Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics. Also, story has been revised to note that SAO stands for Store Assortment Online.
Suppliers to Wal-Mart Stores have been told more than once to optimize the content data and descriptions of every item they sell and provide it to the retail giant for its SAO – store assortment online – initiative.
While there has perhaps been some procrastination among some suppliers whose items typically don’t sell online – whether that’s popcorn, toothpaste or margarita mix – e-commerce experts say companies who effectively optimize their online content will be the biggest winners on Black Friday and just about another day of the year.
Andrew Lipsman, vice president of marketing insights for comScore, said as smartphones use has grown, $2 out of $3 spent in stores were influenced by digital, whether that was browsing before getting to the store, or researching the product once they were already in the store. He said 64% of retail sales, or $2.2 trillion, are influenced by digital. Lipsman was one of three featured speakers in a Thursday (July 14) webinar for suppliers on how to win Black Friday sales with Wal-Mart. The webinar was hosted by WhyteSpyder, a content service provider to Wal-Mart and other retailers.
He said one in six discretionary dollars spent by consumers, or 16.5% of retail sales, were done online in the first quarter of this year. He said apparel sales are leading the way. His predictions for Black Friday 2016 is that total digital sales will eclipse those on desktop and most shoppers will use their phones to browse deals while they are shopping in physical stores.
While that seems important for suppliers who sell big screen televisions or other electronic gadgets, Lipsman said digital access is also relevant for consumer packaged goods companies that dominate so much of Wal-Mart store space.
“It’s the opportunity to fish where the fish are,” he said during his webinar presentation.
He said it’s common for CPG companies to think about the SAO initiative as a strategy for their online business at Wal-Mart which is usually around 2% of total product sales, but that’s the wrong way to look at this. He said as more shoppers use their phones in store to price compare items, check reviews or ingredient lists, having rich and complete data for those shoppers is the best way to ensure they make an informed choice.
MEETING CUSTOMER, WAL-MART EXPECTATIONS
Ram Rampalli, director of omnichannel content technology and strategy for Wal-Mart, also spoke about the importance for all suppliers to update the online product content according to specifications laid out by the retailer earlier this year. Rampalli said having updated content would be beneficial for Black Friday, but he said Wal-Mart wants it now and customers were expecting it yesterday.
Rampalli said tech savvy shoppers can’t accurately price check like items if the product content is lacking. He said Wal-Mart has invested in sophisticated algorithms that look for high quality content for items in its product catalog that is embedded in the search feature of its mobile app. He said this is one way Wal-Mart is ensuring it has a vast assortment available to customers however they chose to shop.
Eric Howerton, CEO of WhyteSpyder, said digital is changing the way people shop and suppliers have to rethink how they are marketing all of their products online, even if most of their sales still come from brick and mortar.
“Wal-Mart is accommodating this omnichannel era. Think about Wal-Mart as one of the greatest marketing partners you can have. They want all this data on your SKUs (stock keeping units), even those they don’t sell. Wal-Mart today is multiple platforms and they want your optimized data and content relevant to your products so that it pulls up higher in any online search for that item,” Howerton said during his webinar presentation.
He said there are at least 2.2 million online searches a month for the word “camera” and any supplier selling cameras or accessories with the right SAO content should come up within the top 3 listings of a search. But it’s not just cameras people search for online. The word “chilies” was searched 550,000 times a month, “chicken recipes” had 368,000 searches in a month and “mango’ was looked for 165,000 times by consumers online.
“Shoppers are wanting information that many times is not there. If they can’t find your product online in the top 3 listing, you are losing potential sales,” Howerton said.
About 70% of people will click on the top 3 lists in a search result on Google. He said it is amazing how many suppliers have hardly any product detail available online. This is the transaction page for shoppers, and they need to be able to see product and get any pertinent information they could see if they were looking at it on a brick and mortar shelf, he added.
Lipsman said Wal-Mart is doing a lot of things right with the effort to drive more digital sales through its mobile app which has been downloaded by more than 20 million users. In the first quarter of this year consumers made 26.6 billion visits online through mobile apps. He said Amazon led the pack with 143 million visits, eBay came in second with 79 million visits and Wal-Mart had 68 million visits for a close third place finish. Target was a distant fourth place with 42 million visits online through its Cartwheel app.