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GUEST OPINION The rise of mobile commerce marks the revival of physical stores

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Shane Finlay, Director of Retail Industries, SAP outlines how Black Friday has shown that far from killing it, the mobile has made the High Street more relevant than ever.

The retail industry’s most important day of the year, Black Friday has come and gone for 2016 and, as predicted, shoppers increasingly shied away from the stores opting instead to make their purchases online. While UK retail footfall dropped 0.7% from 2015, online shopping keeps growing with the association for online retailers, IMRG, estimating that £1.27bn was spent on Black Friday this year, up 16% from last year.

So does this spell the end of the physical stores? According to many industry experts it does, but I’m not so sure.

The belief that internet retailing will replace the high street is driven by the expectation that technological innovation, will transform the retail industry more in the next five years than in the last century And with ecommerce the fastest growing market in the UK retail industry, it isn’t hard to see why many retailers are investing heavily in their online presence.

Personally, I don’t agree with the premise that digital solutions will cannibalise traditional retail channels. On the contrary, I think the rise in ecommerce, and particularly on mobile platforms marks an immense opportunity for physical stores to provide customers with the best of both worlds.

Using ecommerce and mobile devices as another “door-to-the-store”

Studies show that approximately two thirds of the UK adult population have a smartphone, which, equipped with superfast 4G, is significantly altering the way we shop. This, in collaboration, with the UK’s rising commute time, means consumers have vast expanses of time to peruse online shops. More frequently retailers are creating apps to leverage this trend and simplify the shopping experience for consumers, offering both convenience and competitive pricing.

While this sounds like the perfect combination, it doesn’t meet all customers’ needs, which are becoming increasingly complex. Consumers want convenience but they also want an experience, which usually isn’t found with your nose pressed to a screen.

Visiting physical stores gives customers the opportunity to touch and try products before they buy them; a hugely underestimated desire by industry experts. In fact, Time Trade surveyed 1000 consumers and found that 85% of them prefer to shop in a physical store as they like to touch and feel products before they make a purchase decision.

In many cases, retailers are addressing this inherent need by laying stores out like showrooms to enable customers to see a physical product and even speak with an ‘expert’ who will support them in finding the right product.

Many technology retailers use this format to provide customers with guidance, before they go home and search online for the recommended product at the cheapest price. This doesn’t seem to offer the retailer many advantages, but actually digital solutions are supporting online vendors in “attributing all local online sales to the store that enabled the sale, thereby recognising the contribution of the physical store”.

Leveraging the Power of Mobile

Based on this, I think it is safe to say that for now, physical stores aren’t going anywhere. But, with that in mind retailers will need to leverage the power of mobile commerce to stand out from competition. Particularly with high street retailers, the ability to differentiate your store to a customer walking past is incredibly difficult, with shop window displays following the same consumer trends. So, how can retailers draw customers in?

Well, as previously mentioned the majority of the population is walking around with internet enabled mobile devices. This in itself presents retailers with huge potential to attract customers, initially through channels as simple as social media brand evangelism. Armed with Wi-Fi access, and a desire to obtain ‘social capital’, consumers are readily advertising retailers through social media channels, encouraging friends and acquaintances to do the same.

But this isn’t offering consumers anything new, aside from a potential ‘selfie op’. Retailers need to leverage the tools made available to them by digital solutions to target customers and provide them with personalised promotions. Generally people don’t see this happening in physical stores, but in fact the tactics for this are for more subtle and already being used.

RFID or radio frequency identification is becoming a huge asset to retailers, its ability to identify an object, such as a mobile phone, and wirelessly transfer data, makes it key in sending customers within radius emails or push notifications about sales, offers or even personalised promotions. Based on a customer’s online shopping habits and searches, retailers can tailor these offers and provide customers with the same benefits they have online in store. Stores within Dubai mall, the world’s largest shopping centre, often use this technology to differentiate from competitor stores and provide customers with a ‘bargain’ experience.

Mobile devices are not only providing customers with better physical shopping experiences, but are also empowering customers to procure items in store themselves. I’m not just talking about self-checkout, I am talking about staffless stores whereby consumers check-in and check-out using their mobile device.

The world’s first staffless store recently opened in Sweden, with 24/7 access to smartphone equipped customers who simply scan products through an app on their mobile devices. The process takes consumers minutes and even allows them to order products not readily available in the store.

In their current form, physical stores may go extinct, but the opportunity to dramatically transform these facilities offers a range of other opportunities. Staffless stores are one example, but shops could also become a pick up location much like the post office or the likes of Doddle.

Best of Both Worlds

We live in a mobile world, but this doesn’t suggest that the physical world is now obsolete. Mobile devices are offering consumers a completely revolutionised shopping experience that provides them with the cost effectiveness and convenience of ecommerce, coupled with all the benefits of an in-store experience, like guidance and sensory shopping. Mobile and in store commerce are not mutually exclusive, they go hand in hand to generate greater customer experience and sales.

Still, if you want to avoid the treacherous onslaught of next year’s Black Friday, order from the comfort of your own home and go mobile!

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