Digital Commerce in Retail: Supporting a Common Mobile Customer Journey RETAILER SURVEY - CONDUCTED NOVEMBER 2014

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1 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey RETAILER SURVEY - CONDUCTED NOVEMBER 2014

2 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey CONTENTS 1. Background Results High Level Trends Conclusions 15 02

3 1. Background The evolution of the retail industry has seen merchants go from simply serving customers via stores to having to conduct relationships with customers across multiple channels. Although the turn of the last century saw many observers predicting the end of the bricks and mortar shop due to the rise of online retailing, the reality of new retailing has been somewhere in between. Store portfolios for many retail sectors have diminished, but the most profitable retailers of the moment are those which successfully mix brick and clicks and provide a suitable platform for customers to engage with them in the manner of their choice. At the heart of new retail lies mcommerce and the potential for businesses to engage, inform and sell to consumers through their mobile devices. At a time of huge change for the industry, the GSMA wanted to assess how merchants are using mobile in-store and how they are using the technology to get people to visit their stores. Having conducted a number of interviews with the industry representatives as part of the In-Store Shopper Journey workstream, a decision was made to engage with Essential Retail a popular retailer magazine, to broaden the scope of the research. Merchants from all sectors of the industry answered our questionnaire, below is a summary of their responses. It s clear that the point of transaction whilst being functionally the most important and where a customer potentially comes face to face with staff representing the brand or retailer, it is not the most important place to communicate with the shopper. The mobile is a device which allows relevant communication between merchant and shopper to support a change in behaviour, something which all merchants would like to do. These pre-store and in-store experiences are critical in making that change in behaviour, incentivising the shopper at the right time. It s clear that successful merchants want to engage on the mobile and are investing to engage more with their shoppers, but in light of this, the GSMA have conducted research to see if there are any similarities in these customer journeys which could support merchants to deliver consistency in what appears to be identical requirements of a retailer. Why develop something many times when requirement can be documented, technology developed to provide merchant solutions and shopper consistency and usability. This booklet serves to support the GSMA s analysis of customer journey use cases and related technology enablers. The findings of this analysis are documented in detail in the Digital Commerce in Retail: Supporting a Common Mobile Customer Journey white paper prepared by the GSMA. To make sense of the survey responses presented below, it is recommended to read this booklet in conjunction with the white paper: Digital Commerce in Retail: Supporting a Common Mobile Customer Journey. 03

4 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey 2. Results Q1 Which term best describes your organisation? Grocery retailer Fashion & Apparel (including footwear and sports) retailer Department store General Merchandise retailer Health & Beauty retailer Electricals (including mobile phones) retailer Entertainment retailer Convenience retailer Food and drink to go retailer Grocery retailer 14.75% 9 Fashion & Apparel (including footwear and sports) retailer 22.95% 14 Department store 14.75% 9 General Merchandise retailer 22.95% 14 Health & Beauty retailer 9.84% 6 Electricals (including mobile phones) retailer 6.56% 4 Entertainment retailer 3.28% 2 Convenience retailer 1.64% 1 Food and drink to go retailer 3.28% 2 Total Respondents 61 04

5 Q2 What is the size of your organisation? Tier stores, annual revenue over 500m Tier stores, annual revenue over 30m Tier 3 - Fewer than 30 stores, annual revenue under 30m Tier 4 - smaller speciality stores and independents Tier stores, annual revenue over 500m 38.98% 23 Tier stores, annual revenue over 30m 35.59% 21 Tier 3 - Fewer than 30 stores, annual revenue under 30m 11.86% 7 Tier 4 - smaller speciality stores and independents 13.56% 8 Total Respondents 59 Q3 Does your company have a mobile strategy? Yes No Don't know Yes 74.58% 44 No 22.03% 13 Don't know 3.39% 2 Total Respondents 59 05

6 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey Q4 Does your company offer contactless payment in its stores? Yes No Don't know Yes 29.31% 17 No 68.97% 40 Don't know 1.72% 1 Total Respondents 58 Q5 Is your organisation considering introducing contactless payment facilities in its stores? Yes No Don't know Yes 57.50% 23 No 27.50% 11 Don't know 15.00% 6 Total Respondents 40 06

7 Q6 Does your company have a mobile app? Yes No Don't know Yes 57.89% 33 No 42.11% 24 Don't know 0.00% 0 Total Respondents 57 As per responses to the questions above, the majority of merchants already have a mobile strategy in place (75% of responses), showing that the ecosystem understands and appreciates the importance of mobile to their business (see above, in red). Furthermore, almost 60% of respondents already have a mobile app available to their customers, aimed at increasing the use of mobile during the shopping experience. However, only 30% of respondents confirmed that their business offers contactless payment, with almost 60% of those currently not offering the service, considering it in the near future. Almost 60% of respondents already have a mobile app available to their customers, aimed at increasing the use of mobile during the shopping experience. 07

8 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey Q7 When is it best to engage with customers on mobile, to incentivise them to engage with your brand? Please rank in order of importance. Pre-store In-store At point of transaction Post transaction / Total Average Ranking Pre-store 77.36% 5.66% 9.43% 7.55% In-store 13.21% 58.49% 20.75% 7.55% At point of transaction 3.77% 20.75% 54.72% 20.75% Post transaction 5.66% 15.09% 15.09% 64.15% According to results, the vast majority of merchants believe that the best time to engage with potential customers is during the planning stage and whilst the customers are instore over 75% and 60%, respectively (see above, in red). Appropriate customer engagement during those two stages might greatly stimulate increase in footfall and influence customers affinity for the brand. Merchants aim, therefore, is to recognise and learn as much as possible about their customers and use this knowledge to engage them early on in the shopping journey. The vast majority of merchants believe that the best time to engage with potential customers is during the planning stage and while in-store. 08

9 Q8 Which of the following would you consider offering customers via mobile, outside of the store? (You can choose more than one option.) Creating a shopping list Checking in on social media Offers based on trend or location Scanning barcodes/qr codes of products or promotions Accessing loyalty account Standard product information, such as imagery/contents/ingredients Availability of Click & Collect Gamification Information on stock levels/product availability Digital receipt Store location Returns information Loyalty/CRM sign-up Bluetooth beacon/ibeacon Creating a shopping list 55.10% 27 Checking in on social media 61.22% 30 Offers based on trend or location 63.27% 31 Scanning barcodes/qr codes of products or promotions 48.98% 24 Accessing loyalty account 61.22% 30 Standard product information, such as imagery/contents/ingredients 46.94% 23 Availability of Click & Collect 69.39% 34 Gamification 10.20% 5 Information on stock levels/product availability 40.82% 20 Digital receipt 42.86% 21 Store location 65.31% 32 Returns information 30.61% 15 Loyalty/CRM sign-up 46.94% 23 Bluetooth beacon/ibeacon 16.33% 8 Total Respondents 49 An outcome of the question above is a set of most desirable use cases as highlighted by respondents for customer engagement outside the store. Amongst the top listed are: ability to scan an item for more information/promotions, creating a shopping list, checking in via social media, access to loyalty account, availability of different offers, location of the store and availability of click & collect services as the top most popular choice (see above, in red). The wide range of responses might imply that the industry is still to determine which approach is the most successful one. It is worth noting that the importance of both gamification and ibeacons was rated very low, with only around 15% of respondents picking them as core use cases. 09

10 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey Q9 Which of the following would you consider offering customers via mobile, inside a store? (You can choose more than one option.) Creating a shopping list Checking in on social media Offers based on trend or location Scanning barcodes/qr codes of products or promotions Accessing loyalty account Provide Wi-Fi access Standard product information, such as imagery/contents/ ingredients Help available to customers Information on stock levels/product availability Ability to get in-store product location Bluetooth beacon/ibeacon Creating a shopping list 39.58% 19 Checking in on social media 43.75% 21 Offers based on trend or location 54.17% 26 Scanning barcodes/qr codes of products or promotions 54.17% 26 Accessing loyalty account 56.25% 27 Provide Wi-Fi access 79.17% 38 Standard product information, such as imagery/contents/ingredients 56.25% 27 Help available to customers 58.33% 28 Information on stock levels/product availability 43.75% 21 Ability to get in-store product location 45.83% 22 Bluetooth beacon/ibeacon 31.25% 15 Total Respondents 48 A range of use cases is currently considered by respondents when engaging customers in-store. However, providing Wi-Fi is seen as crucial by the vast majority, with almost 80% of respondents selecting it as an option. Other important use cases, with over 50% respondents choosing them, include: ability to help customers in-store, standardised product information, access to loyalty account, ability to scan products and targeted offers (see above, in red). Similar to the outside-the-store case, the trend is to provide a range of services to engage with customers and get to know them better, leading to better understanding and consequently better accommodation of their needs. 10

11 Q10 What has the greatest impact on changing customer behaviour? Please rank in order of importance. Identifying the customer for better engagement Using merchants own social media updates Using influential customers via social media Personalised offers and coupons Non-personalised offers and coupons Using contextual information such as weather, time of year, local events, national sports / Total Identifying the customer for better engagement 45.45% 29.55% 18.18% 4.55% 2.27% 0.00% Average Ranking Using merchants own social media updates Using influential customers via social media Personalised offers and coupons Non-personalised offers and coupons Using contextual information such as weather, time of year, local events, national sports 4.55% 25.00% 18.18% 22.73% 25.00% 4.55% % 11.36% 27.27% 25.00% 15.91% 13.64% % 22.73% 13.64% 22.73% 4.55% 2.27% % 9.09% 18.18% 4.55% 43.18% 20.45% % 2.27% 4.55% 20.45% 9.09% 59.09% Influencing customers behaviour is the main reason for all marketing activities. According to participants in the survey, identifying customer needs and understanding customer behaviour is crucial in changing their actions. They also highly value the ability to provide personalised offers and coupons followed in importance by the influence of social media. 11

12 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey Q11 Who is best placed to support your mobile strategy? New technology players (Google, Apple, Facebook, Twitter, etc.) Mobile operators Banks Card schemes White label organisations New technology players (Google, Apple, Facebook, Twitter, etc.) 74.42% 32 Mobile operators 9.30% 4 Banks 2.33% 1 Card schemes 2.33% 1 White label organisations 11.63% 5 Total Respondents 43 Interestingly, 70%+ of respondents did not see mobile operators as a resource for providing mobile solutions, citing new tech companies as best placed for this purpose. It is also worth noting that neither banks nor card schemes are seen as sources of support for retailers in this space. Q12 Retailers are increasingly identifying the benefits of using Mobile technology to better engage customers. In your view, how crucial is Mobile in your overall business strategy, and why? A number of interesting comments were left by a variety of retailers, showing the understanding of the role that mobile plays in their strategy and the level of importance they are attaching to mobile. Some examples are shown below: Need to engage more often with current customers. Mobile numbers are given more often than landline numbers which is their main port of call. Inter action between business/customer. It is not crucial at this point but as customers become more used to handling technology in this sector it will become crucial to growing the business both in terms of customers and product range. Mobile can be the physical customer connection to the brand for ecommerce and bricks & mortar sales. Critical. It is the fastest growing channel and the glue between online and shops. 12

13 We believe future is handheld devices and we are developing our mobile strategy in line with 21st century because we think it s the future of our company. Important but just as important is the need to avoid overloading the consumer with information in the offline and online space - choose the technology that will have the greatest positive impact on the consumer journey/ experience and look to deploy sooner rather than later. Mobile has to be critical to any retail business. More and more customers are shopping online and failing to provide a mobile solution serves only to reduce the size of market they are serving. Very crucial as it supports our key strategic aims to target new customers and to engage with and retain existing customers. Part of our channel strategy. We are looking at mobile as an assisted selling option. So important to help increase ROI. Very. Customers operate multi touch point interactions simultaneously, however the one consistent element is mobile - anywhere anytime. It s the future or the thing that will required to survive in the Retail market. Because of the age group mobile technology is not particularly important but I m sure that it will in the future. It s on the top of our priority list, because there is no doubt that people s affinity for everything mobile will only increase in the next years. Increasingly important as more traffic and orders made by mobile. The number of mobile and tablet devices continues to increase - as does consumers usage of mobile apps and online mobile to browse/buy products and use mobile to interact with a brand through the whole consumer journey. So mobile technology is important. At present technology investment tends to be on big ticket items such as building a new ecommerce site, Distribution Centres, etc. - so mobile technology does not always get the appropriate level of investment. Mobile is very important in our strategy; we are in the process of developing a mobile site that works in conjunction with our own site so that the brand and consumer message is clear and consistent. In my view it is crucial and if organisations do not catch up with the array of possibilities offered by this technology they run a risk of sinking next to the competition. Mobile technologies are personal, and in today s world they carry the entire life of our customers, thus we need to be present, engaging and influential in this medium. Highly, as allowing our colleagues to be where our customers need them with relevant information, presented in a familiar format is a necessity. Extremely important. Customers must be given the choice to make sure they can interact and shop in a way that s convenient for them. Our challenge is to keep that interaction simple and consistent with our values e.g. customer care. It is vital. Very, because more people are starting to shop on mobile every day. It is important we move with the times in order to keep at pace with national players. We must ensure our mobile proposal is maximised to its full potential and fit for the future. Currently 35% of traffic and growing so extremely important. Very... customers become more mobile focussed year on year - if we don t keep up we won t be able to compete in the market. Absolutely crucial, retailers who do not embrace it will fall further and further behind. From children to pensioners, mobile technology unlike any other, is available and used from morning to night. Not that critical. Integral- trend of mobile shopping and social networking on mobiles will cause us to miss sales unless we have robust mobile strategy. Mobile is of paramount importance as it utilises the customers own hardware to support the company s multi-channel strategy. Increasingly important but as yet benefits unproven. Absolutely central to our business strategy. Our growth in customer interaction has been unprecedented over the last 2 years and this shows no signs of changing. 13

14 Digital Commerce in Retail: Supporting a Common Mobile Customer Journey 3. High Level Trends General Merchandise retailers: When asked what they would consider offering customers via mobile in a store, general merchandise retailers were most likely to choose Wi-Fi access and the capacity to check in on social media. The top three mobile-related services general merchandise retailers would offer customers out of the store are click & collect information, the capacity to check in via social media and store location. Grocery retailers: Grocery retailers view personalised offers and coupons as having the best impact on changing customer behaviour. Grocery retailers are more likely to consider beacon services than other retail sectors. Fashion & Apparel retailers: Gamification is not a popular use case for mobile among any of the sectors questioned, but fashion retailers show the least desire to use gamification to engage with customers outside of the store. Fashion retailers are least likely to offer contactless payment among all sectors questioned, although a significant percentage are considering the technology in the future. Department stores Department stores are clearer about their mobile plans than other sectors, with 89% of those questioned saying their company currently has a mobile strategy in place. 78% of department stores would consider allowing customers to use their mobile phones in-store to scan for promotions. 14

15 4. Conclusion With so many ways to engage with customers via mobile, the ecosystem has their work cut out to choose the most productive options. Merchants are showing an appetite for implementing in-store consumer engagement strategies using mobile technology as it is clear that a growing number of their customer base are embarking on their shopping journeys with smartphones and tablets in their hands. The problem these businesses have, as with any emerging market, is where to hedge their bets. Finding the best strategy might involve trialling a number of the options available and being prepared to fall fast and quickly move on to the next engagement tactic; only by testing these new pre-store and in-store mobile capabilities will merchants get to understand how their customers want to interact with them, and we all know that creating loyal, happy customers is the ultimate goal. Customers operate multi touch point interactions simultaneously, however the one consistent element is mobile anywhere anytime. 15

16 About the GSMA The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai and the Mobile 360 Series conferences. For further information, please contact: GSMA London Office T +44 (0) Follow the GSMA on OCTOBER 2014 GSMA 2015

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