By Matt Pigott - February 25th, 2016
"90% of consumers have their mobile phones with them 24/7."
With apps acting like mini doors to virtual worlds where real things happen, some business models are likely to shift to purely digital, while others will benefit from integrating digital with their physical offering. Today, any outlets that have a solely physical presence will need to adapt and adopt digital fast, or risk being outclassed by their competitors.
Most CMOs already know that personalization is the panacea for their marketing headaches. Paradoxically, they also know that it’s the cause of them. Why? Because they need to make personalization work, and that’s incredibly tough when the digital communications landscape changes on an almost daily basis.
Today 90% of consumers have their mobile phones with them 24/7. Apps are akin to virtual streets with a new kind of footfall: tapping in, searching, ordering, arriving, paying. Presence is no longer just about being in a prime physical location. A timely example of the power of apps to displace high street businesses is found in the UK’s banking industry. Last year more people checked their balances on mobile phone via apps than ATMs, online or in branch.
With frictionless, cashless payments becoming the norm, lack of use by customers combined with the banks’ own desire to reduce business overheads, means that the continuing closure of bank storefronts inevitable. Personalization here is about catering to the growing demographic of mobile users who prefer digital access over face-to-face communication.
Third-party apps making customers happy
Companies that don’t want to build their own apps are turning to third party developers. Target’s partnering with Curbside, recently acquired by Apple, is a good example. Just before the mayhem of Christmas, this neat little tie-in saw the startup tech company take on 100 new Target outlets, expanding its client’s reach to 25 million customers. Through enabling shoppers to buy directly using their mobile devices and pick their items up at the front of the store, the free service prevents parking hassles, queuing headaches, and the need to search for hard-to-find items in store.
By attracting customers with Curbside, Target put itself in an ideal position to gather new information and data on consumer’s buying patterns and preferences, monitoring and managing the flow of their in-store journey.
Customers were also able to get a snapshot of inventory via the app, something that saves wasted store visits and prevents unnecessary frustration. Empowering consumers in this way is a simple strategy for streamlining store resources and securing repeat business. Other companies using Curbside to provide a more personalized experience include Walmart, Kohls, and Nordstrom. Driven by these companies and others to link mobile apps with social commerce, the trend is almost certain to prevail. eMarketer suggests that mobile commerce will grow three times faster than traditional e-commerce, and moving forward brands will sharpen their focus on streamlining the checkout process.
Save ‘em time, save ‘em money, they’ll use the app
For retailers to earn their place on ‘phablet’ phone screens (yes, the fast changing digital world has given birth to yet another toe-curling portmanteau), they need to give consumers a reason to make their apps ‘must have.’ Walmart and Kohl’s both achieved this by focusing on price comparison and consumer coupon-savings respectively.
Apps can only gain traction by being imminently useful and providing reliable and consistent rewards and savings.
Today there are around 22 million users of the Walmart app, up from 4 million just three years ago, mainly enticed by the introduction of Savings Catcher, a receipt scanning service that compared its prices with competitors to highlight value.
While Kohl’s introduced an app with a digital wallet where customers could keep their ‘Kohl’s cash and coupons’ in a single convenient place (their smartphone), including barcode scans of coupons sent in the post, redeeming them at checkout.
But there is a caveat to all of this. Building an app isn’t a ‘set and forget’ formula. As Walmart discovered, with a strong early uptake of its app followed by a petering of interest, use declines with time as novelty wears off. For Walmart, slowing use was linked to the fact that the app was a source of information but not instrumental in triggering any sort of shopping-based saving at point of sale. Apps can only gain traction by being imminently useful and providing reliable and consistent rewards and savings.
Interestingly, a recent survey by Accenture suggests that more than half of smartphone users who don’t make mobile payments would if offered discounts and rewards. Moving into 2016, this is going to be a prime focus for companies, large and small, in winning loyalty through apps.
Interested in mobile customer experience? Check out how Starbucks, Domino's, and Chipotle are using theirs: http://www.incite-group.com/customer-engagement/why-apps-are-heart-starbucks-chipotles-and-dominos-customer-experience
May 2016, San Francisco
The Incite Summit: West is the USA's best brand-focused marketing conference. Taking place in San Francisco on 18th and 19th of May, we will bring together Chief Marketing Officers from major brands to debate one key issue. How you can get a more granular picture of your customer and then engage in "one-to-one marketing". We'll focus on perception, precision and personalization.