Google's so cool – but what a pity about that ageist gag ...
Old-lady anecdote apart, Philipp Schindler's 'learn to love the data' speech to the world's retailers was a real dazzler. Christena Appleyard reports
Sunday 05 December 2010
The guy from Google told a slightly questionable anecdote on stage in front of the 1,100 delegates at the the World Retail Congress in Berlin. The subject of the story was an "old lady of 75" who arrived at the company's office asking if she could buy a piece of medical equipment. When the receptionist said they didn't actually sell anything, the old lady grew angry, saying that her doctor had told her she could get it at Google.
This casually ageist and rather lame story was the punchline to an otherwise quite dazzling speech made by Google vice-president for northern and central Europe, Philipp Schindler, during which he warned the assembled retailers that they should be more aware than ever of the importance of how consumers use the web – and mobile phones – and the impact of these technologies on sales.
Schindler – no tie and too cool for PowerPoint – gave his presentation with the robust insouciance we have come to expect of the Google brand and, in spite of the ageism at the expense of the old lady anecdote, his overall message did have a beguiling simplicity. Explaining that the amount of information on the web had exploded, he exhorted his attentive audience to "learn to love the data". He added: "More than 60 per cent of retail sales are significantly influenced by by what people are doing online."
He believes that the growth in the use of mobile phones should be exploited by retailers as, for example, the most recent research showed that 30 per cent of US adults use phones in store to compare prices or look up information before they actually make a purchase.
He also believes that the rate of technological innovation means that it is only a question of time before the phone replaces the wallet.
Marks & Spencer's chairman, Sir Stuart Rose, who was on stage during the session, responded with slightly less evangelical energy: "The internet is an increasingly important for conversations with your customers. You have to treat it as a friend and ignore it at your peril. We are even selling beds on mobile phones. But I do believe customers want a range of options."
However, there was no question that this conference, which attracted top chief executives from all over the world, was in general agreement that customer data was the key to future retail success. And many of the symposia discussions were devoted to presentations of the latest data retrieval and analytics processes.
One of the companies taking the lead in this area is Mastercard. Its recently launched series of Advisors Merchant Solutions is headed by Andrew Woodward – the former marketing director of John Lewis and now global practice leader and senior vice-president of Mastercard. "There is no question that there is a lot more data than there has ever been. And now it's top of mind," said Woodward.
Mastercard's new service is aimed at retail, travel and restaurant sectors and offers a range of information analysis and finely targeted marketing solutions. "We are offering new ways to understand and quantify the value of customer segments. This is a logical extension for us. Until now we have offered this type of service to other sectors (banking) but now we are extending it to retail. Mastercard has unique access to the actual spending habits of millions," he said.
"These new services will offer everything from the ability to benchmark sales performance and market share relative to competition by tracing market share on a quarterly, monthly or even weekly market share at the regional or individual postcode level," he added. "And then we have SpendingPulse which is a macroeconomic indicator reporting on the national retail sales in the UK and US. It is one of the timeliest sources of information about consumer spending activity released in advance of government or industry data."
Mastercard is also buying into the "end of the wallet" scenario described by Schindler. PayPass – its "contactless" payment system that can be added to Mastercard – is now being used by 78 million people worldwide. This technology enables customers to tap their paypass device on to a shop's machine, eliminating the need for cash or signature.
Cathleen Conforti, the global head of PayPass for Mastercard Worldwide, also believes this is the future and that the mobile phone is key to the way we will pay when we shop. "Even taxi drivers are now agreeing to having our machines in their cabs because the trials show their tips have actually gone up as a result."
The other really hot topic for the industry strategists present was the future of the emerging markets. One of the most interesting contributions came from Dr Ira Kalish, the director of global research for Deloitte.
"A disproportionate share of global retail spending growth is now taking place in emerging markets," he said. "There is a second tier of markets that are attracting increasing attention. Turkey, South Africa, Colombia, Egypt and Indonesia are all experiencing rapid economic growth. Moreover, they are getting increased interest from the world's retailers. They are the ones to watch."
They are the words of a man who has already learned to love the data.
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