MOBILE RETAIL: Using mobile to influence in-store sales

CUSTOMERS FIRST

of phones sold today are smartphones

Reaching out

Getting customers in the store

Most consumers take their phones with them everywhere they go...

...allowing retailers to contact them anywhere, anytime

How can you target this growing group of potential customers and draw them in-store?

By creating a mobile experience that complements customer behavior...

...instead of trying to change it

Sources: Cognizant, 2012; Marketing Charts, 2012

RETAIL LANDSCAPE Retailers have only begun to address the mobile channel

of surveyed retailers have at least one mobile offering

83% YOY mCommerce sales almost doubled in 2012

mCommerce: percentage of total eCommerce sales

2011

5.2% 2012

9.2% mCommerce: total sales

2011

$10.5B 2012

$20.85B 67% 49% 66%

Mobile Web Android iPhone

Sources: Forrester, 2011; Deloitte, 2012

OPPORTUNITY of retailers surveyed state that the objective of mobile is to increase revenue in the digital channel

$158B

$12B

$226B

MOBILE-INFLUENCED STORE SALES VS. MCOMMERCE AND ECOMMERCE SALES

mCommerce (remains at 3%)

But…92% of retail volume occurs in physical locations

Mobile influence on store sales (increases by 26%)

eCommerce sales (decreases by 26%)

2012 2016

$327B

$31B

$689B

This year, retailers will start capitalizing on mobile’s greatest opportunity: influencing in-store sales. It will supplement the investments and efforts that retailers have undertaken to improve sales and profitability.

5 FEATURES will be top of mind for retailers this year:

1. Behavioral Messaging 2. Location-Based Messaging 3. Analytics 4. In-Store Navigation 5. Inventory Integration

BEHAVIORAL MESSAGING

•  Promote products/offers related to app touchpoints used by customer

•  Deliver timely, relevant information (sales, promotions)

•  Pre-purchase, during, and post- purchase interaction

Send messages directly to customers based on how they use your app

•  US consumers spend an average of two hours per day on their mobile phones

•  Canadians spend 2.8 hours per day and 222 times per month on their smartphone

1-800-Flowers Victorias’s Secret HauteLook Michaels Walgreens Groupon

Sources: McKinsey & Company, 2011; Ipsos, 2012

BEST USE CASES BEHAVIOR ADDRESSED WHO USES IT?

LOCATION-BASED MESSAGING

•  Establish geo-fences to push offers, deals, and coupons based on proximity to store (e.g., $1 coffee at Starbucks, flash sales at Aritzia)

•  Can trigger unique interactive experiences (e.g., in-app betting at a sports game)

•  Build customer loyalty - offer exclusive offers to targeted customer segment

Target customers with location-relevant messaging

•  Mobile coupons are redeemed 10 times as often as traditional coupons

•  4% of consumers receive mobile coupons from stores close to them, but 40% are interested in receiving them

McDonald’s Heineken Marks & Spencer Tesco Sainsbury’s

Sources: Graphic Mail, 2012; Mercator Advisory Group, 2011; Location Based Marketing Association, 2011

BEST USE CASES BEHAVIOR ADDRESSED WHO USES IT?

ANALYTICS

•  Interact with customers while they shop •  Offer personalized promotions

and deals based on what they have in their shopping cart

•  Analyze items in cart to push them to relevant products around the store

•  Augment customer behavior - offer alternative ways for consumers to explore and shop

•  Increase browsing time by notifying customers on the best time to line up for checkout (based on cart size)

Interact with customers based on cart analytics

•  54% of people who use their smartphones in the store are looking up other local stores’ pricing, while 53% are looking for online pricing

•  46% of consumers have used their phone to get product information while in a store

Walmart Target Kohl’s Gilt

Sources: Mobile Marketing Daily, 2012; Mobile Commerce Daily, 2011

BEST USE CASES BEHAVIOR ADDRESSED WHO USES IT?

IN-STORE NAVIGATION

•  Customers create in-app shopping lists and app recommends optimal shopping path

•  Location triangulation can be used to offer coupons on additional products: •  Complementary (PB and J),

proximity (same aisle), new and never tried

•  Massive data channel for retailers to analyze buying patterns and time spent in location •  Used to optimized aisles and

product placement (IKEA trip mapping)

Provide item locations and an optimal shopping path

•  A survey commissioned by aisle411 discovered that nearly 84% of US shoppers have difficulty finding products on store shelves

•  More than 20% of shoppers leave the store without their full purchase intent

•  85% of consumers surveyed who used a retailer’s native app or site actually made a purchase that day, compared to only 64% who didn’t use the retailer’s app or site

aisle411 Walgreens Price Chopper

Sources: Deloitte, 2012; Mobile Commerce Daily, 2012

BEST USE CASES BEHAVIOR ADDRESSED WHO USES IT?

INVENTORY INTEGRATION

•  Customer sees a product they like in-store and wants to see alternative sizes

•  Recommendation engine for employees to offer products if initial choice is out of stock

•  If product is out-of-stock, can close the sale in-person and ship it to the customer’s home

•  Improved analytics for retailers - track in-store product requests that are hard to monitor

Enable salespeople to close deals by having immediate access to alternative suggestions

•  73% of shoppers with smartphones prefer to reference their mobile device while in- store rather than ask a sales associate for help

Aldo Apple

Source: internet Retailer, 2010

BEST USE CASES BEHAVIOR ADDRESSED WHO USES IT?

CONCLUSION

This year, mobile’s greatest opportunity will be influencing in-store sales. By implementing a mobile strategy that embraces customer’s current behavior, retailers can engage their customers anywhere at any time and draw them in-store. Retailers who wish to capitalize on the investments they’ve already made to improve sales and profitability should follow these five trends: 1.  Behavioral Messaging 2.  Location-Based Messaging 3.  Analytics 4.  In-Store Navigation 5.  Inventory Integration

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SOURCES Cognizant. (2012). Retail Mobility: Navigating the 21st century Gold rush. Retrieved from http://www.cognizant.com/insights/perspectives/retail-mobility-navi- gating-the-21st-century-gold-rush Deloitte. (2012). The dawn of mobile influence: Discovering the value of mobile in retail. Retrieved from http://www.deloitte.com/assets/Dcom-UnitedStates/ Local%20Assets/Documents/RetailDistribution/us_retail_Mobile-Influence-Factor_062712.pdf Forrester. (2011, June 17). Mobile Commerce Forecast: 2011 to 2016. Retrieved from http://www.forrester.com/Mobile+Commerce+Forecast+2011+To+2016/full- text/-/E-RES58616 Graphic Mail. (2012, April 13). 10 Mobile Marketing Stats. Retrieved from http://graphicmailza.blogspot.ca/2012/04/friday-corner-10-mobile-marketing-stats.html Internet Retailer. (2010, December 6). Shopper would rather use smartphones than consult store associates, survey finds. Retrieved from http://www.interne- tretailer.com/2010/12/06/shoppers-would-rather-use-smartphones-store-associates Ipsos. (2012, August 20). Canadians Maturing as Mobile Users. Retrieved from http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=5724 Location Based Marketing Association. (2011, October 7). O2 Media Case Studies. Retrieved from http://www.thelbma.com/case-studies/10/o2media-case- study/ Marketing Charts. (2012, September 28). US Mobile Commerce Sales to Double This Year. Retrieved from http://www.marketingcharts.com/wp/topics/e-com- merce/us-mobile-commerce-sales-to-double-this-year-23666/ Mercator Advisory Group. (2011). Mobile Incentives: The Next Step in Device Based Transactions. Retrieved from http://www.mercatoradvisorygroup.com/in- dex.php?doc=news&action=view_item&type=2&id=1023 Mobile Commerce Daily. (2011, June 14). Personalizing the retail experience via mobile. Retrieved from http://www.mobilecommercedaily.com/personaliz- ing-the-retail-experience-via-mobile-2 Mobile Commerce Daily. (2012, July 18). Walgreens maps out mobile strategy with in-store navigation app. Retrieved from http://www.mobilecommercedaily. com/walgreens-maps-out-mobile-strategy-with-in-store-navigation-app Mobile Marketing Daily. (2012, May 8). Is ‘Showrooming’ Overblown?: Most In-Store App Users Are Just Big Shoppers. Retrieved from http://www.mediapost. com/publications/article/174122/is-showrooming-overblown-most-in-store-app-use.html McKinsey & Company. (2011, October). Minute by minute: How do global digital consumers spend their tech time? Retrieved from http://csi.mckinsey.com/ Knowledge_by_region/Global/How_digital_consumers_spend_their_tech_time.aspx