Daily Dose of iQ: Walmart's Biggest Asset in Mobile is Brick-and-Mortar Stores

Oct 25, 2012 — Eric Stachowski

As reported by Mobile Commerce Daily's Lauren Johnson (Oct. 24), Walmart understands that a good mobile strategy does not depend on the mobile channel alone. It needs local stores to fully connect with its customer base. Some might call "mobile a bridge to in-store shopping."

Wendy Bergh, who heads Walmart’s mobile and digital strategy, says the key for their mobile success is leveraging the 4,000 stores Walmart already has across the U.S.

This is something Best Buy is trying to do as well: Encourage people to go omnichannel –- connecting online, mobile and in-store channels (e.g. with in-store pickup/returns of online/mobile purchases).

Established retail chains still see and anticipate that the majority of their sales will still come from brick-and-mortar locations. Online presence has certainly shifted some consumers away to buying online, but not all product categories are easily sold online and consumers still enjoy the convenience, timeliness and social aspects of buying in the physical store. 

Retailers who offer an omnichannel experience will appeal to and retain the most customers.

Instead of seeing a mobile-enabled consumer as a threat to sales, these retail chains are now harnessing new technologies to enhance the brick-and-mortar experience, and in doing so appealing to the “traditional” online shopper as well. In the end, retailers who embrace and promote an omnichannel experience for their customers will appeal to and retain the widest audience of customers. In-store is still a vital component of that experience.

Johnson also looks at how Sephora’s loyalty strategy depends on connecting mobile with brick-and-mortar: “Passbook shows how mobile serves as a bridge to in-store sales with the built-in loyalty program that drives loyal users into a store.” As mobile integrations like Passbook (combined with location-based services and GPS technology) advance, the ability for the mobile channel to prompt impulse and proximity visits goes up. And again, the convenience of not carrying physical cards can be huge for consumers.

Mobile loyalty programs offer consumers added convenience and relevance.

It's all about incentives. For consumers to adopt and change behavior, there has to be an advantage for them. The “hook” with Passbook (and to a larger extent, mobile wallet) applications? Convenience and relevance:

  • Convenience: Having all loyalty and reward information stored in one place, always accessible on your phone (who wants to fill their wallets with loyalty cards when they only get used sporadically?), whenever and wherever.
  • Relevance: Getting the right content at the right time to help the consumer make a decision (those cut-out newspaper coupons are no good to me if I’ve left them at home in the drawer!).

As consumers are more open to share preference information with different applications and retailers, mobile loyalty programs will continue to grow -- consumers get something back for sharing their information. They will get targeted messages directly from the retailer they want to interact with, and the consumer-retailer relationship is reinforced by technology. 

Knowing this, retailers will push their loyalty programs even harder through mobile apps -- and therefore make them even more convenient, valuable... and popular.

Take-home message for retailers: It is becoming very clear that as consumers shift their behaviors (toward mobile and omnichannel) and because retailers see the benefit of shifting with them, the pattern is irreversible: Consumer expectations of how they can interact with a retailer will continue to evolve and grow, and if the retailer cannot evolve with them, the retailer will be eventually left out. Even behemoths like Walmart are reinventing themselves to shift -- that should be a sign of how real these changes are.  

Topics: Retail Operations, Wireless Trends, Mobile Industry, Customer Experience, e-Commerce

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