Mobile Retail Execution

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    The Top Performing Mobile Retail Technologies

    Mobile commerce originated in 1997 when two Coca-Cola vending machines near Helsinki accepted payment using SMS text messages. Since then mobile commerce, or m-commerce as it’s known among those in the know, has come to include just about everything that uses mobile devices to perform commercial transactions.

    The market growth of m-commerce is too big for retailers to ignore. At the CONNECT Mobile Innovation Summit, Gartner analyst Michael McGuire shared that in the US, nearly half of digital commerce revenue comes from mobile. Similarly bullish predictions come from an eMarketer study that forecasts half of all online retail transactions in the U.S. will take place on mobile devices in the next year.

    In addition to m-commerce transactions, mobility is increasingly influencing in-store sales. According to a Deloitte study, the "mobile influence factor" — the effect of smartphones on in-store sales — on retail purchases will increase to over $1 trillion, or 29% of total store sales in the next two years.

    Clearly the top brick and mortar retailers are bridging the gap between ecommerce and in-store shopping by adopting a bricks-and-clicks strategy which delivers the best of both worlds to consumers. However, many small and midsize retailers struggle with the opportunity to use mobile commerce in a way that puts a retail outlet in every consumer's pocket or purse and further leverages m-commerce to achieve m-profits.

    To spur some ideas and hopefully some actionable follow-through, I'll use this blog post to share some mobile retail research, best practices and my own experiences in aiding clients with some big m-commerce projects which include clienteling, mobile marketing (including QR codes, SMS marketing, location-based marketing, mobile advertising and beacon technologies), SoLoMo, retail mobile apps and mobile POS.


    Clienteling helps sales associates engage consumers in a personalized way that turns browsers into buyers.

    Sometimes called mobile-assisted selling, clienteling delivers consumer and product information to both sales associates and shoppers, typically on tablet devices, to improve the shopping experience for consumers and the sales conversions for retailers. It’s also a powerful tool to combat showrooming.

    With clienteling applications integrated to CRM systems, sales associates have access to a 360 degree customer view, including the consumer's demographics, purchase history, purchase preferences, lifestyle interests, loyalty program or even personal information such as anniversary dates and birthdays. Associates can use this data to improve one-on-one communication, deliver more relevant recommendations and achieve a more personalized consumer shopping experience.

    In addition to consumer information, this mobile retail technology delivers real-time inventory information so that associates never have to leave a consumer's side. Capabilities such as visibility to product availability by location can enable associates to "save the sale" when an item is not available in the store.

    Retail Clienteling

    Clienteling apps include dashboards, contextual menus, triggering events, automated recommendations and business process workflows which proactively guide sales associates, reinforce repeatable processes and promote rewarding customer experiences. And because clienteling applications support prescriptive business processes they also offer the opportunity for sales associates to easily harness retail best practices or replicate the processes of top associates.

    Clienteling was initially adopted by luxury brands, but the reality is that any store with sales associates that wants to engage and even wow consumers can achieve the benefits. Retailers such as Neiman Marcus and Tiffany & Co have replaced their infamous "black books" used by their sales associates with new clienteling applications.

    Mobile Marketing Technologies

    Mobile marketing technologies, campaigns and programs are plentiful, but the below mobile retail execution methods generally deliver the greatest payback.

    • QR Codes. Retailers have responded in mass in placing QR codes on goods, display ads or other in-store product labeling. When done right, QR, UPC or barcode scanning delivers product-centric positioning at the point of purchase consideration. However, research shows that QR codes deliver varying effectiveness largely based on what the QR code delivers to the consumer. QR codes that display retailer websites and contact information are ineffective while coupons, detailed product specifications or information that aids the buyers purchase investigation can be highly effective.A consumer study by Nellymoser found that readers of national magazines scan QR codes, Microsoft Tags and similar mobile-action barcodes at an average rate of 6.4%. Compare this with landing page average response rates of 3.5%, catalog average response rates of 4.3% or direct mail average response rates of 4.4%.

      QR codes by themselves are not likely to impact store purchase conversions or revenues. However, when used in combination with other mobile marketing methods such as SMS marketing, geo or location-based marketing and branded retailer mobile marketing apps, they can contribute to higher performing marketing programs.

    • SMS Marketing. SMS is a 30 year old no-frills consumer communication service that takes advantage of brevity and immediacy. On average, SMS messages have delivery rates in excess of 99% and are read within four minutes, making them highly convertible if deemed relevant by the consumer. By comparison, open rates on marketing e-mails average about 20%. Even better, as reported by WebDAM, SMS coupons are redeemed 8 times more often the email offers.Short codes (5 or 6 digit numbers) are increasingly effective for brand campaigns and MMS (Multimedia Message Service) campaigns which deliver rich text, video or slideshow images, and are very effective in getting socially propagated, thereby significantly extending the retailers marketing message and contributing to ongoing social network engagement. Like other consumer mobile marketing technologies, SMS is a double opt-in only channel. Sending mobile spam to consumers will alienate them, and some of which may publicly flame the retailer in mobile and social networks.
    • Location Based Marketing. B2C marketers know that getting shoppers into their stores is much of the challenge, so using location-based marketing to engage consumers already in the vicinity removes a physical barrier. Geo-targeting or geo-location marketing uses GPS or cell tower triangulation to deliver personalized content based on not just who the consumer is, but where the consumer is. This is a powerful combination that can be particularly influential in achieving retail marketing objectives.Location-based marketing allows brick and mortar retailers to apply geo fences around store perimeters, urban areas, venues or events. This is not only effective in offering a passer-by a coupon to come into the store, but also by targeting consumers in competitor stores, and offering aggressive incentives to lure them away at their time of purchase.

      Despite privacy concerns that shoppers may react negatively to marketers sensing their location, research from the Yankee Group shows that consumer uptake rates are three times higher as geo fences get tighter, with 100 meter radius fences showing optimal consumer participation.

      However, from my experience, simply delivering mobile marketing messages based on consumer location alone is not effective. Instead, you need to apply a consumer’s location along with the consumer’s profile (from CRM or loyalty systems) or behaviors (from marketing automation systems) in order for location-based marketing campaigns to achieve worthwhile results.

    • In-Store Wi-Fi. Recent research from Usablenet found that 68% of U.S. shoppers are receptive to receiving personalized messages and promotions in a store. This offers a substantial opportunity for brick and mortar retailers to engage consumers using personalized and location sensitive mobile marketing techniques. By offering in-store WiFi retailers are afforded another channel to reach consumers with a custom landing page, mobile app or loyalty program offer. When combined with beacon technology, retailers can even make product offers based on consumer position, right down to the individual isle.
    • iBeacon. Beacon technology has been revived with Apple’s iBeacon indoor positioning system. Apple didn’t manufacture a physical retail beacon but instead enabled its iOS devices and other hardware (i.e., Android devices) to receive and transmit mobile messaging (marketing coupons, offers, incentives, etc.) and perform payment processing with other iOS devices in close proximity. Retailers can tap into the technology in order to pinpoint a shopper’s location in the store, send notifications of nearby goods that are on sale, announce flash sales and accelerate POS checkout processing by permitting consumers to make payment without removing their wallets.This is still nacent technology and I’m seeing some barriers to success. First, there are multiple shopper activation permissions that must be enabled to tap into the technology. Shoppers must turn on their Bluetooth, accept location services on a mobile app and opt-in to the store network. Second, like most retail marketing methods, marketing success is improved when the beacon technology is integrated with CRM so that the retailer advances from anonymous mobile spray and pray broadcasts to relevant, personalized and contextual messaging. Notwithstanding the hurdles, beacon technology brings unquestionable promise to retailers. Retail research from Swirl found that 72% of consumers say they are likely to make an in-store purchase as the result of receiving a mobile offer tailored to their interests and location while shopping.
    • Mobile Ads. Mobile advertisements, especially when a part of paid search marketing, are clearly under-utilized by most retailers. According to the most recent Mobile Advertising Survey, 64% of survey respondents who have smartphones have made a mobile purchase after seeing a mobile ad but nearly three-quarters (74%) haven’t received mobile ads from their favorite brands. This is a big missed opportunity for many retailers. Putting mobile advertising in perspective of the total marketing budget, the Mobile Marketing Association did a study which found that based on performance, mobile ads should account for 7% of marketing budgets, but instead they account for about 1%. Those figures are skewed because so many retailers don’t invest in mobile ads at all. When you just consider marketers who do invest in mobile ads, the Interactive Advertising Bureau reports that mobile spending accounts for 25% of digital advertising budgets – a sizeable allocation but still low considering the response and conversion performance.Many retailer marketers tend to believe mobile ad displays will convert better for impulse purchases than considered purchases. My experience, and now some excellent research, prove otherwise. Researches at Columbia Business School compared utilitarian (i.e. high utility value) against hedonic (i.e. pleasure purchase) and high involvement against low involvement mobile ad effectiveness. The research was published in the Journal of Marketing Research, in a report titled "Which Products Are Best Suited to Mobile Advertising?" and found the following:
      • Mobile ads work well for products that have a practical and important use, like a lawn mower or a washing machine.
      • Mobile ads work well for high-involvement products (where a lot of time, thought and energy is placed into the decision, like a family car).
      • Mobile ads don't work as well for just-for-pleasure items.
      • Mobile items don't work for low-involvement purchases like movie tickets or toothbrush (ones that pose a low risk to the buyer).

    When applied to utilitarian, luxury goods and considered purchases, my experience with mobile ads delivered as part of search marketing campaigns has shown an average keyword conversion of about 12.5% and CTA or landing page conversions of 9.5% - essentially triple that of desktop conversions. Exact conversions will vary, but regardless mobile open and response rates will exceed all other channels.


    It's hard to discuss retail CRM or retail mobile marketing without bringing up what may be the most entertaining acronym in all of retail technology: SoLoMo.

    SoLoMo (Social, Local, Mobile) is most often used for hyper-local search performed on a mobile device whereby search engine results include or highlight nearby locations which match search queries — which are often restaurants or retailers. In this context, SoLoMo brings location to search performed on mobile devices.

    The consumer data is clear in showing why SoLoMo has so much potential. According to comScore, more than 90% of U.S. consumers carry smartphones, 84% use their devices to find local information like directions and retailers, 58% want to receive promotional coupons or offers based on their location, and 28% have checked in at bricks and mortar retailers using social apps like foursquare.

    And on the other side of the equation, while 90%+ of consumers carry smart devices, only 3% of bricks and mortar retailers are smart-enabled. This is a really big missed opportunity. Fortunately, many retailers are adjusting their marketing budgets to respond to these consumers. According to advisory firm BIA/Kelsey, social-mobile ad revenue is increasing 28.5% annually.

    While the convergence of social, local and mobile began as the addition of local information on search engine results displays delivered on mobile devices, it has since evolved to include local check-in services such as foursquare and Gowalla as well as presenting or pushing mobile offers to consumers based on their location or proximity to the retailer. Now retailers are further understanding how this technology trifecta directly influences other channels and impacts in-store sales. Here's some stats from Monetate that show mobile searching's rippling effects.

    SoLoMo Effects

    Despite the upside potential, challenges for SMB retailers generally include education and technology.

    SoLoMo has made it to the marketers' lexicon but not necessarily to SMB retailers. Most retailers see the mobile consumer movement taking place in their stores anecdotally, but are yet unclear as to how much business this really nets, or could net if promoted. Many SMB retailers are similarly unclear on what tools or cost-effective technology solutions are available to automate and accelerate proactive outreach to buyers in their vicinities.

    This retail technology is still in early days but when you recognize that consumers’ want what they want when and where they want it, it's a no brainer that forward thinking retailers will respond to this growing consumer demand.

    To begin preparing for this movement, consider the following recommendations:

    • Meet with your web folks to understand what it takes to make your website mobile-friendly.
    • Update your website to include the information and services that mobile shoppers are looking for, such as Store Locater functions, addresses integrated with Google or Bing maps, click-to-call services and hours of operation.
    • If you're a bricks and mortar retailer that relies on traffic and benefits from search engine discovery, it’s time to update your SEO to include geo-location and local search optimization.
    • Whether in-store or over digital channels, encourage registration and opt-in for mobile offers. Be transparent in your request, and offer multiple types of content for consumers to select from.
    • Investigate SoLoMo retail-based services for attracting shoppers. First use them as a consumer. Then consider how to use these services to acquire shoppers. Start with foursquare.
    • Figure out how to personalize SoLoMo marketing efforts. With some help from your CRM system, personalize the messaging, tailor the offers and customize the deals based consumer shopping history, loyalty program preferences or likes and shares on social networks.
    • To do SoLoMo optimally, it's imperative to view social, local and mobile technologies in a holistic manner and avoid creating yet more information siloes.
    • The intersection of these three mega trends is where retailers can find a significant business opportunity. The ubiquity of smartphones, the expanded reach of social media and the consumer's proximity to merchants are powerful in and of themselves, but making them truly symbiotic requires more planning and effort than just sending promotions to mobile telephone numbers.

    The retailer's goal is to harness the confluence of these three trends in a way that delivers personalized, relevant and timely messaging. For SoLoMo to actually connect with consumers and achieve response objectives, the mobile retail execution should be integrated to consumer data (purchase histories, preferences and the like) in the CRM or loyalty system and further consider predictive analytics in order to identify and forecast what mix of customer data points in combination with social, mobile and local technologies will most resonate with consumers.

    Retail Mobile Apps

    Mobile apps represent a real quandary for retailers. If successfully embraced, they deliver substantive shopper engagement, consumer intelligence and revenue results. comScore reports that shoppers on mobile apps are 46% less likely to compare prices or comparison shop with their mobile devices. However, mobile apps are part of a crowded market and getting consumer adoption can be a tough journey.

    On the upside, mobile retail apps are showing some clear trends. Forrester reports that more than 24% of U.S. adult iPhone users and 21% of Android users have used a shopping application in the past three months. Looking a bit deeper, recent research from Swirl reports that 85% of shoppers have used a mobile app while inside a store to search for sales/offers (81%), research products (61%), make a purchase if the product isn't in-store or cheaper online (26%), check-in (14%) and pay for an in-store purchase (13%). The retail research also shares that 79% of consumers who have received push notifications on their smartphones in the past 6 months have made at least one purchase as a result.

    Many retailers are finding big success with mobile retail apps. Below is a table from Mobidia showing the consumer utilization for some top brands.

    Shoppers using the iOS
    app at least weekly
    Shoppers using the Android
    app at least weekly
    Victoria's Secret
    Gilt Groupe
    RedLaser (eBay)

    As the above table illustrates, retailers often realize notable differences between iOS and Android versions for their apps. Most retailers and m-commerce vendors suggest that Apple mobile device shoppers are more valuable than Android and other device consumers. Chris Hill, VP at Mobidia notes that "Retailers especially often use Apple iOS as what is called the reference platform … It's the platform they first design, build and optimize an app for, and then they port that experience over to Android."

    On the flipside, mobile apps may be nearing a saturation point. More troubling, 26% of the time customers never give a mobile app a second try — suggesting the first impression matters and there is very little tolerance for a poor user experience.

    Also, consumers are only willing to manage a small number of apps, so unless you have a strong brand or can produce an app with a very rewarding user experience and worthwhile utility as judged by your consumers, it may be wise to forego the investment. Mobile retail apps are not something you do on the side or as a part-time project.

    There's also an increasing trend whereby consumers are more willing to shop on mobile-friendly websites. This may represent an alternative to developing mobile apps, however, comes with different pros and cons.

    In my talks with retail marketing executives that have been successful with mobile apps, I find they define success a bit differently. Sure, they use these apps to acquire first-time consumers and increase purchase conversions, but that's secondary. Their primary goal is customer retention and repeat repurchases. They know that delivering periodic relevant and personalized content on the consumer's mobile device, or sending messaging to mobile apps as part of a multi-channel nurture campaign keeps the consumer feeling appreciated and keeps the retailer top of mind.

    Successful retailers also define very specific objectives. For example, enhancing the in-store experience in a way that increases sales conversions. This may be done with retail app features such as check-in, product location, product bar codes, beacon-empowered mobile offers, portable product offers and mobile payments.

    Or another objective may be to enhance the out of store consumer experience in order to promote repeat purchases, higher margin sale items or customer lifetime value. Mobile app features to support this goal can include store finders, product catalogues, shopping lists, gamification techniques, loyalty program access, ecommerce access, order and shipping information, and product scanning with links to product details, back stories, social sharing, product reviews or even side by side product comparisons.

    Mobile Point of Sale

    Mobile POS (mPOS) is another retail technology that has garnered attention from bricks and mortar retailers. mPOS most often uses a tablet or smartphone instead of a stationary point-of-sale terminal to complete the consumer purchase transaction.

    According to research firm IHL Group, the mobile POS market is growing 22% annually. This makes mobile POS one of the top retail IT investments.

    The consumerization of retail IT is showing up from several vendors. The iPad with both free and fee-based apps has become a roaming POS system and the Microsoft 365 Dynamics for retail solution uses the Surface tablet as a mobile POS that is fully integrated with back office ERP as well as omni-channel CRM communications.

    IMHO, the top objective and benefit of mobile POS is to enhance the retail experience by engaging consumers, personalizing the consumer interaction and just delivering a more rewarding consumer experience.

    Mobile POS can also help start-up or expansion mode retailers perform POS transactions without investing in fixed location cash registers, allow sales associates to roam the floor and engage consumers near the place of product consideration, shorten check-out lines, use product lookup (by location) to perform "save the sale" processes, support special orders for out of stock or custom items, increase table turns, reduce front-of-house or cashier staffing, email paperless invoices, accommodate peak demand or customer influxes more easily and act as a tool to deter shopper showrooming.

    But mobile POS can’t exist in a vacuum, so access to related systems such as CRM, inventory management, merchandise returns, asset tracking, promotions management, price marking, merchandising applications and possibly field service are needed to support common business use cases, make the technology sustainable and earn a payback on your investment.

    While easy to adopt, merchants must recognize the many data privacy and information security safeguards. PCI compliance, point-to-point encryption, the storage of the cardholder personal account number (PAN), cardholder verification methods and special considerations for EMV chip transactions are but a few of the data custodianship responsibilities that must be iron clad before mobile point of sale can become a reality.

    Hand in glove with mobile point of sale is mobile payment processing. While the two retail technologies are symbiotic they may be adopted together or separately.

    According to the Juniper Research report, titled Mobile Payment for Digital and Physical Goods, mobile retail payments are forecast to grow 26% annually. That's some big growth. The Gallagher Consulting Group research puts this market figure into perspective by reporting that almost half of today's smartphone users are using mobile wallets as their preferred payments method. Retailers will obviously need to support these consumers payment preferences if they expect to earn their business.

    But like many mobile and retail technologies, merchants face a vast number of digital payment choices.

    Mobile credit card readers such as Square Register, Intuit GoPayment, PayPal Here and a slew of followers simply plug into the mobile device's audio jack to perform payment processing. Technology companies such as Google have been offering its Google Wallet Mobile App for over a decade, and uptake has been slow but consistently rising. Analyst firm Gartner projects mobile apps and in-application purchases will incur double digit growth annually.

    When trying to make the best decision among a high number of technology options, it's important to first know what your customers prefer — which can be understood with a Voice of the Customer analysis — and then to solidify your business objectives. These two prerequisites will then put the technology choices into persepective.

    According to Boston Retail Partners, 52% of retailers plan to implement mobile POS and payment processing in the next two years. The most cited objectives by these retailers included saving floor space, improving customer service, reacting in real time with offers and promotions, saving sales by checking product availability and location even if the products are not available in the floor and creating multiple checkout points at the point of interaction. These objectives might be a good starting point for other retailers planning their mobile POS and payment processing journey.

    The Call for Mobility

    With advantages such as simplicity and convenience, mobility has quickly become a consumer de facto communication method and smart retailers are leveraging mobile retail strategies and enabling technologies in order to connect with consumers using their preferred devices. Mobile marketing delivers immediacy, ubiquity and convenience like no other channel.

    Mobile marketing is also more controlled by the consumer than other marketing methods. Marketing over mobile requires user consent (opt-in) or user initiation. More so, there's a clear correlation between consumers feeling in control and retailer response conversions. It's a win/win scenario.

    Beyond my experiences in QR codes, location-based marketing, SMS, mobile ads, beacon technologies and branded retailer apps, there are a plethora of additional mobile marketing techniques, such as tailoring your website for mobile devices, locality-based SEO, mobile check-ins and similar social network location notifications, mobile push notifications, marketing offers integrated with digital signage, and engaging in mobile ads or location-based PPC and retargeting. And new techniques such as SoLoMo are not yet in mainstream adoption, but clearly offer some impressive potential.

    Notwithstanding the variety of retail mobile marketing options, a marketing best practice is to avoid treating mobile marketing as a standalone effort and instead integrate mobility into the overall marketing mix. Pursuing a holistic marketing strategy will permit different marketing campaigns to complement one another, integrate multiple campaigns into a multi-channel distribution mix, repurpose retail technology tools for future marketing methods, avert disintegrated data siloes and collect the vast amount of consumer intelligence that can be harnessed to enhance and grow marketing performance and consumer relationships.

    Despite a plethora of new marketing technology tools, it's also critical to remember that marketing effectiveness is determined by the quality of the offer, not the technology used to deliver the offer.