The challenges of rolling out a mobile offering in the retail sector

Digital offers and mobile technology are the talk of the town at the moment, from Morrison’s entering the online shopping space, to Sainsbury’s developing its full digital offering. Consumer appetite seems to be there, but retailers have a careful balance to tread so as not to scare the horses.

Mobile: aren’t we just doing what we’d do on a computer, but on our phones?

1. Almost all of the British public (84%) now access the internet in some form or another.
2. Online shopping is popular: 57% buy products or services online (excluding groceries), and 16% buy groceries online.
3. Smartphone ownership has been growing exponentially: 55% now own a smartphone¹ vs. 31% at the start of 2011.

This makes the transition from online shopping to mobile shopping seem like a no-brainer. We shop online, we access the internet from our mobiles, and therefore surely we shop via our mobiles?

Not so fast: recent research undertaken for The Logic Group challenges this hypothesis; when we combine what people say they have done in the last six months and what they say they will do in the next six months, it indicates that only 8% of the general public will have bought something via their mobile phones over this period. In contrast, 18% of the general public will have used their phone to check product details/reviews in store.

There is a pattern that forms when we look at the wider list of retail-related activities that consumers engage in over the same period: at the top we see on-the-go activities that are ‘consultative’ in nature (e.g. checking product details/reviews in store (18%), price matching in store (16%), checking-in to favourite stores/restaurants to receive offers (15%)). At the bottom we see more “action related” activities (e.g. collecting loyalty scheme points in store (9%), paying for things (8%), receiving loyalty scheme offers in store and using them immediately (8%))².

These differences signal the emergence of particular consumer attitudes to mobile:

• Mobile is a tool of convenience. We use it for ‘in the moment’ tasks, such as quick check research.
• We are more hesitant about conducting activities that require commitment or direct action, such as paying for things.

Mobile: a tool of reference, not of action?

This leaves us with a huge opportunity: developing mobile-based tools that allow consumers to quickly and confidently use their mobile phones for (trans-) actions, whether this be purchasing products or services, using loyalty schemes, or something else, is clearly an area of the mobile market with huge scope.

However, firstly, the barriers to mobile-for-action use need to be identified and, where possible, overcome. This means being aware of those who do not have smartphones, or in some cases, internet access of any kind. Within this group, there will be those who are prevented by circumstances (e.g. financial) from access to these technologies, there will be those who could have them, but conscientiously object, and there are those who simply aren’t quite convinced or haven’t quite got round to making the venture to smartphones just yet.

This last group is potentially the one where the biggest potential for growth lies. A conservative estimate is that smartphone ownership will rise from 55% to 75% by Autumn 2015 – that’s some 10 million additional people aged 18+ in the UK with a smartphone. With this group, just as is the case for current smartphone owners who simply have not adopted your technologies, there are two key strategies to adopt.

Firstly, you need to convince consumers of the value of your mobile offering. This means making it clear to them that they will be missing out on something if they do not use the mobile technology. Essentially, they need to be incentivised into doing so and, as previous research for The Logic Group has indicated, the quickest way to make consumers see the value in something is by appealing to their purse strings. This might mean providing special offers, discounts, improved service etc. – at least for first time users, if this is not sustainable in the long term – in order to get them to try the technology. The goal is to get them hooked on the first try so they never look back.

Secondly, and in pragmatic terms, your mobile offer needs to be accessible: easy to obtain, easy to use and reliable. Convincing your customers to try a mobile offering that does not live up to its expectations is ultimately more harmful to your brand than not having a mobile offering at all – particularly at this early stage where mobile specific offers are not yet the accepted norm. Consumers need to trust your brand and trust what they are getting. Our research for The Logic Group (Infographic: PDF) shows that consumers who trust big business to keep their personal information safe are significantly more likely to undertake mobile activities than those who do not. Transparent communication about the details both of the action/transaction they are undertaking, and also the process involved in undertaking it (what to download, when, how etc.) will help. What is also key here is to ensure that every step runs smoothly, and that there are no nasty surprises, and to ensure this is the case repeatedly, so that trust can build.

In summary

Despite enthusiastic take up among some consumers, the use of mobile technologies in the retail space is still very much nascent. And although the future looks promising – The Logic Group research indicates healthy increases in the use of mobile technologies looking forward – companies need to remember to progress at a pace that consumers are comfortable with.There are two strands to ensuring successful roll out of mobile technologies:

1. Mobile technologies need to fulfil a need, not be a gimmick, and this will ensure customers keep coming back.
2. Your customers need to trust you. This means providing a transparent and reliable service –essentially delivering on what you say you will, every time.

Finally, although undoubtedly more and more consumers will be drawn to ‘mobile’ in the coming months and years, there will always remain a portion of consumers (typically older, less affluent) who do not use mobile technologies. This group need to remembered, and provided for appropriately. The term “multi-channel” is not a cliché, it’s a reality!

Notes: 1. Ipsos Tech Tracker Q3 2013 2.The Logic Group mobile research Spring 2013