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Comment: Harnessing mobile data to drive omnichannel retail sales

The first Monday in December, dubbed 'Cyber Monday' by the UK and US press, was the busiest eCommerce shopping day of the year, and indeed the busiest eCommerce shopping day ever. Amazon reported a sales increase of +46% compared to the same day in 2012, whilst eBay was up +32% year on year.

But perhaps a better soubriquet would have been 'Mobile Monday', as a huge part of the growth was delivered by mobile devices. 18.3% of all online sales came from tablets and smartphones, which was an +80% increase on 2012.

The emergence of mobile as the key enabler for omnichannel retail goes hand-in-hand with a new generation of mobile-optimised websites and apps, which harness proven technologies (such as geolocation and mobile payment) in new and exciting ways.

Converging Technologies

The ability of mobile devices to harness the power of geolocation data is hardly new. The first generation of smartphones introduced us to (almost) real-time mapping whilst, before this, satnav systems had acquainted us with the concept of place-based insight.

Although the use of geolocation data for commercial applications was initially constrained by several factors, these have now been resolved by the latest generation of apps. Platforms which switch between technologies (e.g. from WiFi to masts, to GPS for triangulation), which run in the background (i.e. not needing the user to log-in) and which do not drain the battery (e.g. by using the device’s internal gyroscopes to signal movement as the trigger for polling) are reaching the market, and communicating with shoppers in the right place and at the right time.

The ability to deliver the “right message” to a shopper is the job of intelligent targeting – as delivered by companies such as Germany’s Match2Blue.

This targeting can happen in two ways:

1.) User influenced:

The app user either pre-configures the platform (e.g. highlights product sectors of interest, or times of day/week to receive push notifications) or proactively searches for relevant messages (e.g. promotions).

2.) Platform influenced:

Built-in intelligent algorithms and fuzzy logic combine to deliver a range of hypothesis-based and collaborative targeting options which effectively “self-learn” as each user interacts and delivers a data graph. This ensures users only receive messages which are likely to be highly relevant.

The combination of precise geolocation data with smart messaging is compelling. Apps using these features in tandem experience an almost exponential increase in their ability to engage customers, delivering typical click-through rates of 30%+. Promotions using geolocation data alone typically generate a 1% end-to-end conversion, but where the technologies combine, conversion is typically 5-10%.

The landscape for mobile payment has been fragmented for some time, with merchants nervous to commit to any one provider or technology in the fear that they have selected Betamax over VHS!

The latest mobile payment technologies side-step this concern. Specialist providers such as Paythru have developed payment platforms that integrate the full range of payment options, such as credit cards, debit cards, vouchers, loyalty points or bank transfers, with a range of options to integrate either mobile payment or other redemption methods into the retailer’s own systems.

By keeping the SKU level data and the transaction value combined, this additional consumer insight provides a valuable feedback loop for the intelligent messaging algorithms described above.

The integration of mobile payment is the final piece in a jigsaw which creates a digital ecosystem that can be used in a range of flexible ways to add value across a wide range of customer journeys and retail environments.

Here are just a few examples:

Department stores:

Supermarkets:

Multiple retailers:

Shopping centres:

Travel hubs:

Town centres:

Whilst the UK is at the forefront in terms of both consumer adoption of digital shopping and the sophistication of retailer response, there are many aspects of optimised mobile which are being successfully deployed elsewhere (from Turkey to South Africa) and the UK is playing catch-up.

This vacuum is somewhat surprising and will not exist for long; consumers are more than ready for their smartphones and tablets to enhance their shopping whilst the converging technologies described in this article create the perfect environment for change to happen fast. 2014 will undoubtedly be the year of the “mobile market”.

Robin Bevan is the director of the Locations & Analytics practice at Javelin Group, a specialist omnichannel retail consultancy and systems integration firm.

robin.bevan@javelingroup.com

www.javelingroup.com

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