Mobile in the News
Mobile commerce is expected to be among the dominant topics at the National Retail Federation’s Annual Convention and EXPO in New York City, with break-out sessions and a super-session devoted to the fast-growing channel. Two recent studies offer insights into the channel. Here are some highlights:
Growth: Mobile online shopping (excluding travel) in the United States was expected to more than double, to total more than $3.4 billion by the end of 2010, according to ABI Research. Travel-related purchases (airline tickets, hotels, etc.) will add another $1.5 billion.
“Mobile online shopping growth in the United States has been fueled this year by the massive migration of consumers to smart phones, the explosion of highly innovative use-cases deployed by retailers and third-party players, and a significant shift in consumer behavior as more consumers choose mobile shopping over traditional online shopping,” commented ABI senior analyst Mark Beccue.
In Japan, where mobile online shopping has been commonplace for several years, mobile is responsible for nearly 17% of all e-commerce sales. In 2015, ABI Research believes, mobile online shopping will be responsible for $163 billion in sales globally, 12% of global e-commerce turnover.
Mobile marketing practice director Neil Strother added, “Beyond direct sales generated via mobile, innovative retailers will use mobile online shopping to introduce a broad- range of mobile marketing campaigns and CRM programs.”
Smart Phones and Bargain Hunting: A survey by Accenture revealed that the growing use of smart phone technology and the economic downturn have encouraged cost-conscious consumers to explore alternative retail channels to secure bargains.
According to the survey, 79% of smart phone users would find it useful to download money-off coupons to their phones, and 73% would like to receive instant money-off coupons as they pass by an item in a store.
Accenture’s findings suggest that couponing could become a more important part of the retail experience as smart phone technology becomes more widespread, and if retailers are adept at using customer analytics to target messages and deals to consumers. Notably, 48% of conventional cell phone users plan to buy a smart phone in the next 12 months.
The results of the survey also indicate that smart phone technology is changing the relationship between customers and retailers. Many smart phone users said that they prefer using their mobile device rather than interacting with a store employee for simple tasks. According to the survey, 73% favor using their smart phone to handle simple tasks compared with 15% who favor interaction with an employee. Similarly, 71% favor using their smart phone to identify a store with a desired item in stock, while 17% would prefer to get that information by speaking to an employee.
“Smart phones will permanently change the relationship between the store and the shopper,” said Janet Hoffman, managing director of Accenture’s Retail practice. “Today’s tech-savvy consumer wants a seamless shopping experience across store, mobile or online at a time that suits them.”
Privacy, however, remains a key concern of consumers, and could have a negative impact on the growing use of smart phones for shopping. More than half of respondents (54%) worry that using smart phones will erode their privacy. Among the other smart phone shopping concerns voiced, 59% fear losing the personal touch from store employees, and 39% believe that products would get more expensive.
NRF’s Diamond History
The annual NRF Convention & EXPO has a strong history, and while the show’s early concept has evolved over the last century, its message remains the same: to bring together industry decision makers who want to find ways to drive their business.
Some attendees often question why NRF is held in New York City during January, when the weather can be downright brutal. But the reason is easy.
“In NRF’s early days, CEOs, merchandisers and buyers were finished with the holiday season, and came to the fashion capital in January to get a perspective on what to carry for their spring line,” explained David Hogan, CIO for the National Retail Federation, Washington, D.C. “While the show’s draw for New York City’s fashion market shopping may not be what it once was, NRF attendees still come to shop — now it is for technology.”
During the past 20 years, technology has earned a strong position within the convention as it has evolved beyond a mere business component into a business enabler — one that reflects how the industry and the consumer are changing.
NRF plans to highlight the metamorphosis of the show during a closing session, “The Future is BIG, the Future is NOW!” on Jan. 12. Moderated by Macy’s CEO Terry Lundgren the session will take a nostalgic look back to see how far the industry has come, and what awaits it on the horizon.
Holiday 2010: Online Winners in Customer Satisfaction
Amazon and Netflix are the top scorers in terms on online customer satisfaction, according to the sixth annual ForeSee Results E-Retail Satisfaction Index (U.S. Holiday Edition). Both had a score of 86 on the study’s 100-point scale, with 80 generally considered the threshold for excellence. Here are the study’s top performers:
- Amazon (86)
- Netflix (86)
- QVC (84)*Avon (83)
- L.L. Bean (83)
- Newegg (82)
- Apple (82)
- eBay (80)
- Musician’s Friend (80)
- VistaPrint (80)
- Walmart (80)
- Williams-Sonoma (80)
While many e-retailers had a holiday to celebrate, customer satisfaction with the Top 40 online retailers overall slipped 1% to 78 in 2010 compared with the 2009 holiday season, but is still significantly higher than previous years. The overall decline can largely be attributed to declining scores for some computer and electronics retailers and mass merchants.
"In a recovering economy, a lot of us assume that declining satisfaction is a result of frustration with prices,” said Larry Freed, president and CEO of ForeSee Results, Ann Arbor, Mich. “Our research shows that is not always the case, and that it varies drastically from company to company. Retailers are slashing prices this time of year to attract customers, and not all of them need to be doing that."
The report examined a few notable head-to-head match-ups, including:
Amazon versus Walmart.com: E-retail giant Amazon (86) and retail behemoth Wal-Mart (80) both have superior online satisfaction scores, but Amazon still holds a significant six-point advantage. Amazon beats Walmart.com in three measured drivers, or elements, of website satisfaction: content, functionality, and merchandise, and they are tied on consumers’ perceptions of their prices.
Staples versus Office Depot versus OfficeMax: The three major office suppliers compete closely in terms of satisfaction, with Staples leading at 78, Office Depot at 76, and OfficeMax at 75. The difference-maker in the office supply category is price, and Staples scores better than its rivals for the price element of the retail website experience.
Netflix versus Blockbuster: While video rental is not typically associated with holiday retail, Blockbuster and Netflix are still two of the highest revenue e-retail websites on the Internet. Netflix is online only. Blockbuster has the potential advantage of being an integrated multi-channel retailer, but Netflix (86) beats Blockbuster (76) in two very important categories: price and website functionality. In this case, improving functionality is more important than price if Blockbuster is going to make any strides toward closing the satisfaction gap with Netflix.