Retailers face a mobile strategy dilemma

Internet Retailing

16th Nov 2016

By Cameron Wall

Now, more than ever before, consumers are using their smartphones not only as a communication tool, but also as their number one shopping and retail browsing precinct.

This shift in consumer behavior when it comes to mobile browsing has created what I term the Mobile Strategy Dilemma: should retailers develop a mobile application, or invest heavily in a highly responsive website?

Having both a native app strategy and an e-commerce website is a waste of money and grossly unrealistic for retailers, so a choice absolutely needs to be made. But what is the best choice? And which will work best for any given retailer?

Let’s look at the numbers. According to recent data from ComScore, smartphone apps now constitute 50 per cent of all digital media time, up a huge 44 per cent from a year ago. Mobile is now a whopping 68 per cent overall with desktop claiming just 32 per cent of digital attention.

As a society, and with advancements in technology and payment methods, we are transitioning from a ‘point and click’ world to a ‘swipe and tap’ way of life, steering away from the world of desktops to multi-channel usage. Retailers that aren’t reacting to these changes in mobile usage won’t see any online sales conversion, which is where the money lies.

This is where the Mobile Strategy Dilemma comes in. Retailers are asking: “If I invest in a native app strategy not enough people will download and use it, but if I don’t have a native mobile app I am doomed”.

You’re damned if you do, and doomed if you don’t.

Benefits of apps vs. mobile websites

Apps offer benefits that other channels simply can’t, activating location services to coincide with in-store beacons and enhance the shopping experience with the ability to communicate special offers, discounts and personalise customer service and human interaction. The unprecedented accessibility and convenience of shopping from an app doesn’t even compete with that of a desktop, with many laptop users converting to the use of iPad Pro or smartphone to conduct their online shopping activity.

While most retailers have mobile-optimised sites, shoppers are clearly converting across multiple channels. The gap between share of traffic and share of sales represents a huge opportunity for retailers who don’t see over 40 per cent of their mobile traffic converting digitally. Mobile-optimised site browsing isn’t as seamless for the online shopper, which begs for retailers to offer a richer and more convenient customer experience which can be provided in app-form.

With Facebook usage on mobile at approximately 80 per cent and Instagram at almost 100 per cent, it makes sense this is where shoppers are browsing and sharing. So why is it the lions-share of marketing spend on fixed web technology? The skills needed from retailers in order to deliver on mobile are immensely different than web, requiring development, integrations and design (UX/UI).

Today’s marketing funnel is broken into short, intent-driven moments, and marketing’s role throughout the funnel routinely extends all the way through to purchase. As customers enter mid-funnel, skip stages altogether, or move through this new funnel out of order, the business costs to retailers continue to mount and the cost of acquiring and retaining new customers grows more expensive.  In addition, managing the host of technologies that retailers have adopted to meet these challenges has significantly slowed down their ability to respond with speed to changing customer expectations and software advances.

Most retailers turn to mobile vendors due to lack of sufficient in-house mobile resources and expertise to meet their strategic goals. Forrester recently reported that 56 per cent of retailers work with several partners, including agencies, specialty vendors, and platform providers, to support integrated mobile initiatives. The issue lies in integrating and managing multiple point solutions as there are high costs associated, and they hamper the retailer’s agility in responding to changing customer expectations.

So what is the solution to this modern retail dilemma?

Retailers need to partner with specialist tech organisations in order to combat the trend. It’s about working with those that not only have the know-how, but also the connections to produce a universal shopping experience via a native app where all retailers are reachable together.

Mobile first or even mobile-only solutions will start to surface to satisfy this need, where the shopper is chaperoned all the way from discovery to purchase in-store or online. The new measure will be a pay per action model where retailers will pay for an actual sale conversion.

While the future of mobile is bright, it’s vital for retailers to move their strategy to more than optimisation allowing a seamless experience for consumers and further driving sales and traffic via their hefty investment in app technology. This will ensure greater sales, but also higher in-store conversion. A channel consumers will never be able to completely step away from.

Cameron Wall is a mobile technologist and the co-founder of RainCheck.