Opening up a mobile ‘branch’

The British high street is remark­ably resilient. Bat­tered and bruised by the recent reces­sion it may be, but it has sur­vived worse over the years.

The rise of super­mar­kets, retail parks, chain stores, out-of-town mega­malls in the 80s and 90s, and even the inter­net have hurt the high street. But it has recov­ered.

The lat­est threat to the high street, though, could be hard­er to over­come. The mobile phone, once described by Nokia exec­u­tives as a “pock­et com­put­er”, is now also a pock­et super­store. Con­sumers can, and do, buy almost any­thing using a smart­phone, from cars to cruis­es, gro­ceries to glam­orous fash­ion.

Much of the ear­ly mar­ket for m‑commerce was for either games, enter­tain­ment or “dig­i­tal jew­ellery” such as ring tones, says Andrew Bud, chair­man of indus­try trade body MEF. That mar­ket, once worth $20 bil­lion a year, has now large­ly dis­ap­peared, at least in Europe and the Unit­ed States. But oth­er, poten­tial­ly more durable, forms of com­merce have tak­en its place.

Retail­ers, both on the high street and in mega­malls, fear the lat­est shop­ping phe­nom­e­non – show­room­ing. This is when cus­tomers, armed with smart­phones, try out goods on the shop floor, but then tap in the prod­uct infor­ma­tion, or even scan in its bar­code, to search the whole inter­net for a bet­ter price. If there is a deal, buy­ing is just a click away.

But busi­ness­es can equal­ly turn the show­room­ing phe­nom­e­non to their advan­tage, argues Ian Ged­des, head of retail for Deloitte, the con­sult­ing and account­ing firm. Retail­ers that turn to m‑commerce see a sig­nif­i­cant boost to their sales.

“Mobile is used through­out the shop­ping jour­ney,” he says. “Some peo­ple write mobile off as fair­ly periph­er­al, as it accounts for £5 bil­lion of the UK retail mar­ket. But it influ­ences £18 bil­lion of sales, whether that is com­par­ing prices, check­ing stock or pay­ing. It’s quite a crit­i­cal influ­ence.”

Banks, trav­el agents, hote­liers and even busi­ness-to-busi­ness sup­pli­ers are find­ing that adding a mobile ‘branch’ boosts their sales

Some retail­ers have embraced show­room­ing to the point where their shops are lit­tle more than glo­ri­fied dis­plays. Apple, for exam­ple, lets cus­tomers browse its online cat­a­logue in-store and cus­tomers even pay by swip­ing their cred­it cards into a spe­cial­ly adapt­ed iPhone. But Apple’s atten­tion to detail ensures the right degree of retail “the­atre”, even down to the goods arriv­ing from the store­room, ready packed in its trade­marked bags.

Apple is, of course, a brand that attracts the tech­ni­cal­ly savvy. But mobile com­merce has also grown up in the last few years, says Dan Hartveld, tech­ni­cal direc­tor of Red Ant, a con­sul­tan­cy that works with brands such as Top Shop own­er Arca­dia.

This means that cus­tomers have to be able to com­plete their pur­chas­es on the phone. “We always advise clients not to move into this space unless their app allows con­sumers to ful­fil the pri­ma­ry pur­pose of buy­ing the prod­uct,” he says. The shop­per may not choose to com­plete the pur­chase that way, but the impor­tant point is that they have the choice.

Mr Hartveld cau­tions that mak­ing that hap­pen in prac­tice is not easy. Shops have to tie togeth­er sales, stock, dis­tri­b­u­tion, deliv­ery and order­ing to make mobile com­merce glitch free. The retailer’s app, if that’s the approach they take, has to fit the brand val­ues. And m‑commerce still does not suit all shop­pers.

This is why, Mr Hartveld says, in-store appli­ca­tions used on a tablet or smart­phone by a sales assis­tant are at least as impor­tant as apps designed direct­ly for the con­sumer.

These shop-floor pro­grammes can give sales assis­tants much more infor­ma­tion on a prod­uct than any point-of-sale dis­play, allow them to call up rivals’ offers, cross-sell addi­tion­al ser­vices, such as deliv­ery or instal­la­tion, and even per­son­alise the sale to the cus­tomer.

As Deloitte’s Mr Ged­des points out, tech­nol­o­gy that records shop­pers’ loca­tions and even buy­ing habits auto­mat­i­cal­ly, based on their phone’s sig­nal exists, although retail­ers must tread war­i­ly to bal­ance a per­son­alised ser­vice with pri­va­cy con­cerns. And they also need to use tech­nol­o­gy in a way that attracts, rather than frus­trates or repels cus­tomers. The best apps “engage cus­tomers because it is fun”, he says.

But it is by no means only high street retail­ers who are turn­ing to m‑commerce. Banks, trav­el agents, hote­liers and even busi­ness-to-busi­ness sup­pli­ers are find­ing that adding a mobile “branch” boosts their sales.

Even where con­sumers shy away from mak­ing big-tick­et pur­chas­es on a smart­phone, there is plen­ty of scope for busi­ness­es to sell what MEF’s Mr Budd describes as “ancil­lary” ser­vices around the item itself.

“The mobile is not just being used for con­sump­tion, but for dis­cov­ery and addi­tion­al ser­vices,” he says.

In this way, a con­sumer, who buys a car face-to-face from a deal­er­ship, might still be hap­py to book and pay for a win­ter ser­vice on their smart­phone, or a busi­ness trav­eller, a flight or room upgrade. “Mod­ern con­sumers are used to tak­ing con­trol through screens and may pre­fer mes­sag­ing to speak­ing to some­one.”

And there is valu­able infor­ma­tion that retail­ers, brand own­ers and ser­vices com­pa­nies can gain from m‑commerce. Where are cus­tomers when they choose a prod­uct, what else do they look at and when do they buy? Increas­ing­ly, this is also infor­ma­tion that smart­phones can sup­ply, says Robert Has­son, man­ag­ing direc­tor respon­si­ble for m‑commerce at con­sul­tants Accen­ture.

“Mobile is a chan­nel for pro­vid­ing a lot more data and insights into the shop­per expe­ri­ence,” he says. “And omni-chan­nel retail­ing is an oppor­tu­ni­ty to open a dia­logue with the cus­tomer.”

For Mark Fells, direc­tor of dig­i­tal at Whitbread’s Pre­mier Inns, mobile com­merce is the new nor­mal.

Hotel beds are not like books or music, which can be reduced to dig­i­tal down­loads. But almost all the ser­vices around a hotel stay, from book­ing to check­out, can be con­vert­ed to a dig­i­tal, mobile-friend­ly form.

Much of this focus­es on con­ve­nience and this means Pre­mier Inns now devel­op their appli­ca­tions for smart­phones first and then scale up to desk­top PCs. “We think mobile first,” he says.

“We build a mobile expe­ri­ence so, when guests arrive at the hotel, they have a great stay and tech­nol­o­gy takes care of the rest. Whether you enjoy it or dis­like it, mobile tech­nol­o­gy allows much more rich­ness for peo­ple in terms of trans­ac­tions and shar­ing infor­ma­tion, and makes things that were dif­fi­cult, easy and pain­less.”

And, whether it is a busi­ness trav­eller need­ing a room because a meet­ing has run over, or a cou­ple book­ing a spon­ta­neous week­end away, he believes the time when most peo­ple book by mobile is not far off.