Interview before MWC on mobile books & shopping

Interview with Ajit Jaokar in Europe before the Mobile World Congress in Barcelona. We chatted on the subject of mobile books and shopping:

Ajit Jaokar: Mobile moves so fast. How can you write on the subject?

Gary Schwartz: Is similar to trying to work out who is winning a battle when you are stuck in the trenches and watching the missiles fly overhead. There is so much noise on a daily bases it seems improbable write a definitive book on the subject.

However the core thesis of book is universal and something that I believe strongly the mobile industry needs to content with:  how to effectively drive impulse mobile consumption.

The shopper is natively an impulse shopper. They buy in what retailer call “5 by 5″ which is five seconds by five foot. They may write out lengthy shopping list and do hours or research on products but in the store, 80 percent of their basket is full of products bought on impulse.

The phone is now a shopping aid and it can help the shopper be more effective impulse buyers or it can fail and inhibit shopping behavior. This is the industry challenge. The retailer that manages to engage effectively with this new shopper will win.

Ajit Jaokar: What should the reader take away from the book?

Gary Schwartz: There is a disconnect in retail. The shopper is becoming faster and the store is becoming slower. The shopper is proactively looking for new phones, new applications, new ways to search and buy effectively.  Just look at the power of the new devices that the consumer walks into the mall with:

The AGC (Apollo Guidance Computer) that sent the first person to the moon had 2kb memory, 32kb of read only memory (storage), CPU 1.024 MHz. The Samsung Galaxy II S that is in the shoppers pocket has 1 GB memory (1 048 576 kb), 32 GB storage (33 554 423 kb), CPU Dual-core 1.2 GHz (1200 MHz x 2)

This hand sized shopping aid is essentially 2 thousand times faster… but that’s just raw speed.

Instead of trying to embrace this shopper’s new technology effectively, the store is trying to plug a leaky ship by making it difficult for the consumer to comparison shop, use their technology in the store or in the cloud.

Ajit Jaokar: How are retailers responding?

Gary Schwartz: Blockbuster, Borders, have all fallen to the digital efficacies of the internet. Are Target and Best Buy next?

It is clear that stores do not know how to use this super phone and are under siege. TARGET recently went on the defensive talking about “SHOWROOMING,” the phenomenon of using the store to touch and feel a product and then checking out in the cloud (a competitor’s internet cloud).

These retailers do not know how to respond. They try to leverage the phone and new channels but in large part they consider the phone a threat not an opportunity.

Ajit Jaokar: In that case, which retailers are in most trouble?

Gary Schwartz: There are two types of retailers:

Brand Retail: Like the Gap, Pottery Barn, Polo (in which one company makes and markets everything in the box) are channel agnostic. The brand retailer needs to make sure the shopper stays loyal and makes it simple to move from purchase intent to purchase. This retailer needs to count clicks to commerce and optimize the mobile experience.

Mixed Brand Retail: Like Target, Wal-Mart, Best Buy (in which one company houses multiple brand names on their shelves) need a more aggressive strategy to stay relevant and in business. They also need to work on optimizing path to purchase but they have the additional problem of price comparison and losing the shopper into competitive deals on the mobile internet (in four walls of the store.)

Amazon is their nemesis.

Amazon clearly feels that its success with the PriceCheck app is a good indicator that their new Kindle Fire tablet will be the mobile commerce device of choice. When this device become 4G later this year it will rake havoc on the mall. Already this holiday season we saw Amazon’s impact on retailers.

Amazon sees it role as “pro consumer” and if it is all about price then they are right.

If the retail industry continues to lament the rise of “showrooming” is it simply crying-uncle to Amazon. For Target to change its merchandise UPC codes, shut down WIFI or source unique product that are hard to price compare are not sustainable solutions.  By making it more difficult to price compare items in-store is a short term or no-term answer.

Ajit Jaokar: So, what is the solution?

Gary Schwartz: The top three factors in shopper decision making is PRICE, CONVIENCE and TRUST. If it is all about price, we should all close up shop and go home.  Convenience can work for the cloud and bricks & mortar. Trust is the silver bullet.

Mixed retailers need to use mobile technology to engage the shopper in the store and enter into a DIGITAL relationship. Use an iPad to clientel.

Clienteling is a retail term that predates mobile but mobile is the idea channel for the service. Clienteling is when the retailer interacts with the shopper and provides one-to-one personalized service, offers and communication in the store.

Retailers need to use tablets to interact with the shopper. Help them find a product. Add this to a wish list – tie this wish list to a profile. Ask them for their mobile number to send updates, sale reminders, VIP invites. Retailers need to engage the shopper at the cash register and ask for their mobile number for follow on deals and offers.

Ajit Jaokar: So what is the big take away?

Gary Schwartz: Cross channel disconnect is where most of the retail revenue is lost: between the store the online site. Amazon and other mobile savvy folk will either grab your shopper as they fall through the cracks or, worse yet, your will just loose the shopper to another store because you are just making the path to purchase too difficult.

Mixed retailers and brands retailers need to develop a “trust” relationship that will keep that consumer as a loyal consumer. Store that can develop a digital trust relationship across all their retail touch point will help the impulse shopper make that impulse buy at their checkout.

Full post here

How to Drive 10x Conversion Leveraging MOBILE

By Gary Schwartz

Mobile commerce is not only about payment but the ability to optimize the path to this payment. Farhan Ahmad, Director of Emerging Payments at Discover Financial Services, the issuer of the Discover Card, the third largest credit card brand in the United States, explains, “Mobile payment is a small subset of mobile commerce. Mobile commerce is primarily about shopper engagement and marketing”.

What are the mobile marketing mechanisms to engage with the mobile shopper? Twitter’s micro blogging, Facebook’s community building, FourSquare’s crowd sourcing and Google Deals all are valuable tools but any brand or retailer that is committed to a digital strategy across all their customers’ screens, needs to establish a direct relationship with the shopper.

The only two-way targeted channel to move the shopper across the retail touch points is via the shopper’s mobile phone number. Why? Because once a permission-based relationship is established between the shopper and the retailer, Facebook, Foursquare, Google, or Apple should not disintermediate this relationship. In order to improve brand recall and conversion rates, mobile messaging needs to be targeted and personalized.

Like other D2C (direct-to-consumer) channels, mobile messaging should deliver concrete results.  A good mobile marketing service provider will be able to show the brand a projected Return-On-Investment (ROI) calculator. Key to building a loyalty channel strategy is to articulate how you intend to effectively opt-in the shopper, what are your key-performance indicators including which retail touch points you need the loyalty channel to connect to in order to drive your sales.


Mobile WEB: Reduce Clicks to Commerce

By Gary Schwartz

“It’s hubris to think that people will go into your app,” unless you’re a Amazon, says Gary Schwartz, chief executive officer of Toronto-based mobile marketing firm Impact Mobile and the author of The Impulse Economy, a study of mobile shopping.

As it turns out, there already exists a platform for mobile shopping that’s already on every smartphone: The open Web.

A mobile Web application – basically, an enhanced, mobile-optimized website, as opposed to a downloadable smartphone app – should be the first destination for any merchant looking to move sales into the mobile space. They’re more flexible, faster to deploy, and can catch shoppers where and when they want to buy.

Reduce the clicks to commerce

If there’s a mantra to designing a mobile sales application, it comes down to minimizing the number of clicks it takes to get a shopper through the checkout – the proverbial “clicks to commerce.”

This is good advice for any shopping site, but it’s all the more important in the mobile world, where even keystrokes count as clicks. (After all, a user has to touch the screen to key in each letter while filling in a form.)

The goal is to avoid “abandoned intent” – the moment at which a shopper, having decided he or she wants something, gets frustrated by the process and abandons the sale mid-way. Even the smallest irritations that could dissuade shoppers could cost a sale.

“Every click is one more reason for them to abandon their intent,” Mr. Schwartz says.


Clienteling: The fast shopper in a slow store

By Gary Schwartz

Shoppers are natively an impulse consumer. They buy, in what retailers call, “5 by 5” (five seconds by five feet). At home they may write out lengthy shopping lists and do hours of research on products, but in the store, 80 percent of their basket is full of products bought on pure impulse.

The phone has become a shopping aid and it can help shoppers be more effective impulse buyers. This is the industry challenge. The retailer that manages to engage effectively with this new shopper will win.

I have always said that the phone in the shopper’s pocket is more powerful than the computer that sent the first person to the moon.

But the other day I was doing some water-cooler math with my IT director. We worked out that AGC (Apollo Guidance Computer) had 2kb memory, 32kb of read-only memory (storage), CPU 1.024 MHz. By contrast, the new Samsung Galaxy II S has 1 GB memory (1 048 576 kb), 32 GB storage (33 554 423 kb), CPU Dual-core 1.2 GHz (1200 MHz x 2).

That means the hand-sized shopping aid is essentially 2,000 times faster. But that is just raw speed.

It is clear that stores that do not know how engage effectively on this super phone are under siege. Last week Target went on the defensive talking about “showrooming,” the phenomenon of using the store to touch and feel a product and then checking out in the cloud – unfortunately a competitor’s internet cloud.

Blockbuster and Borders have all fallen to the digital efficacies of the Internet. Are Target and Best Buy next?