Global mobile commerce will hit $1.8 trillion in 2018 after 40% growth last year, and almost 60% of traffic to retailer’s sites is mobile. Does that mean actual physical stores are toast and desktop is dead?
In fact, brands like Citi, Home Depot, Walmart, Unilever, and eBay are finding new and powerful ways of melding mobile commerce, e-commerce, and innovative in-store experiences to create retail experiences that surpass both digital-only stores and bricks-and-mortar only retailers.
“Customers move seamlessly between our stores, online, and mobile,” Home Depot‘s vice president of Online Pratt Vemana told me. “They’re using mobile within the store, and texting aisle location from their desktops to their phones.”
Home Depot is not the only one.
“Our clients are coming to us more and more looking for unified offerings that bring their payments ecosystem together,” says Mark Ranta, head of digital banking solutions for ACI, which processes an almost-incredible $14 trillion in transactions each day for over 5,100 retailers and banks. “In terms of e-commerce and m-commerce payments specifically, you can’t have a separate approach for one channel over another.”
The smart combination of mobile, desktop, and in-store is what I call taps, clicks, bricks.
According to recent research by TUNE (full disclosure, I am TUNE’s mobile economist), retailers that are winning are increasingly adopting each of these modes and integrating them within a holistic customer-centric approach.
Taps, clicks, bricks: Here’s what we learned
Buying is changing: that’s obvious.
But what’s less obvious and hits fewer headlines is that 88% of retail in the U.S. is still bricks-and-mortar. So while massive growth rates are forcing retailers and brands to pay attention to both e- and m-commerce, the in-store story is also critical for success.
There’s a reason, after all, why Amazon is opening stores in malls, and why it bought Whole Foods.
The company has been experimenting in old-fashioned bricks-and-mortar retail for years. Amazon only recently started breaking out physical store revenue: $1.3 billion in Q3 2017, and a cool $4.5 billion in Q4, thanks to its new grocery subsidiary. The Amazon Books stores that it opened in malls have helped to sell the company’s tech goods, sure, but could also have been a response to the 6.1% increase in sales at physical bookstores in the first half of 2016.
“Physical goes digital then back to physical: brick to click to brick,” says technology industry analyst Jeremiah Owyang.
I talked to major consumer brands to find out exactly how that works.
Banking at Citi: Mobile-first omnichannel
As George Orwell didn’t quite say, all channels are equal, but some channels are more equal than others.
Citi is a $2 trillion organization with 3,500 employees, and its customers range from seniors who bank in its 4,600 branches to millenials who bank almost exclusively via app. All channels are important, Citi’s Chief Experience Officer Alice Milligan says, but not equally so.
“We built our solutions to be omnichannel … that said, some are more important,” Milligan explains. “For us I definitely believe mobile is the most important … and in particular mobile app. We’re focused there because of what it enables.”
And what does mobile app enable for Citi?
Simple: invaluable customer engagement. And, as a result, stronger relationships with known, understood clients.
“Consumers that bank via mobile interact with Citi seven days a month on average, and for millennials, it’s about 10 days a month … there’s much higher engagement,” Milligan says. “We had 21% growth among mobile users versus last year … the highest growth among our competitors.”
And yet, the organization is not closing its 4,600 branches. Sometimes, you need a physical place to go to do banking.
Home Depot: Web + app + store
With 2,300 locations and almost 400,000 employees, Home Depot is big – just like the products they sell. Large items make online ordering and delivery challenging, and have provided a moat against e-commerce giant Amazon and others.
But it’s an integrated strategy across web, app, and store that has been the true driver of the company’s recent growth.
Interestingly, about 15% of Home Depot’s mobile app usage occurs within the company’s physical locations.
It may seem redundant to use the Home Depot app inside a Home Depot store, but there is method to the madness, Home Depot VP of Online Pratt Vemana says. Customers who do are accomplishing multiple tasks on the app, not the least of which is checking their Home Depot shopping lists.
“They are wayfinding, quickly finding the product they want,” Vemana says. But it goes deeper than that: “You’re … looking at a product and you want details and reviews … so people go to the product detail page in the app and interact with product reviews.”
While the app is important, Home Depot remains aggressively omnichannel.
A single digital Home Depot experience exists across all channels, Vemana says; signed-in customers can see their shopping lists, saved items, pending orders, and other details across desktop web, mobile web, and app.
Desktop web matters, too.
Shopping for major home appliances is a big deal, and consumers want to see and compare multiple models when making a decision. That takes screen real estate, which desktop web delivers. From there, Home Depot makes it easy to take the purchase process in-store by also showing what models are in stock at the local outlet, and by texting the product location to customers’ phones.
For Home Depot, the “end-to-end” customer journey is critical: discovery and purchase, sure, but also delivery, ownership, use, and service.
“The entire journey is important to us, from early shopping behavior to actual purchase to getting delivery,” Vemana says. “No matter where they want to shop.”
Walmart: Setting up home delivery by baby steps in its app
Walmart is a retail giant with 2.3 million employees and a strong desire to take on upstart online competitor Amazon. To do so, it must get e-commerce right, and home delivery right.
Recent acquisitions have bolstered both the company’s overall technical capabilities and its mobile chops, and the results have recently become apparent. Similar to Home Depot, Walmart’s app now automatically shifts to Store Assistant mode when opened within a Walmart location, which can be 200,000 square feet or more in size.
Walmart is also making its in-app shopping list smart, with services that calculate the total cart cost and real-time item stock availability at a given location.
That adds up to major wins: customers using the app more, and customers building shopping lists more. Not surprisingly, both are big steps toward just using the app to order products and food items for delivery, right from your neighborhood Walmart.
Unilever: Research online and purchase anywhere
The British-Dutch conglomerate Unilever owns more than 400 brands, employs 170,000 people, and has annual revenues of over 50 billion euros. Dove, Lipton, and Ben & Jerry’s are just a few of the brands that the company says over 2.5 billion people use every day.
Desktop commerce still accounts for more business than mobile commerce in the U.S., but that’s not always the case globally (case in point: China). And the U.S. is at the tipping point where m-commerce will soon surpass e-commerce, according to Unilever’s Global e-Commerce Experience Design Director Ollie Bradley.
To prepare, Unilever has developed a game plan and set of standards for communications, images, and brands that prioritizes mobile. And also, of course, enable commerce anywhere: on a phone, on a desktop, in a store, via voice, on a social platform, or anywhere else a consumer wishes.
“Research online, purchase anywhere,” says Bradley.
ACI Worldwide: $14 trillion in commerce daily via omnicommerce
If you’ve never heard of ACI Worldwide, you’re a member of a very popular club. Yet this back-end company processes a staggering $14 trillion for more than 5,100 of the world’s largest retailers and banks every single day.
Unsurprisingly, processing $14 trillion in commerce and securities daily tells you a bit about e-commerce, m-commerce, and just about every other kind of commerce there is.
The primary message? Brands need consistent presentation and capability across channels.
And it’s not just about digital commerce. It’s about all commerce, in all channels.
“We have seen a trend of more e-commerce-first merchants (like Amazon and Warby Parker) move to brick and mortar,” Ranta says. “Obviously the opposite is true too, as some of the more iconic brick-and-mortar brands have tried to move to an m-commerce and e-commerce-first approach (like Walmart).”
Mobile is critical, and not just for payments:
“The mobile device can play more into the experience than just the payment,” says Ranta. “Moving that into the experience earlier in the customer journey (in the store looking at items, or ordering your coffee before getting to the store for pickup) can help with both conversion rates as well as moving the client to the payment method of choice for least cost routing for the merchant (a win win!)”
eBay: Even mobile is multi-channel
Nearly 400 million people use eBay, spending close to $90 billion a year via the web’s original auction site. That’s huge volume, and it’s accompanied by huge diversity in channels – even though most of them are mobile.
It starts with apps. eBay’s mobile app is critically important thanks to innovations the company has made that make both buying and selling simple.
“We give customers the opportunity to find and purchase an item that they see in a photo,” says James Meeks, Head of Mobile at eBay. “Image Search allows shoppers to take a photo on their mobile device and then eBay will quickly search for and surface items that are the same or similar for purchase.”
But there are also integrations and other channels.
Mobile web has its place, as the company’s “Find It On eBay” feature enables Pinterest, among other shopping destinations, to point potential buyers to goods on the site. Voice-first interactions with AI assistants are available: eBay customers can ask Google Assistant to find products or check the value of an item they want to sell. And eBay didn’t forget messaging platforms: Facebook Messenger users can chat with ShopBot to find the best deals from over 1 billion listings, Meeks says.
EBay doesn’t operate a physical store. But the company is working on technology that it thinks can appease the desire that a majority of consumers have to physically interact with a product: augmented reality.
Taps, clicks, bricks: What’s not changing
Buying is clearly changing.
But the core of successful marketing and selling is not: a close connection with the customer.
The challenge for brands and retailers is to execute on that age-old goal in new ways across multiple channels, many of them mobile-centric, so that customers connect naturally in known, signed-in experiences. Only then can brands and retailers both serve people the way they want to be served and optimize for customer satisfaction, retention, and share of wallet.
Learn more about the trends and technology driving the retail evolution in 5 Trends to Jump-Start Rethinking Retail.