There are a few times when we realize that a certain technology is going to change everything about our lives: the first time we used a cell phone, received an email, searched the Internet or downloaded a song. This past Black Friday was the day we realized that mobile shopping would have just that sort of impact.
On Black Friday 2012, one out of every four dollars spent online at retail websites came from a mobile device. This amounts to more than $300 million dollars in one day alone. For those retailers who've already embraced mobile, it was a day of celebration, a culmination of their hard work and foresight. For retailers who didn't get their share of this new mobile world, it's a wake-up call: Get with the mobile program, or have consumers leave you behind.
Mobile has matured
Over the past 30 years there has been significant changes in not only the technology available to us, but how we use mobile devices.
30 years ago
The mobile shopping records set this Black Friday were a long time in the making. The first modern-day mobile phone, Motorola's DynaTAC™, was released in 1983. Weighing in at just undertwo pounds, it lasted for a half hour of talk time and cost $3,995 (almost $9,000 in today's dollars). After the DynaTAC introduction, it took 20 years of technology innovations before we got enough speed into the phone to use it as anything other than a two-way communication device.
10 years ago
AT&T® unveiled 3G technology and promised us an "mLife," launching a multi-million dollar ad campaign with a mysterious Super Bowl spot.
The corporate strategy as described by Andre Dahan, president of the company's mobile multimedia services unit at the time, was to "reinforce what the vast majority of people do not yet know — that they can use wireless technologies other than voice to connect with people and information." Even some five years after AT&T's promise, we still used mobile phones primarily as a communication device (voice, email and text).
Five years ago
The first moment when most Americans realized that their mobile phone offered more than just a way to contact friends, family and business associates came in 2007 with the launch of the Apple iPhone®. From the moment we put our hands on this device, we knew our lives had been altered forever. We quickly embraced the mobile phone as a constant communication device, music player, news resource and gaming console.
Two years ago
Android™ and iPhone devices are now part of our daily existence. What's more, millions of us got iPads® under our Christmas trees in 2010 and 2011 — a device that many of us didn't know we needed at the time, but one that 69 million consumers can no longer live without according to an Emarketer 2012 report. The invention of the tablet device has dramatically expanded our use of mobile browsing. The share of website visits from tablets grew 10 times faster than the rate of smartphones within two years of market introduction.
Black Friday 2012
Black Friday 2012 marked the culmination of years of mobile evolution. All the pieces are now in place, and consumers put them together to make a powerful statement. They want to shop and buy through mobile devices from wherever they happen to be. For retailers, the message is clear: offer consumers compelling ways to do this, or lose them forever.
Anything to save a buck
Armed with smartphones and tablets featuring easily readable touch screens, we now use them to shop and purchase in earnest. Consumers shopping on a tablet spend an average of $10 more per order than consumers who shop from their PC.
Price-check apps from Amazon and others had consumers step up a practice increasingly worrisome to brick-and-click retailers —"showrooming." With free shipping, no sales tax and a price discount, consumers could save hundreds of dollars per transaction.
For most Americans there's nothing as compelling as a "deal." We love to save a few bucks wherever we can. What began as people surreptitiously pulling their smartphones out in the aisle has evolved to consumers openly price checking and challenging sales associates about their prices, selection and product availability. Showrooming has spread like a virus through the retail industry. This year IDC estimates that 50 million people in the U.S. will engage in showrooming.
Retailers' first response is best summarized in the TIME article, "Browse at a Bookstore, Buy at Amazon: The Evil of Showrooming". The article jokingly suggested that retailers ask customers to check their phones at the door. Conversation amongst brick-and-click retailers revolved around the negative aspects of in-store mobile shopping and discussed methods to prevent mobile shopping. Some examples included creating retailer-specific QR codes or developing retailer-specific products to make it harder to perform mobile product searches.
One article suggested that manufacturers were at fault because they needed to do more to police pricing and penalize online retailers who undercut the suggested retail price. During the first half of 2012, retailers equated the mobile shopping phenomenon with lost business and pricing pressure and concluded that mobile shopping brought no merit to their business or value to the retailing experience.
Is mobile shopping synonymous with showrooming?
The media played up this drama by focusing the vast majority of articles on the ways that mobile shopping was hurting in-store sales over the Thanksgiving 2012 holiday weekend. They also missed the bigger picture. To their credit, many brick-and-click retailers turned the conversation upside down and began to embrace the ways they could create a competitive advantage through mobile shopping. Those that prepared to serve mobile shoppers through accessible and user-friendly online experiences were rewarded with record-shattering online sales.
Adobe® Digital Index data show a 4x improvement in sales on Black Friday and a 6x improvement on Cyber Monday for brick-and-click retailers who optimized for mobile retail experiences. A comparison to online-only retailers, who saw much smaller sales bumps, suggests that online-only retailers did not cannibalize brick-and-click.
Furthermore, the most advanced brick-and-click retailers were able to capture 30 percent of their sales from mobile devices (tablets and smartphones).
Winning mobile dollars
Brick-and-click retailers that have embraced mobile as a channel for driving consumer engagement and sales have a lot to be proud of. Their transformation has involved rethinking major aspects of their technology and promotion policies. Much can be learned from some of the steps they have taken, such as:
- Rip apart their entire website and install a modern content management system that can identify in-bound requests and automatically scale, rearrange and otherwise dynamically alter itself for different screens, browsers and operating systems.
- Consolidate all siloed information into a centralized merchandising nerve center from where they can drive pricing, recommendations and availability automatically and on the fly.
- Initiate testing and measurement programs specifically for their mobile channel to optimize this channel regularly and incorporate mobile revenue tracking into their analytics dashboards.
- Make internet access available on the floor in thousands of stores through kiosks or tablet devices, as well as empower tens of thousands of sales associates to capitalize on mobile shopper opportunities.
- Develop a mobile-specific promotional strategy, including mobile search and advertising. This requires big investments in location-based interactions such as geo-fencing, in-store alerts and specials, etc.
- Create innovative new ways for customers to use their mobile phones to improve their in-store experiences without relying exclusively on irrelevant or inadequate "apps."
Unparalleled mobile innovation
Retailers have gotten very creative in improving the in-store shopping experience through mobile devices, allowing consumers to double up on their shopping time by continuing to search and purchase while waiting in line or browsing the aisles. Examples of the ways in which mobile can improve the in-store shopping experience are outlined in a recent New York Times article:
- Walmart provided a map showing shoppers exactly where the top Black Friday specials were located in the store.
- Macy's sends special deals every five minutes to the mobile phone of a shopper who is in the store and keeps the Macy's app open.
- Westfield Mall's app enables shoppers to search by product to see the stores that carry the item, and their prices. It even provides turn-by-turn walking directions.
- The Mall of America app helps you find open parking spots and suggests gift ideas.
Many of the retailers who were successful on Black Friday and Cyber Monday have been working all year to activate the mobile channel and their hard work paid off. Their effort should earn them a new title. Instead of referring to them as brick-and-click, it might now be more fitting to call them click-in-brick retailers.
Mobile laggards will see total sales drop
Now that the upper echelon of brick-and-click retailers has figured out how to harness mobile shopping, and a large contingent of consumers has become comfortable with mobile shopping, the game is afoot.
According to an Aberdeen study, fewer than 60 percent of retailers are able to serve mobile devices seamlessly with their website. Almost half are planning to develop a mobile storefront, install a mobile content management system, or activate mobile data mining and analytics. These figures align with anecdotal conversations I've had with retailers. Many still view the mobile channel as a pet project and base budgets and resources on the percentage of sales they generate through mobile today.
It appears inevitable that many retailers may fail to recognize that the mobile train has left the station until it is too late. If a retailer's own mobile sales were below 30 percent of revenue on Black Friday, it means they are already behind the industry leaders and should be alarmed. Retailers who have not undergone the necessary transformation will have, at best, until next Black Friday to figure it out.
Customers who are quickly becoming mobile-shopping savvy will not wait long before abandoning a retail site who doesn't meet their increasing appetite for the ultimate mobile shopping experience.
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