- BRW Lists
Published 13 July 2012 05:25, Updated 19 July 2012 11:07
Convincing conventional retailers to invest in mobile marketing technology has become a little bit easier, the chief executive of start-up StreetHawk, Natasha Rawlings, says.
“I was out talking to retailers at the beginning of the year,” she says. “Their eyes would glaze over when you were talking about mobile. Everyone was singing from the same hymn sheet, saying, ‘We’ve really got to get online right first’. It was like a mantra.”
But six months on, Rawlings, who is about to sign up her first customer, says the large retail companies “have got money set aside for mobile which they didn’t have last financial year”.
“Before, I couldn’t even get in front of people,” she says. “I’m now getting straight through and it’s because they’ve realised the world has changed. Web 3.0 is actually mobile. There’s going to be a big prize for the retailers that are in mobile first. They’ll be able to pull away a shopper from another shop to theirs.”
StreetHawk is “a mobile retail” tool that drives customers in store. It is a free iPhone app that pushes out notifications to shoppers when they are located near a store that has inventory that matches up with what they want.
It is also underlying technology, what Rawlings calls a “triple R matching engine – right person, right place, right time”, that retailers can build into their own apps. “It gives retailers the opportunity to send offers out to customers as they move around the street and are in proximity to their stores,” she says.
Location-based marketing is billed as a saviour for traditional retailers. The ability to lure customers in store, with personalised messages via smartphones, could be a way to claw back some momentum from online. The latest data from NAB shows that for the 12 months ending in May, online spending was $11.3 billion, about 5.2 per cent of offline retail sales. Year-on-year growth of online sales in May was 14 per cent, compared with 1.6 per cent seasonally adjusted for bricks and mortar in April.
“[Mobile technology] is giving bricks-and-mortar retailers the power to affect behaviour in the real world,” Rawlings says, adding that the advantage for online retail has been that websites retain customer data. “Once you bring that power into the bricks-and-mortar retailers’ hands and you have the power of proximity as well, then that really changes things.”
Rawlings has an incentive to spruik the influence and benefits of mobile, but the numbers lend her credibility.
The proportion of Australians with a smartphone jumped to 52 per cent, up from 37 per cent 12 months earlier, according to data released by Google in May 2012. The survey of 1000 people found that 28 per cent had bought a product on their smartphone, 24 per cent use their phones to research products while shopping and 22 per cent had changed their minds about a purchase after completing a mobile search, while they were in a store.
A global study by consultants Capgemini, released in July, found that almost half the 16,000 respondents (44 per cent) want to use a mobile app to support in-store shopping.
But it also found that although consumers have expressed an interest in personalisation, their enthusiasm varied between the online and mobile channels: 61 per cent of respondents want online stores to remember their personal data and payment methods to speed up shopping, but only 41 per cent want to be identified through digital devices (such as their mobile phones) when entering a physical store.
It’s the difference between actively choosing or passively receiving, Capgemini Australia’s digital transformation lead Ben Gilchriest says. “Even with payment details stored online, you still have a level of control over that,” he says. “There’s an action you have to take to do that. Things that are more passive, you’re not sure what you’re doing to get pushed or when it’s active. People are less comfortable with that because the degree of control at the perception level is much lower.”
Gilchriest adds that although most respondents said they didn’t want location-based messages on their mobiles, he reckons this will change as the technology improves. “Consumers say they don’t want it because what’s currently on offer doesn’t add value to them.”
Rawlings emphasises that location-specific messages will be effective only if they are welcome and add value for the customer. “We’re going to get very sick, very soon, of getting spam notifications,” she says. “Mobiles are very personal devices. If you’re getting spam, you’re going to turn off those apps very quickly.”
But there are some hurdles before retailers fully embrace mobile technology such as the kind StreetHawk offers.
As Rawlings has found, many retailers are still trying to get their head around online. Smooth operating “multi-channel” retail requires complete control of inventory management, Lorna Jane digital strategist Sam Zivot says.
“That’s the sort of frustration and the biggest barrier … So much has to happen in the back end and the technology has to be flawless to be able to engage in these things,” he says.
New mobile technologies must also solve a real customer need, he adds. After British supermarket giant Tesco unveiled its subway experiment, in which consumers could scan QR (quick response) codes from a subway billboard and buy on the spot, retailers and marketers went wild for the technology, Zivot says.
“Are people really scanning them?” he asks. “We’ve experimented with them quite a bit in terms of having them in catalogues and [advertising] special offers, even putting them on mannequins in store … It’s cool to be able to offer that [technology], but we weren’t necessarily getting a high amount of scans.”
Sometimes simple technology is as effective as the new whizz-bang versions. “In terms of mobile marketing, the most effective means for us continues to be the good old SMS,” he says.
But Zivot is ready to take advantage of his smartphone-wielding customers. The proportion of Lorna Jane shoppers that visits the chain’s website from a mobile device has increased to about 36 per cent from 15 to 20 per cent two years ago. The chain is working on a mobile-optimised version of its site and although a shopping-based app was in development, Zivot says “there starts to be some redundancy between that app and the mobile site”.
Instead, the chain wants to develop a lifestyle app, more in the vein of Nike+, which gives feedback when users do a workout or go for a run. “It’s not a direct sales tool, but it enhances your experience with the brand,” Zivot says.
The wait-and-see approach is a hurdle, too.
For example, director and co-founder of fashion label One Teaspoon, Liz Roberts, is well aware of the effect smartphones and tablets will have on retail. “If they’re around and we can track where they are and send a message to say we have a promotion … that’s obviously an advantage,” she says. But for the three One Teaspoon stores, Roberts would prefer to wait until a platform is “well and truly tested” before investing.
“Retailers are really good at playing a waiting game,” Rawlings says. “[They] need to be out there experimenting to stay ahead of their competition. They’re all used to copying what the big players do. The world’s not going to be like that any more.”