Paper Topic: How Do People Use Smartphones to Enhance the In-store Shopping Experience?

The paper topic I am interested in writing about is concerning the mobile shopping experience. Specifically, how people use their smartphone to enhance the shopping experience while physically in a brick-and-mortar store, otherwise known as in-store mobile engagement. This mobile engagement can start outside the store as well. I want to know what drives people to use their smartphones to aid in their shopping experience? What information are they looking for when they access information on their smartphone while in store? Who is the customer that is using their smartphone in the store? How do they like to shop? What items would they buy with the assistance of their smartphone? Does empowering customers with information in-store make them more likely to buy? Are they responsive to offers pushed to them via a smartphone application?

I became interested in the future of mobile last year when looking for my summer internship. I knew I wanted to do an internship in high-tech marketing, and mobile seemed like a fast-paced area that is still in development. I secured an internship with Digby, a venture capital backed firm in Austin that provides mobile commerce and mobile engagement solutions for retailers. Digby works with mostly big-box retailers like Costco and Toys R Us on their mobile strategy. They started out providing mobile-optimized websites which allow users to browse and buy products on an interface appropriate for a smartphone. A mobile-optimized website is customized for the mobile browser experience, avoiding the annoying “pinch-and-zoom” problem people encounter when they browse a non-optimized website on their smartphone. It is usually smaller, has less-detailed blocks of text, has fewer navigation buttons, and has fewer graphics. Below is a comparison of a non-mobile optimized website versus a mobile-optimized website for Hotels.com. You can see that mobile-optimized one has no graphics on the main page, only categories for browsing items.

Digby is a leading provider of mobile-optimized websites for retailers, but for the past few years has been moving toward a total mobile engagement solutions provider business model. The mobile-commerce provider business is becoming increasingly commoditized, with many providers offering similar services, making it a “race to the bottom” type of situation. To stay competitive, Digby has expanded its offering with products such as a mobile product catalog, store locator, and location marketing manager. The Location Marketing Manager product allows the retailer to create a geofence around the physical store. When a customer enters the store and opens that retailer’s app, Digby can then track metrics such as entries/exits or UPC/QR code scans. Perhaps most valuable, it lets the retailer tailor marketing messages and offers to push to customers while in the store. Retailers can use this information to then customize the in-store experience for each person walking through the door.

While Digby knew having this information was valuable to retailers, they had a difficult time quantifying the benefits when negotiating the price to charge for the product. One of my main projects for the summer was to figure out a compelling way to sell the Location Marketing Manager product using information provided by customers, such as download rates and in-store foot traffic. I created a dashboard to estimate the return on investment for use by the sales team. Although it used a lot of inputs from the retailer, it still included a fair amount of assumptions for the level of engagement. During my research, it was difficult to find a lot of definitive data because in-store mobile engagement is still in its early stages.

A great source I found was a study that Think Insights with Google released called “The Mobile Movement.” Some of the data may already be outdated, but some interesting findings from the study are:

· 77% of consumers use their smartphone in a store

· 20% of consumers are willing to give up cable TV before internet usage on their smartphone

· 74% of consumers have purchased in-store as a result of information found on their smartphone

As smartphones become more common, I would think these figures will only increase and we will get more specific data about how smartphones are influencing consumer shopping behavior.

Source: http://www.thinkwithgoogle.com/insights/library/studies/the-mobile-movement/

Social Media: Harnessing the Power of the Qualitative

Since the rise of social media, companies have struggled with how to analyze usage data to gain real insights about their customers and leverage it in the best way possible. It’s natural for us to focus on measuring the quantitative metrics such as click-through rates and purchase conversion rates. These are hard numbers which can be used to justify what’s working and what’s not. But how can we tell what’s really driving the behavior of our customers? It’s clear that studying the quantitative data alone will not get us as far as incorporating qualitative means will, especially for certain brands and companies whose customers are not driven to interact as much in traditional ways.

When I think about the persona my team created for Nordstrom, Kirsten, I find that I share lot of the same attitudes and behaviors with her. She’s plugged in to every major type of social media, but she is not the “over-sharer” type who is constantly posting, tweeting, and commenting about every aspect of her daily life. She would rarely click on a Facebook ad or directly mention a brand on Twitter, so it may seem difficult for Nordstrom to glean any real insight about this customer from traditional social media. While updating and monitoring activity on Nordstrom’s Facebook page is important, it may be more fruitful for Nordstrom to interact and monitor customers on various blogs, and vision-board styled social photo sharing websites like Polyvore.com and Pinterest.com. The great thing about these two sites is the visual nature of the content. Pinterest, in particular, allows users to create various boards based on interests- for example, recipe, home décor, and craft ideas- and “pin” links to web content using a picture. No more emailing yourself links and organizing them on your own, likely never to revisit them again.

Like many other department stores, Nordstrom publishes a “look book” on their e-commerce website homepage to showcase new seasonal styles. However, this likely won’t have the same effect as seeing a pin of a Nordstrom look from one of my friends on Pinterest and repinning it to my “Spring 2012 Style Inspiration” board. I’m more likely to be drawn to looks that I see on my Pinterest feed from people I follow, assuming that my style aesthetic is similar to theirs, versus what Nordstrom stylists have picked to showcase, which is not custom to my taste. Our persona, Kirsten, is definitely influenced more by her friends and the styles trends in her locale than by a stylist whom she does not have a relationship with. Something like Pinterest makes it easy for Kirsten to see what her friends are pinning and discover new styles that match her taste. From Pinterest, she can easily click on links to that merchandise on Nordstrom.com as well as other retail sites to create an entire look.

Tech Crunch had an interesting post on five ways brands can leverage Pinterest now. The suggestion that stuck out to me most was to “Optimize Your Web Properties to Draw People to Your Pinterest Content.” As the tips suggests, this can be an effective strategy to segment your customers. People usually aren’t so narrowly focused on something such as a brand enough to follow them on Pinterest. Rather, we think of our lives in terms of activities- cooking, dressing, exercising, entertaining. The post mentions Lowe’s as a great example of a company that has optimized the way its Pinterest content is organized. If we take a closer look at Lowe’s Pinterest boards, we see theme boards (Craft Ideas, Unique Pet Projects), seasonal boards (Valentine’s Day, Christmas Tree Style), and boards tied specifically to Lowe’s merchandise (Bathroom Inspiration, For the Home). Some pins are linked directly to Lowes.com or Lowe’s affiliate websites such as lowescreativeideas.com, but some are linked to general home improvement blogs, decorator blogs, do-it-yourself blogs. Lowe’s could start to segment its customers by what types of pins on their feed are being repinned, and what types pins those users are pinning on their boards from other feeds. We could start to dissect who are the serious do-it-yourself types and who are interested in more out-of-the-box type of products, and target our marketing efforts from there.

Product reviews are also another highly qualitative measure that Kirsten may use to influence her purchase decisions. She values quality and wants to make sure she’s getting a good product, and she doesn’t have time to waste searching for the best. Nordstrom.com currently does a great job of this, allowing customers to not only review products, but also giving them a profile including location, age range, and favorite Nordstrom department. Readers of those reviews not only get an idea about the product, but also who the person reviewing the product is.

Creating a Persona: Meet Gerry

Gerry is a 61 year-old Caucasian male living in the suburbs of Houston, Texas. He grew up in a small town in Arkansas called Russellville with his younger brother and parents. Gerry graduated from the University of Arkansas where he met his wife, Beverly. They have two daughters, both grown and college-educated. Today, Gerry is Vice President of Engineering for a mid-size petroleum services firm, the same company he has worked for most of his career. Gerry is six feet tall with salt and pepper grey hair, and enjoys playing golf, singing in his church choir, and riding his Triumph motorcycle in his spare time.

Gerry spends the vast majority of his time at work or at home. His primary concern is saving for retirement although it’s uncertain when he will actually do that. He takes a lot of pride in his job, and he still puts in long hours at the office. He’s built a successful career over the past 32 years and doesn’t want to give it up anytime soon. Recently, Gerry and Beverly bought a vacation home on Lake Conroe, just north of their home in Houston. They have both put a lot of time an effort remodeling the lake house, with Gerry doing a lot of the electrical and small carpentry projects himself. He still gets a lot of satisfaction from doing a project with his own two hands. He looks forward to spending more time there as well as traveling more once work slows down.

Family is very important to Gerry, but he’s often pulled in a lot of different directions. Although Gerry’s two daughters are grown, he still helps support them, most recently paying for one of their weddings. He’s close with his daughters, visiting with them and talking on the phone with them every so often because they don’t live in Houston anymore. Gerry’s father and most of his relatives are still living in Arkansas, and he often feels a bit disconnected from them, having moved to Texas many years ago to pursue his career. He tries to go back to Arkansas at least once a year to see his aging father and younger brother, but feels guilty he can’t see them more often. He worries about his father, well into his eighties now, still living on his own. Gerry’s mother died years ago, so he’s thankful other relatives still live in Arkansas to help keep an eye on his father.

Gerry has an easy-going attitude, not usually striving to be the center of attention. His friends know him as good story-teller and someone who loves to joke around. He is the type of person who wants everyone else around him to be happy first, often putting their needs before his own and giving them the benefit of the doubt. He has led a pretty successful life and has a generally optimistic outlook. Gerry and Beverly have an active social life, often hosting friends at their home. Recently, they hosted a karaoke party for several of their friends. Although admittedly not a great singer, Gerry really enjoys music, singing mostly classic rock tunes until his wife had to tear him away from the microphone. Gerry likes getting together with friends and having a good time. He loves a good Malbec wine or a fine scotch on the rocks.

Gerry’s style is classic and plain: a button-down shirt and tie for work and polo shirts for leisure. Although he’s a transplant-Texan, he likes Texas styles, often wearing his custom ostrich cowboy boots to work on Fridays. He’s not a workout fanatic, but he tries to stay trim at the urging of his wife and daughters. His He’s reached a certain status and financial success that allows him to buy pretty much whatever he wants, but he doesn't spend extravagantly. Gerry doesn’t shop often, so if he sees something he likes, he buys it. He values quality over quantity. He loves to drive his silver 5 series BMW, but he got it used a few years ago because he thought that was more practical and less showy than buying a brand new one. Gerry is much more willing to pay extra for truly good customer service. He doesn’t have a lot of time to waste, so when someone can help in a timely and effective manner, he’ll likely become a loyal customer for life. When he finds something he likes, he sticks with it, going to the same barber shop and the same tailor since he moved to Houston. Routine makes him feel comfortable and more secure.

Gerry makes an effort to read a lot in his spare time, often on his Kindle. He enjoys political novels and thrillers the best. On Sundays, he likes to read the New York Times, especially the business and lifestyle sections. When it comes to political views, he leans conservatively, but he watches and listens to all sorts of media. He likes technology a lot and has all the latest gadgets- iPhone, iPad, Kindle, flat screen TV and surround sound in his game room, satellite radio in his car. Whenever he finds a cool new app for his iPhone, he likes to share it with his daughters. Having the latest tech gadgets makes him feel more “with it” and connected to them.

The major pain point in Gerry’s life is limited time. As he’s gotten older, Gerry is realizing how important it is to cultivate relationships- with his immediate family, with his extended family, and with his friends. Gerry wants to live a more balanced life between work and leisure. He jumps at anything that will make his life easier, and will allow him to spend more time with his family. As he the years go by, success for Gerry is less defined by his work and more by the strong bonds with the people around him. He's come a long way from his humble beginnings in Russellville, but he still retains those small town values.