It was only a year ago that many businesses we work with saw the mobile majority arrive, which meant that they began seeing half or more of their digital traffic originate from mobile devices.
Now, in holiday forecasts and surveys galore, mobile devices are projected to account for 53% of online shopping (IBM’s Quarterly Retail Forecast). And the projections seem to be receiving validation, with one source saying 37% of transactions took place on mobile devices over the period starting with Black Friday and ending after Cyber Monday. Others placed the mobile commerce percentage somewhere between 20 and 30% of all online transactions around Thanksgiving, but also noted traffic numbers that were much higher.
Of course, that’s not even half the mobile story — or at least it shouldn’t be. Because of this seismic shift driven by the consumer, brands and their marketing teams need to make seismic shifts to their marketing efforts. Simply porting their digital programs to mobile screens is not enough. It is a fundamental new world where it’s all about making consumers love your brand on mobile.
Digital customer interactions are now set to influence 50% of in-store sales by the end of the year, according to Deloitte’s “The New Digital Divide.”
Deloitte notes that 84 percent of shoppers use digital tools before and during their trip to a store, and they convert or make a purchase at a 40 percent higher rate than those who do not use such devices during their shopping journey.
Looking ahead, Forrester Research, Inc., projects that U.S. retail will grow by $475 billion between 2014 and 2018.
While 25% of that figure will come from online retail, the remaining 75% of the growth will come from offline sales — primarily cross-channel sales, also known as web-influenced offline sales. (“U.S. Cross-Channel Retail Sales Forecast: 2014 to 2018,” Forrester Research, Inc., July 24, 2014).
Forrester states:
This growth in cross-channel sales can be attributed to US online consumers increasingly using their phones in retail stores to research products online. Retailers would be wise to see this growing trend as the new normal.
Are You Wearing Shades Or Blinders For Mobile’s Bright Future?
Clearly, with information at their fingertips, mobile is fundamentally transforming consumers’ behaviors. Because mobile is ever-present, it’s there at the moment of need, inspiration and action.
Perhaps no other time of year brings mobile’s massive transformation into such sharp focus as the holidays, where the confluence of consumers looking for deals and retailers counting on cashing in on a very significant portion of annual sales meet with unbridled enthusiasm.
While you must continue to do what you’ve mastered digitally — mobile web sites, search marketing and optimization, social engagement, email marketing and advertising, too — simply optimizing and targeting these same efforts for mobile screens isn’t likely to keep the foreboding ghost of Christmas Future from calling as the below trends foretell:
Apps Overtake TV. According to Flurry, US consumers now spend more time using mobile each day than they do watching TV, and more than 86% of that time is spent in apps versus the mobile web. The latest mobile growth came largely from “torso and tail” apps — not the most popular ones — while time spent on the mobile web remained flat.
Email Loses Action On Mobile. More email opens occur on mobile devices than not, but click-through rates on mobile email remained relatively poor, as do conversions and purchase behavior (Knotice Mobile Email Opens Report, 10/2014).
Mobile Ad Performance Fails To Inspire. In-app ads are twice as effective as mobile web ads, according to Medialets (slideshare), at a 0.56% average clickthrough.
Paid Search Gains Effectiveness. E-retailers surveyed for The State of Retailing Online report, an annual study conducted by Forrester Research and Shop.org, the e-commerce arm of the National Retail Federation, cited paid search as the best way to acquire customers with 76% saying it was more effective in 2013 than in 2012.
Mobile Search Underperforms Desktop Search. Nearly two-thirds of global marketers polled by Kenshoo in Q2 2014 said mobile search underperformed compared with desktop search campaigns. eMarketer cites a wake-up call for many marketers as research suggests 10% to 33% of mobile users are searching in apps first, or in apps only.
As mature marketing channels, retailers’ focus on email marketing and paid search is understandable. Yet key questions remain. Do consumers approach email on mobile differently than on the desktop, performing quick triages versus reading, clicking and responding?
Vendors themselves point to possible issues with screen size, divided attention spans of those on-the-go, and varied user experience due mobile optimization and different email readers like Gmail’s tab design that buckets promotional messages.
What about all the effort marketers have put into building social audiences? Facebook’s recently announced algorithm change severely limits the reach of promotional organic posts, making it much clearer that brands are renting their social audiences versus owning them.
The dominance of paid search is a decades-old story of how the Web won the hearts, minds and wallets of marketers. Brands can readily tap into consumer intent and capture clicks with top-level visibility.
But with mobile, and specifically apps, retailers have the opportunity to move beyond keyword-based clues of intent to more complete understanding of context throughout consumers’ shopper journeys and within their daily lives.
Gaining Inspiration For Mobile’s Massive Mindshift
The big, massive shift that every industry needs to contemplate, but especially retail in the ultra-competitive holiday shopping season, is how to move marketing from hijacking mobile moments to sparking them.
In other words, how to go from being where some consumers will find you in their moments of need, to delighting your best customers in moments throughout their day.
I could point to industry analyst stats and customer stories that show just how much more response marketers get from push notifications over email, like 50% higher open rates and click-through rates that are twice as high.
Or I could tell you that last year, shoppers responded to push messages at higher rates on key shopping days than the year prior, accounting for 25% of app opens on Thanksgiving, Black Friday and Cyber Monday. But all of that only serves to position push and apps as just another customer communications channel.
What’s happening is bigger than that. People are curating which brands they’ll interact with in sustained ways. They are consuming more and more content, but it’s on their terms — whether that’s time-shifted and cross-screen TV, personalized news and entertainment served up through apps and social graphs, or a myriad of other mobile-first capabilities that improve their lives in big and small ways.
The most successful brands have honed to their apps to provide value in customers’ daily lives. They’ve shifted from a singular focus on driving sales, to informing , educating and inspiring customers with rich and relevant content, services and utilities.
The REI Snow Report app is a perfect example of melding valuable utility with its business as a leading national outdoor gear and apparel retailer. (Disclosure: REI is a client.)
Pick your favorite mountain resorts and see the latest conditions, weather forecasts and trail maps; you can even select how much snow has to fall and what time you’d need to be alerted by in order to head out for a day of adventure.
While perennially cited, few brands exemplify the true impact mobile can have more than the mobile excellence of Starbucks Corporation. Innovations it has driven in growing a mobile community to re-engineering its business for mobile with payments, tipping and soon “pay ahead,” offer leading lessons in how mobile can transform customer relationships.
Location & Beacons Offers Uniquely Mobile Opportunities
Consumers also choose the level of access they’ll provide to brands. This goes beyond the push opt-in and now multiple levels of location-sharing permissions, to include requests to access calendars, contacts, social channels, and phone functionality.
If you meet an appropriate value-to-privacy exchange, they’ll give you more insight than ever possible before, including where they currently are and where they’ve been, spanning macro (geofence) and micro (beacon proximity) locations.
For its shopping app, REI ran a test in most of its retail markets, targeting users who had been near a store in the prior three months to notify them of local in-store GoPro training classes as well as its REI Garage Sale. Response to these notifications were four times greater than its non-targeted messages.
From a messaging and engagement perspective, combining everything you know about users to engage them in more relevant and contextual ways can be extremely powerful.
The U.S. Open (also a client) targeted last-minute ticket offers to a small subset of its app audience most likely to respond, including those currently in the Tri-State area (current geofence location), who had been at a ticket booth on-grounds (historical beacon proximity) and had looked at tickets within its app (behaviors)—300,000 users in all.
This level of targeting avoided hitting people who either couldn’t or probably wouldn’t attend, and achieved a massive 32% conversion rate with recipients clicking the “Buy Tickets Now” button.
Success in the mobile age, requires a foundational shift in marketing to emphasize relevance over reach, invitation over interruption and even a services and utility-oriented approach over a necessarily sales-focused one.
Marketing was a business-focused endeavor, but going forward it will be a customer-focused one.
This holiday season will see new successes and best practices emerge from retailers’ efforts to win attention on the small screen and grab a bigger portion of holiday spend. We can’t wait to share them with you. But what’s even more exciting is the bigger, “beyond just sales” opportunity for brands to form deeper and more direct relationships with their very best customers.
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