Mobile Retail

1. Mobile Retail October 9, 2013 Joanna Lee Augenbergs about.me/joannajen 415.425.5228

2. hello I’m Joanna. Let’s talk Mobile.

3. My story A bit about me My BACKGROUND B.S. Business Admin, UC Berkeley B.A. Mass Communications, UC Berkeley MBA, Tuck School of Business at Dartmouth WPP Inc. Management Consulting My WORK Digital Media – social and mobile Digital marketing Innovation Consumer Insights Strategic Planning Business Development My Passion Brand Strategy New media and Technology Social Systems and Structures Travel Teaching Outer space & Under the Sea

4. Mobile Media 101

5. MOBILE IS BIG The mobile market is substantially penetrated with approximately 6 billion global mobile subscribers (that is roughly 87 percent of the world’s population) MOBILE IS DISRUPTIVE The mobile revolution is changing the way people think, feel and behave. Your success (or failure) in mobile will determine the future of your brand and business.

6. US Up to 140M Smartphone Asia Mobile internet usage surpassed PC s LATAM Laggard market Europe Android dominates Worldwide Tablet shipments surpassed PCs ME&A Feature phones leapfrog PCs

7. Digital LEADS, MOBILE surpasses PC Major Media: Share of time spent per day 2013 37.4% 19.4% 19.2% 11.9% 4.5%

8. MEN ARE FROM MARS, WOMEN VENUS GENDER DIVISION AND IMPLICATIONS smartphones 50% smartphones 35% tablet 10% tablet 11% pc 55% pc 39% *Time spent online along US Internet users, April 2013

9. Important Information • By 2014, 208M tablets will be sold worldwide* • 72% of tablet owners make purchases from their devices on a weekly basis* • Tablets are not as mobile as smartphones • Tablets are shared devices • Tablet owners demos are older, more affluent • Design sites specifically to take advantage of tablet touch screens, orientations, cameras, etc.; Build unique tablet experiences that use rich media and interaction iPADMASK WITH REFLECTION

10. Important Information • 87% of the global population has a mobile phone • 50% of US mobile handsets are smartphones • 30% of Facebook audience comes solely from mobile • 60% of Twitter users log in via mobile device • Apple changed the game but Android is closing the gap • Mobile retail or mcommerce is one of the fastest growing areas of mobile media iPHONE MASK WITH REFLECTION

11. Mobile Ecosystem Mobile can mean many things to Many People • PoS • & Payment • Retail Today we will focus on Mobile Retail but mobile media and technology encompass a large ecosystem of players and possibilities. • Platforms • & Apps • Mobile • Banking • & Wallet • Advertising • & Mktng • Social • & Search

12. Mobile Retail Next-Gen Retail: Mobile and Beyond

13. mobile shopping, retail, commerce • Noun • Finding, discovering, browning, researching, bookmarking, price-checking, comparing, sharing, tracking OR purchasing goods, services and experiences – facilitated in whole or in part by mobile devices • (also known as “mcommerce” or “tcommerce”)

14. These days I use my laptop mostly at work – but my smartphone goes everywhere with me. I can look up information or buy something the instant it occurs to me, wherever I happen to be then. Honestly, it’s hard to imagine what life was like before. I’m definitely more efficient. Shopping is just sort of a background process that’s always running. And I find cool, niche items that would’ve taken me forever to come across normally – with way less stress and virtually no time wasted. A lot of shopping apps have too big of a footprint; they’re too clunky, intrusive or ad-heavy relative to how much value they deliver. They need to offer an experience that justifies taking upstorage space on my phone. I’d like to store all my bank and credit card details securely on my smartphone so I don’t have to worry about carrying things with me. Why do I need a real wallet when I could have a digital oneon my phone? source: Latitude, December 2012

15. Mobile is for more than just OTG In which situations do you use a mobile device to shop or make purchase? source: Latitude, December 2012

16. According to eMarketer, sales in 2013 from mobile devices - including tablets - are expected to exceed $41 billion in the United States, approximately 16% of all American ecommerce purchases

17. Mobile Retail Integrating Mobile into Omnichannel Strategy

18. Framework Stages of Multichannel Retail Evolution 0 1 2 4 3 Create Presence Align Fundamentals Achieve Proficiency Optimize Operating Model Leverage Across Channels

19. Create Presence WHAT ARE YOU WAITING FOR?

20. 60% have used a mobile device while shopping In a store 63%expect to do more shopping on mobile devices over the next couple of years 80% would be interested In a mobile wallet 51% feel very comfortable making purchases from their mobile devices 2 out of 5 have more “me” time or feel more relaxed. thanks to being able to shop with mobile devices 61% have a better opinion of brands when they offer a good mobile experience source: Latitude, December 2012

21. Stage 0 Create presence • The goal here is to just BE PRESENT. According to Google: • 85% of smartphone users have searched for local info (and 81% of those have taken as a result, i.e. visited in person, called a business after searching) • 57% of users say they won’t recommend a business with a poorly designed mobile site and 40% have turned to a competitors site after a bad mobile experience • Depending on your business, value proposition and relationship with consumers, your options are: • Build a mobile site • Develop a branded mobile app • Create mobile ads/ creative • Initiate SMS campaign/ program • Leverage SoLoMo partnerships like foursquare • Some combination of the above • At this stage, awareness and reach metrics to measure include app downloads, site visits, eyeballs/ frequency, check-ins, etc.

22. Align Fundamentals UNDERSTAND TARGET AUDIENCE

23. Stage 1 Align Fundamentals • Do your homework; Know your audience. This objective of this stage is to conduct extensive research on your target market and what they want/ need from mobile platforms: • Who are your customers and who are you trying to reach? • Who will want to engage with your mobile content? • What needs does your audience have? • Why do your customers need information from you in a timely manner?  • How will your target audience access your mobile content (which type of handheld device)? • How will they use your content in their daily lives? • How will you make your mobile content sticky and engaging? • Brands and businesses should use multiple mobile touch points to connect with consumers on their path to purchase • Engagement and favorability metrics to measure at this stage include customer feedback (insights), time spent, user reviews, photo/ video uploads, etc.

24. Case Study Shopkick and Target Shopkick is free and available on iPhone and Android devices.  When guests walk into their Target store, Shopkick rewards them with “kicks” points. Then as guests shop the store, they have the opportunity to scan products for additional kicks. Kicks can be redeemed for Target gift cards, Facebook credits, dining gift certificates, iTunes downloads, donations to charities, and more. Guests can also receive special in-store deals including coupons and discounts.

25. Achieve Proficiency STRATEGY AND SCALE

26. Stage 2 Achieve Proficiency • The goal of this stage is to achieve operational proficiency and gain scale in the new channel. • Mobile should be viewed as both a channel and a touch point to incent/ ease purchase, engage customers and deliver relevant, personalized, real-time communications. • Mobile challenges include: • Scale (in the short term) • User insights are often less accessible • Mobile data is complex • Steep learning curve • Efficiency metricsto measure include opt-in rates, cost per download/ acquisition, increased foot-traffic, increased basket size, monthly per user visits, in-app clickstream and analytics, etc. • Can you name a retailer who has built a well-designed app or mobile website that helps to achieve operational efficiency and/or gained scale in mobile channel?

27. Case Study Domino’s Pizza Domino’s mobile app lets customers order more than 1.8B pizza combinations from anywhere and follow their order’s step-by-step progress with the Domino’s Live Pizza Tracker.

28. Having a mobile app is not the same as having a mobile strategy

29. Leverage Mobile INTEGRATE ACROSS CHANNELS

30. Stage 3 Leverage Across Channels • The objective of this stage is to continue reducing costs, increasing effectiveness and to deploy assets or capabilities developed in mobile into other channels. • Opportunity lost: • Poor and inconsistent customer experiences, marked largely by a lack of cross-channel integration, amounts to about $83 billion in lost sales in the U.S. each year, according to a new survey from IBM. • 49% of US consumers believe the best thing that retailers can do to improve the shopping experience is to better integrate in-store, online and mobile shopping channels, details a survey conducted by Accenture. • That same Accenture study showed 53% of consumers want to receive unique pricing, automatic discounts, free returns, or pre-sales based on their loyalty/purchase history – across all channels. Similarly, 53% want to be able to earn and use their loyalty rewards in-store, online or on a mobile device. • Integration metrics to measure include creative content reuse, mobile coupon redemption, SMS click through/ redemption rates, barcode scans, mcommerce checkouts or purchase transactions, etc. • Can you think of a retailer who has integrated mobile across channels well?

31. Case Study Starbucks The Starbucks app generates customer loyalty and drives customer transactions by letting more than 1M coffee-drinking smartphone users locate stores, scan barcodes at PoS, reload their Starbucks Cards and share their locations and favorite drinks via social networks.

32. OPTIMIZE MODEL TAKE TO ENTERPRISE LEVEL

33. Stage 4 Optimize the Operating Model • In this final stage, the objective is to optimize operating models at the enterprise level. • Mobile needs to be viewed as a priority from the senior levels down. Here are some questions your organization should be asking: • Is mobile a key metric in your management dashboard? • How often do you review your mobile stats and who is accountable/ responsible? • Who owns mobile analytics and insights? Who’s watching tablet traffic trends, consumers’ actions on your mobile site, mobile’s inclusion in product launches and campaigns? • Which decisions would change if key business leaders were given timely mobile data? • Who monitor your competitions investment and activities in mobile? • Optimization metrics to measure include ROI, customer lifetime value, YoY mobile budget, user segmentation, time to first mobile conversion/ purchase, etc. • Pick a company and think how they could better integrate mobile into their channel strategy. How would you optimize mobile for this retailer/ business?

34. Case Study Nordstrom Nordstrom is widely praised in the retail community for experimenting and adopting mobile technology. Not only are iPads available in-store, the mobile app combines commerce, customer service and cross-channel engagement by letting consumers buy products, curate looks, create a wish list, venture in-store for events, call customer service and share their favorite items with their friends via social networks and sms/ email. For Nordstrom, mobile is not just a retail channel or customer touch point. They have progressed to the final stage of retail evolution and begun optimizing the entire enterprise for mobile. Nordstrom senior executives have committed over $150M in back-end infrastructure improvements to better support mobile initiatives and m/tcommerce.

35. Metrics and Measurement Mobile Analytics

36. Mobile ANALYTICS THE SITUATION • Mobile ROI is the elephant in the room… • AND It’s the primary factor preventing mobile from fulfilling its promise. • Digital marketing is renowned for its ability to track and quantify every click and conversion. However, mobile is still a new platform and newer media tactics never get the same rigorous analytics as traditional ones. Moreover the fragmented mobile landscape (OS, manufacturer, app versus web, etc.) and inability to cookie mobile devices further complicates measurement. What’s more, the models we rely on don’t always work for mobile.

37. Mobile Path to Purchase (ILLUSTRATION) Locate store on smartphone Visit store Do a quick price comparison with her bar scanner app Look at competitor sites Either buy online or pay at physical register

38. The traditional model of calculating ROI simply doesn’t work. There’s a significant loss of data as she moves between multiple devices and real-world touch points. We need to develop a NEW model that addresses this problem by building on what we know about the desktop Web, mobile devices and consumer purchasing behavior.

39. For example (Follow the reasoning) Product details viewed on a smartphone are far more likely to be viewed in-store when the consumer is closer to making a decision, elevating the value of that action Likewise, it’s logical that a higher percentage of customers requesting store-locator information on a smartphone will visit that store Assume a reasonable conversion number and average shopping cart value, and you start to have a high-level approximation of value.

41. Mobile Analytics Sample metrics

43. Mobile timeline For execution of strategic imperatives USERS Do your homework MEASURE Specify metrics, collect data, track and adjust OPTIMIZE Change the model INTEGRATE Don’t let mobile sit in a silo TRIAL Don’t be shy STRATEGY Deliver the right content to the right person at the right time

44. Mobile Ecosystem Mobile can mean many things to Many People • PoS • & Payment • Retail Today we will focus on Mobile Retail but mobile media and technology encompass a large ecosystem of players and possibilities. • Platforms • & Apps • Mobile • Banking • & Wallet • Advertising • & Mktng • Social • & Search

45. Back to the BIG Picture… What are other opportunities in mobile that you can think of?

46. Thank You

47. Q&A