Consumers are not yet using their mobile phones to do all their shopping, as some forecast, but retailers are still finding them a powerful tool. Joanna Perry investigates

Talk to any retail technology expert about the future of the industry and most will tell you that the mobile phone will play a big part. Yet, despite years of hype, consumers aren’t yet using their phone to do their weekly grocery shop and mobile phone retailing retains connotations of sharp-suited youngsters pushing the latest handset.

But that doesn’t mean that the mobile phone is going nowhere as a retail channel. Businesses initially tried to cash in on mobile communications by sending marketing messages via SMS and MMS. Now, retailers realise that if customers want to communicate with each other via text, they might like to talk to retailers that way too.

Fizzback has worked with retailers including M&S and Phones 4U to allow customers to provide feedback about their businesses via SMS. Phones 4U is using the technology to track purchase satisfaction and whether customers would recommend the retailer to others. The phone retailer takes the customer response it generates this way so seriously that the in-store staff bonus system was modified to incorporate scores and rankings that Fizzback generates.

The system’s artificial intelligence engine understands and categorises customer comments. It analyses comments received and responds to customers, explaining actions being taken to rectify problems they report. Phones 4U is using the service both after the customer’s first store visit and once they receive their first bill.

Lingerie retailer Bravissimo also achieved great results when it gave customers the chance to order a catalogue advertised on TV by text. Customers had the choice of ordering the catalogue by phone, web or SMS and 45 per cent plumped for picking up their mobile and texting their address to the SMS shortcode provided.

The power of SMS doesn’t end there. Retail Week has written in the past about the success of mobile voucher campaigns for promotions around smaller items such as newspapers and cups of coffee. Such campaigns are continuing to see good results.

About 200 retailers took part in a trial organised by News International’s tabloid division. Newsagents process more than 100 million of the company’s newspaper vouchers each year and so it wanted to develop a more user-friendly way of redeeming vouchers. 2nDimension developed the Instant Voucher System for redeeming SMS and e-mail vouchers using the Nokia E50 scanning device, which connects to a live database over an O2 GPRS data connection. Data is sent to a payment system in real time and at the end of each week the retailer receives a text message confirming how much it is being credited with. During the trial, 500,000 vouchers were redeemed and the scheme is being extended to 4,000 retailers in the Northwest.

In addition, a campaign run by furniture retailer Harveys proved that the medium can also work for promotions on big-ticket items. It offered a 10 per cent discount to consumers who requested an SMS voucher. During the 13-day trial, which used technology from Eagle Eye Solutions, an average of 30 per cent of those who requested a voucher went on to redeem it in store. Harveys says that it would use the concept for future promotional activity.

Bluetooth marketing has been adopted in some shopping centres. However, like SMS marketing messages, care needs to be taken to ensure that consumers don’t feel they are being spammed. Fujitsu Services retail industry consultant Sarah Kellett recalls that she received a Bluetooth message to her phone recently when she arrived off a flight at a UK airport. It offered£5 off if she spent£50 in a store in the departures area. Because she was in arrivals, she felt this was neither appropriate nor helpful.

Some retailers have gone a step further with mobile as a channel and introduced portals or sites that can be accessed via a mobile phone. One of these is Tesco Mobile, the grocer’s mobile phone operator venture. It created its own WAP portal with InfoMedia Services, which launched in April last year and is the default portal for all Tesco Mobile customers. Since then up to 20 per cent of the company’s customers have browsed the portal each month. It registers about 115,000 user sessions a week and 300,000 unique users a month.

At the moment, customers earn Tesco Clubcard points every time they spend money on the portal. About 60 per cent of phone customers have registered their Clubcard against their mobile number.

InfoMedia Services commercial director Michael Tomlins talked about his company’s work on Tesco Mobile’s portal at the Mobile Retailing conference in London in early June. Within the portal, the retailer promotes services such as Deal of the Day and information on where stores are nearby and their opening hours. Tomlins said that there is huge traffic to the portal when stores are closed to find out when they are open again in the morning.

Other services available include Tesco Diets, Tesco Book Club and Tesco Entertainment. Tomlins explained: “The services they want are the services that they have already from Tesco on the web or in its stores.”

The most successful service on the portal to date is Tesco Flowers. In the run-up to Valentine’s Day this was promoted through the portal and customers could see text and pictures of different bouquets, with the ordering process completed through a phone call. Tesco won’t release figures on how well this service did, but Tomlins said it proves that you don’t need people to supply credit card details to a portal in order to provide retail services through it.

However, even Tomlins is sceptical about retailers exposing their whole product catalogues through mobile sites. He said: “I don’t think that within the next two years it will be worthwhile trying to replicate a dotcom experience on a mobile phone.

“My personal opinion is that you won’t sell groceries via mobile phones. People might do orders where they have already set up their shopping list and add two or three items. I think that another thing you should be able to do is change your delivery slot through your mobile via a text message or mobile portal.”

Tomlins explained that retailers should aim to replicate services they offer via other channels. He said: “It is important to use it as a transaction or communications medium – it is not a new business.” For instance, he insisted that it makes no sense for a business such as a garden centre to try to sell ringtones through a mobile site.

An emerging channel
Other retailers are being more bullish about turning mobile into a full-blown sales channel. In the US, bookseller Barnes & Noble has launched a mobile version of its web site, which is accessible via any mobile device with a web browser.

The B&N Mobile site – a vastly simplified version of its main e-commerce site – gives customers access to more than 1 million book, DVD and CD titles. They can place orders, check store inventory and view the status of existing orders, as well as look up store information on the site. It has been optimised for use with iPhones and on smartphones with the Windows Mobile operating system.

The site only launched at the end of May, so there has been no word from the company yet on its success. However, after the almost overnight impact Amazon had on the market by selling books online, it is clear to see why Barnes & Noble would not want to be left behind because of the emergence of another new channel.

Japan is still held up as an example of a market where mobile retailing works. However, Kellett says that structural differences in the UK compared with Japan are a barrier to consumer adoption of mobile as a channel. She explains: “In Japan, phones have much bigger screens and there is a standard that mobile phone manufacturers adhere to.” This means that all devices can use the same infrastructure to access services.

In addition, she points out that people are still put off browsing the internet from their phones in the UK because of the potential cost. This was a view echoed by many at the Mobile Retailing conference, who said that it was a problem that it was not clear to consumers what they would be charged for and if they would be charged differently if they chose to access mobile sites that did not reside on their mobile operator’s own portal.

It seems that mobile channels have had the most success where they seem natural for consumers to use. Tomlins, referring to the Tesco Flowers example, pointed out that people used the service without thinking that they were purchasing through a new channel. He said: “This was built on convenience and it was close to Valentine’s Day. I don’t think people thought they were entering a brave new world of m-commerce.”

Starting out with mobile phone communications or sales channels need not be costly. But retailers have to make a mobile channel the most convenient – or the most timely – method for interaction to ensure its success.