Post Categories: Market Watch

Constantly Connected: Catering to the Mobile Lifestyle

By Retail News Insider

feb14-market-coverIf you’re one of the over 175 million Americans who uses a smartphone, chances are you’re living the mobile lifestyle. What exactly does that mean? In technical terms, the mobile lifestyle is defined as a way of life that’s been shaped by the advent of mobile devices and mobility, which have and continue to impact every aspect of human behavior in today’s constantly connected world. In real-life terms, it means you’re engaging with friends via social media, depositing checks, paying your credit card bill, keeping track of your shopping lists and more— all via a 4-inch device that fits neatly in your pocket.

For retailers and brands, the implications of this new digital way of life are huge. “The mobile lifestyle is changing the way we shop,” says Giovanni DeMeo, Interactions’ Vice President of Global Marketing and Analytics. “Today, consumers have the ability to order pretty much anything online—from electronics to the most perishable of grocery items. We have to figure out how to engage with shoppers who are moving wholly toward that way of life.”

Though the move to all-things-digital might, at first glance, seem to imply brick-and-mortar stores will soon become a thing of the past, the hard numbers show that’s not likely to be the case. According to the National Retail Federation, over 90 percent of shopping is still done inside physical stores. The real key will be marrying the in-store and mobile experiences for the 66 percent of consumers that Cisco Consulting Services says already search for products using their mobile devices before purchasing them in-store. As Jon Stine, Cisco Consulting Services’ North American Retail Lead, puts it, “The retailers that will win more revenues from customers today and in the future will be the ones that offer the best online experience and integrate it with the consumers’ in-store shopping experience.”

feb14-market-picWalmart has been one of the leaders in this area for several years now. The retail giant has created an app for smartphones and tablets that allows in-store users to scan products off the shelf and instantly see ratings and reviews from its website. Shoppers can also keep a running tally of their purchases to help make sure they’re sticking to their budget before they get to the register. With the app’s “store mode” turned on, in-store users can also view the unique layout and inventory of the location they’re in. If an item they’re looking for isn’t in stock at that store, they’re given the option of purchasing it online.

Home improvement leader Home Depot has developed an app with similar functionalities. It allows in-store users to search that particular location’s inventory and pinpoint where an item is—down to aisle, shelf and bin (visibly numbered throughout the store). Users can also scan items in-store to look up online reviews, and order products on-the-go via their mobile device and pick them up at their local Home Depot store.

Wondering whether these types of apps truly engage shoppers any more than the “typical” coupon/loyalty card app that has otherwise dominated the marketplace in recent years? According to CNET News, within the first 2 weeks of Walmart’s app launch, the company reported 60 percent of shoppers had turned on “store mode” and 12 percent of its online sales made through the app came from users inside its brick-and-mortar locations. As for Home Depot, its app has been downloaded by over 3.5 million users, and the company attributes one-third of its online traffic to mobile devices.

jan14-calendarOne progressive grocery retailer in China is taking this type of “in-store” mobile engagement approach to a whole other level by literally removing the walls that separate stores from the online world. Yihaodian, originally founded as an online grocer, has set up 1,000 “virtual” stores in parking lots, near large office buildings and in front of Chinese landmarks. These stores are completely invisible to passersby who aren’t connected to a mobile device. But turn on your phone and you’ll suddenly be able to view an entire grocery store through your screen. Shoppers can walk through the “aisles,” selecting items with their phones or tablets and setting them up to be delivered directly to their homes.

Yihaodian’s virtual stores were launched in 2012 and by the end of 2013 the company reported a gain of over 25 million registered users. “With a format like Yihaodian, retailers can have physical locations in any town and offer their customers an endless supply of products, without needing to pay for the real estate,” says Abhi Beniwal, Interactions’ Senior Vice President of Global IT.

As for the future of mobile lifestyle engagement, the possibilities are seemingly endless. For example, “smart fridges” could be connected to users’ mobile devices, notifying them when the cartons of milk or juice inside are about to expire and automatically adding those items to the retailer shopping lists that users have installed on their digital devices. Or, a retailer could send digital notifications to alert shoppers about upcoming in-store demonstrations and allow customers who can’t make it to the store that day to opt-in for the samples to be delivered to their homes (perhaps even via drones) along with their next grocery order. As technologies evolve, so too will the mobile lifestyle—and the way retailers and brands can (and must) interact with shoppers.

As DeMeo admits, when evaluating any new trend or technology, it’s natural to look for the potential drawbacks. But in this case, the only hazard for retailers and brands is not developing the capability to engage with customers who have adopted a mobile lifestyle. “In today’s shopping environment, retailers and brands have to engage with consumers in more than one way,” says DeMeo. “Because of the incredibly large and constantly growing mobile audience, that must absolutely include some type of mobile engagement that provides value-add to the in-store shopping experience. Those who don’t develop these technologies do so at their own peril.”