Telesales redefined

Mobile commerce has been seen by many as the next logical step in retail, but it is still in its infancy. Ronan Shields examines the options available to retail brands and the strategies being adopted by the sector’s forerunners

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John Lewis: 40% of its customers use smartphones, with many researching products on them

Mobile has often been fêted as the next big thing for retailing. Yet other than brands with a hardcore mobile audience, few have had the time or budget to fully integrate it into their commerce strategies.

This is set to change. According to an Ofcom report from December 2011, 46% of UK consumers use smartphones. This means there is a ready-made audience for m-commerce to become mainstream.

Retailer John Lewis launched its first m-commerce app last month, after monitoring consumer usage of a mobile website, which went live in October 2010.

The retailer claims the transactional app will help it complete its multichannel strategy. It offers access to products online and contains GPS and barcode scanner functions to let customers access product information when in-store.

John Lewis head of multi-channel Simon Russell explains: “The customer’s shopping journey is no longer straight forward. People are using their phones as part of the purchase path.”

Internal customer research has shown that more than 40% of John Lewis customers have smartphones and are actively using them to research purchases. “Even before the launch of the iPhone app, we could see people searching for product reviews and such while they were in-store,” says Russell.

He describes how shoppers could also build a ‘wish list’ of products on the app while in store and then purchase them via their mobile device when at home.

The retailer is hoping that the app will prove to be a useful business research tool too, as well as boost the bottom line. “The key driver for launching the iPhone app was the convenience it offers users, but we can also use it to gain insight into how people are shopping,” says Russell.

Consumer electronics retailer Comet also launched its first transactional app in November 2011, with mobile development agency Grapple Mobile, following its sale to Hailey Holdings.

Comet head of direct channels Ryan Thomas explains how apps will play a large role in its bid to turn around its fortunes over the next 12 to 18 months. “Growth [from its mobile audience] is outstripping desktop,” he says. “It’s a significant part of our business and growing rapidly.”

In the run-up to last year’s Christmas shopping season, Comet began equipping its in-store retail staff with tablet devices to help customers efficiently with their product enquiries.

The retailer will be taking feedback from this experiment to develop a future app strategy for both in-store and mobile apps. “We’ll be doing a lot of app development over the next 12 to 18 months,” claims Thomas.

Meanwhile, as one of the first UK high street brands to launch a fully transactional mobile property, Marks & Spencer has been running an m-commerce website since May 2010. Although the retailer won’t share exact user numbers, the site has “grown phenomenally in terms of both revenue and unique users”, according to M&S head of new technology business development, Sienne Veit.

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Marks&Spencer: Typical mobile customers are time-poor women

Veit says some of the most popular products being sold through M&S’ mobile site are school clothing, TV sets and bouquets of flowers. “Flowers are the ‘just in time’ kind of gifts that lend themselves well to the mobile experience,” she says.

She adds that purchases of black goods, such as TVs, are mainly driven by sales promotions. She also describes the retailer’s mobile customers as typically female, although not exclusively.

“She’s typically very busy and very much on the go,” says Veit. “A lot of them are ordering things like school trousers while they’re waiting in the car to pick up the kids from school.”

M&S also sees some big-ticket items being purchased on its mobile site, with the record purchase valued at £5,156 for an entire kitchen unit.

Other high-price purchases to have been made on the site include a sofa retailing for over £3,000. Although such transactions are hardly the norm, Veit points out that they do highlight that providing a good mobile user experience, such as a stripped-down site that works on most handsets, can yield dividends.

M&S’s m-commerce site has won various plaudits in both the mobile and traditional retail sectors. The website recently scored top marks in an m-commerce research study from mobile web analytics company Keynote (see chart on page 55).

The M&S site has been so successful that the retailer has resisted the urge to follow John Lewis and launch a mobile app for a specific operating system, such as Android or Apple’s iOS. Real-time information, such as product pricing and availability is really only available via the web, according to Veit, further justifying the decision not to launch an app thus far.

“We’ve been waiting to see what we can’t deliver via the web [before taking the decision to launch a native app],” she says. “Plus, almost every retailer with a mobile app also has a mobile site.”

Instead, she describes a growing interest in writing websites using the HTML5 web language, which effectively lets developers write one code that can be published across multiple platforms, including desktop and mobile.

She says that a lot of brands, not necessarily retail ones, are opting for hybrid apps or ‘web apps’ using HTML5, which are placed in relevant outlets, such as Apple’s App Store, and then downloaded to a device.

This puts the app on the phone homepage, ideally making the brand front-of-mind when the user is shopping via their device. It fulfils the function of a native app while starting up a mobile web session to facilitate purchases. One of the benefits of this approach is the brand can avoid in-app purchase charges, which can be levied by Apple’s iTunes store at as much as 30%.

Retailers are also responding to the growing ubiquity of smartphone devices by rolling out in-store Wi-Fi networks and display items that act as virtual customer assistants. John Lewis has been quick to pick up on this as an opportunity to engage customers further beginning the roll-out of its in-store Wi-Fi last October.

“The in-store Wi-Fi roll-out was again to make it more convenient for our customers,” says John Lewis’s Russell. “3G reception in certain areas is not great. Plus our stores are quite big.”

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Topshop: Counts purchases made via tablet devices in its m-commerce figures

Although the Wi-Fi was initiated in October 2011, there has already been “heavy use” of the service, according to Russell, with users predominately using their mobiles to look up product reviews for big-ticket purchases.

Other high street retailers to employ such tactics include British fashion house Ted Baker and Tesco.

As of last month, customers shopping in any of Tesco’s Extra stores can have free, unlimited access to Wi-Fi by signing-in with their Clubcard number. Those who do not have a card are able to use the service free of charge for 15 minutes during every 24-hour period.

However, while rolling out such Wi-Fi networks is convenient for customers, they also pose a risk – it opens the door to shoppers checking out the competition.

Online retailers such as Amazon and eBay can, in many instances, undercut their high street-based rivals. In the run-up to the Christmas shopping season last year, Amazon’s US operation offered consumers discounts of up to $5 on purchases if they compared prices using the online giant’s mobile phone app while in a physical store.

Similarly, eBay began sponsoring public Wi-Fi hotspots in areas such as stations and released research suggesting that 49% of respondents use their mobile phone to compare product prices, while 36% use the mobile internet to make purchases. Meanwhile, three-quarters of mobile users (73%) claim they would spend more through their mobiles if retailers had optimised websites.

Google’s head of mobile for EMEA Ian Carrington recently told Marketing Week that retailers need to improve their in-store mobile experience to attract people to buy in store rather than online (MW 12 December). He explained how Google is exploring several options to ensure users can seamlessly link to their mobiles through initiatives such as a ‘Chrome-to-Phone’ Android app, which lets users push links, maps, text and phone numbers to their devices.

“One of our views is that regardless of what screen you’re on, if you’re watching a movie, you should be able to pause it on one device and pick it up on the next, wherever you are,” he said. “There’s no reason why this can’t be the same with commerce.”

However, traditional high street retailers have faith that providing in-store experience, through initiatives such as free Wi-Fi, will give them an edge over online competitors.

“We don’t match solely online retailers for price,” says John Lewis’s Russell. “The fact is that people are going to check prices whether we like it or not.”

Aside from issues such as whether to develop an app, offer free Wi-Fi or use HTML5, retailers are also considering how to treat tablets. Since the iPad can come equipped with 3G connectivity, should these qualify as mobiles?

A recent study from trade body the Internet Advertising Bureau (IAB) found that tablet devices are being used very differently to mobiles. More than 50% of tablet interactions take place between 7pm and 12pm, according to the survey of 600 respondents by research agencies Sparkler and On Device Research.

This means some companies no longer view tablets as mobiles because they are mainly used at home.

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Tesco: Customers can log on free to in-store Wi-Fi with their Clubcard number

Many companies concede that earlier attitudes towards tablets were to include them under the m-commerce umbrella.

“We strip out iPad traffic,” says John Lewis’s Russell. “Traffic coming from these devices is now too significant to put it in with mobile traffic figures. To do so just skews the results.”

Yet this opinion is far from universal, since most tablet devices use operating systems, such as Android, BlackBerry or Apple’s iOS, with origins that lie within the mobile industry.

For instance, Arcadia-owned Topshop has launched a dedicated mobile site and iPhone app after seeing 8% of all online sales come via mobile. However, this figure includes iPad traffic, according to Topshop’s head of ecommerce Kate Walmsley, speaking recently to new media age.

Although Topshop has yet to launch an iPad app, it does demonstrate that opinions in the industry are still divided as to whether customers visiting a site are best served by a mobile or online site.

For instance, eBay does qualify purchases via tablet devices as mobile although Angus McCarey, eBay UK’s retail director, acknowledges behaviour on the platform differs from mobile users.

“Tablet shoppers on eBay tend to browse for longer and look at over twice as many products as mobile shoppers,” he says. “We account for this through the quality of the app experience on a tablet, which provides multiple high resolution images and is easy to browse,” he says (see Q&A box, below).

While mobile retailing may have some way to go in terms of what can be strictly defined as m-commerce, one thing that is clear is that brands are seeing on-the-go interaction increase. Retailers must ensure they balance how to use mobiles effectively both in-store as a research tool and externally as a buying channel.

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Angus McCarey

UK retail director, eBay

Marketing Week (MW)/ How do you see mobile playing a role in ecommerce?

Angus McCarey (AM): Research from Forrester suggests around half of all purchases are being influenced by the internet in some way, and mobile is frequently the preferred means of getting online. In the next three years, we predict more change in how people shop than there has been in the past 20 years, and mobile will play a key part in this retail revolution.

MW: How are people searching for items differently on mobile devices as opposed to online?

AM: With mobile, you have the added limitation of a smaller screen and a shorter browsing session from the shopper. This means there’s even more pressure for retailers to get the user experience right.

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eBay: Sees most traffic from mobiles and tablets during the evening

By having a ‘store in your pocket’, consumers are also able to compare prices between shops. For instance, they might see an item they like while browsing in one shop but then use their mobile to ‘click and collect’ at a more convenient local store.

However, our customers are just as likely to use their mobile or tablet while at home relaxing or watching TV. In fact, the busiest time on eBay for mobile shopping is in the evening.

MW: Is the ability to compare prices online by mobile while shopping a threat to the high street?

AM: This doesn’t have to be bad news for the high street. We strongly believe that if used in conjunction with an offline offering, mobile can help, rather than hinder, high street retailers.
For example, retailers that have a mobile offering can use location-based apps to send discounts and deals to customers as they walk past their physical shops, driving footfall. This kind of targeted marketing wasn’t possible before the advent of the smartphone.

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