Guest post written by John Caron
John Caron is Senior Vice President of Marketing at Modiv Media, a mobile shopper marketing company based in Quincy, Mass. Follow him on Twitter: @jcaron2.
If no one else will say it, I will. Contrary to popular opinion, and what we may want to believe as mobile and retail enthusiasts, consumers have not been buying billions of dollars of products via mobile commerce. The majority of purchases, easily 90% or more, have actually been mobile-enabled e-commerce. Not mobile commerce. There is a difference. While subtle, it’s extremely important for retailers to recognize the difference because it’s going to change quickly.
Here’s a quick perspective. If you buy a TV via your iPad, is that mobile commerce? In my opinion, no. Yes, a tablet is a “mobile” device, but the experience the purchaser had was with a tablet-optimized website. Ditto for the person who bought a Mercedes SLR via eBay mobile on their smartphone (for $240,001). This is mobile-enabled ecommerce. Not mobile commerce. For the retail and mobile industries to better understand (and report on the growth of) this crazy thing called mobile commerce, or m=commerce, we need to break it out into three categories:
- Mobile e-commerce: Transacting with an e=commerce site via a mobile device. Examples include: eBay mobile, Amazon mobile, the Tesco app in Korea, and the majority of mobile commerce “apps.”
- Mobile payment: Payment using the smartphone as the conduit. Examples include: Google Wallet, PayPal, and LevelUp.
- Mobile commerce (in-store): The ability to purchase physical goods in the store via an app that interacts with the store’s point-of-sale system (and bypass the checkout process). Examples include SCAN IT! Mobile from Stop & Shop, Starbucks Card Mobile app, and Chipotle Mobile Ordering App.
It’s the latter two that offer the greatest opportunity for retailers. They both leverage mobile to improve the in-store experience. Unlike the original promise of e-commerce (to replace the bricks-and-mortar store), m-commerce offers retailers the unprecedented ability to connect with shoppers in and out of the store. By engaging and interacting with the shopper in the store, they connect the physical store with a mobile device to drive a personalized experience for the shopper that influences behavior and boosts spending. This is transformational.
For 2012, m-commerce will experience a rapid maturation as two key elements will be added to the experience:
- Convergence: When bricks and mobile finally integrate to provide a holistic shopping experience whereby each shopper has a unique experience with the physical store.
- Context: When mobile couponing, offers, location, check-ins, etc. become personalized to the individual shopper based on who they are, what they like, where they are, what they want, and what they’ve just scanned or purchased.
Convergence
A visit to any store shows (and there’s tons of data to support this) that today’s shoppers are mobile and they leverage their mobility to shop smarter, faster and more efficiently. While apps for price comparisons, online shopping and product information are relegating retailers to showrooms and warehouses, the future of retailing is represented by the convergence of mobile and physical store locations via retailer-centric mobile apps. Innovative retailers must recognize the potential of this convergence now. Retailers who fail to do this will pay dearly as they watch the thousands of shopping, comparison and purchasing apps available to shoppers remove them from the customer engagement cycle.
This isn’t about simple check-ins, games or QR codes. This is about creating an experience (and app) that provides real value to the shopper. It’s about providing an app that saves time and money while providing a truly unique and personalized experience with your store. And lastly, it’s about an app that is integrated to the physical store’s systems to provide for a seamless shopping and buying experience. That is what convergence looks like, and it’s becoming a reality for the retailers that understand its value and importance to the shopper and the future of their business.
Context
Only 14% of us care about location when receiving an offer, while nearly 60% of smartphone users prefer a personalized offer. While location has impact, it clearly pales in comparison to the value of a relevant, targeted offer. In retail, there has been a long-standing dream of being able to target a consumer with an offer as they walk by or into a store. It’s a great concept… unless the ad I’m receiving is for a product or service which has no relevance to me (a great deal on a tea as I walk by a Starbucks when I only drink coffee, for example). There are a couple of important things to consider when looking at how context will take mcommerce to the next level in 2012:
- Check-ins: Mobile check-ins were an early attempt at this type of context, but have failed. It’s checkouts that matter to retailers. Offering a deal to those who physically walk into the store and check-in via a third-party app (such as Foursquare or Shopkick) was, conceptually, a good idea. However, the lack of context that could identify each shopper as an individual rendered these apps no more effective than having an associate stand in front of the store handing out the same offer to everyone who walks in. Savvy retailers already have many highly effective ways to get shoppers to their stores. What they’re looking for is how to influence behavior once a shopper walks into the store and fully attribute mobile’s impact on revenue.
- Daily deals and coupons: From daily deals to the over 330 billion coupons offered last year, we are bombarded with ways to SAVE NOW!!! Over 3,500 a day, in fact. As such, the idea of one-size-fits-all coupons and offers is going to be replaced with offers that are presented in the context of each shopper’s needs, desires, preferences, timing and location in the store. This drives relevance and value for the shopper, boosts loyalty for the retailer and provides measurable lift for the brand. Otherwise, it’s just noise.
This time, it’s personal
The important thing to remember is that m-0commerce can transform the way that retailers engage their customers… if the strategies and campaigns take into consideration both convergence and context . Tihnk about how the e-commerce experience leverages clickstreams, cookies, implicit and explicit personalization and collaborative filtering to drive a personalized experience for the visitor.
With mobile, retailers can emulate many of those components because they know when you’ve entered the store (you open their app), they know your purchase history and brand preferences (because it’s tied into the loyalty program), they know where you are (using in-store, wi-fi based location services), they know what’s in your cart (using mobile scan-and-bag) and they know how you want to pay (using a mobile wallet, mobile payment or NFC). The smartphone becomes the tool by which retailers can directly engage and influence purchase decisions while the customer is in the store and just before they make a purchase decision. Now that is transformational!
Mobile is an incredibly personal channel by which retailers can directly engage their customers. The mobile experience must reflect this desire to be engaged directly, within the context of the shopper’s needs, desires, preferences, timing and location. In 2012, those retailers who integrate mobile and the in-store experience with context will thrive while those who don’t will become showrooms and warehouses for the mobile apps that have displaced them.
