By George Ioannou, Head of Creative & Strategy at Maginus

Retailers are investigating the potential of the smartphone to interact with their customers in new ways, but success requires a deep understanding of customers and how they operate on line.

A variety of technological developments in the mobile phone industry means that mobile marketing is likely to cross over to the mainstream within the next year or so. The technology has shown phenomenal growth in the last ten years, but only now is this beginning to provide new and lucrative opportunities for retail marketers to use mobile as an additional channel for their sales and marketing, and to integrate with existing channels. Most people now own a mobile phone and this year there will be another leap forward in take up.

Worldwide smartphone sales are expected to reach 468 million units in 2011 — a 57.7% increase on 2010. The explosive growth in affordable smartphones will see annual sales top 1.1bn by 2015, according to the research firm Gartner. Consumers now expect a lot more from their devices and retailers must consider providing them with products and services that help them improve the customer experience.

Consider your customers

The entry of major brands into the mobile marketing sector through the iPhone and App store in particular, has made it easier for big brands to do mobile marketing.

There is much less risk involved for brands who want to launch an application, as there is clear and demonstrable evidence that consumers like and regularly use mobile applications. In contrast, fewer brands have launched m-commerce sites; however, many are using mcommerce to allow consumers to browse, select items and pay via the mobile version of the online store, thus acting as another funnel to conversion.

Mobile also allows consumers to be flexible in their buying patterns. Customers want to be able to shop in a way that is convenient to them and click-and-collect is an ideal way to reach and influence them — not only does it improve customer service but it ensures you get the sale. Argos has revealed almost a quarter of its total sales are made through its click and collect service, compared with 10 per cent ordered online and delivered to customers’ homes.

However, businesses must be sure they are using technology that matches the needs of their customers. For example, retailers may want to consider a price comparison scanner app, a store finder solution or even technology that provides ethical backgrounds to products such as fairtrade.

Companies shouldn’t just jump down the app or mcommerce route. It’s important that a retailer’s mobile strategy fits in with their overall e-commerce strategy. Businesses may want to analyse their data before deciding to take the plunge and investing heavily. Retailers will want to consider their current analytics and see where the demand lies. It’s also important to consider certain issues. For example, many big fashion brands may have ‘flash’ websites and these won’t work on iPhones so they need to consider alternatives to make the technology work.

The fashion retailer, Oasis, launched an iPhone app (one of the first to be launched by a
retailer in the UK). This is a useful supplement to the main site, allowing users to browse through the latest collections, read the newsletter and find the nearest Oasis outlet. This provides a useful tool for its customers and points to the future where there will be digital interactivity with customers across multiple media — smart phone apps, web sites, social media, driving consumers not just to stores and ecommerce web sites, but to events such as music festivals. Once retailers join the conversation, provided they add value and do not try to take over, they will start to get the kind of feedback that today they have to pay for.

The future of mobile shopping

According to Nielsen, at least 9 million mobile subscribers have already used the mobile web to pay for goods and services. However, this represents only 3.6% of US mobile subscribers. Mobile commerce is still very much in the early stages of its evolution, with early adopters making up the majority of the market.

Over the next two years mobile payments will become more commonplace and it’s crucial for retailers to embrace this technology now and look at the opportunities it presents. Choosing to ignore the role mobile is likely to play in the retail industry will see businesses being left behind by their competitors.

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