Retail is going mobile. So what does that mean for your head of customer loyalty?

26 March 2013

Barry Moles

Barry Moles

Consultant

This blog has been co-authored by Barry Moles, Retail Industry Expert, and Steffen Boelaars, Mobile Architect, Bluefin Solutions.

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With 48,000 empty retail shops across the UK and with 50% of retail leases up for renewal between now and 2015, it is inevitable that number of empty retail units will rise.

Retailers like Carpetright, Mothercare and PC World say they are scaling back their presence on the high street.  All we hear is bad news from retailers - 'store closures', 'redundancies', 'it is cheaper on-line' and 'the death of the high street'. Mary Portas, the Government's High Street "tsar" is trying to play King Canute and turn back the tide of change.  And whilst I applaud her efforts and passion, there is no escaping that retail is going mobile (and online), so we will inevitably need fewer shops. 

Using mobile applications via smartphone's and tablets is the future of retail and savvy retailers are investing in this technology today to gain competitive advantage.  Growing market share in retail is getting easier as the shrinking number of competitors is allowing those retailers that embrace advances in technology to effectively obtain and use business intelligence to gain a decisive competitive advantage.  Apple's new iPad mini is a great example of game changing technology adoption within the retail space. The device can be packaged with a scanner and held comfortably in one hand with merchandise in the other.

Where one sheep leaps the ditch, the others will follow

A major challenge for retailers is how to create differentiation that leads to better profitability.  Retailers are trying to jump an ever-moving hurdle that is continuously charging ahead. If one grocer starts offering delivery of your self-picked basket, others will copy. Result: nobody gains any market share. 

Mobile technology offers a versatility here that, if wielded well, can be exploited as a competitive advantage. This is the year of mobile with those retailers investing in developing a mobile first strategy primed to win as customers increasingly use Smartphone's and tablets to shop online.

The power of customer data

But how to go about it and where to begin? Look at the problems we all have to deal with these days. They mainly revolve around not having enough insight. This comes down to either not having enough data, not having the right data, or not having proper access to data. This is true from both an internal and an external viewpoint.

Data provides information which gives you the insight to make decisions. As a retail manager, before you arrive at work, you already want to know which departments need special attention that day, or whether you need to head to a different store. As a customer, it's hugely frustrating if you reserve something for pick-up later the same day only to be informed it was out of stock to begin with.

These are just a couple of simple examples where it would be so great if you could see the current status instantly in real-time.  If you can just wake up, glance at your phone, and you know: "Ok, I need to head to the Bristol branch today." Or, if you're working on your bathroom and need extra tiles, simply tap in a reserve and pickup order on your phone. Your phone informs you that the local branch is out but that it's ready for you in the town eight miles down the road - and that they'll be holding the tiles for the next couple of hours.

Data is the key. But many retailers are struggling with insight into what's in stock, what's out of stock, how fast current stock sells, where new stock sits in the supply chain and matching this to future rather than historic buying patterns in real time. So they can't use this crucial information for managing their business effectively, nor can they use it to supply great services to their customers. And that's what it's all about: customer service.  The products all remain more or less the same, but the convenience around being able to purchase through any channel is where all customers are demanding improvements.

Can you live without your Smartphone?

We are all busy people now, fully aware of the power the internet and our smart devices hold. We all expect to see this power utilised everywhere to give us efficiency and entertainment. That entertainment level is not to be forgotten here.  Part of the job to get people to actually do the tasks they should be doing or that you want them to be doing, is to make it entertaining for them.  When your floor manager spots that Product X is not on the shelves anymore, the level of entertainment of being able to do some quick Smartphone taps or a scan to make sure this is not going unnoticed are much higher than having to collect a handheld terminal or go to and sit at a terminal. In the first case it's actually enjoyable to do this ad-hoc task, where as the latter is so annoying it's easy to simply 'forget' about it.

Our phones are our modern-day entertainment. Can you live without your mobile? Actually, I cannot. Well… not easily.  I carry it nearly everywhere - and this is the opportunity I'm talking about when it comes to mobile.  Look around you in the streets, in the trains, in the parks.  Mobile phones are now ubiquitous, with 81.6 million mobile subscriptions in the UK. That is 92% of the adult population! Almost half of UK internet users are going online via mobile phone data connections, with some 45% of people surveyed said they made use of the net while out and about, compared with 31% in 2010. It's not just those numbers. It's clear around us.  Everywhere you can see that people entertain themselves with their smartphones more intensely all the time. Usage is growing fast.  Effectively tapping into that, embracing it, makes your brand perceived as a form of entertainment. Get that right, and your customers are hooked, your company an even greater place to work, and you've opened a gold mine of opportunities. 

The future can be seen in South Korea where Tesco Homeplus became the #1 retailer by introducing mobile shopping. Customers can scan products displayed on posters displayed at an underground station while on their way home or to work and then have the order delivered later that same evening.  In short Tesco took their store to where the customers were, engaged them through using their mobile, and generated a considerable sales growth of 131%. Wal-Mart in the US is trialling self scanning with your mobile phone in 200 stores right now, based around 3 simple steps: (1) Download (2) Scan and (3) Pay &Go. Apple has already even gone a further step ahead and have removed all tills form their stores. Just walk in, grab an item, scan & pay on your own phone, walk out without ever seeing an employee!

So where to go from here?

This will be vastly different for each retailer, but let's start by asking yourself some basic questions, depending on your priorities and not forgetting dependencies. For instance:

Retail-is-going-mobile

 
What the right mobile solution is will vary greatly per company and their priorities.  But this will give you a sense of direction about where to start working on optimising your organisation. It all comes down to ensuring

  • You have the data you need
  • Your employees have the right tools to effectively update the data
  • You have easy access to the key parts of the data required by you.

Once this is in place, you can leverage this to bring compelling integrated mobile services to your customers.

The real power of awesome is of course when you can let the customers themselves update the data. This generally works best if they can undertake entertaining playful actions, like mobile shopping or games. They scan a bag of crisps and pay on their mobile? *Poof* stock goes down by 1. That's the easy one of course. But what if you integrate it with location-based technology? Mobile innovation giants like Apple are all investing in indoor mapping technology similar to what GPS does for you on the road.

Customers can use these innovations to find their way through your stores quickly, but also it can enable retailers to do real-time trend analysis where in your store people pick and scan products most effectively and where optimisations can be made. I'm sure plenty of innovative ideas can be thought up around this. This latest example might be still a little far-fetched with the current generation of mobile devices, but watch this space. The first retailers to leverage near-future developments like this will steal the limelight.

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About the author

Barry Moles

Consultant

I am a retail expert, having spent more than 20 years in numerous managerial and operational roles including merchandise, supply chain, finance and marketing.

I bring a unique hands-on perspective to advising clients having worked in every retail category (food, electrical, clothing, telecoms, pharmacy, charity) across all consumer channels (out of town, online, shopping centres, department stores, concessions and outlet villages) for major retailers in the United Kingdom.

My passion, amongst many hot topics facing retailers, is helping senior executives and their teams plan and run omni-channel retail strategies.

When I am not with a client, I can either be found on the high street or travelling the world with my family.

Bluefin and SAP S/4HANA - welcome to the one horse race

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