Today, innovative retailers are already able to create an enhanced customer experience in brick & mortar businesses through local and relevant information and services on smart phones. Customers expect a seamless shopping experience, which makes interconnecting stationary and virtual distribution channels in both organization and IT a necessity.
For established retailers, mobile commerce has become both an opportunity and a challenge at the same time. Nowadays, 2.1 billion people worldwide own a smart phone and are using it in an increasing number of points in the shopping process – and it has become the most private existing medium and an important channel to reach customers both on- and offline.
However, an analysis of existing mobile retailing apps by Capgemini Consulting outlines that only a few retailers engage in this new technology in order to deliver unique customer experiences, enable employees to do more and to achieve excellent financial results all at once, which is an outcome that we call Mobile Excellence.
The necessary fields of action that retailers need to focus on to achieve it are detailed in this blog article.
The first field of action, Mobile Vision, contains all activities concerning the creation of attractive customer experiences, which are complemented by a sensible interaction of established and mobile touch points. On a related note, the systematic analysis of the financial impact induced by mobile app innovation in retail is a key pillar of Mobile Vision.
Many retailers have already understood the importance of mobile apps in retail and have implemented a mobile-first strategy. Dr. Rainer Hillebrand, Vice-Chairman of the large German retailer Otto Group, has defined the vision of his mobile strategy distinctly:
“It is our vision to generate 50 percent of our online traffic from mobile devices across all our online brands until 2016”.
After already accomplishing this milestone in mid 2015, Otto Group founded its very own Mobile Lab and an App Acceleration Center, underlining its consequent pursuit of becoming a mobile-first company. A successful implementation of a Mobile Vision can be found at the US retail giant Walmart as their app intelligently connects their online channel to their brick & mortar stores. With its help, customers are able to compare prices of the online and offline stores and can browse the range of products for every Walmart store as well.
Besides providing mobile ordering and payment, the app offers a wide range of additional features that aid customers before, during and after the buying process. Users can create personalized shopping lists, navigate within the store, scan barcodes to learn more about products, read and write reviews on the fly and even use their personalized vouchers at checkout, which is made even easier with the “Scan & Go” self-checkout function.
The second field of action, Mobile Customers, comprises a holistic view on all mobile apps and websites for customers in the form of a portfolio in order to efficiently target customer groups in diverse markets. For example, Capgemini’s Digital Shopper Relevancy Report states that already 19% of customers in saturated markets are “real digital customers”, who expect a seamless and sensible integration of all channels and are characterized by an increased need for information and communication during the product search and buying decision. These “digital customers” use mobile apps to compare prices, track deliveries and purchase online.
The app “ProTrace” by the Metro Group is a brilliant example of how companies can generate excess value through digital and mobile offering and apps. By using “ProTrace”, customers are able to detect the origin of their meat and fish products by scanning the QR-code on top of the package – added value that fosters a close and loyal relationship to company.
The development, maintenance and operation of such app portfolios are integral parts of the Mobile Customer field of action – and its complexity is constantly growing. These processes require an effective cooperation between specialty division, IT division and external service operators. Similarly, the third field of action, Mobile Employee, encompasses activities aimed at enabling employees through mobile solution at the point of sale.
Mobile IT Architecture
The fourth and last field of action, Mobile IT Architecture, contains all activities concerning the establishment and operation of Mobile Client Architecture and Mobile Service Architecture as well as their integration in a company’s IT application landscape.
In contrast to the 20% of an app’s complexity that is visible to consumers, the remaining 80% can be attributed to the aforementioned activities during the app-launch. Every complex mobile app needs a solid architecture fundament in order to offer a consistent API, eased maintenance, further development and the fulfillment of data security requirements. Data privacy protection and data security are central aspects of every IT implementation, but, according to common opinion, these aspects are often neglected, especially with regards to applications on mobile devices – which is detailed in Capgemini’s study on mobile security.
A few years ago, mobile apps in the retail industry seemed to be fancy experiments lacking strategic relevance, but in the future, mobile apps represent the central element of every innovative and competitive strategy. A projection of mobile commerce revenue in the US market underlines this global trend. While only 13.6 billion USD have been generated via mobile devices in 2011, the total revenue grew to 429 billion USD in 2016 and is said to reach up to 669 billion USD in 2018.
This trend is fueled by innovative technologies such as in-store navigation and in-store-location-awareness, being supposed to change the buying habits of customers fundamentally. In addition, available data on customer habits grow exponentially thanks to the usage of mobile apps, which allows for a deeper understanding of customer needs.
Furthermore, retail companies improve their brand perception by providing relevant data services on mobile apps. As an example, the North Face app offers information about snow conditions in the respective ski resorts and thus creates an additional channel that aims at increasing usage and strengthening customer loyalty.
Nowadays, simple mobile apps can be compiled with minimal programming efforts using special IT tools from predefined components. Still, the interesting smart functions of a mobile app and handling of sensitive customer data require a close integration with the established IT landscape and the IT governance in retail. This makes the process of launching an app, from designing the customer experience to the final rollout, a quite complex endeavor – and thus, requires a strategic approach combined with profound knowledge of Mobile Excellence.