Setting the Stage
Not since the dot-com boom has a consumer trend single-handedly turned the retail industry upside down. As shoppers become more comfortable with smartphones and tablets, they are demanding their favorite retailers do the same by adding mobile-centric solutions that will personalize and improve the shopping experience.
Omni-channel shoppers bring mobile device into stores to research merchandise, share information and photos with peers and make purchases on the go. Some 86 percent of shoppers currently use mobile phones, according to research from NCR, “and they are using this more than any other shopping channel,” says Adam Blake, NCR advanced marketing solution general manager.
“The online experience is an important channel for retailers, but the mobile device is setting the stage for interactivity between the retailer and consumer.”
Clearly, many consumers are using these tools to ensure merchandise is available or do price comparisons in-store, but the picture is much broader. Shoppers are demanding a more personal experience, and retailers that can offer the best combination of apps are sure to win consumers’ loyalty — and their discretionary income.
In fact, 54 percent of companies’ mobile channel initiatives were driven by the need to improve customer retention, according to “Mobile and Tablet Shopping Demystified,” a study from Aberdeen Group; 50 percent reported that mobile channel projects were implemented to improve customer satisfaction.
When the initial foray into mobile retailing began, many efforts centered on optimizing e-commerce and web-based channels, allowing online shopping through mobile-friendly user interfaces. But as shoppers demand higher levels of in-store customer service — and more importantly, an online shopping experience at store-level — mobile retailing has taken on a consumer engagement role that allows the retailer to be a “silent partner” as the omni-channel shopper moves from education and browsing to payment and post-transaction communication.
“With many retailers generating greater revenues in the store compared to online, using mobile initiatives to incentivize in-store purchases will lead to improved sales,” says Rand Nickerson, CEO of OpinionLab, a provider of voice of customer (VOC) technologies. “And, with millions of shoppers now engaging with retailers via mobile devices, brands have greater opportunities to listen, understand and react to customer feedback through the mobile channel.”
W hile mobile device adoption is on the rise, mobile retailing transactions still only account for 1 to 5 percent of e-commerce transactions, according to Aberdeen.
“While multi-channel operations are a must, statistics show that 90 percent of all purchases still occur at store-level,” says Nathan Pettyjohn, CEO of mobile shopping navigation platform aisle411. “Mobile has become the glue that can connect all of the points in the shopping ecosystem, from the consumer’s home — when their shopping intent begins — to transacting an in-store mobile payment.”
Retailers must consider which apps will offer the most value to their mobile shoppers. Among the top considerations are mobile coupons that engage and create a more intimate relationship with consumers, both at home and in-store; barcodes and QR codes that link to product-specific URLs delivering specs, prices, even sweepstakes entry forms; and loyalty programs that allow chains to deliver incentives to mobile phones, eliminating the need for plastic loyalty cards and paper coupons.
Successful retailers “will learn how to deliver a multi-functional mobile experience that can be directed by the consumer,” Blake says. “Consumers are thirsty for a high level of engagement. By offering a multi-functional mobile app, retailers will be delivering the value consumers are demanding.”
Many retailers are surely shuddering at the thought of the labor and time required to create these apps. Rather than build these apps from scratch, however, cloud-based computing can provide retailers with access to pre-existing software and open-source and cost-efficient development tools, reducing both the total cost of ownership and speed to market.
“We are only seeing the initial stages of these efforts,” says Daina Middleton, CEO of performance marketing agency Performics. “The key to mobile is delivering the right information to the right person at the right time and place. Cloud could be the catalyst retailers need to deliver relevant data and engage with shoppers on-demand.”
Consumer mobile technology “is engaging because it is something that is always with the shopper,” says Michael Kurtzman, vice president of consumer products for iLoop Mobile, a marketing service organization. “Consumers are already accustomed to conducting searches, shopping and banking through their mobile devices. It is proving to be powerful and pervasive enough to eventually replace every analog item in a consumer’s pocket, from currency to, at some point in the future, car keys. There is an opportunity here for retailers when it comes to shopper interaction.”
While many retailers initially considered mobile as a potential “fourth” retailing channel, savvy companies are proving that mobile is much more powerful than a shopping conduit. Rather, mobile technology is a critical interactive consumer touchpoint – one that is imperative to the one-to-one customer relationship.
The Loyal Community
Loyalty programs are so pervasive in retail that it is not uncommon for shoppers to carry upwards of 10 loyalty cards in their wallet — or worse, just leave them all at home. Besides ridding shoppers of the plastic burden, mobile technology has the power to create an intimate sense of community at the store level.
“Mobile loyalty provides consumers and retailers the benefit of identifying shoppers at all times — before, during and after the shopping experience,” explains Chip Fishburne, vice president of sales with Firethorn Mobile, maker of the SWAGG gift card app.
Starbucks is one retailer proving the capabilities of a mobile loyalty program. With the help of technology partner Codilink, shoppers opt in to the program by texting “Starbucks” to a dedicated SMS number. Once approved, users receive a URL that downloads a 2D barcode for a “buy-one-get-one-free” merchandise promotion. Participating locations’ point-of-sale systems are equipped with 2D barcode scanners that can process the codes directly from mobile phones and apply discounts.
Redemption rates hover around 60 percent — high enough to encourage the chain to embark on accepting mobile payments. The app lets BlackBerry, iPhone, iPod Touch and Android users load mobile pre-paid gift cards and pay for purchases electronically.
Consumers download the app and input their Starbucks Card accounts, which allows them to electronically check card balances,
reload funds, check
their My Starbucks Rewards status and find a nearby store. Starbucks’ m-payments option is available at nearly 8,000 locations.
Talk to Me
OfficeMax claims to have an aggressive mobile strategy “focused on providing a better, more personalized experience for our customers,” says Jeff Haddon, the company’s mobile marketing manager.
In addition to mobile-friendly websites, the chain developed apps for iPhone, iPad and Android; it recently deployed contactless payment terminals in more than 100 stores that accept payment via the Google Wallet app on NFC-enabled smartphones; and it is leveraging mobile technologies like 2D barcodes for interactive content delivery on printed media and in stores.
“Mobile has the advantage of reaching customers wherever they are, so we’re more accessible when they need us,” Haddon says. “Mobile isn’t a replacement for other tried-and-true channels. Rather, it’s an extremely useful addition that allows customers to engage with us in whatever way they prefer.”
OfficeMax is enhancing that engagement with an SMS messaging platform from Cellit. Besides delivering mobile alerts to subscribers, the platform allows OfficeMax to deploy SMS-activated promotions and events.
“We have the ability, via mobile technology, to provide a better, more personalized experience for our customers, and customers are eager to use the technology to simplify their lives and engage with brands in a way that provides value,” Haddon says. “But in designing the experience, we still have to get the basics right.
“For OfficeMax, great customer engagement occurs when we successfully replicate the benefits of interacting with a cheerful, knowledgeable OfficeMax associate,” he says. “We’re working hard to assure that our mobile efforts meet that fundamental requirement, and that we provide real value to our customers.”
Following the Mobile Road
Knowing how time-starved shoppers are these days, St. Louis-based Shop ‘n Save is banking on a mobile-based store navigation service to help them streamline their store visits.
Through a partnership with the St. Louis Post Dispatch, the grocer delivers relevant content, promotions and advertisements through a mobile app. “When launching their ‘stltoday’ app, mobile shoppers receive advertisements from their neighborhood Shop ‘n Save,” says Marlene Gebhard, president of the nearly 50-store chain. “These ads guide you either to find a store near your current location or let you know of an item you might need for dinner tonight.”
Once shoppers enter the store, a search and mapping platform developed by aisle411 “delivers a mobile map to their smartphone, helping them find the in-store aisle location of the items they need, so they can quickly be on their way,” Gebhard says. “They can also add other items to their aisle411 grocery list for a later, more leisurely shopping visit.”
Shop ‘n Save launched the iPhone app 12 months ago, when it noticed a rise in website traffic originating from mobile devices. “There is no better way to help our customers make decisions for meals, alert them to where an item is in the store [and] provide them with delicious recipes for dinner tonight than through their mobile device,” Gebhard says. “This is the perfect solution to support a quick visit to a Shop ‘n Save store and allows the customer to leave satisfied, which is our ultimate goal.