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February 29, 2012
According to comScore, online retail sales increased by 14 percent in the fourth quarter of 2011, and by 13 percent for the full year. The increased use of mobile devices to access product and price information by shoppers while in-store (known as “showrooming”) is accelerating this shift to online sales, as well as motivating consumers to ultimately buy products at another retailer offering a better price.
For a retailer considering consumers’ growing preference to buy online and the disruption to traditional in-store shopping caused by showrooming, on the one hand, with the low interest in branded retail apps, on the other, is deploying a retail app a good strategy?
The short answer, in our view, is yes, provided that the app is designed with certain features and functionality. (This does not mean that retailers should not also be building viable mobile websites.) This is because consumer use of apps is now outpacing web browsing in general (see Chart 1).
Chart 1.
And consumer use of mobile devices to access retail information grew by 87 percent during 2011 (in this case, the reference is to mobile online, not apps; see Chart 2). Research from the Pew American and Internet Life Project found that 52 percent of adult cellphone owners used their device while in store for purchase assistance (i.e., to call a friend, to look up product reviews, and to check prices elsewhere). Also noteworthy are the findings from a recent survey conducted by Prosper Mobile Insights, which found that 40.6 percent of survey respondents “stated that they have compared prices and then left to purchase an item from another retailer’s physical store,” and that “25.6 percent have compared prices and then purchased from another retailer’s website.”
Chart 2. Top Mobile Categories by Growth in Audience (000)
Source: comScore MobiLens, 3 mon. avg. ending Dec-2011 vs. Dec-2010, U.S.
Perhaps the issue is not whether retailers should create branded apps, but that they need to create apps that customers want to use. This is no small task, considering that IDG has found that “the majority of mobile phone owners use fewer than seven apps on a regular basis,” and that “only 17 percent regularly use more than 10 apps.”
So what functionality is required to get consumers to use retail branded apps? First, the easy suggestions:
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Integrate mobile into the retailer’s customer strategy.
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Incorporate features such as product research, how-to videos, way finding, and store information.
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Solve a problem or provide utility.
Other features and functions that a retailer should consider incorporating into their apps (the harder ones) include:
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Provide unbiased price checking and match pricing for loyal shoppers. While this will not help a retailer’s bottom line per se, it can result in increased customer loyalty and enable the retailer to retain the sale of certain items.
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Make the payment process easy, as well as provide for mobile in-store payment
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Provide immediate access to expert advice – think customer service.
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Provide a recommendation engine and product reviews that incorporate social elements.
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Be sure merchandise is available, and if it is not available in the store, provide other access options (i.e., ship to the customer’s home).
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Coupons, promotions, and pricing need to be available and consistent across all platforms.
In the final analysis, it’s not about mobile shopping. It’s about empowering consumers to shop when, where, and how they want. This requires a multi-platform, integrated solution. So if you are a retailer, you’d better get your app in order.
Author’s note: To read the full article, Are Apps the Answer to Retail’s Future? click here.
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