Still waiting for "the year of mobile?" It was 2010. And 2011 and 2012. In fact, with the current speed of mobile adoption in the U.S., the "year of mobile" is here to stay. It’s time to retire that thinking and start looking at mobile as an essential part of building a connected brand.

Mobile devices (feature phones, smartphones, and tablets) have become an everyday part of consumers’ lives. The recent

introduction of low-cost smartphones and tablets has helped fuel the growth of mobile ownership. As of June 2013, 91% of the

adult population in the U.S. owned a cell phone, and 61% of those cell owners were classified as smartphone owners1. That means,

for the first time, the majority of Americans (56%) own a smartphone. This boom in mobile technology has fundamentally changed

the way consumers travel, shop, and interact with others. As a result, brands need to shift their approach to not only mobile but

marketing and the overall customer experience as well.

In this POV, we’ll look at three main aspects of mobile and retail: the move towards mobile shopping, mobile couponing, and how

mobile devices are affecting traditional retail experiences, and what brands need to do to stay current with consumers’ mobile

trends and expectations.

by Sarah Kuntsal, Associate Director, Strategy and Planning, iCrossing

1 PEW Internet Research, “Smartphone Ownership 2013.” June 2013.

THE CMO'S GUIDE TOMOBILE FOR RETAILERS

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NOVEMBER 2013THE CMO'S GUIDE TO MOBILE FOR RETAILERS

WHY MOBILE? Mobile devices have drastically changed the way consumers interact with content. In 2012, desktop search volume declined for

the first time, while the share of queries from smartphones and tablets reached roughly 20%. SEM activity on mobile devices

was even more exciting: in 2012, U.S. marketers that ran search campaigns targeted to mobile devices saw clickthrough rates

well above desktop averages and cost-per-click rates below desktop norms2. The smaller screen and limited ad space means

consumers can better focus on what they’re seeing – without many of the traditional distractions they find on desktop interactions.

The main draw of both smartphones and tablets is their portability. And it’s that portability that gives marketers the chance to

deliver content (or features) to their consumers exactly when and where they need them. Not sure if you could buy that book

cheaper on Amazon? There’s an app for that. Wondering if that sound system would work with your TV? Scan a QR code and

find out.

Mobile is unique because it allows retailers to reach consumers when they are shopping in a store or thinking about a product on

the go. Every part of the purchase funnel can be affected by mobile – from researching products to placing an order. But mobile

isn’t just about utility – consumers will be looking to engage with your brand on mobile in the same way they do elsewhere. The

brands that succeed in mobile will be those who tie together what consumers love about the brand with what they love about

mobile to create memorable experiences that, over time, lead to brand momentum.

MOBILE SHOPPING“With mobile, consumers no longer go shopping - they always are shopping3.” Mobile’s always-on technology allows consumers

to research and purchase a product at any time of day, in any location. It’s no longer constrained to weekend trips to the mall or

online shopping in front of a desktop. Now consumers can easily research a product on their way to work, save a coupon to their

phone, or price-check an item in a store.

Deal sites such as Gilt Groupe have helped push the boundaries of mobile shopping with their mobile properties. Gilt’s sales

start at 9am PST every morning – a time when most of their consumers are at work or commuting. To ensure consumers can

access a Gilt sale anytime and anywhere, Gilt Groupe has developed robust apps and sites for mobile devices that allow their

consumers to find and purchase products exactly when they go on sale. The mobile properties allow the products to be the stars

with photo-focused pages and easy browsing, and they feature mobile-friendly gestures and intuitive navigation to ensure the

shopping process is quick and easy. They further ensure consumers don’t miss out on sales with the addition of electronic sale

alerts and mobile-only discounts. This focus on mobile has translated into big sales for Gilt: It now receives more than 50% of its

daily visitors from mobile devices, and 40% of total revenue from mobile commerce4.

2 eMarketer, “State of Mobile Search 2013: Key Trends in Mobile SEO and SEM.” April 2013.

3 Mobile Influence: The New Power of the Consumer by Chuck Martin. June 2013.

4 Internet Retailer, “Gilt Groupe will offer mobile-only deals all summer long.” June 2013.

Gilt Mobile

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NOVEMBER 2013THE CMO'S GUIDE TO MOBILE FOR RETAILERS

Gilt’s success in mobile can be tied to the following:

1. Simplicity: Gilt has created useful and usable mobile touchpoints that make mobile shopping easy. Simple design, beautiful

imagery, quick load time, and one-click purchases make for an enjoyable mobile browsing experience and cut down on

wasted time and clicks.

2. Successful (and frequent) mobile promotions: Gilt regularly offers features to mobile-only users. Android users received free

shipping during the first week after the app launched. Mobile-only flash sales are run during the summer when consumers

are away from their desktops.

3. Constant Engagement: Consumers are busy, but daily alerts help remind them to return to the brand and browse the newest

sale. And in a world where 22% of apps are opened only once, it’s important to keep consumers interested5.

MOBILE COUPONINGMobile couponing has boomed in the last few years. eMarketer expects mobile coupon users to grow to 53.2 million in 2014,

up from just 12.3 million in 2010. Plus, users are 10 times more likely to use coupons on their smartphone, rather than coupons

snipped from print publications6. There are a variety of ways to distribute mobile specials to consumers, including:

+ Social and Location Tie-ins. A large number of brands, such as Walgreens and H&M,

are working with location-based apps such as Facebook Places and Foursquare to

help deliver coupons to consumers who check in to their brick-and-mortar locations.

Coupons range from a simple dollar off discount to a loyalty coupon for consumers who

repeatedly check in at a location. These coupons help reach consumers when they are

in the moment of sale and help push them further down the purchase funnel.

+ Text or Email Coupons. Many brands, such as Payless and Crocs, allow consumers

to text or email a code to a specific address in order to receive a coupon in return. The

lack of a location check-in means the prompt can be delivered in-store or in traditional

print or digital marketing. QR codes can be used in a similar manner, although QR

codes should only be placed in easy-to-scan locations like mailers (not billboards).

+ Dedicated Coupon Apps. For brands with a large quantity of coupons that change

frequently, such as Target or Wal-Mart, the creation of a mobile-optimized coupon site

or app helps consumers organize and find the coupons relevant for them. Target’s recently-released Cartwheel app allows

consumers to sign in with their Facebook account and access a variety of coupons that can be saved for later, shared with

Gilt's Mobile Promotions

5 Yahoo Finance, “App Downloads: A Deceptive Measure of Success.” May 2013.

6 Mad Mobile News, “Mobile Coupon Redemption Growing in Popularity, Set to Double in 2013.” March 2013.

H&M's Foursquare Coupon

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NOVEMBER 2013THE CMO'S GUIDE TO MOBILE FOR RETAILERS

friends, printed or redeemed on a mobile device. (To ensure

all users can access Target coupons, they can also be found

on the dedicated Target app, and on the mobile-optimized

Target site.) Dedicated coupon apps allow brands to create

ongoing relationships with users and continually push their

latest coupon offerings.

Target's Cartwheel App

Mobile coupons are a great way for retail brands to create

relationships with consumers and to drum up interest in their

products. But brands need to thoughtfully create a mobile

couponing strategy. Here are a few tips for marketers:

+ Beware of coupons that are difficult to redeem (for

example, coupons that are only redeemable if someone

is the mayor of a location). It’s important to ensure that

coupons are easy to obtain and easy to redeem for all your consumers.

+ Ensure that your consumers are familiar with whatever technology you choose to use. For example, if your consumers tend

to skew older, email or text coupons may be a better choice than coupon apps or QR codes.

+ Keep the entire process simple. Consumers are using a device with a small screen, and will be looking for quick and simple

steps. Don't expect consumers to fill out 10 entry fields when applying for a coupon. If consumers must enter information to

receive the coupon, ask for only one-to-three fields. You can always ask for additional data at a later time.

MOBILE IN-STOREMobile has made a splash in the retail world, allowing brands to engage with (and sell to) consumers 24-hours a day. Additionally,

mobile couponing can add extra incentive to the purchase process. But how has mobile affected the traditional in-store shopping

experience?

The launches of price comparison apps, such as Amazon’s Price Check app and eBay’s Red Laser app, have caused a stir in the

retail world. In 2010, 15% of shoppers checked prices on their mobile devices while they were in a store. In 2012 that number

jumped to 50%; and of those consumers more than two-thirds who checked the price changed their buying decision because of it7.

Using a brick-and-mortar store to check out a product in-

person and then purchasing that product online (otherwise

known as “showrooming”) is becoming a serious problem

for retail brands. To further aggravate brick-and-mortar

retailers, brands such as Amazon have offered a promotion to

encourage the behavior. For instance, Amazon offered a 5%

discount to consumers who scanned a product in a store and

then purchased it on Amazon.com.

Retail stores are fighting back against “showrooming” with

a variety of tactics. Both Target and Best Buy ran seasonal

promotions where they offered to match online prices in-

store. The promotions were so successful that both brands

have made price matching online retailers a year-round policy,

giving consumers the price benefits of online shopping with

the immediate rewards of brick-and-mortar shopping8.

7 McKinsey & Company, “The Future of Brick & Mortar Retail in the Digital Era.” September 2012

8 The New York Times, “More Retailers at Risk of Amazon ‘Showrooming.’” February 2013.

Amazon's Price Check App

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NOVEMBER 2013THE CMO'S GUIDE TO MOBILE FOR RETAILERS

Furthermore, mobile devices can be easily used to enrich a

consumer’s in-store experience, even tying it to her online

experience. Retail reward apps such as Shopkick reward consumers

for visiting and shopping certain stores. Shopkick allows consumers

to earn “kicks” for doing a variety of actions such as previewing

products in the app, walking into a participating store, scanning an

in-store barcode, or making purchases with connected credit cards.

Kicks can be redeemed for gift cards or products from participating

retailers. Brands such as Macy’s, Crate & Barrel, Old Navy and Best

Buy have all taken advantage of the Shopkick platform.

Mobile also can act as a source of information for employees or

consumers when they’re in a retail store. Best Buy has added QR

codes to all their product information cards. After scanning the

codes, consumers can find additional information about the product,

read updated reviews, and view videos on a mobile phone. Product

information can then be saved for later or shared with friends.

Home Depot has launched a similar initiative with QR codes in

their stores. QR codes were placed on certain plants and plant

products, allowing consumers to scan the codes and learn more

about how to take care of their purchases. Employees were also

given mobile devices that would allow them to scan a product

to get more information, communicate with other store locations

about product availability, and act as a mobile checkout counter

while helping consumers in the store.

WHAT'S NEXTAs consumers continue to rely more on their mobile devices, it’s imperative that retailers be there to take advantage of mobile

opportunities. Currently, many retailers are behind in their mobile efforts. Of the top 500 retailers, only 60% have a mobile

consumer interface9. As Christopher Mason, CEO and co-founder of Branding Brand, said at this year’s SXSW, “This means that

for the first time, the relationship between the customer and the retailer is being shaped in a world where the customer is ahead

of the retailer.” In the near future, we’ll see retailers trying to get back in front of their consumers with advanced mobile offerings

such as mobile payment systems, NFC, and efforts that change how we look at the in-store process.

Mobile Payments

The move away from fixed-point, card-based transactions toward mobile payment options is starting to change the way consumers

think about paying for goods. A variety of consumer-side options, including Square Wallet and Google Wallet, allow consumers

to tie the credit cards they already have to a digital app that can be used at a variety of stores. Who needs to bring a wallet with

them when everything is on their phone? Starbucks has led a similar initiative with their introduction of mobile payments via their

Starbucks app (and most recently their acceptance of Square Wallet payments at 7,000 locations). Though they are still in the early

phases of adoption, mobile payments are on the rise: eMarketer estimates that in-store mobile payments quadrupled in 2012 to

$640 million in transaction volume10.

Near Field Communications

The introduction and growth of near field communications (NFC) also offers huge potential for the use of mobile in retail. NFC allows

for mobile devices to interact with each other after coming within a certain distance. Information can be shared from the phone to

another device such as a tablet or cash register, or from a device to a phone. The obvious first step is payment systems – allowing

9 Publisher’s Weekly, “SXSW 2013: Mobile is the Future of Retail.” March 2013.

10 eMarketer, “Proximity Mobile Payments Set to Explode in US.” October 2012.

Shopkick

Best Buy QR Codes

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OCTOBER 2013THE CMO'S GUIDE TO MOBILE FOR RETAILERS

consumers to pay for something with just a quick wave of their cell phone. But additional information, such as loyalty numbers,

coupons, and discounts, could be shared as well. NFC also allows for information to be passed to a mobile device with a quick

touch. This could simplify the QR process from a photo or scan to a simple touch. Though the potential of NFC is large, it is not

standard in all phones, and many phones (specifically iPhones) don’t have NFC technology.

Scan and Go

There are other ways mobile can change the ways consumers shop and pay for products in store as well. For example, Wal-Mart

has recently been testing a scan-and-go app, which allows consumers to scan products as they shop, download and apply any

applicable coupons via the app, and pay for the products at self-checkout kiosks. An initial test in 70 stores that began in August

2012 was recently expanded to 200 stores and will soon include an Android app. More than half of the customers who tried the

app used it more than once11.

Mobile’s ability to free retailers up from the traditional checkout counter and setup of the brick-and-mortar store clears the path

for breakthrough processes and new purchase paths.

BEST PRACTICES FOR MOBILE AND RETAIL1. Keep it simple

Mobile devices offer a small screen with limited space. That means more pinching and zooming, smaller images and fonts, and

a lower tolerance for problems or glitches. When launching new mobile efforts, be sure to test, then test again. Ensure that every

step of the process is simple to complete, has clear instructions and obvious next steps. Think through who will be using your

mobile programs, where they will be, and what is required for a successful interaction (Is there cellular service in your stores?

Do they need Wi-Fi?). Finally, match your efforts to your consumers. If your consumer demographic is young and tech-savvy,

Foursquare coupons may be a great idea; just remember, they won’t work for everyone.

2. Keep it useful, or consumers will forget about it

The majority of mobile apps and offers get ignored. It’s important to consider what your consumers will be looking for, and how

you can best deliver that to them through mobile. If your brand is known for coupons, a couponing effort is a no-brainer. If your

consumers are constantly looking for ways to compare products, a comparison tool may be best.

3. Offer benefits and make them exclusive to mobile

Why should consumers use your technology? Make sure there is a clear and concise reason for engagement. Whether it is discounts,

the opportunity to get more information, or the ability to tie the offline and online experiences together, make sure the benefits are

clearly communicated to your consumer. Mobile interactions are still new to many consumers, and they need to understand how

or why they should interact with you on mobile. Add information on your mobile offerings to your website, include prompts in your

marketing efforts, and announce new mobile efforts through your distribution sites (PR, news feed, social media sites, etc.).

11 Reuters, “Walmart adds iPhone scan-and-checkout feature to 12 more markets.” March 2013.

CONCLUSIONMobile is here to stay, and as consumer adoption rates continue to increase, so will the level of technology offered. The usage

rates of smartphones and tablets are reaching record highs, and are putting advanced technology in the hands of consumers.

However, it’s important that retailers embrace mobile technology in ways that make sense for them and their consumers. There’s

no reason for every retail brand to employ QR codes in store or place mobile devices in their employees’ hands. Each audience is

different, and it’s important to understand their needs and level of technical savvy before embarking on a mobile effort. Embracing

what your consumer loves about your brand, and learning how you can best translate that to mobile, will ensure a good match of

useful content and fun technology to build a connected brand relationship.

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