Talking tech: Food retailers going mobile
m-commerce is set to become an increasingly important channel
With the number of smartphone users to exceed 1bn globally by 2014, grocery retailers looking to build a cohesive multichannel experience for their customers need to consider how they approach this emerging channel.
UK grocery retailers, particularly those with strong e-commerce offerings, have been quick to realise this, creating a variety of ways that consumers interact with their brands online.
The importance of this channel cannot be underestimated. Ocado spokesperson Ben Lovett highlighted the success of the online-only retailer's app, saying that in April last year, the group saw 6% of sales come through its mobile apps, with that figure rising to reach 12% by the end of January this year.
However, the retailer's appetite for innovation has given it a headstart on the market, as it was the first grocer to launch a transactional iPhone app in mid-2009. The retailer then launched an Android App in early 2010.
Lovett says that customers have "really embraced the format" as it "gives them time back" allowing customers to fill time when on the move.
"Anecdotally on Twitter, we've heard stories of our customers doing their shopping while they're waiting to pick up their kids from school, or in the queue at the bank, people are using that otherwise wasted time to do something constructive."
Lovett says the Ocado team have worked hard to really understand what the customer wants when it developed its apps, including features like barcode scanning, voice ordering, and the ability to shop while offline. Lovett adds that building the online store been an ongoing project, and that it continues to find ways to finesse and refine the customer experience.
Tesco has also initiated a drive to promote its iPhone app, launching a TV campaign this year highlighting its ability to scan barcodes.
Tesco spokesperson James Wiggan says the retailer is "very pleased" with its performance so far. "If you look at the download charts, it's been as high as number one in the free lifestyle download charts [on Apple's app store] so we've been very pleased with the response to it," he explains.
Ocado is one of the few retailers to launch a fully-featured app on other smartphone platforms, such the Android operating system. Lovett says the move was down to its regular dialogue with customers, as well as industry knowledge that Android is "one of the most popular smartphone platforms out there".
Retailers focusing their attention too heavily on iPhone or Apple platforms may alienate or underserve a large number of their customers, given that, according to Canalys research published this week, Google's Android system is the leading smartphone platform, with a 32% share of the global market, compared to a 16% share for Apple's iPhone.
Wiggan would not confirm that Tesco is developing an Android App, however, he says that the retailer "would always look look to find ways to make shopping as easy as possible."
While the future of mobile shopping does seem to be transactional, for retailers that are not yet ready to commit to doing this, or that don't have an online offer, there are still a number of ways to capture customers while on the move.
In August last year, Sainsbury's launched an app that allows customers to locate their nearest store as well as collect its loyalty card points through exclusive iPhone deals that are linked to customers' Nectar card.
Similarly, Marks and Spencer has joined O2's 'You Are Here' location-based marketing service, which sends customers on the O2 network targeted text or MMS messages when they enter areas 'owned' by a brand.
The retailer launched the service earlier this month, with a deal that offers customers who have expressed an interest in food and drink or clothing who enter an area near an M&S store a free smoothie when they buy any Simply Fuller Longer sandwich or salad.
Going beyond the UK, German grocery retailer Metro Group launched an app for its Real supermarkets, which will help customers to find its stores, create shopping lists, and provide a range of weekly cooking offers and a cooking show, where celebrity chef Armin Auer presents video recipes together with the corresponding recipes.
While the obvious situation for m-commerce remains while customers are on the move, Casino has found a number of innovative ways for customers to use their smartphones instore.
Speaking at NRF earlier this month Casino CIO Stephane Bout and SAP vice president of solution engineers Scott Flathers demonstrated the French retailer's app. Customers are able to download an app to their iPhone or use instore devices to scan products they want, and the company uses a 'real-time marketing engine' to create personalised recommendations sent to their device while they shop. It will show relevant offers, suggest cheaper alternatives or complementary products.
Linked to the customer's loyalty card, insights driving offers pushed out to the consumer will be driven by inventory and local promotions, the customer's CRM profile and status as well as their expressed lifestyle choices. Last, but not least, the app also allows customers to pay using their mobile phone.
While 2011 looks set to be an important year for mobile retail, it seems as though we've barely hit the tip of the iceberg in terms of innovation and uptake.
"No one really knows where the technology will take us. If you think of where we've come from with the brick phone of the 80s, to now where you can hold a smartphone with a million times the memory of that brick phone. It's developing so rapidly," says Lovett.
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