It seems like every day another major retailer is in the news struggling to maintain profits. Major brands
from Walmart to Best Buy have alarmed shareholders and employees alike in recent years with struggling profits and slumping sales.
For many of these companies, e-commerce (and by extension, mobile) is viewed as one of their last saving graces. However, despite the opportunities the channel presents, retailers are still struggling with mobile marketing — falling victim to the mobile engagement crisis which I’ve discussed so much before.
The challenge for many retailers that want to capitalize on mobile is that it’s a fundamental change in how brands interact with customers. The web is a one-way, static delivery of content, whereas mobile transforms that dynamic into an interactive, two-way experience — one that’s dynamic to the user. Sounds good, right? Yes, but it’s difficult to harness.
The difficulty with this shift is that retailers are stuck in the belief that mobile is simply an extension of the web. It’s not, and that kind of thinking leads to an unimpressive app that is more likely to push away users than keep them coming back.
With mobile user expectations higher than ever (our research shows that 23 percent of apps are only launched once after the initial download), retailers especially have no excuse for not putting their best foot forward.
Unfortunately for many retailers, the challenges facing those focusing on mobile are only getting worse. Our latest research shows that e-commerce and retail apps saw a decline from the fourth quarter of 2015 to the first quarter of 2016 in key benchmarks for user engagement (like app launches, session length and time in app).
What are retailers doing wrong?
The obvious reason for this slowdown is that there are now seemingly infinite apps for users to choose from, which is uniformly lowering engagement rates. However, I believe that the larger reason is that those making and managing retail and e-commerce apps are doing a poor job of keeping users engaged.
Another major issue that I see time and time again is that marketers aren’t effectively using the mobile tools at their disposal. How many retailers are taking full advantage of channels like push and the data that they have about their users? Some are. Many aren’t.
I recently talked to a retailer that said, “We haven’t sent a single push message.” They’re not alone.
Of those that choose to utilize channels like push messaging and in-app messaging, many are making missteps. Of note, a recent research study we completed showed that 40 percent of push messaging campaigns resulted in a decrease in user engagement.
Furthermore, 45 percent resulted in a decrease in revenue — a death wish for a retailer looking to boost slumping sales. Those numbers are alarming if you’re currently in a marketing role at a retailer.
How to do it right
The good news is that there are a few ways to combat these challenges.
First, if retailers want to leverage mobile, they must make efforts to go deeper in their understanding of their users. That means driving users to register and authenticate; otherwise, there’s no good way to automatically fingerprint and figure out who those users are.
Without knowing who their users are, retailers can’t use their insights to be more intelligent (and successful) with user interactions down the road.
Secondly, retailers must make sure that they are sharing data between channels consistently. If a retailer is sending push messages to try to get a customer to convert, but they don’t know whether the person has gotten an email in the past day, the retailer is going to double up on marketing outreach to the same person and potentially annoy him or her — losing the customer altogether.
Finally, it’s up to retailers to make sure that with any mobile marketing campaign they are linking their efforts to the correct metrics. Many campaigns are successful in the short term (they sell a lot of a new line of products, for example) but may have unintended consequences on a more important metric, like lifetime value.
For retailers looking to drive strong profits over time, it’s key to look more carefully at the longer-term, downstream metrics rather than just those that shine in the short term.
Success for retailers means going beyond what’s already been done and thinking beyond the device. If you’re a large or successful brand, you likely have piles of customer data just waiting to be harnessed. With that, you can become more insightful, driving improved mobile engagement and building apps that delight customers.
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