What Sellers of Physical Goods Should Consider When Adding a Software Layer

by Jonathan Tarud
Blog Post

The world of retail has changed at a rapid pace.

Sellers of physical goods are finding that they have to do more to remain competitive. Not only are they competing with online or mobile rivals who don’t need a physical location to do business, but they’re competing with others who have implemented technological innovations into their products.

Adding a software layer might mean creating an app that is designed to boost the sales of physical products, or it might mean integrating technology into the actual function of the product, such as what we see with the Internet of Things.

In this competitive and hyper-connected world though, you want to be sure you’re making the right impact by adding that software layer – here are some considerations for thought:

Retail apps

One of the first considerations for adding software for retail is to have a comprehensive app strategy in place. The fact is, there are millions of apps out there and users have come to expect that they are top-notch. If not, they simply won’t use them and development will have been a waste of time and resources.

Customers demand better mobile experiences, largely because they’re spending more time on mobile than ever before. A report from Smart Insights shows that, not only does mobile dominate in terms of total minutes spent online, but mobile app usage takes the lion’s share of total minutes on mobile.

An Apptentive survey revealed that 55% of shoppers use mobile apps while in-store and that they’ve come to expect higher standards from retail apps, especially due to the in-app experiences provided by brands such as Starbucks and Amazon.

To develop a good mobile strategy, you might consider:

  1. Asking for and incorporating customer feedback. Take the guesswork out of development by giving them what they want.
  2. Connecting the mobile experience to the offline experience. Remember, 55% of users are using the app in-store. They’re looking for enhanced experiences which allow them to seamlessly navigate the online and offline worlds.
  3. Simplicity of use. What makes the customer experience easier? For example, can they check out items with one click? Can they scan a barcode in-store to learn more information about a product?
  4. How you’re going to measure analytics and gather feedback. For example, will you use in-app messaging? How will you monitor app usage? This will be valuable for making any improvements.

What does “experience” mean?

We’ve all heard and can understand that customers want a better experience from using mobile, but what does that experience entail? Besides attributes such as usability and great UI and UX, here are a few things to consider about overall “experience:”

  • Can you incorporate more than just the basic browse and checkout options for a more enhanced experience? For example, think about functions that will have some kind of utility to customers, such as augmented reality options to help the customer picture the product in their house or get instructions about using it.
  • Are there related “nice to have” features which can upgrade the customer’s experience? For example, Starbucks has a “music” feature on their app – it’s not directly about their product, but listening to music is something that people will often do while in a cafė.
  • Can you deliver “mobile moments?” For example, can you deliver something the user will want immediately within the context of their current situation? Location technology can help you let nearby customers know of an event happening, such as how Krispy Kreme let people know when fresh donuts were ready.

The bottom line is that adding value is the key to excellent customer experiences with mobile. Retailers incorporating a software layer should devise a plan with those experiences in mind.

Smart Products

Adding a software component to the physical product you sell is another consideration. Look at Alexa or Google Home and the possibilities that artificial intelligence brings to make homes and products “smart.”

The humble watch doesn’t have to be so humble anymore – your timepiece does extra duty if you have a Fitbit or Apple Watch, gathering data on your physical activity or letting you know when you have a message. Even your clothes can be smart – with special leggings which can determine the best brand and fit of jeans for you.

“Smart” technology is applying to more and more products, not just home appliances or other gadgetry to run the household, so what should manufacturers or sellers of physical products be considering when it comes to adding software?

To begin with, the first question should be, how will this product add value by being connected? As Nick Mival points out in this Marketing Week article:

“In the vast majority of cases, a connected device will take the place of a non-connected device in an existing system. As such, it is important to understand how the connected device could add value and change things for the better. To do this we start by establishing the purpose and the performance of the system that the device inhabits. This then forms a baseline benchmark to assess the proposed changes against.”

The second question should probably be, is there a market for this as a smart product? When you think about it, there is probably a way to make most things “smart”, but that doesn’t mean that people will value it being so. I’m not going to change out my old un-smart product if I don’t see the point of the smart one. There has to be some kind of clear problem or nuisance that the smart product will take care of (those smart leggings can save you from ordering the wrong size online, for example).

As Nick Mival points out, another question you will need to answer is how to get the multisensory experience right for the customer. The experience should be seamless and easily provide them with the information they need. This is something that is still being honed as far as things like voice technology go – if you’ve ever found yourself yelling at Siri or Alexa because they didn’t understand the first time, you’ll recognize this!

Smart products provide companies with the opportunity to deliver a value layer that may be completely new to their industry or product type, largely around the collection and use of data. From that perspective, companies should consider what data is of value to customers. Here’s a segment from Harvard Business Review:

“Smart, connected products also create opportunities to broaden the value proposition beyond products per se, to include valuable data and enhanced service offerings. Babolat, for example, has produced tennis rackets and related equipment for 140 years. With its new Babolat Play Pure Drive system, which puts sensors and connectivity in the racket handle, the company now offers a service to help players improve their game through the tracking and analysis of ball speed, spin, and impact location, delivered through a smartphone application.”

Final thoughts

What could your company and customers benefit from when it comes to adding a software layer to physical products? Is it the retail app experience, the “smart” product, or perhaps a bit of both?

Mobile and smart technology are here to stay and customers are demanding more from them. Sellers of physical products who are able to meet that demand well can create for themselves a valuable differentiation from other competitors.

Value is the key – your app or product must be delivering unique value to the customer which justifies to them why they should use it.

Koombea helps companies to build incredible apps. Talk to us today about how we can help you.

by Jonathan Tarud
Blog Post