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The post below is authored by my very good friend and SHIFT colleague, Parry Headrick.  Parry’s our VP of Sales & Marketing, and even as he does a bang-up job for the Agency in that department, his hair routinely catches fire with other great ideas. 

When he asked if I’d be willing to blog about his ideas for “social shopping,” I recognized that wild glint in his eye and quickly suggested that he was the only man who could communicate the concept with the passion it deserved.  As I read Parry’s words below, I couldn’t help but think that the marriage of Transparency & Real-Time Retail Analytics he broaches could both goose the Retail sector (big time), and also prove the true power of social technologies. 

With that, I turn it over to Mr. Headrick…

I post this with a wee bit of hesitation, since the few (very smart) people who have heard the idea believe it’s a potential game-changer for big retail. Somebody will do this, it’s just a matter of who and how fast. You heard it here first, folks.

 

I’ve toyed with the idea of reaching out to rainmakers like LinkedIn’s Reid Hoffman for advice or feedback (or to grovel for a few lousy million in seed money,) but at the end of the day I realized the idea isn’t so much a new product as it is a new internal process, predicated on social media, that could radically change the way companies like Walmart and Target interact with – and extract more revenues from – their existing consumers.

 

Let’s use Walmart as our subject. After years of torrid growth, how do they continue to increase sales and keep their stockholders grinning? After all, there’re only so many new bedroom communities you can drop a Walmart supercenter on, right?

 

Okay, so what about Walmart’s dirt cheap prices? Well, I’d argue that the secret’s out about Walmart having great deals. As such, it’s simply not very effective marketing to say: “Come to Walmart – we STILL have cheap prices!”

 

Put all of this against the backdrop of the conversation I had with a friend about how corporate America needs to be more transparent. This got me thinking about the openness of social networks, and how one group’s behavior can greatly influence another group’s decisions. It gets more granular, of course, right down to the individual.

 

Revelation: it’s not enough to sell to your customers. In this social media age, it’s time to get your customers to sell to your customers!

 

So, what could be more transparent – and ultra social – than allowing Walmart shoppers to see which products are in other peoples’ shopping carts (theoretically)?

 

Imagine if you entered a Walmart (or a home depot, or an IKEA, Old Navy, ToysRUs, etc.) and there was a GIANT screen on the wall listing the Top 10 Products people bought that day. Imagine further that you could see the rankings change in real time, like the stock market. This creates a classic upsell situation. Customers are far more likely to buy items on the popular list – above and beyond the stuff they originally intended to buy.

 

“What does everyone else know about Deb Talan that I don’t?  Her CD must be pretty good…”

 

Think of dad, “back to school” shopping for his daughters. He’ll buy everything he set out to buy – plus a few items on “the list.”  Think of the bored housewife who just wanted to browse and kill some time while little Cindy is at soccer practice. “Whoa! Why is everyone buying that new Swiffer?”

 

And yes, because it’s Walmart (and because I’m a PR guy), major news and broadcast outlets will naturally keep tabs on “the list” in their daily retail reporting; it would be the national bellwether on retail. Hmmm, maybe retailers might even be willing to lower their prices to get on the list?

 

But wait, there’s more. Walmart can discount the top items in relation to their popularity (how many are flying off shelves). Essentially, the transparency causes more people to buy popular items, which slightly drives down the prices of those popular items. It could reverse the laws of supply and demand! Walmart can make its money on the volume, and customers win. It’s giving the power to the people to discount the stuff they love most – and the power to Walmart to coax people into loving the stuff Walmart most wants loved!

 

Example: Let’s say Walmart has too many NFL beer cozies in stock. Knock down the price so low it moves up the list. Viola! People see them on the list, and now they’re suddenly flying off the shelves.

 

Note to economists: I’m not an economist. Keep that in mind while using your economic models to skewer me. Bless you.

 

You can take this MUCH further than having a big screen in stores with a simple list. You can install little interactive screens in shopping carts that dig much deeper. For example, you can find out what the most popular items are in the store you’re physically in (versus the national data on the big screen). You can parse every department in the store: What’s the most popular tennis shoe? Handbag? Board game?

 

Imagine if the actual number of the “popular” items in stock in your store could be displayed? You can actually see that there are only 4 Forman Grills left in stock. Better high-tail it to isle 6! And what if you could look up that same information while sitting on your couch? The Social Supply Chain.

 

So, how does this all work? Basically it has to do with RFID, a point of sale solution and real-time analytics. As each item is purchased, the data automatically gets fed into the national tracking system, which displays the data on the big screens in stores, in real-time. Walmart won’t have to collect any new data – they’ll just examine and display it differently – on the wall; in the carts; on the Internet. There are no privacy concerns – it’s anonymous aggregate data, yet it’s open to all!

 

And that’s the crux of it. Walmart and other retailers will one day let their own customers do the selling, social media-style, while people are physically already in the store for the sole purpose of buying things.

 

What say you?