A Stellar Progress Report for Mobile Retail
Jun 3, 2015 10:36 AM PT
Any industry player sitting at the vortex of mobile marketing and retail has a great deal to be excited about at present. The marketplace is witnessing an incredible growth and innovation surge. At the end of last year, mobile technology clearly upped the ante -- creating fresh, breakthrough marketing opportunities for a merchant community looking to increase revenues while better controlling ROI.
During the latter part of last year, 16.6 percent of all online purchases were made on a mobile device, according to IBM.
As we march toward the halfway mark for 2015, more shoppers are turning to their mobile devices than ever before.
These trends signal an unprecedented adoption of mobile technology as it relates to the retail experience. As a proven sales influencer, it now holds a more formidable hand in the game. Mobile browsing and buying are impacting how and where the sales needle moves -- across all key categories, and at the superstore, brand chain and boutique levels alike.
As we look ahead, we can clearly see the specific dynamics most likely to shape the mobile-influenced retail experience. What's noteworthy and truly exciting is that these emerging trends won't have a positive impact on just one predominant sector. They are poised to benefits all key parties within the mobile-retail marketplace: the consumers who use the technology; the merchants who will benefit from greater access to a more highly targeted consumer; and the financial community that will be closely watching and putting fiscal muscle behind the latest innovations.
The Biggest Catalysts
Which aspects of m-commerce offer the greatest potential to catalyze the marketplace?
As mobile technology takes on an even more integral role in the retail experience, consumers are enjoying a greater level of convenience and financial savings than ever before.
On the merchant side, large retail brand chains, in particular, have good reason to be as giddy as children in a candy store, with a multitude of new digital -- and especially mobile -- marketing tools in their arsenal.
As retailers themselves become the "shoppers," discovering new ways to advance their brand position through a menu of disruptive digital technologies, many will find that no- to low-cost mobile influenced sales drivers can bring buyers directly to their doorstep -- and dollars to their spreadsheet -- with far greater ROI than paid media and promotions are able to deliver.
More than half of retailers indicated mobile initiatives were among their top three priorities this year, according to the NRF.
These new technologies do more than help merchants tap into an expanded customer base. The audience target that they're reaching is increasingly qualified and predisposed to purchasing. Through the use of multiple digital tools designed to attract and retain consumers who are already in the buying mindset, they're able to reach the right buyer profile in a more intuitive way than previously possible.
On the investor side, any time that market growth opportunities whirlpool around a specific technology sector that directly entices revenue acceleration, the investor community is poised to reap huge rewards.
"VCs invested (US)$4.2 billion in m-commerce from Q3 2013 to Q3 2014" -- a huge leap over the previous two years combined -- and that investment "has also continued to fuel an explosion of m-commerce startups, including several in new subcategories," Digi-Capital estimated."
Mobile is a hot commodity right now, and venture capital investment will be drawn like a magnet to evolutionary uses of mobile residing directly at the retail intersection. Given the diversification and continued new innovation in the field, startup innovators within the mobile shopping and digital retail marketing arenas, along with their investor partners, are set up to have a banner year.
Which other stand-out trends currently are inspiring consumers, merchants and financial investors alike?
First, mobile pay options, with Apple Pay being the predominant current offering, will continue to mature and advance. Purchasing by tablet already has mainstreamed.
Tablet sales accounted for 13.4 percent of overall online purchases in late 2014, according to IBM. However, while paying on a handheld device (versus a tablet) remains cumbersome and challenging for many users, smartphones are beginning to surpass tablets as the dominant purchasing tool.
These developments, together with advances in mobile wallet technology, are poised to significantly shake up m-commerce purchasing dynamics once the marketplace further matures.
Second, the use of mobile shopping aids as research and browsing tools will continue to play a defining role for smartphones. Until the technology evolves further, browsing by smartphone is still the most effective use of the medium. The market saw the rate of consumers turning to mobile devices to conduct research, identify desired retail venues, and receive and vet sales offers spike at the close of 2014 -- and there is no reason to expect that momentum to slow.
Despite smartphone transaction growth during Q1 of 2015, consumers still like to touch and feel what they actually purchase. Fifty-four percent of participants in a recent survey were not interested in making a purchase from a mobile device, noted 451 Research.
Third, new innovations around the way consumers adapt mobile technology tools to enhance the retail browsing and shopping experience will continue to appear. For example, the ability to find deals and check specific inventory prior to visiting the actual retail storefront -- and then place desired purchase items on "virtual hold" -- will continue to pick up steam.
This "reserve it" functionality is already growing, and it's a win-win for consumers and retailers. Consumers have the chance to scoop an item on heavy sales days (snatching it from the store shelf before others), and retailers have the opportunity to target the shopper with the lure of other purchase items when they come to the store to complete the actual transaction.
Fourth, the ability for retailers to more accurately target desirable consumers will reach a new level. Enhanced Retail Deal Discovery will accelerate as a game-changer for merchants who understand the value of personalizing the browsing and buying experience.
By knowing a shopper's location, mobile technology can help to suggest deals, promotions and other retail events to users. Along with the ability to tap preferential shopping data, merchants have a low-cost, highly effective marketing tool. Plus, consumers will be able receive customized deals and shopping information based on their exact shopping location, the time of day, and their own spending habits.
The growing use of these technologies will play directly into the Shop Anywhere Mentality that consumers already are embracing. In essence, the location of "window shopping" becomes anywhere that the user has a mobile device in hand.
As adoption of wearable devices takes off, this trend will only increase. The browsing process is no longer dependent on being physically in-store.
"Smartphone use is more or less continuous. [It] doesn't say anything about whether the use has anything to do with shopping, but it does mean that [it has] a large part of the consumer's mindshare during that shopping mission. The shopping trip starts earlier and ends later than it used to," said Nick Hodson, partner at Booz & Co."
In effect, even when consumers don't think they're shopping, they are still in a shopping state.
Fifth, merchants and consumers alike will rely increasingly on omnichannel communication aids as they relates to the retail experience. Merchants will look to more effectively tap and relationship-build with their consumer targets through a greater variety of mediums (websites, email marketing, creative promotions, mobile alerts, online ordering, affinity and redemptive marketing, social media, etc.).
In turn, consumers simply will have more information and opportunities at their fingertips than retail brand managers could have imagined even a decade ago.
Sixth, the ability to command myriad marketing tools will help retailers better reach Millennials -- a buying demographic that will figure prominently throughout the remainder of this year and next.
This year, reaching Millennial shoppers will be "ground zero" for retail brands. This 18-34 age group, which is surpassing 75 million, according to Pew Research, grew up a click away from information, social connections and access to all things that matter to them, both materially and philosophically.
Merchants that can effectively corral mobile technology with this audience (and Millennials are the largest group of smarthphone users) will own that dialog and have greater opportunities to build loyalty and convert sales.
It will be essential for savvy marketers to move outside of their comfort zones, deploying unconventional tools such as gamification (providing entertaining content to build stronger stickiness) and other affinity marketing tools to create loyalty with a traditionally brand-finicky generation.
Last, we will see a continued use of mobile as a real-time market pulse point -- for retail marketers, analysts, the press and investors. The ability to have millions of micro consumer focus groups across the socioeconomic spectrum in multiple regions at any given time -- spewing shopping preferences and behavior by the minute (via their mobile devices) -- will be worth gold to interest parties who can use that data to adjust in-store and social media sales offers to more aggressively pursue desired targets.
It will also be valuable for a developer or product investor who can calibrate a market offering based on the particulars of a consumer's response to certain aspects of a commodity offering, as it relates to very specific buying conditions. The possibilities truly are endless for the use of this live, in-the-moment information.
In closing, these are vibrant times for the mobile/digital and commerce space -- and without question, these new technologies are rewriting the rules of the game at every level. At present, all parties have the opportunity to benefit: retailers, as they open new and more effective sales and marketing doors; consumers, as they have the opportunity to make their dollar extend yet farther, and glean time as well as financial savings; and investors, as they cast their eyes to a horizon of new product development opportunities and the many startup possibilities spawned by the ROI-rich mobile revolution.