Podcast: Mobile shopping and discovery in the age of Spotify and Netflix

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Last week marked Spotify’s anticipated debut on Wall Street. The streaming service quickly went down in history as the third-biggest U.S. tech IPO of all time, and its success has been compared to Netflix’s. One of the reasons why companies like Spotify and Netflix continue to thrive today, is their ability to cater exactly to their audience by continuously serving up new content that exactly matches their interests and behavior. Consequently, these brands are causing ripples beyond the music and TV industries, impacting every industry that involves customers ‘finding’ and ‘discovering’ new content or products to buy.

The likes of Spotify and Netflix show users the most relevant content first—before they show them anything else on offer. People are consequently getting used to the fact that it now takes them less time to find content they enjoy. They are also starting to expect to be shown relevant content immediately. So, shoppers are becoming increasingly impatient and selective about what they buy.

Today we launched a podcast episode with the UK’s leading industry association for ecommerce, IMRG. In the episode, IMRG’s Strategy and Insight Director, Andy Mulcahy; along with our Director of Product Management, Simon Jaffery; and Enterprise Customer Success Manager, Michelle Cachucho; discuss:

  • The impact that changing consumer behavior is having on mobile shopping
  • What retailers can learn from the likes of Netflix and Spotify
  • What impact other types of technology, including voice, will have on shoppers

 

Click below to listen to the episode!

We explored this topic in more detail in our latest research. Read the whitepaper The growing influence of mobile discovery on ecommerce revenue to find out what an analysis of 2.1Bn user journeys and insights from a survey of over 4,000 consumers taught us about today’s opportunities in mobile commerce. Or read the transcript of the podcast below!

Podcast transcript

Welcome to the latest IMRG podcast looking at customer behavior in relation to retailers, and also looking at the different platforms where we might be able to learn something from the propositions that they operate.

Andy Mulcahy, Strategy and Insight Director, IMRG. I have two guests here with me today; if I could just ask you to introduce yourself.

Simon Jaffery - Director of Product Management, Qubit. I’ve been here nearly eight years, I joined the company whilst in the research development phase and have been here to oversee a lot of technology that has been built over that time period. Most recently I have working on our product called Qubit Aura which is about helping retailers with the challenge of mobile discovery.

Michelle Cachucho - Enterprise Customer Success Manager, Qubit. My role within Qubit is to look after the enterprise clients. Essentially, I look after Qubit’s customers to ensure they are successful. Bit of history, started off in Telcos and moved across to SAS technology to email service provider, then ran a couple of my own businesses, then decided to get back in to the world of corporate, and I am working now with Qubit.

AM And this area is more exciting than Telcos, would you say?

MC Without a doubt.

AM To get started, we are looking at customer behavior, specifically how it is evolving. If we are to look at people today, how have they changed, how are they doing things differently to five or more years ago?

SJ Since joining Qubit, this is an area that I follow very closely. I have a data background, looking at data understanding trends, doing deep analysis to understand which types of behavior and changes are on the horizon. Effectively trying to help forecast where this will go.

I started looking at this problem with the current shift going back a couple of years ago and actually very recently we launched a whitepaper, just over the course of the last couple of weeks. It’s titled ‘The growing influence of mobile discovery on ecommerce revenue’ - this has explored 1.2billion customer journeys across a number of different ecommerce sites, looking to understand what types of behavioral changes we’re seeing. Some highlights are quite simply, mobile is at the heart of every ecommerce journey, 1/5 transactions that happen on a computer are influenced by mobile.

We don’t have the data to go on to influence in-store, but one can imagine much higher, the challenge or the reason for this is mobile is often the starting point of a journey and product discovery is at the core of what we’re trying to do. What retailers are finding mobile does for them, a couple of data points, so consumer survey 47% consumers, faster or easier browsing would help them with their customer journeys. In the US specifically, 56% of those customers said better product discovery would result in the making a transaction. Mobile has come to the very core of what the ecommerce journey is about and I think that is the fundamental shift we have seen in the last couple of years.

MC I think—whitepaper aside—it’s interesting to digest it as a human, if you like. The mobile has become an extension of who you are, I read an article recently where your mobile is no further than five meters from you for most of the day. Technology is here to stay, which we now know, and it has become an everyday part of our lives, and I think mobile is leading that way. It’s a big change even from ten years ago, I look at my niece now and she is totally decked on the ipad or iphone, I think a lot of kids are getting into it, it’s very simple stuff for them.

AM How does this change expectation?

SJ I guess the expectation is the media, part of the reason the mobile is no more than five meters away from you, is because you can just grab it and get the information you want straight away, you don’t need to wait until you’re next at the library until you’ve properly woken up. The minute you wake up, you have to have some sort of self defense strategy by putting the device in another room. That expectation of immediacy is paramount, the second one I also think is an attention scarcity, where as a brand or a retailer, or even the apps, you have to be front of mind. Be the first thing that person is thinking of, you have to become the mechanic or default reaction when you pick up the phone - what’s the first app you go to?

You see it when you first touch down when you’re landing, when someone turns off their airplane mode, what’s the first app people go for? It’s that reaction which is completely different to what we have seen in the past. Previously you might make a phone call to a loved one, is that what you do now? No, you see people open up Instagram.

AM Poor old loved ones. Well maybe they’re on Instagram? [laughter]

MC Kind of echoing what Simon said, it’s about instant gratification and getting notifications from all over. I think things need to be faster and better thought out, the expectation of users is, if you don’t have a site that is fast and easy to use, you will go and spend your time elsewhere. That’s a big challenge that a lot of retailers, and I think any company to be fair is facing.

AM I mentioned in the intro that we are looking at retail, clearly, but also at some of the platforms that are very influential. So how are things like Instagram and Netflix, maybe even Spotify, influence that kind of behaviour?

SJ One of the things that I’ve certainly read up about and found very fascinating; I follow various podcasts and other commentators in the space, and there’s a guy in the space Ben Evans who works at A16Z a couple of years ago he wrote an article called ‘Lists are the new search’. What he refers to within this paradigm is effectively about the history of the internet here, you essentially have Yahoo Directories, which is a list of all the different types of content they thought was interesting for people to navigate, there’s a curated list. But it comes to a point where a list is unsustainable and there’s too much information out there, obviously the internet grew very fast and then Google came about as a search engine, it was just a box that came up on the front page, if i’m a consumer I know I can click and search and get a list. But when you get to a mobile device it changes again, because all of a sudden you’re on the go, you’re doing one hundred different things, and your attention is both sparse.

What Facebook essentially seeded here, was rather as me a consumer having to think about what i’m looking for in advance, they can tell me what I should be thinking about. They should be feeding me the types of content I should be looking at and thinking about. When the newsfeed was first introduced people weren’t that keen about it, but now everyone uses it multiple times every single day. So Facebook, then Instagram then Pinterest and all these different social media platforms effectively borrow that type of content, and then you mention Spotify in there as well, Netflix is also there and very important in this space as well. Spotify and Netflix, they are essentially ecommerce, they are providing content to customers who are paying, so part of their challenge is how do you find the right type of content so they remain engaged, so ultimately that shift is all about putting the right content in front of the consumer.

MC For me it’s from a personal user base, Spotify does a great job, I really love the journey and experience you have with Spotify, because for me it’s all about discovery. It’s like Simon mentioned earlier, Facebook does that less so now, ever since the data scandal going on right now.

AM Yes I know, can you believe it—Facebook is getting data off of you? I mean did anyone in this room know, headline news?

MC I think Netflix and Spotify do it in a way that’s a lot softer, for example if you’re going to view a movie it will tell you percentage of the likelihood that you’ll like it. This still gives me the control to say, do you know what Netflix, I’m going to try it anyway, or I might not. I think one of the most powerful things of Spotify for me personally is the ability to discover new music. Whilst we rely on radio to do that now, you can leave Spotify to play, or add new music to your playlist or make a new playlist. That’s really powerful as it leads you in to other worlds. It can be more exciting as well, but I think just creating diversity which is interesting.

SJ I think your first point there where you reference there, with what Netflix do, it’s called ‘evidence selection’, so they’re choosing which piece of evidence to put in front of the consumer and give you a reason why you should watch it. Okay, so you’ve watched a crime thriller and I want to watch another crime thriller this evening so i’ll look through this carousel of products. In the interest of Spotify, the daily mixes, they put in front of you five or six mixes, are curated around the music you have been listening to in the past. They will say, these are the types of artists you’ve been listening to in the past in this playlist, so you kind of have a seed planted, an idea, so you know what to expect in there. So that comes as your reason for starting, but once you have started on that journey they can then explore within that space, and then you can the option on both these platforms to give a thumbs up, to say I really like this track or movie, or no, it’s not so good, don’t show me anymore of that. That type of feedback on the mobile group is something that we haven’t had before. That type of consumer feedback has much more of a voice and means everything gets more personal and helps these systems, ai and ml of this world, get more intelligent and curate things around my need and your need completely individually.

AM Say I’m a retailer, what is it I’m learning from these models? These recommendations and the way they’re trying to learn more stuff, what do I take from that?

MC I think it sets the foundation for the utopia for the ones in personalization. All of our clients and the ones I work with, that’s absolutely where they want to go, we know that personalization works with more segments and the more relevant you are, the better experience you have, that’s the foundation that has been set and it’s only set to grow.

SJ There’s a big gap actually, between that utopia and where a lot of businesses are today. I think that can be quite scary, retailers are thinking this is where I need to be, how do I get there? Many of the customers I’ve spoken to, and even other agencies are in the partner space servicing businesses who Qubit aren’t engaged with, they talk about the fact businesses will come to them with a problem, and therefore it’s then on the middle men to find out which technology can help you get there.

If you look at what the current ecosystem is of the technology platforms, some of the commerce platforms or content management systems, they’re effectively designed to serve a product catalogue, in the way that a product catalog was a mail order delivery every month or part of the season. That kind of changing mentality, it’s very difficult for a lot of the businesses who have been improving their retail operations over the last 20 years, and this has changed from a technology point of view; those two things and the way in which you operate a business and the technology that goes with it, has to go hand in hand. Just for a couple of examples, you have a couple of businesses which are very young but have grown very fast, so take Stitch Fix in the US, they are a fashion business where you sign in you put all your sizes and preferences up front. Not many ecommerce platforms enable you to do that, but what happens off the back of this, is that Stitch Fix can send you specific, curated items of clothing based on who they think you are or what types of input you entered. This is kind of the reverse, it’s almost going back to a personal shopper model at scale. This is, if you like, borrowed from Pinterest or Twitter. They ask customers to engage with what types of topics they’re interested in when they first sign up, it’s a reversal of how that works.

We have a customer, who are based out in LA, ColourPop, and they work in health and beauty, and they use quizzes to try and give their customers a better understanding of what types of lip or skin care products they might have, which suits their needs. We are trying to help our customers on that journey, but I imagine that journey is a big gap.

AM If you can find out things about your customer, this is a useful way to personalize an experience. But I think the thing you need to avoid is being too intrusive at parts of the journey.

MC It’s an age old debate and we have this in the world of email as well. We asked customers what they want, but funnily enough it is one of the most effective ways to start segmentation and if you have a customer and a user who wanted to share their preferences, then you can offer them a better experience. I think the expectation now that has been set when you go to a website, or a mobile, it’s now “normal” to have this ‘Hey miss, by the way, we want to give you the best experience—do you accept these cookies?’ I think the law and GDPR has done a lot to break that mould and set the expectation. I think these surveys, a lot of our customers, are now leveraging it which is really useful as it’s sometimes as simple as asking the customer what they want to start with segmentation and then you can build from there.

SJ As long as it’s an opt in experience and you’re not forced down the road. The consumer can see the benefit, I’m going to go through the website experience without answering it, and you might get to a point of, oh this isn’t relevant. For me there’s too much in this catalogue there’s over 40,000 products here, how am I going to find what I want? Then there’s the option to go through the survey route and then you find what’s right for you. There’s little tricks that retailers can do around badging, highlighting things or trending which helped go along way to get that customer to break down the amount of choice that is available to the customer.

AM With personalizing, it’s helping to build loyalty and build a better experience. How would retailers get people to approach customer acquisition, how you decide which one you’re going to focus on?

MC It depends on which hat you’re wearing, but for me I’ve always been of the mindset that retention works best. The reason being, for businesses I think it’s a lot cheaper to retain a client than it is to go an acquire one. But in order to grow we need to acquire clients, with regards to segmentation and personalization, one of the most powerful things that is the outcome of going down that journey is loyalty. Once you have a loyal customer and they become a raving fan, they then start sharing with their friends and doing your marketing for you which makes your job a whole lot easier. So if you can get your customers to that state, I think it’s a really powerful way of doing things. Personalization is one way and focussing on the customer lifecycle is the other way, then using the right data and technology to help scale that, it can also be very powerful.

SJ One of the areas i’ve been looking at over the last couple of years, is the role of mobile across acquisition, retention and everything in between. What’s really interesting about mobile, is that it isn’t specific to a channel for acquisition, or a channel you can put in one place. Mobile plays the role across the entire customer lifecycle, so the first time someone might engage with a brand is because they may Google it, or are shown content on Facebook of this brand, then they will go on to the site and it will just stay with them. It’s all part of that initial acquisition and strategy, so part of the role of the retailer there is to ensure we get great types of content in front of the customer as quick as possible.

Then what might happen, they could go on another device and go on a deeper research journey, browse and find reviews and other pieces of information to support that journey. Mobile might come in to play when the customer comes into store to make the transaction, this is when you see that mobile cannot be pigeon holed into one place. The use cases which mobile solve are very varied which make it more challenging to design a mobile strategy from a HP tailors, because you have to design the system that you can play across the customer journey and the customer has the control over which stage they’re at.

AM We’ve talked a lot about mobile, of course, but the thing that’s happening is the movement towards voice assistance. They’re flying off the shelves and in to people’s homes, not that they know what to do with them. But I think if you went forward two years, what impact do you think voice assistance is going to have?

MC It’s a good question and it feels to me kind of bitter sweet, it depends on your view whether you’re a contrarian, and if you believe in conspiracy theories?

AM Yes, that’s me.

MC Okay, good. So, you’re probably sitting here thinking my Apple watch is recording this whole conversation and everyone’s listening.

AM We are being recorded by the way.

MC I think the data and technology are being used for the good I guess then I’m comfortable with it. It’s definitely changing, Simon and I getting ready for this podcast actually had a debate about kids using Alexa. Again, it’s becoming more intuitive for youngsters to use these sorts of technologies when they’re growing up. Simon was saying about your little one, saying growing up saying ‘well mum and dad just speak into the air and get their questions answered’ and that’s a crazy concept. But I guess in the future this is something we need to get comfortable with, with the likes of Elon Musk and their driverless cars; thinking about our kids and them not needing to know how to drive is an interesting concept. It feels like we are in this massive wave of change. It’s about getting comfortable with how all these technologies, robots, is going to influence your life. For me, as long as it’s for the good, then i’m ok with that.

SJ The future is impossible to predict, right? It is given i’m the one in product, I kind of sit on the fence a little bit. I personally as Mich said, I don’t have one of these voice controlled things in my house, I have a one year old, and the last thing I need my boy picking up is ‘Alexa, do this’ - it’s also about what type of role model do we want to be in society, how do we want people to navigate. The one thing I will say is, before that kinds of comes mainstream and you have to think about how different players can also participate in that ecosystem, how voice controlled systems are very much controlled by the Amazon’s, the Google’s, the Apple’s of the world. Actually, to make sure that if you’re a retailer you’re investing in the right infrastructure, so that if it does take off, you can structure things in the right way, this includes your catalog and data. This is so it can be understood and not just in the English language but multiple different languages. There’s definitely a lot of investment retailers can do to prepare themselves for when this happens.

These are the same type of investments you would to put in place for anything to with machine learning anyway. We at Qubit, went through a fairly large shift in our infrastructure and going back a couple of years, we asked our customers to go from a schema-less data set-up (meaning you put in any kind of data you want with any kind of labels) to having a very strict schema. The reason behind that is because ultimately machine learning works best when you have a strict data structure around what type of data you’re collecting. You can understand which information relates to the size or the color, and as long as you’re prepared to go through and put in investment it helps you go a long way. But one thing I do think will play an important role in the future is the idea of having a personal shop for every single individual, you can go on to a website—it doesn’t matter what device it is, doesn’t matter which voice and the response I get back will be entirely unique for me. Compared to what it is for Mich or yourself Andy, this means the data presented to you has been thought about and curated back for your purpose. This is the big shift and it doesn’t matter if it’s voice controlled device, it’s just about getting that data back to the customer.

MC So I was reading Kevin Kelly’s book called the Inevitables, it’s a fantastic book. He talks about the 12 inevitable technologies that are going to be around in the future which we need to get used to as humans and how the world will be. I think right now, as we stand as retailers, or in travel or whatever industry you’re in, is a little bit of fear around artificial intelligence and machine learning. I watch my clients as we talk about these solutions and it’s almost like a fear of loss and control. In five years time and the future I think that’s going to be pretty normal stuff with robots and AI and all sorts of things, what ‘humans should and shouldn’t be doing’ is what Kevin Kelly talked about, so there are going to be things that are inevitable and will happen but I think there’s a bit of a mind shift with that hurdle that we need to get over. There’s a bit of a balancing act, but certainly my clients often talk about how they can leverage technology in a greater way. Humans and tech as a combined force and is a real driver in strategy, client or engagement or retention, whatever it may be.

AM For my part, I won’t sit on the fence. I think particularly for the future an interesting place to look will be with what happens on the high street in the next five years, thinking about what’s there now and how it works now will be completely transformed because it’s already been exposed that it’s not worked. The online and offline, we’ll be seeing this as stores go in to administration from the pressures on retailers continues—like we’ve seen at the start of this year.

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