How to Dominate mCommerce Part 2

This blog post has been co-authored by Seth Lively, Associate Partner, and Jonathan Leung, Senior Consultant, from the Digital Transformation practice in Infosys’ Retail Sector.

In our last post, we explored the importance of retail mobile solutions, and how they fit in the context of two fundamentally different models. In this the second and final part of our series “How to Dominate mCommerce” we will present a decision tree that is the result of linking these two concepts. But first, let’s look at the some examples to determine if mobility is right for your business.

Which mobile solution should you prioritize?

Businesses that are interested in enabling more mobility must first assess their needs. Do they want to play a more authoritative role when customers are evaluating purchase options (i.e. the Engage stage)? Or are they more concerned with building Advocacy for their brand (i.e. the Manage stage)?

Changing the way you Engage

By focusing on the first part of the journey, retailers are essentially enabling a more personalized shopping experience. Technologies such as in-store mobile devices and beaconing have allowed retailers to access valuable customer data and thus be able to tailor its messaging specifically to that individual. Some common benefits include:

• Driving incremental purchases
• Enabling customer in-store behavior insight
• Improving employee knowledge
• Enhancing task and workforce management

LEADING/PIONEERING CASE IN POINT – NORDSTROM

In 2012, the Seattle-based fashion retailer deployed 6,000 mobile devices throughout 117 stores in the US. Not only were its sales staff able to check out customers from anywhere in the store, they can also access inventory to inform a shopper if another size or color is available at another location. According to the retailer’s 2012 March Sales Report, quarter-to-date sales increased by 15.3 percent compared to same period year ago, and can be attributed to the growth in average selling price and incremental purchases.

Changing the way you Transact

Mobile ordering is becoming a popular practice among restaurants, specifically Quick Service and Fast Casual Restaurants, because customers are no longer confined to the realities of a queue. An order can be placed at any time, and, assuming that there are enough employees to service these orders, can further improve revenue stream. Similarly, digital wallets make it possible for the business to complete a transaction at a faster rate. Other benefits include:

• Reducing checkout time
• Improving conversion rates
• Decreasing merchant fraud liability
• Lessening credit card fees

LEADING/PIONEERING CASE IN POINT – WALGREENS

While businesses are still figuring out the single standard digital wallet platform of the future, Walgreens is one of the few retailers that have adopted both Google Wallet and Apple Pay. While Walgreens may incur a higher cost from the contactless payment terminals, it is able to maximize conversion rate from a wider coverage of customers who use different mobile devices. Apple Pay claims a twofold increase of conversion rates, and this is evident with mobile wallet payments doubling since it was introduced in Walgreen stores.

Changing the way you Service

Social media integration with retail channels is all about facilitating brand engagement and generating brand legitimacy. Department stores and clothing retailers are among those who are experimenting with new ideas, leveraging social media not only on their e-Commerce websites, but within physical stores. Becoming closer to customers in the social media space can allow these fashion chains to achieve the following:

• Increasing share of voice
• Enabling customer sentiment measurement
• Accelerating customer service response time
• Simplifying content distribution

LEADING/PIONEERING CASE IN POINT – MARC JACOBS ‘TWEET SHOP’

In February 2014, premium fashion retailer Marc Jacobs integrated social media with its physical stores by setting up a pop up “Tweet Shop” in New York City. Customers were able to tweet or post an Instagram photo using the hashtag #MJDaisyChain in exchange for free products ranging from perfume samples to jewelry. The campaign succeeded in effectively engaging with its shoppers and distributing its content online by garnering over 13,000 mentions on Twitter and over 4,000 posts on Instagram in just two days.

Changing the way you Manage customer relationships

If the business priority is in post-purchase experience, it may want to introduce or further improve on its loyalty program. This is one of the most fundamental retail concepts that is beginning to make its way to the mobile world. Asides from the obvious benefit of acquiring new customers and reducing churn, a retailer may consider an innovative loyalty program for these reasons:

• Up-segmenting customers
• Creating brand advocates
• Enabling greater customer data insights
• Increasing customer lifetime value

LEADING/PIONEERING CASE IN POINT – MY STARBUCKS REWARD

The world’s largest coffeehouse company in the world goes beyond the traditional points-for-purchase model with innovative ways to incentivize their customers. My Starbucks Reward offers industry-leading customer experience, enabling coffee drinkers to easily see how many points they have and even find the nearest Starbucks location. The program also offers exclusivity by offering a “gold level” status, which comes with a physical gold card and perks such as free refills and food. In one quarter, Starbucks saw a rise of 23% of in membership versus same period year ago, acquiring over 900,000 new customers. Over 60% of their members have gold status, which means success in customer up-segmentation and an increase in overall customer lifetime value.

How should businesses approach retail mobility?

While it may bring about immense benefits, retail mobility is a highly complex project to implement, because it requires the fulfillment of both fundamental prerequisites (applicable to any technology transformation) and other unique considerations inherent to mobile technology. Here is it a high-level decision process map, which incorporates the Shopper Journey and SoE model, to help C-level executives navigate the perplexing trails from discovery to implementation.

Retail Mobility Decision Framework

Download infographic as PDF

It is important to think of retail mobile solutions not as individual achievements, but potential complements. Depending on available resources, business and IT may choose to explore how one solution could be integrated into another to deliver the best possible user experience. A good example of this is the aforementioned My Starbucks Reward app, where it not only offers a loyalty program, but also a digital wallet, mobile ordering, and social media integration capabilities.

Key takeaways

As the second and final post, here are the key points worth highlighting:

• In-store mobile solutions hold strategic importance to any business due to two reasons:
  • Consumers’ increasing usage of mobile devices to aid purchase decisions
  • Retailers’ renewed focus on brick-and-mortar
• Retailers will be able to identify the most impactful mobile solution when evaluated in the context of a shopper’s journey
• Mobile solutions, which are mapped to different phases of a shopper’s journey, bring their respective benefits and thus should also be considered when prioritizing for implementation
• The Stages of Excellence should be used additionally to determine a retailer’s as-is mobile capabilities and its desired to-be state
• Many retailers have already achieved the “Leading/Pioneering” stage with measurable success, namely Nordstrom, Walgreen, Marc Jacobs, and Starbucks
• Infosys’ Retail Mobility Decision Framework can help C-level executives navigate retail mobility from discovery to implementation