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GUEST OPINION Retailers need to look to mobile to build a two way communication

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In the first of a two part look at why and how retailers should embrace mobile, Frederic Court, tech partner at Advent Venture Partners looks at how to use mobile to build two way communications with consumers, before next time looking at how to turn that into a billing transcation

Technology continues to drive dramatic changes across most industries. Having been hit by the wave of Internet-led disruption, retailers and brands now are faced with mobile technology and the reality that it needs to be included in their multi-channel distribution and marketing strategies. In developing a mobile strategy there are some easy to implement steps that retailers need to begin to make.

Firstly, there are a number of ways that retailers, in particular in Europe, should be thinking about mobile both as a defensive and offensive measure. Mobile technologies can impact the whole retail experience, from attracting customers, engaging them at the point of transaction, helping them pre and post transaction, retaining them and driving overall customer satisfaction. With its wide potential reach, mobile has the power to transform customer service. Any organisation that has the customer at the center of its business (who hasn’t right?) should start to think about using mobile to engage with its customers, across both B2B and B2C businesses.

There are three main reasons for retailers and brands to act now. Firstly, mobile is now a ubiquitous platform, used by everyone and requiring very little customisation or explanation. It is there waiting to be leveraged. Secondly, mobile is an amazing tool to engage in two-way communication with consumers, both in B2C and B2B environments (using voice, text or email to engage with customers in a personalised one-to-one relationship, customised to their profile). Finally, mobile has the potential to boost the quality of information provided to users, maximising both convenience and customer satisfaction, but also reducing operational costs

Mobile phones are everywhere

Most Western countries have reached mobile penetration of over 100%, and all European countries are above 100% except France (with Italy up to a jaw dropping 151% penetration!). Mobile phones are now the most likely device we will carry with us all the time. They are more pervasive than our wallets, and even more essential than our watches. Consumers have become increasingly technology-savvy. Both Voice and Text (SMS) remain powerful mobile applications with a high level of usage and understanding by consumers, but the growing usage of smartphones, enabling data-rich mobile applications, offer additional opportunities

Customers are increasingly seeing their mobile as the ‘remote control for their digital lives’, using it to contact each other, access the web, consume data and images and of course to transact. With a phone in their pocket, they are ready to receive on their mobile relevant messages with specific calls to action and then to act upon it.

Information, hand-delivered in your mobile

At its most basic level, mobile is a simple information tool and retailers can use it to deliver to customers information such as logistics or product details. As many retailers scratch their head on developing a mobile commerce strategy, starting with a simple plan for engagement through information over the mobile is a good step forward. Mobile can be used to inform people of product availability, send promotions by text, confirm that an item has been shipped or simply purchased (who needs the paper receipt anymore?), display store opening hours, and more.

For instance, in real time, SMS can be sent to customers about any service that they are expecting. In the US, companies are using text-based mobile search service ChaCha to send automated answers to consumers, including some contextual promotions in the messages.

Companies have seen that customers are open to this type of communication as well. Mobile customer engagement company Fizzback has seen that over 60% of people contacted by text do not consider it spam but more a sign that the brand “cares”. Text also offers the flexibility for information to be automatically tailored to the recipient (including name and other personal details like an email), contextualised, and sent in real time. As long as customers are happy to receive pushed texts to their phones, retailers and brands should engage and seek to gain a presence on the device.

Real-time two-way communication, anywhere, anytime

Mobile is the best two-way communication tool. As brands and retailers praise themselves on having a “dialogue” with their customers, mobile is a key, if not the key, communication option. The upside isn’t just about “customer feel-good” but could reduce costs significantly, especially customer care operational costs, by automating responses. In fact mobile should be an option offered by any service provider as an alternative, or a complement, to receiving an email or a phone call. It is a perfect channel to engage in a dialogue with consumers for feedback and issue resolution, but also more offensively with CRM and marketing.

There are a number of ways in which the retailer can optimise two-way communications via mobile. For starters, transaction confirmations and expensive and lengthy customer services calls can be replaced by simple SMS exchanges, driving customer satisfaction. NatWest implemented a simple SMS confirmation during a mortgage approval process. The texts reassured its customers that their applications were progressing, reducing the load of calls from anxious customers to the customer support centre, but also increasing customer satisfaction as they get clarity on their mortgage in a timely and efficient manner.

Coupons and offers are also key. The mobile channel is not reserved to large retailers and coupons are an easy way for small to large companies to engage their customers. For instance, Firezza, a Pizzeria chain in London, sends SMS-based offers during football games to their users. They combine with this a simplified version of their site so the customer can order from their mobile. A number of companies, such as Foursquare or Qype, have emerged that facilitate the use of mobile-based coupons and businesses are taking advantage of it. Bars, restaurants, hairdressers and others are using services such as these to engage with their customers online and via the mobile, offering vouchers using the self-serve solutions from these sites, especially to customers who ”check-in” in the stores from their mobiles.

Customer feedback is another part of the two way mix. In the UK, companies like Fizzback have developed solutions that enable large retail organisations to communicate with their customers, either via pushed text messages (many mobile phone retailers such as Carphone Warehouse or T-mobile use this approach) or by inviting consumers to send feedback via their mobile phones. Tesco has now rolled out the solution across all of its UK stores and is collecting unique information, in real time, about what consumers think of their shopping experience, receiving not just complaints but a lot of positive, constructive feedback that helps them improve the customer experience.

These are just a few of the steps retailers should start thinking about when developing a mobile strategy. Businesses from small to large should not be afraid to try new services using mobile: test them, get user feedback and optimise. A retailer simply starting to capture the mobile numbers of their customers and making basic information available via a mobile device, can open up customer communication.

Retailers and brands can then seek to gradually gain more “presence” on the device. Beginning with the steps outlined above in the first instance. Over time they can build different layers of services using mobile technologies. Moving on from personalised, relevant and contextual texts/emails, they can try to open a “mini-branch” on people’s phone through an app, which is always-on and can be personalised and contextualised (i.e. adapted to time of the day or location).

The bonus is that when it comes to implementation many mobile-based services do not require massive investments, as they are mainly software and services-based, and these suppliers have dedicated staff who can work alongside a company’s internal marketing and IT teams to implement and ensure the smooth running of a mobile based customer solution, often priced on a usage-basis.

The real challenge will be to keep pace with the innovation in the space, as many new services and devices emerge. For instance the iPad and a new generation of tablet devices will open up new opportunities for retailers and brands to leverage this new mobile platform to improve further customer experience and satisfaction.

We may still only be at the beginning, but mobile technologies can no longer be ignored.

About Advent Venture Partners

Advent Venture Partners is one of Europe’s most established venture and growth capital firms, investing in world-class technology and life sciences businesses. We seek out remarkable companies that want a pragmatic and well-connected partner by their side. We are dedicated to executing a balanced investment strategy delivering consistent returns for our investors. Find out more here

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