Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

You are in: > Home > Research > Research Articles

This is your 1 complimentary article for this month

Become a member for unlimited and immediate access.


Register
Already a member? Log in here

Linking technology

Linked InTwitterFacebookeCard
Linking technology
Linking technology

Many retailers urgently need to rethink their approaches to mobile as part of their cross-channel strategies, argues our m-retailing editor, Paul Skeldon

In the UK, traffic to mobile is fast approaching, if not surpassing, 50% of internet traffic. Mobile devices are becoming the default way that shoppers access the web and, with retailers with bricks-and-mortar shops struggling to get footfall through the doors, mobile also holds the key to linking the real world and the virtual.

Couple this with the changing shape of retail where shoppers are online, in the shops and using mobile as part of the same shopping journey, and mobile’s importance is clear.

So what are UK retailers doing to capitalise on this consumer shift? To give context, according to research we conducted when compiling the IREU Top500, retailers are embracing apps to service these consumer needs, but not necessarily as wholeheartedly as you might expect – and the apps are not always delivering what users want.

The overall percentage of Top500 retailers across the European Economic Area (EEA) with an iOS app is around 70%. However, in some countries such as Italy, Spain and Germany, this figure is around 98-99% of retailers. In the UK, this figure languishes at just 54%. When it comes to Android, the numbers are even lower. The EEA average is 64%, but the UK sees just 49% of retailers with such an app. To put that further in context, the top performer is Ireland, at 93%.

This shows that retailers are still not entirely getting apps. With traffic to mobile devices on the up, it is possible to suggest that retailers are seeing traffic hitting mobile via the web driving sales and aren’t necessarily investing in apps.

The number of transactional apps also suggests that retailers are getting sales more from mobile web traffic. The EEA average for apps that are transactional sits at 56%. More positively, the UK sees 63% of retail apps being transactional.

The need for better apps



Part of the problem is that retailers that do invest in apps don’t see much of return. Despite a third of UK consumers saying they downloaded more retail apps in the last 12 months than they did in the previous year, just 40% said they were satisfied with the current offering.

The figures, from mobile app developer Apadmi, show that nearly one in five consumers would like to see retailers invest in more innovation to improve apps, while 30% would be more likely to use apps if they could do more than just browse and buy.

Only a third of app users said they had noticed any kind of improvement in the shopping tools they have previously downloaded. Worryingly for retailers, more than a quarter said they would think less of a retailer that developed an app but failed to update it regularly.

Of those shoppers who said they wanted to see improved innovation or incentives to use apps, more than a fifth said they would prefer apps that could help them make purchasing decisions, or recommend products based on their browsing histories. More than half said they would be more likely to download apps if they were offered specific rewards for doing so.

Nick Black, CEO of Apadmi, says: “These results sound a clear warning message to retailers that, while retail apps are becoming more popular with consumers, many are failing to meet expectations and deliver the kind of service customers clearly expect.”


He adds: “New technology is making it possible to offer a genuinely personalised mobile retail experience, helping consumers make purchasing decisions and even recommend new products, and apps are an ideal platform to deliver this service. Retailers should use these findings as a kick-start to improve their apps before consumers start to turn away.”

Retailers need to embrace next-generation technologies such as artificial intelligence (AI) and augmented reality (AR) if they want shoppers to continue using their apps. A third of consumers would like to see more innovation in mobile apps, so that they provide a better, more personalised shopping experience. Shoppers surveyed said they would be more likely to download a retail app if it featured technology that helped them to make a buying decision, or let them preview products before purchasing them.

Our research also found that retailers are focusing their app efforts on offering collection of orders (click and collect), barcode scanners, the ability to share items, push notifications, store finders and wishlists.

This disconnect between what consumers want – AI, chatbots and more – and what they actually get – basic features you could find on a website – is a growing problem in UK mobile commerce. And it is a massive issue: app users are retailers’ VIPs and should be treated as such.

A privilege, not a right



Being on users’ devices is a privilege that should not be taken for granted. According to comScore, the typical user in the US or Europe downloads just one app a month, and only has between 20 and 40 apps on a phone. Of those, the majority are highly popular apps such as Facebook, Twitter, Instagram, Messenger, or the standard Google or Apple suite.

These apps are starting to become the place where consumers go to shop when on mobile. As well as simply using the web on their devices, many are using the trusted apps that they use for other things, in order to engage with retailers.

According to marketing tech firm Kenshoo, 53% of people in the UK who use mobile messaging apps such as Facebook Messenger and WhatsApp have interacted with a company via mobile messaging, or are open to doing so as long as they can block brands they’re not interested in.

In fact, only 28% of messaging users said they are not interested in interacting with companies over this channel. But to avoid a consumer backlash, companies need to ensure messaging interactions are personalised and responsive.

While messaging apps have until now been largely used for conversing with friends and family, it seems there is a willingness among consumers to use messaging to communicate with brands. More than half (51%) of messaging app users in Kenshoo’s study see messaging as faster and more immediate than email interactions with companies, while 48% think it is going to be less hassle than making a voice call.

In-store



With high street shopping suffering declining footfall, mobile offers a much-needed lifeline to retailers, and capitalising on this in the real world is imperative. This explains the propensity for click and collect, stock check, store location and returns functionality within apps. But mobile has to be much more interwoven than that, it needs to be part of the fabric of the overall retail experience, not least as a younger generation of shoppers comes along.

According to The Institute of Customer Service, 60% of customers don’t tolerate poor service under any circumstances. In light of this, says Vanessa Walmsley, MD of Qmatic, providers of customer journey management solutions, it’s important for retailers to know exactly how to care for in-store customers, in the same way as they do for online customers.

“Shoppers, especially omnichannel-savvy ‘super-shoppers’, expect the in-store experience to be a complete reflection of what they’ve experienced online and on mobile with zero gaps in the look, feel, offerings, personalisation and level of clarity,” says Walmsley. “This might mean translating an ecommerce site design that proposes items based on the shopper’s past activities into an in-store environment where staff offer observant suggestions.”


Research from retail and shopper marketing agency, Savvy, suggests that the rise of these ‘connected shoppers’ has now reached a tipping point. The mass adoption of smartphones and social media, broader technological advancements and, crucially, the rise of Generation Y as a group of shoppers have fundamentally reshaped the path-to-purchase.

Alastair Lockhart, insight director at Savvy Marketing explains: “The rapid rise of the connected shopper reflects the enormous influence technology now has in our lives as shoppers – digital media inspires us, is our go-to place for product research and, in many cases, is where we buy products. Shopper behaviour is evolving more quickly than ever before, and the onus is now firmly on retailers and brands to keep up and be fit for the future.”

This group of shoppers is constantly connected. Their smartphones sit at the centre of their lives, with 80% of Generation Y saying they look at their phones multiple times an hour. They are also highly active on social media – 97% having accessed social media in the past month, while 95% have used messaging services such as Whatsapp and Facebook Messenger. In contrast, only 55% of this group had read a printed newspaper during the past month.

Some 66% of Generation Y shoppers say they regularly use their smartphones to buy products and nearly half (49%) regularly use their smartphones while in the supermarket.

Lockhart adds: “Retailers and brands need to think outside of the confines of stores and retail websites to unlock the full spending potential of Generation Y. Retailers and brands need to go where there shoppers are – and that place is mainly social media, especially Facebook.”

The generations



But while mobile drives online and high street shopping, don’t get dragged into thinking that it is something that merely services the young and Gen Y. They are just the outliers. Everyone else, including older people, is adapting to this new age too. Baby boomers are just as eager to see next-generation technology such as mixed reality and artificial intelligence being adopted by retailers as their millennial counterparts, according to a new retail report, with nearly three quarters saying they would use the platforms if they were offered.

Despite the widespread perception that younger generations are the tech-savvy saviours of a beleaguered British high street, these figures throw a dampener on the stereotype, revealing that consumers of all ages are eagerly waiting for businesses to take better advantage of the technology available to them.

This is particularly true when it comes to visualisation technology that allows users to preview products at home before committing to purchases, with 73% of consumers aged 18 to 34 saying they would be more likely to shop with a retailer that offered this service, exactly the same as the proportion of older shoppers.

More significantly for retailers, of those consumers who said they expected to be able to use this technology either in the store or online, more than half (55%) said they would be more likely to buy something after previewing it.

David Levine, CEO of Manchester-based DigitalBridge, which commissioned The Imagination Gap: Retail’s £1bn Problem report, says retailers should take the figures as a warning not to ignore the importance of implementing technology in customer offerings.

“There has been a long held belief in the retail sector that increasing the use of technology was only beneficial in attracting younger customers,” he says. “These findings show that this isn’t the case and that businesses may have underestimated the demand for a better shopping experience using the latest technology. Older shoppers are just as engaged in the technological revolution of retail as their younger compatriots and businesses could be missing a huge opportunity by not capitalising on this sooner rather than later.”

As well as revealing the number of consumers who would use visualisation technology, DigitalBridge’s report also highlights the main benefits consumers think it will offer.

For 61% of consumers, the main advantage of this technology is that they could try different options before committing to a purchase while 29% would use it to get a second opinion on choices – including via social media.

Using this type of technology would also speed up the trend of consumers moving online, with 15% of shoppers who currently prefer shopping in stores saying they would move to a retailer’s website if it offered a better shopping experience.

The mobile imperative



There are many drivers for mobile’s rise, there are even more that stress its importance to modern retailers. With all generations becoming connected UK shoppers, and with the smartphone becoming the centre of people’s lives, retailers need to look closely at how they use mobile.

That doesn’t stop at just developing an app: they have to look closely at how to leverage apps that users use regularly across social media and messaging, as well as how to channel all that traffic from the internet. But most importantly, they need to look at how mobile fits into the whole shopping paradigm across the web, apps, stores and more. This is where the ecommerce battles of tomorrow will be fought.
Linked InTwitterFacebookeCard

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter