Online retail sales- challenge or boon to the new age retailers?

The online retail sales market is flying high with a marvelous hike of 14% in the 4th quarter of 2011 and 13% for rest of the year, according to comScore. The renowned research firm Forrester had previously predicted that the online retail sales market will show a massive growth of 60% from 2009 till 2014, exceeding 8% of the overall retail sales.

Mobile apps in retail stores

The unique trend of show-rooming is compelling more and more shoppers to use mobile devices to get direct access to product as well as price information while ‘in-store’ is shifting them towards online sales. This trend is helping consumers to know about the ‘best products’ that comes with the ‘best price’ and is hence motivating them to ultimately buy stuffs at another retailer offering better deals.

To get hold of more online business, to help in-store sales grow and maintain more efficiently, conventional retailers are advised to employ branded mobile applications. Based on a recent survey conducted by AisleBuyer, currently only 14% retail respondents have in-store mobile applications in use. But after comparing with this trend of deploying branded mobile apps in retail stores with another piece of research that has been extracted by Zmags consumer survey from a 2012 report named ‘Meet the Connected Consumers’, it came out that the smartphone applications are not exactly what the consumers prefer for shopping or browsing, just 4% of the connected consumers prefer using branded applications.

But then again a huge contrasting finding came up from this survey that pointed out around 87% consumers have a strong preference towards mobile websites. So, this creates a really perplexing situation for the retailer whether they should consider the consumer’s increasing inclination to shop online or pay heed to the disruption caused by showrooming in a conventional store. On the other side, is it that important for a retailer to note the much lower 4% consumer interest in branded retail applications or working towards the deployment of a retail app a better strategy?

The verdict is in favor of the apps which is pretty predictable since applications appear with certain attributes and functionality and its usage rate is also outdoing web browsing in general. In fact, the trend of retrieving retail information out of mobile devices soared by up to 87% during 2011. According to recent survey report brought out by Pew American and Internet Life Project, around 52% adult use their mobile phones for purchase assistance while in-store, to have a look at the product reviews or to compare product prices elsewhere.

Yet another noteworthy survey finding include the data presented by Prosper Mobile Insights that says about 40.6% survey respondents have affirmed that they leave to purchase an item from a physical retail store only after comparing the prices. And about 25% consider comparing prices to buy an item from another retailer’s website.

Going by the survey findings of Google, a number of consumers use smart mobile gadgets like the smart-phones while making a purchase decision. Around 41% of them agreed to use mobile phones while shopping that helped them to make purchases directly from their smartphones. 46% managed to conduct a research over their smartphones to make a purchase directly from a physical retail store while 37% researched about a product on their smartphones to make the purchase online.

Both the in-store mobile shopping and application use are on the rise these days, a clear conclusion surfaces out with the low usage rate of the branded retail apps owing to the fact that most of the retailers don’t offer a lucrative reason to use them. Considering this statement released by Mobilewalla, in 2011 December about 1 million applications were launched and an estimation of 15,000 applications are released every week. A survey report published by Localytics confirms that around 26% of applications are used for just once.

Therefore, the concern is not about whether retailers should focus on creating branded apps but that they should rather consider creating apps the customers want to have. Creating apps as per customer preferences and requirements is not any cakewalk. IDG’s report says that most of the mobile phone users use less than 7 apps regularly and only 17% use more than 10 apps on a daily basis. So what are the functionalities that can get consumers to use the branded retail apps? Following are some insightful suggestions:-

  • Incorporation of features like how-to-videos, product research, store information and so on.
  • Integrating mobile technology into the retailer’s customer strategy.
  • Either provide a utility or solve the problem.

Some functions or features that a retailer should consider integrating into its application-

  • Provide an unprejudiced price comparison system for the loyal customers. With such a feature by the retailer’s side, they can expect to achieve increased loyalty from their existing customers and can even retain potential shoppers.
  • An easy-to-pay process would be of great help to the customers along with a complimentary option of mobile in-store payment.
  • A swift customer service or expert advice wing could be added.
  • Product reviews and recommendation engines integrating social elements should be made available by the retailers.
  • Ensure providing promotions, coupons as well as pricing need across all the platforms.

Finally when consumers shop online, it is not always about mobile shopping. Shopping online through mobile devices should be empowered and customized as per customer preferences. For this an integrated platform as well as solution is desirable that makes user experience fun and entertaining. According to Flurry Analytics, consumers spend about 79% of the time using apps on social networking and games. Quoting Flurry Analytics, “games and social networking apps deliver the most engaging experience on the Web and mobile today, and set the stage for the battleground for controlling the consumer relationship going forward.” Therefore, retailers should gear up to devise apps that are in proper order which not just comprises entertainment and fun but an element of  thrill enhancing usability and experinece.

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