Mobile commerce has grown very rapidly all over the world. While the UK in
many ways leads the way, there are many examples of how it’s been put to
use in other markets around the world that reflect not only the differences in
local shopping habits, but can showcase how widely mobile can be used in the
retail experience. Paul Skeldon, Mobile Editor, Internet Retailing investigates.
FLAVOUR OF the month in mobile retailing in the developed markets of the US and the UK is spiralling in on the role mobile has to play in store – with the industry seeing it as the glue that makes omni-channel stick together as a coherent customer facing offering. The focus is on how to pull different platforms together; on how to turn the mobile device into a payment and a POS tool; and on how best to develop websites that work across a vast array of devices.
This highly strategic focus on the role of mobile in these developed markets often leads to some technologies – most notably simple QR code scanning – being overlooked, or even derided. But a look at how other markets overseas are making use of mobile shows how mobile can be used to create a whole new, simplified way of shopping and make retail even more competitive.
Perhaps the most notable overseas market that comes to the fore when looking at how mobile is reshaping ecommerce and retail is Korea. Here Tesco has pioneered 30 virtual stores on the walls of subway stations across Seoul that used barcode scanning from mobile to buy food to be delivered home for busy commuters.
WHERE TESCO LEADS
These HomePlus virtual stores demonstrate what Simon Hathaway, president, shopper marketing and retail operations at Cheil – which worked on the Tesco project – describes as “the end of the space race” for retailers. It also plays into the mindset of busy commuters who don’t want to spend their precious non-work time shopping.
It has proved extremely successful. According to international advertising industry analysts Adverblog “online sales between November 2010 and January 2011 increased by 130%, with the number of registered members rising by 76%”.
The HomePlus virtual store has been such a popular idea that it has spawned competition in the Korean market with giant supermarket chain Emart launched its flying stores. The idea was not to create a virtual store, but to encourage consumers to do their shopping on mobile. To do this the retailer launched an array of brightly coloured balloons, each with a wifi router attached to offer fast connection as they drifted through shopping malls, stations and even trains.
The promo exercise – again run by Cheil – was designed to get shoppers to download Emart’s app and start shopping immediately. During the month of the promotion, downloads of Emart’s app rose to 50,000, while its mobile sales more than doubled. The retailer also felt the benefits of this campaign offline, as coupons downloaded from the balloons drove a sales increase of 9.5% in its stores. The high penetration of mobile devices – compared to PC ownership – in Korea means its population is especially well-primed for this mode of shopping. Tesco’s HomePlus amassed 1.1 million downloads over a two- to three month period.
Korea is just one market that has hit western headlines over the use of virtual stores. This kind of ‘pop up’ retailing predicated by mobile’s immediacy and reach is proving very popular all over the developing markets since it allows for small footprint-high yield entry into often crowded markets. It also allows for new players to more accurately target the demographic they are trying to reach.
India offers a prime example. Here, online fashion and lifestyle shopping portal Yebhi.com has launched virtual stores across Café Coffee Day outlets where customers can buy products from a virtual wall, akin to what is being seen in Korea. Currently trialling with 30 virtual stores across two cities – Delhi and Bangalore – customers can view, choose and buy from a large range of products such as clothing, shoes, accessories, mobiles and home products.
The virtual stores feature pictures of merchandise from the Yebhi.com website, with each having a corresponding QR or NFC Code. Customers can select any item by scanning the QR code or tapping on the NFC code via their smartphone. They will be taken to the Yebhi. com website where they can buy the item for delivery to their doorstep. Customers will also get an instant discount of Rs 200 if they buy at Yebhi’s virtual store.
“Today, Indians living in big metros are very busy and this initiative offers them an opportunity to shop while they chill,” says Nikhil Rungta, Chief Business Officer, Yebhi. com. “We settled on outlets near corporates and youth hangouts as customers who come here have time on their hands and money to shop. With the virtual store, we are taking online shopping to the next level by touching base with our customers and allowing them to shop from anywhere, at anytime.”
This move allows careful extension from the online world into the natural habitat of the customers a brand is trying to reach, and is proving hugely successful. But moving further east and into perhaps the world’s most interesting developing consumer market, China shows how these virtual shops are not only meeting the challenges seen in Korea and India, but are being used with guerrilla-like warfare between old and new retailers.
Yihaodian , one of China’s leading ecommerce websites, has teamed up with Ogilvy & Mather Advertising/Shanghai to take the battle for China’s grocery shoppers online. In a highly successful retailing stunt, Yihaodian has just launched 1,000 stores overnight, located at some of China’s most iconic landmark locations, as well as directly in front of its competing brick and mortar supermarkets.
The interesting twist is that these Yihaodian stores are not real; they are virtual 3D stores. Consumers can only see, visit and shop in them by using the Yihaodian Virtual Store App while being physically at one of the 1,000 locations. These location-tagged virtual stores have just launched in iconic areas of Shanghai, Beijing, Guangzhou and Shenzhen. Each of the stores is packed with promotional discount coupons and high-value, free gift vouchers that are just waiting to be claimed by shoppers.
Yihaodian Chairman YU Gang explains: “The most distinguishing feature of our augmented reality 3D virtual stores is its bringing online shopping to the offline world, combining the advantages of online and traditional retail through constant innovation. Not only is this one-stop shopping experience cost-effective, it’s a direct home delivery service that’s free from the restrictions of store location, shelf space and operating hours through its mobile and ecommerce capabilities. Consumers can enjoy the convenience of online shopping while still having fun purchasing from these virtual stores that are set up in residential communities, offices, parks, and even on the Great Wall.”
The Yihaodian virtual stores are a world’s first in using GPS location tagged augmented reality where consumers can actually go shopping. It works just like visiting a traditional offline supermarket: you enter the store and browse the aisles for products then buy them before you leave the shop.
TURNING MOBILE ON ITS HEAD
Interestingly, in Japan – often considered to be many years ahead of the game in high tech usage – the idea of virtual shops has taken a strange twist. Unlike the pop-ups in Korea, India and China, in Japan, mobile is increasingly being used to offer consumers the chance to virtually browse and buy from shops and department stores from the comfort of their own homes. Here, two leading retailers have launched virtual shops that allow visitors to browse through the stores’ interactive web pages to give them a realistic in-store experience – all from the comfort of their own homes. Users can navigate around the virtual shop with keyboard or mouse commands, and even walk over to spots for a better look at products.
The virtual shops are designed using a series of photos to create a panoramic web layout. Nissens’s Smileland Virtual Shop recreates the department store floor online so visitors can browse through items as they would instore. The ShinQ Virtual Switchroom allows visitors to explore multiple floors and even lets customers checkout the ladies toilets remotely.
Japan sets itself aside from the growing groundswell around the world where virtual shopping is now an outdoor activity done while doing something else. Filling up commuting time with the relatively boring task of food shopping makes perfect sense, but extending this to leisure shopping may also prove a challenge.
In Russia, virtual shopping is being offered around shopping malls with posters with QR codes offering shoppers the chance to check out and buy consumer electronics. Directly inspired by HomePlus in Korea, Germanbased Media Markt has rolled out interactive billboards across Moscow. The company has had success with this in Germany, but it is yet to be seen whether Russians embrace this mode of shopping.
What all these projects do show however, is that there is a very can-do attitude within developing markets to take mobile at its simplest level – well one of the more simple levels: barcode and QR scanning – and use it to create exciting new shopping experiences. They are all predicated on having robust mobile payments technology and the need for consumers to have preregistered debit or credit cards or for mobile phone service regulators to allow on-bill payment for goods. Something that can’t be done (yet) in the UK or US.
They all also face the same challenges of logistics and fulfilment that have vexed many an ecommerce manager in the UK for years. But still, there are lessons to be learned from these projects that could well be adopted here in the UK to great effect. Maybe it’s time to look at the more simple, tactical stuff while we let the big boys wrestle with the strategic, omni-channel ‘new normal’ in which we find ourselves operating?