Tagged: apps

Retailers face a mobile strategy dilemma

Now, more than ever before, consumers are using their smartphones not only as a communication tool, but also as their number one shopping and retail browsing precinct.

This shift in consumer behaviour when it comes to mobile browsing has created what I term the Mobile Strategy Dilemma: should retailers develop a mobile application, or invest heavily in a highly responsive website?

Having both a native app strategy and an e-commerce website is a waste of money and grossly unrealistic for retailers, so a choice absolutely needs to be made. But what is the best choice? And which will work best for any given retailer?

Let’s look at the numbers. According to recent data from ComScore, smartphone apps now constitute 50 per cent of all digital media time, up a huge 44 per cent from a year ago. Mobile is now a whopping 68 per cent overall with desktop claiming just 32 per cent of digital attention.girl-iphone-stock-810x360

As a society, and with advancements in technology and payment methods, we are transitioning from a ‘point and click’ world to a ‘swipe and tap’ way of life, steering away from the world of desktops to multi-channel usage. Retailers that aren’t reacting to these changes in mobile usage won’t see any online sales conversion, which is where the money lies.

This is where the Mobile Strategy Dilemma comes in. Retailers are asking: “If I invest in a native app strategy not enough people will download and use it, but if I don’t have a native mobile app I am doomed”.

You’re damned if you do, and doomed if you don’t.

Benefits of apps vs. mobile websites

Apps offer benefits that other channels simply can’t, activating location services to coincide with in-store beacons and enhance the shopping experience with the ability to communicate special offers, discounts and personalise customer service and human interaction. The unprecedented accessibility and convenience of shopping from an app doesn’t even compete with that of a desktop, with many laptop users converting to the use of iPad Pro or smartphone to conduct their online shopping activity.

While most retailers have mobile-optimised sites, shoppers are clearly converting across multiple channels. The gap between share of traffic and share of sales represents a huge opportunity for retailers who don’t see over 40 per cent of their mobile traffic converting digitally. Mobile-optimised site browsing isn’t as seamless for the online shopper, which begs for retailers to offer a richer and more convenient customer experience which can be provided in app-form.

With Facebook usage on mobile at approximately 80 per cent and Instagram at almost 100 per cent, it makes sense this is where shoppers are browsing and sharing. So why is it the lions-share of marketing spend on fixed web technology? The skills needed from retailers in order to deliver on mobile are immensely different than web, requiring development, integrations and design (UX/UI).

Today’s marketing funnel is broken into short, intent-driven moments, and marketing’s role throughout the funnel routinely extends all the way through to purchase. As customers enter mid-funnel, skip stages altogether, or move through this new funnel out of order, the business costs to retailers continue to mount and the cost of acquiring and retaining new customers grows more expensive. In addition, managing the host of technologies that retailers have adopted to meet these challenges has significantly slowed down their ability to respond with speed to changing customer expectations and software advances.

Most retailers turn to mobile vendors due to lack of sufficient in-house mobile resources and expertise to meet their strategic goals. Forrester recently reported that 56 per cent of retailers work with several partners, including agencies, specialty vendors, and platform providers, to support integrated mobile initiatives. The issue lies in integrating and managing multiple point solutions as there are high costs associated, and they hamper the retailer’s agility in responding to changing customer expectations.

So what is the solution to this modern retail dilemma?

Retailers need to partner with specialist tech organisations in order to combat the trend. It’s about working with those that not only have the know-how, but also the connections to produce a universal shopping experience via a native app where all retailers are reachable together.

Mobile first or even mobile-only solutions will start to surface to satisfy this need, where the shopper is chaperoned all the way from discovery to purchase in-store or online. The new measure will be a pay per action model where retailers will pay for an actual sale conversion.

While the future of mobile is bright, it’s vital for retailers to move their strategy to more than optimisation allowing a seamless experience for consumers and further driving sales and traffic via their hefty investment in app technology. This will ensure greater sales, but also higher in-store conversion. A channel consumers will never be able to completely step away from.

How Restricted Media is changing everything.

clockAs the Digital Revolution charges ahead and seemingly transforms everything in its path, it forces people to ingest content at an ever increasing pace. Early on the fixed Web was a relaxed environment where you could mull around on facebook, your favourite Portal and Tweetdeck maybe fire off an email here and there, but now we are all Mobile and the engagement window is massively reduced. This has spawned a barrage of platforms that’s take up is simply phenomenal and it’s all about Restricted Media.
Restricted Media is a term given to platform based products and services that encourage user generated content however with pre-set constraints such as Twitter’s 140 characters as a popular example. Others that have also arrived are Instagram’s single shot post and 15sec video, Vine’s 6sec video post, Snapchat’s 3sec photo view or GIFbomb’s short animated GIF clips.

Why are restricted media platforms and their services starting to rule the digital world? There are many reasons however the main reason is Mobile. As the Internet spreads into Asia and the developed world along with a much younger demographic in the western world, all those screens are Mobile. An enormous amount of users in the Asia are enjoying digital interaction via a Mobile screen, and that is the first screen many have ever had.

Most young people are interacting on Mobile screens also. Summarizing its recent BI Intelligence report on teen’s mobile-first usage, the publication wrote, ” we may be witnessing is the unravelling of a unitary, centralized social media landscape, dominated by Facebook, into a set of multipolar nodes. Facebook warded off the Instagram threat by buying the company, but it won’t always be possible for the company to neutralize threats with acquisitions.”

Restricted media apps make it easy to create frictionless content. Anyone can type in 140 characters, take a photo, or hit a button to compose 6 second of looping video. In contrast Blog’s, formatted Web sites and delivery networks require careful time consuming preparation and publishing.

More interesting is how these restrictions impact the simplicity of the product interface. These media restrictions mean that the product can support a smaller number of use cases, making it more personable, and easy to use. Often, you can power the entire interaction with one button, like Snapchat or Vine. Just tap a button to create content, and once you hit the limit, it’s a done deal and in the cloud, there are no issues with editing and rearranging the content.
Both the simplicity of the content, as well as the device UI, makes the whole experience much more directed and higher conversion.

In addition to simple content creation, there is the transition to context to communication, rather than publishing, which encourages a higher level of participation. The “90/9/1 Rule” is being smashed apart, (which refers to out of 100 people, 1% will create the content, 9% will curate the content and the other 90% will consume it). The content creation participation by restricted media is much higher, SMS is over 90% and so is IM, email, Skype etc. The point of communication is that all parties involved create content that’s directed at other people, and everyone participates.

Twitter has @mentions, Dribbble has rebounds, and Snapchat is all about communication. This invites people to participate, because the media can be directed at other people, and there’s a built-in context to communicate to one another. This leads to email notifications based on healthy user-to-user engagement. This drives frequency, virility, and all sorts of other interaction.

Creating content from scratch is hard. Similarly, being the first to communicate can be difficult also, anyone who’s introduced themselves to a stranger knows the feeling. However, replying is easy. If someone takes a picture of themselves making a funny face on Snapchat, then a natural response is to make a funny face back. Even more if you know that the picture was sent specifically to you, and then you feel like you owe a response. In fact most people try and respond within this virtual window of opportunity where the “hang time” in between responses can diminish the quality of the response and of course the moment.

Traditional media platforms tend to bring out the flamboyance in everybody and create show-offs, this in turn leaves people who tend not to participate because they don’t want to compete with those who are more skilled or who have more time.
Instead, restricted content creation reduces the variance in output between the low-skilled and high-skilled users, which makes it so that everyone can interact and have fun. Take Instagram and its very user friendly image filters which can propel anyone into the spotlight with a great time piece of photo brilliance, with instant feedback from many-to-one. In contrast updating a blog or a personal site would not reap the same connections.

All of the above translates to more frequent, more inclusive content creation. This fuels traction. More frequency of use means there’s more opportunities to take users through viral loops, as well as firing organic user-to-user notifications that power retention. It becomes easy, for instance (in Snapchat’s case), to ask the user to include a couple extra recipients of a photo after you’ve replied. Or after you’ve created a 6 second video, it’s easy to ask the user to share it onto a couple different social networks.

Restricted content creation needs to be seamless and with very limited user interface interaction and must be bound to a communication protocol. All these factors are inherent on the Mobile platform and the next billion users will interact for their first time on the Internet on a Mobile device.

What’s Next? “Zou Chuqu”

Quite simply What’s Next is Asia and Mobile media. For many people in the Asian region the Mobile screen is the first screen that they ever had that can deliver content.

The population in Asia is now 4.2Billion people with China sitting at 1.3Billion. Why is this important? Well, the Chinese consumer Web is like a parallel and totally closed version of the web in the rest of the world. They’ve got vibrant and powerful local substitutes for every popular web service that the West has. What’s more many Chinese companies have been ex­plicitly mandated to “zou chuqu” (go out), in the words of the declared government policy seeking customers and alliances across Asia.

An example of the potential on offer in China is the huge market that a company like Apple just can’t ignore. Apple’s iPhone 4 launch there in the first quarter of this year brought the company’s phone sales there up by fivefold from a year ago. Revenue in China reached a record $7.9 billion last quarter (yes that was $7.9billion), which is up threefold year-over-year. That brings Apple’s revenues in the country to $12.4 billion for the first half of the fiscal year. That’s nearly what Apple made in all of the last fiscal year when it made $13.3 billion in China. “It is mind-boggling that we can do this well,” said Apple chief executive Tim Cook on the last earnings call.

As the recession eases, the shift of global economic activity to Asia is accelerating. This transition had begun well before the collapse, but as recently as 2008 many Western businesses were essentially ignoring it. That is no longer a viable strategy.

Take in to account the fact that retail sales growth has rebounded sharply in Asia. One force driving this turnaround is consumer credit; younger populations in Asia are more amenable to buying on credit than their parents are, (60% of Vietnam’s 86million population are under 30) , and as aspirations and incomes grow, people recognise the value of credit in allowing them to make purchases they would have otherwise put off for years. Levi Strauss & Company has just an­nounced the first consumer credit program for low-ticket items in India, offering jeans on an interest-free, “buy now, pay later” installment plan. In an experiment con­ducted over two months in com­pany stores in Bangalore, consumers spent 50 percent more than usual when offered an installment op­tion. The number of credit cards issued annually in China, meanwhile, was about 140 million in 2008, and it’s growing more than 50 percent per year.

Australia is also a member of the Asian region and plans are already well underway to transition from print to digital on mobile devices for news content. As the Asian region advances and blooms it will attract foreign investment for infrastructure projects worth billions from the West. This will not only offer high speed transport and cutting edge communication networks yet also education and health services. Most of Asia including China and India will enjoy brand new LTE wireless networks that will be available to almost all the populations simply due to scale (cost spread over many people).

For Asian companies, the conventional strategy of moving abroad by acquiring assets will not work. For Western companies, moving established operations into Asia will be equally fruitless. There’s only one way for both types of companies to succeed: By determining the capabilities they need to drive operations and investing in those exclusively. If companies’ capabilities match their strategic plans, Asia’s growth can provide a powerful counterweight to the worldwide recession — and a platform for global expansion afterward.

A combination of new media the ubiquity of the Mobile phone that is engaging, personal and easy to use and acquire will pave the way for an avalanche of opportunities for any communication company.

It’s time for western digital agencies to “zou chuqu” and engage with strategic partners in the region that we are a member of and offer compelling experiences through innovation in portable media. It’s no longer a case of “build it and they will come” in Asia it is now “build it as they are here”.