E-commerce transformed traditional brick-and-mortar retail at the turn of the 21st century and altered the industry beyond recognition. Facing the threat of the ultimate disruption, retailers went online trying to balance two different business models – both offline and online retail. The integration proved to be a serious challenge, and online-first retailers have a clear lead over brick-and-clicks in terms of online revenues and customer engagement. However, both models are yet to find ways to effectively incorporate and fully realize the potential of mobile apps. But what are the stakes?
As The State of Retailing Online 2016 reveals, mobile accounts for 44% of retailers’ online traffic, translating into 31% of sales. However, despite healthy growth of the mobile traffic, conversion rates remain low. This brings mCommerce to retailers’ agenda and highlights the need for a circumspect mobile strategy. This is particularly important for brick-and-click retailers. If implemented wisely, a mobile strategy could help physical stores mitigate their shortcomings and stress their advantages over purely online shopping.
A customer app as a focal point
A consumer-facing app is a key element of any retailer’s mobile strategy. According to the recent PwC survey, 34% of participants believe their mobile phones will eventually become their main purchasing tools. Say nothing of those customers who use shopping apps occasionally. The vigorous growth of mobile traffic that retailers observe is a trend to reckon with.
Yet, traditional retailers are lagging behind their online-first competitors. As revealed in App Annie’s research, in 2016 the time US customers spent in brick-and-clicks’ mobile apps grew by 55% year over year while online-first retailers enjoyed a 60% increase. Online-first apps outpaced brick-and-clicks in terms of sessions per user and sessions per user growth rate as well. The question is whether traditional retailers need to match their online competitors by all means or search for potential synergies between mobile apps and physical stores.
Tilting the balance
Some retailers prove that a mobile app can significantly increase in-store sales. For example, Walmart claims that the customers who installed its app visit their physical stores on average twice as often as those not using the app. Besides, app users tend to stay in-store 40% more than an average shopper.
In order to achieve such outstanding results, it is important to carefully consider app functionality early on in the mobile application development process. The following app features can help brick-and-clicks to leverage advantages of their physical presence:
- In-store mode. As proved by Walmart, a mobile app might be a perfect bridge between traditional shopping and shopping online. Such app features as shopping lists and budgets help streamline in-store experience. The ability to scan barcodes and add items to a virtual shopping basket helps consumers stay on budget.
- Geo-targeted mobile alerts. An app can serve as a window display extension, wooing customers in the immediate proximity of a store with a custom offering in a push notification. The offering depends not only on the customer profile and interests, but also on the current promotions at the specific location she approaches.
- Full information access. In a physical store a person has a chance to check the look and feel of a product or test it before purchasing. That is one of the major advantages of in-store shopping. However, many people require more information than just product characteristics to make purchase decisions. They prefer to check reviews and customer feedback first, which can be easily done when shopping online. If a mobile app features peer reviews and ratings, customers are less likely to postpone their purchase decisions.
- Streamlined click-and-collect. Click-and-collect business model is a popular alternative to door-to-door delivery that leverages retailers’ physical presence. A mobile app can further streamline the process. For instance, in-app communication can allow a customer to send a message when approaching the store to make sure the order is ready for pick-up immediately.
- Integration with social networks. Social media apps account for the major part of mobile traffic in the US. A customer app should enable users to share their shopping experiences on social media. It’s the best way to please customers and tap into the infinite marketing potential of the social channel.
- A mobile app can employ cutting-edge technologies to provide a customer with brand-new services. For instance, a product configuration feature can enable a customer to visualize a complex modular item compiled based on her requirements. A virtual dressing room helps to choose fitting garments and accessories. Furthermore, an app can employ image recognition technologies to enable customers to take pictures of an item they liked and search for similar items on stock.
- Customer loyalty programs. Incorporation of customer loyalty programs into a mobile app accomplishes two important tasks. First, it further incentivizes customers to install the app, thus giving a boost to the install base. This comes natural as 91% of consumers in a global sample are members of loyalty programs. Second, it fosters customer engagement with the app.
The list is by no means exhaustive and it’s up to a retailer to come up with and implement any features which will make an actual competitive advantage.
Digital assistants: in-store experience from a different perspective
Customer engagement is an essential element of a successful mobile strategy. And it doesn’t have to be limited to a shopping app. In a physical store, a knowledgeable shop assistant can make a difference. Sales associates’ expertise and deep knowledge of the product range ranked #1 among the factors determining the purchasing experience. 40% of the global PwC survey participants considered it crucial to improving their in-store shopping experience.
Yet, rising numbers of SKUs and personnel’s insufficient skills hamper efficient communication. This is especially challenging if the high staff turnover rate, which is typical of retail, is taken into consideration. A functional mobile app helps field staff to overcome such difficulties. Such a digital assistant could provide the following functionality:
- Reveal comprehensive information about any item and suggest complementary items, as well as special offers and sales promotions;
- Perform instant checks of item availability on stock across various locations;
- Notify a responsible unit of any merchandize running short in the real time;
- Check a customer’s record in the CRM and suggest most relevant offering based on his or her track record;
- Make delivery arrangements, etc.
Payment apps and mobile wallets
Another way mobile technologies are reshaping the retail is through enabling new payment methods. NFC mobile payment solutions, such as Apple Pay and Android Pay, gain momentum. Which comes as no surprise since the technology ensures faster and securer payments. Being easy-to-use on top of that, with nothing but a smartphone needed to make a payment.
For physical stores, a faster payment processing could mean a decrease of the time customers spend waiting in a queue, which is highly important for the overall customer satisfaction. However, at present low merchant acceptance hinders further technology adoption. Besides, it’s hardly enough just to introduce new payment options. Retailers will need to integrate mobile payment solutions with their loyalty programs as mobile payments evolve into mobile wallets.
Creating a truly omnichannel experience
A mobile app – should it be aimed at customers, employees, vendors or any other stakeholders – needs to be implemented as part of a comprehensive mobile strategy. The main goal of such strategy should be creation of a seamless omnichannel shopping experience that leverages a retailer’s advantages and brand image. Streamlining the purchasing journey and guiding customers across various touchpoints is crucial to maximizing a retailer’s revenues. Mobile apps can be a perfect solution to this challenge. Yet, it’s important to remember that for retailers’ mobile strategies to be successful they need to keep pace with the constantly evolving mobile technologies.