Mobile Driving Online Traffic To Offline Stores

Internet changed many industries but its impact on the retail industry has been the maximum. The value chains and the supply chains changed dramatically especially in the developed countries due to fixed internet. Now the mobile internet is changing the way people shop but its impact is significantly different from that of fixed internet.

Retail industry has a variety of players from organized players to mom and pop stores. There is always a never ending tussle between the different players in the retail and also between the manufacturer and the retailers. In fixed internet, the manufacturers saw an opportunity in reaching out directly to the consumers, bypassing the retailers. The retailers felt threatened and they saw declining footfalls but could do little. Declining footfalls made retailers reevaluate their store and location strategies. New players like Amazon emerged while the brick and mortar retailers like Barnes and Noble struggled. However, with mobile phones, the retailers have an opportunity to engage with their consumers in a way that would attract them to their stores. Mobile phones can not only increase footfalls into a store but can also be used to give superior in-store experience. The capability of mobile to drive “online traffic to offline” stores sets it apart from the fixed internet.

Retailers pay a high rent in the malls or high street and can recover their investments only if there are higher footfalls. Physical presence also means that the sales person can convince the buyer to buy more. For this to happen, it is important to convert online traffic to offline traffic into the stores. Retailers are now planning to capture the attention of potential buyers on the internet or mobile and do the fulfillment at the retail point. The mobile phone can be used to locate a store, create effective loyalty program, convert a non-user through real time coupons, advertising and alerts. All these applications have the potential to increase the footfalls at the retail point as the consumers can find out about the stores and the deals available while on the move.

Foursquare is a highly popular mobile application available in the US which is tracking the consumer locations and rewards the loyal customers of a store or coffee outlet. Foursquare gives opportunity to small business to benefit from the location of a potential buyer. A bar can run promotions not only when a person checks into the bar for the first time but also when the person checks in after a certain number of times. The stores can pull the consumers even when they are around the store by pushing promotional messages. Foursquare is clearly giving tools to the retailers that can help them increase footfalls by rewarding loyalty. Pepsi has tied-up with Foursquare to take advantage of the location based marketing.

There are several applications on iPhone application store that enable the retailers to give promotional coupons to mobile users. Free mobile applications, such as Yowza, Coupon Sherpa, MobiQpons, and Cellfire, allow consumers to check for nearby businesses offering special deals. Because mobile coupons target customers who are near a store’s location, the redemption rates can exceed those of paper coupons. These applications are again increasing footfalls to the retail stores.  Starbucks has successfully used mobile coupons to increase footfalls to its cafe.

Imagine a situation where a movie theater dynamically offers discount coupons to fill up the hall on weekdays or a retailer can push a coupon to sell if he knows that the consumer has brought products from competitors or products complementary to what he sells. Perishable goods can benefit hugely by pushing mobile coupons in the evening based on the inventory. This would help the retailer to sell the stocks at full price if there are buyers instead of offering discounts after a certain time say after 8 PM for the bakery products. The bakery just needs to push a discount coupon to mobile users in the vicinity if it is unable to sell the inventory and it can do that even before 8 PM. Again this is driving the online traffic to offline stores but profitably.

What enables the mobile to drive online traffic to offline store?

There are many features in a mobile phone that the PC can never match:

  1. Location: Mobile phones can provide the location of the consumer that allows targeted advertising and location specific offers and deals
  2. Personal: The mobile device is a personal device. This means that unlike PC that is shared by many users, the mobile phone’s usage can be mapped to individual characteristics and behavior.
  3. Always On: Another positive feature of a mobile phone is that the device is always on and is always with the user. It is possible for the retailers to push real time coupons, offers or advertisements.
  4. Larger Penetration: Mobile phones have a much higher penetration than the computers across the world. This means that the mobile phone has a larger potential as compared to computers especially in the emerging markets. Today, there are more smartphones sold than the desktops which has suddenly changed the dynamics in favor of smartphones. If you add tablets, iPads, iPods, etc. to the list of portable devices, then the devices that are carried by consumers become much larger in number than the desktops and laptops.
  5. Camera: Most of the mobile phones come with camera and hence it is possible to convert them into bar code readers that can help the consumers in finding more about a product or even compare the prices of the same product in the location around them.
  6. Additional channel: Mobile represents an additional or incremental revenue opportunity because people can buy anytime and anywhere. Mobile also helps in directing footfalls to a physical store as many consumers want to touch and feel the product before buying and in this case the mobile phone acts as a discovery medium. Many retailers like Ikea, Next, etc. have a mobile store but the fulfillment in most of the cases is happening in the stores.

The potential of mobile phone is immense but the retailers need to have a well thought out mobile strategy. The mobile strategy is completely different from the internet strategy and it is critical for the retailers to hire people from the mobile industry to manage the mobile channel or outsource to the people who know mobile the best.
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