Blog: Mobile Retail Requires Retailers to Take Bold Steps

March 26, 2018  |  MATTHIJS KNEPPERS

This post is co-authored by our Director Mobile Solutions, Matthijs Kneppers, and our Retail Software Global Product Marketing Manager, Reint Jan Holterman.

Consumers love mobile in retail …

When talking about ‘mobile in retail,’ most people immediately think about searching, selecting and paying for items using their smartphone. This is usually referred to as m-Commerce. Forrester estimated that 15% of all online sales in 2016 were completed on a smartphone, equaling $60 billion in sales. They expect this to grow by 20% CAGR, to $152 billion in 2021, equaling roughly one quarter (24%) of all online sales transactions.

However, if we look at mobile-influenced offline sales, these numbers are dramatically higher: in 2016 one-third of all offline sales were mobile-influenced, meaning that at least one touchpoint in the consumer journey was a mobile phone or mobile app. Total mobile-influenced offline sales in 2016 already reached $1.05 trillion (!) and according to Forrester, that number is expected to grow to $1.4 trillion by 2021.

In this light, it is also interesting to notice that 50% of US consumers use a mobile retail app while in-store. According to the 2017 US Mobile Consumer Report, two-fifths of these mobile app users use them often or always. In general, consumers have downloaded four to five retail apps, indicating they are somewhat selective about which retailers they allow on their personal device.


… But have retailers embraced mobile?

Having seen these statistics on mobile usage in retail, it looks like the retail industry is on the right track. However, these numbers mostly reflect how consumers have adopted mobile in their shopping journeys; they don’t say much about what retailers have done to facilitate a seamless experience.

According to Gartner’s 2018 CIO Agenda: Retail Industry Insights (in which Retail CIOs answered which technology area they think is most important to helping their business differentiate and win), a mere 11% mentioned mobility/mobile applications as the most important area to invest in. And, only 38% of those retail CIOs rank ‘mobile payment technology’ as one of their top-five solution priorities.

Mobile is often touted as one of the cornerstones in retail organizations’ strategies, to make retail more personal and convenient, but when it comes to executing upon this strategy, reality looks a bit more pale. Retailers are lagging behind their consumers when it comes to mobile adoption—somewhat understandably, since introducing ‘mobile’ into your retail strategy involves so much more than simply adding a new channel to communicate and interact with consumers.

Adoption of a bold mobile strategy is required

In a recent article about why digital strategies fail, McKinsey explains that almost every organization understands they have to get serious about implementing a digital strategy, yet most fail to do so due to a number of pitfalls. One of those pitfalls is that organizations are missing the duality of digital, i.e. organizations “need to digitize their current business and innovate new models” at the same time.  It’s like reconstructing an airplane mid-air.

Mobility plays a key role in the digital transformation process retailers are going through. Retail organizations face “massive and rapid disruption,” according to McKinsey, and hence will find themselves in the top right quadrant of the matrix shown below. They are confronted with a high degree of change and turbulence, and this change must be accomplished quickly.

This means retailers need to move fast and furious, taking bold steps in order to survive. At the same time, they also need to keep their stores open and run their day-to-day business as usual.

This duality may be one of the reasons why retailers—even when there is no debate about whether they need a mobile strategy—still are lacking behind in the execution of their mobile initiatives. But there are other reasons as well.

A new thought process for an evolving channel

For starters, mobile strategy requires retailers to think about what operational changes they want to introduce in their day-to-day interactions with consumers. Mobility opens doors to completely new methods of consumer interaction and new consumer journeys, such as mobile self-scanning and mobile loyalty. It requires retailers to rethink each of their core business processes, such as marketing, checkout, stock management and store optimization processes.

In addition to changes in business processes, retailers will be confronted with additional investments in network infrastructure, in software development to build a clever consumer app, and in well-educated staff that can support consumers in new mobile journeys. All in all, it is obvious that mobile retail will have a big impact on the way retailers are running their business tomorrow.

In part two of this blog series, we will explain how Diebold Nixdorf has geared up to help retailers execute upon their mobile strategy—improving consumers’ mobile experiences, innovating journeys and reducing costs and time-to-market for new mobile initiatives at the same time. Stay tuned!

Find out more about our retail software, or connect with us directly to start mapping your own mobile strategy.

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