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The Mobile Leap of Faith – Why Mobile is Not the Next RFID

It's no secret that consumers are adopting mobile technology at a breakneck pace and integrating it into every part of their lives, including shopping. But while the retail industry generally understands that mobile technology CAN add significant value to both the customer experience and their own bottom line, it may not exactly know HOW or WHY this is the case.

A recent webinar co-hosted by RSR Research and UBM, organizers of the upcoming Mobile Commerce World conference, got me thinking about the essential leap of faith that is required for retailers to fully embrace mobile technology. As related by RSR Research analyst Steve Rowen, data collected from retailers in January 2013 indicates that while a majority of retailers recognize that mobile technology can provide value in getting customers to the store, more than half (52%) say that mobile technology influences less than 25% of sales.

Rowen correctly informed the audience that this estimate is unrealistically low. “Sales may not be consummated via mobile device, but along the path to purchase mobile is involved in more than 25% of sales.” This is where the leap of faith comes in.

Retailers need to trust in the fact that by the time the modern customer darkens the door of their store, most of their shopping is already done. Customers arrive at a store much more focused because they have already performed extensive product research — visiting retailer, manufacturer and brand sites and social network pages, independent review sites, consumer forums and blogs, etc. before they ever enter a store. They know what they want and who can provide it with the most convenience at the lowest price. Much of this research is performed on mobile device, and even in the store customers will use mobile devices for activities like “showrooming” (checking current prices at rival retailers before making an in-store purchase).

So where does the leap of faith come in? It comes in when retailers recognize all this mobile preparatory activity that occurs outside of their direct control and commit funds to turning it to their advantage. Most importantly, retailers need to provide a mobile-optimized customer experience tailored to the unique capabilities and confines of mobile devices. As Rowen pointed out, simply duplicating an e-commerce site in the mobile space is “overwhelming” for the consumer. Whether retailers use responsive design to optimize their digital offering for all platforms or create a separate mobile environment, a tailored mobile experience will draw in mobile consumers at all points along the path to purchase.

In addition, retailers need to take advantage of mobile’s location awareness capabilities. On an opt-in basis, retailers should send customers individually targeted promotions, advertisements and discounts when they are near or in a store. These marketing messages must be highly personalized and timely or they will provide little value.

Retailers also need to perform mobile “social listening,” so that for example if a customer tweets from a store that an item they want is out of stock, either a store associate or remote mobile customer service agent can immediately come to their aid and resolve the problem before the consumer starts browsing competitor websites. Mobile devices also allow retailers to place items on hold shortly before a customer enters the store or direct shoppers to another nearby location where an out-of-stock product is available, saving them the hassle and disappointment of entering the store and finding an empty shelf.

I’d like to conclude with a word about why mobile technology will not turn out like another technology that everyone knows can provide value but so far has not lived up to its potential value proposition – RFID. Obviously RFID has the capability to dramatically improve supply chain performance, but outside of efforts by a few global retail leaders RFID has not delivered anything close to the results that have been predicted for the past decade.

Retailers who took the leap of faith on RFID’s unique potential and got burned may be especially skittish about trusting in the potential of mobile. They shouldn’t be. The reasons that RFID has not yet lived up to expectations (and I’m not saying it never will) would take up another column, but suffice it to say the entire world is shifting to a mobile paradigm. Nobody ever suggested RFID would become a near-universal means for consumers to blend the physical and digital worlds. Mobile is already well on its way to achieving that status, and in places like South Korea has already done so. Adopting an aggressive mobile customer experience strategy now is not so much a leap of faith as a recognition of fact.

dberthiaume@chainstoreage.com
@DanBerthiaume1


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