Savvy customers are turning to their mobiles to check prices in store for buying elsewhere, so retailers are learning to embrace ‘showrooming’.
Mobile has become an integral part of retailers’ multichannel strategies, with many businesses recently launching mobile-optimised sites and apps. The greatest advantage is that customers have their devices on them at all times.
But is this mobile dependency - and retailers’ eagerness to tap into it - fostering promiscuity among shoppers? Even worse, is it actually leading them away from stores?
One concern in retail is that the rise of mobile has helped create ‘showrooming’ consumer behaviour. Showrooming is the process of customers entering a store, finding a product they are interested in and then checking their mobile to find the same product at a cheaper price elsewhere.
The initial reaction from many retailers was to try and curb this behaviour, but they risk damaging the relationship between the customer and the brand. People want to shop in whichever way they choose, using whichever channel they choose and for the cheapest price; they will undoubtedly be left disgruntled if they are hindered.
Many retailers have concluded that they need to embrace the trend towards showrooming by looking at ways of improving interaction with shoppers in store. “The short answer is we have had limited visibility of what our customers are doing on mobile in store,” Sean McKee, head of ecommerce at footwear retailer Schuh. “However, this is something we want to change and are currently rolling out free wi-fi across all of our UK stores.”
This is far from being the norm. A recent survey by mobile marketing agency Sponge showed 80% of major fashion retailers do not offer free wi-fi in store - of those that do, only half are actually collecting customer data.
“Wi-fi in store creates rich marketing opportunities but hardly any retailers are offering wi-fi and even fewer are telling customers and benefiting from its full potential,” says Dan Parker, chief executive of Sponge.
“Encouraging people to register when they’re in store opens up a huge opportunity to offer something of value, increase shopper loyalty and encourage repeat custom.”
In Sponge’s survey, John Lewis was cited as the retailer offering the best experience. Talking about its mobile proposition, Sean O’Connor, head of online delivery and customer experience at John Lewis, says: “Mobile has grown massively for us over the past few years. It’s a part of our customers’ everyday lives and it has to be part of our response to the changing retail landscape.
The main driver has been through the increase in tablets and mobiles, which contributed to 28% of traffic to our website last year, up from 10% in 2011.”
John Lewis has also introduced wi-fi into stores as part of its multichannel strategy.
“Mobile has been an important part of our strategy for physical shops,” he says. “Our app was specifically designed to give access to ratings and reviews from customers and staff. We introduced wi-fi in all our stores to make it easier for customers to browse the web when physically in our shops, and we are trialling in-store navigational maps in some shops too. We have also used QR codes and near field communication (NFC), mainly as a marketing tool in advertising, although QR codes in window displays were also a sales driver.”
McKee agrees that QR codes - previously dismissed as a passing fad - could become an important part of providing the customer with additional information in store. “It is certainly something we have been looking at adding to products to give customers the chance to scan products and find out more information,” he says. “Currently the level of interaction is low but the act of scanning for information and getting enhanced content is definitely a goer.”
Other technologies that retailers have trialled to drive traffic from mobile into stores are NFC and augmented reality. While NFC is on the radar of most retailers it is yet to become mainstream, with many citing cost as a factor. “NFC has yet to reach critical mass due to handset and card limitations,” says Kevin Edwards, strategy director at consultancy Affiliate Window. “I think it will come and incentivisation will help drive consumers to engage with it. At present we’ve yet to see any innovative publisher models emerge to take advantage of NFC, but it will come when the opportunity is better understood.”
McKee says customer research at Schuh revealed the ability to check stock levels in real time was cited as shoppers’ most useful tool. This is something the company is planning to launch in spec stage in the first half of 2014, with a focus on providing customers with enhanced access to stock information.
“87% of the customers surveyed said they shop in store,” says McKee. “They like the theatre of stores but we need to overlay that with convenience and certainty. There has been a big surge in mobile search and people looking for information while on the move.
If we can develop a technology that allows customers to key a product code onto a mobile site, and we can then tell them if a product is in stock in that store today, it will make the customer more comfortable to come into store and make the trip a happy one. Our customers are telling us they want it, so we have to do it.”
Geo-fencing, the process of sending texts to potential customers as they go past the store, is another method of driving footfall that has been trialled by retailers. Dan Hartveld, technical director at digital strategy agency Red Ant, thinks that while this method can work, retailers need to think carefully about the message they are sending.
“Geo-fencing always needs to be thought about in the wider context,” he says. “Retailers have the data so they need to decide what the message is going to be and use purchase history to drive a personalised offer and incentive, connecting the journey from mobile to in store.”
Hartveld points to Amazon and Sainsbury’s as two retailers with mobile initiatives that other retailers should take note of. He says Amazon’s scanning technology for customers to scan a product when out and purchase it
on Amazon’s site, and Sainsbury’s technology allowing consumers to buy as they shop rather than having to go to a till, both show how shopping behaviour is changing and retailers are adapting.
The most popular mobile-to-in-store campaign, often mentioned by retailers looking at how to incorporate mobile into
a marketing strategy, hails from Meat Pack, a footwear store located in Guatemala. Edwards explains how the campaign worked: “A discount was pushed to consumers [via their mobiles] who were within a short distance of the Meat Pack store and counted down from 100% to 0% [discount] based on how quickly the customer could get to the shop. Clearly designed to achieve wider media coverage, it succeeded, but it serves to show how interruptive and powerful this small device all of us now carry around can be. Simplicity can be appealing.”
Mobile brings a wealth of new opportunities, using a range of tools that can reach customers on a personal level, as well as improving their overall shopping experience. It can also be used by in-store staff to increase the level of customer service. Even so, while retailers know mobile has to be part of every strategy across the business, whether that is technology integration, in-store footfall drivers or overall customer service, many are still holding back from implementing these plans.
With so many opportunities available, retailers need to focus on which ones will work for them. “A 2012 study by Google/Ipsos found that 85% of consumers will start shopping on one device and finish on another,” says Jim Davidson, manager of marketing research company Bronto Software. “You can’t ignore that. You must make the shopping experience seamless and convenient, while keeping their interest and attention.”