Traditional retailers have been facing intense competition over the last few years. Digital technology means that physical distance is no longer a barrier for shopping with the competition, not to mention that online-only retailers have been able to slash the overheads faced by physical stores.
Mobile app usage is also now playing a big role in the retail space. Mobile now represents a great opportunity for traditional, bricks and mortar retailers.
Some might not like the idea of straying into an area outside of their traditional business model, but more are finding it is necessary in order to be able to compete in a digital world. It’s a bit like the railway of the early Twentieth Century. Famously, railway owners didn’t see the development of cars as a threat because they weren’t trains. It was a tough lesson to learn when they had to acknowledge that they were in the “transportation” rather than “train” business, with railway companies bankrupted across the US.
Similarly, if you’re in the retail business then you need to account for new technologies which impact buyer modality and preferences.
Mobile should be a priority for retailers now, here’s why.
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A few years ago retailers were worried that online shopping habits would decimate bricks and mortar stores, but as Pew Research point out, the concept of “going online” has changed. Our modality for going online is increasingly via mobile device and often done while we’re out and about rather than sitting stationary at home.
Consumers also don’t tend to use their devices to make the final purchase so much as they prefer to use them for product research. InReality’s 2016 Reality of Retail report reveals that 83% of consumers prefer to do their product research online or via mobile rather than in-store. By contrast, 75% preferred to make their final purchase in-store.
RetailMeNot found in their report “The State of Mobile Apps for Retailers” that 84% of those surveyed use their smartphones in-store. They like to research products on the spot where needed and look up coupons or sales.
Smart retailers are getting in on the mobile trend and using it to serve customers through those “mobile moments” that occur in or near stores. They are looking for ways to seamlessly connect the physical and digital experiences to cater to customer demand.
Challenges for mobile
Studies show that there are still plenty of challenges ahead for retailers when it comes to using mobile. One of the biggest of those is actually grabbing a slice of the consumer’s attention and having them not only download your app, but actively use it.
RetailMeNot found that it’s really not an easy task to get consumers using retail apps; of those surveyed in the US, 60% only had one or two retail apps on their phones and 21% had none. These days, people have so many apps on their phones that they need to have a compelling reason to download your retail app.
InReality found that one of the challenges for retail is that shoppers expect more now from digital in-store experiences:
“For today’s shoppers it’s all about self-help. Online adoption seems to have created new expectations of the in-store shopping experience. Shoppers want to be able to control their shopping experience just like they do online. And, they’re also looking for in-store experiences to be increasingly personalized.”
It helps to have a good understanding of why a consumer would choose to use a retail mobile app. RetailMeNot looked at that in their study and found that 63% of shoppers who show a preference for a retail mobile app for shopping-related activities do so because the app provides convenience. Speed of use, stored settings, and benefits or rewards for using the app also rated highly in reasons for choosing to use the app.
Here is a summary of the questions retailers should ask themselves to tackle the challenge of succeeding with a mobile app:
Have we provided a compelling reason for users to download the app?
Are we meeting expectations of convenience, such as stored settings, ease of use and relevant information?
Have we provided a measure of personalization with our app?
Is it easy for users to get the product information they need?
Could we use some kind of app-based reward or incentive program?
How to use mobile
It’s clear that incorporating mobile to enhance the in-store experience should be a key strategy for retailers. It’s not that shoppers overwhelmingly want to replace website shopping with an app, but they’d like to have their in-store shopping experience made more convenient or enjoyable through use of digital tools.
Research conducted by RetailMeNot found that 49% of coupons downloaded on smartphones are ultimately used in-store, probably because of the tendency for shoppers to be looking for coupons at the time that they actually need them.
If you look at apps such as Target’s Cartwheel, they use coupons which are only available to app users. In order to use the coupon for purchases, users must save the coupon in the app, then present their phone for scanning at checkout.
It’s clever on Target’s behalf when you think about it; not only do they have a good way to encourage people to use their app, but they get to gather personal data about the user. If they know what the user’s preferences tend to be, they can make better-targeted offers directly in the app. It beats the old paper-based coupons, where no data was gathered on the customer.
This type of app also helps customers where the research shows they are asking for it – while in the store. There’s no forgetting discount coupons and leaving them at home because they carry their phone with them.
It’s not rocket science, humans like to be rewarded. In fact, 31% of those surveyed by RetailMeNot chose to use retail apps because of some loyalty or reward element being included.
This is another way you can get back to that personalized experience. For example, Starbucks knows what your orders tend to be and will offer the opportunity to earn extra reward stars by purchasing certain menu items you’ve already shown a predilection for over a set period.
Gartner Research predicts that by 2020, shoppers will go through 85% of their path to purchase prior to talking with any staff. Shoppers want to be able to help themselves and go into talk with retail staff when they feel that they already know a bit about the product.
InReality found that shoppers would like to be able to help themselves through a number of tasks where digital channels can help:
Finding a particular product.
Comparisons of products and prices.
Viewing customer reviews and ratings.
Learning about products and how to use them.
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Perhaps the most important reason for retailers to incorporate mobile technology into their bricks and mortar operations is that customers are demanding it. Shoppers want convenience, personalization and incentives, all of which can be delivered with digital experiences.
A point to remember is that successful retail mobile apps aren’t just a mobile version of your website, they deliver value that can only be realized by mobile. Most customers are not using the app for final purchasing anyway – they’re using it to supplement their in-store experience.
Retailers who cater to mobile demand have a good chance at sticking around. It’s about delivering up-to-date customer experiences and genuine added value.
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