Going Mobile November 2010 Retailers and Consumers Embrace Mobility to Increase Customer Experience
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contents4 Summary of Findings5 Introduction Background and Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Report Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 A Look at Consumer Use of Mobile Technology Who Responded? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 What Type of Phones Do Consumers Use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 What Features Do Consumers Seek for Their Mobile Phones? . . . . . . . . . . . . . . . . . 7 Who Pays for All This? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 How Do Consumers Typically Use Their Phones? . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Do We Use Our Phones To Make Purchases? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Future Devices Consumers Want . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1214 Currently, Where are Retailers with Mobile? Which Platforms Are Currently Supported (and Which Ones Going Forward)? . . . 14 How and When Will Retailers Engage the Customer with Mobile? . . . . . . . . . . . . . 16 What Future Development Can We Expect? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1619 Where are Vendors in Their Response? What We Hoped to Learn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Which Platforms Do They Support for Consumers? . . . . . . . . . . . . . . . . . . . . . . . . 19 Which Platforms Do They Support for Store Associates? . . . . . . . . . . . . . . . . . . . . 19 Web Functionality – How Much is Lost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Where Do Vendors Stand on Consumer Applications? . . . . . . . . . . . . . . . . . . . . . . 2224 Conclusions
SUMMARY OF FINDINGSThis report is a summary of a much more Verizon or some other carrier. 56% they will have the ability to not onlydetailed study that can be found at of current smartphone users are deliver coupons electronically to theirwww.ihlservices.com. That being said, seriously considering the iPhone as customers’ mobile phone, but also tohere are a number key ﬁndings that are their next device. Current market scan the coupon into the POS directlycontained in this summary. share for iPhone from other studies from the mobile phone’s screen. This shows at less than 25% today. 44% capability requires an optical scanner,• This is a study with a high concentra- are seriously considering an Android, a device which currently only has a tion of smartphone users, the very which should also see increased 2% penetration in US POS lanes. people that retailers and marketers share. And only 24% are considering want to reach with their mobile a Blackberry and 10% a Windows • Your boss wants his reports on his eﬀorts. Seventy-seven percent (77%) Smartphone for their next device. iPhone. While Blackberry (52%) of those surveyed indicated that they is the most common platform used a smartphone. This is in contrast • 52% of smartphone users in the study supported by retailers for their to data for the US population as a have paid for an additional application. management team today, this is whole, for which less than 25% use a 65% use their smartphone to update quickly shifting to the iPhone and smartphone. Facebook. iPad for the future. Today only 19% of retailers support the iPhone and• Texting is near universal and is seen • Security is a real concern, however, 10% the iPad, but 12 months from as the faster and more reliable email with cell phones being lost or stolen now that rises to 60% for iPhone and as there are no spam ﬁlters for texting. more than any other electronic device. 47% for the iPad. Once again a similar Ninety-seven percent (97%) of all 44% have accessed their bank account jump occurs for Android, from 14% respondents claim that they have from their smartphone, but very few today to 33% in one year. sent or received text messages on have a strong password on their their mobile phone in the last 12 phones. • The biggest mismatch between months. where Consumers see their next • 35% of smartphone users have phone and retailer’s and vendor’s• There is essentially no diﬀerence received and/or redeemed a coupon plans to support them resides with in the percentage of texting use they have received via text message. Windows Mobile. Fifty-three percent between the youngest members of (53%) of retailers and sixty percent the sample (teenagers) and the 46-55 • 41% have checked competitive prices (60%) of vendors claim they will be year-olds. There is likely a diﬀerence on their smartphones while in a retail providing support for Consumer’s in volume of texts, but no diﬀerence store either with Amazon, Red Laser, Windows Mobile phones going in terms of number of plans. We sur- or other comparison engine. forward, yet only 8% of Consumers mise the 46-55 year olds are using plan to make a Windows Mobile text as a way to communicate with • Outside of work, we love to use our phone their next purchase. their kids. phones for entertainment options. Sixty-three percent (63%) of mobile• Standalone GPS is an endangered phone users have used their phone species. Sixty-six percent (66%) of all to check on show times or explore smartphone users have used the GPS dining options. application on their phone in the past 12 months. • It’s good to be a scanner company as mobile phones are issuing in a new• The Apple iPhone could likely double generation. 54% of all retailers sur- its market share when released on veyed indicated that within 12 months 4
INTRODUCTIONBackground and Objectives Vendors, for their part, will be able to using the most advanced consumerFor this report, IHL partners with Retail utilize the data in the survey as a tool to technology.Connections in an eﬀort to truly understand gauge the most likely areas of investmenthow consumers, retailers and vendors are by retailers. The survey consisted of a variety of questions.currently utilizing mobile phones and All respondents answered 10 consumer-devices. Additionally, the authors strive This study presents ﬁndings in three sep- centric questions. There were an additionalto anticipate how those same groups will arate categories. The ﬁrst category, upon 10 questions for anyone identiﬁed as alook at mobility in the future. which the bulk of the report focuses, retailer, and an additional 10 questions addresses the consumer side of mobile. for anyone identiﬁed as a vendor. TheSeveral recent studies have shown the Following that, we examine what vendors topics covered included:penetration of cell phone usage to be in are currently doing in terms of theirthe 90% range of the total U.S. population. mobility oﬀerings. Finally, we take a look Consumer/General QuestionsStandard cell phones are not only capable at what retailers are doing today, with a • Demographic Information –of making and receiving calls, but also of heavy emphasis on where they anticipate Gender, age rangedoing the same with text messages. Many spending their mobile IT dollars in the future. • Current cell phone and plan –of these standard cell phones can also Type of device, who pays for the plan,take, send, receive and store pictures and The survey used as the basis for this study length of contract, etc.video. Smart phones not only do all of the generated a tremendous amount of data, • Past and Future use of phone –above, but also act as music libraries and and this study presents an overview of texting, GPS, payment, etc.web portals, while allowing users to be that data, along with several key ﬁndings. • Future purchase considerationsgeo-located and continually connected A more comprehensive report will beto multiple email accounts. Clearly, retailers published by IHL in November 2010, Vendor Questionsand technology vendors have a vested and it will include additional insight into • Current mobile oﬀerings –interest in understanding consumers’ use speciﬁc consumer behavior. Applications, platformsof these devices and developing strategies • Functionalityto leverage the technology. With so many Report Methodology • Future applications and functionalityretailers facing steep competition from The data for this study were obtained byall sides, the ability to put discounts, performing a web-based survey), the Retailer Questionsspecial oﬀers, and other key information invitations for which were distributed • Retailer demographics –directly into the hands of core customers through IHL and RetailConnections during Vertical, annual revenueis rapidly become a diﬀerentiator in the the August-September 2010 timeframe. • Current mobile oﬀerings –market. To best understand how to lever- The survey was then distributed virally, Applications, platformsage this, retailers and vendors must ﬁrst through contact lists, Facebook, and • Future plansunderstand how consumers currently other social media. All told, we were ableuse their mobile devices. to use 570 responses. Respondents were When the response timeframe expired, oﬀered the opportunity to win an iPad we set about compiling and analyzing theIn addition to understanding consumer (one entrant drawn at random from pool data. The key summary points from theuse, this study also seeks to quantify of all respondents) and were notiﬁed that data are delivered within this document.what retailers and technology vendors every completed survey would result in a Additional detailed analysis work isare currently doing with mobility, as well monetary donation to a sponsored charity, currently underway, and the results ofas where they see the technology going RetailROI (www.retailroi.org). The time- that eﬀort will be made available by IHLin the future. Retailers can utilize the data frame of the survey allowed for it to be in a more comprehensive report to beto measure their own perceptions against conducted after the release of the iPhone published in November 2010.what their customers are anticipating, as 4, Droid X and during the Droid 2 release,well as what other retailers are considering. allowing for responses from consumers 5
A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGYWho Responded? indicated that texting was part of theirIn order to get an understanding of who current plan. Texting is essentially thewas using mobile phones and how they new, faster email, and from a businesswere using them, we asked some standard perspective it has a several positive at-demographic questions of the survey tributes. Texts can more often be sent orpool. Data were collected from everyone received in areas with minimal signalfrom teenagers to those past retirement strength, and communication can beage. The responses indicated that the quicker than email as fewer steps areaverage respondent was a 46 year-old involved in the transmission and deliverymale who uses a smartphone and who process. Further, a text message alwayspays for his own plan. We didn’t want to makes it to the recipient, whereas emaillimit ourselves to that characterization,however, since we wanted to paint asbroad a picture as possible of the demo- Figure 1 - Age of Respondentsgraphics of the respondents. That said, amajority of the respondents (57%) were Over 65 - 2% 2% - Under 25male, and a heavy majority (66%) werebetween the ages of 36 and 55. The Under 56–65 26–3525 and Over 65 crowds each represented 15% 15%just 2% of total respondents.What Type of Phones Do Consumers Use?Of note here is the fact that men had 35% 31%more smartphones than women (86% to64% respectively), but further analysissuggested that mobile behavior has more 46–55 36–45to do with the device itself and not thegender of the user. That said, other IHLstudies have given a clear indication thatwhen it comes to IT, men tend to be more Figure 2 - Phone Type by Genderrapid adopters in a given situation. Gender Standard Cell Phone SmartphoneWhat Features Do Consumers Seek for Male 15% 85%Their Mobile Phones?We also wanted to ﬁnd out what kinds of Female 36% 64%features consumers chose to be included Overall 23% 77%in their mobile phone plans. For instance,heavy texting is often associated with often gets caught in Spam ﬁlters and isteenagers, with recent surveys suggest- never seen. It seems as though a vasting that one third of teenagers send majority of cell phone users are nowgreater than 100 texts per day (one of utilizing texting as part of their cell phonethe authors is a ﬁrst-hand witness to a plan. In our survey, we were surprised tomiddle-school student who was found to see that texting plans were every bit ashave sent over 900 texts during the ﬁrst common for the 36-55 age demographicmonth his parents had texting added to as they are for the youngest age grouptheir plan). Fully 94% of all respondents in the survey. 7
A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGYAdditional ﬁndings regarding service plan?” Fifty-nine percent (59%) claim thatplans show that 80% of users have email they pay their own cell phone bill, whileincluded in their plans, 78% are able to 50% reported that their employer pays atbrowse the internet, 48% have video least some of the bill (many respondentstexting and 45% can view video. Seeing had two (or more) cell phones; one forthe raw numbers in terms of computing business and one for personal use).ability should both amaze and give pause Whether or not the business pays has noto readers. Think about it…email and the impact on the use of text messaging asinternet truly went mainstream less than 94% of all users have texting in their plan.15 years ago, and today 78% of people Where separation occurs however, is inare surﬁng (or at least have the ability the additional plan features. Fully 95% ofto surf ) the internet on mobile phone respondents whose businesses pay fordevices. For those who might be suspect cell service utilize their mobile device toon the role mobility will play in retail, send and receive email. Video texting andthey discount it at their own peril. To put mobile video are relatively close as planit in proper perspective, who would have features, regardless of who pays the bill.thought ﬁfteen years ago that Amazon,who had just opened their doors forbusiness, would be a willing participant Figure 3 - Features Included in Mobile Phone Planin (indeed, an enabler of ) competitiveprice checking while their customer wasstanding in the brick and mortar store Texting 94%of a competitor? Email 80%By now, we’ve all heard a version of thejoke that says, “The iPhone/Droid/etc. is Mobile Web 78%great, so long as you don’t want to makea call.” In the distant past (say the 1990s, Video Text 48%early 2000s) cell phones were used formaking calls from places where landlinephones were not available or convenient. Mobile Video 45%Today, while such calls are certainly stillmade and many Americans have eventransitioned to landline-free homes, it is However, additional separation is seenclear that much, much more is expected between business and personal plansfrom phones. More detail for this and where Mobile Web is a feature. 92% ofother sections will be available in the business-paid plans include the ability toexpanded version of this report, available surf the internet, compared with just 68%in November 2010. of personal accounts. The bottom line is that email access is the driving feature forWho Pays for All This? business-paid plans, but the users enjoyHaving all those features can cost some the texting, mobile web, and entertain-dough, so we asked the respondents ment beneﬁts of the plan for their own“Who pays for your current cell phone personal use. 8
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A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGYHow Do Consumers Typically Use the activities discussed above. Clearly,Their Phones? business users in that age range are likelyNearly every respondent sent or received to be mid- to senior-level executives whoa text message in the 12 months prior to travel. This age range would also includethe survey. While it is not surprising that many who have lived and workedthe least text friendly group were those through the adoption of various tech-over the age of 65, it is a bit surprising nologies in the workplace. The fact thatthat the Under 25 crowd did not have the these “older folks” might be slightly morehighest rate of response. In fact, 99% of experienced and adept at handling thethose from 36-55 in our study said they technology (compared to those in thehad sent or received a text message youngest age ranges) should not bewithin the last 12 months, making that overlooked by developers and marketers.age range the most text-friendly.As seen before, email is pervasive, as is Figure 4 - Respondent’s Cell Phone Activitythe use of phones for GPS navigation.The numbers are so high in fact, that wewould declare standalone mobile GPS Text 97%units as an endangered species. A clearbeneﬁt of utilizing phones for GPS is the Email 79%ability to receive a location name viaemail or text, search for information GPS 66%regarding it utilizing a mobile browser,and then mapping it on the internal GPS Movies or Dinner 63%application. In fact, 66% of consumerrespondents reported having used theircell phones as GPS devices. TXT Coupon 30%When it comes to going out on the town, Download Ringtone 28%many people utilize their browsers andinstalled applications to check on movie TXT to Charity 14%show times as well as investigate diningoptions. This would highlight the impor-tance of small, independent restaurantshaving a web presence suitable for Figure 5 - Social Media Usagemobile surﬁng. Since 63% of thosesurveyed utilized their phones for this Facebook Twitter MySpace Four Squarepurpose, the impact of not having a webpresence is clear; if a consumer doesn’t 52% 24% 2% 5%know a restaurant is there or can’t ﬁnd it,they certainly won’t dine there. Given that “social media” is one of the hottest topics concerning smartphonePerhaps the most interesting ﬁnding use, we were interested in the social aspectregarding usage by age, is the fact that of mobility, as well as the commerceadults in the 36-65 age range showed aspect of engaging consumers throughsome of the highest overall utilization of those social media formats. The term 10
A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGY“social networking” is freely bandied consumers engaged in commerce with conveniences that consumers areabout in today’s press. One limitation of their mobile devices. The results over- looking for with their mobile devices.the term however, is that it tends to whelmingly indicate that consumers arefocus attention only on certain sites or ready and willing to use their mobile One issue often raised surrounding theservices like Facebook, Twitter, etc. devices for more and more activities, question of paying via cell phone is theHowever, social connectivity has a much but it must be convenient to do so. question of security. However, it wouldbroader meaning and helps diﬀerentiate appear as though security isn’t too bigbehavior. Beside social networking sites, More than four out of ten consumers of a concern for consumers as fullysocial connectivity can include the use of have used their mobile devices to 35% of respondents reported havingFigure 6 – Types of Mobile Phone Financial Transactions Paid with Paid for Movie Accessed Bank Competitive Free App Paid App Checked In for Phone Account Price Checked Travel 6% 9% 35% 41% 66% 40% 44%GPS, user review sites such as Yelp, conduct competitive price checks of a accessed their bank account informa-texting for communication or to donate retailer’s oﬀering. This places intense tion from their mobile device. One ofto a charity, or even looking up movie pressure on retailers to have adequate the authors does all of his bankingtimes or looking to make dinner reserva- inventory at a competitive price, and to online and through his mobile phonetions through a site such as Open Table. have those inventory levels and prices including paying all recurring bills. Not available online for consumers to ﬁnd. only is it now an expectation that banksBefore Foursquare, before Twitter, and Furthermore, bricks-and-mortar retailers will always provide this service, but thebefore Facebook, there was MySpace. have the added burden of having to ease and convenience of banking this In a stark reminder that what once was consider changing the way in which they way far surpasses any question ofbig will not always be big, MySpace goes do business. For instance, they might security.virtually untouched by mobile users in have to allow their sales staﬀ to “deal”the survey. Clearly Facebook’s 500 million with a purchase-ready consumer who Interestingly, after spending severalworldwide users enjoy staying up to has found a better price from the hundred dollars for a smartphone,date while on the go, as 52% of the total competitor down the block. This may consumers are 50% more likely tosurveyed population has utilized the site enable the consumer to complete a download and install a free app forfrom their mobile device. The heaviest transaction in a timelier manner; they their mobile device than pay for an app.users of Facebook were under the age do not have to go home, review prices, While this may be in response to all ofof 55. Only a quarter of those over 55 then make a decision. This can work in the digital noise that consumers arehad accessed Facebook on their a retailers favor by perhaps eliminating continually bombarded with, it couldmobile devices. a portion of the traﬃc that is merely also be in response to some lack of window shopping. fear regarding an infected or unsafeDo We Use Our Phones To application, that maybe somehowMake Purchases? For those that travel, 44% have utilized their phone isn’t like their PC. Of course,Another aspect of consumer behavior their device to check in on a plane or this is a tough way to learn that youthat we wanted to investigate was how subway. This helps to highlight the get what you pay for. 11
A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGYFuture Devices Consumers Want considering Blackberry are consideringFull Disclosure: Sometimes after a study is the iPhone.concluded, questions you wish that youhad asked come to mind. While we did ask What seems even clearer is that HP/Palmfor future cell/smart phones under consid- will have to take drastic steps to makeeration for the next purchase, we failed to themselves a viable option going forward,ask for speciﬁcs regarding brand and as a mere 1% of consumers surveyed aremodel of current phones used. That said, considering them for future purchase.we were still able to quantify the devices While not quite as dismal, Windows mobilethat consumers are considering for futurepurchase. Figure 7 - Next Phone Under ConsiderationThe clear leaders here are iPhone andAndroid, with 49% and 40% (respectively)of survey respondents considering them iPhone 49%for their next device. Certainly there issome overlap here as there are likely con- Android 40%sumers who enjoy a particular cell carrierwhich the iPhone is not currently a part of. Blackberry 22%While rumors abound as to the next net-work that will land the iPhone (Verizon ismost often mentioned), at the time of this Windows 8%writing no deﬁnitive announcement hadbeen made. However, it seems a foregone Standard Cell Phone 8%conclusion that eventually iPhone willmake a debut on another network outside HP/Palm 1%of AT&T. The question will then becomehow many iPhone users will migrate toAndroid devices on Verizon’s advertised phones are not highly desired bysuperior network, or how many Android consumers. In fact, consumers ﬁnd theusers will happily embrace the newly prospect of purchasing a Windows phoneavailable iPhone. Perhaps in part, an on par with purchasing a standard cellanswer to that lies in the fact that of those phone, as only 8% of those surveyed areconsumers that are considering an considering either for their next purchase.Android, 57% are considering an iPhone, Also a challenge is the simple fact thatwhile 48% of those considering an iPhone over 57% of those few consumers that arealso would consider an Android purchase. considering a Windows smartphone are considering either an Android or iPhoneResearch in Motion’s Blackberry devices as well.have long been the dominant player insmart phones due almost exclusively to Whatever the future purchase considera-their best in class email service. However, tion, it seems evident that Apple, throughit would seem as though the power of the its iPhone, is on track to one day becomeiPhone, and increased email eﬃciency and the market leader. Whether or not thefunction, has made huge headway against competitive push that Apple is receivingRIM’s long established dominance. Fully 61% from Android can continue, or if and whenof those considering Blackberry are consid- the iPhone becomes available on Verizonering an Android. Likewise 51% of those (or T-mobile), remains to be seen. 12
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CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?In terms of what retailers are doing, this Clearly, retailers see Apple’s platformstudy sought to determine what current as being around for the long haul, asplatforms were supported, what future increases in support are forecast for allplatforms were under consideration, devices. Additionally, Android makes aand what key functionality retailers were signiﬁcant jump from 50% support to alooking to leverage to engage their cus- planned support of 79%. The 18 pointtomers. Perhaps the greatest opportunity increase in Blackberry support probablyfor retailers in terms of mobility is alsothe greatest challenge; truly engagingcustomers beyond the occasional Figure 8 - Consumer Mobile Platform Supportinformational text or coupon.The original pool of 570 respondents was 85% iPhone or iPod 88%reduced to 66 respondents who identiﬁedthemselves as retailers. These 66 answered 55% iPad 72%not only the initial 10 questions thatconsumers were asked, but an additional 50% Android 79%10 questions which touched on demo- 40%graphics (retail segment, annual revenue), Blackberry 58%mobile applications (types already 10%deployed and how they are deployed), Symbian 14%platforms (current & future), and 23%consumer-oriented mobile. HTML 5 23% 18%Which Platforms Are Currently WAP 23%Supported (and Which Ones 43%Going Forward)? Windows Mobile 53%It seems everyone truly does have “an 23%app for that”, since the vast majority of Windows CE/7 35%retailers already support iPhone/iPod 5% Currentapplications. What’s truly amazing about Other 2% Futurethat level of penetration is the fact thatwhile only 25% of the cell phone marketis comprised of smart phones, only 28% reveals a realization of deﬁcient support,of those smart phones are iPhones. rather than a true belief in the futureThis means that the leading platform success of the product. While it wouldsupported by most retailers is for a device seem obvious that Blackberry hasthat commands only 7% of the market. significant challenges ahead, it stillBlackberry, which still has the largest represents such a significant portionshare of the smartphone market is of the market (particularly in businessonly supported by 40% of the retailers circles) that it is unlikely to disappearsurveyed. Android, while much newer altogether.than either of the previously mentionedplatforms, is already supported by50% of retailers. 14
CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?Prior IHL research indicates that providing employee schedules, see inventory data,associates with better tools is a key priority and track specific sales data from thefor retailers. The retail IT community sales floor can only be viewed as aclearly recognizes that a successful store positive. It would appear as though theexperience goes beyond having great increased investment in supporting thattools. There is a critical relationship activity reveals a realization of somethingbetween the tools themselves and the very simple. In fact, IHL has been pleadingability for them to be both accessed with vendors for years to engage in theand utilized properly. Databases full of practice of walking around and seeinginformation can be great, but they areabsolutely useless without the correctinsight into how to make the information Figure 9 - Store Associate Mobile Platform Supportcontained within them actionable.From the ﬁgures above, it is clear that a 42% iPhone or iPod 67%signiﬁcant portion of retailers see thepotential for Apple mobile products to 11% iPad 44%play a key role in accessing that informationand delivering actionable customer 26% Android 41%service within the store. Recently, therewas a LinkedIn discussion which focused 47% Blackberry 52%on the “cool factor” of sitting down at aﬁve star restaurant and having the full wine 5% Symbian 4%list presented in visual form on an iPad.Additional utilization of this technology 16% HTML 5 11%could include the ability to see additional 16%color/style combinations at a soft goods WAP 15%retailer, or to show a digital photograph 42%of what a room would look like after a Windows Mobile 41%particular paint was selected at a hard 26%goods retailer. All of these examples are Windows CE/7 22%taken from currently available software 11% Currentproducts, the idea of making them Other 11% Futureavailable to store associates on thefloor with a modern, sleek, and userfriendly device simply makes goodbusiness sense. their technology in use. This helps vendors to see what works in real worldManagement platforms and store applications and what doesn’t. Theassociate platforms are of course closely same is clear for retailers; enable yourrelated. That said, a true management managers to be on the front lines whereplatform would also allow managers to they can engage the customer as wellaccess key back oﬃce functions. The ability as work with the store associates onto view, adjust and modify upcoming delivering exceptional service. 15
CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?How and When Will Retailers Engagethe Customer with Mobile? Figure 10 - Management Mobile Platform SupportThere is often talk of utilizing variousmedia to ensure that retailers have apresence in their customers lives. The 19%most successful retailers take it to the iPhone or iPod 60%next level and actually engage their 10%customers. Survey results indicate that iPad 47%there are numerous ways retailers are 14%attempting to make that engagement. Android 33% 52%While the to-be-released extended version Blackberry 50%of this study will examine the above 0% Symbian 0%graphic in greater detail, perhaps thenumber one takeaway here should be 10% HTML 5 3%the mobile screen coupons. Fully 54% ofretailers plan to oﬀer this within the next 5% WAP 3%year, while 70% will have the capabilitywithin 2 years. The importance of this is 19% Windows Mobile 27%the fact that if the coupon contains a barcode, it will need to be read by an optical 14% Windows CE/7 10%scanner, a device that currently only hasachieved a 2% rate of penetration in retail. 10% Current OtherThis foretells a potentially massive increase 7% Futurein the number of scanners that will needto be installed in order to leverage thenew method of coupon delivery.What Future Development Figure 11 - Consumer Engagement Methods and Implementation PlansCan We Expect?While the potential beneﬁts and requisiteplans to use mobile to engage the customer Coupons on Mobile Screen 16% 38% 16%are obvious, and while we have previouslyencouraged the act of enabling retail Text Coupons 25% 47% 9%managers to have more ﬂoor time, oursurvey also revealed the applications Regular Bar Code 22% 22% 22%for which retailers plan to focus futuredevelopment. This goes beyond the 2D Barcode 21% 23% 17% 2%question of device or platform, insteadfocusing on speciﬁc functionality that RFID for Payment 9% 17% 8%retailers hope to achieve. This is important Consumer Self-Checkout 9% 9%9% Already Usebecause while customer engagement is 7% Next 12 Monthskey, these functions go to the heart of Competitive Pricing 18% 7% 8%12-24 Monthsthe retailer’s operations, both at the storelevel and throughout the supply chainand home oﬃce functions as well. 16
CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?For Business Intelligence/Decision Namely, stores would utilize the newfoundSupport, retailers are clearly seeking ways mobility of associates in an eﬀort tofor those vast databases to be leveraged on provide greater, more efficient andthe ﬂoor, in the ﬁeld, and throughout all effective customer service.aspects of the supply chain. That said, BI hasthe highest percentage of retailers who From a consumer’s perspective, there areclaim to have absolutely no plans to its use. few things more frustrating than trying to ﬁnd a sales associate on the ﬂoor.Fully one-quarter of the responding Once one is found, inquiring about theretailers revealed that they already had a availability of a diﬀerent color/size/etc.mobile POS application deployed. With of an item (or even the correct price ofan additional 35% planning to undertake the item) can generally result in a wildlythat capability within the next 2 years ineﬃcient process that involves moving(with 22% planning it within 12 months), from one end of the store to the other,clearly M-POS is an area that is ripe for perhaps interrupting the checkoutexpansion. More than three-quarters procedure at a POS terminal, and the(78%) of the retailers surveyed anticipate associate having to fend oﬀ otherFigure 12 - Consumer Engagement Functionality Plans Future Already Next 12 12-24 24-36 No Plans Functionality in Use Months Months Months to Use BI/Decision 12% 30% 14% 8% 36% Support Mobile POS 25% 22% 13% 20% 22%Inventory Lookup 16% 30% 20% 12% 24% Price Lookup 16% 35% 22% 8% 22%having M-POS within the next 3 years. customer requests or questions during theThere is clearly signiﬁcant advantage to process. How many sales have been losthaving associates who are able to walk or negatively aﬀected by this process?the ﬂoor, assist customers with decisions While we don’t have an answer, we wouldor selections, and then close the sale on ask the reader to consider his/her ownthe spot. Some might argue that this experience with such activity, andwould be an aﬀront to the labor force, as whether or not it aﬀected future trips tostores would look to decrease the number said retailer. By enabling associates orof paid employees by eliminating cashier managers to handle this process on thepositions, but we believe that a more ﬂoor, with the customer engaged, in alikely scenario would be what we see in timely manner, customer satisfactionretail applications of self-checkouts. can only increase, as will sales. 17
WHERE ARE VENDORS IN THEIR RESPONSE?What We Hoped to Learn and Vendors. Interestingly, Blackberry’sAs mentioned in the Methodology sec- strength is matched fairly well betweention, survey respondents who identiﬁed Vendors and Retailers for Store Associates.themselves as a mobile application ven-dor were asked an additional 10 questions While this is truly an area for deeperupon completion of the consumer survey. analysis in the expanded version of thisWe found 55 individuals who identiﬁed report (available November 2010), it isthemselves as vendors, and we wanted to plainly obvious where the heaviest areaglean information on three topics from of Windows Mobile investment is.them. We wanted to gain insight intowhat platforms are and will be supported,the functionality that is currently attained, Figure 13 - Vendor’s Current Phone Platforms - Consumersand what current and future consumerapplications will (or will not) be supported. 66% iPhone or iPod 70%Which Platforms Do They Supportfor Consumers? 34% iPad 53%Each mobile device brings with it adiﬀerent set of challenges for conﬁguring 38% Android 77%applications to run properly on the 45%device. The interesting thing to note here Blackberry 60%is the level of disconnect that appearswhen one compares the Consumer’s Symbian 21% 13%plans for their next phone with the Vendor’s 24%plans for supporting Consumers in the HTML 5 30%future. Simply, Consumer expectations 14%for use of Blackberry and Windows smart- WAP 17%phones are way overmatched by the 62%Vendor’s investment in those platforms. Windows Mobile 60%Windows certainly has an opportunity to 41%gain signiﬁcant market share if Microsoft Windows CE/7 37%can ﬁnd a way to translate the popularity 14% Currentseen here to the consumer facing side of Other 13% Futuremobile business. The fact that 21% morevendors support iPhone than do Blackberryis a further indicator of Blackberry’s Business Intelligence, Mobile POS, andperceived decline. Clienteling applications underscore the fact that Windows Mobile has the potentialWhich Platforms Do They Support for to remain strong in business settings, ifStore Associates? not in the minds of consumers. Clearly,Vendors currently show Windows Mobile as the areas of support reveal the focus onthe preferred platform for Store Associates, the two of the prevalent themes inand there is nowhere near the mismatch today’s retail environment; investment inbetween Retailers and Vendors going BI applications and giving ﬂoor associatesforward as there is between Consumers access to all of a retailer’s technology tools. 19
Research EventRetail ROI Super Saturday - PwC Auditorium, ManhattanSaturday, January 8, 2011 • 9:00am – 3:30pmNew York’s big show starts on Saturday this year! We’ve brought together retail’s most prominent thinkers forrevealing discussions on store technologies, business intelligence, PCI and security issues, IT Forecasts for 2011,Wall Street’s view and engaging the consumer’s mobile device. Deborah Weinswig Steve Bozzo Other speakers currently include: Managing Director, CIO 1-800-Flowers Retailing, Ed Rennemann - CIO, Crate & Barrell Citi Investment Research Virginia Wright - VP Application Development, Kohls John Mitchell - CIO, Pep Boys Timothy Kasbe Jon Kubo Lori Schafer - Co-Author “Branded: How Retailers CIO, Sears Holding CIO Wet Seal Engage Consumers with Social Media and Corporation Mobility” Kevin Sterneckert - Research Director, Consumer Centric Retailing, Gartner Jeff Roster Austin Gutwein Lee Holman - VP Product Development, IHL Group VP Global Industries Hoops of Hope Retail, Gartner Jim Crawford - Executive Director, GREC Cathy Hotka - Retail Diva, Cathy Hotka & Associates Greg Buzek - President, IHL Group Joe Skorupa Evan Schuman Group Editor in Editor, To Register for this event, go to Chief, StoreFront RIS News BackTalk www.retailroi.org/SuperSaturday2011.aspxRegistration is free to retailers. Sponsor money generated at the event benefits the Retail Orphan Initiative, a retailer-ledcharity that funds feet on the street charities helping vulnerable children. To get on the mailing list, drop a note email@example.com. To see more about the Retail Orphan Initiative, visit www.retailroi.org. Retail Orphan Initiative | www.RetailROI.org | info@RetailROI.org | +1.615.591.2955
WHERE ARE VENDORS IN THEIR RESPONSE?Ensuring that associates are able to fullyleverage technology on the ﬂoor also Figure 14 - Vendor’s Current Phone Platforms – Store Associatesencourages store management to movebeyond the back oﬃce and interact withboth the customers and employees. From 50%a basic service and business standpoint, iPhone or iPod 65%it is wise to enable your highest paid, 36%most trusted store personnel to be iPad 47%actively engaged on the front lines. 23% Android 63%What is noteworthy here is the increased 32%attention that store associate mobility Blackberry 47%for the iPad and iPod/iPhone is seeing 9%from vendors. While some analysts have Symbian 14%expressed doubt and confusion with the 11% HTML 5infatuation many have with those devices, 16%it is clear that they really are game changers. 9% WAP 9%Vendors see these devices as having astrong, continued, and real presence in 61% Windows Mobile 65%retail formats. Lest anyone think thatApple is the only player, clearly vendors 43% Windows CE/7 44%are hedging their bets with equalattention being directed towards 9% Current OtherAndroid devices. 9% FutureWeb Functionality – How Much is Lost?Anyone who has used a mobile site or Figure 15 - Web Functionality, Full Site vs. Mobile Siteapplication for which a full site exists knowsthat a there is generally some limitationto the mobile version. IHL sought to Activity Percent Functionalityquantify what percentage functionality of Full PC Versionvendors expected from the solutions thatthey supported. Business Intelligence 61% B2B 64%Not surprisingly, all activities showed adegree of degradation in service, but Knowledge Management 69%activities were able to gain close to 60% Merchandising/Inventory 62%functionality of the full version. It wouldstand to reason that retailers would like Mobile POS 53%to see the most improvement in the Clienteling 61%Mobile POS area, as we see that as anarea with explosive growth potential in Time & Attendance 57%the coming years. Overall 57% 21
WHERE ARE VENDORS IN THEIR RESPONSE?Where Do Vendors Stand on distinct diﬀerentiation where vendorsConsumer Applications? are going to focus on their core oﬀerings,Through this survey we also sought to and perhaps not invest extensive, if any,see which consumer mobile applications capital into entering new areas.vendors already supported, and whichones they planned to in the future. The second noteworthy result is a little more confusing. While it is clear that socialAs we looked at this data, there were two media is a constantly changing landscape,results that caught our attention. First, the fact that almost 20% of surveyedwhen looking at Geolocation, Regular vendors have no plans to engage inBarcodes, RFID and NFC Payments, as well as supporting consumer applications in thatConsumer Self-Checkout, there are virtually area seems quite high. On the ﬂip side,the same number of vendors that have the 46% that already support socialno plans to support those applications media make it the 3rd most supportedas those who expect to support them activity. And to be fair, within the nextin the next 12 months. It would seem 12 months, fully 81% of vendors plan toas though we are entering a period of have social media support.Figure 16 - Mobile Applications for Consumers Activity Already Use Next 12 Months 12-24 Months 24-36 Months No Plans To Use Social Media 46% 35% 0% 0% 19% Geolocation 21% 38% 0% 4% 38% Local Search 44% 30% 4% 4% 19% Read Regular Barcode 50% 23% 7% 0% 20% Read 2D Barcode 48% 24% 7% 0% 21% RFID for Payment 15% 35% 19% 0% 31% Coupons on Mobile Screen 34% 41% 9% 3% 13% Coupons by NFC/RFID 21% 29% 25% 8% 17% NFC Payment 22% 30% 13% 9% 26% Consumer Self-Checkout 21% 28% 21% 7% 24% 22
2011The must-attend premier Summits andretail event lineup for the year! ConferencesFeb 27– March 1 s Fourth Annual Business Executive SummitFairmont RetailConnections’ signature Summit has grown and prospered every year and now standsTurnberry Isle as the premier industry event that draws up to 100 senior retail executives for an extraordinaryResort & Club two days of intense yet casual networking and learning. This congenial congress of Presidents,Miami, Florida CEOs, CFOs, COOs, CMOs, CIOs, SVPs and VPs from across the enterprise serves up a wide range of perspectives. Summit workshops, roundtables, general sessions, receptions, dinners and golf give rise to fresh thinking and new relationships. A peer-to-peer, senior management share group experience.May 16 – 18 s Second Annual Fresh ForumRenaissance Few product categories in all of retailing today offer more profit potential and safety scrutiny thanNew Orleans Fresh Foods. Do it right, and even small improvements have major impact on top line revenuesPere MarquetteHotel and more importantly, bottom-line profits. RetailConnections’ second annual Fresh Forum will bringNew Orleans, together retail leaders in the perishables area, government officials and other thought-provokingLouisiana presenters to explore key strategies for success in Fresh.June 2011 s Second Annual Retail Mobile Executive Summit The mobile revolution is well under way. Consumers leverage wireless devices to shop for lowest prices, instantly access product reviews and order/pay for goods at the touch of a button. These changes are revamping fundamental areas of retail operations, from marketing through the supply chain. This groundbreaking Summit will explore the many sides of the mobile retailing revolution to reveal opportunities to exploit new shopping trends and bolster profits.October 2011 s Second Annual Business Executive Summit West RetailConnections, whose signature Summit is held annually in south Florida, will host the second annual Business Executive Summit West in 2011. This version of the popular winter event was a smashing success in its first year, with considerable growth evident for 2011. Summit West will bring together senior executives from across the retail organization. This mix of Presidents, CEOs, CFOs, COOs, CMOs, CIOs , SVPs and VPs creates an unusually charged two days of learning and networking. Attendees will hear fresh perspectives and come away with new business ideas and industry friends. Summit West features workshops, keynotes, roundtables, elegant receptions, dinners and golf.Throughout s Regional Forums And Executive Dinnersthe year In addition to its four major Summits, RetailConnections hosts regional executive dinners and forums in major cities throughout the year on a wide variety of cutting-edge topics relevant to senior-level retail executives. About RetailConnections: RetailConnections, LLC, focuses on live events that bring top management executives together for learning and sharing. The company also has a communications arm that creates out-of-the-box concepts and collateral for getting your message and deliverables in front of the executives you most want to reach. For information on sponsoring any of these or other senior-level RetailConnections events, contact Tia Potter at firstname.lastname@example.org or LuAnn Hallberg at email@example.com. For information about speaking at or attending any of these or other senior-level events, contact Denise Power at firstname.lastname@example.org. For any questions, contact Marc Millstein at email@example.com or 914-620-5947.
CONCLUSIONSThe data delivered from this survey (and which will be exploredfurther in IHL’s upcoming expanded study), yields several keyresults. Perhaps the most important result is the least quantiﬁable.It is the distinct realization that consumers, vendors, and retailersalike recognize the power that mobility has as a tool. Like alltools, it is truly as effective only as the artisan, craftsman, orworker who wields it.As a new tool, there will be many successes and failures in thecoming years. As any avid iPhone user knows, for every earth-shattering, astounding app, there are three or four forgettableones. But, it seems clear that those who take bold, decisiveaction and embrace the power of mobility will reap greatrewards. Those who choose to ignore it will certainly sufferas smartphones, tablets, and other mobile devices becomemore and more pervasive in our connected culture. 24