Don’t Let Amazon Eat Your Lunch This Holiday Season
As consumers' shopping behaviors continue to evolve, Josh Manion reveals tips for using data to boost mobile app engagement and in-store revenue.
The battle of the titans is on again this holiday season, as commentators line up to report on Black Friday plans by Amazon, Walmart and the other big retailers, putting a spotlight on the relationship of online and in-store spending.
Who’s winning that battle? And where does the truth lie for retailers like Walmart that are seeking to compete in both arenas?
Walmart is the world’s biggest retailer, with $482 billion in annual sales, but its online revenue is small compared with Amazon. Now Walmart has announced it will invest $2 billion in the next two years to bolster e-commerce capabilities, which is likely to yield big results.
But my view is that retailers may be putting too much weight on the climb in online spending alone — and too little on how to monetize the data generated by digital channels to drive in-store revenue.
Buyers visiting stores in the past were anonymous until they reached the point of sale, when they pulled out a credit card or wrote a check. Mobile has changed all that.
The shopper who walks into a store is likely to be carrying a smartphone with geo-location features, which can trigger in-store advertising and alerts and spur mobile shopping in general. Mobile is fast becoming the place where digital engagement and in-store buying merge.
Mobile delivers an advantage to retailers, with both stores and e-commerce platforms that Amazon lacks. Using beacon technology, one big-box home repair retailer, for example, can serve up personal offers and recommendations on its mobile app as a customer enters the store.
Getting mobile right is critical this holiday season and beyond. But more than half (57 percent) of digital business professionals are still not using any type of mobile analytics to measure and optimize the mobile app experience, according to Forrester Research. That suggests a huge opportunity is being missed.
Where Do Consumers Buy?
Let’s look at the numbers. Analysts at PricewaterhouseCoopers (PwC) investigating 2015 trends report that nearly three-quarters of the growth in retail sales spending has occurred through online channels. PwC puts online’s share of the “addressable market” at 16 percent (a number it reaches by subtracting autos, gasoline and groceries, which are sectors much less affected by online).
That growth is likely to continue to rise. Amazon, for example, wants to drive 25 percent growth in the fourth quarter of this year. Early this month, it released its Black Friday Deals store and electronics holiday gift guide, with more “lightning deals” for its top shoppers this year.
Amazon’s aggressive goals may strike fear among retailers. But it’s clear that the retail landscape continues to evolve with ever-more-complex shopping behaviors across digital and in-store buying.
Consider this example. Retailers in recent years have worried that shoppers would use stores largely to “showroom” products that they buy online. But in fact, PwC reports that consumers now use online stores to “showroom” products before visiting a local store to purchase.
PwC’s annual consumer survey revealed that nearly 40 percent of consumers make purchases in-store at least weekly, compared to 27 percent online.
Consumers like to see, touch and feel merchandise, and this will continue to be a draw to in-store experiences. In fact, Caltech researchers reported findings from research showing that people will actually pay more for merchandise they can touch.
Learning To Use Data And Mobile Analytics
Penny Stocks Lab reports that people send 27 billion texts, download 189 million apps and make $1.1 billion in mobile payments every 24 hours. Clearly, users are spending a good deal of time on mobile. The question is how to monetize the ocean of data generated in digital activity as shoppers visit brick-and-mortar stores. Three elements are critical.
• Collect Data Everywhere. Retailers need to collect and integrate user-level data everywhere, meaning all digital and offline sources.
Mobile app and web data, for example, must be unified. Too often, marketers use sophisticated tools to gather and analyze web content, while tools supporting mobile are largely neglected.
Marketers at a minimum need to extend tagging to mobile apps so that in-app data can be added to data generated from other channels and platforms. Dynamic mobile app tagging is essential to getting mobile behaviors into the mix.
• Create An Analytics-Driven Strategy. Analytics is fundamental to effective mobile marketing. Without it, you fly blind when it comes to optimizing the consumer experience with in-the-moment changes in mobile apps.
What’s needed is the flexibility to test and swap out features quickly within native mobile apps in real time. Using technology to avoid time-consuming re-coding by software developers is key to achieving this agility.
• Personalize. The ability to monetize data comes to its full realization in the ability to deliver relevant offers and information to individual shoppers as they go shopping. In mobile marketing, for example, you can target app content to a single user based on a unified profile, drawing from data generated across the customer journey.
The shopper in the middle of a home renovation project, for instance, when visiting a home improvement retailer, ideally gets served recommendations and offers based on both past browsing and buying history and predicted future need.
What we often describe as a 360-degree view of the customer must include mobile to support actionability in real time.
With the line separating online and in-store shopping blurring, how do you best engage the customer who functions seamlessly in both realms? Start with the data as the foundation for boosting both mobile app engagement and in-store revenue.