December 1, 2013
By Sarah Sluis,

At Shop.org, Retailers Prepare for a Mobile Future

At the Shop.org Annual Summit in Chicago in October, mentions of mobile commerce seeped into every conversation, as did the accompanying buzzword, omnichannel. The use of the "O" word has risen as retailers try to respond to the changing behavior of their customers.

M-commerce currently accounts for 8.6 percent of total e-commerce, according to a study by comScore and The Partnering Group. While just a small number of people are hitting "buy" on their smartphones, mobile sites and apps are playing a larger role in supporting e-commerce that ends at a desktop computer or in a brick-and-mortar store.

Right now, customers move more fluidly between channels than retailers do. Customers expect retailers to cater to their own needs and shopping behaviors. Many shoppers want to make their purchases in one channel but pick up their order in another. During a presentation by Tory Burch's chief marketing officer, Miki Berardelli, and senior vice president of global stores, Matt Marcotte, the duo talked about the decision of the affordable luxury retailer to satisfy customer requests for in-store pickups. The service created additional shipping costs on the e-commerce side and personnel costs on the store side. Plus, there was a question about which outlet would get credit for the sale.

By "thinking about the customer having a seat at the table" and putting her first, the decision to deal with these operational changes became easy, Marcotte emphasized. "We didn't care about what channel gets the credit, and we ended up with three new full-priced stores in volume, just by doing what is right for the customer," he said.

Walgreens is also driving business to its stores through mobile and online channels. Some of its best customers shop both online and in the store, which is all the more reason for the company to invest in features such as online ordering with in-store or curbside pickup. They also have an app that enables users to refill prescriptions simply by scanning the labels. Their average mobile customer is a 45-year-old woman, and their average desktop user is a 52-year-old woman, bucking the notion that digital is for young people.

During his keynote speech, Walgreens CEO Gregory Wasson stressed that innovation isn't just about keeping up with the latest technological advances, but bringing that sensibility to the brand as a whole. "It's tempting to let innovation drive the bus," Wasson said, but success is about "knowing who you are and who your customers are." For Walgreens, that includes flagship locations that offer everything from manicures to seeing a nurse for the sniffles, and the acquisition of Duane Reade drugstores and drugstore.com. Innovation in e-commerce and mobile technologies is part of an overall strategy to keep the century-old company fresh.

More channels mean more data about customers, but bringing it all together remains a challenge for retailers. That's why many high-end clothing stores, such as Saks Fifth Avenue and Tory Burch, have equipped their on-the-floor sales associates with iPads that can bring up information about a client, including her purchases both in-store and online. They can then make recommendations that reflect past purchases or contact the client about a sale or item she might find appealing.

Tory Burch has been able to use feedback from customers to change the sales process. The retailer pays close attention to Net Promoter Scores and communicates that information regularly to associates. The company has even discovered that holiday shoppers want quicker in-store experiences than people shopping at other times of the year and tweaked its service accordingly. It also sifted through its data and realized that someone who mentions a salesperson by name will give Tory Burch a much higher-than-average Net Promoter Score. Salespeople hear both the good and bad feedback quickly, which helps them tailor their customer service.

While shoppers in a high-end store might crave personal attention, one out of three people said they access store information on their mobile devices while in stores so they can avoid interacting with sales associates, according to Todd Sherman, chief marketing officer at Point Inside, which helps companies develop a "store mode" for their apps. With mobile in use at multiple points at the purchase funnel, retailers have many options as they pursue their mobile strategies. And if they need any reminder, they can turn to a mantra often repeated in panel discussions at Shop.org's Annual Summit: "It's all about serving the customer where, when, and how they want."