Role of the mobile in shopping

Using your mobile phone to improve your shopping experience in bricks and mortar stores may not be top of your mind as you leave for the mall, but increasingly people are using their devices to perform many functions often done at the desktop PC - and more. Coupons, advertising, price checkers and product reviews are just a few examples.

The explosion of smartphones and apps, growth of the mobile web, the availability of high-speed mobile broadband networks, and the ever-growing usage of SMS are all offering retailers, brands and merchants new opportunities to communicate with customers and to offer the ability for them to shop by mobile.

Cost-effective reach

Major household brands, retailers and top-tier MNOs are launching mobile marketing campaigns or extending existing campaigns. These companies are seeing the potential of mobile as a retail tool and specifically the potential for targeted and more cost-effective campaigns.

The mobile channel offers merchants the opportunity to differentiate from their competition and acquire customers that become loyal. For brands and retailers, mobile enables them to change campaigns quickly (for example by time of day), and crucially the ability to track success and customer acquisition rates.

For younger people (typically below 35) who organise their lives around their mobiles, using their devices in this way is often an obvious development. Using the mobile in a live shopping situation can be particularly effective - not only for product price comparisons and reviews, but also product browsing, stock checking, payments, loyalty.... and the list of functions keeps growing.

Mobile retail and marketing has evolved. Initially, the overwhelming majority of products advertized/marketed and available for sale via the mobile were forms of mobile content: games, ringtones, screensavers, videoclips. The mobile content providers simply take out on- or off-portal banner space to promote their products. For the mobile industry, this is not ideal, because while it helps to promote sales of digital products, there is no interaction with the world of retail beyond the mobile; no new advertising revenues enter the business.

The next stage involves external brands - selling goods or services from beyond the mobile environment - trying out the medium for the first time, usually via an ad-hoc advertising campaign. It is at this stage for the first time that we see new revenues enter the industry.

Once brands have successfully engaged in an initial ad hoc campaign, they will hopefully return for repeat advertising, which may for the first time enable direct mobile purchase of the marketed products.  Lastly, having reaped sufficient benefits from repeat marketing, brands will then seek to make mobile part of their integrated multimedia/multi-platform strategy, both in terms of marketing and direct sales.

Different markets and retailers are at different stages along this evolutionary path.

In Indonesia, for example, the bulk of advertising/marketing is conducted by the mobile content providers such as AMob. In India, the market is at a transitionary phase, with many brands now testing the mobile medium for the first time (e.g. Kodak Express).

Other markets are more advanced. In the US and UK, some brands are now seeking to go down the integrated route, both for marketing and direct sales - Ocado on the Go is a landmark example. With this transition from ad hoc mobile campaigns to multimedia integrated campaigns, another key trend is the evolution of the sales and marketing technology itself, from bulk SMS, through banner advertising, into targeted advertising and apps enabling direct retail.

Retailers, merchants and brands are becoming aware that the mobile device is being personalized more and more and therefore is an opportunity for unique, individual marketing program. Juniper Research believes that the mobile device has a central role to play now and in the future as customers shop at supermarkets, stores, bookshops and other retail bricks and mortar locations. 

Howard Wilcox is a senior analyst with Juniper Research. Contact John Levett ([email protected]) for more info about the topic or its report on Mobile Marketing & Retail Strategies: Advertising, Coupons & Smart Posters 2009-2014
 

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