MOBILE RETAIL
October 9, 2013
Joanna Lee Augenbergs
about.me/joannajen
415.425.5228
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HELLO
I’m Joanna. Let’s talk Mobile.
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MY STORY
A BIT ABOUT ME
MY BACKGROUND
MY WORK
MY PASSION
B.S. Business Admin, UC
Berkeley
Digital Media – social and
mobile
Brand Strategy
New media and Technology
B.A. Mass Communications, UC
Berkeley
Digital marketing
Social Systems and Structures
Innovation
MBA, Tuck School of Business
at Dartmouth
Travel
Consumer Insights
Teaching
Strategic Planning
Outer space & Under the Sea
WPP Inc.
Management Consulting
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Business Development
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Mobile Media
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MOBILE IS BIG
The mobile market is substantially penetrated with approximately 6 billion
global mobile subscribers (that is roughly 87 percent of the world’s
population)
MOBILE IS DISRUPTIVE
The mobile revolution is changing the way people think, feel and behave.
Your success (or failure) in mobile will determine the future of your brand
and business.
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US
Up to 140M Smartphone
Asia
s
Mobile internet usage surpassed PC
LATAM
Europe
Laggard market
Android dominates
Worldwide
Tablet shipments surpassed PCs
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ME&A
Feature phones leapfrog PCs
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DIGITAL LEADS, MOBILE SURPASSES PC
MAJOR MEDIA: SHARE OF TIME SPENT PER DAY 2013
37.4%
19.4%
19.2%
11.9%
4.5%
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MEN ARE FROM MARS, WOMEN VENUS
GENDER DIVISION AND IMPLICATIONS
smartphones
35%
tablet
10%
pc
55%
smartphones
50%
tablet
11%
pc
39%
*Time spent online along US Internet users, April 2013
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Important Information
• By 2014, 208M tablets will be
sold worldwide*
iPAD MASK
WITH REFLECTION
• 72% of tablet owners make
purchases from their devices on
a weekly basis*
• Tablets are not as mobile as
smartphones
• Tablets are shared devices
• Tablet owners demos are older,
more affluent
• Design sites specifically to take
advantage of tablet touch
screens, orientations, cameras,
etc.; Build unique tablet
experiences that use rich media
and interaction
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Important Information
• 87% of the global population has a
mobile phone
iPHONE MASK
WITH REFLECTION
• 50% of US mobile handsets are
smartphones
• 30% of Facebook audience comes
solely from mobile
• 60% of Twitter users log in via
mobile device
• Apple changed the game but
Android is closing the gap
• Mobile retail or mcommerce is one
of the fastest growing areas of
mobile media
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MOBILE ECOSYSTEM
MOBILE CAN MEAN MANY THINGS TO MANY PEOPLE
PoS
& Payment
Platforms
& Apps
Retail
Banking
& Wallet
Mobile
Advertising
Social
& Mktng
& Search
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Today we will focus on
Mobile Retail but mobile
media and technology
encompass a large ecosystem
of players and possibilities.
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MOBILE
RETAIL
Next-Gen Retail: Mobile and Beyond
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mobile
shopping, retail, commerce
-
Noun
Finding, discovering, browning, researching,
bookmarking, price-checking, comparing, sharing,
tracking OR purchasing goods, services and
experiences – facilitated in whole or in part by mobile
devices
(also known as “mcommerce” or “tcommerce”)
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These days I use my laptop mostly
at work – but my smartphone goes
everywhere with me. I can look
up information or buy something
the instant it occurs to me,
wherever I happen to be then.
Honestly, it’s hard to imagine
what life was like before.
I’d like to store all my bank
and credit card details securely
on my smartphone so I don’t
have to worry about carrying
things with me. Why do I
need a real wallet when
I could have a digital one
on my phone?
A lot of shopping apps have too
big of a footprint; they’re too clunky,
intrusive or ad-heavy relative to
how much value they deliver. They
need to offer an experience that
justifies taking up storage
space on my phone.
I’m definitely more efficient.
Shopping is just sort of
a background process that’s
always running. And I find cool,
niche items that would’ve
taken me forever to come
across normally – with way less
stress and virtually no
time wasted.
source: Latitude, December 2012
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MOBILE IS FOR MORE THAN JUST OTG
IN WHICH SITUATIONS DO YOU USE A MOBILE DEVICE TO
SHOP OR MAKE PURCHASE?
smartphone owners using smartphones
dual owners using smartphones
dual owners using tablets
77.00%
at home
62.00%
87.00%
59.00%
60.00%
watching TV
77.00%
51.00%
on-the-go
66.00%
26.00%
45.00%
commuting/
traveling
68.00%
42.00%
36.00%
in a store
65.00%
21.00%
35.00%
at work
57.00%
32.00%
source: Latitude, December 2012
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ACCORDING TO EMARKETER, SALES IN 2013 FROM
MOBILE DEVICES - INCLUDING TABLETS - ARE
EXPECTED TO EXCEED $41 BILLION IN THE UNITED
STATES, APPROXIMATELY 16% OF ALL AMERICAN
ECOMMERCE PURCHASES
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MOBILE
RETAIL
Integrating Mobile into Omnichannel Strategy
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FRAMEWORK
STAGES OF MULTICHANNEL RETAIL EVOLUTION
0
Create
Presence
1
Align
Fundamentals
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2
Achieve
Proficiency
3
Leverage
Across
Channels
4
Optimize
Operating
Model
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Create Presence
WHAT ARE YOU WAITING FOR?
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2 outof5
80%
would be interested
In a mobile wallet
have more “me” time
or feel more relaxed.
thanks to being able to
shop with mobile devices
63%
expect to do more shopping on
mobile devices over the next
couple of years
51%
60%
have used a mobile
device while shopping
In a store
61%
feel very comfortable
making purchases from
their mobile devices
have a better opinion
of brands when they
offer a good mobile
experience
source: Latitude, December 2012
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STAGE 0
CREATE PRESENCE
• The goal here is to just BE PRESENT. According to Google:
– 85% of smartphone users have searched for local info (and 81% of those have taken as a
result, i.e. visited in person, called a business after searching)
– 57% of users say they won’t recommend a business with a poorly designed mobile site and
40% have turned to a competitors site after a bad mobile experience
• Depending on your business, value proposition and relationship with consumers,
your options are:
– Build a mobile site
– Develop a branded mobile app
– Create mobile ads/ creative
– Initiate SMS campaign/ program
– Leverage SoLoMo partnerships like foursquare
– Some combination of the above
• At this stage, awareness and reach metrics to measure include app downloads,
site visits, eyeballs/ frequency, check-ins, etc.
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Align Fundamentals
UNDERSTAND TARGET AUDIENCE
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STAGE 1
ALIGN FUNDAMENTALS
• Do your homework; Know your audience. This objective of this stage is to
conduct extensive research on your target market and what they want/ need
from mobile platforms:
– Who are your customers and who are you trying to reach?
– Who will want to engage with your mobile content?
– What needs does your audience have?
– Why do your customers need information from you in a timely manner?
– How will your target audience access your mobile content (which type of handheld device)?
– How will they use your content in their daily lives?
– How will you make your mobile content sticky and engaging?
• Brands and businesses should use multiple mobile touch points to connect with
consumers on their path to purchase
• Engagement and favorability metrics to measure at this stage include customer
feedback (insights), time spent, user reviews, photo/ video uploads, etc.
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Case Study
Shopkick and Target
Shopkick is free and available on iPhone and Android devices. When
guests walk into their Target store, Shopkick rewards them with “kicks”
points. Then as guests shop the store, they have the opportunity to
scan products for additional kicks.
Kicks can be redeemed for Target gift cards, Facebook credits, dining
gift certificates, iTunes downloads, donations to charities, and more.
Guests can also receive special in-store deals including coupons and
discounts.
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Achieve Proficiency
STRATEGY AND SCALE
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STAGE 2
ACHIEVE PROFICIENCY
• The goal of this stage is to achieve operational proficiency and gain scale in the
new channel.
• Mobile should be viewed as both a channel and a touch point to incent/ ease
purchase, engage customers and deliver relevant, personalized, real-time
communications.
• Mobile challenges include:
– Scale (in the short term)
– User insights are often less accessible
– Mobile data is complex
– Steep learning curve
• Efficiency metrics to measure include opt-in rates, cost per download/
acquisition, increased foot-traffic, increased basket size, monthly per user visits,
in-app clickstream and analytics, etc.
• Can you name a retailer who has built a well-designed app or mobile website
that helps to achieve operational efficiency and/or gained scale in mobile
channel?
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Case Study
Domino’s Pizza
Domino’s mobile app lets customers order more than 1.8B pizza
combinations from anywhere and follow their order’s step-by-step
progress with the Domino’s Live Pizza Tracker.
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HAVING A MOBILE APP
IS NOT THE SAME AS
HAVING A MOBILE
STRATEGY
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Leverage Mobile
INTEGRATE ACROSS CHANNELS
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STAGE 3
LEVERAGE ACROSS CHANNELS
• The objective of this stage is to continue reducing costs, increasing
effectiveness and to deploy assets or capabilities developed in mobile into other
channels.
• Opportunity lost:
– Poor and inconsistent customer experiences, marked largely by a lack of cross-channel
integration, amounts to about $83 billion in lost sales in the U.S. each year, according to a
new survey from IBM.
– 49% of US consumers believe the best thing that retailers can do to improve the shopping
experience is to better integrate in-store, online and mobile shopping channels, details a
survey conducted by Accenture.
– That same Accenture study showed 53% of consumers want to receive unique pricing,
automatic discounts, free returns, or pre-sales based on their loyalty/purchase history –
across all channels. Similarly, 53% want to be able to earn and use their loyalty rewards instore, online or on a mobile device.
• Integration metrics to measure include creative content reuse, mobile coupon
redemption, SMS click through/ redemption rates, barcode scans, mcommerce
checkouts or purchase transactions, etc.
• Can you think of a retailer who has integrated mobile across channels well?
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Case Study
Starbucks
The Starbucks app generates customer loyalty and drives customer
transactions by letting more than 1M coffee-drinking smartphone users
locate stores, scan barcodes at PoS, reload their Starbucks Cards and
share their locations and favorite drinks via social networks.
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OPTIMIZE MODEL
TAKE TO ENTERPRISE LEVEL
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STAGE 4
OPTIMIZE THE OPERATING MODEL
• In this final stage, the objective is to optimize operating models at the enterprise
level.
• Mobile needs to be viewed as a priority from the senior levels down. Here are
some questions your organization should be asking:
– Is mobile a key metric in your management dashboard?
– How often do you review your mobile stats and who is accountable/ responsible?
– Who owns mobile analytics and insights? Who’s watching tablet traffic trends, consumers’
actions on your mobile site, mobile’s inclusion in product launches and campaigns?
– Which decisions would change if key business leaders were given timely mobile data?
– Who monitor your competitions investment and activities in mobile?
• Optimization metrics to measure include ROI, customer lifetime value, YoY
mobile budget, user segmentation, time to first mobile conversion/ purchase,
etc.
• Pick a company and think how they could better integrate mobile into their
channel strategy. How would you optimize mobile for this retailer/ business?
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Case Study
Nordstrom
Nordstrom is widely praised in the retail community for experimenting
and adopting mobile technology. Not only are iPads available in-store,
the mobile app combines commerce, customer service and crosschannel engagement by letting consumers buy products, curate looks,
create a wish list, venture in-store for events, call customer service and
share their favorite items with their friends via social networks and sms/
email.
For Nordstrom, mobile is not just a retail channel or customer touch
point. They have progressed to the final stage of retail evolution and
begun optimizing the entire enterprise for mobile. Nordstrom senior
executives have committed over $150M in back-end infrastructure
improvements to better support mobile initiatives and m/tcommerce.
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Metrics and Measurement
MOBILE ANALYTICS
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MOBILE ANALYTICS
THE SITUATION
• Mobile ROI is the elephant in the room…
• AND It’s the primary factor preventing mobile from fulfilling its promise.
• Digital marketing is renowned for its ability to track and quantify every click and
conversion. However, mobile is still a new platform and newer media tactics
never get the same rigorous analytics as traditional ones. Moreover the
fragmented mobile landscape (OS, manufacturer, app versus web, etc.) and
inability to cookie mobile devices further complicates measurement. What’s
more, the models we rely on don’t always work for mobile.
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MOBILE PATH TO PURCHASE
(ILLUSTRATION)
Locate store on
smartphone
Visit store
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Do a quick price
comparison with her
bar scanner app
Look at competitor
sites
Either buy online or pay
at physical register
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The traditional model of calculating
ROI simply doesn’t work. There’s a
significant loss of data as she moves
between multiple devices and realworld touch points.
We need to develop a NEW model
that addresses this problem by
building on what we know about the
desktop Web, mobile devices and
consumer purchasing behavior.
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FOR EXAMPLE
(FOLLOW THE REASONING)
Product details viewed on a
smartphone are far more likely to
be viewed in-store when the
consumer is closer to making a
decision, elevating the value of
that action
Likewise, it’s logical that a higher
percentage of customers
requesting store-locator
information on a smartphone will
visit that store
Assume a reasonable conversion
number and average shopping cart
value, and you start to have a
high-level approximation of value.
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MOBILE ANALYTICS
Sample metrics
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What is it?
User
acquisition
cost
Percent of new
leads
User retention
rate
Percent of
mobile
influenced
customers
This metric will show
you exactly how
much money you are
spending to get one
mobile customer.
This calculation will
help you determine
how many of your
leads were generated
from mobile.
Why it
matters?
Compare this
number with your
other marketing
efforts to see how
much you are
spending to acquire
customers.
Knowing how many
leads came from a
specific place will
help you decide
where to focus
marketing efforts.
You can use this
number to see how
many customers are
coming back to your
app (after
downloading it).
If customers only
use your app only
once, you need to
know that so you can
figure out why then
fix the problem.
Use this calculation
to see how many of
your customers
made a purchase
because of your
mobile efforts.
This metric will
further help you
understand the
buying behavior of
customers and
which ones are using
mobile.
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Calculation
Total Cost Of Mobile
App: $5,000
Number Of App
Users: 1,000
Total New Leads Per
Month: 500
Mobile App Leads
Per Month: 50
Mobile site Leads Per
Month: 50
Number Of App
Requests: 20,000
Number Of App
Users: 1,000
Total New
Customers Per
Month: 200
Customer Who Used
Your App: 20
Customer Who Used
Mobile Web: 20
Sample
$5,000 / 1,000 App
Users =
$5 Per New Mobile
Customer
500 Leads / 100
Mobile Leads =
20% Of All Leads
Were From Mobile
20,000 Requests/
1,000 App Users=
Average 20 Requests
Per User
(the same can be
calculated for unique
versus repeat mobile
web visitors)
200 Customers / 40
Mobile Users =
20% Were Influenced
By Mobile
How to
improve
The more users that
download your app,
the lower the
acquisition cost.
Continuously market
your app to
customers to ensure
you continue getting
new downloads.
Put items in your app
that are redeemable.
Making these time
sensitive can
sometimes
encourage
immediate action
from customers.
Ensure the offer is
interesting and
worthwhile.
You
need to make
sure your app has
great content to
begin with, but also
refreshing that
content and giving
users a reason to
come back is very
important in building
mobile loyalty.
Like the first metric,
you must increase
your app awareness.
Possibly launch a
ongoing marketing
camping to ensure
all your new and
loyal customers are
in the know.
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MOBILE TIMELINE
FOR EXECUTION OF STRATEGIC IMPERATIVES
USERS
MEASURE
OPTIMIZE
Do your homework
Specify metrics, collect
data, track and adjust
Change the model
TRIAL
STRATEGY
INTEGRATE
Don’t be shy
Deliver the right content
to the right person at the
right time
Don’t let mobile sit in a
silo
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MOBILE ECOSYSTEM
MOBILE CAN MEAN MANY THINGS TO MANY PEOPLE
PoS
& Payment
Platforms
& Apps
Retail
Banking
& Wallet
Mobile
Advertising
Social
& Mktng
& Search
Presentation to Santa Clara University  October 9, 2013
Today we will focus on
Mobile Retail but mobile
media and technology
encompass a large ecosystem
of players and possibilities.
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BACK TO THE BIG PICTURE…
What are other opportunities in mobile that you can think of?
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THANK
YOU
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Q&A
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