What does mobile mean for retail?

Mobile technology is ubiquitous. It can seem as though every second person is rushing to tell retailers what smartphones can do, and quick-thinking etailers like Kiddicare and Asos expect it to account for up to 30% of sales within a few years.

But for retailers whose sales are not purely based on the web, the role of mobile has been less clear and the level of investment necessary is similarly up for discussion.

The medium is certainly growing apace. Ofcom says 26.5% of mobile phone owners in the UK claimed to have a smartphone in the UK as of May 2010, representing a jump of 81% from 7.2 million users in May 2009 to 12.8 million a year later. But even those with the budget and appetite for innovation advise pragmatism, saying rushing towards the latest buzzword is a bad idea. Tesco.com head of research and development Nick Lansley says what really matters is deciphering what works for your customers and whether they actually want it.

“You need to ask your customers if they use or would use mobile. If they say yes, you could do some trials. You would be surprised how many customers aren’t sure they’d use it. Don’t do it just because your competitors are,” he said at this year’s Retail Week Conference.

Slow and steady wins the race

Heather Barson, retail director at technology supplier Steria, agrees that the slow and steady approach is best, and says most retailers are still waiting to see which direction they should go in. The first step for many is likely to be to look at providing personalised marketing offers through phones, and plenty of retailers are already working on building up and combining their customer databases or rolling out new CRM systems. It won’t be long before the targeted offers that are increasingly popping up in our email inboxes move on to phones, and beyond that, shopping on a phone will be a natural step for some. But Barson adds: “It won’t suit everybody – it will be better for certain types of retailers.” Lansley agrees, saying food shopping is perfect for mobile but more expensive or complex goods are less likely to do well.

While there are isolated examples of mobile technology dotted around the industry – Waitrose’s handheld in-store scanners or mobile gift vouchers at fashion retailer Oasis,for instance – it’s not yet integral to the way things are done. Mobile’s main strength at the moment is its potential, and there’s no real way of yet knowing what will become mainstream and what will become the RFID of 2011. Over the next few years, mobile phones could become the central part of the purchasing process, doing everything from scanning goods to paying for them to acting as a loyalty card. But there are plenty of hurdles to overcome before that scenario materialises – security for one – and it’s worth remembering that there’s still a high number of consumers who have trouble texting, let alone using a mobile scanner.

Trial and error

So a healthy level of scepticism is advised, but so is an open mind. Majestic Wines ecommerce director Richard Weaver says location-based services on a mobile represent a real possibility for bricks and mortar retailers to “fight back” against pure-play etailers that have gained so much ground over the last decade. The wine retailer is trialling the use of location-based social networks FourSquare and Facebook Places. Weaver says it’s not clear where they will go with the trials at the moment, but says location is definitely something to play to on mobile. Meanwhile, Phil Parry, group technical director at point-of-sale system supplier DigiPoS, says he is a “firm believer” that customers are ready to shop using their phones – it just relies on retailers to provide the right support.

The level of disruption caused by online and mobile technology in industries like music and publishing has helped fan the hype around mobile, but as with everything, there will be an element of natural development as different retailers become convinced. There may not be much need to be the first to rush out new technologies, but mobile commerce will at some point play a part in every retailer’s online strategy. The best approach, say the experts, is to be open minded as to what it could do for them, and be flexible enough to move quickly once they know what they want to use it for. Mobile may well yet revolutionise the way people shop, but what will drive it is innovative retailing, not hype.