As everyone is talking about digital transformation, retailers get their hands busy with unlocking omnichannel, the holy grail of business growth and competitiveness. For B2C brands, supporting the mobile channel becomes a necessity rather than a marketing fad (today, it drives more than 30% of sales), and the absence of one on the brand’s list will likely bring a drop in sales, let alone no increase. Be it apparel stores, fast food chains, gas stations or even retail banks, to go mobile is for them to satisfy at least one necessary requirement to penetrate the mobile retail market worth $220 billion. But if offering a mobile app is a matter of survival in the omnichannel race, how does it actually drive sales? What can differentiate mobile shopping experience from other channels and how exactly can it boost purchases?
Retailers differ, their goal doesn’t
When it comes to mobile adoption, mCommerce and mBanking indeed take the lead in shaping the retail market. Each of these domains heavily relies on connecting and interacting with customers. Yet, there is one fundamental difference that can re-define a mobile strategy completely: although mCommerce covers the entire customer journey (it can be installed right during the first brand encounter), mobile banking apps can only be installed and activated by current customers in a secure environment.
Despite each retailer tailors the approach to their own specifics, the ultimate goal – revenue generation – is shared by all. Reaching this goal takes recognizing what drives consumers’ decision-making, and as we discuss this in 2016, their decisions are largely about how good a brand is at customer experience (CX) across channels.
CX has become a battlefield for retailers. Its implications in retail are two-fold, affecting how carefully brands started to treat customer engagement and customer satisfaction beyond professional buzzwords (it all shows on the bottom line!). Taking into account the growing importance of mobile in retail, it’s not surprising consumer apps came to play a critical role in driving both.
As the focus shifts to customer engagement versus ‘one-way marketing’, brands want to elicit response, not just bombard their customers with irrelevant messages. Having their app in a customer’s pocket seems to be the closest they can get to starting a personal, real-time conversation. Another pillar of stimulating sales with CX in mind is customer satisfaction, and here mobile plays out prominently too. Where higher satisfaction scores mean lower price sensitivity, higher repeat purchase rates and more referrals, mobile as a significant part of digital experience contributes to customers’ brand perception and influences their purchasing decision.
Now let’s take a look at how these strategic concepts are translated into practice.
Boosting mobile sales: Down to practice
The following is both an overview of what a retail app can do, and an offer to think on how these capabilities can nicely complement what a brand already does in other channels. Remember that with each customer, you deal with one and the same person switching between screens, so communication should remain consistent at all levels.
It would be unforgiveable to overlook such a brilliant marketing opportunity to personalize communication by location and provoke an immediate response, right here, right now. Through push notifications, it’s now easy to let app users know they are a stone’s throw away from the location of the day, or that there are just 4 days to go till the end of a special offer at the closest store.
Another, more interactive option is to communicate with a customer’s device via beacons – a brave but not so new technology that has already brought quite a success to the likes of Macy’s and United Airlines.
Based on the history of a customer’s interaction with the brand, his or her experience can be further personalized with tailored content beyond just the location. Here, pop-ups can come in handy to offer a complementary product, say thank-you for staying a patron, advertise new relevant features or reward for an active app use with a bonus.
With a mobile app, customers can now spread the word about the brand they like (or don’t – be aware of it too) in a few taps. Using this chance for retailers would mean earning new audience by providing a convenient social sharing experience. Another option is to tailor engagement strategies specifically to mobile with, for example, Instagram competitions to leverage the capabilities of both apps and reach out to your customers’ social circles simultaneously.
Digital customer experience may cover several channels, but each of these channels is equally important in sustaining the brand voice, prompting a customer to make a purchase, and encouraging conversion.
With mobile, consumers no longer look for just slick design and convenient shopping with easy login, smooth checkout and secure payment. They are not isolated, because they decide to buy in the environment that is heavily populated by competing brands. What’s more, consumers are well aware of it, and use it to their benefit. That is why they want features that bring value above an industry average. Providing a coupon for a mobile app user is unlikely to impress, but making him or her spend less time in a queue by ordering ahead will definitely make a difference.
Digging data is key but still a challenge
It’s easy to conclude that each and every element described above strongly depends on how well a retail brand can handle customer data and analyze it at every touchpoint. Mobile apps themselves can serve as a valuable source to learn about customers’ preferences, to study their behavior and measure satisfaction via quick pop-up forms. With professionally done enterprise application integration, the app will correctly interact with key systems, such as CRM, and feed its rich data back to marketing and sales teams through actionable reports.
The insights sourced from a brand’s channels can be further used to identify the most valuable customers and segment them accordingly to optimize efforts and minimize costs. The Adobe study revealed that only 5% of customers drive 35% of an average retailer’s revenue, so identifying these 5% and enforcing their engagement via mobile is potentially a money-generating strategy.
However, this road is not easy. To reach out effectively to the highest revenue-driving segments, along with other target audiences, would require having a single, unified view of the customer as well as an adequate technology to support such an approach. This is where the lack of digital adaptation and a number of legacy systems still keep many retailers from fulfilling their omnichannel dreams.
Yet, 2017 looks promising for both retail leaders and contenders. Let’s see how digital transformation will be playing out, especially as wearables, augmented reality, IoT and more disruptive innovations redefine consumer-oriented industries.