

Broadly speaking, that was the major takeaway from "The Consumer Path to Purchase 2.0," a panel discussion at the R2 Retail Reinvention Conference Aug. 5 at McCormick Place in Chicago. Seven panelists discussed the future of retailing in light of the increasing digital options available to consumers at all points of the buying process.

The lone retail representative on the panel, Stephanie Farsht, senior group manager of innovation and strategy at Target Corp., noted the huge penetration of Amazon Prime and said flatly, "If we want those customers, we can't think of the store experience as we did before."

One of the biggest points of debate among the panelists was to what degree brick-and-mortar stores can and should be included in the omnichannel experience. One of the panelists, Gene Alston, head of business development for Pinterest, recounted a recent incident where he visited Target to buy water guns for his three young children. It was a hot day, the kids were impatient to get their hands on the water guns and start playing, and Alston just wanted to buy and get out, but was stymied by the size of the store.

"Another parent had pity on me and said, 'Hey, you can download the Target corporate app and just quickly buy and check out,'" Alston said. "It was just an amazing experience, because I was able to get the squirt guns at a discount and just walk out of the store really quick."


But that drew an objection from panelist Christopher Skinner, chief innovation officer of Raise, an online service that allows consumers to both sell unwanted gift cards for cash and buy cards at a discount: "Don't we want you to stay in the store? I think making it a little too frictionless is maybe a concern for me."

Farsht responded, "This is a tremendous debate internally, but I believe those days are gone." She noted later that she teaches adult education on the side, and when she tells her students she works for Target, "they get big smiles and say they love Target, but I ask them how long has it been since they were in a store, and the answer is, pretty long. Then I ask them who is an Amazon Prime customer, and every single hand goes up, including the international students."

Pinterest just last week rolled out payment capacity nationwide, allowing consumers to buy items directly through Pinterest. As Alston described it, this is a natural outgrowth of Pinterest's function. Pinterest, he said, is "not a social media platform. Social media is about connecting with other people. Pinterest is about people connecting with their future interests." Pinterest's function of "pinning" pictures into various categories translates naturally into sales because it allows consumers to sort and store ads for items that appeal to them.

"In terms of where we see our goals, it's really helping people plan for their futures, their aspirations and their dreams, and then hopefully helping them accomplish those things on a platform that brings these ideas to life," he said.

Skinner agreed, saying Pinterest is capable of appealing to consumers at a different stage in the path to purchase than most social media.

"Social does a great job once you're in consideration," Skinner said. "I think that's why Pinterest exists, it's because there's a little bit of a void there. That's why you say you're not social, you're solving something that's different, in a different state, a different mindset."


Alston said online shoppers are becoming more inclined to buy through apps like Pinterest because "the mobile web is a broken experience for shopping." Pinterest plans to support multiple payment platforms, including purely digital ones, and can help connect shoppers with retailers' apps, Alston said.

The panelists mostly agreed that because different channels offer varying information, they create different key performance indicators, such as referrals and recommendations. Mark Hoffman, director of rewards marketing at Discover Financial Services, said apps or other online paths to purchase are, fundamentally, conduits for information, including pre-purchase information for the consumer.

"A lot of this enabling, whether it's through Pinterest or Twitter or any information that goes down to the customer, it's really about information gathering and referrals."


"A lot of this enabling, whether it's through Pinterest or Twitter or any information that goes down to the customer, it's really about information gathering and referrals," Hoffman said. "We're crowdsourcing from people we don't know, and we're relying on the math of averages to say, 'I think this lines up pretty good. I think we're going to make this purchase.'"

One of the biggest advantages of social media, as seen by the panel, was that not only is it a conduit for consumer information, but it's information that consumers implicitly trust.

David Rush, founder of Earshot, a marketing service that works through real-time targeted messaging, said social media can have more influence than traditional media on consumers' perceptions. "People trust their friends and their family, and so when recommendations are shared, there's an amplification effect achieved through social media that you're not going to be able to get through e-mail or traditional forms of engagement," Rush said.

"People trust their friends and their family, and so when recommendations are shared, there's an amplification effect achieved through social media."

–DAVID RUSH, Earshot


That sparked a discussion over the role of Facebook in retailing. It's common for major retailers and brands to have Facebook pages, but Bob Gilbreath, president of Ahalogy, a marketer that specializes in developing advertising for Pinterest, noted that Facebook's reach for brands is down 1 percent to 2 percent. "People don't actually care about brands" on Facebook, Gilbreath asserted.

That drew a mild objection from Rush, who said a distinction should be made between paid and "organic" content on Facebook. The latter can make an impact "when it truly is a conversation between a person from the brand and a consumer connecting at the right time," he said.

Farsht pointed out that retailers, especially big ones like Target with many physical stores, will have to figure out how to leverage their real estate to fit into multichannel strategies.

"We'll never outdo Amazon in ease and convenience, or price, for the most part," she said. "But we will outdo them in local connection, inspiration, true design, private label, those types of things."