Thinking Beyond e-Commerce Part One: Mobile

Wednesday, January 19, 2011 | 1:50 PM

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Looking to the year ahead in online retail, we review some of the key areas that achieved prominence over the past 12 months and which will help shape e-commerce in 2011. The first is mobile and its impact for retailers and their cross-channel sales strategy.







When considering the further transition of their businesses from “bricks” to “clicks” in 2010, retailers were challenged to include an understanding of m-commerce and the increasingly significant role it plays in multichannel sales.

Modern customers embark on a complex and progressively non-linear journey, shopping across multiple sales channels but with an abiding expectation of receiving a consistent, end-to-end brand experience. Aside from the operational challenges this means for traditional retailers in terms of stock availability and delivery, they are also required to think about engaging with a different type of customer; one with an unprecedented degree of access to product information before, during and after venturing in-store.

The ROPO (reserve online, purchase offline) effect is everywhere, for example, it is estimated that today some 60% of EU sales are affected by web research prior to their purchases on the high street. The advent of mobile with full web browsers means that this trend is set to only increase. During 2010 the mobile web grew at an exponential rate. Five billion devices were sold worldwide with 250k Android devices activated every day; one every three seconds. It is anticipated that by 2015 mobile will be the primary means for customers to access the web.

The mobile web is a powerful sales channel in its own right and a compelling means of driving new customers to retailers’ online stores. Global technology company Usablenet, posited that a fully enabled m-commerce website gave an increase in traffic to some UK retailers’ websites in the region of 50 to 100% over the Christmas weekend[1].

Published research in Internet Retailing by Forsee Results based on 10,000 visitors to some of the UK’s biggest e-retail websites also confirmed a similar picture[2].They reported 8% of visitors to UK retailer websites on mobile purchased something. 47% used mobile to compare prices and research products. 34% used phones to look up product specifications and 15% to view product reviews[2].

However, mobile’s complex interplay with the offline world can also realise incremental sales and advanced demands and gains for multichannel retailers. The notion of the “connected customer” is a relatively recent but nevertheless transformational concept in the changing retail landscape. A recent article published by the Independent revealed that 55% of surveyed retailers believed shoppers were better connected to product information than the sales assistants trying to help them[3].

Tech-savvy shoppers replete with smartphones and comparison shopping mobile apps visit retail stores primed with a greater awareness of the products they are looking for and the prices they are prepared to pay. Consumers have ready access to retailers’ products and prices at any time, not to mention the freedom to compare items in-store with direct competition just around the corner.

67% of surveyed mobile shoppers in the Forsee Results research said that while in physical stores they used their phones to visit the store’s own website, and 26% used their phones to access a competitor’s website, an increase from only 17% of mobile shoppers who accessed a competitor’s site while in-store during 2009[2].

Developing a good mobile experience with mobile optimised sites or apps or both, can mean retailers attain a vital cross-channel impact in their cross-sales strategy. Again, surveyed results from Forsee Results revealed that shoppers who are highly satisfied with a mobile experience are 32% more likely to buy from that retailer online and 31% more likely to buy offline[2]. In itself this addresses a crucial tenet of the multichannel experience; namely how to engender customer loyalty.

Other benefits for multichannel retailers must surely be the constant access mobile provides to potential customers and the ability to offer them individually tailored promotions. Multichannel retailers already engaging with this concept include Marks and Spencer and House of Fraser, both of whom have ramped up their mobile strategies to include pilot tests of proximity marketing schemes with O2[4].

We believe that in 2011 mobile, ROPO and multichannel will be even more closely interwoven, bringing with it a raft of changes that will revise aspects of the physical shopping experience. In the US Best Buy have already begun including QR codes in their stores to help customers learn about the products they are selling.

Across the wider industry, strategies for how to deliver contactless payments via smart phones are already underway. Plans range from full software-only solutions to hardware which could make generating transactions as easy as tapping a handset against a card reader.

The very near future of many in-store purchases looks set to be dictated even further by online customer research, transparency and personal connections driven through mobile. Meanwhile the primary way of making payments could very well be one that is entirely wireless, seamless and with no bank details required.


[1] Usablenet January, 2011
[2]Internet Retailing January, 2011
[3] Independent January, 2011
[4] Marketing Week January, 2011

1 comments:

Chris Cox - Retail IT said...

I agree. I think a key part of it is that multi-channel element you touched on.

Retailers need to be able to offer mobile functionality instore, letting consumers look up the item online by scanning the tag with their mobile, and vice versa (letting them find an item beforehand on a wishlist and say "oh you're here, great, your item is in stock, come and get it!").

The bad news is retailers that don't get this and who don't make that experience seamless are going to look like dinosaurs, the same way we look at those retailers who don't offer online shopping today. We don't hate them, but we have to ask whether someone in senior management there made a very bad strategic choice a few years ago.

Now's the time to get this sorted out!