The UK’s digital society is going mobile.
In the UK alone there are nearly 88 million mobile phone subscriptions, so more mobiles than there are people. Smartphone sales have long outpaced the personal computer and these devices have become indispensible elements of our day-to-day lives. This smartphone saturation – combined with consumer mobile behaviour – provides a unique opportunity for retailers to connect with each customer’s personal habits, desires and preferences. The frequency with which consumers use mobiles to search for and receive information, the fact they are always on and always to hand, and their GPS location-based capabilities, make smartphones a goldmine for information and communication opportunities.
However, personalisation is critical to the success of the mobile channel. Recent research we conducted with retail analysts Conlumino found that around 50 per cent of consumers said they were more likely to use a retailer if its offers were personalised. With personalisation, retailers can ensure that services, offers and information are matched to the user, improving their experience as well as increasing up-sell and cross-sell opportunities. Data is crucial to this process, ensuring that customers are accurately and swiftly segmented by their demographic data and buying decisions. The smartphone is businesses’ natural ally, in both gathering this information and delivering it back to the customer at the right time.
The days of consumers eyeing up promotional material with suspicion are long gone. In fact, according to our research, almost 40 per cent now actively opt-in to receive marketing material from retailers. This reflects a shift towards consumers embracing the benefits of direct communication. The success of retailers’ mobile applications and social channels shows an appetite for increased engagement and communication with brands. In addition, the report found that nearly a third of consumers are likely to respond to relevant in-store offers, highlighting the increasing importance of location and the potential for mobile services.
According to a recent Google study, 97 per cent of smartphone owners use their phones at home, 85 per cent use them on the go, and 72 per cent in-store. This always-connected culture offers retailers unprecedented potential to create instant wins, by connecting with customers right when they are making a purchasing decision. The study reveals that a third of consumers would be likely to take advantage of an offer if they received it via their mobile device while standing in store. The potential impact of around 30 per cent of more than half the population immediately taking up offers would have a substantial impact on retailers’ profit margins.
The crucial element for businesses is ensuring that their communications are accurate, insightful, personalised and timely. The information gathered from mobile data, coupled with customer details and a wealth of other data sources, can transform businesses’ digital marketing and the relationships they build with the customer.
Mobile data allows brands to go beyond basic demographics and generic segmentation. By combining geo-location data with data generated through loyalty schemes, retailers can use data analytics to provide real-time, specific, individualised discounts and incentives. This kind of personalisation can make a real difference to average order values and can increase loyalty.
For example, consider a campaign to market train tickets to frequent fliers. Using mobile data, a transport company can see how many mobile phones disappear suddenly in Heathrow and reappear in Edinburgh later that day, in the time a flight would take. With further analysis of the data, the company can design specialised offers for different segments of these travellers and promote the offers via their mobile devices, either via email or for instantaneous effect, as they enter and exit geo-fenced areas.
After using SAS predictive modelling, Hallmark discovered that a good predictor of a customer visiting a Hallmark store was if they had visited one recently. Combining this detailed information with predictive modelling and data mining meant Hallmark could customise its direct marketing campaigns to time offers more effectively.
Near field communications (NFC), Bluetooth and various other emerging m-payment technologies also mean that it’s easy for consumers to purchase items directly from their device or by waving their smartphone at the ticket counter or checkout. In the UK, 250,000 outlets are now capable of accepting mobile payments, and 32 million contactless cards are in circulation around the country. These payment capabilities introduce a whole new world of data gathering potential from mobile devices, allowing retailers to get an even greater understanding of their customer base. As more high-performance and visual technology solutions become available the opportunities have never been greater for retailers to deliver the right product, for the right price, at the right time, to the right person and via the right channel.
In today’s retail market, in order to achieve superior growth retailers need to do two things: retain their existing customers at the same time as attracting new ones from rivals. This battle for market share, or share of wallet, is particularly pronounced as organic growth is thin on the ground.
The issue for many players is that this is a buyers’ market. There is a proliferation of retail choice, offers and deals with too little demand to go around. Engendering customer loyalty is key and mobile opens up the next level for loyalty schemes in the UK. As technology evolves, retailers can use data and analytics to get even closer to consumers through rich, personalised and relevant offers.
Smartphones and tablets have rapidly become the device of choice for UK consumers. The opportunities these always-connected devices are creating allows retailers and businesses to have unprecedented insight and never-before-seen access to consumers, right at the point of purchase. The mobile opportunity is here to stay and retailers need to capitalise on the new chances for data gathering and engagement it affords.
By Alex Fovargue, retail specialist, SAS UK & Ireland.
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