A new research paper on the future of mobile commerce, published by Strategy Analytics, reveals that 67% of smartphone owners use their phones to find deals and compare prices. But the actual point of purchase is the least popular activity on all mobile devices. Mobile clearly can’t be ignored as a channel to attract and interact with customers, but what should retailers be doing about mobile payments?
Many retailers are wrestling with the challenges set by increasingly mobile customers. But “mobile” itself may be a bit of a red herring. “Mobile” shoppers will most likely fall into one of three camps:
1. at home
2. in store
3. out and about
And that’s the key: creating a mobile strategy that meets the needs of customers at a particular time and place – putting things into context.
There’s a general trend among people browsing at home, away from desktop computers and towards tablets. It’s easy to understand why, as tablets are both more convenient and more engaging than PCs, while having bigger screens than smartphones.
But once these “Downton Abbey shoppers” leave the house, they’re more likely to resort to a mobile phone. It’ll be this device that your customers carry into your store – and that changes the dynamic.
It’s all about identifying opportunities to add value and improve the experience at each stage.
Put yourself in your customers’ shoes. Why are they using a smartphone? While they’re out and about they’ll expect quick and easy access to information about your nearest store and available stock. In the store they might benefit from store layout help, easy access to further product information or current offers – through things such as QR codes, which make jumping off to sites easier and quicker on a mobile.
Of course, retail is all about securing the sale. But one thing that came through loud and clear at NRF this year was the fact that new payments technologies have to make the consumer’s life simpler and easier. So, while there’s a lot of noise about mobile payments, technologies such as NFC – one of the main contenders for linking mobile phones and payments – aren’t necessarily putting the interests of the customer first.
However they choose to pay, customers want a frictionless process wherever they are – and that’s one of the stumbling blocks with mobile at the moment.
The fact is, retailers can take money quite easily in-store just now. NFC for payments in store is not a problem that needs to be solved. That doesn’t mean NFC has no role to play in store, but its strength may lie elsewhere, for example, as a way to provide easy access to information and offers through in-store contact points.
Big budget production
So how do you solve the problem of mobile payments? There were three main approaches put forward at NRF:
1. The ‘wallet in the cloud’ – led by PayPal and Google
2. The mobile device – championed by NFC technology suppliers
3. Direct transfer exchanges – run by retailers fed up paying the middle men
Strategy Analytics’ research into NFC reveals: “The ramp up is extremely slow and even years from now we are expecting only a minority of consumers will use mobile payments; 158M users, or 2.9% of total cellular users in 2017.”
If we once again put ourselves in the shoes of the consumer and ask what’s best for them, the wallet in the cloud seems to be the most convenient. It promises a frictionless payment experience regardless of channel, and customers can bundle loyalty cards and e-vouchers. But this still doesn’t help with the here and now.
There’s no future proof answer to mobile payments as the dance between the different technologies and approaches plays out. But what is clear from these latest findings is that it’s vital that you take mobile seriously and build a solid foundation for your mobile channel.
Just now, that means ensuring your mobile channels provide a brand experience consistent with your other channels. And creating a mobile friendly site that’s designed to meet the needs of mobile users – so that it works on a smaller screen, with the most appropriate information brought to the fore and easy to access (through bigger buttons and simpler buying steps).
Like most other aspects of retail, it’s all about having the right things in the right place, at the right time.
Posted by Jason Shorrock, Product Director, BT Expedite
Jigsaw24 is the largest supplier of Apple products to the UK’s creative industry. With such tech savvy customers, the company’s site needed to hit the mark in terms of its UI (user interface) and the experience of using the site for research, advice and purchasing.
Having ordered Apple products through Jigsaw24 ourselves, we knew that it has fantastic customer service and expert advisors, and a strong, unique brand identity. However the website was letting the side down – the navigation was difficult to use, requiring many more clicks than you’d hope to get to the product you want, and the bold brand wasn’t coming through, either in terms of look and feel or the customer experience.
Reflecting the brand
So, that became the basis of the brief: create a site that was an extension of the way customers interact with the brand elsewhere – through friendly and knowledgeable staff and print design work that captures the vibrant brand in a market that can seem dry and where products often look much the same. Being intuitive and easy to use was paramount.
The key was to consider all of these things while designing and building each part of the site.
We made use of the core brand elements: a strong orange, an informal hand-drawn script typeface (drawn by the design team at Jigsaw24 themselves) along with illustrations in the same loose style and friendly photos of the actual people you’d be dealing with. It all came together in a site which is eye-catching and modern while also being clear and friendly.
From browsing to buying
Look and feel is one thing, but what the site really needed was to make the find-and-buy process a breeze. A pleasure even. In order to achieve this we used clear navigation, intuitive and intelligent filtering on list pages (that change according to the product-set) and a slick product comparison tool.
All of this means that any product list page feels customised to the products being shown (from the vast catalogue), while comparing that long list of all-important specs is very easy.
“With an abundance of information, it’s sometimes hard for customers buying technology to decide on the product right for them,” says Matt Duncan, Head of Client Services at BT Fresca, “but with the enhanced search and filtering ability on the new website, customers can make an informed decision by comparing multiple product choices.”
We hope we’ve provided a website that shows just how ‘Insanely great’ Jigsaw24 really is.
Posted by Dean Taylor, Head of Creative. BT Expedite & Fresca
It’s nice to share
Collaboration in retail supply chains, both the sharing of infrastructure, like shared trucks and warehouses, or the sharing of data, would give great benefits to retailers and their customers.
But retailers shy away from it because they think that their supply chains are a source of competitive advantage. In fact, because they all suffer from common inefficiencies, retailers’ supply chains are probably a source of collective disadvantage at the moment.
With the rise of online shopping there is a trend to smaller, more frequent deliveries (as opposed to the full truck, once a week of the past). But that means lorries driving around the country half empty and that is costly to retailers, their customers and the environment.
So what are the barriers to collaboration? In a nutshell: irrational fear. Managers want to protect their empires and see collaboration as a threat. Retailers don’t feel they can completely trust their own supply chains let alone someone else’s.
Yet I recently heard of a project where two competitors used the same unbranded vehicles for deliveries. It drove down costs for both without compromising service for either. So the potential for profitability gains through collaboration are definitely there.
Return to sender
Supply chain efficiency is particularly important for omni-channel clothing retailers where customers return 22% of what they buy online (Martec, 2013). The cost of processing a return can be 2-3 times that of an outbound delivery and can eat up 35% of the profit of the transaction. But a well-executed returns strategy can be a driver of loyalty and can add 2% to profitability.
The trick is to treat a return as a conversion opportunity, especially in the case of a BORIS (buy-online-return-in-store). The most precious commodity in retail today is footfall. If a customer comes into a store to return something bought online, the store staff should be trained and motivated to sell them something else.
A good up-front returns offer is necessary to put you into the shopper’s consideration set. But many retailers offer them without understanding the true costs of returns processing. Marketing and supply chain functions need to co-ordinate more closely and merchandisers should track returns percentage by product SKU (stock-keeping unit).
Outward logistics tend to be standardised and efficient, but reverse logistics are often less-well understood and can have a big impact on profitability. Returns are also often not accounted for prudently, with stock being returned to the balance sheet at full value, when a 25% mark down in value would be more realistic.
Services like BT Trace which enable collaboration, improve supply chain visibility and drive down cost to serve the customer are going to be of strategic value to omni-channel retailers.
Posted by Mark McDonnell, Senior Marketing Manager, BT Global Services
BT is today launching the findings of Retailtopia, a year-long investigation into the challenges facing the retail supply chain. I was lucky enough to be involved in a panel discussion to review the findings of the research and two words dominated the event: transformation and urgency. Every single week of the year last year we saw a major high street retailer go out of business. Things need to change – and quick.
The panel included a wide mix of retailers, suppliers and logistics, with two camps emerging: one with a focus on the commercial side of logistics, the other, more customer-facing, concentrating on supply chain agility. What quickly became clear, though, was that these two views need to be reconciled to create a genuine omni-channel supply chain.
Consumers are pushing retailers into omni-channel retailing, whether they like it or not and the Retailtopia vision paper highlights four ‘clear and present threats’:
1. the pace of change
2. the supremacy of the customer
3. the knowledge explosion
4. omni-channel supply chain design
While much of the traditional energy and focus was on fulfilment, getting the goods out is just half the battle for omni-channel retailers. Some sectors can expect as much as 40 per cent of the products sent out to customers to be returned. (In fact, Administrators at a large electrical retailer reportedly discovered more than 6,000 unsorted returned items going back years on pallets at a Warehouse!) And as retailers become more omni-channel, the problem of returns becomes more acute.
There and back again
Returns are an opportunity, not a problem. But getting to that stage, involves:
1. Elevating the supply chain
The supply chain needs to be the same level as traditional topics discussed around a boardroom table, such as purchasing.
2. Getting an omni-channel process for stock from store
With people buying online and returning goods to random locations, retailers need a tactical approach to get the returned goods back into the system – but it is, by its nature, almost unplannable.
3. Mapping profitability of returns
Targets need to be set for buyers and merchandisers based on returns/margin, so the right measures are in place throughout the entire supply chain journey.
To achieve all this, retailers need systems and processes in place that enable them to use the stock that comes into the store in the most profitable way possible, whether it comes in through a planned delivery or is brought in by a customer. But this demands commitment and leadership, right from the top. Effective supply chain management will increasingly become a differentiator for retailers as it becomes a vital part of the customer experience. Those who ignore it will find themselves on a road to nowhere.
To read more about the panel’s recommendations and to see video interviews with panel members, visit www.bt.com/retailtopia
Posted by Josh Pert, CEO, BT Expedite & Fresca
Retail rules the social media game. But our research has shown that not all sectors are equal in the social media world – and some have a much harder job than retailers to get engagement from their customers on social.
Part of it is down to different audiences. Retailers have the brands that we like to talk about – but we rarely share the intimate details of our finances in the pub (not to mention the fact that banks face a legal and regulatory minefield around giving financial advice in public).
Travel companies come a close second to retailers and have been doing it the longest – via well established forums like Trip Advisor – and they also need to cope with disgruntled travellers taking to Twitter via their smart phone.
Social media’s good for retail
Our recent white paper on social media found no other sector uses it more than retail. And of the interactions we looked at (2,986 of them), over half were complimentary or general comments. Only 25 per cent were negative (13 per cent criticism, 12 per cent complaints).
But even retailers could do better
Even so, only 25 to 45 per cent of retailers are actually engaging with their customers. A big chunk of them are still missing a trick.
In comparison, finance and central government have a lot harder job – in the research sample, they had the least amount of interaction and none of the organisations sampled had ventured onto Facebook. Even if it is difficult to engage on social, it doesn’t give organisations permission to ignore it. However rushing into social media without a strategy beyond “everyone else is doing it” is also unwise.
So what’s the answer?
- Set out clearly how and why you want to engage on social media – do you want a conversation or simply listen and learn? Who in the organization needs to be engaged?
- For the compliance heavy banks – the best are engaging customers by talking about something other than banking. What or who do you sponsor? Say it’s a golf tournament; make golf ‘your thing’. Make your social media channels the place to go to get the inside track on everything golfing. But keep it relevant to your brand.
- Focus on fixing problems. You could turn your social media channels into an extended helpline. From our sample, most customer interactions were common grumbles about being on hold, ignored emails, or broken links on websites. These are valuable operational cues that can be used to increase contact centre resources, deflect calls or fast track technical fixes. Channels like webchat can also be used effectively alongside social to take conversations out of a public channel and engage in a more one-to-one dialogue.
- Be human – social media is about people rather than reeling out scripted answers. Use your front line people well and ensure that you engage the right experts to sort issues out rather than simply apologizing (although even an acknowledgement can help).
Posted by Dr Nicola Millard, BT Futurologist