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[21 comments]

Will mobile personalize shopping?

February 20, 2014

Through a special arrangement, what follows is a summary of an articlefrom Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.

As most retailers think about how to extend their brand into the digital domain, and specifically to mobile, they are still thinking about "pushing" their offering towards consumers. But according to Ethan Song, the co-founder and CEO of Montreal-based men's fashion e-retailer Frank & Oak, for digital natives, "Mobile is an extension of you. Mobile isn't a destination; it's an extension of the individual. Stores and the e-commerce site are destinations, i.e. you 'go' to a store or a site."

At the recent Apps World conference in San Francisco, the entrepreneur talked about what he called "Consumer Brand 3.0," leveraging tech platforms to integrate the entire product and customer lifestyle across multiple touch points. The team at Frank & Oak believes that consumer always-on connectivity creates the opportunity for retailers to shift from the mass model to a personalized experience.

Mr. Song pointed out that Frank & Oak seeks to create unique relationships with different segments of customers, even while selling the same products. In other words, Frank & Oak wants to make shopping easy for men through personalization and curation, offering premium name-brand shirts and accessories at affordable prices. And the company leverages mobile to make it happen.

Mr. Song explained, "Mobile allows you to shop the same environment in a different way ... giving consumers more control over their experiences. Very few retailers are providing content based on the physical context. Content should inspire and educate. Mobile has the power to personalize the in-store experience by adding that content layer."

What is interesting in that statement is that it is from the consumer's point-of-view, not what the retailer wants the consumer's point-of-view to be.

That's worth thinking about. If it's true that digital natives think about their mobile digital devices as an extension of themselves rather than an appliance to be used on an as-needed basis, then retailers' view of the technology as the outer edge of the corporate information world is not quite right.

This analogy might seem like a stretch, but I'm reminded of something that someone wrote about why Jimi Hendrix was such a guitar revolutionary. It was that he viewed his "instrument" — the Fender guitar, the cord, the sound effects pedals, and the massive Marshall amps he used — as an extension of himself rather than just an instrument he was playing. Perhaps that's why Jimi called his band "The Experience" — to appreciate what he was doing, you had to experience it in a new way.

So, who knows? Maybe Ethan Song and the team at Frank & Oak is on to something. Perhaps retailers have to learn to listen in a new way.

Discussion Questions:

Do you agree that mobile "has the power to personalize" the in-store experience? Should stores be thinking of mobile as a tool for consumers to express themselves rather than a tool for retailers to "sell more stuff"?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What's the likelihood that mobile will lead to a much greater personalization of the in-store shopping experience in the years ahead?

Comments:

Not exactly.

Ethan Song is generally dead on, by the way, but I see mobile as having "the power to personalize all experience," not just in-store.

The real message here is that from yesterday forward all life will be negotiated best when approached on the consumers' terms -- a mantra I've been chanting for two decades now.

It doesn't matter what "stores think." To paraphrase the late science fiction writer Philip K. Dick, reality is the stuff that doesn't go away just because you stop believing in it.

The barbarians aren't at the gates, they have stormed the palace and are sitting on the throne. The revolution is over and all those push marketers will be lined up in front of commercial firing squads.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

I absolutely agree. And apps in particular offer the best opportunity to personalize, which is why I find myself scratching my head over retailers who say they are abandoning their mobile app strategy.

Regarding the second half of the question, I agree even more strongly with that one. I feel like I'm a recording playing back over and over again, I can't tell you how many times I've said this since the beginning of the year: Retailers have too little imagination when it comes to the role consumer mobile can play in the store. It's because of two things. One, they're not putting themselves in their customers' shoes and thinking about how mobile can help their experience, so they're missing tons of opportunities there - real, differentiating opportunities. And two, they're locked into a model where the store is expected to sell stuff. So any metrics that they look for in any kind of mobile engagement model ultimately leads to "did it help me sell more stuff?" (which is why they lack imagination about how to help shoppers).

On the one hand, I get it. In the store, the distance between call to action and action is nonexistent. So if retailers invest to influence behavior in the store, then they should see an immediate impact on sales, right?

Wrong. While mobile in stores can play that role, it's short-sighted to think of that as the only role. Personalization strategies get to engagement and loyalty and building these things over time. Looking to an immediate sales lift is selling out the long term for a minimal short-term gain. I'm still waiting to see a retailer figure this out and actually create an engaging in-store consumer-driven mobile experience. Sigh.

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Nikki Baird, Managing Partner, RSR Research

I think the question is a bit more complex that this, and you have to consider retail as a segmented market with products that are higher involvement or niche (maybe like Frank & Oak), as opposed to more staple and frequently purchased products. You can certainly create great in-store experiences with niche or high involvement products, but the execution there has got to be different than in more FMCG categories where price, convenience, speed and relatively low involvement in the process are probably commonplace even with a mobilized consumer.

In an apparel store, a mobile experience that helps you build your outfit by scanning tags, share the combination with friends, review friends' own combinations and ratings, etc., maybe even check out without talking with an associate, is a great idea. For grocery, the mobile experience is probably more about promotions/games, coupons/trial offers, and speeding the shopper process by directing you to where your list items can be found on the floor. Ultimately you have to understand your shopper and what will provide them with the best experience such that they keep wanting to return. Collecting their digital breadcrumbs is a good way to start.

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

Irrelevant messages from merchants and CPG brands via mobile get marked as spam quickly today. The whole point to mobile is that it needs to be uniquely personal. Consumers want this personalization and even with all the concern around security and privacy, they are all too eager to post via Twitter, Instagram and every other social channel all of their personal preferences.

Stores need to offer a compelling way for the consumer to feel connected to the store and/ or product brand. There are great, secure platforms that retailers are using, especially overseas to capture the "mobile" audience.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Mobile has much more "power to personalize" in terms of the in-store experience, and for four compelling reasons:

1. Most in-store associates don't know customers by sight, name or shopping history. Even those that have clientelling systems aren't real time and thus start with customer anonymity. Mobile changes this fundamentally.

2. Most stores are increasingly under-staffed and service levels follow. See #1.

3. Most retailers have under-invested in technology to support and deliver the customer experience at a store level. Mobile can advance retailers capabilities more rapidly than enhancing or replacing legacy POS systems.

4. Every customer carries at least one mobile device. With technologies like iBeacon and other LBS solutions, automating, scaling and leveraging customer data is potentially more foolproof via mobile than virtually any other delivery mode.

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Phil Rubin, CEO, rDialogue

Digital is all about personalization. This is not a new or revolutionary concept. It's about helping consumers find what they want, gather information and suggest additional items.

Retailers should customize their mobile websites and apps to fit the devices and their customers. This will enhance both the in-store and out-of-store shopping experiences.

Retailers also should resist the urge to push products at consumers. Personalization allows the opportunity to customize the shopping experience in a collaborative, rather than pushy manner.

Digital can be a valuable tool, both in-store and out of store, if it's used to talk with consumers, rather than push items at them.

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Max Goldberg, President, Max Goldberg & Associates

This is definitely a step in the right direction, "seeing" the mobile device as the shoppers' eyes, etc., to sense the store, just as online provides one BIG eye - the computer or tablet - to "look" into the online store.

But the real challenge is that mobile developers are stuck in the mono dimensional focus of online - looking down a pipe, as it were, to a carefully controlled 2D scene. The radical difference of this developer perspective, with the reality of the 3D, 360 degree store experience, is that the shopper may be looking down a pipe, too, to an extent, but the available scene is more like the inside of a giant bubble that the shopper lives in. Online and mobile are BOTH highly focused, narrow pipes.

Hence, massive investments, and effort, are being made by the tech crowd, into a problem that they VERY POORLY understand. Hence, the misguided excitement about things like "way finding" and "coupons," both of which are seriously stunted in terms of their utility and effectiveness for shoppers. Meanwhile, retailers, who themselves have incredibly superficial understanding of the shoppers in the store, think these two bastard children, "way finding" and "coupons," sound like just what they need. Tsk, tsk!

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

Of course mobile has the power to personalize shopping, but retailers and manufacturers have to figure our how mobile works. First, they have to get beyond the either/or mentality. Mobile is neither appropriate for just pushing information nor is it appropriate for just listening to consumers.

Second, Listen to what we say about mobile (an extension of themselves) and watch how consumers use mobile (to connect with friends through text and phone).

Third, think about what a relationship is - give and take. Companies and consumers talking AND responding to one another makes a relationship work. A one-sided relationship does not work.

Given these guidelines, can mobile personalize the shopping experience outside and inside stores. Of course, but not by just modifying current one-way communication strategies.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

An unequivocal YES!

Mass is the enemy of personalization. With the mainstreaming of mobile and despite its potential to deliver a more intimate experience with consumers, members of the previous paradigm continue to apply mass marketing approaches to smart devices that come across as spam.

Mobile changes the rules and expectations for everyone. Personalization is not only possible but doable, and an existing reality. Today's consumers won't settle for anything less. Huge opportunity ahead!

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

Love the comments Herb Sorensen makes. Right on the money. Mobile is the shoppers path to purchase "in the pocket/purse" - as marketers and developers we should all realize that our jobs must change - we now "owe" the shoppers the experience they imagine/crave. It CAN happen if we keep our eye on the right prize.

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

Mobile tech enables individuals to personalize their media consumption. It will enable them to personalize their shopping too. Winning retailers and brands will be those who adapt and learn to respond according to shoppers' stated and unstated preferences.

Just as I have argued in the past that the loyalty arrow needed to be reversed (store loyal TO shoppers), we need to begin working on reversing our perception of the personalization arrow.

In short, it's not about personalizing the store; it's about meeting the expectations of shoppers who curate and pursue their personal solution sets. Very likely this activity will be distributed across multiple stores for most shoppers.

Mobile devices will likely be the platform to make that happen, at least in the visible future. If this prospect terrifies you, I suggest you get out of the retail business now (and take your proprietary apps with you).

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James Tenser, Principal, VSN Strategies

I agree with Ryan that what matters is what the customer wants, not what we the retailer wants.

It also goes beyond personalization. Whether it's an app or an employee, if it doesn't add value to the customer's experience it's going to push them away to a competitor.

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Doug Fleener, President and Managing Partner, Dynamic Experiences Group

Mobile is a wonderful way to "personalize" the in-store experience. They key, as I've written before, is to have the customer's permission and to deliver relevant content that the customer wants. Too much content or too much marketing/advertising will turn off the customer and you may lose the connection. Treat the mobile connection as a valuable asset and handle it carefully.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

Mobile in retail is not an either/or scenario, but should be approached with a strategy that's a win/win for the retailer and the shopper. Yes, it can provide a path for retailers to "sell more stuff." And it can provide a personalized experience for consumers. The execution of programs that provide personalization will ultimately result in brand loyalty and increased sales, in-store and online.

I think the view of mobile as an extension of the shopper is right on. Brands can't expect to successfully "push" to the consumer's mobile. They have to set up the value proposition that resonates with the consumer. That means creating awareness of why the consumer should reach out and engage the brand experience from their mobile. It's a "pull model," with the consumer establishing the connection that can result in an ongoing relationship. Mobile is the consumer's control mechanism, and gives them the power of a personalized brand experience.

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Matt Schmitt, President & Chief Experience Officer, Reflect

Mobile has the power to personalize the overall shopping experience across all channels. Today's mobile device is basically a sensor package that has a lot of information about the user, so the ability to deliver personalized and context-centric content is very high.

The key is for retailers to think about the UI from the point of view of the user and with the proper opt-in, delivery the type of information the user wants while collecting the information needed to drive the content.

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Kenneth Leung, Director of Enterprise Industry Marketing, Avaya

I like the idea of seeing mobile as an extension of the shopper's eyes like Herb Sorensen says - maybe a sort of sixth or seventh sense. It can help create augmented reality: store associates can learn more about the shoppers (using Beacon technology) and shoppers more than meets the eye about the store and products. However, it remains just a tool or channel. It's a means, not the destination.

Dominique Levin, CMO, AgilOne

Apps are software. Some are designed to the likelihood of being easier to understand and manipulate on specific devices. This is where the inventiveness stops short of completion.

Retailers and software developers are continuing to create within these apps a software experience that is perceived as "special for me alone" by the user. This has created a series of never ending and constantly expanding enhancement installs that are crushing the enterprise system architecture with server and location overload failures at a disastrous pace throughout the retail industry. Information Technology (IT) budgets are often unable to keep pace with the needs to expand just to maintain simple point of sale operations at the expense of customer satisfaction, the very thing that they are trying to improve.

As an alternative, developers might consider enabling the software to become expandable in content and function by the user on their side of the communication by downloading additional connectable software apps. Using consumer feedback from paying customer experiences should be the highest priority of development priorities, making the investments more practical. But that's just what I think.

'gjarnoldjr'

Mobile absolutely has the power to personalize in store experiences. By using mobile technology, users can be alerted to specific and personalized relevant offers in the store as they shop. The emergence of beacons in stores and advanced technologies such as augmented reality, mapping capabilities in store, and others, customers can truly have a differentiated experience from the other customers, all in the same store.

Additionally, loyalty programs and engagement strategies can be integrated seamlessly into the in store mobile experience to easily deliver an omni-channel experience to customers.

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Jesse Karp, Omnichannel Consulting Manager & Loyalty Practice Lead, Cognizant Business Consulting

Mobile could be huge in this space. Retailers need to be sure that they don't treat it as a "another email channel" to send massive amounts of undifferentiated stuff to everyone. If a retailer thinks personal is sending 2 or 3 different offers to 15 or more segments, they will have a hard time keeping customers opted in.

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Peter J. Charness, SVP America, Global CMO, TXT Group

The goal is to surprise and delight the consumer. If we do our job as marketers, those consumers will be loyal and frankly buy more stuff. If they didn't buy more stuff, great retailers that go out of their way to delight consumers would go out of business.

The mobile device can and should be used as a way for consumers to express themselves and allow retailers to pick up on that message. Simple example, I walk into the Gap and snap a few pictures of shirts I like (style and color). When I walk into the dressing room and a monitor picks up on the data I collected and shares with me items that match the traits of the items on my phone. This could be cross retailer. Imagine I then go to American Eagle and that same data from Gap is used to personalize the experience at that store.

This is a win for retailers and consumers. Retailers have personalized the shopping experience without having to pay an associate to learn about the shopper and then track key data for future sales. Now the consumer controls his own database of likes and the store reacts.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

Observation 1: This reminded me of the old movie industry line:

A: You know what it takes to make a movie?
B: No, What?
A: A bunch of trucks!

We need more trucks.

Observation 2: Retail Wisdom from the Beatles...

Something in the way you sell
Attracts me like no other merchant...

Vahe Katros, Consultant, Plan B

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