RSR Research: Early Results from our New Mobility Survey
Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research’s weekly analysis on emerging issues facing retailers.
The other day, on one of the many technology solution briefing calls we had, one of the technologists we were speaking with said something very interesting. His company is aiming to bring a solution to market that enables retailers to get ahead of consumers using mobile devices — a highly relevant goal for the times. To emphasize the need for such technologies, he asked us if we could think of a few case studies where retailers have had mobile "happen to them," without much control of how mobility is being used in the shopping experience. My partner Paula Rosenblum’s response was perfect: "All of them!"
The retail respondents in our brand new mobile survey agree. Of the 60 qualified retailers who’ve responded so far, only six percent are happy with the results of their mobile offering to date. In fact, 49 percent are currently in the process of selecting the right components for their mobile offering as we speak, and 91 percent say that they "need to be there" right now due to the fact that consumers are using mobility as part of their everyday shopping routine.
But 77 percent agree that the true impact of mobile and its best uses are still not fleshed out. Retailers are hungry for practical, intuitive mobility solutions, and many more are willing to experiment than even we could have predicted. In three years’ time, 50 percent of our early respondents anticipate that slightly more of their total sales will come from the mobile channel — another 42 percent say it will be significantly more. These numbers represent massive and fundamental change in how retailers can and will interact with consumers. If we needed to drive home how drastic this change is any further, or how seriously retailers are reacting to consumers’ mobile behaviors, feast your eyes on the following chart:
In short – that’s an awful lot of importance ascribed to virtually every mobile capability we offered up as a choice.
Discussion Questions
Discussion Questions: What do you think is the most important mobile channel capability from the perspective of retailers? Where do you think most retailers should be focusing their mobile investments now?
There are two keys to mobile for shopping: simplification of the shopping process and additional offers/value. Right now, mobile fails on simplification. If you try to use relevant apps for grocery shopping you’ll quickly see how it slows down the shopping process unacceptably. This can change and must change before mobile hits the tipping point. The other thing I want to mention is that mobile’s impact on shopping is way overstated by surveys. Have people ever used mobile for shopping? Sure. What percentage of transactions are impacted? I suspect that is tiny. Again, this can change once mobile becomes a force for simplification.
The most important thing retailers can do at this time is optimize their content for mobile. Make it easy for consumers to find and read the information they want to obtain on their mobile phones.
Quite frankly, I doubt that retail will get ahead of consumers in the mobile space, just as they still lag consumers on Internet technology. Retailers are not willing to invest the sums needed to be on the leading edge. It’s not in their DNA.
By focusing on giving consumers the information they want, in a format that fits their devices, retailers will make a quantum leap forward from where they are today.
To me, the four most important mobile capabilities for retailers are access to reviews and product ratings, redeeming offers and buying merchandise. In many categories, ratings and reviews make or break the deal, so easy access to that information can get the shopper closer to the “yes” than just about anything else.
And while I’m not a huge fan of delivering more coupons and offers, given the margin losses they cause, many shoppers need them to survive and retailers have to enable redemption of offers or risk losing the shopper altogether. Too high risk not to focus on this aspect, in my opinion.
And the buying? Well, if you can’t get that POS system to make mobile easy for the shopper at the checkout, all the other stuff is just a waste of time.
For years I have talked about the idea of using a mobile device to help a consumer retrieve additional information on a product while in the store and now with Smart phones and QR codes, the time has arrived. For example, you are shopping at Costco for a new 50 inch television. With a QR code on the TV, the manufacturer could provide the shopper with additional details. Even more powerful, offer the consumer a discount on the spot only good for that day to help close the deal.
Finally–and this is really the ultimate–tie inventory data to the decision process of what type of discount you will offer a consumer.
Example: You are in Staples and you are buying a new camera. You use the QR code to learn more about a Cannon model you are interested in. The smart phone then reports back that inventory in this store is low so the discount is only 10% off, but if the consumer is willing to drive 5.2 miles to the Staples down the road they could save 30% (inventory in that store is very high and Cannon wants to move the cameras before Staples sends them back). In fact, you have an option to share the 30% savings with X number of friends.
I call this approach Consumer Driven Supply Chain (CDSC) and it has the potential of being the next great idea at retail. The question is who will create the first successful solution?
We are still in early days of consumers interacting with retailers via mobile platforms. Most uses seem to be informational (store locations, hours, product availability) or seeking value (sales, coupons, other promotions). The level of usage is much more prevalent in Asia, with millions accessing blogs and other information channels unattached to the retailer or brand. I expect the U.S. to follow.
Retailers are losing direct control over consumer interaction and messaging, with consumers and independent thought leaders taking over. Retailers must learn how to authentically reach the influencers and ensure consistent customer experiences in-store and online to create more positive than negative buzz.
In short, the most important mobile channel capability will be to influence the influencers who are often on their mobile devices blogging, tweeting and more in real time about their experiences with the retailer.
A key mobile investment should be to enable mobile interaction in-store (free Wi-Fi) to make it easier for the consumer to gather information, access promotions, and blog/tweet in real time.
This survey addresses physical or multichannel retailers, not pure play e-commerce. As a result, the opportunity lies in marketing rather than commerce.
Mobile will always command a much higher share of retailer marketing budgets than merchandise sales for chains with brick and mortar locations.
The chart above, from the retailer perspective, affirms this. All capabilities scoring > 50% drive in-store sales. Capabilities driving mobile commerce (buy merchandise, purchase gift cards) score < 50%. Both findings are consistent with similar studies from the shopper perspective.
Retailers are better served focusing on mobile to drive trips and basket than to improve the buying experience.
I find it interesting that the retailers are measuring their success on mobile by the percentage of sales that they expect from the platform. Retailers would be better served to look at how mobile will enhance their engagement with consumers. Consumers are using mobile to research products and find place at which to shop before they ever step into the store. Google has termed this the Zero Moment of Truth; the time at which consumers are researching and making their shopping decisions.
Mobile is where this search is happening, more often than not. The sooner that retailers are able to interact and engage with consumers at this ZMOT, the more often consumers will utilize mobile devices to build loyalty with their retailers of choice.
Remember the Glass House? Retail IT is entering an entirely new era, and anyone who says they can predict where this is going is fibbing. Expect a number of fascinating experiments over the next few years.
Among consumers, mCommerce has increased dramatically and willingness to use mobility has increased 92% globally. Note: the question is now, “Which technologies are you willing to use to shop and to purchase?” — not, “…are they using?”
The other interesting fact is that TV has increased significantly. Though the idea of using a TV to purchase with a push of a button on a remote was a hypothetical situation in the retailer’s mind last year, based on her 13 year old son’s use of PS3, this technology has increased significantly. In fact, as we have worked with companies in media and entertainment, we have learned that this idea of “Social TV” is much closer than we think. If we think mobile is the wild west, wait until TV shows up.
Imagine your TV and your computer coming together. Let me play a scenario for you: Someone watching a TV show, likes the skirt on one of the actresses and is able to purchase that skirt directly from the TV. Or, an actor is wearing a branded watch and you can buy that watch from the TV.
This willingness to use a TV to purchase by pressing a button on a remote has gone up 41% globally (24% want to use a TV to shop and to purchase in the U.S.).
How many use Skype? How about Apple TV?
Imagine how the idea of TV/social will begin to emerge in the future. Mobile phones are only the beginning. And retailers need to become integrated into the channel as part of the lifestyle of the consumers.
Mobile phones are already much more widely accepted in growth/emerging versus mature markets.
– Mature: Canada (10%); UK (19%); US (17%); Australia (12%); France (16%); Germany (17%); Italy (21%)
– Emerging: Brazil (51%); China (41%); Colombia (45); Argentina (40); Mexico (47); Chile (43)
Also, the idea of using a TV to shop and make purchases is more accepted in growth markets
– Mature: Canada (14%); UK (18%); US (18%); Australia (19%); France (16%); Germany (16%); Italy (19%)
– Emerging: Brazil (44%); China (28%); Colombia (34%); Argentina (25%); Mexico (33%); Chile (37%)
Retailers must focus mCommerce investments around building their brand virally to create a “pull” of demand, rather “pushing” their messaging.