The makings of a mobile holiday
A Q&A with Forrester Research's Julie Ask
Mobile’s influence on shopping is growing fast. This year’s SORO: State of Retailing Online Report reported that store-based retailers experienced an average of 135 percent year-over-year growth in sales from smartphones, and 86 percent via tablets. And in this year’s eHoliday 2014 Pre-Holiday Retailer and Consumer Study, 42 percent of consumers said they anticipated using their smartphone to make holiday purchase decisions, and 53 percent will use their tablets to do the same. Not surprisingly, retailers have reported mobile as a significant area of investment for 2014.
To go beyond the numbers and see just where retailers and consumers are with mobile this holiday season, we turned to Julie Ask, vice president and principal analyst at Forrester Research. Ask will be sharing more mobile insights in her session on mobile commerce at Retail’s BIG Show this January.
What’s driving the growth in mobile right now?
One of the things we talk about at Forrester is how consumers are shifting their expectations; we call that the “mobile mind shift,” which is this customer expectation that I can get anything that I want immediately and in context. One in five consumers expects to be able to pick up their mobile phone and do anything from getting store hours to price comparisons to who has what in inventory. It's all being driven by this expectation. Retailers are getting better at it, but many of them are still struggling to keep up with customer expectations.
You’re going to see growth because mobile is growing and the holiday season is the biggest shopping season of the year, but there’s no one specific thing that’s happening today that is going to make us see a big jump in mobile this holiday season. A handful of technologies like Apple Pay are going to help mobile’s numbers, but generally we’re seeing the combination of consumer comfort — the apps are better, the websites are better, companies are getting better at doing flash sales, merchandising on phones is getting better and our screens are bigger and better too. In-store, there’s more Wi-Fi available, and there are also more store associates armed with mobile devices, which makes them better able to sell. So there are a lot of little things that are pushing up m-commerce or mobile influence, and it’s just all contributing to steady growth year over year.
Let’s talk more about mobile in-store. What should retailers be thinking about as they’re adjusting their physical locations to the always-connected consumer?
In-store mobile is so nascent. Unless they’re very advanced, for a lot of retailers, mobile is some subset of what’s online. If I wanted to buy something from a retailer that has a bricks-and-mortar presence, more often than not, if I go to my phone, I’ll see online inventory available at some distribution center, not the store. But the in-store experience has to be digital. Retailers have to know the store inventory, and not every retailer has digitized the store to create that intersection. There are a lot of interesting patchwork solutions, such as scanning a bar code or something in the store triggers an experience for me, but we’re not yet at the point where we know what consumers are doing where in the store or where we have the ability to somehow enhance that experience with mobile. That’s a real opportunity and something that will happen probably in the next couple of years.
The store associate side of this is just as important as getting consumers information. If store associates can look up inventory on a mobile device without disappearing for 20 minutes and coming back, it keeps them out on the floor helping customers.
We’re hearing lots of buzz about beacons. What’s your take on this new opportunity?
People are putting big hopes on beacons. You can put beacons in your store, and if someone has downloaded your app and has Bluetooth turned on, you can identify who’s coming into your store. But then you have to figure out what to do with that information besides something super generic. If you’re just showing your weekly specials, that’s just not that powerful. Or if I’m a consumer, and I stop for two minutes in front of painkillers, what does that mean? Am I confused? Am I having trouble making a choice? Or have I just got distracted because I’m texting a friend? It’s hard right now for retailers to do something meaningful with that information.
What retailers are doing interesting things with mobile right now that other retailers should learn from?
The best things are much simpler than people like to imagine. Starbucks is one example. There’s nobody that does mobile payments better than Starbucks. Having a loyalty card and payments on my phone is brilliant, and it’s working for them, with 16 percent of Starbucks transactions occurring on mobile now.
Nike is a great example for mobile POS. Store associates can not only use mobile devices to see if they have my size, they can also ring me up while I’m with them. They’re helping me make a decision, and capturing me in that moment where I’m excited about that thing I just tried on, so I’m paying without waiting in line and before I have the chance to change my mind.
Walgreens is very good at reminding consumers when a prescription is ready to be refilled, and they’re able to get a higher percentage of consumers to refill prescriptions and come back into the stores through their mobile app.
I also think there are some good examples of using tablets as a kiosk substitute, for example in restaurants at LaGuardia Airport. It’s smart because they’re good at upselling consumers. It knows what I bought before, so it can ask if I want it again.
So what about small retailers with limited resources? Where should they start when it comes to mobile?
If I couldn’t afford a mobile app, I might have someone optimize my website for mobile as the first step. But then I would be thinking about how I can leverage the potential of third-party platforms. If someone searches for my business on Google or Google Maps — is all of my information available? Are my store hours and my phone number part of the results? Big retailers like Walgreens and Nike own most of their mobile moments. But if you’re a small retailer, you have to “borrow” mobile moments, which means you need to have a presence on third-party platforms ... that your customers use when they’re on the go, like Google Maps, Google search, Facebook and Yelp.
For more mobile insights from Julie Ask, check out her session, “The Mobile Sales Shift: Using Mobile Moments to Influence and Drive Commerce” at Retail’s BIG Show, to be held January 11 to 14 in New York City.