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.
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.
It seems like yesterday when I met with my lead developer to discuss the viability of an idea for what is now a thriving startup called RainCheck.
Now here we are only 9 months on and off to Cannes as the only Australian startup for the Lions International Festival of Creativity, invited by Unilever as part of their Foundry50 program – a global search for the top 50 marketing technology startups.
Ever since I can remember, software and platform design has always been about IFTTT (If This Then That), and designing RainCheck was no different.
Certain other things had to happen before other things could happen. For example, BLE v.4.0 (Bluetooth) needed to “wake” an App on a Smartphone before anyone could realise a benefit.
I gathered a world-class team with over 65 years’ combined experience to originally solve the problem of online shopping cart abandonment, which is around 75% in retailand worth over $4Trillion globally.
During our research we uncovered some interesting insights;
- Firstly, eCommerce isn’t exactly taking off in retail, like we have been led to believe
- Secondly, everyone now has their computer in the palm of their hand while shopping
In 2010, the eCommerce contribution to retail figures in Australia sat at 4.4%. At the time, Gerry Harvey, founder of Harvey Norman (one of Australia’s largest retailers), stated “why would I be worried about eCommerce at that rate”. Everyone including myself thought the guy was mad, buying online will take off and be huge!
Fast forward to 2015 and that figure is 6.7%, so in 5 years it has only grown 2.3%, hardly booming is it?
With new marketing jargon arriving such as “omni-channel” and “connected store”, and brands and agencies trying to understand shopper behaviour, we saw an opportunity.
If so many people are in fact shopping online, yet 93% are still buying in-store, the market needed an online to offline solution, and RainCheck was born.
Our vision is to be the world’s leading Online-to-Offline (O2O) shopping enabler.
We are dedicated to bridging the gap between online and offline for retailers – feat no company has achieved globally, yet.
By combining the most innovative technologies onto one platform we offer a seamless journey from online to offline for both retailers and shoppers.
- For retailers, RainCheck is the world’s first mobile-only O2O Commerce platform that helps close the data loop from online to in-store via the Cloud, Beacons and Proximity technology
- For shoppers, RainCheck is a virtual shopping wishlist that notifies them of items they like online when they enter physical stores
We’re on a mission to capture the $50Billion of abandoned items online each year in Australia, and convert them in-store where the value of multi-channel shoppers is much higher.
We are launching in our local Australian market first as it’s ripe with very high Smartphone use on top of a savvy shopping community.
We see Asia as our progression path next year once we prove the platform, as they are a “mobile-only’ region where O2O Commerce is already huge.
We’re excited by the prospects ahead and hope you’ll join us on this journey. I will be sharing more on LinkedIn as we go so please check-in regularly for updates.
Feel free to email me directly at firstname.lastname@example.org and visit our website for more information – http://www.getraincheck.com/
Check out my new DigMag Mobile News & Amazement – http://flip.it/zPyjA
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”.
Gen Y are a group of people generally born between 1977-94 so are aged between 16 and 33, the baby Boomers are generally late 40’s to late 60s age bracket. Gen Y’s are a tech savvy generation with text messaging, Internet, iPods, to keep them socially connected, due to events such as 9-11 & Bali they “live for the moment”. GenY is the largest group on Facebook however the over 35 sector is the fastest growing now fast becoming the Baby Boomers.
Interestingly the GenY’s are influencing what the Baby Boomers spend there, (in many cases), immense cash reserves on. Example, GenY’s influence parents on most tech appliances and gadgets e.g. mobile phones, entertainment equipment, online shopping sites etc. in most cases indirectly. Mobile phones are now handed up in families and not down. GenY’s now stay living at home and spend their cash as fast as they earn it they are not interested in saving for a house that they will never own.
Not only are they making most of the FMCG purchasing decisions such as drinks, fast food, entertainment tickets etc. they can also be a major influence on Grandma’s next holiday or Grandpa’s next flat screen TV. Why because they network with each other and can naturally carry out a research task in minutes online via Blogs, vertical sites, social networks and search engines.
Sure Gen Y’s probably will not influence the older generation on what the best wine to have with Scampi on a sunny afternoon maybe, but I am sure they could find out via their mobile phone within a minute. Is it highly possible that this Gen Y generation would work on a commission basis via Social networking? Ummm I wonder.
With the arrival of the iPad imminent and the release of the Microsoft Courier tablet and HPs Slate one has to wonder about the desktop environment. Microsoft has enjoyed such a great ride since the late 80s with its closed client/server environment however the time for change is upon us all, and its all portable and personal.
People are on the move. In order to do business these days in any industry you need to “get out there” and communicate. People today want a simple, small yet powerful device that has access to software and data that is stored in the “cloud”.
More and more people consume disposable content today that can be discovered, downloaded, installed and run in many cases just once then discarded all usually for free or the cost of a magazine.Desktop Dead
Global mobile browsing users will surpass broadband subscribers any moment now if it hasn’t already. Browser based application execution is far more reliable then installed software. The reason is that once a software package is installed on a desktop it looks at the resources available and installs to that metric, the problem is that once another package is installed after that it neglects the other installs. This in time slows the desktop down and can corrupt DLL files and strain memory.
Fast paced networks in most cases wireless and the associated services built on and around them is the future. Even this week Mexican telecoms tycoon Carlos Slim, founder of the America Movil empire, has edged out Microsoft boss Bill Gates as Forbes magazine’s richest person in the world.
It is very clear to me and other people that work solely in the Mobile ecosystem that the medium is huge for marketing and social interaction. The two main reasons are its wireless therefore truly mobile and its personnel (my handset, my stuff). It is also clear that the traditional “Digital Agencies” that have spawned over the past decade will not have the right expertise or people to deliver what Brands want.
Head AssJust recently Gartner Research predicted that mobile Web access will surpass traditional PC access by 2013, people have now embraced that fact that they can surf while on the move and access content on a personnel basis. Add to that the fact hat most people are over the Mobile data cost mass hysteria that the carriers imposed a few years back. Who needs a carrier for data anyway WiFi is here and offers another branded marketing opportunity.
Mobile Advertising is set to Grow 45% in 2010 to $3.8B. That explains why Google and Apple are diving head first into mobile advertising and marketing, with Google’s AdMob $750M acquisition and the recent announcement that Apple will likely acquire Quattro Wireless for $250M. (It looks like Microsoft / Yahoo might want to scoop up Millennial Media or another mobile ad firm to compete.) The advertising industry as a whole may take a while to recover, but one of the largest growth areas is in mobile.
They say “the proof is in the pudding” so lets’ look at some recent results; A recent campaign run by Shedd Aquarium found that SMS beat out Web in Direct-TV Spot. The SMS call to action generated 325% more entries than the Web based call-to-action, making up 52% of the total entries, though it ran in only 25% of the ads. And over at Pernod Ricard their Malibu branded mobile application that was created to support the launch of its new Malibu Island Melon flavor has seen over 2 million downloads (not just iPhone).
Delivering a nice and/or fantastic experience on the 4th Screen (Mobile), is not the same as it is on the 3rd Screen (Desktop), there are around 5,000 handset models, 8 different operating systems, scripting languages, various browsers, delivery platforms and then the carrier networks to negotiate. It is important to point out that Mobile is NOT another medium yet is designed to work across all media in one form or another. Now is the time to develop a Mobile strategy and start to implement it as your clients are about to ask you all about it.