As the 2014 holiday season indicates, mobile devices are becoming more than just stocking-stuffers. With mobile usage on the rise, companies want to exploit the influence of these devices on shopping behavior. For some companies, that means using mobile to drive physical traffic inside stores; for others it involves enhancing the online shopping experience in an application.
Deloitte research indicates that 72% of smartphone users and 69% of tablet users will use them for holiday shopping, with 50% of in-store retail sales being influenced by digital transactions. Companies are trying to appeal to customers who have adopted mobile as a main way to shop. The goal is to make these experiences fast and easy, said Sumit Mehra, CTO at Y Media Labs, the app developer behind eBay and PayPal.
"People want an experience that's as frictionless as possible," he said. "Companies are minimizing the amount of steps it takes to order something."
From mobile to physical
Sumit MehraCTO, Y Media Labs
It might seem counterintuitive, but some companies are also using mobile devices to drive traffic back into physical stores. Karen Macumber, chief marketing officer at ShopAdvisor, which makes an app that helps customers research products, said that customers use mobile apps in stores to price-match and comparison shop.
"They're not necessarily walking [away from the store] and then purchasing online," Macumber said. "The apps are being used more by customers who want to get their item at the right price in-store."
Macumber cited beacon technology as a means to use mobile devices to encourage customers to shop in physical stores. Beacons placed around stores can sense a device's location when it's in close proximity, enabling companies to push special offers, discounts or perks to shoppers who have downloaded specific apps. But this technology isn't effective when a company lacks insight into its customer base, she argued.
"What's most important is understanding that individual, understanding where they are in the buying cycle and what their brand preferences are," she said.
Customer experience and engagement is a top-three priority for 95% of companies, according to a survey from retail consulting firm Boston Retail Partners, and mobile is a way to achieve that. The same survey found that, over the next five years, 72% of companies plan to have a strategy to identify customers via their mobile device when they walk into a store.
Y Media's Mehra said that the in-store experience is more important for high-ticket items, such as electronics. In those cases, customers use mobile to window-shop, then seek out a physical store to touch, feel and test these kinds of products.
"For some of the lower-cost items, perhaps below $100, people don't really care about going to the store for those things," Mehra said. "Those items are [more conducive] to mobile buying."
ShopAdvisor's Macumber said that customers expect a better experience from an app as opposed to using a mobile website while shopping. But having an app is not a do-or-die proposition. The Container Store, a retail chain that sells household storage and organization products, optimizes its website for mobile devices instead of using an app. To boost mobile sales this year, the company revamped its website layout to be more responsive and mimic the look and feel of its desktop offering, said quality assurance manager A.J. Azzarello.
The company doesn't differentiate between mobile and desktop traffic and uses both to facilitate online sales. But the in-store experience, combined with salesperson expertise, remains paramount, Azzarello said. Using the mobile website to drive in-store traffic while simultaneously making the online shopping experience pleasant was a more appropriate investment than building an app, he said.
"Companies struggle with making apps effective, trying to roll [them] out and getting people to download [them]," Azzarello said. "We know people are going to surf on their mobile devices. We don't want them to take an extra step to download an application in order to serve our website."
Sprinting to checkout
The core issue for companies is reducing the number of steps it takes to make a purchase. Innovations to achieve a streamlined mobile experience are constantly on the minds of executives.
The smartphone app Drizly works with local merchants to deliver alcoholic beverages in metropolitan and urban areas, catering to city dwellers who can afford to pay a little more for convenience. Customers can save their most recent orders and various delivery addresses within the app to facilitate the ordering process.
"Our brand promise is around speed and convenience," said Michael DiLorenzo, Drizly's senior vice president of marketing. "Part of that is how quickly a customer gets to checkout and payment. That creates a lifetime customer."
Along with a points-based loyalty system, Drizly is testing a program that encourages customers to order during off times or to schedule orders several days in advance. The company is building APIs with navigation apps like Waze to help drivers expedite delivery as part of efforts to give customers what they need faster, DiLorenzo said.
"Amazon has conditioned the world [to expect] that you can effectively have every item delivered easily and [quickly] at the touch of a button," DiLorenzo said. "Customer expectations are that this is how business is done."
Y Media Labs' Mehra said that companies are striving to demographically segment their customers and carving them up into different sorts of lifestyle groups to learn their tastes and accommodate them. "There's nothing better than knowing where you are and who you are," he said, adding that many personalization efforts target users' emotional response by making the mobile experience better in subconscious ways, such as using sharp graphics, unique banners or colors. "We don't think about these things, but they really matter," Mehra said.
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