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January 06 2014

The return of local retail?

About a month ago, IBM published its five tech predictions for the next few years. They’re mostly the sort of unexceptional things one predicts in this sort of article — except for one: the return of local retail.

This is a fascinating idea, both in the ways I agree and the ways I disagree. First, I don’t think local retail is quite as dead as many people thought. Now that Borders is no longer with us and Barnes and Noble is on the ropes, I see more activity in local bookstores. And the shopping district in the center of my town is full; granted, we’re talking reasonably prosperous suburbia, not Detroit, but not too many years ago there was no shortage of empty storefronts.

What surprised me was the reason IBM thought local retail would return. They observed that many of the same techniques that Amazon and other online retailers use can be applied locally. You walk into a store; you’re identified by your cell phone (or some other device); the store can look up your purchase history, online history, etc.; it can then generate purchase recommendations based on inventory; and send over a salesperson — with an informed view of who you are, what you’re likely to buy, and so on — to “help” you.

Well.

I like walking through local stores to see what’s there, and I even buy stuff in local stores (though, no doubt, not as frequently as they’d like). And I almost never want sales staff coming over to “help” me. I’ll ask if I need help. And I’d certainly find it more than creepy if salespeople came over and already knew what I was looking for, and made helpful suggestions about what I’d like to buy. I’d be more likely to leave than to give in to the upsell.

Some years ago (when Amazon was only a gleam in Jeff Bezos’ eye), I observed that local retail was dying in part because local retailers had given up. Stores didn’t sell what you needed, and customer service was awful. I remember setting up my home office and having trouble finding a business supply store that would sell me a desk or a chair — or, for that matter, a 3-hole punch or a case of copy paper. They had plenty of stuff on the shelves, but it was mostly greeting cards. (Why greeting cards in office supply stores? Don’t ask me…) And yes, “awful customer service” includes the obnoxious salesperson who won’t leave, even when it’s clear the store doesn’t have what you want. No wonder Staples ate their lunch. Staples will even carry the case of copy paper out to the car for you.

If there’s going to be a revival in local retail (and I believe there is), it won’t be by becoming more intrusive and obnoxious. It will be by getting back to basics: well-stocked stores that have merchandise that meets customers’ needs, and good service to help customers find what they want without being intrusive, to handle issues like returns efficiently and politely, and even to haul your stuff out to the car.

Unfortunately for IBM, the retailers won’t need Watson to do that.

March 07 2013

If followers can sponsor updates on Facebook, social advertising has a new horizon

This week, I found that one of my Facebook updates received significantly more attention that others I’ve posted. On the one hand, it was a share of an important New York Times story focusing on the first time a baby was cured of HIV. But I discovered something that went beyond the story itself: someone who was not my friend had paid to sponsor one of my posts.

Promoted post on Facebook.Promoted post on Facebook.

According to Facebook, the promoted post had 27 times as many views because it was sponsored this way, with 96% of the views coming through the sponsored version.

When I started to investigate what had happened, I learned that I’d missed some relevant news last month. Facebook had announced that users would be able to promote the posts of friends. My situation, however, was clearly different: Christine Harris, the sponsor of my post, is not my friend.

When I followed up with Elisabeth Diana, Facebook’s advertising communications manager, she said this was part of the cross-promote feature that Facebook rolled out. If a reporter posts a public update to his followers on Facebook, Diana explained to me in an email, that update can be promoted and “boosted” to the reporter’s friends.

While I couldn’t find Harris on Facebook, Diana said with “some certainty” that she was my follower, “in order to have seen your content.” Harris definitely isn’t my friend, and while she may well be one of my followers, I have no way to search them to determine whether that’s so.

In these situations, “sponsored” is the label you’ll see on promoted posts, Diana explained. She also confirmed to me that anyone can (or will be able to) sponsor/promote the public post of someone else, “if they are following them or are friends with them.”

If that happens, the sponsored post will then be boosted only to friends of its author, as opposed to an entire network of followers, said Diana. In the United States, she said that will cost about $7. If this is broadly rolled out, it will be interesting to see if PR companies or news outlets quietly opt to boost stories.

The only constant on Facebook is change

What this all seems to herald is a broader move where getting seen on Facebook will depend much more upon your willingness to pay for it. This is, of course, the dynamic that has long existed on radio and television, unless you can earn “free media” coverage by being newsworthy.

Given the recent kerfluffle over the cost of sharing on Facebook and criticism of the Facebook newsfeed, issues around algorithmic transparency only seem to be growing.

While Facebook posted a “fact check” in response to Nick Bilton’s New York Times column, arguing that “overall engagement on posts from people with followers has gone up 34% year over year,” my experience on the platform matches his: even with nearly 100,000 subscribers, my updates aren’t receiving anywhere close to as much engagement as they did before last November.

Given the reactions I’ve seen to his column, I believe that Bilton speaks for many journalists and others who have turned on subscribers, along with quite a few Page owners. What we see on Facebook is now driven not just by what our friends and family share but how we and others respond to it, as interpreted by algorithms, along with our interests, expressed by Likes, and the social networking giant’s need to make money.

I remember quite clearly when this shift began, on November 3, 2012. WolframAlpha analytics told me that an update with a screencap and annotation of Facebook’s prompt to “pay to promote” received the most comments of any picture in 2012.

Pay to Promote on Facebook imagePay to Promote on Facebook image

My feeling last November was that paid promotions would result in my updates becoming deprecated in the newsfeeds of others. Feelings, however, have to be balanced with data. Recent research suggests that, like most users, I have underestimated the audience size for my posts.

A new study (PDF) by the human-computer interaction group at Stanford University’s computer science department and Facebook’s data science team found that a median Facebook user reaches 60% of his or her friends over the course of a month.

Percentage of Facebook friends who saw a postPercentage of Facebook friends who saw a post

I’m not sure if making public updates sponsorable will fundamentally change how we use or experience the world’s biggest social network. Will having followers promote posts degrade your relationships with friends or your interactions with them? Does it create an incentive to be nicer to them? Perhaps the latter, but the rest of it seems uncertain.

What does seem clear is that, over the past five months, Facebook users have been seeing fewer updates from friends and more content targeted to their “Likes.” This now include updates containing links or ads regarding products, services, causes or politicians that their friends “Like” elsewhere online.

Given that Facebook is a public company that provides a free, advertising-supported product and needs to grow its revenues, these changes aren’t surprising. That said, these changes feel like one more step away from the clean, uncluttered network I joined in 2007 to privately share details about my life with friends and family.

If this new pay-to-promote feature catches on with brands and corporations, they will have a quietly effective new means to influence us through our friends. I still find Facebook valuable, but my relationship status with Facebook is now set to “it’s complicated.”

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