Retailers shift their ad spending from TV, radio and print ads to digital ads.
Catching up is getting harder, an expert says at MMCF 2012.
A woman standing in her kitchen speaks into her smartphone: "Find fridge." Then she holds out the device, which has two cameras on its front that act like a pair of eyes and scan the room. The phone figures out what size of refrigerator will fit where hers is now, as well as which color would match the rest of the room's decor. Then it checks her funds through her banking app and searches for nearby stores to find a refrigerator that fit all the criteria the phone just collected.
Some retailers may think such futuristic m-commerce scenarios are too far down the road to imagine, says Julie Ask, vice president and principal analyst at Forrester Research. But, she says, top companies are already developing these technologies and thinking out creative ways to use the next generation of smartphones. And while a retailer lagging in mobile two years ago could pay a vendor around $500,000 to effectively "catch up" in three months, the industry is moving so quickly that in the next three to five years retailers that are behind now will struggle to get in the game, she says.
Ask laid out Forrester's forecast of where mobile commerce is headed and gave retailers tips of how to plan for it in a session at the 2012 Internet Retailer Mobile Marketing & Commerce Forum entitled, "How store merchants can bust in-aisle mobile-based price shopping to boost store sales."
She first debunked the idea that "showrooming"—when consumers look at items in stores and use their smartphones to compare prices or buy them elsewhere online—is a mortal threat to store-based retailers. Instead, they should embrace the opportunity to figure out how to use mobile to enhance customer experience and influence sales themselves, she says, for example adding store navigation or inventory-checking tools.
Ask outlined a "mobile first" approach of designing for mobile commerce specifically from the beginning, rather than trying to shrink or replicate web site features for a phone or tablet. "Even if you don't have the details, you need to have a high-level plan," she said. That includes not just developing mobile sites and apps that consumers see, but making sure all back-end inventory, staff and support systems are ready to handle mobile, she says. Online retailers on average are spending $250,000-$500,000 annually on mobile services, she adds, but that isn't enough—the retailers winning at mobile have dedicated staff of 15-20 people and spend $10-20 million or more annually on their mobile strategies, she said.
To come up with a plan, Ask said retailers need to define mobile use cases for their customers. While today many apps focus on location and time to provide extra value, she said in the future the information available to aid m-commerce will be much more sophisticated. In addition to the dual-camera system that she says will soon be standard on smartphones, allowing them to "see" depth and dimension as in the refrigerator shopping scenario, future phones will also include magnets to determine in which direction a customer is facing, bio-sensors to monitor their health and surroundings and other sensors that will provide instant information to help consumers make decisions in the physical world, she says. For example, a phone could tell a shopper her blood sugar level is high and point out the healthy options on a cafe display shelf.
With that mindset, Ask added two warnings. First, despite the fact that retailers will soon have a great deal more personal information about individuals from their mobile devices, they should aim to be more "big mother," helping ease daily life, than "big brother," watching everything and pushing invasive marketing messages at every turn. That is the only way mobile will not be thwarted by privacy legislation and issues in the future, she said.
Secondly, retailers should keep in mind that mobile is a task-oriented platform, which means longer shopping processes, like picking a new car, don't translate well from the web to m-commerce. Instead of trying to be the point of contact for researching, test driving and note-taking, Ask said, retailers should use mobile to provide quick assists, like locating a dealer or comparing prices at multiple locations.