Are we nearing the death of desktop based retail?
Speaking about the impact of mobile commerce in India and how mobile apps will be the only channel in retail in the next few years, this article analyses the trends and the reasons for this shift to mobile app only retail.
Mobile eCommerce has and will continue to change the way we shop, with new in-store innovative capabilities like beacons, touch less payments and more. Today, more data and context is being generated and organic outreach is becoming easier. But while India retail is quickly transforming from "Mobile first" to "Mobile app only" retail practices, the same may not hold true globally yet.
What are the retail trends saying?
Various surveys have indicated that consumer confidence on purchasing through desktop and larger screen formats is still much higher than Mobile. According to a Google insights study in November 2013, consumers spend an average of 15 hours a week on researching products on mobile devices and about 93% of shoppers that research a product from a mobile device will ultimately make a purchase, albeit; through any number of channels. Hence, investing in an omni-channel approach and being available through multiple channels would be beneficial.
Let's take a look into the global consumer retail app usage pattern
A study by RetailMeNot asked mobile shoppers how often do they shop on their phones and tablets through apps. The results may surprise you. With Storage becoming cheap and prices of smartphones & tablets dropping everyday it is easier to own a mobile device and this would be the primary channel of choice when it comes to entertainment, games and even e-retail. While many use retail apps on their mobile devices, they do so very infrequently. A Little over half (57%) use their apps once per month or less. Only 10% say they use their apps once every day or more.
Surveys indicate that a very small amount of users keep more than two retail-based apps on their phones & tablets at any given time. In fact, only 39% have one or two, and 39% say they have more. A discouraging 21% of consumers say they don't have any commerce apps on their phones at all.
Before you develop and launch your app, you have to be sure that your customers will find your app important enough to download and use amidst all other eCommerce and commerce-based applications. After all, there is only so much memory on mobile devices, and it's very natural for millennials to delete retail apps in favour of games & entertainment apps which usually take up a large footprint of the memory on the device.Some statistics from other surveys also indicate that more than half of the traffic would come to your website from browsers and hence top e-tailers prefer to take an AWD or RWD approach to developing websites. The pros and cons of these approaches would require a whole new blog post!
Another interesting area where the apps find their most use is for reviews of products. More than 30% consumers use mobile apps to access product reviews and that number is slightly north at 50% on the website. So the website does win here as well. The best case where apps have really proved their mettle is for loyalty and reward points - both earning and redeeming them on the store apps. More than 20% of consumers use their apps for this feature. E-tailers are really pushing the limits to ensure that the apps get downloaded and they are able to retain consumers on the platform and hence, this is one of the focus areas for them in addition to adding one or two killer experiences that are not available on any other channel. Some recent applications in the apparel & luxury segments have features like the Magic Mirrors which use Augmented reality and interactive capabilities to provide virtual showcasing of products, without holding actual inventory. Mobile capable 3D garment simulation features allow customers to design custom combinations of products and order from the store. These features provide exclusivity and individuality for the customer which keeps them associated to and engaged with the brand for a longer period of time.
Why India retail is trending towards app only or app-first models?
Mobile device penetration vs other devices - Urban indian smart phone penetration is over 34% and this number is climbing rapidly.
Higher mobile subscriptions to broadband - 3 in 5 smartphone users mentioned above are using mobile broadband in India. There are over 220 Mil mobile internet users, and this again is multiplying rapidly.
Ability to personalize and target the customer - as the customer is always logged in, retailers are increasingly taking advantage of notification capabilities and are pushing highly personalized discounts & offers.
Google and Facebook's search Monopoly - Over 40% of eCommerce sales happen on mobile devices in India. With Google & Facebook wanting to capitalize on Mobile Commerce, they are promoting multiple brands though their channels with direct purchase capabilities at the point of interest. This is resulting in retailers losing their brand identity - another reason for the transition.
Access to device specific features - We saw earlier how device capabilities like cameras could provide advanced showcasing capabilities. Indian e-tailers want to be able to extend their customers' digital experiences leveraging these capabilities to provide a unique experience and retain them.
While all the above reasons are enough to make the shift, they are not without challenges. Top retailers recommend presence on multiple channels and do not want to force customers to a specific medium as most of them might own many devices. Mobile data plans are still expensive in India and data rates & coverage are also a challenge in some areas. It is great to hear that "every smartphone is a customer" and that the customer is "Always Addressable" through multiple channels, but the same can also be a disadvantage if customers are sent too many unnecessary communications, which can possible annoy them.
Though the trend of taking an app only approach has caught on in a big way in India, it will take a while before this is embraced at a global level; despite customers enjoying the benefits of the app only marketplaces.