Retail Week and PayPal got together with a group of retailers to hear about their most pressing mobile commerce issues.
The fledgling channel that is mobile commerce is providing retailers with more than a few conundrums. How big will it get?
How much investment does it require? What does m-commerce best practice look like? These are just some of the issues that were discussed at the October roundtable.
No one has the definitive answers. Retailers and industry commentators alike can only roughly predict the impact of this rapidly growing phenomenon and how to capitalise on it. But one thing is clear; Forrester Research suggests that only 2% of European adults have made a purchase using their mobile phone, and yet 70% of those who have done so have said they will continue to use this channel. And so as PayPal head of relationship management Simon Moran said: “These are the early adopters. Retailers that can really get mobile commerce and capitalise on that will be at a huge advantage.”
One of the common themes of the event was the sheer scale of the challenges involved. As BrandAlley chief executive Rob Feldmann said: “The mobile experience has been frustrating. It’s not an easy consumer experience and it works differently on different phones.” Key, he believes, is to make things easy for the target consumer wherever they are.
And because mobile commerce is in its infancy, retailers are still grappling with the question of how much to invest in it – particularly at a time when budgets are under ever increasing scrutiny. Ultimately, said Feldmann, to boost mobile sales retailers need to make it very easy for them to buy and to push people to buy on their phones. Does this necessitate an app? There was no definitive answer. BrandAlley decided that because of the breadth of its audience, making the whole site mobile optimised was a better strategy in the immediate term than creating an app.
Argos, meanwhile, built an iPhone app in the middle of last year and has since had 1.7 million UK downloads. But as Argos multichannel programme and operations manager David Tarbuck said: “There’s a question of how far you go with apps and which phones you cater for.” Argos found that while the iPhone app has worked well, mobilising the website was more of a priority than creating an app for Android phones.
Organic food specialist Riverford, on the other hand, has realised that it would benefit from three different apps if it is to truly capitalise on mobile sales. Its head of digital Geoff Bull said the retailer has defined three separate roles that mobiles play; as a means to access recipes, as a way to do a weekly shop, and as a channel to find new customers. It can therefore envisage three separate apps to cater for each purpose.
The answer to the question of apps therefore varies hugely from one retailer to another. Thomas Pink head of ecommerce Nadine Sharara said that ultimately, retailers need to carefully consider the actual purpose of an app for their individual brand. “A lot of people download an app and don’t actually use it. We’re launching a loyalty programme, where I can see a lot of use for an app,” she said.
There is nevertheless limitless potential for apps when employed correctly, and PayPal director for large merchant sales Mark Brant discussed innovative apps that which have transformed the brand experience. One, for Pizza Express, allows customers to pay for their meal using their PayPal account, solving the problem of lengthy waits for time-pressed diners. Another involves retailers projecting a version of their website on to store windows when the store is shut. “The app takes control of the store window when the shop is shut. It’s about taking the digital experience to the store,” said Brant.
The role that mobile commerce plays in the entire multichannel experience was another talking point. It cannot be viewed in isolation. Forrester senior analyst Jonathan Browne used the example of Sally – Forrester’s vision of typical young female shopper out on Saturday morning shopping trip, five years from now. She starts her shopping trip days in advance of the purchase, having perhaps received ideas from friends. Location-based data then allows retailers to predict her shopping route, during which Sally can be tempted with offers and relevant advertising. In-store, her mobile will “become the hub”, said Browne – retailers will be able to interact with her through in-store technology, and could also provide virtual agents in call centres. Post purchase, engagement doesn’t finish. Sally could save or like products through social networking – often done through a mobile phone. “Mobile will be the glue between online and offline capabilities,” explained Browne. “Customers want to be able to freely transition from one touch point to the next.”
But there is much work to do before this picture of retailing in the next five years is realised. Everyone concluded that technology must catch up with retailers’ aspirations. Wi-Fi in stores, for instance, is a major leap forward, but it must work perfectly all the time. And as BrandAlley marketing director Melissa Littler pointed out: “You can’t expect the customer to go through multiple stages using their mobile in-store because they will just go to the till.” Retail staff must also be aware of the capacity of mobile commerce – and that applies to staff in stores and call centres. People working in all channels need training if retailers are to capitalise on the benefits of mobile.
So what does the future hold? Everyone agreed it is hard to tell. Mobile commerce is and will continue to be difficult to get right. As Sharara said: “How do we prioritise? We’re a small ecommerce team. You can’t just copy a model. You have to make mistakes and learn.”
Participants also agreed that replicating what you do online will be fatal.
Tarbuck pointed out that it is a great opportunity to assess how you communicate with your customers. “It’s about going back to proper design. With fast internet access, people have got lazy –they’re not worried about page weights. Mobile is a great discipline.”
Equally, in the multichannel world, retailers need to be careful about diverting too much attention and resources to this one channel. Brant from PayPal borrowed a quote from the chief executive of eBay: “M-commerce isn’t something we should be talking about any more. It’s just commerce.”
Many questions about how best to approach this burgeoning area of retail will remain unanswered in five years’ time. But everyone was sure that one thing is clear; successful mobile retailing requires putting the customer first.
1 Rob Feldmann Chief executive, BrandAlley
2 Ben Chaudoir Head of sales, engineering and integration, PayPal
3 Geoff Bull Head of digital, Riverford
4 Mark Brant Director, large merchant sales, PayPal
5 Nadine Sharara Head of ecommerce, Thomas Pink
6 Simon Moran Head of relationship management, PayPal
7 Jonathan Browne Senior analyst, Forrester
8 Melissa Littler Marketing director, BrandAlley
9 David Tarbuck Multichannel programme and operations manager, Argos
M-commerce: the facts
- Only 2% of European adults have made a purchase via their mobile phone
- 4 million European consumers are using their mobile to make a payment at least once a quarter
Of European daily mobile internet users:
- 32% are using mobiles to research products and services
- 17% have used mobiles to check on the status of an order
- 20% have used mobiles to locate a nearby store to buy a specific product
- 18% have used mobiles to compare prices when shopping in a store
- 15% have used mobiles to look up product information while shopping in a store
- 8% have used mobiles to find or redeem a coupon code
- 11% have used mobiles to learn about an in-store promotion or event
- 8% have used mobiles to buy an item that was not available or not in stock