mobilizing the shopping experience: tips for building relevant mcommerce relationships
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Andrew Gaffney Editor Retail TouchPoints
John Stelzer Director Retail Industry Marketing Sterling Commerce an IBM Company
© 2010 IBM Corporation 4
Agenda
Proliferation Of Mobile Phone Usage
How Retailers Want To Use Mobile Access To Consumers
How Consumers Want To Use Their Mobile Phones
How To Bridge The Gap Between Retailer Goals And Consumer Preferences
A Sample Scenario For Bridging The Gap
© 2010 IBM Corporation 5
Agenda
Proliferation Of Mobile Phone Usage
How Retailers Want To Use Mobile Access To Consumers
How Consumers Want To Use Their Mobile Phones
How To Bridge The Gap Between Retailer Goals And Consumer Preferences
A Sample Scenario For Bridging The Gap
© 2010 IBM Corporation 6
Mobile Phone Penetration Is Extensive
82%
Of U.S. adults own mobile phones1
96% Of multi-channel consumers
own mobile phones2
234 million U.S. consumers ages 13 and older used mobile devices in
Q2, 20103
1 Source: Pew Research Center’s Internet & American Life Project and The Nielsen Co. survey: April 29-May 30, 2010 2 Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010 3 Source: US Consumer Survey; The Nielsen Co.; July 2010
© 2010 IBM Corporation 7
Smartphones Are A Significant Portion Of Mobile Phone Usage
53.4 million
U.S. consumers own smartphones1
1 Source: US Consumer Survey; The Nielsen Co.; July 2010 2 Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
46% 54%
Smartphone Ownership2
Own A Smartphone Plan To Buy A Smartphone
© 2010 IBM Corporation 8
And, Smartphone Adoption Is Accelerating
Source: eMarketer Inc. Source: The Nielsen Co.
© 2010 IBM Corporation
Mobilizing The Shopping Experience
John Stelzer – Director Retail Industry Marketing
09/22/10
Editable Text Editable Text Editable Text
© 2010 IBM Corporation 10
Agenda
Proliferation Of Mobile Phone Usage
How Retailers Want To Use Mobile Access To Consumers
How Consumers Want To Use Their Mobile Phones
How To Bridge The Gap Between Retailer Goals And Consumer Preferences
A Sample Scenario For Bridging The Gap
© 2010 IBM Corporation 11
Retailers Are Rapidly Embracing The New Mobile Channel
Source: Forbes Insights; “Retail’s Mobility Imperative – A Measured Approach To The Emerging Channel”; April, 2010
73%
Of U.S. retailers have some type of mobile initiative in place
20% Of U.S. retailers are in the
process of evaluating the mobile channel
10% Have already widely implemented a strategy
24% Are expanding their strategy rapidly
39% Are in pilot programs
20% Are evaluating their mobile strategy
7% Do not currently plan to pursue a strategy
© 2010 IBM Corporation 12
The Revenue Contribution Of The Mobile Channel Will Grow Rapidly
$23.8 billion Projected U.S. mCommerce revenue (in 2015)
8.5% Of all U.S. eCommerce revenues (in 2015)
20% Of global mobile commerce revenues (in 2015)
Source: Coda Research Consultancy & ABI Research
© 2010 IBM Corporation 13
Mobile Sites Are A Common Approach For Retailers Embracing mCommerce
Source: Forbes Insights; “Retail’s Mobility Imperative – A Measured Approach To The Emerging Channel”; April, 2010
Mobile retail sites
36%
40%
24%
Deployment Of Mobile Retail Sites
Deployed
Plan To Deploy < 1 Year
Not Planning To Deploy < 1Year
© 2010 IBM Corporation 14
The Majority Of Retailer Mobile Tactics Are Focused On Selling
Source: Forbes Insights; “Retail’s Mobility Imperative – A Measured Approach To The Emerging Channel”; April, 2010
What mobile tactics are you using today and planning to use
in one year?
© 2010 IBM Corporation 15
And, Planned Retail Mobile Investments Are Focused On Selling
Source: Forbes Insights; “Retail’s Mobility Imperative – A Measured Approach To The Emerging Channel”; April, 2010
Where are you focusing the bulk of your spending on mobile initiatives?
© 2010 IBM Corporation
What are the main factors that drive
your mobile channel efforts?
16
But, Retailers’ Top Reasons For Pursuing The Mobile Space Are Quite Different
Source: Forbes Insights; “Retail’s Mobility Imperative – A Measured Approach To The Emerging Channel”; April, 2010
© 2010 IBM Corporation 17
Agenda
Proliferation Of Mobile Phone Usage
How Retailers Want To Use Mobile Access To Consumers
How Consumers Want To Use Their Mobile Phones
How To Bridge The Gap Between Retailer Goals And Consumer Preferences
A Sample Scenario For Bridging The Gap
© 2010 IBM Corporation 18
Consumers’ Current Uses Of Mobile Phones Provide Insight Into Their Preferences For Mobile App/Site Capabilities
Source: Internet Retailer; September, 2010
© 2010 IBM Corporation 19
Consumers Are Increasingly Adopting And Using Mobile Apps
The average adult mobile phone user has 18 apps on their phone1
1 Source: Pew Research Center’s Internet & American Life Project and The Nielsen Co. survey: April 29-May 30, 2010 2 Source: The Nielsen Company Apps Playbook; Sep. 2010
Average Apps Per Smartphone User2
Dec. 2009 Aug. 2010
iPhone 37 40
Android 22 25
Blackberry 10 14
© 2010 IBM Corporation 20
The Most Popular Consumer App Downloads Signal Consumer Preferences For Further Smartphone Use
Source: The Nielsen Company
Entertainment
Convenience
Shopping
Shopping
© 2010 IBM Corporation 21
Even When Focused On “Shopping” Capabilities, Consumers Want Convenience Capabilities Over The Ability To Purchase A Product
Source: ROI Research, Inc. & Microsoft, “Future of Mobile”, Nov. 2009 1 Source: Read Write Web; “More Smartphone Users Now Use Their Phones to Shop Online”; 1/4/10
A recent Compete study found that product research (price comparison, reading ratings and reviews) was the most common mobile shopping-related activity
conducted by smartphone users.1
Coupons Find A Store
View Info On Phone
Compare Prices
17%
36% 44% 46%
© 2010 IBM Corporation 22
Most Consumers Are Still Not Comfortable Purchasing Products Using Their Mobile Phones
69% Are not comfortable making a purchase on their mobile phone.
Top 5 Inhibitors To Purchasing More Via Mobile Phones
1. Cannot connect to the internet with my mobile phone 40%
2. Difficult to use, because the screen is too small 34%
3. Difficult to visualize what the product looks like 31%
4. I don't think it's secure 28%
5. Interacting with the retailer's website via the mobile phone is too slow 22%
Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
© 2010 IBM Corporation 23
Interestingly, All Solutions For Removing Increased Purchase Adoption Impediments Were Security Based
Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
Top 5 Changes That Would Make You More Comfortable Making Purchases Via Mobile Phones
1. Option of using PayPal 45%
2. Knowing that the mobile phone app does not store your credit card information 39%
3. Mobile phone only shows a truncated credit card number (only shows last 4 digits online & on the mobile phone
23%
4. Being asked to provide your 3-digit security number on your credit card when paying with a credit card
22%
5. Viewing the retailer app's security policy 20%
© 2010 IBM Corporation 24
Consumers Showed Interestingly Different Inclinations To Purchase Via Mobile Phones Based On The Mobile Platform Used
Source: The Yankee Group Research
267% Increased incidence of an iPhone user using their device for mobile
shopping more than any other smartphone user
© 2010 IBM Corporation 25
As Interested In Selling Via The Mobile Channel As Retailers Are, It’s Important To Note That Consumers Do Not Want To Be Sold To
Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
How comfortable are you having retailers send you advertising/promotions via your mobile phone?
70%
30%
Receiving Proactive Promotions
Not Comfortable Comfortable
© 2010 IBM Corporation 26
Agenda
Proliferation Of Mobile Phone Usage
How Retailers Want To Use Mobile Access To Consumers
How Consumers Want To Use Their Mobile Phones
How To Bridge The Gap Between Retailer Goals And Consumer Preferences
A Sample Scenario For Bridging The Gap
© 2010 IBM Corporation 27
Consumers Are Clear About What Would Incent Them To Use Retailer Mobile Apps/Sites More Frequently
Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
Top 6 Capabilities Consumers Would Most Like To See In A Branded Retailer Mobile App
1. Look up and verify product availability at a particular store location 62%
2. Ability to look up the price of an item while in the store 57%
3. Find nearest store location 49%
4. Ability of retailer to proactively notify you via your mobile phone about the status of outstanding orders
48%
5. Ability to locate an OOS item at an in-stock location, purchase it, and have it shipped to you or held for pickup
46%
6. Ability to access user product reviews while in the store 46%
© 2010 IBM Corporation 28
And, Consumers Expect Seamless Integration Between The New Mobile Channel And Retailers’ Existing Channels
Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
85%
15%
Expect A Seamless Experience
Expect A Seamless Cross-Channel Experience Do Not Expect Channels To Be Integrated
To what extent do you expect consistent shopping and brand experiences across the various channels that you can shop for a certain retailer (e.g., Web, store, call
center, and mobile)?
© 2010 IBM Corporation 29
This Is Very Troubling Given How Few Retailers Have Completely Integrated Their Mobile Channel With Their Other Channels
Source: Forbes Insights; “Retail’s Mobility Imperative – A Measured Approach To The Emerging Channel”; April, 2010
© 2010 IBM Corporation
Balancing Consumer Preferences With Retail Objectives Is Critical To Consumer Adoption Of Mobile Retail Offerings
Customer Convenience
Increased Sales
30
© 2010 IBM Corporation 31
Agenda
Proliferation Of Mobile Phone Usage
How Retailers Want To Use Mobile Access To Consumers
How Consumers Want To Use Their Mobile Phones
How To Bridge The Gap Between Retailer Goals And Consumer Preferences
A Sample Scenario For Bridging The Gap
© 2010 IBM Corporation
Retailers Have An Opportunity To Apply Mobile Capabilities To “Kill Two Birds With One Stone”
Question • What everyday occurrence in the world of retail brick-and-
mortar business offers an opportunity to apply mobile capabilities to:
1. Speak to retailers’ objectives to use the mobile channel to increase sales and
2. Enable retailers to address consumers’ preferences for increased convenience via mobile capabilities?
Answer • Recovering from—or avoiding—stock-outs
32
© 2010 IBM Corporation
Consumers experience OOS on 17.8% of their shopping trips 1
The average consumer spends 20% of each shopping trip looking for—or waiting for store associates who are looking for—out-of-stock items 2
53% of consumers admit that they consciously shop at fewer retailers courtesy of current economic conditions 3
– But, the retailers with whom they still shop are the ones with which they feel the greatest loyalty 3
Upon experiencing a stock-out4
– 1 in 3 consumers frequently leave the store without purchasing additional items (1 in 10 always do this)
– 1 in 3 consumers frequently leave without purchasing any items – 43% leave the store and look for the item at a competitor – 33% purchase the item at the competitor – 40% of affected consumers will make fewer trips to the OOS retailer (chain wide)
33
Retail Out Of Stocks (OOSs) Remain A Significant Scourge To Consumers
1 Source: IHL Group “What’s The Deal With Out-Of-Stocks”; 2008 2 Source: “A Comprehensive Guide To Retail Out-of-Stock Reduction In the Fast-Moving Consumer Goods Industry”; Thomas W. Gruen, Ph.D. and Dr. Daniel Corsten; 2008 3 Source: Fleishman-Hillard Research Survey, “The Multi-Channel Shopping Experience”; January 2009 4 Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
© 2010 IBM Corporation 34
Recall Clues That Consumer Preferences Provided Regarding Avoiding—Or Recovering From—The Inconvenience Of Retail OOSs
How consumers would prefer to use mobile capabilities while shopping: – #3 Preference: Verify item availability in stores (26%)
Most important use of mobile phones while shopping – #1 Preference: Checking product in-stock availability (28%)
Top 6 capabilities consumers would most like to see in a retailer-specific mobile app/site: – #1 Preference: Look up and verify product availability at a particular store (62%)
Importance of being able to determine in-stock availability of product – 66% consider it Important to Very Important
Ability of a retailer’s mobile app to enable the consumer to locate an OOS item at an in-stock location, purchase it, and have it shipped to them or held for pickup
– 46% of consumers selected this as important to them
The ability of a store associate to be able to locate an OOS product at an in-stock location and have the product: shipped to the customer, transferred to the customer’s home store, or held for customer pickup at the in-stock location
– 72% consider it Important to Very Important Source: Survey “Cross-Channel Brand Interaction: 2010 Consumer Preferences”; Sterling Commerce/Demandware; Sep. 2010
© 2010 IBM Corporation
Multiple Goals Can Be Achieved
Applying mobile capabilities for avoiding—or recovering from—retail stock-outs provides a recipe for achieving retailer goals (i.e., selling), appealing to consumer preferences (i.e., for increased convenience), and funding future mobile initiatives (i.e., that leverage consumer adoption).
35
© 2010 IBM Corporation
Store Associate Mobile – Associates assisting customers
36
Access Product
Information
View Product Availability
Check Inventory
Levels
View Fulfillment
Options
© 2010 IBM Corporation
Store Associate Mobile – Associates assisting customers
37
View Product Details Description Specifications Promotions
Companion Or Substitute
Items
© 2010 IBM Corporation
Store Associate Mobile – Associates assisting customers
38
Select Fulfillment
Method Ship To Home
Pick And Hold For Customer
Pickup
Contact In-Stock Store If Low Inventory
© 2010 IBM Corporation
Store Associate Mobile – Associates assisting customers
39
View Customer
Order
Edit Cart Content
Access/Collect Customer
Information
Provide Unique Order Identifier
© 2010 IBM Corporation
Store Associate Mobile – Associates assisting customers
40
Check Outstanding Pick Orders
Track/Verify Order
Completion
© 2010 IBM Corporation
Order is ready and wai6ng when consumer
arrives
Order Management Mobile Framework – Consumer Convenience Instant access to:
Product informa.on/special offers Product availability
Purchase/Fulfillment op.ons Order tracking
Search for product and product
informa6on
Complete order with mul6ple
fulfillment methods
Check availability loca6ons
Choose preferred fulfillment method(s)
41
© 2010 IBM Corporation 42
Conclusion
Mobility is undeniably the next major Retail channel
Retailers want to increase sales via this new channel
Consumers want increased convenience from the mobile channel
Retailers must offer consumer convenience to incent consumer adoption and use of retailer-specific mobile apps/sites
Applying mobile capabilities (whether in the hands of store associates and/or consumers) to recover from or avoid retail OOSs provides the highly promising potential to boost sales while increasing consumer convenience and satisfaction
Regardless, any retailer mobile commerce offering must successfully address consumer awareness, adoption, and use in order to be successful
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