Retail showrooms, mobile sales
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Consumer behaviour is changing as a result of the adoption of smartphones, in particular the way individuals shop. This article considers the way in which ‘showrooming’ — considering goods in a retail outlet and then purchasing them online — is moving into the mainstream, and suggests marketing strategies that retailers might adopt to cope with this shift.
Keywordsmobile marketing loyalty retail
Connecting with the mobile consumer
Mobile offers the opportunity for a revolution in customer loyalty management, providing the last piece in the jigsaw of connectivity to individuals at the point of purchase. With 64 per cent of consumers now researching products on mobile, 1 UK smartphone penetration moving north of 70 per cent and price comparison just a click away, getting their mobile strategy right to harness the many opportunities has become a priority for forward-thinking brands.
‘Showrooming’ goes mainstream
Extending the reach of loyalty
There are major opportunities for forward-thinking retailers to fundamentally rethink their approach, embracing mobile to establish new grounds of competitive advantage.
- 1Mobile adds greater context to the customer situation
- ° It enables retailers to understand more about an individual customer’s behaviour and location, allowing them to make the content, tone and timing of their messaging more relevant to that individual. As importantly, it can be delivered via device-tracking, giving the option of collecting anonymous data (to allay any privacy concerns).
° The rollout of iBeacons (and Bluetooth low-energy beacons generically) super-charges these opportunities for 2014. Micro-locational targeting within specific stores/aisles as well as within malls or High Streets becomes a reality. At a cost of less than US$1 per beacon, this is more likely to see rapid return on investment than previous store-installed technology.
- 2Fuse the power of web analytics with in-store shopper behaviours
- ° Mobile devices provide the opportunity for bricks and mortar stores to access the level of customer insight and sophistication that has given web companies such an advantage in recent years. Companies such as Euclid in the United States mark the first of a generation offering a new window into the store environment by analysing shopper movements through store, dwell times and so on. Like dunnhumby’s innovative use of Tesco data back in the late 1990s, these mobile data innovations represent a similar opportunity for ‘smart retail’, to deliver service and operating efficiency at the bricks and mortar level.
- 3A service nirvana where high-value customers or prospects can be identified within the store environment
- ° Smartphone functionality opens up the opportunity of differentiated service, of tiered pricing, or the ability to discount in reaction to a consumer showrooming in-store. This could be based on a score that is linked to the profile on a specific device, looking at current and potential future value.
° Spaaza has already run UK pilots with White Stuff where consumers scanning a product code in-store are given a personalized price-point based on a series of profile features.
- 4More creative engagement at the point of purchase
- ° Are Clubcard vouchers, mailed weeks after a purchase, or even Catalina vouchers on a till slip post check-out, part of a past era of shopper marketing?
° We live in the age of instant gratification. Mobile offers the opportunity to engage in the browsing phase with a broader, creative range of rewards — not necessarily points-for-prizes, cashback or discounts. Major brands are now trialling triggers (via scanning, audio, etc) that then offer video, music or games as rewards via the smartphone.
- 5Mobilized data brings CRM opportunities to the High Street
- ° Many loyalty marketers engage with customers only post purchase and, even then, have a limited view of their value potential or broader share-of-wallet.
° Where have customers been searching (online) or shopping (physically) before that initial purchase? What share of wallet are you gaining from your current shoppers? Mobile again provides the connection to bring that data into the bricks and mortar store, linking via registration, Facebook or Twitter IDs and so on.
It’s only the beginning of the journey
There is no doubt that this is still early in the journey for smartphones and tablets. In the era of the empowered consumer, people will make their own choices around which services to download, what their comfort level is around data usage and privacy and so on. Retailers and brands will need to work out ways to avoid an ‘offer blizzard’ every time a smartphone-carrying shopper hits the High Street, alongside a fairly substantial reinvestment in store-scanning and other technology.
But already markets such as China and, to some extent, the United States are showing a glimpse of the future. In China, 39 per cent of online shoppers are using a tablet for their purchases and 56 per cent are going direct to brand sites to make purchases (52 per cent in the United States). The retail landscape is shifting fast, and retailers and brands alike need to overcome the fear factor and embrace the multiple opportunities.