While more and more retailers are adopting mobile technologies and systems as part of both their internal and customer-facing operations, it seems as though consumer demand for shopping experiences enabled by mobile applications is outstripping the retail supply
According to smartphone statistics compiled for Ofcom in 2011, smartphone sales nearly tripled between the first quarter (Q1) of 2009 and Q1 2011. By the end of 2011, almost a half of UK adults owned a smartphone and 9% owned a tablet. And research published by Wi-Fi hotspot network The Cloud also recently found over one in five people (21%) now expect any coffee shop they visit to offer free Wi-Fi.
Vince Russell, The Cloud managing director told Retail Technology: "Retailers adopting a 'bricks-and-clicks' strategy are realising offering customers free Wi-Fi is not just about marketing instore," he said. "It's about getting customers to spend more time in an environment the retailer can control, capturing potentially missed sales and integrating online channels at the point of decision."
Joining up customer experiences
This trend also enables retailers to expose and join up operations around not only the supply chain, but also customer transactions. For example, Delos and SecureTrading have recently partnered to provide retailers with a mobile payments system using Wi-Fi. Tim Allitt, SecureTrading head of sales and marketing, said: “Accepting payments via a smartphone allows merchants to enhance customer service with operational improvements, excellent customer relationship management and provides considerable data capture opportunities."
But Allitt cautioned that finding a partner that can meet Payment Card Industry (PCI) standards would be essential if consumers are to feel their data is secure enough to embrace mobile payments. Mark Andrews, Delos Solutions chief executive, added: “Software solutions that are quick and easy to install and can be integrated with the main EPoS [electronic point-of-sale] types for real-time interaction offer the most attractive proposition to merchants.”
John Kenney, senior vice president for business development at retail point-of-sale (PoS) and web application provider Stella Nova Technologies, added: “There are many attractive sounding, standalone mobile point of sale (PoS) applications that can process mobile transactions and can be quickly implemented," he said. "But implementation without integration across the enterprise creates the risk of developing information and data silos that can be expensive to correct downstream." He also agreed that retailers must keep pace with consumer demand.
"The mobile space is perpetually changing and, with consumer devices doing much of the transaction shaping, it is imperative not to get boxed into a corner by constraints early on," added Kenney. "Good planning and an effective pilot phase will actually result in a faster and more robust implementation, with the downstream benefits of being fully integrated into the overall enterprise.”
Staying ahead of tech development
The recent wave of mobile payment technology – from Google Wallet to PayPass Wallet and Pingit to V.me – is enough to leave retailers reeling, according to Niklaus Santschi, chief executive of SIX Payment Services. "With Visa predicting that the number of contactless PoS terminals in the UK will rise by 50% to 150,000 this year, retailers cannot afford to fall behind the pack and not upgrade," he said. But Dan White, director of retail mobile solutions at NCR, said there is a lot of pent up demand for mobile payments.
"People want to be able to use their mobile to search out stores, products, prices, and discount offers on the move," White said. "Consumers can "pre-shop" the items they're interested in, download digital discount coupons, make payments and keep track of their spending using digital receipts." And Stefan Schmidt, vice president of product strategy at e-commerce vendor hybris, cited web development around quick response (QR) and mobile bar codes, apps and mobile-optimised websites as evidence that mobile consumer adoption was influencing online, as well as instore, developments.
Schmidt added: "While retailers are starting to build marketing strategies with mobile, they are operating in isolation and are not always linked to the commerce systems. For success, they must be integrated into the multichannel strategy."This story first ran as the introduction to the 'Mobile Retailing' feature of the May/June 2012 issue of Retail Technology magazine. Click here to subscribe to the print edition or register for the free e-version.