Did you know that today you can probably choose from 10 billion different products and services in New York City versus 300 items available in a traditional hunter-gatherer society some 500 years ago? – estimates Professor Eric Beinhocker from Harvard University.
Nowadays, the consumer is flooded with product options, and on one hand he expects to have a wide choice, but on the other hand he is overwhelmed with too much information. The way to deal with such a problem is to use new technologies like smartphones, social media, location services and internet. The new resources bring help to an overwhelmed customers, who uses these innovations to make research and get fast feedback from their friends. The model in which this process is done is called SoLoMo – a Social-Local-Mobile way of purchasing goods.
In the past, consumers were usually recognising a need for purchase when they were physically in a store, seeing a product placed somewhere close to other often-bought items. Alternatively, they were watching or hearing about the product from friends or traditional media. Today, we have tweets on Twitter, posts or sponsored stories and offers on Facebook, product pictures on Pinterest and ads on YouTube. As a potential customer, you go to social media sites to hang out with friends, play games and you end up seeing adverts of products, places and services liked by your friends. This is an extremely powerful “need creator”. Why wouldn’t you want to try the products or visit the places that have recommendations of some of your trusted friends?
As a second step, customers tend to search for more information about the product and its company. A task which is extremely simple with smartphones in their hands. They check if the company supplying the product has a website, a FanPage, is it present in social media. They are also interested in how popular and active the company is in social media, how many likes, followers or pins it has. Research shows such presence positively influences customers’ opinions. In fact, the lack of online and social media presence makes potential clients change their minds about the purchase.
Moreover, there are many online websites comparing usefulness and quality of products. And since smartphones with internet connection make it so simple to browse the web, customers evaluate their alternatives when they see fit, even in stores. After this step, part of the customers buy the product in an online store, while the other part seeks local info about the product, like where is the nearest store selling it for the lowest price. This brings us to the Local part of our SoLoMo model.
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RocketFuel published an infographic based on few studies done by themselves, Economist Intelligence Unit, Google and eMarketer from 2011 and begining of 2012. They state that after seeking local information about business, 88% customers take action on their purchase on the same day. 67% go to the physical store and purchase the product. Among the remaining 33%, some go to a local store just to try the product and make a final decision about buying it, but 9% purchase the product via their smartphones, while being in the store! Clients who left the store after trying the product tend to purchase it online (23%), although some of them make their purchase via smartphones (16%).
This shows just how important smartphones, social media and location services have become. Furthermore, it proves there is another part of purchasing process – the social media moment – that needs recognition. This moment is called the “Zero Moment of Truth”. I on the other hand prefer to look at it from the perspective of clients presence, so SOcial-LOcal-MObile – SoLoMo – fits better as a description of this new purchasing model.