As smartphone use spreads rapidly, mobile 'showrooming' is the new mantra and retailers who fail to adapt to this trend will be left behind, says Vishwanath Alluri, founder and executive chairman, IMImobile
The retail industry is changing rapidly, mainly due to the evolving habits of shoppers (particularly in terms of non-physical ways of shopping) and their increasing expectations.
The Indian retail industry is estimated to cross $1.3 trillion by 2020; but the growth in India's organised retail market slowed down to 10 per cent in 2012-13, from an average of 20 per cent during 2009-10 and 2011-12.
Consumers expect seamless integration and high quality shopping experiences when they shop through their mobiles. They expect both choice and convenience across channels.
While price is always a consideration, the real value for consumers today is in the experience. To fulfil this need, companies have to spend on the adoption of technology and climb a steep learning curve. They have to understand how adopting new marketing methods through technology would help build consumer engagement.
The Indian retail experience has moved beyond the traditional brick and the mortar model; it consists of various points such as online stores, social networks and the mobile engagement.
Mobile commerce involves managing the entire customer life-cycle. From initiating a dialogue with the customer to obtaining feedback about the service, the mobile phone plays an essential role in the entire process. Mobile commerce offers retailers opportunities to integrate payments, vouchers, and coupons. The advent of Near Field Communication (NFC) technology will further fuel these trends.
Owing to the smartphone explosion, consumers can now transact, search, research, compare prices, review and seek comment from peers on social networks. The capabilities for researching, transacting and communicating that the mobile has enabled has completely, and irreversibly, transformed the way consumers shop.
The mobile acts as a bridge between the retailer and shopper to provide a real time retail experience for the consumer. It is in fact a virtual sales assistant. The growing popularity of smartphones has been spurring the growth of location-based marketing, where layers of location intelligence allow a brand to offer services based on the geographical area of the consumer.
In the networked society, with the increasing usage of mobile and broadband, having a good understanding of consumer behaviour is a key ingredient in optimising customer experiences.
Analysing information available through customer feedback provides insights and hence enables choice, relevance and accuracy in the decision making process. It is about time that the retailers take advantage of the abundant information available at their fingertips.
Customer experiences - in-store as well as on the website - need to be integrated and optimised to maximise business results. There is advanced technology available to discover patterns in buyer behaviour, notice the newly emerging trends, and deliver a memorable shopping experience across mobile.
A Deloitte report on the dawn of the mobile influence states that when it comes to the mobile, many retailers focus primarily on sales transactions conducted through mobile devices, or m-commerce.
The traditional retail sector faces a new age challenge - that of showrooming - affecting the sales of traditional retailers.
Showrooming is the trend in which consumers treat retail shops as showrooms and use either the web or mobile channels to purchase the same product for a lower price. It is the tactic of visiting a store to examine a product with the intention of buying on the internet later. Needless to say it is a matter of grave concern to retailers as it hits their own in-store sales and revenues.
Using mobiles as an empowerment tool, customers are actually challenging the entire supply-chain process and the basic foundation of retailing.
As per a recent TNS report, 33 per cent of people globally use showrooming and two-thirds use their phone to do so.
While many traditional retailers would see the mobile as a culprit, it is in fact an opportunity for retailers. Keeping in mind "if you can't beat them, join them", they can improve the mobile shopping experience of digitally-savvy customers that encourages them to not just research but buy a product while inside a brick and mortar store.
The report also highlights the different ways in which shoppers are using their phones for showroooming. A majority of them use phones to read reviews, followed by using phones for comparing prices and lastly to get advice from friends and family while showrooming.
Additionally, the report also states that traditional retailers can improve the shopping experience of the consumers and get involved in different ways such as developing apps to check availability of products elsewhere as well as navigating store locations, providing mobile coupons and having barcodes for more information.
The mobile ecosystem is not well-developed and there is a need for conditions that are more conducive to mobile-based commerce and payments and to focus on building a more powerful and a holistic mobile ecosystem aimed at providing an end-to-end environment for the ultimate user experience.
Retailers who respond to the changing customer behaviour and focus on improving their knowledge of the customer base will be the ones left standing in the socially integrated world.