Sector
Home Depot and Pay Pal Take a Real Shot at mCommerce
Home Depot is the first brick-and-mortar retailer to accept PayPal in stores.
As a reminder, customers have a couple of new options to pay with their PayPal digital wallets. Shoppers can either go card-free by entering just their phone numbers in conjunction a pin number, or they can use an actual PayPal card.
PayPal is so confident in the rapid rise of mobile commerce transactions that, in January, the eBay-owned company upped its mobile payment volume predictions to $7 billion by the end of 2012.
By comparison, PayPal reached $4 billion in mobile payments volume in 2011, far higher than the company’s original prediction of $1.5 billion.
Sears betting on mobile and customer data to save business
Our two cents:
When a company sees declining revenue for six straight months, they’ve got to swing for the fences. In the case of Sears, this means betting big on creating a customer loyalty program with mobile devices and customer info at the center of it all. Whether it be store associates armed with tablets or customers using check in apps on their smartphones, Sears is betting that a technology focus is the thing that will turn the company around. Quite frankly, we are skeptical. Firstly, customer loyalty programs are nothing new, nor are they unique. Secondly, they take time to build, even with a large installed base. This is time that Sears doesn’t have. Lastly, Sears customers are not exactly on the cutting edge of technology. We looked at 2011 Forrester Technographic data to get an idea of just how tech savvy Sears customer were and found that only 37% own smartphones. That means that roughly 2 out of every 3 lack the technological means of a richer shopper experience.
Something to think about Sears. Read related article on WSJ
Four experiences today’s mobile shopper expects
- Impatience: The consumer of 2015, 2017 and 2020 will have no time for sloth, be it in product discovery, page uploads, physical or online/mobile checkout, returns or customer service response. It is not seconds, but milliseconds that matter here.
- Frictionless: The entire searching, shopping, browsing or buying experience has to be devoid of hurdles or pain points. Smooth transactions will be the minimum expectation, and intuitive response to customer overtures will be the norm.
- Affordable: Blame marketers for this expectation. Having trained most consumers to shop by price – except in the case of brands that maintained their mystique and value to customers – price will be the deciding factor for most purchases. It is a race to the bottom where everyone running to the breasting tape would rather not be in the sprint – but the starting gun’s off. Consumers do not expect cheap, they expect affordable.
- Connected: Consumers do not expect brands to have a downtime in any area – be it shopping hours, product delivery, returns, customer-service calls or email or text responses. They expect to access the marketer or retailer on their own terms – always on, always there, always helpful, always friendly, always obliging.
Google, Amazon, Facebook shifting shoppers’ buying behavior.
Source: Sucharita Mulpuru, Forrester on February 7, 2012
Nearly 50% of web shoppers start their research process on Amazon or Google. Over 40% of the world’s Internet traffic constitutes daily visits to Facebook and Google. Twenty-one percent and 49% of iPhone and iPad owners respectively purchasing products via these devices. Google, Amazon, Apple, and Facebook not only absorb consumer time but are quickly becoming gateways for other eBusiness traffic. This makes the Big Four critical in the product research and sales funnel. In our recently published report, “Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012” we help eBusiness professionals identify what’s on the horizon for these companies and what it means for them. Some key findings of the report include the following:
- Google has broad ambitions to support (or displace) incumbent eBusinesses. While Google struggles to move beyond its paid search roots, eBusiness professionals will need to keep the company top of mind because it maintains a majority share of online marketing spend but promises to transform every industry from financial services to travel to health care and retail.
- Amazon is disrupting retail economics. While Amazon has the smallest market cap of the four players, it is completely changing the dynamics of manufacturers and distributors.
- Apps can be powerful tools to support eBusiness objectives. Companies that see apps as just extensions of web content are missing the many opportunities to enrich experiences with cameras, microphones, speakers, accelerometers, and location-sensing capabilities.
- Facebook is more akin to television than to traditional interactive marketing. Facebook has broad reach but seems to work best when building awareness and driving “top of funnel” activity, much of which is not where interactive marketers focus their budgets.
What does this all mean? Should retailers throw in the towel now to avoid being flattened by these tech giants? No. Savvy eBusiness professionals should understand where these companies can help, but more importantly learn from their flexible, agile, and tech-centric approaches to growth. Forrester clients can read the full report here for a full analysis.
Retailers to Create Their Own Mobile Payment Systems
Our two cents:
While it makes sense for Retailers to try and create their own proprietary mobile payment system, the net effect is further fragmentation in the marketplace and complexity for customers. There are already several mobile payment camps out there, e.g., ISIS, Pay Pal’s Digital Wallet and Google Wallet. But when you have participants with a combined annual revenue of $1.38 trillion, it’s easy to understand why they’re taking the initiative to create something of their own. However, it’s important to remember that one of the reasons why marketers are so excited about this technology is because you inherently combine the loyalty program and the payment device. So brands are able to send contextually relevant offers and coupons, based on anything from the customer location to their purchase frequency to the same device the customer uses for payment. It’s basically a direct marketer’s dream.
Read full article on WSJ about mCommerce and mobile payments
How Walmart May Well Be Changing eRetail
Our two cents:
Walmart may well be indicative of some larger eCommerce and digital marketing trends we’ll see within the next year. Specifically, we like the idea of:
- Using store associates (offline) to drive sales on their eCommerce engine (online) by focusing on crediting store managers with local online sales. Not only does this give the sales staff a new incentive, but also uses the idea of geographically relevant information in a new way.
- Building social communities around 3,500 stores rather than the brand itself. This is probably Walmart’s biggest risk, but they are wisely couching it as an experiment.
- Incorporating Siri into the iPhone app is smart, really smart. For one, Siri will soon work for other languages, namely Spanish, which Walmart has a large customer base with. Secondly, Walmart’s massive inventory is difficult to navigate with mere buttons and swipes on the phone. Voice on the other hand is much easier.
- Shopycat App is an interesting way to turn seemingly meaningless facebook likes into real revenue, but still feels a bit too big brother, it takes shared data from your friends’ profiles and news feeds and transforms them into gift ideas.
Best of all, Walmart seems to be doing all this because they are talking to consumers and asking them what they want.
via Ad Age Digital A-List: Walmart | Special: Digital A-List 2012 – Advertising Age.
Best Practices for Integrating Mobile into Retail
Source: By BRIAN X. CHEN | February 13, 2012, 8:00 AM, Bits, NYTIMES
3:18 p.m., Feb. 14 | UpdatedCorrecting reference to Walgreens at the end. The Walgreens app is generating 40 percent of online transactions; it is not generating 25 percent of all transactions for the company.
In just four years, one billion people will own smartphones, many of whom will be professionals taking these devices to work, says Forrester, a research company. And because of that, businesses need to think big about how to use mobile products to engage with customers, the company says.
Forrester on Monday published a 28-page report forecasting the growing impact of mobile in the world of business, based on its survey of 3,534 business decision-makers, like chief information officers or I.T. technicians, around the world, among other measures.
It estimated that by 2016, 350 million workers will use smartphones — 200 million of whom will take their own devices to the workplace. By that year, consumer spending in the mobile app market will amount to $56 billion, and business spending on mobile projects will have doubled, the study found.
With the explosive growth of mobile use among consumers, businesses need to think beyond making versions of their Web sites for small smartphone screens, said Ted Schadler, a principal analyst at Forrester and an author of the study. When making mobile products, businesses should strategize about how they can take advantage of the data they can gather from smartphones — like location information and spending habits — to create a richer experience, he said.
“Mobile is the new face of engagement,” Mr. Schadler said. “Businesses should stop thinking about it as a small Web site on a tiny computer, and start thinking about mobile as being deeply embedded systems of engagement. That turns out to have huge implications.”
Take, for example, Target, the retail store. If a customer walks into Target and has bought baseball gear in the past, the ideal Target mobile app will know when he is standing in the sporting goods section and will be able to tell him about a discount on a new baseball mitt, Mr. Schadler said. That’s more customized and engaging than a mobile version of the Target Web site.
Giving customers a good mobile experience requires a lot more than simply designing a cool-looking app with some nifty tricks. Businesses must strategize about how to invest properly in the back end, or the servers and employees necessary to maintain services so they run smoothly even when the number of customers using an app grows, the research report said.
Security will be tricky, too. I.T. departments will have to expand security measures to go beyond protecting the business itself and protect user data gathered from mobile apps. Then, of course, companies must evaluate how to respect user privacy, and take advantage only of the information that customers willfully share.
John McCarthy, an analyst at Forrester and another co-author of the study, said: “How do you interact with somebody in their moment of decision? How do you take advantage of their permission they’re giving you to be in their pocket, if you can be right there alongside somebody in their daily life and their daily work? It’s up to you to do this respectably, without invading privacy.”
Developing a strong mobile business strategy hardly sounds easy, but it could pay off big. The research study lists Walgreen as an example of a business that has greatly benefited from its app. The pharmacy company said that 40 percent of its online transactions came from its one-year-old mobile app, where the most active customers are tapping through to shop, order prescription refills or find nearby stores to get flu shots.
The Challenges of Cross-Channel Data Integration
Source: eMarketer, Feb 21, 2012
Marketers fail to deliver real-time customer-targeted brand experiences
Increased consumer demand for more personalized and relevant brand experiences has made customer segmentation and targeting an imperative for companies.
According to a November 2011 survey from Acxiom andDIGIDAY, though the majority of US advertisers and agencies were able to identify and segment their customer base, few were capable of doing so in a way that delivers a personalized experience in real time and across multiple channels.
More than half (58%) of advertisers and 39% of agencies said they were able to track and segment their best customers. However, agencies were more than twice as likely (12%) to be able to incorporate both online and offline data into the segmentation process, compared to just 5% of advertisers capable of this more advanced approach.
By segmenting customers, brands can create the more personalized, relevant experience that consumers now demand—especially from retailers. April 2011 data from the e-tailing group and MyBuys showed 50% of US cross-channel shoppers expect to be offered promotions or merchandise that reflect their past online shopping behavior and purchases. More importantly, 46% of shoppers reportedly would buy more from retailers that personalized the shopping experience across channels.
To accomplish the goal of delivering a truly personalized experience in real time, brands must be able to track activity throughout the customer lifecycle and act on this data immediately across channels. But Acxiom and DIGIDAY found advertisers and agencies have yet to make this work—though many are well on their way.
Less than a third of agencies and 37% of advertisers said they had neither the capability to deliver real-time, personalized customer experiences nor to do so across channels, though nearly half of advertisers and 28% of agencies had the ability to at least perform one of these two tasks.
In December 2011, the Winterberry Group and Interactive Advertising Bureau (IAB) found many marketers hoped to do better in the coming year. Most marketers worldwide planned to focus more closely on customer behavior analysis, and offer optimization and cross-channel touchpoint optimization—tactics required to meet the goal delivering real-time experiences to customers across channels.
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Check out today’s other articles, “Super Bowl Viewers Had Smartphones Firmly in Hand” and “Social Network Users in Brazil, China More Likely to Engage with Brands Online .”
