Some hail mobile as the saviour of the high street – whilst others are concerned about the impact mobile is having on bricks and mortar businesses as retail stores become showrooms for online retailers. Regardless of which corner you sit in – both points of view speak to the influence mobile is having on retail sales and that influence is only set to grow. A recent Deloitte study, titled the Dawn of Mobile Influence, affirmed the increasingly influential role mobile will play in the coming years with the report anticipating that by 2016 as much as 17-21% of all retail sales will be mobile influenced.
So is mobile a retailers’ friend or foe, and is mobile helping or hindering customer loyalty?
Mobile: A Foe of Retailer Loyalty
One of the biggest threats mobile poses is the heightening of consumer promiscuity. Price comparison is obviously not new – but the trusty mobile device has made it easier than ever to compare retailer pricing instantly and not just on a local scale. So easy has mobile price comparison become that a recent Telstra study has shown 49% of Australians now use their mobile phones to compare prices in-store. But it isn’t just price comparison that is the problem, traditional bricks and mortar retailers are being subjected to show-rooming – a trend where consumers browse shelves in store to touch, feel and experience the product before venturing online to buy it at a cheaper price.
Rather than bury their head in the sand, smart retailers are embracing the trend and tackling it head on. UK retail powerhouse John Lewis now offers free Wi-Fi in stores to enable consumers test their price guarantee.
Sean O’Connor John Lewis’ Head of Online Delivery and Customer Experience believes “when we supplement the price commitment with good advice, service, trustworthiness and the instant gratification of making a purchase there and then, we believe we have a winning recipe.”
But unfortunately not all retailers have shared the same sentiment to John Lewis. Take Best Buys in the US as an example – as an electronics retailer competition is fierce and comparing like for like products is easier than in verticals like fashion. Initially Best Buys considered how to stop the price comparison phenomenon in-store by adopting unique barcodes so consumers couldn’t easily scan and compare pricing. For Best Buys, price comparison and switching has become a thorn in the retailer’s side and the lack of positive action has led to significant revenue decline.
Regardless however of how retailers are reacting to the trend – price comparison and show-rooming are fuelling brand switching more than ever before – which makes mobile a bit of a retailer loyalty foe.
Mobile: A Friend of Retailer Loyalty
Whilst the always-on nature of mobile is diluting brand allegiance and fuelling a breed of disloyal consumers, mobile is presenting new opportunities for brands to take personalisation to a new level. Best in class retailers are integrating mobile location data with ones social graph and other customer information, such as purchase history and browsing behaviour to build more memorable brand experiences with shoppers to drive repeat purchase and loyalty.
The powerful nature of combining mobile technology and data has resulted in a proliferation of retailers building and experimenting with mobile loyalty apps that;
• Provide personalised local based offers
• Reward consumers for repeat purchase
• Store loyalty program data and preferences to streamline the in-store experience.
Brands like Dunkin Donuts, Game UK, Costa Coffee, Monsoons and a host of others have launched loyalty based apps to better engage their customer base over the past 12 months.
To date however Starbucks has been the stand out in the mobile loyalty space. Amongst other features, the app stores a virtual rewards card for the “myStarbucks reward program”. By doing so the app has enabled Starbucks to grow its loyalty program to over 10 million members, half of whom have opted in to receive personalised offers which keep Starbucks top of mind and increase shop frequency. The app also seeks to drive repeat purchase at shorter intervals by providing a “free pick of the week” which is a free download of music, content or even a game that can only be downloaded if the consumer ventures in-store. The Starbucks app even allows consumers to store their favourite drinks and pay for their purchase (25% of Starbucks consumers now pay via this method) – which streamlines the ordering process in-store.
By leveraging mobile as a central pillar of its customer management strategy – Starbucks has demonstrated the powerful role mobile can play in building deeper, more engaging relationships with its consumers.
Mobile: A Consumers Friend – Make it Yours
They say the way to a man’s heart is through his stomach. As mobile devices are the one item consumers can’t live without – you could say that the way to a consumer’s heart is through their mobile. With the launch of Apple’s Passbook in September 2012 and Google’s continued focus on growing Google Wallet, 2013 is set to be even bigger in the mobile space for retailers. Retailers must start to see mobile as a “friend” and core pillar to achieving CRM and loyalty success – as thinking any other way is a distraction.