Retail Industry Is Going Mobile

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A few weeks ago I wrote about the increasingpopularity of the application store model, especially for mobile apps. A majority of silicon.com's CIO Jury are considering development of mobile apps as part of their companies' IT strategies, with one of them calling mobile apps a "fantastic opportunity for rapid innovation and excellent value for money."


Mobile devices are growing in popularity both among employees carrying them for professional use and consumers using them for darned near everything else. Sixty-three percent of mobile employees surveyed by iPass said they'd rather use a smartphone than a laptop as a primary mobile device. A recent ComScore survey found an 18 percent increase in U.S. smartphone users in the last quarter of 2009, with 63.5 percent of mobile phone owners sending a text message and 28.6 percent using a Web browser.


Mobile shopping is expected to be a particularly hot app. ABI Research says mobile shopping in the United States increased from about $369 million in 2008 to some $1.2 billion in 2009 and could reach $2.4 billion this year. It expects Americans to spend $119 billion from their mobile devices in 2015. I'm not sure how to account for the huge disparity in numbers, but Juniper Research predicts the U.S. mobile retail market will exceed $12 billion by 2014. (It would obviously have to exceed it by quite a lot to hit the ABI Research number.)


Retailers that aren't already working on developing mobile apps will need to play catch-up to companies like Target, which is introducing a program to send coupons directly to consumers' phones. The Wall Street Journal reports shoppers simply sign up to receive SMS from Target, either at the company's Web site or by texting COUPONS to 827438 (TARGET). Then they'll get monthly text messages linking to a mobile Web page with special offers.


In addition, Target brags its advanced point-of-sale technology makes it the first national retailer with the ability to scan mobile barcodes in all of its stores. (I've had poor luck in trying to scan bar codes from my iPod Touch at my gym and elsewhere, but maybe other folks have been more successful?) Target also offers an iPhone app that lets people access gift cards, manage gift registries, browse weekly ads and check product prices and availability at local stores.


According to the Juniper Research I cited above, mobile coupons initially will dominate the market, but will be overtaken by mobile advertising expenditures by 2013. Juniper Research says mobile offers brands and retailers the ability to change their campaigns quickly, and to track the success and customer acquisition rates -- both big benefits. It believes consumers will be especially interested in using their mobiles in "live" shopping situations, such as making product price comparisons.


Mobile will be part of the equation in IBM's recently-announced "virtual" competency center for retail technology, which is designed to bring retailers up to speed on mobile technology, kiosks and social networks, among other trends.


A National Retail Federation blog offers some great advice for retailers considering a move into mobile :

  • Survey your customers to see how they use mobile already and what future functionality might interest them.
  • Experiment with mobile advertising.
  • Consider enlisting outside developers and other mobile specialists. But in exchange for help, you'll need to be willing to make your content available beyond your own company.
  • Integrate mobile into a broader operational plan. Ask yourself questions like these: Is there a space in your stores for consumers to browse on their mobile devices? How is your wireless connectivity? Do you provide other means for customers to access online information, such as kiosks located in stores?


As I've written before, kiosks may help retailers bridge the Internet, bricks-and-mortar divide. That may still be true, but I don't think kiosks' role will be as large as may have been originally envisioned. I think consumers will prefer to use their personal mobile devices for tasks like price comparisons or searching for customer reviews.


Still, there may be some interesting interactions between kiosks and mobile devices, and kiosks will fill the bill for folks not carrying a smartphone. Kiosks with videoconferencing capabilities could provide better customer service.