Leveraging the Customer-Driven Channel

Retailers entering the second decade of the 21st century have a lot to contend with. From an increasingly complicated and globalized supply chain and competitive landscape to sweeping economic disturbances and sharp disruptions in shopping behavior, retailing has never been more complicated nor higher stakes than today.

Adding to that mix of factors, retailers now face a shopping revolution: customers armed with powerful mobile devices, expecting instant access to information, services, and next-generation experiences -- in their homes, as they go about their days, and in retail stores.

With smartphone penetration in the United States projected to top 50% by 2012, retailers have a small window of opportunity to embrace the customer-owned mobile device, or risk ceding this new ground to their competitors.

Shoppers are armed with a new kind of device: smartphones that offer high-definition touchscreen interaction, location-awareness, camera interfaces, and an "always on" Internet connection. Couple this with the easy download of "apps," making it simple for anyone to add new programs to their phone, and shoppers have a powerful tool in their hands to check prices, read reviews, locate products, manage lists -- and just about any other shopping feature imaginable.

But turning mobile shoppers into profitable customers is far from simple. Retailers looking to take advantage of this new opportunity have their work out for them as success at mobile retail will involve:

  • Mastering a myriad of mobile devices: Android, Blackberry, iPhone, Symbian and Windows Mobile all maintain roughly equal market share among smartphones, not to mention dozens of handset manufacturers and cellular carriers. To embrace all their shoppers, retailers will have to create mobile shopping experiences across many types of devices.
  • Introducing new technologies into the store: While experiences based solely on the "mobile Web" are a step in the right direction, leading-edge retailers are already introducing next-generation barcodes that link the physical world and the electronic, new payment technologies that let the mobile phone act as a "wallet," and sophisticated wayfinding and augmented reality that make real-world navigation simpler.
  • Integrating information throughout the enterprise: Mobile phones, at the end of the day, are simply an interface to information that today resides in dozens of retail systems. Clienteling applications will require new customer data and CRM functionality, while delivering offers to the phone means an interface into the POS. And all these new interfaces will require near perfect data, as telling a shopper the wrong thing is worse than saying nothing at all.
  • Putting the customer first: While few retailers have a "customer czar" that steers all roles and departments toward a customer-centric view of the brand, this idea and position becomes critical if retailers are to avoid the pitfalls and organizational stumbling blocks they faced in evolving e-commerce during the 1990s.

Whether a simple text message promotion campaign or a sophisticated shopping app, retailers' experiments with mobile shopping will pay off the most when integrated into a holistic mobile retail strategy that stretches from the finger on the touchscreen throughout the enterprise.

RIS News and the Global Retail Executive Council (GREC) will expand this executive summary into a major report that will be released at the Retail Executive Summit on June 18. The report will be posted on the RIS Web site in June followed by a webinar in July.


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