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Forget Your Well-Thought-Out Mobile Strategy: You Now Need Three

Written by Evan Schuman
January 21st, 2010
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The most popular parlor game in retail tech circles these days is plotting out mobile strategies. For some, that strategy may be little more than “not now.” But the simple act of trying to craft a single, coherent mobile strategy may itself be flawed. Most retailers now need to prep three distinct strategies for dealing with the three separate ways mobile devices will be used.

The mobile retail world has now neatly morphed into three categories: consumer-used (with true M-Commerce, mobile research from home and on the road, etc.); retailer-used (for price checks, inventory inquiries, in-aisle supply chain inquiries, etc.); and consumer-in-store (2D barcodes, price comparisons, SMS communications with the chain, watching demos, mobile research from within the store, direct payment, etc.). To make matters worse, some applications sit in multiple categories, such as a retailer-used device that is temporarily given to a consumer for checking online inventory or seeing a demo.

The change from a year ago is how distinct these categories have become and how merchant strategies for one approach may not be ideal for the others. We have spoken often of the merged channel, where we refer to channels including mobile, in-store, online and call center (catalogue no longer seems relevant). But it’s now becoming clear that “mobile” isn’t one channel but potentially as many as three or more. In the same way that a strategy that might work well for in-store could be entirely inappropriate for a call center, one aspect of mobile may not work for another.

Earlier this month, I was attending a New York City dinner with a group of StorefrontBacktalk subscribers who happen to be senior retail IT execs. When the topic turned to mobile strategy, the Chief Technology Officer of a major multi-billion-dollar clothing chain sighed and pulled out three different mobile phones from various coat pockets. As long as his chain is testing them, he needs to carry all three. It’s the absolute right thing to do, but what kind of industry are we in when a Fortune 500 CTO needs to carry around three phones?

The problem with the three mobile categories is that they are different enough to merit very different technology approaches. For example, until a few months ago, the smartphone choice for consumer-facing apps was clear: Apple’s iPhone had a huge visual and app advantage. But Google’s Nexus One is prompting quite a few chains to sit back and wait, wanting to see how marketshare and app migration plays out over the next several months.

This phone choice decision is very different across the three categories. To decide what apps to make available for consumer mobile use requires a chain to make an accurate projection of which phone most of its customers will have when they walk into the store. That needs to be a consumer popularity contest. For the mobile app that your employees will use—and certainly for the app running on the phone that they’ll show consumers for inventory or demo purposes—the chain can choose whichever phone works the best and has the most attractive volume pricing.

As long as the phone doesn’t sell so poorly that it gets yanked off the market, the retailer-used category strategy can be entirely marketshare-agnostic. Hence, the retailer-used strategy could focus on an entirely different mobile device than other categories. And that’s how it should be.

Another area of mobile will be mobile payments. It’s not hard to envision a retail community—say three to four years down the road—where mobile payments could replace many of the plastic cards, cash and checks of today. The carriers and handset manufacturers could then play huge roles in payment issues. So a chain might do well to make retailer-used phones support certain carriers and manufacturers, something that may be entirely irrelevant to consumer-in-store and consumer-used decisions.


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2 Comments | Read Forget Your Well-Thought-Out Mobile Strategy: You Now Need Three

  1. Fabien Tiburce / Compliantia Says:

    The value proposition of mobility is multi-faceted because mobility is an enabler, not an end it itself. Mobility is actually a lot harder to do well than web-based applications. Networks are slower, devices are smaller (usability does matter) and there is no default mobile platform (hence the reason for carrying 3 phones) unlike the PC/Windows monopoly we love to hate. What is your mobile strategy? And perhaps just as importantly what is the strategy of the technology industry giants? Google is betting that the future lies with browser and micro-browser based applications, not app stores. These applications usually run on all mobile devices with an embedded browser. Apple and Research in Motion (BlackBerry) are trying to tie you in to writing “local” applications, distributed by an exclusive app-store (although RIM does allow over-the-air installers not using their app store), using their platform and API exclusively. The Google model gives you more portability and near universal support. It also does away with the updates/patches. The app is online and always up to date. This truly is software as a service. The Apple/RIM model gives you more local control, the ability to add peripherals (scanners) but does mean you have to write to one specific platform and install and update this software. Personally I believe that app stores are a stepping stone to a truly web service based world. I think the Google model will eventually eclipse the Apple/RIM model. Retailers should review their options and carefully evaluate which model is best for their current and future operations.

  2. David Dorf Says:

    ARTS has initially divided mobile apps into (1) Marketing and Loyalty, (2) Payments and m-Commerce, and (3) Operations (for employees), but your categories are interesting as well. Agree on the need for most retailers to address all three aspects, and the need for some sort of standardization of the platform. I have spoken with a couple companies that claim to automatically build native apps for different platforms from one source.

    If each retailers builds 1-3 apps for 1-3 platforms, consumers will be overwhelmed. As more retailers enter this area, its going to get tougher to differentiate.

    A few will get this right and lead the market.

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