By Steve Rowen, Managing Partner
10/13/2009
Last week I attended and spoke at the annual CTIA Wireless IT & Entertainment Conference, an event specific to wireless technologies and one that none of the partners at RSR had ever been to before. A crowd of more than 15,000 packed into the San Diego Convention Center to learn how – across multiple verticals – mobile devices are both upsetting and improving how business is conducted in the digital age.
On the expo floor, vendors trotted out next-gen end-user devices (for a real trip, check out the Bond-meets-Star Trek smartphone wristwatch - a video clip of it taken from the show floor is available on YouTube here), as well as demonstrations of technologies and programs that retailers are rolling out – (Nokia and Best Buy have some very cool projects underway, including “Point and Find”) - the majority of which are designed to leverage the devices customers already have in their pockets.
However, some of the most interesting takeaways from the event came in the sessions of the first-run “Mobile Retail Experience” track, hosted by Jim Crawford, executive director of the Global Retail Executive Council. Within, a group of highly technical attendees actively participated throughout the day with their moderator and presenters – few audiences I’ve ever seen have been as engaged. Topics ranged from the viability of a day when retailers can utilize near field communications programs that are solely reliant upon NFC-enabled chips within consumer-owned devices, to the impact a widely distributed 4G network will have on what is possible for retailers to fold into the mobile equation (most agreed we would not see whole scale 4G availability in the US until 2012/2013).
In his presentation, Rick Mathieson, mobile expert and author of Branding Unbound, walked the audience through practical examples of how such brands as Coca-Cola, Sephora, Prada and Proctor & Gamble have supplemented traditional marketing techniques with mobile marketing campaigns; former CIO of Virgin Megastores, Robert Fort, shared the backstory of where Virgin was headed with mobile technologies (the retailer had multiple projects underway to tap into its tech-hungry teen-to-twenty-something audience before being forced to shutter its doors earlier this year).
Throughout the day, though, the most important theme to emerge was the common agreement among all parties that mobile technologies are making the store more important than ever. Whether a customer wants to compare prices while at the shelf, reach out to a social network for advice in a dressing room, or check a product’s availability while en route to the mall in order to determine where to park for the quickest in-and-out, mobile technologies are based in what was previously referred to as a cross-channel world: a world that is now just called the “anyway I want to shop world.”
We saw this in our recent eCommerce study, Online Commerce in 2009: The Game Has Changed – Have Retailers?, from which I was there to present findings. As it pertains to the future/limit of mobile technologies in a cross-channel retail world, I saw a number of pleasantly surprised faces when I presented to the attending crowd (this was a room of technologists, after all). In that research, few believe that online commerce has come close to its sales potential (according to the US Department of Commerce, online sales currently account for five percent of overall retail sales); only 21% of our respondents agree that online sales will top out at 10-15%, and 57% completely disagree that the 15% index is any type of ceiling. As a result, retailers still have tremendous opportunity to sell more products – more frequently – via their online channels. However, at the same time, 86% of our respondents agree that the future of online commerce lies more with cross-channel or “merged” channel capabilities. Mobile technologies are a key driver to this shift in vision.
Overall, 60% of respondents agree that mobile is a big untapped opportunity for their company - 16% strongly agreeing. Winners see a greater opportunity for mobile than their peers (65% vs. 45% of all others). But the biggest difference is between mixed-model retailers (those who sell anywhere from 11% to 75% of their overall goods via the online channel) who have a larger online component vs. all of their peers, including online pure-play retailers. In some ways, this is surprising. Online retailers theoretically have an important opportunity to tap into customer dissatisfaction (or at a minimum, curiosity) with either price or selection when standing at the store shelf. If an online retailer can offer competitive selection or pricing for a mobile search (especially one initiated in the store), online pure-plays suddenly have an opportunity to make a stand in a place they have historically had little interest in going: the store. The differentiator of store-based cross-channel is suddenly significantly reduced.
However, mixed-model retailers are in a better position to understand the intricacies of mobile/store/online interactions. For those that posit that mobile is more about connecting the virtual world with the physical, rather than simply adding a miniature version of the online realm to the mix, mixed-model retailers' interest in mobile (77%) seems to validate that theory.
All in all, the room was in violent agreement that even though we’ve only scratched the surface of where the customer will take mobile technologies, the future looks very bright for multi-channel store operators who can effectively access her via her beloved wireless device – the earlier in the sales cycle the better. In Mathieson’s words, “Brick and mortar is the new click and order.”
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