Retail will see a major Impact in 2013
Posted on January 14, 2013
Retail is on the cusp of big changes facilitated and driven by the use and availability of mobile applications. The traditional model of store+salesperson=sale is very quickly changing. How will this impact retailers?
The Growth of Multichannel Selling
The drivers for change in retail are many, and have already started some time ago with the expansion of e-commerce on the web. Giants such as Amazon have been slowly but surely building market share and eroding the margins of traditional retail players.
Customers are increasingly at ease with purchasing on the web and entering their credit card details; but as mobile become more popular they will have even more options.
A retail organization has not to see this as an attack on multiple fronts, rather an opportunity to engage across multiple channels. This hard part is that many retailers will have to be present on all those different channels to address their customers. These range from physical presence, specialist trade shows, on their website, social media sites and mobile.
How is Mobile Impacting the Retail Channel Mix?
In 2012 the term showrooming started to gain traction as more and more customers were using their photos in stores to check on prices. Indeed, Amazon even promoted this use of their application.
For retailers, showrooming is particularly nefast. They invest in a physical presence and in a physical service, but don’t gain the sale.
Unfortunately, a direct attack on showrooming, for example by banning mobile phones, is unlikely to be effective and is most likely to be counter effective.
Yet, whilst mobile is the cause of a problem, it also offers a multitude of solutions.
How can Mobile Provide Help Defend Against Showrooming?
The best form of defence is often the attack. Here mobile can help, and it helps in the form of enabling retailers to build a presence and relationships through the channel.
Customers coming to stores will either choose to purchase immediately or to purchase online. The need or desire to purchase immediately is obviously valued more highly than a price saving by the customer. And that’s okay – customers are effectively happy to pay a premium for that extra value.
However, other customers are more price-sensitive and are happy to wait in order to pay a reduced amount too. The goal of the retailer should be to capture these purchases even at a lower margin. Some marginal profit it better than none at all.
So if customers are going to be using an application to check prices online, make sure it’s yours, and let them buy easily. Tie the application into a loyalty card scheme so you can lock in purchasing, build relationships and learn more about your customer. Use Apple’s Passbookto show location aware prompts for your application and pertinent coupons and discounts.
Using Mobile to Deepen the Retail Experience
Every product has a story. During product development, particular materials were selected, different use-cases imagined and special purposes conceived. Stores chose to stock a product with a particular idea in mind.
Tell your story. Make sure consumers can learn about it. Imagine being in a store and trying to decide between different items. If you can tell a story about them you will engage the customer in a much more emotional way leading to a happier, more valuable sale. You can include comments from other customers to help in the selection process.
Mobile is strong in this area because it allows the customer in store to quickly identify a product, either through search or through scanning and then find information about it. Quickly and easily.
From a product point of view, it allows the product story to be told directly to the customer, not via a sales assistance who may not be knowledgeable or may have their own particular bias.
Retailers must start looking at this technology to offer a more engaging retail experience, both in and outside the store.
The Future for Retail in 2013
Smart retailers will already be looking to implement mobile solutions to ensure a channel presence, fight against revenue loss through showrooming, to build stronger relationships with customers and provide a better overall customer experience.
Don’t miss our future article on how mobile is enabling the endless-isle for retailers