By Honey Kirtley, Head of Insight and Loyalty at The Logic Group
The retail industry is not one unfamiliar with change. With the rise of the mobile and the Internet it is hard to imagine a time when technology has changed so radically, and where change has had such an immediate effect on the consumer and retailer alike. Globally, the number of smartphones surpassed the 1 billion mark in October 2012i. It comes as no surprise that according to research from Deloitte, half of shoppers say they have bought products from a mobile app, with 57%ii having checked for stock using a mobile device. As a result, retailers are now racing ahead to embrace new payment technologies including mobile services as part of a wider multichannel customer interaction strategy.
Shoppers are doing more research before they buy, undergoing price comparisons, reading reviews, browsing and conducting their purchases at any time, day or night. Mobile technology has taken this even further, giving shoppers access to the internet and the ability to shop from almost anywhere. Mobile shopping is clearly here to stay, however the benefits of ‘purchasing on the go’ are not just limited to the consumer looking to find the best deal. The rise of smartphones has created an important lifeline, connecting the shopper to the store and opening up new buying opportunities beyond an initial visit. Apps and incentives that complement shoppers’ experiences and integrate with retail campaigns are vital to engaging consumers and generating greater loyalty.
While smartphones may be willingly used by consumers looking to compare purchases or even buy on the move, a recent survey into mobile attitudes and use conducted by Ipsos MORIiii found that retailers may still have some way to go before engaging all demographics via mobile. The survey found that only 30% of British consumers admitted to trusting major retailers to protect their personal information. This indicates that retailers looking to truly capitalise on this new tool must tread carefully in order to first build this customer trust.
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Other Ipsos MORI researchiv found that over half of the British consumers surveyed (58%) said that they have purchased products and services online (excluding groceries), suggesting consumer confidence is building when it comes to shopping online, leaving the door open for mobile devices to follow. These findings highlight just how important trust is in the customer- retailer relationship. In particular, the findings of the mobile study revealed that consumers are particularly wary of housing credit/debit cards on their mobile phone to enable them to pay without cards. However, for those who do trust their retailer, 46% said they would be happy to share their location via their mobile in order to receive relevant rewards and offers, and 54% say they would be happy to house their loyalty cards on their mobile to collect and redeem points without cards. Effectively, if your customers have high levels of trust in your brand, they will be keen to interact with you, regardless of channel. Give these customers the option and ease of accessing your services via their mobile devices and you’ll see a very encouraging return on investment.
To be able to stay one step ahead of their competitors and capitalise on the increasing uptake of all payment activities, adopting new payment and loyalty technologies is key. To benefit fully however, retailers must take care to build a trusted consumer relationship, partnering with businesses that value and respect the wealth of data that can be collected and brought to bear to deliver an engaging customer experience.
Allowing mobile to be adopted initially as a customer interaction tool to drive traffic in-store and online is a key step to achieving loyalty among customers. Only by taking this type of approach will retailers improve this trust level and move beyond the initial customer apprehension that is typically associated with new technology. Retailers must not forget when adopting these new solutions that loyalty schemes and payments pivot around trust with customer willingness to participate directly relating to perceived data sensitivity.
Mobile devices are already changing consumer experiences in many ways. Consumers are becoming more comfortable with using mobile technology in the shopping environment and increasingly measure a retailer on how well it supports this change. As such, for retailers to gain maximum benefit it is vital that they engender customer loyalty first before embarking on this new technology journey.