Is Mobile’s True ROI Found in Driving Loyalty?

Discussion
Jul 17, 2013

According to a survey of retailers conducted by EpiServer, the biggest return on mobile is coming from increased customer loyalty and personalization, rather than mobile transactions.

The survey of more than 100 retailers conducted at the Internet Retailer Conference & Expedition found only eight percent indicating they use their mobile strategy for sales, compared to 46 percent who use it for customer loyalty.

Forty-six percent of retailers that already have a mobile strategy in place and 74 percent of retailers who are planning to implement a mobile strategy in the coming year are using mobile primarily to increase customer loyalty and/or provide a more personalized experience for consumers.

EpiServer, a provider of digital marketing, found that even among pure-play web merchants with a mobile strategy in place, 60 percent said mobile transactions accounts for less 20 percent of their sales. Forty percent indicated that mobile commerce made up only between 20 percent and 40 percent of sales. Only 22 percent said mobile transactions accounted for more than 20 percent of their sales, up from 16 percent in a similar survey conducted in 2012.

"We call it the ‘Amazon effect,’" said Bob Egner, VP of product management at EpiServer in a statement. "As e-commerce powerhouses like Amazon and eBay make it increasingly difficult to compete on price, retailers are using mobile as a way to differentiate themselves through convenience and brand loyalty."

Mr. Egner also believes retailers are still not completely sold on the ROI of a mobile strategy that focuses on mobile transactions, and "realizing a higher return and an increase in repeat business when they provide their customers with a positive experience that fosters loyalty and convenience."

Do you believe mobile will always be better suited to driving loyalty than transactions? What are the greatest loyalty-driving strengths of mobile?

Join the Discussion!

21 Comments on "Is Mobile’s True ROI Found in Driving Loyalty?"

Notify of

Sort by:   newest | oldest | most voted
Max Goldberg
Guest
4 years 5 months ago

Retailers need to have a mobile strategy. It should start with adapting the information that the retailer wants to convey to mobile screen sizes. Then that information must be formatted to allow consumers to easily search the site. Those are the basics. From there, a retailer can add layers of promotional options designed to drive sales and/or loyalty.

This survey is indicative of nothing. Only 100 retailers were polled and the company involved in the study has a vested interest in encouraging retailers to adopt a mobile strategy.

Ken Lonyai
Guest
4 years 5 months ago

It doesn’t and shouldn’t be an “either/or” mobile vs. transactions situation. Mobile is a vague term with many meanings, so integrating mobile technologies and user acceptance as part of the retail experience is what the focus should be. That will vary by brand and retailer, but execution and satisfaction no matter what the technology is the true driver of customer loyalty.

Debbie Hauss
Guest
4 years 5 months ago

I absolutely think that eventually, mobile will be the driver of both loyalty and transactions. In the shorter term, until mobile payment and mobile POS reaches saturation, mobile will continue to drive loyalty.

The strength of mobile is that it’s with us all the time. As more and more younger people who have grown up with mobile enter the consumer base, mobile will become even more relevant.

Ed Dunn
Guest
4 years 5 months ago

Mobile will be better suited to driving mobile technology, not trying to fit existing paradigms like loyalty into the mobile space.

Mobile loyalty should involve more than displaying a picture of a barcode on a mobile device to be scanned at the register.

If we were to look at a real world case scenario, the Starbucks app offering mobile transactions could be the driver of loyalty.

Joel Rubinson
Guest
4 years 5 months ago

While there is no question that signing up for a loyalty program that has an integrated app platform will affect loyalty, the main effect should be short-term sales. Are retailers saying that mobile is NOT driving sales? If so, then saying it’s about loyalty is really grasping at straws.

Zel Bianco
Guest
4 years 5 months ago

Mobile is great because it’s essentially attached to the shopper and can be accessed at any time. There are people that are more comfortable making purchases on actual computers and who knows if that will change. If people are accessing information and going home to purchase, mobile is essentially driving the transaction. Of course, this would be another survey to conduct.

Mobile enables retailers to convey messaging and drive customer loyalty, so they should definitely not abandon this strategy.

Nikki Baird
Guest
4 years 5 months ago

“Always” is such a commitment-heavy term. I think that currently, mobile does best at loyalty and personalization—think of it as an interactive loyalty card, basically. So I’m not surprised at the results. We hear it too: personalization will drive the next wave of retailers’ mobile investments.

Lee Kent
Guest
4 years 5 months ago

Mobile has the potential to drive both loyalty and transactions as long as the retailer is giving the customer apps that enhance the path to purchase.

Make web sites mobile friendly, expedite the shopping experience, answer the customers’ questions, show them the value, and create a great customer experience.

All speak to both loyalty and transactions!

Bill Bittner
Guest
Bill Bittner
4 years 5 months ago
When I think about mobile transactions, I think about convenience. To me, the goal is to make spending my money as “frictionless” as possible. Having said that, I also want it to be ironclad safe. I don’t want someone picking up my phone and booking a vacation to the Bahamas (without me). So there lies the quandary and the challenge for which I have yet to see a viable solution. For loyalty, however, I can afford to have someone else get my super discount on Raisin Bran. It is not such a hardship if someone impersonates themselves to be me. And the loyalty programs can be much more robust on a mobile device, delivering discounts as I walk the store. A reward is much more likely to get me to change brands when it is delivered in the aisle as I am picking up the alternative product. This is much better than receiving it the checkout and then hoping the customer keeps it until they need the product again. I think a retailer without an… Read more »
Herb Sorensen
Guest
4 years 5 months ago
Loyalty vs. transactions is being driven by two major, distinct phenomena, that will NOT remain independent. First, for a retailer, there is a LOT more experience with loyalty marketing. Many blind alleys have already been thoroughly mapped, and what actually works has a much better demonstrated capability, really pioneered by dunhumby at Tesco. See “Scoring Points” by Clive Humby. Some retailers have learned how to leverage loyalty to themselves. Secondly, some people already have vast experience with driving transactions, Catalina Mobile, for example. But the how’s and why’s of driving sales are early times, and will likely not explode until the mobile wallet supplants plastic cards for payment. That process will begin with single retailers, but like the cards long before them, will break out of the bricks boxes, and move cross-retailer, cross-channel, etc. Again, think “electronic plastic.” Then you will see the true winners at retail. And loyalty will more likely be to the “app” than to the retailer—just like most shoppers today prefer to use cross-retailer cards than having a different card for… Read more »
Todd Sherman
Guest
Todd Sherman
4 years 5 months ago
Sure, mobile is great for helping drive loyalty and personalization. And transactions. We are still in the early days of mobile—not just in terms of what will happen, but the way we think about it. For example, many studies use a traditional online and ecommerce-centric view of measuring digital sales. That is, when there was only the ecommerce website, customers could shop and then buy, there was a very convenient, one-channel and correlated view of the shopper (notwithstanding the crossover between the retailer’s site and brick and mortar activities). They came, they saw, they bought (transacted), and were measured. Now we’re in a world where shoppers are often switching between multiple devices—smartphones, tablets and PCs—during the path to purchase. And they’re using mobile devices in-store to help with the buying process and then transact in the physical store. This has caused some headaches in connecting the different influences to the final purchase. Just because it’s difficult to directly/automatically measure the impact of smartphones on in-store or other sales channels does not mean they are not… Read more »
Kenneth Leung
Guest
4 years 5 months ago

I think it depends on the retail format. Opentable works well as a mobile transaction because of the nature of the transaction. I have used Amazon Mobile to transact once or twice, but the bulk of my retail purchases needs the bigger screen to do research. I think mobile+location service is the key for loyalty driving because of the nature of convenience. If I am on a mobile device, I am normally looking for information about shopping in the context of my location.

Shep Hyken
Guest
4 years 5 months ago

It’s not that mobile will always be better suited to driving loyalty to other locations. I don’t think that is the case. Mobile apps help create loyalty. If a consumer has your store’s app on their phone, and know how to use it, he/she will have more confidence with the app and how it works. That leads to a higher frequency of use, which is repeat business, which can turn into loyalty.

Peter Charness
Guest
4 years 5 months ago

As usual, there can be considerable confusion with the terminology, and “mobile” can include a lot of different functions. A mobile (smart) phone is a ubiquitous, but extremely personal possession of a shopper. A retailer’s interaction with that shopper’s device has to be relevant and respectful. Thankfully there are MMA and FCC guidelines as to some of the interaction requirements.

There can be little doubt that shoppers will use relevant functionality that makes their shopping experience more convenient and more engaging, and potentially the mobile phone can make an in store visit more compelling and counter show rooming. This will build shopper loyalty, as will most customer convenience factors in an era where price is pretty transparent.

There is also no doubt that the form factor of a smartphone will also provide certain logic to what will be convenient on a cell phone. Mobile can be an important part of the shopper experience, but a retailer still has to get it all right (product, place, promotion, yada yada) to earn long term loyalty.

Ralph Jacobson
Guest
4 years 5 months ago

I wouldn’t bet my life on the results of this survey. I believe mobile strategies will continue to evolve and become far more lucrative for both retailers and CPGs. Transactions are on a steep rise in mobile, and as more mobile sites become more intuitive and simpler, more shoppers will develop a real loyalty to the mobile sites.

Anand Sri Ganesh
Guest
Anand Sri Ganesh
4 years 5 months ago

What mobile has as a great medium for driving loyalty is the incredible ability to be direct, relevant yet personalized. Getting the right message to the right customer at the right location, and getting feedback on the communication instantaneously—that’s what makes mobile powerful.

Gordon Arnold
Guest
4 years 5 months ago
Businesses, politicians, and charities are not looking for internet friends to visit and provide positive feedback about their web sites. They are looking for money to continue the business or cause. Anyone with a celestial cause in mind when designing an e-commerce business plan is in real danger of disappointing results. The simple truth is that there are precious few individuals capable of designing transaction software for mobile platforms that are easy and reassuring to use with adequate security in place. There are even fewer executives in business that can qualify the capabilities of the many wannabes and would-bes in the e-commerce market. As we have seen with the results of the self proclaimed home run hitter just jettisoned from the bookstore company for poor tablet sales, this is a tuff market economy with no mercy for mistakes or non monetary returns on investment. Mobile e-commerce is here right now. There is a whole generation world-wide, waiting for us to open our web site doors on their smart phones. They will not spend time trying… Read more »
Jeff Berry
Guest
Jeff Berry
4 years 5 months ago

Mobile should be a core component of delivering relevant value to consumers, but is not a driver of loyalty in and of itself. Loyalty will accrue to brands that effectively leverage the technology by making consumers’ lives easier. In a recent study we conducted on Mobile transaction behavior, we found that the top consumer benefits identified by consumers in relation to mobile use centered around simplifying their lives, making difficult tasks easier and helping to narrow choice to the best options. Mobile is a key engagement tool to create a consistent, relevant experience for your consumers, so leverage it to its fullest extent to turn engagement into loyalty.

AmolRatna Srivastav
Guest
AmolRatna Srivastav
4 years 4 months ago

Mobile will drive both loyalty and transactions. Loyalty eventually leads to transactions and more transactions depict loyalty. Strength of mobile lies in convenience. How retailers leverage this “convenience” is the key.

Dan Frechtling
Guest
4 years 4 months ago

In this case, like many others, analogs are more instructive than small scale surveys. Yes, mobile is a more natural fit for loyalty than payments (aka transactions) because of what it replaces.

Mobile payments attempt to replace credit and debit cards. Consumers have grown attached to these things. Mobile loyalty replaces punch cards, club cards, and key fobs. Consumers have little love for these things. Force of habit, need for security, and the value of the currency form a moat for incumbent payment cards. In other words, plastic, with its high adoption, beats mobile for payments.

Shopper intelligence and personalization are critical to loyalty and require processing power. Mobile beats plastic and paper for for loyalty capabilities.

Alexander Rink
Guest
4 years 4 months ago

Mobile may be better suited to driving loyalty than transactions at present, but given the pace of technological change, it is difficult to make such sweeping pronouncements for all time, or even a few years for that matter.

As for the loyalty-driving strengths of mobile, the ones that stand out most in my mind are convenience, personal productivity, and ease of interaction.

wpDiscuz

Take Our Instant Poll

Do you agree or disagree with those who believe mobile will successfully drive sales transactions in the near future?

View Results

Loading ... Loading ...