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Contextual Commerce: Shopping in the Moment

Contextual Commerce resizedUntil recently, we haven’t heard much about contextual commerce in the retail, payments and ecommerce space, but in 2017, it has attracted almost everyone’s attention. Contextual commerce is centered around being in the right place at the right time with the most perfectly suited product for each individual customer.

What exactly is Contextual Commerce?

Contextual commerce isn’t really a new concept. Have you ever walked out of a soccer match and seen t-shirt vendors lining the streets? This is an, admittedly primitive, example of contextual commerce. Right when and where you want a club shirt, there is a vendor. The modern definition of contextual commerce, or part of what Google calls “micro-moments”, takes this personalization to the next level.

90% of consumers research purchases on their smartphones before buying. Yet there is still a large gap between researching and purchasing. In fact, conversion rates from smartphones are significantly lower than on desktop or even tablet. Consumers are researching with their phones, but few are taking the next step to buy.

A GfK study for Facebook found that 56% of consumers said they made a purchase on their phone “because they already happened to be on the device”. It therefore stands to reason that the best way to capture more of that 90% of consumers researching on their phone is to insert your sales offering into this part of the process.

Be Relevant to Individual Customer Needs

However, contextual commerce goes beyond simply presenting your offering at the right time. To be truly relevant, you need to offer the right product aswell. If a consumer searches for ski jackets when they are in the mountains of St. Moritz, you wouldn’t present them with water ski safety vests.

Consider this example of your potential customer who is on a ski holiday, and just ripped their coat. They immediately perform a search on their phone to find out where to buy a new one. If that consumer is standing on a corner in St. Moritz, how valuable is it for you to notify them that the jacket is in stock at your store three blocks away, and that they can pay on their phone and pick it up in the store? And with data on the demographics of St. Moritz residents and visitors, you’ll know to suggest a top quality, higher priced item than you might in a less affluent ski town.

From Awareness to Purchase

This retail strategy isn’t limited to searches. It also taps into the social aspects of shopping. Thanks to the advancements made on the Chinese social media platform, WeChat, new buy-it-now buttons are appearing in social platforms like Facebook, Pinterest and Instagram. These buttons allow consumers to travel directly from awareness to purchase.  Furthermore, since these buttons are available on items that a friend has shared or pinned, there is also an inherent sense of personal recommendation associated with them.

However, there are challenges in the real world application of these buttons. With the volume of shares and pins, it’s easy for a product to get lost. And with only a limited number of brands participating today, the acquisition numbers seem small. Yet as WeChat has seen, it’s just a matter of time before consumers participate more completely in contextual commerce supported by social platforms.

Contextual commerce is the next logical step in ecommerce. The key to success is to make sure you can present your offering, at the right time and place, and do so with relevant and personalized products that meet the consumer’s needs.

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