Mobile retailing - if you don't do it, someone else will

Mobile Retailing
If you don’t do it, someone else will

Rik Veldhuizen

According to research...
Which Industry has the most potential for new Mobile Growth and Value Generation?

Healthcare /
#1 Life Sciences #2 Retail

Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.

Source: Deloitte - Open Mobile: The Growth Era Accelerates - 2012

According to some other research...
Which Industry is most impacted by digital disruption (size/timing)

#1 Retail #2 Finance


Source: Deloitte - Digital Disruption - Short Fuse, Big Bang? - 2013

CRM

41

Topics
High level topics for today
One size
does not
ﬁt all...
4 +1 P’s

What can
you do?

Mobile
Inﬂuence


Mobile Inﬂuence
Mobile Disruption & its Inﬂuence on Retail

Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. 7

Mobile Disruptionmain considerations
Mobile Strategy –

1970-1980 1990’s 2000’s 2010’s MOBILE IS NO LONGER OPTIONAL

+
Mainframe Terminals Windows Applications Web Applications Mobile Computing
“Green screens” “Fat Client Server” “Thin” “Multi-Platform”
Computers Tablets Smartphones Mobile Web Kiosk

“The mobile power shift will touch every aspect of our lives at home and at work. This power shift will
change how companies and institutions treat us and how they empower their own employees to take
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. action in their immediate context and moments of need”
- Forrester, 2013

Constantly Connected Consumer
Consumers love their devices

Would
Sleep next
rather give
to it
up chocolate

Use it on
the toilet

Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.Google/IPSOS
Source: OTX Media CT Mobile Movement Study, April 2011: PEW Internet & American Life Project

Deﬁne own Purchase Path
•Social Interaction
•Product Discovery
Pre-Purchase •Marketing
•Price Checking

•Cashless/cardless purchase
Purchase online or in-store
•Self-checkout

•Order Management
•Customer Service
Post-Purchase •Loyalty
•Social Interaction

Mobile price checking & Social Networking

}
Makes prices & quality Reduces number of store
transparant to everyone trips to comparison shops

Customers buy from your
Reduces store transactions
competitors in your store!

Invasion
Competitors invade your store

} 65%
changed where they
purchased

changed what they
77% purchased based on
product reviews

6 of 10 smartphone owners comparison-
shop online while in your store Source: Board of Governors of Federal Reserve System - Consumers & Mobile Financial Systems - March 2012

Mobile Inﬂuence Factor

Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. Source: Deloitte Mobile Inﬂuence Survey, March 2012

Mobile Inﬂuence Factor

“When are you most
likely to use your
smartphone for a
store-related shopping
trip?”

Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. Source: Deloitte Mobile Inﬂuence Survey, March 2012

Mobile Inﬂuence Factor - by store category

Source: Deloitte Mobile Inﬂuence Survey, March 2012

Mobile Inﬂuence Factor - the future of retail

Sources: Row 1: eMarketer — US Mobile Commerce Forecast: Capitalizing on Consumers’ Urgent Needs; Row 2: Deloitte analysis; Row 3: Forrester — U.S. Online Retail Forecast, 2011–2016


Yet, focus is kept on mCommerce

82%
“Mobile objective is to drive revenue to website”

Forrester — Mobile Commerce Forecast: 2011–2016, June 17, 2011

New Approach to Mobile

Should be strategic imperative because it affects
the entire business

Should be C-suite issue, not a low-priority,
eCommerce division task

because

17-21% of store sales mobile-inﬂuenced by 2016;
21% Higher conversion rate driven by mobile

Source: Deloitte Digital - the Dawn of Mobile Inﬂuence - 2012


What can you do?
Knowledge, Experience & Payments


If they know more, they buy more
Keep them hooked

• Provide key tools & information to support customers at
each stage of decision-making process
• Especially in store
• Information needs vary by product & shopping trip
• Relevant & tailored
• About products, locations, events & promotions
• Be relevant on channels they use
• Interactive experience


Get to know you customer
Now more than ever

• Complicated behaviour
• Omni-channel analysis
• But... new ways of getting to
know your customer
• Many customers rather share
personal info with ‘machine’
than with sales person
• Intimacy requires
• Knowing how customers shop within
product categories
Lots of data
•
• Mining & Analysis 30% sales increase
• Data analysis
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.Sources: Deloitte - Mobile retailing - are you ready for radical change? - 2012
Zebra Technologies, “How printing from iPad enhances the shopping experience: Lift sales while creating multi-channel opportunities,” 2011

Mobile Advertising is dead
Long live tablet & smartphone advertising

• Mobile advertising traditionally grouped tablets &
smartphones together
• Prediction is that “mobile” advertising will get split into
2 categories (similar yet distinct)
€ 0,46 € 5,38
• Makes it easier to realize value
• Lots of innovation & experimentation
• Second/Third screening ad revenue
• In-game advertisements
• Advertisement geared towards type of interaction...
• Smartphone > discovery
• Tablet > more information
• Desktop > transaction € 1,90 € 9,70
• ...and towards device speciﬁcs
• Screensize, location based, connectivity type, etc
Source: Deloitte - Technology, Media & Telecommunications Predictions 2013
display revenue

Experience
Are you ready for tomorrow’s store?


“While physical stores may have once
enjoyed the advantage of crafting cool
shopping experiences, the aesthetics of the
iPad and all the social sharing surrounding
online shopping today are now shifting that
advantage to online retailers.”
Source: Industry Leader quote - Deloitte - Global Powers of Retailing 2013 - Retail Beyond


Price & Promotions
Still relevant

indicate Price & Promotions are
78% most important factors

(targeted promotions) greater purchasing
4-5x rate than conventional marketing

• Geofencing
• Young technology; adoption is spotty

use phones to learn about in-store
7% promotions or events

• Popularity gaining
• Most cost-effective Sources: Maxxing, “Increased promotions efforts in response to economic conditions”
Forrester, “Can texting save stores? 'Geofencing' lets retailers offer deals to nearby customers, ﬁght price- shopping,” Wall Street Journal, May 8, 2012

Physical Space
Retail Store is not dead, and is not going away

• Supports consumer interaction with
the brand, product and each other -
mobile technology as starting point

• Extends virtual world into the
physical space - Merge

• Shifts from transactional to
experiential

• Change in future store portfolio,
footprint, layout & inventory
• Brand & Product showroom
• Hub & Spoke
• In-store pickup
• After Sales Service

Elevate In-Store Experience
Some examples


Talent
Assess how to enable store-talent to deliver new service model, with the technology & right-sized workforce to support it

• Mobility = Productivity Improvement
• Free personel from checkout counters & stockroom
• Check inventory across stores & distribution centers
• Reduce inventory costs & stockouts and expand shopper’s
choices
• Out of stock items costs retailers almost 50% of intended purchases
• Make inventory visible & keep customers from shopping elsewhere
• Provide virtual inventory to mobile users
• Technology-enabled product & service knowledge
• Technology-savvy assistance with sales, order tracking & returns
• Brand ambassadorship (face of the retailer)
• Link personel with customers through mobile
• Favorite sales associate

Process in the Store
Systems of the future
• Enabling Technology
• Store technologies equip talent
with tools to deliver superior
service
• Accomodate expectations of the
connected consumer (drop off,
showroom, after sales service a.o.)
• Customer facing tools &
technologies deliver customer
experience of tomorrow
• Requires ﬂexibility & ability to
integrate existing & emerging
applications and devices
• Intelligent Mobile Wallet

4+1Ps
Product, Price, Promotion, Place & ... Payment


Mobile, Money & Cards
Turning into the inevitable Mobile Wallet


Mobile Payments - where are we today?
Preparedness of key players to deploy mobile payments

Most viable business model


Source: Deloitte Future of Mobile Payment Survey

Players & Scenarios

Mobile Carriers Financial Institutions Handset Makers Merchants Consumers

Loses by being on the
Limited gain from Loses because of
Gains by innovating sidelines or acts defensively Limited gain from small scale
Wait & See disruptive models when credible threat NFC deployment by carrier
competition to card-based fragmented offerings and
ecosystem limited availability
emerges

Gains from tapping existing Loses by sharing merchant
Moderate gains from NFC Gains from speeded up
payment network and revenues with carriers unless Gains from merchant
Buddy System generates incremental it is a niche player that
deployment to larger transactions but loses from
acceptance and convenience
customer base upgrade costs of POS
revenues expands revenue pie

Significant risk without Significant risk without Limited gains from small- Limited gains from small- Limited gains from low
Fly Solo commensurate returns commensurate rewards scale deployment scale deployment merchant acceptance

Significant gains from mass Gains significantly because
Significant gains from large- Moderate gains from large-
Significant gains from mass deployment of NFC and of expanded choice,
Open Federation scale mobile payment scale mobile payment
deployment of NFC greater competition among merchant acceptance and
deployment deployment
payment instruments convenience

Source: Deloitte - Cell me the money - Unlocking the value in the mobile payment ecosystem

And why should you care?

• Merchants reluctant
• Changeover costs (even online)
22%
• Operating costs, Stability & Processing time
• Additional mode, but may be not perfect substitute think mobile wallets will
be successful

• Merchants have lot to gain
• Expectations to be innovative 27%
• Channel additional information a/o Increase customer loyalty
• Differentiation from competition think NFC-enabled
• Improved reporting & real-time analysis on purchases payments will be most
• Reduced complexity in payment process successful

Source: EHI Retail Institute 2011

Consumers don’t understand the value...

86%
“Cash, Card and... phone.
Another payment method” don’t know mobile
payments systems

Sources: Steinbeis Research Center for Financial Services 2012
EHI Retail Institute 2011

...But they understand the risk

73%
says security is most
important factor re
mobile payments

86% don’t want to pay extra for using mobile wallets

Source: Steinbeis Research Center for Financial Services 2012

When will Mobile Wallets rule the world?

A: 2013 B: 2014

C: 2015 D: 2016

One size...
does not ﬁt all


One size does not fit all...
Use of Mobile Technology differs, as Retail formats differ in their value propositions, strategies, performance objectives & customer expectations

Home Non-apparel
Department Discount
Apparel Store Club Store Drug Store Grocery Store Improvement Specialty
Store Store
Store Store

• Expert opinions • Loyalty programs • Low prices
• In-store Ambience • Loyalty programs • offerings • Targeted offerings • Discount offerings • Targeted offerings
Personalized
• Customized • Targeted offerings • Bundled products • Decrease checkout • Real-time • Expert opinions • Brand / product
Clothing • Price discounts • Discounts time discounts
• Store talent type connection
to attract & retain
appealing to price- attractive to price- may keep customers could shape
• Customer profiling
more important than young customers
sensitive customers sensitive shoppers from shopping customer behaviour
transaction speed
elsewhere & increase loyalty

• Efficient navigation Credible • Expert opinions
• Real-time fashion • In-store navigation • Sale
Mobile Point-of-
• Locate specific • • How-to videos for • Personal
advice information on relevant products recommendations
items on shelves • Accelerate
• Access social
may help customers
drugs
shopping process
networks to
find products they
to shorten wait times
beneficial for club • Checkout time enhances customer based on shopper’s
validate purchase & simplify shopping experience and own tastes &
are looking for store customers
decisions experience valued by customers decreases staffing requirements
(members)
requirements

Choose your Consideration(s)
You can’t do it all at once

Map Customer Journey Usability & Experience first
How do customers move from mobile to social to store to web and beyond as they go Usability is everything. But not just the app, make sure that integration points between
through product & price considerations, purchase a.o.? Understanding the customer your mobile and other channels, notably the store, are in place and support a desirable
journey is the bedrock of any mobile strategy. experience.

Include Employees & Partners Product, Price, Promotion, Place & Payment
As consumers become ‘super users’ of mobile devices and apps, deyning your sales Consider the impact mobility has on the 4P’s, plus the additional P for Payment.
staff (ao) access to the same technology and tools could cause a fundamental 5P Consider how consumer do price research while in store, or provide proper promotions
disconnect and lead to to an ineffective customer experience in the stores. when consumers are in the store or when they are scanning a certain product (bundles),
Furthermore, consider how mobility can enable your interactions with suppliers and or how to deliver a new ‘place’ (in-store) experience.
your distribution process.

Mobile Capabilities Omnichannel approach
Consider movement, NFC, Bar/QR codes, etc. Retailers should constantly explore how Make sure your mobility strategy isn’t operating in a silo. Things get really interesting
these additional capabilities can not only speed up or enhance existing processes, but when mobility is combined with your other channels.
more importantly how they can be leveraged to expand the horizon of what is
possible.
Preserve Flexibility
Current Pain Points Consumers will increasingly expect a seamless and user-friendly mobile experience
regardless of the mobile device or operating system they use. When selecting off-the-
A great starting point for mobility is to identify current pain points. For example, have you
shelf apps or developing mobile apps in-house, consider short and medium-term
ever walked all over a store floor to find an available sales associate? Mobility could easily
implications of your choice with respect to a potential change in the dominant
alleviate this customer pain point by allowing the customer to submit a “help” request
smartphone operating systems or brands. Always consider how your mobile strategy
including their current location in the store through an app.
impacts your overall flexibility.

Don’t underestimate Security & Privacy Benefits of doing it right
A mobile-related security or privacy breach could severely damage your reputation and Grow brand awareness and loyalty, Increase revenue, Increase traffic, Improve

Deloitte Digital
hamper adoption of mobile capabilities. If you want your customers to engage with your
business via mobile Consulting B.V. All rights reserved. info such as their location, you should
Copyright © 2013 Deloitte channels and share critical
€ conversion rate, Increase overall basket size, Enhance the customer experience, Keep
pace with evolving customer demands and expectations, Reduce labor costs, Increase
emphasize privacy & security at all times. marketing efficiency, Execute flawlessly, Implement securely

Bottom Line

If you don’t do it, someone else will...

And they’ll do it to customers inside your stores


Thank you.


Mobile retailing - if you don't do it, someone else will

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (6)

Similar to Mobile retailing - if you don't do it, someone else will

Similar to Mobile retailing - if you don't do it, someone else will (20)

Recently uploaded

Recently uploaded (20)

Mobile retailing - if you don't do it, someone else will