22 Percent Changed Their Mind, While In the Store? Why every retailer needs a mobile strategy

I was hit by three significant statistics this week. They came from different sources, different countries and might seem innocent if taken alone. But when we look at all three, we have a huge story here, this week (especially for anyone working in retail).

76% OF RETAILERS ARE BLIND TO MOBILE

So lets start with the facts. Yesterday as we prepared for our Tweetcast with Paul Berney the CMO of the MMA (Mobile Marketing Association) and Peggy Anne Salz of Mobile Groove, I heard an interesting stat on Twitter. Alex Rahman @alexrahman and Neil Robertson @neil_robertson posted tweet that according to a YouGov survey of UK retailers, 76% of UK retailers have not optimized their websites for mobile, or do not have mobile optimized content. Considering that the UK (esp London) is one of the major shopping destinations for international travellers, and the UK is one of the more advanced countries in mobile, and that the world's first conference for m-commerce was held in London, literally ten years ago this summer (I did a keynote there BTW), this is pretty pathetic in my mind, but if its only 24% of UK retailers who have gotten the message about mobile in retail, I am afraid it will be worse for retailers in most other European and North American countries.

CONSUMERS WANT SMS CONTACTS

Then there is the US stat that shocked me. Pew has been interviewing US consumers for many years about their internet and mobile habits. And they inserted a new question to their latest survey, for which the gave results yesterday. What is your preferred means of contact. And have a guess what US adults said about SMS? Pew reports that 31% of US adults - not teenagers - adults said their preferred means of contact was SMS ! And another 14% said they preferred SMS contacts some of the time (at other times voice calls).

The survey was not about retail, it was not about advertising or marketing. But it is a mind-boggling stat. If 31% of American adults prefer to be contacted by SMS, it will be even more for the youth, obviously (heavily SMS addicted as every survey of US youth has reported over the past four years). And even if we say 31% overall, that means 3 out of 10 American consumers prefers contacts via SMS. Why isn't every US company, advertiser and brand using SMS as their primary vehicle of marketing communications? Only a quarter of Americans own smartphones and a smaller fraction of those use apps, and out of one million published apps already, if your brand does a 'smartphone app' strategy for mobile, that is the iSyndrome, that is what Martin Wilson has taught us, is the mistaken belief that creating an iPhone app is tantamount to a mobile strategy.

No, it has to be like Kraft the US food giant teaches us 'leave no phone behind.' All mobile marketing has to start from SMS. That is what Coca Cola taught us at the MMA event when they said Coca Cola mobile is built on SMS first, mobile web second, and smartphone apps a distant third. It starts with SMS. And now we have the irrefutable Pew stats of US adult prefernces: 31% say all the time their preferred means of contact is SMS. 45% of US adults say they want SMS always or some of the time to be used. And these numbers even bigger for the youth.

SHOPPERS CHANGE MIND IN-STORE DUE TO MOBILE

And if that is not shocking enough, here is my closing stat. I spoke at the Google Think Mobile event again, this time here in Hong Kong on Monday. And I saw the stats from the Ipsos-Google surveys that Google has run across 30 countries. In each of the Think Mobile events they show findings from the local part of the survey that are relevant to that market. So as Hong Kong is a shopping meccha, Google showed some revealing stats about shopper behavior here in this country. And just to be clear, Hong Kong is one of the world leaders in smartphone adoption rates. Whereas the USA and Europe are only now reaching the point where half of all new smartphones sold are smartphones, we passed that point here in Hong Kong last year. Out of the 30 countries that Google surveyed for smartphone ownership, Hong Kong ranked third behind only Singapore and Australia and ahead of such 'obvious' countries as the USA, UK, Finland, Sweden, Japan and South Korea. So this is no fluke, we are looking at a market that is a leading indicator for what is to come in mobile, when it relates to smartphones.

And the statistic. 22% of Hong Kong smartphone users had changed their mind in the store, while shopping, due to information they got from their mobile phone. In some cases, we call up our friend and ask for advice, maybe we select a different item than what we intended to purchase. Sometimes we see a price, are not sure, and do some price-comparisons via the phone. We may go to a competitor store's site, and decide to buy that same good from a rival store (ouch!) or go see whether that good is available on an online store and buy it and have it delivered to our home all for less than buying it from the retail store where we are currently standing, looking at that very item. 22% of smartphone owners have not just used their phone in the store - but have changed their mind, driven by the mobile phone. For this stat, obviously I do not have a link as that was a slide shown at the Google Think Mobile event, but you can quote the source as Google Ipsos Study of Hong Kong Smartphone Users, September 2011.

MOBILE STRATEGY FOR RETAILERS

So what do we learn? We learn that consumers use mobile phones while shopping. They use them while at the store, and change their minds even when in the store. We learn that a huge number of consumers, at least 3 out of 10 adults even in the USA, which is hardly the most advanced market for mobile, prefer SMS as the primary way to contact them and most retailers do not have any SMS (or MMS) strategy. And worst of all, while most consumers bring their phones to the shops when shopping, even in the relatively advanced mobile market of Britain, only 24% of retailers have enacted any kind of mobile strategy, a mobile optimized website or offering mobile services.

What do you need to do. First you do the quickest thing. If you have a digital agency who runs your website, have them instantly do a quick mobile-optimization of your website. Tell them it has to be done to 'dot mobi' and MMA recommendations, that gets you started. Today there are thousands of shoppers in your stores, who while in your store, are trying to use your website. If it is not mobile optimized, you are creating very bad experiences.

ONE WEB IS A FANTASY

There are many technologists, including still many even among digital agencies, who talk of 'one web' or those other misguided ones, who say we can somehow automatically reformat an existing website to display well on a mobile phone like an iPhone or other smartphone. That is simply hogwash.

We have the absolute concrete evidence now, proving beyond any shadow of doubt, that there are indeed two webs, the old-fashioned legacy internet like we use on our desktops, laptops, netbooks, and iPads, which is for lack of better term, the 'fixed internet' where we have large screens and we use the device seated, with both hands, with plenty of time to consume. Like I write in my books and teach in my workshops, this is the 30 minute metaphor.

And we have the again for lack of better terminology, the 'mobile internet' which is mobile phone optimized, for the tiny screen, where we have no mouse, where we cannot print (to sign this form, print out the pdf file, etc.. as many websites have for their businesses). We use the mobile web in a hurry, often single-handed, often walking or standing, and often while multi-tasking. We are very frustrated with delays, we actually expect faster responses on the mobile web than on our PC, even as the PC tends to be connected via broadband connection.. I call this the 30 second metaphor.

But yes, I promised the evidence. That comes from Tiffany's the jewelry store. Tiffany's has an ebusiness website, where they sell jewelry. Their digital agency in New York City, R/GA, noticed that the Tiffany's website does not have a mobile optimized mobile website version. They did the mobile optimization and what happened? The sales of jewelry on the mobile website grew by 125% ! More than doubled !

One, this is the case study that every retailer must memorize, they must optimize their websites for mobile NOW. Secondly this is absolute proof, that there are two webs. There is a legacy internet, for the PC world, for large screens, full keyboards and the mouse (and the printer) that works well also on laptops and even tablet PCs like the iPad. It is now proven beyond any doubt, that the PC optimized web cannot work as well on mobile. To have mobile success, you have to optimize the website for mobile! This is nothing new. We have seen this from innovative companies and innovative countries for years already. Here in Asia, in Japan they have done all websites on a 'Mobile First' principal for more than five years already - yes, every website is first designed for the small screen, and then, a large-screen legacy internet PC version is also generated. But Japan was the first industrialized country where the majority of internet users came from mobile, not from the PC. That is hardly a surprise, Japan is the country that launched the mobile internet first, in 1999 so they have now had 12 years of time to learn that world.

ONLY MOBILE AT EVERY TOUCH-POINT

So you seem a bit skeptical. Don't be. No other technology on the planet touches a consumer at every toucgh-point. So. What do we see in the retail space and mobile? You can teach your customers about new locations of stores that will open. Like Victoria's Secret did with their 'Who is the sexiest person in Chicago' picture messaging campaign in the USA. You can drive footfall into those stores with mobile, like North Face did with their 'Conquer China' virtual flags campaign (that grew sales by more than double, 108% increase in sales last year). You can have consumers test out your products before they buy, like Ikea did with their Augmented Reality furniture tester (see what the furniture would look like in your home) out of Germany. You can send consumers offers and recommendations based on their preferences (using SMS and MMS) like Borders Bookstore did in the USA. Their early redemption rates were 23% on mobile coupons (Wow! Compare to paper coupons at about 2% or online banner ad campaign click-through rates of about 0.2%) and even 9 months after the campaign started, they were achieving 4% redemption rates on the Borders book coupons delivered via mobile.

But we can do better than that. In Japan McDonalds has been working for more than five years now to build its opt-in database of its consumers. They have passed the 20 Million opt-in level in Japan. That means one in six Japanese people of any age (from babies to great grandparents) has already signed up to receive McDonalds mobile ads. And Infinita reported in June of 2011, that more than half, more than 10 million of those Japanese redeem McDonalds mobile coupons regularly. Wow!

IN-STORE EXPERIENCE

I said every touch-point. Those were all still under the category of mobile advertising or marketing communciations. What about the in-store experience. Good that you asked. Tesco in the UK has launched its shopping helper. You can create your shopping list onto your phone, and then the magical bit, when you tell Tesco which store you intend to go to (select from list, select from map, use GPS and say 'this store' when you are entering the given Tesco supermarket of your choice) all the items in your shopping list will be re-arranged in sequence, by the layout of that store, to be in the order of the items in the aisles in that store! This is magical! And it greatly helps manage the time we spend in the store. And if you are a retailer and you think 'but our game is to confuse the customer, to make them lost, that is why we re-arrange the aisles often, so they spend more time in the store, as studies have shown the consumer who stays in the store longer, buys more' - yes, that was true in the olden age of analog thinking. In the digital age, how much MORE VALUABLE is it for you, Tesco, to know beforehand - beforehand - what Tomi Ahonen has on his shopping list today? And now you have far more power to influence me, to make me offers. If I am buying shampoo, offer me a package of conditioner as well, that kind of thinking.

And then, the diabolical bit. Tesco can now - after opt-in of course - start to sell info on its customers to the brands. They will not compromise my identity or phone number etc, but Tesco can easily look at my shopping list, and see that Tomi Ahonen is a habitual Pepsi buyer. And then offer Coca Cola a chance to deliver a two-for-one Coke offer to 'a Tesco buyer who is a Pepsi drinker'. I get a two-for-one offer from Tesco, on what I drink. That is good, I like that (they won't make the mistake of offering me Diet Coke, I do not drink diet cola drinks). Even if I don't take the offer, I am happy Tesco is looking out for my interests. If the offer works, Tesco sold two bottles of Coke vs one bottle of Pepsi, so Tesco made more sales. And they charge Coke for customized targeted delivery of the ad, with a remarkably high rate of redemption, so Tesco makes extra profits out of these ads.

We have plenty of more examples. In Singapore the Adidas stores did a promotion to let consumers try on funky Adidas T-Shirts without actually undressing and dressing, by using their mobile phones with an Augmented Reality t-shirt tester, using a digital mirror. The consumers absolutely loved it, about half took pictures of themselves as they played with the t-shirts. A similar idea works with hairdressers and virtual haircuts. In Japan Ez-My-Styling is a virtual hairdresser mobile service that lets ladies upload their picture of their face from the cameraphone, and then try different hairstyles and even ask friends to make recommendations. When done, they can click on the app to see the nearest registered hairdresser who can do that hairstyle and click to make the appointment.

And what about language for foreigners. Here in Hong Kong Guinness beer offers an app related to the Rugby tournament the Sevens, which has the typical sports and tourist guide things you'd expect of a sports tournament app (including helping tourists find bars that serve Guinness of course), but it also has click-to-talk buttons that do English-to-Cantonese translations. If you need to speak to the taxi driver, or the bartender, or the pretty lady in the bar - use the app to be able to do basic communciation from English to Cantonese. Did it work? Ogilvy reported that Guinness sales grew by 25%. And what about in-store interactivity? The coolest example comes from Manhattan where Daffy's the fashion store's New York flagship store had an interactive window display, driven by SMS. Two live models, one woman, one man, were in the window display with a rack of clothes. The shoppers were sending recommendations via SMS to them (displayed on a big screen so all could see and read the messages) and the models would then try on the clothes as directed. The gimmick being - for you to try on something, you have to first strip off the clothing you are now wearing.. While there was no nudity, the models only stripped to their bikinis, it still was very sexy and very popular. Only mobile allows us to do things like this.

Or take the International School of Toulouse France. I know a school is not strictly 'retail' haha, but the idea is gorgeous. They ran a treasure hunt in the school using QR codes. Who is the first retailer to do their super-special event of the year as a QR code specials and bargains hunting day?

EVERY POINT OF CONTACT

And then what happens after you leave the store? You may have some complaints. You may need more help. In India the State Bank of India now offers a service of SMS Unhappy. If you are unhappy with their service in any way, you can SMS them and they have customer service reps on 24 hour standby to assist you far faster than you could be helped if you called the calling center and waded through that frustrating maze of press 1 for...  Swimsuit Outlet does something similar on their mobile website, they have live chat so at any time if you go to their website, you can chat with their service reps to ask questions etc.

And then again the killer example. This from Singapore. The telecoms operators were the first to do this, now other retailers are starting to follow as well. When you leave the telecoms operator/carrier store, within a few steps of you having left the store, you receive an SMS, that asks you simply, were you satisfied with your visit to our store. If you are satisfied, all is well. If you say you were not satisfied (and obviously you are not charged for sending the reply - and gosh darnit, USA, you are such backwater country in mobile, of course in almost no other countries do consumers have to pay to receive SMS messages!) - you will receive a call from the headquarters asking why is it that you were not satisfied.

Imagine how much better customer service becomes, if the store manager knows that HQ is listening in to the feelings of every customer that leaves the store. The store manager will be teaching his or her staff to be far more attentive to customer needs? This is the power of mobile! This is the future!

And what of after-sales? The loyalty card? Isn't it time we stop manufacturing those silly plastic cards we stuff into your wallets? Rite Aid the USA pharmacy has for two years now offered the chance for its loyalty card program holders to register their cellphone number as their loyalty card. No need to carry the plastic card, you always remember your phone number and makes it far easier. And best of all, for Rite Aid, now they can communciate with you directly, on the phone. So when the prescription is running out and you need to get a Doctor's signature to renew it, Rite Aid can send a reminder (via SMS obviously). Etc.

VIRTUAL STORES

And then the most astonishing retail story of today. Tesco's South Korean brand, Home Plus, has decided to use mobile in a new way to provide supermarket shopping experiences. They hired huge billboard space in the subway train stations underground. And on those posters, with white background, they have life-size pictures of the major items in the stores, stacked on what look like shelves, in logical sequence. So the giant billboard posters, from ground level to a little above our heads, you have virtual shelves. There you see Orange Juice and Milk and Coca Cola and Pepsi and Sprite, etc. Two liter bottle, one liter bottle, 33 cl bottle etc. Just like they are in a store. And the clever bit - each item has a little QR code next to it, and shows the price. If you take your phone, snap a picture of the QR code, the item goes to your shopping cart and you can do your shopping right there, while waiting for your subway train to take you home. No need to stand in lines at the supermarket or collect the items into a shopping trolley in the store. Do your shopping in a few mintutes. All items you buy, will be delivered this afternoon/evening to your home for no extra charge.

How successful? They doubled their sales!

What retailer manages 10% growth in store sales? That retail manager gets not just a huge bonus but a big promotion to run a series of stores. Here Home Plus/Tesco simply DOUBLED their sales in the giant city of Seoul, by this innovation of doing some clever outdoor billboard advertising, which is made interactive through mobile. They essentially doubled their 'store locations' without having to pay for the retail shop rents. Brilliant, magical, wonderful, time-saving and certainly a sign of the future. And another far simpler idea, but the German Post Office decided to offer user-generated stamps, sold by SMS (rather than licking a printed stamp, you get a unique alpha-numeric code you can write onto the envelope). This was so successful it has already been copied in Denmark and Sweden. Its another version of offering a virtual experience of the retail purchase.

There is very much more to mobile in retail. This is only the beginning of the journey. But just remember this, no other technology comes close to mobile today. More people have mobile phones than own PCs, or have TVs or wear a wristwatch. Mobile phone penetration now exceeds the limits of literacy. In poor parts of the world, mobile phone usage has gone beyond the limits of electrical coverage even (parents send their mobile phone batteries with their children to school, knowing the teacher will let the batteries be charged at the school, which is a nice way for the teacher to make sure the parents will not stop the kids from coming to school..).

Every economically viable person on the planet today has a mobile phone. And every mobile phone can do SMS. Most mobile phones can also do MMS and basic mobile web (including WAP). If you are in retail, do not start by thinking of the iPhone app. That is sexy yes, your ad agency likes it yes, so they can win some awards. Remember what Kraft said, leave no phone behind. Or like Coca Cola said that mobile starst from SMS and then goes to the mobile web, with apps far behind that.

So. Only 24% of retailers have even built a credible mobile strategy. If you are not in that group, then take solace, most of your peers are also not there yet. Start with SMS, remember, even in the USA, 31% of adults prefer to be contacted via SMS. And why do you, the retailer need to go mobile now? Because the world will soon be all smartphones, and here in Hong Kong's shopping districts we see that future. More than one in five shoppers, 22% have changed their mind while in the store, driven by their mobile phone. You have to make sure, that when the shopper is in your store, you have them first go to YOUR website, if they want any information, and that website needs to be mobile optimized. (And then also, as long as your rivals are slow to the game, that perhaps, once in a while, when your customer is in the shop of your rival, they might come to your website and decide to give you their business instead).

WANT 2 DAY COURSE ON MOBILE AS MEDIA AND IN RETAIL?

And if you feel you'd like to learn more, or perhaps you would like your digital team to get up-to-date about mobile, please consider the Oxford University course I am running at the end of October. The two-day course is non-technical. It explains why mobile is a different medium, it shows how services are created on mobile, what are its unique abilities and the two-day course is overloaded with real world examples, case studies, consumer insights and latest statistics. And best of all, as it is a university course, it is far cheaper than most commercial workshops run by conference producers. And you cannot imagine a stronger teacher lineup than the author Alan Moore (who co-wrote Communities Dominate Brands with me)
who invented engagement marketing; David Cushman the author and ex digital guru of Britain's second biggest magazine publisher Emap; and me (well, what can I say, the world's most published author of mobile haha). Please consider joining, or sending some from your team to take the course at Tomi Ahonen Oxford University Course Mobile as 7th Mass Medium on 26-27 October 2011. (PS if you are heading a big retail chain in some country, we can also bring the Oxford course - customized and adapted to your needs of course - to your location in your country, to run for your people, please be in touch with me or with Peter Holland of Oxford University)

AND MY 12TH BOOK

Talking about books. My 12th book was just launched yesterday. Its not about mobile in retail, but it is very close, its theme is mobile money. You may want to see more and consider buying, it won't kill your budget haha, at only 9.99 Euros, the 171 page ebook is formated for the small screen so it fits onto your smarpthone or iPad or Kindle for having always with you. It has 50 Case Studies of mobile and money, including several mentioned in this blog (Tesco, German Post Office virtual stamps, Borders books, Rite Aid, etc). See more here Introducing my 12th book Tomi Ahonen Pearls Vol 3: Mobile Money.

Comments

[Szymon]

Excuse my poor English.

Tomi, i discovered your blog about month ago... it's one of the very best i have ever seen (i have content in my mind of course, not layout/markup ;p ).

I have read carefully many posts despite the fact that previously i "missed" mobile world (minus some webpage tweaking, i mean making them (little) "mobile friendlier").

This is scary... phone as keyring, wallet... my wallet & keyring spamming me with viagra ads... using mobile to do groceries... I feel so old and 1990's ;( and i'm much younger than you ;).

It (that revolution (minus viagra ads)) was predicted in 80's but reading usenet discussions is something different than seeing it with my own eyes. Scary.

Keep up the good work.

Regards, Szymon.

[Peter Fry]

Great article once again. You mentioned about in-store change of mind, but how about Google's ZMOT?
http://ezinearticles.com/?Advertisers,-Do-You-Know-About-The-Zero-Moment-of-Truth?&id=6540433

[ugg outlet]

I have paid attention to, thank you for sharing!

[wholesale Cheap Jerseys]

So glad to have you back, was begining to wonder where you were, as it’s not like you to post your going to do something then not do it. Let’s hope the internet behaves itself from now on.

[hogan shoes]

As I'm in the midst of writing my thesis on better interfaces in EMRs, I was extremely curious about the program that the tech geeks built which enhanced medical student learning through signs/symptoms input.

[mediafacilitator]

"Pew reports that 31% of US adults - not teenagers - adults said their preferred means of contact was SMS" according to your post. That equals about 193 million Americans. Unfortunately, that's not what the Pew study says. Rather, 83% of aprox. 193 million Americans over the age of 18 have cell phones and of them, 73% - 141 million - use texting. Of those, 44 million (31%) prefer a text to a voice call. There is a very big difference between 193 million and 44 million adult Americans...

[Leather Jacket]

wow! really very descriptive post, very great post. I want to read your 12th book send me more details....

thanks to share,

[Jim]

"Why isn't every US company, advertiser and brand using SMS as their primary vehicle of marketing communications?"

Because while 31% may prefer "SMS contact" from a friend instead of a phone call, about 0% prefer an SMS from a marketer.

[joomla templates]

I have found here much useful information for yourself. Many thanks to the editors for the info

[Murat]

"What do you need to do. First you do the quickest thing. If you have a digital agency who runs your website, have them instantly do a quick mobile-optimization of your website."

Yeah because it's that simple. Do me a favour, go and ask the 76% of retailers who don't have a mobile site why they don't have one.

Do you think it's because they don't want one? Or because the infrastructure that holds their e-com sites together is so antiquated that it takes months to years and millions of pounds to get it to work with mobile.

That's why screenscraping is so popular but is that the solution? No.

Realities from the ground.

[Anna Caracolias]

Thanks for excellent examples and for good arguments. I hope to be able to add some Swedish examples to your list shortly. I'm trying to convince the Swedsih companies to adapt their web sites for mobile phones(and not for the approx 200 000 iPads existing here if the want to reach a broader mass), explaining the difference between apps and mobile web. The absolutely most important message is that they can enhance their business. If that is by starting with an SMS, subway-ads, ads in other mobile channels... It will vary, I guess. But, by not being there with a RELEVANT content/message, at a time when the customers/users need it - that's a bad choice.

What gets to me, still, however is that why don't we collectively have a good name for it? Like the app community has, yes - app. You mentioned "mobile internet", there is "mobile web", "web apps", "mobile web sites","mobile adpated web pages"...

Who will come up with that one and only expression that people around the world understands? Until then, we'll keep on convincing the customers what good it does for business by simply - building good sites.

[moncler jackets]

Adding this siteurl is an issue because when you want to distribute this to your customers the problem is when i change my servers - i have to repackage the wsp with the correct new site url - any workarounds for this?

[wholesale Cheap Jerseys]

So, don't be left in oblivion and start getting the jersey of your favorite sports team. Wear them as a symbol of support during the playing season. This would give the players great inspiration of returning the favor by doing everything just to win the championship.

[Packers Jersey]

Adding this siteurl is an issue because when you want to distribute this to your customers the problem is when i change my servers - i have to repackage the wsp with the correct new site url - any workarounds for this?

[order paper]

This article is really the one that I needed. I really learned a lot by reading the whole content. Thanks for this.

[Henry Sinn]

Tomi, Tomi, Tomi,

The one element you miss and people that comment here miss is the $500b we spend globally advertising our businesses..

Currently the ONLY way 100% of customers can interact with an ad is a phone CALL. Phone numbers have been advertised for that reason for 100 years [give or take].
An advertised web site / address [for odd 20yrs] is great but it requires the reader to go back home or work and get on their computer... It's that simple. Desktop web sites on mobile phones are a bad experience.
If you want to argue that, I'm sure Steve Jobs would have a thing or two to say...

The ONLY way forward for EVERY business is a mobile friendly web site..
WHY?
Because we advertise and we want customers to buy our products and services when they are thinking about it!

When you read "that ad" you will NOT HAVE THE APP. It's that simple...

Murat - crap. eg Search Wapple

[Endymion]

Ahonen, any comments on the merge of limo and meego and samsung / NEC likely stealing the spotlight on nokia following on N9 success? *pre-orders are sold out* Wouldn't that be the ultimate joke?

[Murat]

Henry - what is Wapple a magic wand? You think buying a license will just merge a retailers e-commerce store with no apis or feed into a mobile shopping site?

Go try it and come back

[Monclervest]

thanks very much for sharing! it make us in deep thinking! The way you have “blended” (hehe) it all together makes this look like a solid, whole product, as good as any Pixar short. Probably better. But then again: That’s my opinion.

[mac cosmetics]

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