On a cold, crisp Thursday night in Montreal, a large-scale downtown bookstore is filled with customers perusing rows of books, toys and home décor objects with their smartphones and mini-tablets in hand. Among them, a frowning middle-aged man is doing comparison shopping on the store’s competitor website while a fidgety, lip-biting red-haired woman is nervously posting a picture of a green fluffy monster to Facebook in order to get her friends opinion on this last-minute gift idea for her five-year-old niece before the store closes.
The widespread use of smartphones and tablets has become both a blessing and a curse for retailers. Mobile shoppers want instant access to information. When they use their phones inside a store or en route to a retail location, they aren’t interested in doing intensive research. They are preparing themselves to make a purchase and are using their mobile phones as tools to find local deals or to do some comparison shopping in a quick and efficient way. Consumers have become much savvier about shopping thanks to their mobile devices. Many shoppers can now be seen “showrooming” or browsing stores with their smartphones held out to gather information about products before they decide to buy the items online.
The Verge recently reported the story of an Australian retail storeowner who started charging customers $5 for “just looking,” in order to offset losses from shoppers who browse and then buy online. Are retailers reacting adeptly and quickly enough to this new breed of mobile consumers who use their smartphones as decision-making tools to guide them through their shopping experiences? As consumers are increasingly using their smartphones to discover what’s around them, retailers need to get smarter about how to use mobile to their advantage by rethinking the offline shopping experience to meet the needs of mobile-empowered shoppers.
Social, Local, Mobile
SoLoMo, short for social-local-mobile, is a mobile-centric approach that aims to provide a higher level of precision to local search results. The increasing popularity of smartphones and tablets, combined with the fact that mobile users spend the bulk of their time on social networks, has brought about this opportunity for local retailers to attract in-store traffic. Mobile consumers will most commonly use their devices to discover what’s nearby, and then visit the stores in person to do some comparison shopping.
However, it takes more than the addition of local information to search engine results for retailers to capitalize on the increasing use of mobile. An obvious first-step for retailers is to optimize their online presence for local search. Some proactive retailers have developed simple and innovative solutions by offering a quick snapshot of pricing on their mobile landing page or a ZIP code box to generate a map to the nearest store location. Others have gone a little further by making sure visitors can opt-in to receive mobile promos while they are in the store or in a nearby location. The next step for retailers is to consider geofencing, a technology that can target consumers inside the store by sending offers and promotions to their smartphones when they are entering or nearing a specific area, even down to a particular aisle in a grocery store.
A more comprehensive approach to mobile optimization must take into consideration the entire digital ecosystem of a store. This is exactly what McDonald’s Spain asked Nurun to accomplish last year when we undertook the localization of the restaurant’s website and mobile site as well as the development of a mobile app for iPhone and Android devices. Nurun also undertook the internal management of this complex ecosystem to make sure that a very large amount of relevant information (articles, press notes, nutritional data and allergens for close to 100 products, restaurants listings with different services and characteristics, multimedia content and digital coupons) could all be easily accessible across all devices, each with its own adapted experience.
Savvy retailers should also establish their business presence on content-driven discovery services such as Yelp. When current and potential customers notice that a store is listed on Yelp, they have the opportunity to share their personal reviews. This, in turn, allows retailers to engage in an open dialogue with their customers by addressing their reviews—positive or negative—and provide additional information and further support. Services such as Yelp also offer retailers the opportunity to sell deals and gift certificates through their business listing.
Even if a portion of smartphone users are still reluctant to share their locations in order to cash in on coupons or special offers, there are other ways to leverage the popularity of mobile devices. A mobile loyalty card program is another possible strategy for retailers who are looking for ways to influence in-store purchase decisions. Moreover, mobile loyalty programs provide retailers with much more detailed information about to the level of participation and the behaviors of their customers compared to traditional loyalty methods, such as punch cards.
The Mercury News recently reported that Safeway, the grocery store chain, saw a 13 percent net income increase in the final three months of 2012 following the launch of a mobile loyalty program. Safeway executives credited this strong financial performance to the popularity of its “Just for U” program, which offers coupons and other deals that are specifically tailored to each customer's specific shopping habits. Customers can receive the digital coupons on their tablets and smartphones. This success story stems from the principle that retailers need to give consumers the information they need, when and where they need it. Safeway designed the program around what is important to the individual customer. The program allows clients to access personalized deals based on their purchasing history and add them to their loyalty card. Unlike regular coupons, these offers can be used as many times as the customer wants for up to 90 days. Customers can explore in-store deals and add them to their profile. All these offers can also be accessed through a personalized grocery list where all items can be sorted based on the shopper's purchasing routine, the offer expiration date or the store aisle.
In-Store Mobile Shopping
Along these same lines, Nurun recently worked with L’Oréal Paris to create an interactive kiosk that helps consumers find the perfect product for their needs and improve the overall in-store cosmetics shopping experience. The application features intuitive, and non-intrusive, functionalities that assist consumers with their product selection. Here again, the process is based on a simple insight: consumers want tools that can help them pick the right product by reducing the scope of their search, and in the process, make the retail store experience more intuitive. Complementary to the existing mobile application, Instant Beauty, this new installation represents the final step in a complete consumer purchase support initiative.
Retailers have an opportunity to transform the in-store shopping experience by examining the behaviors that derive from the mobile activities of their clients. They need to find ways to give their consumers the local info they want and include location-based offers or deals to reinforce loyalty. However, most retailers are struggling to respond to new consumer demands and they don’t necessarily have the financial means to develop their own innovative business model. Fortunately, there are now convenient and readily available mobile payment and mobile loyalty solutions that retailers can integrate to enhance the shopping experience in their own stores.
The Convergence of Mobile Payments and Mobile Loyalty Programs
Retailers who are looking for turn-key solutions to improve the in-store shopping experience should consider mobile wallets solutions such as Google Wallet or Apple’s Passbook. These two companies have taken different approaches to the idea of mobile wallet that integrates payment solutions, loyalty programs and security considerations.
The Google Wallet app allows users to pay with any credit or debit card they own by tapping their phone to an NFC-equipped terminal. The app takes care of the payment and can also automatically redeem Google offers from participating merchants. In comparison, Apple’s Passbook app offers consumers a simple way to manage and use all sorts of mobile payment items such as coupons, boarding passes and loyalty cards from partner companies such as Starbucks, Target, McDonalds, Barnes & Noble and more. In both cases, the goal is convenience.
There is no doubt that mobile payment is an appealing solution for consumers who are looking for the same hassle-free, in-store checkout experience they receive when shopping online. It’s also an efficient way to keep track of one’s expenses. And there’s the added advantage for retailers who are now able to identify, track and reward mobile shoppers. By increasing their customer’s loyalty, there is an opportunity for retailers to generate more revenue.
Helping Consumers Make Better Choices
Even with myriad options, most retailers are missing out on the opportunity to leverage these emerging mobile shopping behaviors and apply them to their consumers. Despite increased traffic driven to their stores by localized search results on smartphones, many retailers still haven’t made strides in the mobile world. Simple steps, such as offering free wi-fi in bricks-and-mortar locations are still rare.
Instead of being concerned with a store filled with customers doing comparison shopping on their smartphones, retailers would be better advised to think of all the sales lost because their website isn’t mobile friendly. Finding the solution involves recognizing the shift in consumer habits and mindset, and working to build a new in-store experience that becomes interdependent on technology. Retailers need to keep a closer eye on innovative approaches to remain competitive.
By adopting a new approach that is more in sync with the needs of mobile shoppers, retailers have a better chance of maintaining customer satisfaction and loyalty over time. The value of mobile payments and loyalty programs goes far beyond convenience.