February 7, 2008
Retail TouchPoints: New Mobile Device Apps Impact Marketing & In-Store Experience
By Amanda Ferrante, Assistant Editor, Retail TouchPoints
Through a special arrangement, what follows is an excerpt of a current article from the Retail TouchPoints website, presented here for discussion.
As penetration of mobile devices tops the 250 million in the U.S. alone, retailers are not only looking at the mobile device as a new marketing vehicle, but also as a new opportunity to improve the in-store shopping experience. With the emergence of the iPhone and other smart phone devices, new applications are emerging that allow the mobile device to merge the rich media experiences of the web with the personalization of brick & mortar shopping.
“With over 250 million Americans owning a mobile phone — more than a computer or TV — mobile marketing is becoming a necessity if retailers are looking to optimize customer interaction,” said Alex Muller, CEO of Slifter, a mobile solution provider that’s worked with stores like Toys “R” Us, Best Buy, Wal-Mart, and Macy’s. This year, Slifter will also be launching web-based tools to manage and share mobile shopping lists.
Slifter enables consumers to enter the name of product they want along with their zip code to attain information directly onto their screen. The phone displays a photo of the item, along with product description, local availability, store location, phone number, and a map to the retailer. “Slifter is about making a consumer’s life a little easier,” said Muller.
A new application from StoreXperience, Shopping, is designed to act as a Personal Shopping Assistant, offering suggestions and recommendations via the mobile device. StoreXperience offers the capability to design, implement, and monitor campaigns in real time, at the local level.
“Mobile devices provide a largely untapped opportunity for retailers to connect with consumers, particularly those in the 18- to 40-year-old demographic, in real-time as they shop,” said Herve Pluche, president of StoreXperience.
Built on the Microsoft software platform, StoreXperience easy Shopping leverages 2D Datamatrix technology – interactive bar code-like symbols that can be placed next to product information cards, on posters, on signage or on websites. By downloading a simple software application via a text message to their mobile phones, consumers can then “scan” 2D Datamatrix tags with their phones’ cameras while they shop, receiving rich, in-depth product information supplied by participating retailers and brands.
“With the introduction of feature-rich mobile phones and data capable telecommunication networks, brands and stores have a unique opportunity to reconcile these two fields, and inform and influence consumer behavior in the field before a purchasing decision is made,” said Mr. Pluche.
Discussion Question: As technology around mobile devices works its way to retail, what do you think of its potential to improve the in-store shopping experience? Do you see mobile devices eventually becoming an integral part of the shopping experience? If so, when?
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Clearly, we’re all trying to get a handle on how to target consumers using as many one-to-one (aka measurable) methods as possible, and now that applies to the in-store experience, as well. Given that, the mobile device presents itself as a form of the Holy Grail–at least on the surface.
As many of us talk about theories of mobile marketing, the one I hear from time to time and tend to embrace myself, both as a strategist and as a consumer, is that the cell phone can–and likely will–become the consumer’s “remote control” outside the home. The real debate is, therefore, about whether this is a push or pull medium.
If we keep the consumer’s interests in mind as we develop mobile marketing solutions, it’s my belief that we’ll see more rapid adoption of this medium–and significant financial returns.
We’ve been told for years that mobile phone technology will revolutionize shopping and the retail experience, but this has yet to happen. Consumers have consistently shown an unwillingness to receive advertising on mobile phones.
Perhaps when advertisers are prepared to offset the cost of mobile phone service or the ads offer uncommon value, this attitude will change. Until then, tech companies will create gimmicks and urge brands to buy into them.
It’s absolutely true that retailers are looking to mobile to create a road, if you will, between online and in-store: something that will deliver the informational depth and inventory variety of online with the immediacy and touch-and-feel aspects of in-store.
But this will also force to the surface some of the emotional and business plan conflicts behind merged channel. Until compensation and other issues get resolved, online managers are not going to be thrilled with having their efforts driving revenues (and bonuses) for their in-store counterparts, at their expense.
That said, once retailers truly embrace a consolidated brand experience and structure their businesses accordingly, mobile will have a prominent role.
The thing about mobile that people tend to overlook is that it’s an extremely flexible device. Retailers can use the “phone” aspects for customer interactions and for playing audio, the screen for displaying images, the texting capabilities for 2-way real time interactions, the digital camera for 2-D barcodes (which themselves open a world of advertising and product demo and instant purchase options) and the ability of this chunk of plastic to hold all kinds of things, including RFID chips.
It can be a payment device several different ways (with a chip, it can act as a contactless payment card; charges can be placed on the carrier’s bill; the phone number and unique phone identifier can be used as authentication, etc.), potentially being a smartcart/self-checkout/queue buster that the customer pays for and brings in with them.
It can act as a restaurant pager and as a direct in-store connection with customer service.
All told, that’s a lot of potential. But there are equally compelling hurdles. To program capabilities for some of the more sophisticated interactions requires cooperation with carriers, phone manufacturers, OS vendors and ISVs. Not an insurmountable hurdle, but coming up with apps that easily work throughout all those players will not be easy.
Lastly, you have the internal phone issue. Some chains have explored purchasing smartphones to give to employees–for use in-store only–so they can be used not just for line-busting, but for price-checking, inventory acceptance and 100 other capabilities.
The temptation, though, is to leverage devices the employees have already paid for and bring into the store every day anyway. As we wrote about a couple of weeks ago, this is a temptation that is best avoided.
Putting all the money into something that takes the customer’s eyes away from my displays and merchandising to their phones seems to be making the shopping experience more mundane, not richer. In theory, this sounds great to be able to know who has what in stock, but we all know when you check your POS and it says you have 4, then can’t find one in the store, that we have a long way to go. And at that point, from a customer’s expectations, is the experience richer in-store than online? I don’t think so.
Part of the fun of shopping is discovering new things, ideas and people. Encouraging hand held devices would also seem to be making the employees in the stores little more than fulfillment vehicles. Is that what we want in a great retailer? Is that how we’re going to build a generation who will look at retailing as a career? I don’t think so.
It’s taken a hundred years of self-service to convert retailers to “passive” retailing, where the shopping responsibility is all on the shoppers’ shoulders. The advent of a variety of technologies will lead to a reversal of this phenomena, so that retailers will actively engage in the shopping process, just like online retailers already do. However, locational awareness is crucial so that any communication from the retailer can be relevant to exactly where the shopper is and what they are doing.
Close to 100% of all cell phones in Japan presently have locational chips which can be read by “the shelf.” Alternatively, deployment of readers in phones, where the “the shelf” is read by the phone is likely in the not distant future. I recommend a tour of l’Echangeur in Paris to see further nifty shopping technology demonstrations. (http://www.echangeur.fr)
All of this of course moves us closer to the “active” retailing that is so common in developing markets AND on the internet – where the retailer is right with the shopper at every step, offering and facilitating the purchase. As people click-click-click their ways through the e-commerce sites, so they will be click-click-clicking their ways through the bricks and mortar stores.
There will no doubt be many atrocious implementations of the technology, with deserved failures. But cutting edge retailers will learn to intelligently communicate with their shoppers in real time. More importantly, right now, pre-technology implementation, cutting edge retailers are learning to think about, and communicate as the new age of “active” retailers. Post-modern retailing is aborning!
I’ll give you two use-cases for mobile interaction in-store that I think are very compelling. First, a restaurant one: I just learned of a service that will deliver nutritional information to your phone. You text 34381, with the name of the restaurant and the item, and it returns the basics: calories, fat, carbs, protein. For an industry that has long grappled with how–or whether–to provide easy nutritional info “at the shelf,” this is a great shortcut for consumers who care about this stuff. And it has other wonderful applications as well. Text to get the top 3 reviews for this item. Photograph the barcode to get coupons or carbon footprint information or product history…simple stuff.
Here’s another use-case, actually very similar to the first. I know an art gallery that is experimenting with this. Every painting has an SMS code next to it. You text “info” to that code and get back the artist’s description of the work–whatever they want to say about it. Then you can reply and leave feedback, and also read the feedback that others have left about the painting (similar to the Yellow Arrow project in New York). This is a great way to encourage people to explore and learn about some very high-end items.
I agree with the comments above that mobile phones probably won’t do a good job with product discovery. But as a way to link the virtual world to the physical world, mobile phones are primed to help provide information that there simply is no room to stuff in employees heads (provided you could find one anyway) or post at the shelf–information, by the way, that consumers expect to have as just “the basics” when they shop online.
Marketers need to be very careful when considering how this is used, and to whom. I, as a Boomer, would never consider looking at my phone to tell me what’s on special at my local store (that’s what the signs and displays are for), how much nutrition there is in food at a restaurant (I can ask the waiter) or information on a painting in an art gallery (they have brochures).
You may think this is a great idea for the new generation of tech-savvy consumer, but think about this: If I’m, like, texting my friends, and we’re, like having a really good “conversation” and suddenly I’m interrupted by a sale ad from a store, like, I’m going to be annoyed.
The younger gens are NOT used to an invasion of this kind of privacy. They have had the years of experience of constant phone solicitations so they aren’t programmed to ignore it. So I say, don’t jump in feet first before you have a better understanding of your audience. Just because consumers are in a technological world, doesn’t mean they don’t have limits.
Mobil technology holds great promise, but there are many minefields. First, consumers do not want advertising on their cell phone. Second, they would like to pay for products with their cell phone as a replacement for credit/debit cards. Third, the cell phone may become a primary form of identification, i.e. the downloading of one’s driver’s license.
Applications that help the consumer will be accepted. Where is the closest gas station, ATM or Wendy’s? Anything like the GPS systems will be used. That all said, just like the internet and shipping charges, consumers will not pay for these features. Adding cost will delay acceptance. Retailers will need to pay for assisting the consumer find their store and shop, only if they want help.
One last bit of comment — sorry, I meant to include in my original post. And Ron Verweij hit on this point, as well. There’s a tendency to gloss over technology solutions and look at them as the next best thing — as standalone solutions. But there’s a danger in deploying such solutions if they aren’t well-integrated into the marketers’ systems, databases and programs. Scanning bar codes from cell phone screens is one terrific example of a cool idea that’s very unrealistic to execute in today’s retail world. Even in a test scenario, some back-end system integration is critical.
And all of this STILL needs to provide consumers what THEY want, not what the marketers want them to have.
I love Technology, but just because you can, doesn’t mean you should. Information and Advertising on cellphones may sound like a great marketing tool, but I just spent the last 20 minutes sorting out and deleting 350+ spams from today’s emails. Now another 20 minutes for my Cellphone? Technical hurdles are details–gaining consumer acceptance is the real challenge, especially for the age groups doing the bulk of today’s shopping. It might work for teenage cell-phone “text-junkies” in 10 years. I don’t want my coffee maker to give me stock reports, I just want coffee–and I’m not alone.
I wish I had a big research budget. I would get out there in the community and in the stores and ask consumers and shoppers. I would let them play with the mobile devices for a while. They would tell us a lot of things–if mobile is relevant, when and how. They would explain how, when or why it is not relevant. I would organize my research and my findings in a category framework, and I would create a relevancy matrix to help marketers decide if and how to participate in this new space. Is anyone doing this?
Any communications medium can be used by retailers to sell something. Not to everyone. Not everything. Some people. Some things. Sky writing, cave paintings, sidewalk chalk drawings, sandwich signs, so why not cell phones?
I am working in the mobile phone scanning business since 1999 and must temper the expectations. I have been involved in 2 pull scanning (scanning with camera phones, Gavtitec and OP3) start ups and now run a push scanning company (scan barcodes on phone LCDs Mbarc).
The vision of scanning barcodes on phones is mind bogging, for sure, and coming one day but….
1) there are no good 1D pull scan applications that work without lenses;
2) there are 60 2D barcode pull scan companies with some pushing their proprietary codes, and others, standard codes;
3) there are 3 mayor Operating systems, thousands of phones and every year hundreds of new models and they are all slightly different, so the scan application needs to be optimized for every phone. Who’s gonna pay?
4) Hardly anybody installs software on phones;
5) hardly anybody can activate its GPRS/WAP/Mobile Internet settings;
6) only when GPRS/WAP/Mobile Internet is being offered for a flat rate fee we will see the masses starting to use it;
7) how do retailers connect to the barcodes in the store?
When the above are solved or retailers roll out closed systems, sort of like Self Scanning 2.0 giving scan phones to loyal customers, count me in to be a true believer of Marketing & In-Store Experiences that will change Retail. In the meantime, I concentrate on Push Barcode solutions like Mobile Coupons and build a solid business in Mobile Ticketing.
What’s amazing about most of this conversation is how little of it involves creating a more compelling guest experience. There will be lots of opportunities to use mobile (and whatever else comes along!) to help “e-tail” the retail experience and give consumers the information they want. Certainly, in most stores, you’re not getting it from the staff.
And, of course the consumer doesn’t want to be interrupted while they do something just to have a Bluetooth ad show up on their phone, but they will want to learn, engage and pay in retail using mobile. Also, mobile devices could help turn the retail space into a “social experience” rather then just be about inventory management. Just look at what stores like Nau are starting to do.
It’s time that we really put the consumer in control and let them tell us how to better use these new tools for their benefit, not ours!
I have a question for the group….would it make sense to strategically create mobile call to action promotions in store where a complementary but not competitive product would be promoted? Coupons for Papa John’s pizza at Blockbuster video racks for instance?
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Clearly, we’re all trying to get a handle on how to target consumers using as many one-to-one (aka measurable) methods as possible, and now that applies to the in-store experience, as well. Given that, the mobile device presents itself as a form of the Holy Grail–at least on the surface.
As many of us talk about theories of mobile marketing, the one I hear from time to time and tend to embrace myself, both as a strategist and as a consumer, is that the cell phone can–and likely will–become the consumer’s “remote control” outside the home. The real debate is, therefore, about whether this is a push or pull medium.
If we keep the consumer’s interests in mind as we develop mobile marketing solutions, it’s my belief that we’ll see more rapid adoption of this medium–and significant financial returns.
We’ve been told for years that mobile phone technology will revolutionize shopping and the retail experience, but this has yet to happen. Consumers have consistently shown an unwillingness to receive advertising on mobile phones.
Perhaps when advertisers are prepared to offset the cost of mobile phone service or the ads offer uncommon value, this attitude will change. Until then, tech companies will create gimmicks and urge brands to buy into them.
It’s absolutely true that retailers are looking to mobile to create a road, if you will, between online and in-store: something that will deliver the informational depth and inventory variety of online with the immediacy and touch-and-feel aspects of in-store.
But this will also force to the surface some of the emotional and business plan conflicts behind merged channel. Until compensation and other issues get resolved, online managers are not going to be thrilled with having their efforts driving revenues (and bonuses) for their in-store counterparts, at their expense.
That said, once retailers truly embrace a consolidated brand experience and structure their businesses accordingly, mobile will have a prominent role.
The thing about mobile that people tend to overlook is that it’s an extremely flexible device. Retailers can use the “phone” aspects for customer interactions and for playing audio, the screen for displaying images, the texting capabilities for 2-way real time interactions, the digital camera for 2-D barcodes (which themselves open a world of advertising and product demo and instant purchase options) and the ability of this chunk of plastic to hold all kinds of things, including RFID chips.
It can be a payment device several different ways (with a chip, it can act as a contactless payment card; charges can be placed on the carrier’s bill; the phone number and unique phone identifier can be used as authentication, etc.), potentially being a smartcart/self-checkout/queue buster that the customer pays for and brings in with them.
It can act as a restaurant pager and as a direct in-store connection with customer service.
All told, that’s a lot of potential. But there are equally compelling hurdles. To program capabilities for some of the more sophisticated interactions requires cooperation with carriers, phone manufacturers, OS vendors and ISVs. Not an insurmountable hurdle, but coming up with apps that easily work throughout all those players will not be easy.
Lastly, you have the internal phone issue. Some chains have explored purchasing smartphones to give to employees–for use in-store only–so they can be used not just for line-busting, but for price-checking, inventory acceptance and 100 other capabilities.
The temptation, though, is to leverage devices the employees have already paid for and bring into the store every day anyway. As we wrote about a couple of weeks ago, this is a temptation that is best avoided.
Putting all the money into something that takes the customer’s eyes away from my displays and merchandising to their phones seems to be making the shopping experience more mundane, not richer. In theory, this sounds great to be able to know who has what in stock, but we all know when you check your POS and it says you have 4, then can’t find one in the store, that we have a long way to go. And at that point, from a customer’s expectations, is the experience richer in-store than online? I don’t think so.
Part of the fun of shopping is discovering new things, ideas and people. Encouraging hand held devices would also seem to be making the employees in the stores little more than fulfillment vehicles. Is that what we want in a great retailer? Is that how we’re going to build a generation who will look at retailing as a career? I don’t think so.
It’s taken a hundred years of self-service to convert retailers to “passive” retailing, where the shopping responsibility is all on the shoppers’ shoulders. The advent of a variety of technologies will lead to a reversal of this phenomena, so that retailers will actively engage in the shopping process, just like online retailers already do. However, locational awareness is crucial so that any communication from the retailer can be relevant to exactly where the shopper is and what they are doing.
Close to 100% of all cell phones in Japan presently have locational chips which can be read by “the shelf.” Alternatively, deployment of readers in phones, where the “the shelf” is read by the phone is likely in the not distant future. I recommend a tour of l’Echangeur in Paris to see further nifty shopping technology demonstrations. (http://www.echangeur.fr)
All of this of course moves us closer to the “active” retailing that is so common in developing markets AND on the internet – where the retailer is right with the shopper at every step, offering and facilitating the purchase. As people click-click-click their ways through the e-commerce sites, so they will be click-click-clicking their ways through the bricks and mortar stores.
There will no doubt be many atrocious implementations of the technology, with deserved failures. But cutting edge retailers will learn to intelligently communicate with their shoppers in real time. More importantly, right now, pre-technology implementation, cutting edge retailers are learning to think about, and communicate as the new age of “active” retailers. Post-modern retailing is aborning!
I’ll give you two use-cases for mobile interaction in-store that I think are very compelling. First, a restaurant one: I just learned of a service that will deliver nutritional information to your phone. You text 34381, with the name of the restaurant and the item, and it returns the basics: calories, fat, carbs, protein. For an industry that has long grappled with how–or whether–to provide easy nutritional info “at the shelf,” this is a great shortcut for consumers who care about this stuff. And it has other wonderful applications as well. Text to get the top 3 reviews for this item. Photograph the barcode to get coupons or carbon footprint information or product history…simple stuff.
Here’s another use-case, actually very similar to the first. I know an art gallery that is experimenting with this. Every painting has an SMS code next to it. You text “info” to that code and get back the artist’s description of the work–whatever they want to say about it. Then you can reply and leave feedback, and also read the feedback that others have left about the painting (similar to the Yellow Arrow project in New York). This is a great way to encourage people to explore and learn about some very high-end items.
I agree with the comments above that mobile phones probably won’t do a good job with product discovery. But as a way to link the virtual world to the physical world, mobile phones are primed to help provide information that there simply is no room to stuff in employees heads (provided you could find one anyway) or post at the shelf–information, by the way, that consumers expect to have as just “the basics” when they shop online.
Marketers need to be very careful when considering how this is used, and to whom. I, as a Boomer, would never consider looking at my phone to tell me what’s on special at my local store (that’s what the signs and displays are for), how much nutrition there is in food at a restaurant (I can ask the waiter) or information on a painting in an art gallery (they have brochures).
You may think this is a great idea for the new generation of tech-savvy consumer, but think about this: If I’m, like, texting my friends, and we’re, like having a really good “conversation” and suddenly I’m interrupted by a sale ad from a store, like, I’m going to be annoyed.
The younger gens are NOT used to an invasion of this kind of privacy. They have had the years of experience of constant phone solicitations so they aren’t programmed to ignore it. So I say, don’t jump in feet first before you have a better understanding of your audience. Just because consumers are in a technological world, doesn’t mean they don’t have limits.
Mobil technology holds great promise, but there are many minefields. First, consumers do not want advertising on their cell phone. Second, they would like to pay for products with their cell phone as a replacement for credit/debit cards. Third, the cell phone may become a primary form of identification, i.e. the downloading of one’s driver’s license.
Applications that help the consumer will be accepted. Where is the closest gas station, ATM or Wendy’s? Anything like the GPS systems will be used. That all said, just like the internet and shipping charges, consumers will not pay for these features. Adding cost will delay acceptance. Retailers will need to pay for assisting the consumer find their store and shop, only if they want help.
One last bit of comment — sorry, I meant to include in my original post. And Ron Verweij hit on this point, as well. There’s a tendency to gloss over technology solutions and look at them as the next best thing — as standalone solutions. But there’s a danger in deploying such solutions if they aren’t well-integrated into the marketers’ systems, databases and programs. Scanning bar codes from cell phone screens is one terrific example of a cool idea that’s very unrealistic to execute in today’s retail world. Even in a test scenario, some back-end system integration is critical.
And all of this STILL needs to provide consumers what THEY want, not what the marketers want them to have.
I love Technology, but just because you can, doesn’t mean you should. Information and Advertising on cellphones may sound like a great marketing tool, but I just spent the last 20 minutes sorting out and deleting 350+ spams from today’s emails. Now another 20 minutes for my Cellphone? Technical hurdles are details–gaining consumer acceptance is the real challenge, especially for the age groups doing the bulk of today’s shopping. It might work for teenage cell-phone “text-junkies” in 10 years. I don’t want my coffee maker to give me stock reports, I just want coffee–and I’m not alone.
I wish I had a big research budget. I would get out there in the community and in the stores and ask consumers and shoppers. I would let them play with the mobile devices for a while. They would tell us a lot of things–if mobile is relevant, when and how. They would explain how, when or why it is not relevant. I would organize my research and my findings in a category framework, and I would create a relevancy matrix to help marketers decide if and how to participate in this new space. Is anyone doing this?
Any communications medium can be used by retailers to sell something. Not to everyone. Not everything. Some people. Some things. Sky writing, cave paintings, sidewalk chalk drawings, sandwich signs, so why not cell phones?
I am working in the mobile phone scanning business since 1999 and must temper the expectations. I have been involved in 2 pull scanning (scanning with camera phones, Gavtitec and OP3) start ups and now run a push scanning company (scan barcodes on phone LCDs Mbarc).
The vision of scanning barcodes on phones is mind bogging, for sure, and coming one day but….
1) there are no good 1D pull scan applications that work without lenses;
2) there are 60 2D barcode pull scan companies with some pushing their proprietary codes, and others, standard codes;
3) there are 3 mayor Operating systems, thousands of phones and every year hundreds of new models and they are all slightly different, so the scan application needs to be optimized for every phone. Who’s gonna pay?
4) Hardly anybody installs software on phones;
5) hardly anybody can activate its GPRS/WAP/Mobile Internet settings;
6) only when GPRS/WAP/Mobile Internet is being offered for a flat rate fee we will see the masses starting to use it;
7) how do retailers connect to the barcodes in the store?
When the above are solved or retailers roll out closed systems, sort of like Self Scanning 2.0 giving scan phones to loyal customers, count me in to be a true believer of Marketing & In-Store Experiences that will change Retail. In the meantime, I concentrate on Push Barcode solutions like Mobile Coupons and build a solid business in Mobile Ticketing.
What’s amazing about most of this conversation is how little of it involves creating a more compelling guest experience. There will be lots of opportunities to use mobile (and whatever else comes along!) to help “e-tail” the retail experience and give consumers the information they want. Certainly, in most stores, you’re not getting it from the staff.
And, of course the consumer doesn’t want to be interrupted while they do something just to have a Bluetooth ad show up on their phone, but they will want to learn, engage and pay in retail using mobile. Also, mobile devices could help turn the retail space into a “social experience” rather then just be about inventory management. Just look at what stores like Nau are starting to do.
It’s time that we really put the consumer in control and let them tell us how to better use these new tools for their benefit, not ours!
I have a question for the group….would it make sense to strategically create mobile call to action promotions in store where a complementary but not competitive product would be promoted? Coupons for Papa John’s pizza at Blockbuster video racks for instance?