Mobile Strategy Dilemmas
By Sathish Kumar, [email protected]
Companies everywhere are successfully leveraging mobile technologies to increase conversion, revenues, loyalty and lifetime value from customers. As companies develop mobile strategies, there are important considerations to bear in mind.
A majority of leading global retailers already have some kind of mobile initiative in place. This interest in mobile resembles the Internet wave in the ‘90s when many companies jumped to put up a website without having clarity on long term strategy and where the returns were going to come from. The evolution of the Internet has taken its own course — from static to dynamic websites, free to paid content and back to free content, e-commerce, digital marketing and social media — and is still evolving. In the process some companies have succeeded, some are still trying to find the recipe for success while others have disappeared.
Many retailers are hurriedly undertaking mobile initiatives not wanting to miss the bandwagon. All too often companies jump in the mobile fray without a strategy and a roadmap. It is important that companies that take the next step are very clear on what they want to achieve and how they want to leverage new mobile opportunities. Some of the dilemmas include:
Dilemma 1: Breadth versus depth
The most important question every company needs to ask is how comprehensive and stand alone a mobile channel needs to be as opposed to how complimentary the mobile channel is with existing channels. For example, a popular e-commerce site launches a mobile site where its consumers can search and browse its product catalog, add products to the basket, checkout using mobile-enabled payment and redeem mobile-delivered promotion coupons. This is depth of offering as the mobile site offers fairly comprehensive functionalities to its consumer. On the other hand, another retailer provides location-based services such as redemption coupons while a customer is shopping at a store, which could positively influence the customer to buy the product. In this case, mobile technology is leveraged to compliment the brick-and-mortar channel by providing an “extra push” that helps the sale. This is breadth of offering wherein mobile services compliments existing online and offline channels.
While both strategies are not necessarily mutually exclusive, they do need a different set of thinking, different approaches, different maturity levels of enabling technologies and different cycle of adoption.
Two of the key challenges faced in the mobile channel are limited user interface (UI) space on a mobile device (this is changing with the advent of larger screen next-generation smart phones and tablet PCs and better rendering technologies) and security concerns around mobile payments. Even though mobile platform and service providers are continually working to address these challenges, these concerns are here to stay for now. It is essential for organizations to keep these current limitations at the center of their strategy and roadmap.
Back to breadth and depth, a strategy of breadth is less dependent on mobile payment security concerns as it can leverage other well-established channels for payments. Similarly, concerns around limited UI space for providing enhanced user experience are less relevant for providing complimentary services unlike an end-to-end shopping experience within mobile.
Unless you are willing to invest and take more risks to stay ahead in mobile, it would be prudent to initially pursue breadth-based mobile strategies, for example, by coming up with numerous complimentary services that would enable better conversion and improved revenues across existing brick-and-mortars as well as online sales channels.
However, keep revisiting the options as and when some of the current shortcomings are addressed that will enable more content delivery and enhanced security. This approach will allow companies to come out with more comprehensive strategies that align with the technical advances and move over to a depth approach over a period of time.
Dilemma 2: Extent of push versus pull
A key differentiator of the mobile channel is location awareness capabilities. Companies can target mobile users at a given location criteria at any time, which is likely to maximize the impact of its targeted communication. For example, a person walking through a large shopping mall can be targeted with specific promotions that may likely to result in a sale within the mall.
Mobile allows companies to target their existing and potential customers in a more effective way as mobile devices are seen as a personal, always-with-you device. This also sets up the next dilemma — when does it become intrusive? How much can be “pushed” to non-volunteering clients? How does the effectiveness of marketing campaigns vary from being push oriented versus pull oriented? There is no one answer to these questions as it largely depends on type of industry, laws in place and the type of services being offered. However, it is a good practice that these concerns are considered while developing your mobile roadmap. A best practice is to empower your customers to choose the timing and level of offerings they would like to receive and adhere to the code of conduct around privacy and personal data.
Dilemma 3: Apps versus mobile website
More and more companies are increasingly looking at building mobile applications. A mobile app does enable richer, faster and more user-friendly UI though it does have its own set of limitations:
- With thousands of apps in the marketplace, it is critical that the consumer finds value to download
- Need for keeping the apps continually updated for new features
- Need for maintaining multiple versions for different platforms – though there are new breed of platforms to help to better manage this!
If the benefit of having a mobile app justifies handling above challenges, it would make sense to build one. Otherwise, a nicely built and simple mobile website would serve the purpose as well.
Dilemma 4: Is mobile technology right for me?
If you are dealing with end consumers, the answer is YES. Keep in mind the breadth versus depth options and the impending challenges and limitations that current mobile technology offers. Draw out a clear strategy and a roadmap and think about possible future scenarios and how to leverage opportunities and counter challenges. Allocate resources in accordance with the roadmap. Don’t forget to add adequate validation points in the roadmap to ensure you are on track as well as to undertake necessary course correction based on new innovations and breakthroughs that become available in the market. With the convergence of mobile and social media, there is more to lose by not being ready to embrace new opportunities and by having a right strategy and structured approach.
Sathish Kumar is a senior principal in the Retail, CPG and Logistics practice at Infosys, and specializes on the demand-side of customer operations focusing in areas such as multichannel commerce, order to cash cycles, marketplace, customer service and loyalty. He can be reached at [email protected].
Amazon posts record-setting 51% increase in Q2 sales, profits drop
Seattle — Amazon reported Tuesday that sales for the quarter ended June 30 soared 51% to $9.9 billion.
Profits dipped 8% to $191 million from $207 million on surging operating costs, but still beat Wall Street expectations.
The sales growth spanned geographies and categories, with worldwide electronics and other general merchandise sales growing the fastest at 69% to nearly $5.9 billion. Worldwide sales in the media category grew 27% to $3.66 billion. By region, sales in North America grew 51% to $5.41 billion while international segment sales grew 51% to $4.51 billion.
“Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we’ve seen in over a decade,” said Jeff Bezos, founder and CEO of Amazon.com.
Jones Group Q2 net income falls on acquisition expense, beats Street
New York City — The Jones Group reported Wednesday that second-quarter earnings dropped almost 80% to $5.2 million, compared with $25.7 million in the year-ago period. The retailer and manufacturer, whose brands include Nine West and Anne Klein, cited expenses related to the acquisition of U.K. luxury footwear retailer Kurt Geiger for the poor earnings performance but results still exceeded Wall Street estimates.
Revenue for the quarter increased 3% to $887.4 million, just edging analysts’ expected $887.2 million.
Jones Group CEO Wesley Card said the company is focused on inventory planning and controlling costs in the second half of the year. “Our operating trends in the core businesses continue to improve as a result of our focus on brand management, inventory planning and controlling costs and expenses,” he said in a statement.