In a few short years, mobile commerce has quickly become a mainstay in online shopping. Between 2012 and 2013, Ecommerce Quarterly reported that mobile shoppers’ interaction with ecommerce brands increased by forty-five percent. eMarketer estimates that 2014 mcommerce sales accounted for one-fifth of all retail online transactions.
That’s $57.79 billion versus sales of $42.13 billion in 2013.
There’s no turning back. At the end of last year the number of smartphones in use worldwide hit 1.3 billion, and International Data Corporation (IDC) expects that number to increase to 1.4 billion in 2015. Expect all these statistics to only go up this year and in years to come. To stay competitive and deliver desired customer experiences, it’s critical that mcommerce is central to this year’s retail strategic planning.
Mobile Commerce Enhancing, Not Detracting from the In-Store Experience
In early 2014, online purchases made on mobile devices exceeded those made on desktops, just one year after mobile traffic exceeded PC internet traffic. According to IMRG, mobile e-retail visits grew 2,000% in just the last four years.
No longer tied to browsing on their computer before they leave the house, mobile shoppers use their smartphones as personal shopping assistants. From both outside of and inside the store, they scout deals, comparison shop, check out product ratings and reviews, and even ask their friends and family for opinions and resources.
John Lewis also reported the ‘rise of the mobile shopper’, stating fifty percent of their sales accounted for those that researched on mobile devices while in the shop, and then purchased in person at the store. Google found through a survey they conducted with Ipsos MediaCT and Sterling Brands, that 71% of in-store shoppers who use their smartphone for research said they relied on their device to have a better in-store experience.
This is great news for SME retailers and big brands alike, especially since footfall overall has been on the decline. The device in a shoppers’ pocket or purse, which never leaves their side, provides more opportunities for engaging with the customer one-on-one and attracting them back to the local shop.
Cited in Google’s report, Serena Potter, Group Vice President of Marketing Strategy at Macy’s, explains how they use customized mobile messages for nearby shoppers on the go, "Local inventory ads really help us by displaying actual inventory available at a store nearby. A shopper can take action if she sees that there are three pairs of shoes right now, in the size and color she wants, at a Macy's that's five blocks away."
How Mobile Marketing Will Drive Multichannel in 2015
Mobile touch-points in the form of advertising, coupons, push notifications and emails can drive people to buy from you at your shop as well as your website, mobile optimized site or app.
The National Retail Foundation (NRF) polled retail executives on how they expected mcommerce to influence the 2014 holiday shopping season. Debra Radcliff, Senior Vice President, Marketing at West Marine stated, “Seventy-percent of our emails are opened on a mobile device. We see marketing the mobile channel as an opportunity to really enhance that.”
During the holidays, women’s fashion retailer The Limited sent SMS messages to customers with discount notification codes for additional savings off the already marked-down sales items. In an effort to push out year-end inventory, their after Christmas, two-day promotion offered an extra 60% for online purchases, and 50% off in-store purchases.
Although SMS notifications are not new, having been in use for years, consumers are becoming more accustomed to receiving bargains bleeping on their smartphones. In fact, according to Dr. David Greenfield from the University of Connecticut School of Medicine, “Every time you get a notification from your phone, there’s a little elevation in dopamine that says you might have something that’s compelling, whether that’s a text message, an email, or anything.”
The difference between disruptive and value-add mobile marketing comes in the form of precision targeting and personalization. Research firm Aberdeen Group states in their mobile consumer report, which surveyed 162 retailers, “Businesses tailoring the timing and message of each [push] notification based on consumer needs, behavior and location, however, are far more likely to elicit the desired customer responses.” When notifications such as SMS messages are delivered with a specific purpose and context, retailers saw an annual improvement on their return on marketing investments of 4.8%, versus non-specific targeting saw a decline of 14.6%.
Mobile Payments, Digital Wallets, Contactless and Security
Also part of NRF’s poll, Doug Collier, Senior Vice President, CMO & International President for La-Z-Boy believed, “Mobile payments are going to become much more important and more viable.” And as of the end of 2014, eMarketer estimated that 93.3 million U.S. adults will be doing banking on their smartphones each month.
With the limited introduction of Apple Pay last year, support from local and national banks, along with retail, is expected to roll out in greater numbers both in the U.S. and in the U.K. At the same time, Samsung may be pushing aside Google Wallet to offer their own mcommerce Android platform offering in the later half of 2014.
The pending partnership is with contactless payment startup, LoopPay. According to Re/code, LoopPay’s technology mimics that of a standard credit card when swiped, preventing retailers from having to upgrade to NFC (near field communication) terminals that are common in the U.K. but have yet to be adopted widely in the U.S.
That said, U.S. merchants are already planning to upgrade equipment to support NFC to support standard contactless payment credit cards and chip-and-PIN when it’s finally available in the fall of 2015 to meet stricter security standards.
Biometrics, or fingerprint identification, are used as the authentication process for Apple Pay users. Recently German hacker, Jan "Starbug" Krissler, was able to demonstrate how he faked a fingerprintof a public figure through pictures of their thumb, using commercially available software to authenticate their phone. iPhone and other smartphone users need not fear and cover their fingers while in public. The process took several photos is not expected to be feasible means for hacking into mobile devices.
Last year saw a number of substantial retail hacks that compromised customer data. Michael Fauscette, Group Vice President of Software Business Solutions at IDC, was one of those victims. As a longstanding user of PayPal for online shopping and new iPhone 6 with Apple Pay user, he sees mobile payments and digital wallets getting a boost from the retail security risks of traditional process of passing detailed financial data to merchants. “The risk of using a single payment card, debit or credit, combined with the hassle when one is compromised just might be the lever that pushes us all over the adoption hump.”
Being Optimized for Mobile - Are You There Yet?
We’ve covered optimizing your company website for mobile in our blog post before the holidays. It outlines the why and how visitors should be able to easily view your product images and descriptions, and then experience a seamless checkout process. Going beyond a responsive website, best practices include preventing prospects from having to pinch or zoom in on pages, reducing clicks and simplifying forms.
If you’re not quite there yet, you’re not alone. Of the retailers surveyed by Aberdeen, 60% had plans in place to design a mobile-ready website, meaning, they didn’t have one in place currently. At the same time, customers’ tolerance for sites that do not support their mobile shopping habits is expected to dwindle to zero, leading them to visit a competitor’s website with a few flicks of the thumb.
At the same time, being ‘mobile ready’ in 2015 goes beyond a mobile-friendly website. The key to successful mobile touch point campaigns is the ability to capture customer data based on past engagements such as buying history and opting into email newsletters and push notifications. On the backend, aligning marketing initiatives with customer account data stored in your customer relationship management (CRM) or enterprise resource planning (ERP) platforms supports that desired level of personalization.
Larger brands like Target, Macy’s and John Lewis tout their mobile apps, and because of their size, it makes good business sense. But for most SME retailers, that may not a viable expense in the near term. Rest assured, KISSmetrics reported that 7 in 10 consumers prefer mobile websites over mobile applications on both smartphones and tablets.
Digital Will Continue Impact Retail Throughout 2015
BI Intelligence reported that fifty-percent of the top 100 U.S. retail brands tested out new technologies such as iBeacons in 2014 to increase reach and engagement.
Beacons are small devices located around a physical store, communicating with shoppers’ mobile devices using Bluetooth along with an installed retail application. When shoppers are in a given location of the shop, beacons communicate back to a server, collecting data on how consumers interact with the app. Those trials will be rolling out on a larger scale in the coming year, with a third of their stores using iBeacon by the end of 2015 and 3.5 million devices in retail use by 2018.
Why the increase in beaconing technology?
For the Mothercare retail chain in the U.K., “People want to be inspired by mobile – it’s not just about sales. People like to connect with brands. It’s not just a sales channel but a broader part of the whole journey,” said Harpinder Singh, the company’s Senior Omnichannel Development Manager. John Lewis has also invested in iBeacon technology through their technology business incubator, JLAB, awarding Localz and their micro-location platform as the first winner to be funded.
As Bluetooth-enabled Android and Apple smartphones increases to an estimated 570 million, other retailers like Alex & Ani are rolling out iBeacons deployments to compete with larger retailers. Married with Swirl Networks’ software platform, they tested promotions in their Boston and New York City stores. The results of over 75% of shoppers viewing the discount promotions and 50% redeeming offers encouraged them to expand to all 40 retail stores.
Although many SME retailers may not be ready to invest in their own mobile application in order to support iBeacons, it’s important to be aware of technology trials such as these to see where the future of digital retail is headed.
To support all the existing and anticipated mobile in-store activity, from one-person shops to national retailers, more retailers are offering free Wi-Fi. Again, this investment provides yet another opportunity to engage, making Wi-Fi available to shoppers in a way they’re already comfortable with, opting in via email or their social profiles.
2015 will see remarkable change and opportunities for retailers to explore, rethink, optimize and engage with customers in new and exciting ways.
If you’re a SME multichannel retailer that desires to scale and succeed, you’d be wise to prioritize mcommerce within your short and long-term business goals. Bridging the gap between your online and in-store operations will enable you to deliver an enriched, digital shopping experience for your customers, keep you ahead of the competition and impact your bottom line.