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New Retail Tools, Strategy Help Improve Market Share

Jan 12, 2011 8:10 PM   By Rapaport News
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If you are a retailer and did not attend the National Retail Federation's (NRF) Big Show in Manhattan, here are interviews with three vendors who offer services and information to arm you for growing market share.  Esri offers marketing research software solutions; Multimedia Plus provides training solutions, and lists several top brand jewelers; and ForeSee Results provides new insight on the latest retail mobile shopping trends that retailers cannot ignore and stay competitive. 

Esri shows jewelers and marketers how their geographic information system (GIS)  can be used to map demographics in a given area. The results give clients the insight to plan inventory, create specific email or advertising campaigns, and shows where jewelry, diamonds, and other products are in demand based upon consumer demand.

One size does not fit all when hiring or training staff.  Multimedia Plus, who works with a number of top jewelers, determined that training employees is part of a much larger "visual branding" program. The company creates training and testing programs in digital form for their clients — which include Cartier, Giorgio Armani, Hermes, Guess, Stuart Weitzman, David Yurman, Mont Blanc, Movado, Ralph Lauren and others.

ForeSee Results reported on an "explosion" of mobile technology that will inevitably drive the retailers' next steps in marketing.

Kevin Ertell, vice president of retail strategy at ForeSee Results, revealed the latest statistics at the NRF Big Show. The consumer is growing even more empowered with mobile technology. With the touch of a button, almost anywhere, consumers can research products, companies, and even make purchases. How does this trend impact a retailer’s bottom line? What can retailers do to retain mobile shoppers as customers across all channels?

As part of a study of nearly 10,000 visitors to the biggest retail websites in the United States and as determined by revenue according to Internet Retailer, ForeSee Results used the methodology of the American Customer Satisfaction Index (ACSI) to examine the impact of mobile shopping trends on retailers.  The ACSI is able to show how customers’ satisfaction with various interactions with a company (including mobile shopping and applications) impact visitors’ purchase intent, loyalty, and recommendations across all channels.

ForeSee found the use of mobile phones to access companies’ websites, mobile websites and applications for shopping purposes is increasing dramatically, indicating that any retailer who is not wholeheartedly embracing the mobile trend is leaving money on the table for competitors.

Key findings included:

• Shoppers are using mobile phones to access websites and apps more than ever before. 33 percent of respondents have used their phone to access a retailer website, and an additional 26 percent indicated they plan to access retailer websites or mobile apps by phone in the future.

• Mobile purchase behavior is exploding. A total of 11 percent of web shoppers reported having made a purchase from their phones this holiday season, compared to only 2 percent at this time last year.

• Shoppers use their phones for a variety of tasks. The majority of shoppers who used their phones did so to compare price information (56 percent). Shoppers also used their phones to compare different products (46 percent), to look up product specifications (35 percent), and to view product reviews (27 percent). 

• Shoppers use their phones to look at competitor websites. While in physical stores, more than two-thirds of mobile shoppers (69 percent) used their phones to visit the store’s own website, but nearly half (46 percent) also used their phones to access a competitor’s website.

• Traditional websites satisfy shoppers more than mobile sites and apps. In general, shoppers rate their satisfaction with retail websites significantly higher (78 on the study’s 100-point scale) than their satisfaction with mobile experiences (apps and sites) (75).

• Good experiences with mobile sites and apps have critical cross-channel impact. Shoppers who are highly satisfied with a mobile experience say they are 30 percent more likely to buy from that retailer online and 30 percent more likely to buy offline, as well as being far more likely to return to the main website, recommend it, and be loyal to the brand.

Mobile Phone Use on the Rise

Analysts are predicting that smartphone use will outpace feature phone use by the end of 2011, which means more people than ever before will have retailer websites, mobile websites, and retailer-supplied applications within arm’s reach any time, any place.

In the study, 33 percent of all survey respondents indicated that they had accessed a retailer’s website using a mobile phone (compared to 24 percent in 2009) and an additional 26 percent indicate that they plan to use their mobile phone to visit a company’s website, mobile website, or mobile application in the future. In other words, more than half of all online shoppers are either already using or plan to use their phones for retail purposes. This finding indicates a huge opportunity for retailers with sophisticated, user-centric mobile sites and apps.

Compared with 2009, about three times as many people are using their phones for product research purposes. Use of retailer-developed mobile applications has increased seven-fold, and purchasing from phones has quintupled. Any retailer not making huge strides in developing user-centric mobile shopping apps is leaving money on the table for competitors.

Among the group that exhibited mobile shopping behavior for the specific Top 40 retailer they rated, most looked up price information (56 percent), compared different products (46 percent), looked up product specifications (35 percent), or viewed product reviews (27 percent). Retailers need to understand what their shoppers want, need, and expect so they can develop mobile apps and sites accordingly.

Mobile phones give retailers the opportunity to target customers not only in their own brick-and-mortar stores, but also in their competitors’ stores. While some retailers have adopted location-based advertising that shows mobile shoppers targeted advertisements and specials based on their locations, our research shows that customers are actively visiting competing websites and apps in order to get product information. In fact, the proportion of mobile shoppers who look at a competitor’s site while in a retailer’s brick-and-mortar store has nearly doubled compared to last year (46 percent compared to 25 percent). Having accessible and easy-to-use in-store product comparison tools may be one way to prevent customers from turning to competitors for information and to make purchases.


Measuring Satisfaction is a Must

The ACSI methodology used to conduct this study recognizes that satisfaction itself is not the only desired end result. As shown in the following diagram, a world-renowned economics professor at the University of Michigan created a methodology that measures customer satisfaction in such a way that it predicts customers’ likelihood to shop again, buy more, or be loyal to the company in question. It has even been shown to predict stock prices.

 
The impact of mobile customer satisfaction on a retailer’s multichannel business is clear. The data shows that a satisfied shopper is far more likely to purchase (online and offline), remain loyal, and engage in positive word-of-mouth recommendations than is a dissatisfied mobile shopper. While this may be intuitive, the ACSI is able to quantify the impact of a satisfied online shopper on a retailer’s overall business operations.

As shown, customer satisfaction leads to:

• Future purchase: Compared to shoppers who are dissatisfied with a mobile experience (have satisfaction scores of 69 or lower), shoppers who are highly satisfied with a mobile website (have satisfaction scores of 80 or higher) say they are 30 percent more likely to purchase from that retailer online and 30 percent more likely to purchase offline.

• Loyalty and market share: Compared to dissatisfied mobile shoppers, those who are highly satisfied are 33 percent more likely to buy from that retailer the next time they buy similar merchandise (customer loyalty), 34 percent more committed to the brand, and 26 percent more likely to return to the company’s website.

• Positive impression of the retailer overall: Satisfied mobile shoppers are 32 percent more satisfied with the retailer overall than dissatisfied shoppers.

• Positive word of mouth recommendations: Highly satisfied mobile shoppers are 35 percent more likely to recommend the website to a friend, family member, or colleague than are dissatisfied shoppers.

1800Flowers.com Case Study

Of the top 40 e-retailers measured, one retailer stands out in terms of mobile savvy: 1800Flowers.com. Of all the companies measured, 1800Flowers had the largest proportion of customer usage of their mobile app, specifically, in the past three months (14 percent).  In total, one in five (21 percent) 1800Flowers.com customers said they used their mobile phone to access the company’s website or mobile app, which puts the company in the top three of the 40 individual  retailers measured as part of this research. Other retailers customers accessed via mobile include Apple (31 percent), which is most likely due to the link between the iPhone and iTunes, which is used to download music and applications; and Nordstrom (23 percent). 

In addition, 1800Flowers customers are more likely than customers of all other top 40 retailers to prefer to receive product information from the company through mobile text messages or alerts (15 percent), rather than through other channels (email, postal mail, the website, etc.). 

How does this company succeed with mobile? 1800Flowers offers tailored interfaces for the iPhone and iPod Touch, Android, Blackberry, and feature phones with mobile web. Additionally, users can set up text message reminders of holidays and special events, which then allows them to immediately send a gift from their mobile device. Users have the option to integrate their mobile account with their address book so they don’t have to reenter contact information for their recipients.    

Additionally, users are given the option to manage their accounts across channels either online or on their phone. 1800Flowers’ nimble adaptation to mobile has big results. In general, users who are influenced to visit a company’s website based on a mobile phone text message or alert have a satisfaction score three points higher (81) than the aggregate satisfaction score (78). Since highly satisfied customers are more likely than dissatisfied customers to buy from a retailer online and offline, as well as return to the site, recommend it, and be loyal to the brand, 1800Flowers’ approach to development in the mobile space will serve it well when it comes to attracting and retaining customers. 

Conclusion

Applications and websites tailored to mobile shoppers are a must-have for retailers. As smartphone use increases, more customers will turn to the mobile channel to find price and product information before making a purchase. Whether or not a customer turns to a specific retailer’s site or app will be dependent on availability and ease of use. Since satisfaction with mobile experiences drives critical customer behavior, the measurement of satisfaction with websites, mobile websites, and mobile apps shoppers is a necessity.  

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