The impact of mobile on multichannel retail. The consumer


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Research commissioned by Webloyalty looks at the impact of mobile on multichannel retail. This section looks evolution of the consumer.

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The impact of mobile on multichannel retail. The consumer

  1. 1. The evolution of the consumer Over the last few decades the emergence of a multitude of new channels has played directly into consumers’ hands giving them the opportunity to shop how, when and where they want The evolution of the consumer and the drivers Over the past 20 years consumers have evolved and adapted to new methods of shopping and interacting with retailers. Developments have been fast and Drivers Pre 1990’s changed the retail landscape so dramatically that the days when the average consumer would just use a physical store are a dim and distant memory. Traditional shopper 1990 The first challenge to the store came from the internet. Online saw rapid growth in the noughties as consumers gained confidence in the channel and it The Internet proved itself as an effective tool for research and information gathering. As internet penetration increased and as security made people more confident in Online shopper 1999 making purchases the influence of the internet as a transaction channel grew. As the internet became more influential it redefined the meaning of Information convenience and choice in retail. The internet today has moved well beyond just a convenient channel for research. Today, websites interact more with Multichannel 2008 consumers through adopting social features from websites such as Twitter and Facebook. This has made them an important source of inspiration and ideas. Convenience Retail is now a multichannel environment in which the consumer has an enormous choice over where to undertake different aspects of their shopping. To a degree the theme today is very much about the channels coming Social 2010 together. Services such as click and collect and order in store for home delivery are becoming more popular and improving convenience for multichannel shoppers. m-commerce The downside of this is that consumers are increasingly demanding a seamless Future and consistent shopping experience, often requiring a more personalised level of service. Delivering on such demands is far from easy for retailers. 2020 and beyond7
  2. 2. Consumers use multiple channels Consumer shopping patterns have evolved and now multiple channels are used as part of the purchasing process Traditional channels continue to play a pivotal role at all stages of the The percentage of consumers using various channels at any purchase process. Indeed, almost 93% of customers regularly visit physical stores; and a majority of consumers still use stores for the act of buying. stage of the purchasing process For many, using catalogues combined with physical stores was the first Traditional experience of using multiple channels and the catalogue remains influential retail 92.9% today. This is especially so when it comes to browsing and ideas gathering. Retailers like Jack Wills and White Company have strong catalogues that help to inspire consumers and supports both the brands and physical stores. Physical shops 32.2% Online shops are the most commonly used channel with just over 95% shoppers regularly using the internet for any stage of the purchasing process. Online is most frequently used in combination with other channels. For 53.9% 23.8% Newspapers 7.8% example, a large number of consumers research on the internet and then buy in store; others prefer to order online and collect in store through click and & magazines collect type schemes. John Lewis has seen rapid growth in their click and Catalogues collect offer since its initial launch. Retailer Telephone/ magazines call centres With consumers now used to shopping online and using multiple channels mobile commerce is growing in influence. Although used by 52% of 85.1% consumers, this number is rising strongly and over the next five years we expect around 80% of the population to use mobile as part of the purchasing 95.2% process. Internet sites Online shops Physical stores remain the central hub of most multi channel businesses. Online drives the innovation and m- commerce is emerging as the channel that keeps 52.0% everything connected. The Future Mobile8 commerce
  3. 3. New channels create new shopping experiences M-commerce gives the consumer information on the go and evokes a different kind of shopping experience The smart phone is empowering consumers by giving them instant access to information while they’re ‘on the go’ If it is about anything, m-commerce and smart phone technology is about empowering customers and about giving them a more engaging shopping experience. Price comparison Applications like RedLaser allow customers to scan in a barcode and access detailed product information on the fly. Importantly, the details include price comparisons which means a consumer standing in store can see where the item is also available and at what price it is being sold. This can be combined with GPS location data meaning that consumers are just shown retailers in the vicinity. Such tools bring a dangerous (for the retailer) level of price transparency to the market. Location Through applications such as FourSquare, shoppers can ‘log in’ when they visit stores. This potentially enables retailers to target them with special offers. Other applications, such as Voucher Cloud, allow consumers to search for special deals and offers in their current location. Taking this a step further, online maps can be used to help the consumer find the location of the nearest store and obtain directions, but also to find a product’s specific location within a store. Reviews and Opinion As sites such as Amazon and iTunes have proved, consumers often enjoy giving product reviews and many now see this as an integral part of the shopping process. In turn, this feedback enhances the buying decisions of other consumers.9
  4. 4. The future of shopping trips M-commerce technology enables consumers to have a personalised shopping experience, mobile phones increase social interaction between the consumer and the retailer and can act as a self service tool A future shopping trip The diagram shows how a future shopping trip, involving the use of a physical store, may look Online In-store in the future Customer logs into Research products, availability Message from retailer store, receives Find product in a shop and prices online with recommendations update of deals and personalised product Mobile used to scan products suggestions Product selection and details for price comparison and sent to mobile phone product information Customer reviews Go to shop to view the product Customer locates Customer finds online product and asks for nearest shop with best is cheaper, uses mobile opinion price and availability to go online and buy Order product in store and using GPS map the product track delivery Physical stores are still a vital channel for retail. However, the role of the store is changing and, today, is much more variable than it was in the past. It is vital that retailers understand how their stores fit into the whole purchase decision making process and, indeed, Mobile used to reserve item at understand the role they play in consumer’s consumption experiences. chosen store Mobile used to download or One of the keys to ensuring the continued relevance of the store is to make sure it is redeem mobile coupon embedded within the new processes mobile technology is enabling. For example, in large stores shoppers should be able to use their phone to locate particular products. Equally, Once payment is made, retailers should encourage consumers to scan information or barcode tags next to customer receives mobile products to access more information about a particular product. coupon via text to redeem against next online purchase10