A trip to the store is not what it used to be. The days of making a list, reading the circulars, printing or clipping a few coupons, and visiting the nearest grocer are coming to a close. The shopper, smartphone in hand, is charging ahead with high expectations ― and leaving behind the brick-and-mortar retailers not prepared for a mobile world. To stay relevant, grocers and other retailers must embrace these new mobile shoppers with value, convenience and innovation, both inside the store and out, or risk losing them entirely.
The Mobile Age Is Here, Ready Or Not
The statistics are staggering; though to some they are familiar, the data around mobile growth tends to be just outside many retailers’ peripheral vision. According to comScore/Mobilens, as of March 2011, nearly 70 million people in the U.S. owned a smartphone, up 13% in just three months. The FCC reports that 28% of all cell phone users now have smartphones, and more than 40 percent of cell phone purchases today in the U.S. are smartphones.
For retailers, the implications of smartphone growth are huge. The North American Technographics Retail Survey conducted in the third quarter of 2010 revealed that in the six preceding months, mobile commerce (m-Commerce) purchases grew 25% faster than any other channel. At the same time, Forrester Research reported that 43% of retailers had not yet defined their m-Commerce strategy ― an ominous sign that unprepared retailers are on the verge of losing customers to other channels.
In a marketplace saturated with mobile apps and endless offers, retailers need to either get on the mobile bandwagon, or, better yet, lead their own bandwagon by delivering m-Commerce solutions that provide true, fundamental value to the shopper. When considering mobile apps, the goal is to get back to basics: how to save shoppers time and money. Once an app gets opened and is used in-store, a retailer has the opportunity to drive shoppers through the door again and again by engaging, guiding and nurturing them from entry to exit and beyond —anytime, anywhere in today’s always-connected world.
In retail, mobile is as simple as this: the winner is rewarded with customer loyalty and basket lift; the loser faces intermediation ― perhaps becoming a mere pick-up point or generic distribution channel ― with no influence on buyer behavior nor an opportunity to grow loyalty and the bottom line.
Mobile is Disruptive
Retailers need to realize that mobile technology represents a significant disruption to the shopping landscape. Mobile is highly personal. It’s location-aware. It delivers a wealth of on-the-spot information, giving shoppers, for example, immediate product reviews and price comparisons — information and choices that can easily drive consumers to new channels.
Shoppers typically take their mobile devices everywhere, opening new market opportunities for time- and location-specific services. For retailers, that means shoppers must be engaged wherever they are — in and out of the store, at home, work or on the road. With smartphones nearly always on and now in the pockets and purses of more than 70 million Americans, mobile is a channel like no other: done correctly, the possibilities for customer engagement and brand building are virtually without limits; done improperly, and the consequences to the brand could be grave.
Developing A Successful Mobile Strategy
With 43% of retailers without a clear mobile strategy, as Forrester Research found, it’s easy and tempting to dive right in and try to deliver applications that have the most buzz and appeal. However, thoughtfully answering a few preliminary questions can save retailers from wasting time on “me, too” apps or making a damaging mistake that could easily alienate shoppers downloading apps with high, unmet expectations.
What do shoppers really want?
What are shoppers using today? What is their influence and what fundamental needs do they meet?
What specifically will drive loyalty and basket-lift?
Which tools will deliver the most effective results?
What is their cost and implementation?
What capabilities does the retailer have to provide adequate support?
Consumer behavior researcher Ryan Partnership offers interesting guidance through its recent study of more than 5,000 retail shoppers and their expectations of mobile applications. The study found two key factors motivate consumers to adopt mobile technology. Not surprisingly, they are:
1. Saving time
2. Saving money
As smartphone penetration increases exponentially, the study concludes that, “these tools will become a critical part of everyday shopping behavior because of the utility they provide to shoppers.”
Longer Term Impact
Saving time and money are clear shopper motivators, but what increases share-of-wallet and motivates shoppers to try new brands and products?
Shoppers first and foremost value mobile technology for the utility it provides, the Ryan study concluded. Perhaps, even more importantly, mobile technology is an impactful tool for driving incremental purchases, and should play an integral role in brand trial and product launch plans.
To create the most useful mobile experience, retailers need to recognize the importance of providing real convenience and value, looking beyond the hype of flashy mobile apps that likely won’t get used more than once or twice. Successful leaders in retail will embrace a mobile solution that integrates with existing retail POS and CRM systems as well as the people and processes that surround them: this is the key advantage proactive retailers will leverage to maintain and grow their relationships with their shoppers.
What About The Dreaded Checkout Lines?
The Wall Street Journal, in citing an Ipsos Public Affairs survey, reported that customer frustration with checkout lines was highest in grocery stores, mentioned more often than motor vehicle departments and doctors’ offices. The article concluded that supermarket lines may not be the longest, but are the most loathed. Improvements to date have had little impact. For example, self-checkout did not impact speed substantially, due to its complexity and customer unfamiliarity with barcode scanning. Leveraging mobility to improve checkout ease and time is one example of a key attribute of a winning mobile strategy.
The Future Has Arrived There is little argument about the explosive growth of smartphones and the shopper’s growing thirst for the true convenience mobile apps can offer. The disconnect has been with apps that simply take a non-mobile concept such as coupons and move them to mobile, where often they don’t work when and where the shopper needs them. For the retailer, preventing that disconnect means delivering a single solution that:
Enhances the shopper experience from the moment that customer enters the store through checkout … and beyond;
Predicts shopper preferences over time, delivering targeted content aisle-by-aisle;
Accommodates shoppers’ needs and wants, such as integrating with their favorite apps, from lists to manufacturer coupons; and
In the future, enhances the in-store experience through the critical checkout phase — mobile checkout.
As we look to the future, a solution that enhances the in-store experience through the critical checkout phase — mobile checkout. To summarize, a successful retail mobile solution should encompass convenience, relevance, personalization and savings, working in harmony with existing marketing and customer services aimed at creating and sustaining customer loyalty.
How To Get There
The results of a recent Forrester m-Commerce report found that 38% of retailers surveyed believe they do not have the right skills and expertise to approach mobile. In addition, just over 70% of e-Business managers said they have average or below average mobile expertise. Choosing the right partner and strategy is critical to capitalizing on this open window of opportunity.
In considering strategic partners, seek out a teammate with:
Direct experience in your business, with a track record of successfully bringing innovation to an industry slow to change;
The capability to integrate with existing systems and processes, and the people responsible for managing those systems; and
A proven commitment to continuous innovation.
m-Commerce is not simply about shoppers making purchases from their smartphones. With consumers armed with their mobile devices 24/7, m-Commerce solutions must engage the shopper both in and out of the brick-and-mortar store in a way that builds loyalty by providing a superior experience with your retail brand. The right m-Commerce strategy begins with fundamental utility: saving your shoppers time and money. It continues with convenience, relevance and personalization, resulting in loyal customers who reward with a higher share of their budgets.
Mike Grimes is an accomplished sales and business development executive with expertise in new customer acquisition, go-to-market strategies and strategic alliances for early-stage companies. Mike has been with Modiv Media since 2001. Previously Mike served as Vice President of North American Sales for PinPoint Corporation, a manufacturer of real-time proximity solutions for manufacturing and healthcare markets, where he built and managed the direct and channel sales teams. Prior to PinPoint, Mike held various VP-level positions at Telxon Corporation (now part of Motorola), a manufacturer of mobile wireless information systems. Mike ran Telxon's Northeast Division for four years and later built up its North American channel sales team.