Providing Seamless Multichannel Experiences for the Captive Consumer

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1 Mobile Technology In-Store White Paper: Providing Seamless Multichannel Experiences for the Captive Consumer Methodology Usablenet recently conducted an in-depth research study, involving subjects in the US and the UK on the use of in-store kiosks/tablets. In this research, Usablenet carried out first-hand unobtrusive observations of customers interacting with kiosks in a physical store environment in both US and UK, as well as in-person interviews with employees and customers who have experienced using the kiosk. Usablenet additionally surveyed 1500 respondents on their use of smartphones and kiosks in-store. Lastly, this research is supplemented by market studies on mobile device usage in relation to multichannel browsing and shopping behaviors. In-store Smartphone experience Shopper usage of Smartphone in stores Shoppers carry their smartphones US: 70% UK: 60% Shoppers use their smartphones US: 30% UK: 40% I. Introduction It has been well-established that consumers today are increasingly device-agnostic, comfortable with using multiple devices at different times and in different ways to achieve their goals. The most successful organizations are those that are able to provide a seamless and consistent user experience as shoppers switch between desktop to mobile, and tablet. Retail organizations are especially interested in ensuring that consumers complete a browsing-to-buying cycle regardless of which devices they start and end with. Mobile, of course, has always presented an evolutionary challenge for retail organizations, as the traditional in-store model has been to treat consumers as a captive audience surrounded by temptation. However, today s consumers remain mobile-ready even when they are inside a store. In our recent research we found that 70% of US and 60% of UK in-store shoppers have their smartphones with them while they browse, and 30% and 40%, respectively, actually have them in their hands while browsing. Our research also discovered that 79% of US shoppers and 64% of UK shoppers use their smartphone for browsing and shopping on websites and apps the number one usage. In the US, 41% of shoppers browse and purchase using their smartphone at least once a month, 34% almost daily. In the UK, 29% browse and purchase at least once a month, and 28% almost daily. Furthermore, comscore s Social and Mobile Commerce Consumer Report noted that in Q close to one out of every 10 ecommerce dollars were transacted on smartphones and tablets. E-shopping experience Usage of Smartphone for shopping Using Mobile Shopping US: 79% UK: 64% At least once a month US: 41% UK: 29% Almost daily US: 34% UK: 28% Significantly, smartphones remain an essential aspect of the shopping experience when consumers are actually inside the retailers stores. In that context, shoppers use their smartphones for store information (other branches of the same chain or a competitor), coupons and deals, price comparisons, product features, and product availability. As part of their pre-buying research, consumers use their smartphones to connect with their personal network by taking and sharing photos of products, texting or calling their friends, and scanning product barcodes. 28 W. 23rd St, 6th Floor New York, NY e: contact@usablenet.com Page 1

2 Based on these studies and Usablenet s close consultative relationships with its many retail clients, it is indisputable that an important opportunity exists for retailers to begin to integrate mobile into the in-store experience or to significantly improve their efforts thereby closing the multichannel loop and achieving the highest-quality experiences in both customer service and customer self-service. Usablenet s technological platform is helping to define the future of multichannel marketing. This paper details a number of emerging best practices for using mobile in-store and enabling consumers to take full advantage of the benefits of mobile to activate or complement other devices in the multichannel mix. II. Best Practices for Implementing Mobile in Stores No one wants to see a sales assistant on the phone, but replace the phone with a tablet and the sales assistant goes from looking passive to being armed and ready to deliver a high level of service. But mobile devices can also be installed and implemented as self-service kiosks not the bulky, clunky touchscreen kiosks of yesterday with their limited utility and connectivity but empowered, highly functional devices of today, which can take the form of mounted ipads or tablets, 40 smart-screens or floor-to-ceiling interactive (touch) display surfaces. Retailers need to enable shoppers to make their purchases on mobile right then and there, if they so choose. The following best practices can help guide retailers in optimizing the in-store experience. A. In-store mobile experiences should focus on addressing consumer needs and goals Yesterday s kiosks gave consumers only as much information as the retailer wanted to reveal. When replacing that technology with a mobile device it is essential that the rules of mobile commerce apply: the experience must be tailored not only for the specific device being used, but also to satisfy the needs and goals of customers. Many retailers are concerned about the practice of showrooming, in which consumers record prices in the store and instantly compare them with competitors to decide whether or not to make the in-store purchase. Our research confirms that among smartphone shoppers who used the store s site or app while in the store, three out of five compared the in-store price to the online price, while half were searching for an online coupon or customer reviews. Rather than discourage this activity (which would be futile), retailers need to understand it and adjust their pricing and sales models to make sure that in-store mobile shoppers get the incentives needed to convert them from browsers into buyers. Eying shoppers behaviors and expressions while using a kiosk can give a sales assistant the cue to intervene. Page 2

3 That can be where the integration of a customer s personal mobile device and an in-store mobile device best bears fruit. After all, Usablenet s research shows that customers who use their smartphone while browsing products in a store use it primarily for messaging/ ing a friend (84% US/90% UK), using social networks (64% US/45% UK), comparing product prices (71% US/66% UK), and checking customer reviews (51% US/57% UK). A retailer s in-store display should offer at least much of the same functionality; otherwise, there is little incentive for the shopper to use it instead of or with their own device. Most US (51%) and UK (58%) shoppers do product research on their smartphone, while 77% of US and 81% of UK consumers told Usablenet that they prefer to browse on their smartphone and make their purchases on a larger device, such as a tablet or computer. An in-store mobile kiosk, therefore, needs to enable shoppers to make their purchases right then and there if they so choose, even to arrange shipping to the home if they re too big to take out or have to be ordered from the warehouse or another store (the endless aisle ). In-store Consumer Behavior What shoppers do on mobile Messaging/ ing a friend US: 84% UK: 90% Using social networks US: 64% UK: 45% Checking customer reviews US: 51% UK: 57% B. Quality of user experience on in-store mobile devices can be the difference between gaining a sale or losing a customer Usablenet s research found that consumers using in-store mobile displays became frustrated at the following issues: Long-winded journeys to achieve the desired goal Shipping fees charged on transactions Inability to check product stock and order from another store Consumers Showrooming How consumers use mobile while shopping Conduct product research on their smartphone US: 51% UK: 58% Prefer Buying on large-devices, e.g.., Tablet US: 77% UK: 81% Having to register to make a purchase Having to manually enter credit card information These obstacles added time, cost, and inconvenience to the experience exactly the opposite of what consumers want. Observations in one store found customers abandoning their session because of unnecessary barriers that increased the time needed to complete their task. While customers are willing to move between devices over the course of a browsing-to-buying cycle, the shift should be prompted by their preferences rather than the failure of a particular channel s user experience. A well-designed and carefully planned user journey is streamlined and efficient, with full functionality, guest registration, and incentives such as free shipping when ordering from the mobile kiosk. Such an experience not only achieves the user s goals in an efficient and satisfying manner, it also encourages return visits to the store because the in-store experience was positive. The goal is not to capture a transaction on the kiosk as much as it is to leave the shopper with a satisfying experience. According to Usablenet s research, 58% of US and 69% of UK customers found their last in-store mobile kiosk experience easy to use. These are pretty good numbers, but they also suggest there is plenty of room for improvement. At the same time, retailers Page 3

4 can t assume that in-store shoppers have any prior experience or facility using such technology. Only 59% of US customers have used in-store kiosks for browsing and ordering, while 77% of UK customers have prior experience with them. Sales assistants should be trained to identify when shoppers are having trouble with the technology. Eying their behaviors and expressions can give a sales assistant the cue to intervene, answer questions, or lead the kiosk journey. The goal is not to capture a transaction on the kiosk as much as it is to leave the shopper with a satisfying experience. In-store primarily practices Smartphone kiosk experience Found kiosk easy to use US: 58% UK: 69% Have used in-store kiosks in the past US: 59% UK: 77% C. Make your store multichannel-friendly On the subject of consumers adopting a multichannel approach to shopping online, Usablenet s recent research reiterates a number of previous studies. Shoppers do prefer to research on one device and complete transactions on another. Much of this has to do with real and perceived advantages of one device over another. With a smartphone, consumers can take photos of products on shelves and quickly contact friends of family members for advice and opinions. When it comes to actually making a purchase, security concerns tend to make consumers opt for a computer; the larger screen also makes comparing products easier, which helps explain the growing popularity of tablets. For this reason, retailers should offer a seamless multichannel experience in the store. By giving customers greater access to the information and functionality they need to make and act on a buying decision, retailers will inspire shoppers to visit stores more often and buy in the store, where upselling is easier to achieve. The key to this is to provide free wifi in the store, which essentially enables an open channel with which to engage customers. With wifi, shoppers can use their smartphone (and tablets) to their fullest functionality. Our research found that customers frequently take photos of products and prices to have on hand and to share with friends. They also are increasingly using their phones to scan QR codes. Furthermore, since consumers can access their social networks and from their phones, retailers have an opportunity to push special offers and notifications to customers when they re in the store. Kohl s is a good example of a best-in-class multichannel experience. When mobile users walk into a Kohl s store and log in using the store s wifi, they receive a special offer and a call welcoming them to the store, encouraging them to shop either in the store or through their smartphone. Again, the retailer has the opportunity to put a number of buying options at consumers fingertips, from ordering directly for in-store pickup ( click and collect as it s called in the UK) to arranging shipping on purchases. Imagine the satisfaction a customer would feel to be able to access a bridal registry from their smartphone while looking at the products in store, then buying them from their phone and shipping them directly to the newlyweds. Customers frequently take photos of products and prices to have on hand and share with friends. There remains an opportunity for retailers to develop apps that combine robust functionality with added-value features not easily accessed by other channels. Page 4

5 On the subject of apps, our research confirms that mobile sites account for a majority of phone and tablet purchases, with apps still an emerging option especially in the US, where our research showed that 36% of respondents said they do not purchase on mobile retail sites but do purchase on apps they have downloaded (compared to only 14% of UK respondents). Because smartphones are such an important aspect of the mobile and in-store shopping journey, there remains an opportunity for retailers to develop apps that combine robust functionality with added-value features not easily accessed by other channels. Shopping on Apps Prefer to Buy in an App US: 36% UK: 14% D. Arm sales staff with training and tablets It s ironic, but just as in-store self-service displays can make sales assistants more productive (by freeing them from minor customer interactions so they can spend more time with preferred shoppers), sales assistants can also be more effective by carrying a tablet themselves or by offering help to someone using a self-service display. The fact is, a sales assistant with a tablet is essentially a walking kiosk, able to bring knowledge and functionality to the consumer. Armed with tablets, sales staff will never have to tell a shopper, I m not sure, but if you ll wait a minute I ll go and ask my manager. The sales assistant will never have to leave the customer s side and so never have to hope that the shopper is still there when the information has finally been obtained. The fact is, a sales assistant with a tablet is essentially a walking kiosk. Furthermore, a majority (78% of US shoppers and 67% of UK shoppers) told us they do not take their tablets with them into stores. Yet they understand the functionality and know and appreciate the experience, and will be able and perhaps even more likely to ask for specific assistance from a sales assistant with a tablet. Of course, sales assistants should be well-trained on how to use the full functionality of the in-store mobile kiosk or tablet display, and be able to find whatever a consumer is looking for, quickly and efficiently. Our research showed that some shoppers will even ask a sales assistant to use the display for them, in the simple (yet reasonable) belief that the store employee will be able to accomplish the task more quickly. Considering that consumers do extensive research online before entering a store, many actually have more knowledge about what s on sale than the in-store sales assistants, who may or may not have been briefed with the latest information. This naturally puts the sales assistant at a disadvantage which can be ameliorated with better training and a tablet on which he or she can quickly and easily get the most current and correct information. Consumer Behavior Percentage Of Shoppers who do not bring their tablet while shopping US: 78% UK: 67% Some UK department store employees are incentivized to use kiosks and ipads to help customers; the department with the greatest revenue from the in-store mobile channel wins a prize. At the same time, retailers should maintain close communication with employees to learn from them the range of requests and questions they receive from customers about the kiosk experience. This will provide useful information that can help them optimize how kiosks are designed and used. Page 5

6 III. Best Practices for Marketing In-Store Mobile to Consumers According to a recent comscore s report, Leading retailers are ensuring that a large percentage of total R&D and IT project pipeline is put toward mobile initiatives. Strategically, we have heard that a minimum of two in ten of your project dollars apportioned to e-commerce should be dedicated to mobile initiatives. Because of this, it s essential that these precious resources are protected by effectively marketing mobile tools and technology to customers. Otherwise, they simply go to waste. Put plainly, implementing in-store mobile is important but insufficient on its own. Retailers have to make the technology visible and accessible, and inform customers through existing communications and some additional signage that a valuable new shopping tool has been provided to them. Until such devices are ubiquitous enough that a critical mass of consumers expect that their retailer of choice offers them, they are not likely to notice or use them regularly. Two in ten project dollars apportioned to e-commerce should be dedicated to mobile initiatives. Fortunately, retailers needn t worry about carving out additional marketing budget. The following best practices can help to guide retailers in marketing their in-store mobile offerings. A. Lead consumers directly to your in-store mobile displays In-store displays are still an emerging trend, but market leaders that are often early adopters of innovative strategies are on board today. In the UK, such mobile kiosks can be found in Marks & Spencer, Argos, John Lewis, House of Fraser, Debenhams, Tesco, and Asda. US brands with in-store units include Kohl s, Sephora, Office Max, Aeropostale, PacSun, and Target. Kiosk Usage Used in-store kiosks for browsing and ordering US: 59% UK: 77% While our research revealed that 77% of UK customers have used in-store kiosks for browsing and ordering, only 59% of US customers have prior experience with the technology. Still, as consumers around the globe become more familiar with the mobile technology in their smartphones and tablets, they will desire the same functionality in stores and be enthusiastic about in-store self-service displays. Unfortunately, even among market leaders, in-store kiosks are often hidden without clear signage identifying the technology that is available to shoppers. Here are some qualitative comments we received from shoppers and employees: you can hardly see it. I didn t know what it was when I walked past. It was my friend who saw Browse and Order so that s when we decided to see if we can find the shoes on it. There are no big signs at the entrance of nearby promoting them. We should be printing about them on the back of receipts, too. Page 6

7 A self-service display is a major benefit to consumers don t make them discover it by accident. In-store mobile technology should be aggressively and enthusiastically promoted, both within the store via signage and in customer s and marketing. In addition, sales assistants should be positioned near the displays to help direct shoppers to them and to engage with consumers who are interested in using them. Assistants should understand not just the functionality of the device but also the business goals for having it on the floor. It s important to understand that such devices are not replacements for sales assistants; rather, they are complementary and additive to the in-store experience, giving shoppers the flexibility to pursue their curiosity independently or combine self-service with expert assistance. Gather input from employees to optimize how kiosks are designed and used. B. Use all channels to draw consumers to the in-store kiosk Retailers can t assume that a customer interaction with an in-store self-service kiosk will result in a transaction. Consumers will often do research in store and complete the transaction at home. In-store experiences should support a multichannel, multicontext process. Retailers should therefore develop strategies that allow the kiosk to support customers across all channels such as by leveraging analytics to personalize special offers that can be pushed to the consumer s smartphone and providing incentives to return to the store and fulfill the offer through the kiosk. According to our research, 48% of US and 46% of UK shoppers would be receptive to receiving messages and promotions to their phone based on their browsing experience in the store, assuming they can opt-in. Said one: I think that s a good idea. It would be another way to get me back in the store or explore the sales online. In its report, comscore advises, Don t leave the shopper unengaged idle thumbs will wander to competitors. Remember, one of the keys to providing a welcoming, multichannelfriendly environment is to provide and promote free wifi, and take advantage of the connected consumer by targeting promotions to them while they shop. Push Notifications Shoppers receptive to receiving e-promotions US: 48% UK: 46% To ensure the success of such a strategy, the in-store device s home screen should make it clear what the technology can help consumers accomplish. If it just has product images or the company logo on it, its potential usefulness and value will be lost on the consumer. At the same time, these devices should provide product details and product availability information for all stores, as a shopper may prefer to make the purchase at a store closer to home. Page 7

8 IV. Conclusion Back at the end of the last century, retailers responded to m-commerce by creating mobile sites that enabled users to access the content and functionality of their favorite brands websites while on the go. As tablets took hold, retailers again mobilized to offer a tablet site that took advantage of the particular capabilities and advantages of that device. As in-store kiosks emerge, it is essential that retailers take a step back and not simply create another dedicated version of their online presence for another dedicated device. The result would simply be a set of single-channel silos. There are, of course, success stories retailers who have taken the time to understand customer behaviors as they relate to multichannel activity and designed mobile experiences that engage them while they shop in the store. For example, Aeropostale uses ipad tablets as kiosks in store, which provides its fun and innovative Outfit Builder to users who want to mix and match components even those not in stock in the store (but which can be ordered online) and create an exciting and original look for themselves. Users can even browse songs on the Aeropostale playlist and vote for the next song to be played in the store. Ultimately, retailers need to think like consumers, who have proven adept at moving from one device to another to complete the tasks they prefer on specific devices in specific contexts. Brands must also have the vision and flexibility to offer a truly seamless, consistent, and integrated multichannel experience within their brick-andmortar stores for their customers, one that can also extend to other contexts such as the home. US and UK customer behavior and preferences are more similar than had been anticipated. By building and proudly promoting and featuring in-store self-service devices, retailers will be able to address the needs of their smartphone-wielding consumers while they shop. They can also increase the productivity and effectiveness of their own employees by arming them with tablets and training them on how to provide exceptional customer service with their knowledge of the in-store kiosks. Usablenet s research found that there is less difference than we thought between the behaviors and preferences of US and UK customers. This is good news for global retailers, who can deploy similar functionality and strategies at stores around the world. The research indicates there is an advantage to retailers who adopt the technology now, while usage is growing; there is also an advantage to understanding customer behaviors and how mobile technology can be implemented and presented more effectively to shoppers. Following the best practices detailed in this white paper will provide retailers with important foundational knowledge on how to use mobile technology more effectively, and to create a more seamless experience for their device-agnostic shoppers who want to shop anywhere, at any time, on any device. 28 W. 23rd St, 6th Floor New York, NY e: contact@usablenet.com Page 8