Overcoming the Barriers to Mobile Use in Stores, Part 2

This is the second installment in a two-part series that examines why mobile phones aren’t a larger part of the in-store shopping experience. Part one looked at data that reflects low engagement and explored the barriers to mobile use in-store. Part two attempts to understand the role of technology and why it may (or may not) increase usage.Shoppers have shopped the same way for a long time, and their ingrained behaviors are just one of the many barriers identified in part one that stall the use of mobile phones in stores. Other barriers are technical (shoppers don’t want to waste phone memory on an app), promotional (shoppers are unaware of the tools available to them) and confrontational (brands and retailers aren’t sharing data).A shift is somewhat inevitable as today’s youngsters age into primary household shoppers who are comfortable with technology in-store. But first, some key technologies are going to have to evolve so they’re truly useful and solve fundamental shopping needs within the store ecosystem. At the moment, however, it’s still the Wild West out there when it comes to technology, with variations on big ideas like augmented reality, location-based beacons, NFC chips and ink that can “type” on your smartphone being touted by dozens of startups that then come knocking on your door.Kim Garretson, director of Realizing Innovation, a Missouri School of Journalism online service that helps brands and agencies discover startups to evaluate, says there are too many new companies, concepts and technologies for marketers and agencies to sort through efficiently on their own. “They don’t have the time, budget or staff devoted to startup discovery,” he says. “But they realize that there may be ideas out there that can improve their marketing efforts.” It’s understandable that they’d become gun shy, Garretson adds, given industry estimates that 96% of startups that don’t raise venture capital fail. The question, then: How best to test?Understanding TechTerry Logan, group director, Digitail, The Integer Group, says a safe way for brands and retailers to approach technology is via the 70/20/10 model: Designate 70% of time and money to core business goals, 20% to programs that support the company’s business goals, and 10% to innovation.Logan says that a fairly standard mobile marketing concept like a “Text to Win” program, for example, could easily roll into the 70% designation because texting is such a highly ingrained behavior. After that, a mobile MMS upload program, which is less common to shoppers, could fall into the 20% area. That leaves the 10% area, which could be used for some innovative, video-making, customized mobile engagement tool.Don’t overthink the precise allocation of 70/20/10 percentages, Logan says. The point is to lower financial expectations and pressures while still being able to experiment. And whatever approach is followed, he says, always remember that “you’re in the business of selling products, not in the business of inventing technology.”Another useful innovation management tool is to categorize some of these technologies into activation buckets that represent how shoppers actually engage with their mobile phones:1. Optical: The camera lens is the entry point on a mobile phone that shoppers use first and most often to engage with brands. A common example is asking a shopper to scan a generic QR code (or a custom-branded variant like SpyderLynk’s SnapTags) to receive a link to a video or contest page. Digimarc’s digital watermarking technology, which can read patterns embedded in print, is another optical example. Augmented reality (AR) also relies on the camera to display its 3-D information over the phone.2. Conductive: Capacitive materials represent a newer (and largely still conceptual) entry point that would enable shoppers to use their smartphone’s screen to physically engage with the print surfaces of packaging and signage – bypassing the camera altogether. Touchcode from T-Ink is a German technology that embeds a secure, printed conductive-ink signature into a product label or signage; the content can be read or engaged with just by touching the smartphone screen to this capacitive material. Assuming the matching app or mobile page is already open, the interaction is virtually instantaneous (in a sense, it almost types its commands into the phone), a feature that lends itself to special tasks like product reordering, impulse purchasing or the compiling of loyalty points.3. Wireless: Today, the mobile solutions community is especially focused on engaging with shoppers through location-based technologies built on Bluetooth Low Energy (BLE) and Wi-Fi networks inside a store. Assuming shoppers have the correct Bluetooth and Wi-Fi settings enabled, brands and retailers can communicate with them by sending a notification when they are within a certain radius. Common examples are check-in apps such as Shopkick, Foursquare or CheckPoints that reward shoppers when they enter a store.Beacon technology requires that a small transmitting device be placed somewhere in the store that will communicate with a shopper’s phone, generally sending a notification. General Electric and Philips are testing beacons housed inside store lighting fixtures.Near-Field Communication (NFC) is another example most commonly associated with mobile payment. Unlike beacons, a shopper needs to wave an NFC-enabled mobile device over a visible transmitter to receive information. Wearables, especially as they grow from glasses and watches into clothing, also fit into this bucket.4. Deviceless: This final bucket of activation is still something of an imaginary playground in which a shopper can be engaged without the use of a mobile phone or any device. As suggested by an often-referenced scene in the movie, “Minority Report,” a retailer could engage with a shopper through retina scanning as they enter a store or via some other sort of personal marker that identifies the individual and then transmits individualized messaging based on buying history or other interests.But regardless of how the technology engages with the shopper, all brands, retailers and tech companies need to ask themselves what role technology should play in the process. If a shopper’s routine is so engrained, we’d better have a very good reason to be disrupting it with technologies that then try to force new behaviors.Logan says The Integer Group’s approach is to integrate a technology into a current shopper routine. Integer’s “adidas Wi/Sh” or “window shop” used a storefront window in Helsinki with touchscreen capabilities that let passersby shop while the store was closed. One can imagine, for example, walking down Fifth Avenue after dinner and using a storefront window to explore products, share information, buy or even save for later purchase. If the technology can remind that shopper of the saved product the next time she passes that location, it’s created a solution that’s within her routine and thus welcomed.Garretson thinks it will be possible to alter a shopper’s routine, but from a different angle. As social networks mature and become more “mobile-first” – think Facebook, Twitter and Pinterest – the activities of trusted friends and the sharing of new shopping discoveries will persuade the “on the go” shopper to change routine.Morgan McAlenney, executive vice president, Digitail, The Integer Group, says, “All technology is migratory, and while mobile, in the near term, can be a tool in the shopping process, it’s not the be-all and end-all.”McAlenney believes it’s quite likely that mobile will migrate shoppers toward some other technology that hasn’t been introduced yet. When Integer originally developed MillerCoors’ “Beer Compass,” it was a gesture-based (using Microsoft’s Kinect) in-store display that answered questions. That program eventually morphed into a mobile app, and McAlenney suspects the basic concept will migrate again and again as new technologies arise.What’s NextThinking of next-gen possibilities, Rick West, CEO and co-founder of Field Agent, believes that if online “scraping” via the phone while in-store becomes easier, it would be a game-changer. He says many consumers have trained themselves to first go online while at home and look up Frosted Flakes, for example, on Amazon.com or some other search engine. They know that a price will come up instantaneously because desktop/laptop search engines are configured to “scrape the Web” for prices. But if a shopper tries to do the same thing on her mobile phone, she has to open each app – Ibotta, Groupon, or the chain’s app – individually: “You can’t scrape the ‘apposphere’ as easily to see what is offered in terms of price,” West says. “As long as apps remain fragmented and individually focused on specific brands or retailers, Google will remain the best game in town.”When it comes to using technology in “frictionless” ways, West likes where Walmart is headed with Savings Catcher, a mobile app and website tool that lets you enter or scan your Walmart receipt to compare what you paid to the sales prices in local competitors’ printed ad. If it finds a lower price, Walmart will refund the difference in the form of an e-gift card. “Walmart is telling them, ‘Hey, you don’t have to collect coupons or even worry about apps inside the store anymore,” West says. “Just trust us – all you have to do is scan that receipt.”Joel Warady, chief sales and marketing officer of Enjoy Life Natural Brands, believes that beacon technology is “the next big area that has great potential.” He believes that if it can be tied to a mobile wallet it will be game-changing. Right now, when a shopper enters a store, the chain has no idea if she is a loyalty cardholder until the shopping trip ends. “But mobile knows you’re there, welcomes you and can tailor your shopping experience based on preferences and history,” Warady says. “If done properly with a beacon, what you’re being pinged with is stuff you’ve actually requested or asked for.”Garretson considers beacons a promising technology, although less for their ability to send notifications to shoppers about a product on sale and more for their social implications. “Imagine a beacon saying, ‘Would you like to see the last five comments by shoppers of this new product who were standing right here, in this same location?’ You can argue that that borders on the creepy, perhaps, but it is also social.”Rich Donahue, director of marketing, Ibotta, agrees that a beacon would provide an inherent value by serving messages at the right time and place. “But it will become less important if seven people send you the same message or if people abuse it,” he adds. “It will be incumbent on the community not to bombard people.” Since the Ibotta app measures back to the sale, Donahue says his company can run A/B tests using Apple’s iBeacon to see if an offer is generating a sales lift for clients.Field Agent’s West, however, believes that beacons are impractical. “Let’s say you put one beacon per category into a Walmart store,” he argues. “That’s roughly 110 iBeacons. And let’s say that in each of those categories, only three manufacturers are given the privilege of the code for that iBeacon so their apps could ping someone. Even if you only shop 50 categories, you’ll still get pinged 150 times.”West thinks beacons are ideal for high-ticket categories like electronics and cosmetics where shoppers tend to hover, “but for 80% of categories, shoppers do a drive-by and go.” He claims that in iBeacon tests, it took anywhere from two to three to five seconds for the iBeacon to register and ping the phone. “By the time you get that ping about razor blades, you’re already in the shampoo aisle,” he says. “I’m not trying to confuse the conversation, but my role when working with my clients is to caution them about chasing shiny objects.”Data LockLogan believes that the real power of technology isn’t the fact that an iBeacon can deliver a notification to a shopper while she’s in the aisle. “The power is using that iBeacon to learn how she walks the store and track her linger time in-aisle,” he says. “You can test to see what offers work better than others and learn from that.”If data like that is the answer, however, sharing remains a problem. “The barrier is around who owns, controls and monetizes the shopper’s data,” Garretson says. “Retailers think they own it all because the shopper checks out via their POS and loyalty programs. Brands argue that shoppers are there because they build the intent to purchase through marketing spend.”Warady of Enjoy Life says the real power behind mobile technology is that it provides consumer insight data points that are easily shareable with retailers. When Enjoy Life shared the results of its work over the Ibotta app with Target, the chain increased Enjoy Life’s SKU selection by 40%. “They want us to do Cartwheel, and we will,” Warady says. “We will test programs at retailers and overlay them with what we’re currently doing. We’ve done that at Target and with Meijer’s mPerks.”Garretson is particularly interested in RSI Retail Solutions, a provider of business analytics and real-time supply chain intelligence that helps CPG companies maintain their in-stock positions. He says the company recently began partnering with MaxPoint, a hyperlocal advertising company. Theoretically, this should enable a brand to know if there are too many boxes of Honey Nut Cheerios clogging a store’s backroom a half-mile from households that will respond to a targeted mobile ad that says, “Go get your Honey Nut Cheerios!”Logan says companies like Acxiom and Datalogix can also tackle what to do with the data. “Brands and retailers don’t have to be all-in when it comes to sharing,” he says. “Lean on the smart guys.”About the SponsorThe Integer Group (www.integer.com), a member of Omnicom Group Inc., is a promotional, retail and shopper marketing agency that lives at the “intersection of branding and selling.” Integer creates strategic marketing solutions for clients in categories that include retail, beverage,

Overcoming the Barriers to Mobile Use in Stores, Part 2

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