In this new era of convenience, where digital channels are ubiquitous, consumers now expect the ability to make purchases wherever and whenever they choose. However, this does not mean that businesses should reject other channels. Despite the growth in online, physical stores play a vital role, and often generate the majority of revenue. As a result, retailers that can provide a great service through all available touch points are at a distinct advantage over the competition.
The influence that online and mobile channels have had on consumer behaviour cannot be disputed. In our recent study An App is Not Enough – which surveyed 1,000 UK consumers on their retail behaviours – 70 per cent said they made more than a quarter of their purchases online, and more than a fifth have even admitted to using their phones to make purchases while at work.
Encouragingly, almost all of the large retailers have realised the importance of providing a mix of online and offline services, opening their doors to consumers 24/7. However, as consumer expectations evolve, the most successful retailers will be the ones that can merge these two worlds together in a way that appears seamless.
As it stands, despite the word ‘omnichannel’ being used to describe this idea frequently, examples of this being implemented successfully on a large scale are few and far between. Although there has been some crossover in the form of click and collect services, which allow customers to pick up their online orders from physical stores, or efforts from companies such as online retailer Amazon, which opened its first physical store earlier this year, there is still a huge opportunity for innovation within this space. However, with the growth in the use of mobile applications and the added functionality that this provides, retailers will be able to mould these worlds together in ways never seen before.
For companies looking to do this, our research shed some light on where consumer expectations lie. 64 per cent of respondents stated they would rather use mobile apps to make a payment rather than queuing up at a check out, and over half agreed that they would be encouraged to visit physical stores if they were provided with personalised offers when nearby. As a result, it is clear that consumers increasingly expect the excellent levels of convenience provided by mobile devices to be available in bricks and mortar stores. With the recent high profile announcement such as Apple Pay, which now means consumers can easily pay for goods on the their phone, and the introduction of iBeacons from Facebook which can work with mobile apps to provide location based updates, retailers will increasingly be in a position to fulfil these demands.
Having said that, although it’s within the interest of both consumers and businesses to implement this technology as quickly as possible, they must also bear in mind the potential risks that come with it. Although apps have the potential to provide added convenience, any glitches or delays within these applications are guaranteed to be a source of frustration. In the same way that long queues or unhelpful staff leave customers feeling disillusioned, anything that prolongs the process of purchasing goods will shatter the impressions of convenience in an instant. Almost 70 per cent of the consumers we studied stated that the performance of a mobile apps affects their perception of a retailer on the whole, indicating a clear correlation between tech performance and brand loyalty.
In light of this, retailers and their CIOs must ensure their apps function across multiple platforms in order to retain and nurture always-on consumers. By ensuring they have capacity to deal with peaks and troughs in purchasing and behaviour, and implement intelligent platforms that can monitor the health of applications at all times, retailers can ensure that any problems within this technology are kept to a minimum.
However, this does not mean retailers should wait for new innovations before focusing on performance. Our study also found that users are already using retail applications widely enough for glitches to have a notable impact on their revenue. For example, a third of consumers are now using mobile apps to get the best shopping deals, and over a quarter use shopping apps when they cannot find what they are looking for in store. As much of the use of retail apps occurs in the research stage of the purchasing journey, applications can mean that potential customers will already have an opinion on the brand before they have been anywhere near the checkout. For pure play retailers, where digital channels are the only point of contact with the customers, the entire business model relies on providing a great performance.
With the ease and convenience of online retail becoming the norm for today’s time poor customers, they are already on the lookout for new ways that their shopping experience can be sped up and streamlined by using mobile technology. In the same way that the first supermarkets and online shopping sites revolutionised the concept of convenience when they were born, the next success stories of the retail world will be the ones that can utilise mobile technology to define new levels of expectation. The businesses that can cater to this expectation economy will be sure to dominate in the near future.
By John Rakowski, Director of Technology Strategy, at AppDynamics