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With nearly half of all American adults (46%) owning smartphones — a jump Pew Research says is up from 35% last May — the mobile retailing market is only poised to grow. The retail conundrum: how to use mobile capabilities to bring consumers back in-store.
Lori Schafer, executive retail adviser at SAS Institute and author of Branded! How Retailers Engage Consumers with Social Media & Mobility, says mobile commerce must do more than promote sales and discounts.
"If retailers have customers in their stores on a mobile device, they need to give them an incentive to stay," says Schafer. "They need to use the device to promote exclusives, great service, and generally make the consumer feel like a valued part of their program. There are a whole lot of ways to do this rather than cutting price."
Retail has never been a walk in the park, but the digital dimension has radically changed the shopping landscape. One of the biggest new challenges is "showrooming" — when shoppers come to a store location to check out the merchandise in person, use their device to compare prices or product information, and then buy elsewhere. In fact, nearly 8 of 10 consumers (79%) always, usually, or sometimes compare prices of clothing online before purchasing an apparel item in store, according to the Cotton Incorporated Lifestyle Monitor™ Survey.
Additionally, Monitor data reveal that before consumers buy clothes in-store, they take a moment online to look-up coupons (73%), browse clothing styles (71%), and read customer reviews (57%).
Some e-tailers have capitalized on this; Amazon recently added 1-Click payments — a popular purchasing feature of its online site — to all in-app purchasing, allowing for fast and easy buying.
Rather than bemoan the frustration of watching customers walk out after they have stood in the store scrolling on their phone, retailers must instead focus on attracting those customers who still buy offline; despite mobile's rapid rise, most purchases are still made in-store.
SkuLoop's Michelle Cramer, founder and CEO, helps stores create their own personalized, digital promotions. She described a program created for Ricki's, a 140-chain store in Canada.
"We offered $10 off $50 in regularly priced merchandise," Cramer explains. "Customers could redeem the coupon online or in-store. We saw 70% of redemptions took place in-store. And we drove a 75% lift in the average in-store transaction value because when consumers went to a store, Ricki's could upsell. Also, shoppers tweeted or posted to Facebook about the coupon and where they were shopping."
Nearly half of all consumers (48%) browse the Internet for clothes on their mobile device, the Monitor survey shows. Among those age 13-to-24, the percentage jumps to 57%, and increases to 62% for ages 25-to-34. Additionally, those earning $75,000 or more are significantly more likely than those making less than $50,000 to browse their phones for apparel (55% vs. 43%).
Dillard's customers can use the retailer's new iPhone app to locate nearby stores and receive alerts about special events. App users can also pre-shop, save selections on the app's wish list, and then ask associates to quickly pull the items in store, says Julie Bull, spokesperson.
"We definitely see it as a tool to drive customers into our locations," Bull says. "Mobile apps and our website have a unique opportunity to bridge the gap between the web and our physical stores."
Generally, 72% of consumers buy clothing online, and 22% of consumers buy clothing online through their mobile device.
Lorel Marketing Group has been working with retailers, including King of Prussia Mall in Pennsylvania, to create mobile apps. Sebastian Pistritto, president and CEO, says mobile apps will continue to improve and develop new features that help the retailer engage the shopper more and vice versa.
"Today, mobile is helping educate shoppers on which products and which retailers offer the best value," Pistritto says. "But shoppers want more; they want options to research products, to make a purchasing decision, and to let the retailer know more about their preferences to make their shopping experience more enjoyable."
King of Prussia Mall's recently introduced iPhone app offers a current deal finder, an interactive mall map, suggested parking locations and store locator. It is tightly integrated with the mall's website, so all store and mall information within the app can be instantly updated.
Schafer says retailers can go as shallow or deep as they want with their mobile sites.
Some apps, like shopkick, will unlock specials on your phone just for entering a particular store. You can build up points to use for a reward later," she explains. "Other apps draw you in: H&M partnered with the My Town game on Facebook. They sent a special notice to all My Town players who were near an H&M store, telling them to go in, scan the new denim line and they would receive points in the My Town game. About 350,000 people actually scanned the items — and they didn't even offer money off the assortment."
More proof, notes Bull, that "mobile apps are a great tool for building cross-channel relationships with customers."
This article is one in a series that appears weekly on WWD.com. The data contained are based on findings from the Cotton Incorporated Lifestyle Monitor™ Survey, a consumer attitudinal study, as well as upon other of the company’s industrial indicators, including its Retail Monitor and Supply Chain Insights analyses. Additional relevant information can be found at CottonLifestyleMonitor.com.