What's In-Store for Mobile? The Winning Moves In Mobile Shopping Assistance

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Innovative retailers understand that many people regard their smart phones as indispensable assistants for shopping, as with other aspects of their lives. A majority of smart phone owners now use …

Innovative retailers understand that many people regard their smart phones as indispensable assistants for shopping, as with other aspects of their lives. A majority of smart phone owners now use their devices to assist in purchases every month.

Mobile solutions come in two forms: “mCommerce” enables customers to purchase products directly through mobile devices, and “shopping assistance” features are mobile solutions that enhance the in-store shopping experience.

Though many retailers recognize the opportunity and provide some kind of mobile solution for their customers, few have cracked the code for offering a truly best-in-class mobile experience, particularly when it comes to shopping assistance features.

In this Executive Insights, L.E.K. managing directors Alex Evans and Rob Haslehurst share best practices such as mobile-enabled research tools and in-store navigation—and reveal their strategy for maximizing mobile’s impact in the rapidly evolving landscape.

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  • 1. L E K . C O ML.E.K. Consulting / Executive Insights EXECUTIVE INSIGHTS VOLUME XVI, ISSUE 7 INSIGHTS @ WORKTM What’s In-Store for Mobile? The Winning Moves In Mobile Shopping Assistance was written by Alex Evans, a managing director in L.E.K. Consulting's Los Angeles office, and Rob Haslehurst, a managing director in L.E.K. Consulting’s Boston office. For more information, contact retail@lek.com. Imagine a seamless shopping experience that begins and ends on a smart phone, with a trip to the store in between: Scrolling through emails while sipping a latte in her local coffee shop, our imaginary shopper—let’s call her Emily—sees a retailer’s flash offer for a new jacket from her favorite brand. Tapping a link in the email, Emily visits the retailer’s mobile Web site, where she’s offered a download of the retailer’s app. She downloads the app and opens it to read customer reviews for the jacket and check size availability at the nearest store location. Noticing only one jacket in her size left in stock, she makes a beeline to the store. When she arrives, the app’s in-store navigation feature guides her to the jacket’s precise location. She quickly tries on the item in her size and then uses the app to scan a coupon for additional savings. On the way out she notices a scarf she likes, too. Having already exhausted her budget for impulse buying, Emily uses the app’s scanner to add the scarf to her wish list and share it on Face- book – maybe her parents will make it a Christmas present. For some retailers and their customers, this vision is fast becom- ing a reality. These innovative retailers understand that many people regard their smart phones as indispensable assistants for shopping, as with other aspects of their lives. Indeed, previous research by L.E.K Consulting found that a majority of smart phone owners now use their devices to assist in purchases every month, and a recent Google survey found that as many as 8 in 10 smart phone owners use their devices in-store to help with shopping. Although most retailers recognize the opportunity What’s In-Store for Mobile? The Winning Moves In Mobile Shopping Assistance and provide some kind of mobile solution for their custom- ers, few have cracked the code for offering a truly best-in-class mobile experience. Mobile solutions come in two forms (see Figure 1). The first, “mCommerce,” enables customers to purchase products directly through mobile devices. As one would expect, online retailers such as Amazon and Zappos are leaders in mCommerce, offer- ing best-in-class features such as one-click ordering and product browsing and search optimized for small screens. Some brick- and-mortar retailers also have strong mCommerce offerings, including mobile-specific deals and in-store pick up. Mobile features that enhance the in-store shopping experience comprise the other category of mobile solutions that retailers now use to compete. We refer to such technologies as “shop- ping assistance” features. These include innovations such as navigation tools and bar code scanners, as well as online inven- tory checks, product reviews, and wish lists—all the features our imaginary shopper used on her unexpected jacket-buying excursion. Some shopping-assistance features are also used for mCommerce. Shoppers are using their smart phones for both types of mobile solutions, although some prefer the user experi- ence on tablets’ larger screens for completing online purchases.
  • 2. EXECUTIVE INSIGHTS L E K . C O MINSIGHTS @ WORKTM Offering Assistance Along The Customer Journey Leading retailers use mobile shopping assistance features to achieve specific objectives at each stage of the customer journey (see Figure 2). At the pre-visit stage, retailers use shopping-assistance features to drive traffic in-store, such as with flash deals or coupons. They also use these features to make it easier for consumers to conduct research on products when planning a visit. Shoppers are increasingly turning to shopping-assistance fea- tures to conduct in-store research as well as to comparison shop. Additionally, leading retailers are enhancing the shopper experi- ence with features that simplify in-store navigation and purchas- ing. For example, IKEA’s mobile app provides information on products’ location and availability in stores to help shoppers find and buy items they have viewed online. Retailers can also use in- sights they gather on mobile behavior to provide the missing link between traditional eCommerce and in-store behaviors. Having Page 2 L.E.K. Consulting / Executive Insights Volume XVI, Issue 7 EXECUTIVE INSIGHTS Both mCommerce and shopping assistance are valuable ad- ditions to the customer experience. But we have found that shopping-assistance technology is more likely to be underdevel- oped and underexploited by retailers. This is a missed oppor- tunity. Retailers who can become best-in-class in these mobile features will find their effort is richly rewarded. By opening up a new, intimate channel to the consumer, shopping assistance is a key lever for delivering a superior customer experience that, in turn, will ultimately drive sales and create value. Retailers Need a Highly Customized Approach Effective shopping assistance requires retailers to customize their mobile presence (either on a Web site or app) to their own brand, store experi- ence, and customer needs. But many retailers are focusing on lowest-common-denominator features, rather than ones that will make their mobile experience stand out and resonate with their brand. They may offer primarily mCommerce solutions, such as an online catalog, while making limited gestures toward shopping assistance, such as providing a store locator. Some have added bells and whistles without creating value for customers and excelling in particular features. These problems often arise due to organizational issues. Responsibility for mobile strategy may lie with either eCommerce or marketing, without giving a seat at the table to both or to other key functions, such as store operations and customer experience. As a result, mobile features may emphasize online transactions or not be based on a detailed and up-to-date un- derstanding of in-store shoppers’ needs. Mobile Shopping Solutions Figure 1 SH O PPING ASSISTANCE mCOMMERCE Receive targeted deals while in store Find about in-store events Mobile self-checkout Share purchases via social media Store locator Check inventory In-store Wi-Fi In-store navigation Mobile wallet Email coupons that can be redeemed in store Receive unique content Create wish list Virtual catalogs Gift / wedding registry programs Promotional offers received via text Access your loyalty / reward program View informational videos Detailed product information Mobile- or tablet-only deals / push notifications Read product reviews Scan QR code Mobile-specific loyalty program offers One-touch customer service interaction Promotional emails received on mobile device View purchase history Check for promotions In-store pick up Purchase on mobile for home delivery Source: L.E.K. Consulting
  • 3. EXECUTIVE INSIGHTS L E K . C O MINSIGHTS @ WORKTM L.E.K. Consulting / Executive Insights a comprehensive set of insights on each customer’s behavior will allow retailers to tailor offerings more precisely. After a store visit, shopping-assistance features can help with brand reinforcement by making the return or exchange process easier and enabling continuous engagement with customers. Retailers can use email, text messages, and/or so- cial networks to steer customers to their apps and once again stimulate store visits through special deals as the customer journey comes full circle. At each of these stages, retailers are employing a range of best practices. Best-in-class retailers apply a deep understanding of customer needs to design shopping-assistance features that address specific pain points and offer sources of satisfac- tion above and beyond the usual shopper experi- ence. For example: • Mobile-enabled research tools use barcode or QR code scanning to give shoppers the abil- ity to research products online while shopping in-store. Shoppers can compare product speci- fications and capabilities in real time without an associate’s help. Macy’s, REI, Sephora, Nord- strom, and Best Buy are among the retailers us- ing this functionality to make available product information and the consumer reviews that shoppers crave. Nordstorm’s app, for example, allows shoppers to check scanned products’ price, sizing, and availability in stores and on- line. Shoppers can also add scanned items to a wish list that they can share with friends and family. • In-store navigation tools use store maps, GPS, and beacon technologies to make it easier for shoppers to locate the items they want. For example, Home Depot recognized that a key pain point for some customers was navigating its cav- ernous stores to find the exact product they needed. To help customers locate items efficiently, the retailer has introduced an app that provides rich in-store navigation tools—thereby improving convenience and freeing up associate time. • Integrated rewards programs provide quick access to program features, which increases convenience for cus- tomers, enables faster checkout, and incentivizes the use of programs that can track customer habits. For example, Starbucks, Sephora, and Walgreens are among the retailers that integrate their rewards program into apps that can be scanned at checkout to accumulate points and apply points to purchases. The best-in-class retailers include these shopping-assistance fea- tures as part of a comprehensive mobile strategy that not only makes shopping and transactions easier, but also reinforces the brand and keeps customers engaged outside of the store. Customer Journey Mobile Customer Journey Figure 2 Source: L.E.K. Consulting STIM ULATI O N / CALL TO ACTION RESEARCH / PLA N VISIT 1. In-store pick up 2. Check inventory 3. Find out about in-store events 4. Mobile- or tablet-only deals / push notifications 5. Promotional texts / emails / emailed coupons that can be redeemed in store 6. View detailed product information / read product reviews / view informational videos 7. Virtual catalogs 8. Store locator 9. Check for promotions 16. Access loyalty / reward program 17. Mobile wallet 18. Mobile self-checkout 19. Purchase on mobile for home delivery 20. View purchase history 10. Mobile-specific loyalty program offers 11. In-store Wi-Fi 12. Receive targeted deals while in-store 13. Scan QR code 14. In-store navigation 15. Gift / wedding registry / wish list creation 21. One-touch customer service interaction 22. Receive unique content 23. Share purchases via social media CUSTOMER JOURNEY In -store Pre Visit PostPurchas e BRANDREINFORCEMENT/SOCIALENGAGEM ENT TRANSACTION IN-STORENAVIGATION
  • 4. EXECUTIVE INSIGHTS L E K . C O MINSIGHTS @ WORKTM Maximize Mobile’s Impact To evaluate the potential for improving their mobile features, retailers should consider the following questions: • What activities are our customers doing with mobile today, whether for shopping assistance or mCommerce? • Which mobile features do our customers want from us? • How will mobile features enhance the shopping experience for our customers? • What specific pain points can mobile features address? • Which organizational functions should be involved in mobile strategy and execution? Do they already have a seat at the table? A well-designed mobile strategy is aligned with the core cor- porate strategy and based on a deep understanding of your customers and a thorough assessment of how you can use technology to improve the customer experience. Retailers that master mobile features at each stage of the customer journey will likely gain a significant competitive edge in the rapidly evolving market landscape. L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. While L.E.K. advised the parties cited in a number of the examples, all data are sourced from publically available records. © 2014 L.E.K. Consulting LLC L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and analytical rigor to help clients solve their most critical business problems. Founded 30 years ago, L.E.K. employs more than 1,000 professionals in 22 offices across Europe, the Americas and Asia-Pacific. L.E.K. advises and supports global companies that are leaders in their industries – including the largest private and public sector organizations, private equity firms and emerging entrepreneurial businesses. L.E.K. helps business leaders consistently make better decisions, deliver improved business performance and create greater shareholder returns. For further information contact: Los Angeles 1100 Glendon Avenue 21st Floor Los Angeles, CA 90024 Telephone: 310.209.9800 Facsimile: 310.209.9125 Boston 75 State Street 19th Floor Boston, MA 02109 Telephone: 617.951.9500 Facsimile: 617.951.9392 Chicago One North Wacker Drive 39th Floor Chicago, IL 60606 Telephone: 312.913.6400 Facsimile: 312.782.4583 New York 1133 Sixth Avenue 29th Floor New York, NY 10036 Telephone: 646.652.1900 Facsimile: 212.582.8505 San Francisco 100 Pine Street Suite 2000 San Francisco, CA 94111 Telephone: 415.676.5500 Facsimile: 415.627.9071 International Offices: Bangkok Beijing Chennai London Melbourne Milan Mumbai Munich New Delhi Paris São Paulo Seoul Shanghai Singapore Sydney Tokyo Wroclaw INSIGHTS @ WORK TM Page 4 L.E.K. Consulting / Executive Insights Volume XVI, Issue 7