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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Retailers are stepping up as European shoppers adopt smartphones, writes Chloe Rigby



European shoppers are steadily adopting the smartphone, albeit at a slower rate than elsewhere in the world, and using it to shop online. Leading retailers in the Mobile & Cross-channel Performance Dimension are responding by making it easier for consumers to buy using their phones. Mobile is not only a research and buying channel in its own right, but also plays a key role in connecting online and the store. But the average retailer still lags behind the best, suggesting there are opportunities for those that act strategically to work with shopper’ emerging behaviour patterns. More adults in the seven leading European economies (89%) now use a smartphone as their main mobile phone, contrasted with the 85% of US mobile owners who do so, according to Forrester research, The Online Retail Forecast 2017-22 (Western Europe). Such consumers have high expectations for mobile experiences, suggests the report, with 44% reporting they are more likely to return to a website in the future if it is mobile-friendly.

Nonetheless, mobile use for shopping still lags behind elsewhere in the world, according to the European Ecommerce Report 2017, from Ecommerce Europe. This cites the IAB’s A Global Perspective of Mobile Commerce 2016 report to show that, while 75% of Europeans had bought via their mobile phones, and only 25% had not, most European online shoppers have yet to transact via their phones with any great frequency. Just 7% do so daily, and 15% once or twice a week. More common are those who buy from their mobile devices between two and three times a month (25%) or once a month (20%). Ecommerce Europe cites figures from GfK’s Future Buy 2016 report to suggest that Europeans shop relatively infrequently via mobile phone when compared to those in Latin America or the Asia Pacific region. Markets such as Germany, France and the UK are ahead of the overall European average, and in the UK mobile sales are growing faster, with around half of all online sales now made via mobile. That said, Nick Wilsdon, SEO lead for global channel optimisation at Vodafone, told IRX 2017 that the reason for relatively low mobile conversion, at around 7%, in the UK was clear. It was, he said, “because the experience is so shambolic for a lot of brands”.

Leading experiences where they can, however, shoppers in leading European economies are moving fast to adopt smartphone use. Around 50% of customers of UK train-ticketing website The Trainline, for example, already use their mobile phones to buy tickets, and can often use their phones to show their tickets at automated barriers. “The intention,” Bill Hopkins of The Trainline, told this year’s InternetRetailing Conference (IRC 2017), “is that by the end of 2018 passengers will be able to use some form of smart ticketing anywhere in the [UK] rail network.” The company also plans to expand its services to continental Europe. Such easy uses of mobile, also available via European airlines including easyJet, raise customers’ expectations of being able to replicate that experience elsewhere. Retailers too are responding to customer behaviour in offering more mobile-friendly services. When Shop Direct brand Very and, later, UK and leading European retailer Asos launched visual search in their mobile apps – harnessing the smartphone or tablet computer’s built-in camera to take images and then using these images as the basis for product searches – they did so in response to an audience that wants to use mobile devices in retail. Eighty per cent of Asos’ UK traffic comes from a mobile device, and shoppers spend an average of 80 minutes a month using the Asos app. “We know this is where our customers are and it’s how they interact with us every day, so we are always looking for ways that are mobile native to make their experience even better,” said Andy Berks, at the time of the launch.

Spanish retailer Zara has used mobile to streamline the customer experience, enabling mobile payments in more than 15 markets, including Spain, the UK, Italy and France, via individual brand apps or a group InWallet app. Berlin-based fashion retailer Zalando also sees mobile as important to its business, which now stretches across Europe. Writing in InternetRetailing Magazine in March, Nuzhat Naweed, VP customer experience at Zalando, said that orders via smartphone had grown by 90% year-on-year, and that 65% of site visits were from mobile. This, she said, highlighted “the power consumers can have in the fashion world, with a clear shift from desktop to mobile”. Zalando has used machine learning within its mobile app to personalise fashion journeys in response to its learnings about customer behaviour. What mobile customers craved, argued Naweed, was “speed, service and social media engagement”.

Voice search is now emerging as an important way for consumers to engage using mobile and across channels. Retail giant Amazon enables shoppers to buy using its Alexa device, as does UK online grocer Ocado, while Tesco uses Google Home to enable voice orders. Alastair Sterling, industry head, retail at Google, emphasised the importance of developing cross-channel shopper journeys. He said that in order to engage with customers digital experiences needed to focus on what works across devices, including mobile, voice, the laptop and the connected watch. Doing so, he said, helps “people live that constantly connected experience they want”. Builders’ merchant Screwfix, which trades in the UK and Germany, has put the mobile firmly at the heart of the store experience, enabling five-minute click and collect of online orders, which are very often placed on mobile devices. Through its app, John Lewis enables barcode scanning to check store stock and to add an item to a shopping list.

What the average Top500 retailer does



Across Europe, retailers are moving towards enabling mobile shoppers to buy in the convenient way that suits them. Some cross-channel and mobile functionalities have proved popular among the IREU Top500. Almost two-thirds (64%) of IREU Top500 retailers enable online shoppers to pick up online orders in the store and 60% employ push notifications.  Elsewhere, performance is patchier. Less than half (43%) enable shoppers to return items ordered online to the store, while just over a third (34%) enable users to complete their transactions in a native shopping environment within a mobile app. Less than half (49%) of Top500 retailers enable customers to find their nearest store from the app – or to view a product via a choice of images (49%) or to zoom in on those images (43%). Still less common is the ability to check via the app to see if an item is in stock at a local store, offered by 21%, and to find out what other people think of products through the use of social media through Likes (13%), star ratings (27%) and written product reviews (25%). These figures suggest strategic opportunities for retailers that are keen to outperform rivals in a European retail market where it’s clear that smartphones are steadily being adopted.

Raising the game



Other improvements can come from optimising the customer experience, Vodafone’s Wilsdon told IRX 2017. He cited Domino’s Pizza, which has seen its app go from 1% of online sales in 2012 to 51.6% in the half-year to June 2015. “They understand they need to be where their customers are, and they understand their customers are ordering pizzas on the way home, on the train,” he said. “Cut out as many unnecessary steps as you can from the experience then you will succeed.” Wilsdon added: “The web is being rewritten now from the ground up. Mobile-first will require significant changes across our infrastructure, everything is up for grabs. With that impact you have opportunity – this is the time to come in and grab that first.” In its recent report, Forrester suggested retailers focus on improving the customer experience to capture a greater share of sales. That could include better delivery options and a focus on improving the ease and speed of checkout, particularly relevant for smaller screen devices such as mobile phones. Checkout improvements are particularly relevant since conversion from mobile phones and tablet computers remains well behind the fast-growing amount of traffic such devices drive.

Looking to the future, we expect to see fast improvements in mobile commerce as retailers respond to the way that shoppers want to buy. It seems likely that customers will increasingly opt for easy buying options via the smartphones that they are now purchasing in greater volumes – and that will drive uptake of new and emerging mobile technologies by retailers.
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