Mobile: a strategic priority for retailers

The use of smartphones affects almost every aspect of daily life, including all activities related to grocery shopping. Brits use their smartphone to prepare grocery shopping, in-store and after purchase. In that context, many retailers are testing mobile technologies and making this channel a strategic priority. Mobile is a powerful tool to attract consumers in-store, encourage purchase and drive loyalty. It also allows to facilitate and simplify the path to purchase.

A tool to attract consumers in-store

For retailers, mobile is first and foremost a tool to attract consumers in-store, in particular through drive-to-store or mobile-to-store mechanisms.

In a Food Navigator article titled “2019 and beyond: six trends shaping the supermarket of the future”,

Bjorn Thumas, Director of Business Development at Tomra, says: “Traditional supermarkets fight back against the online disruptors – and information about shoppers’ preferences and habits will be an important weapon. Consumer-facing technologies, such as shopping-cart mounted devices or smartphone apps, will steer shoppers towards the aisles and shelves where they are more likely to make purchases.”

Sainsbury’s for example ran a location-based pilot campaign last year to engage consumers and boost in-store visits. Customers in and around 20 Sainsbury’s stores received personalised offers on their mobile phone, informing them about deals available. Micro-location data was used to identify if the customer was outside, entering or walking around a store to trigger offers. The pilot was a great success: in addition to generating high customer satisfaction, it significantly boosted visits and sales: visits were up 8.2% and sales 6.6% over 12 weeks versus a controlled period. This innovative approach was recognised with a 2018 Marketing Week Masters Award.

James Moir, Managing Director of Nectar Loyalty Ltd at Sainsbury’s told WARC: “The implications of being able to deliver a message in real time and genuinely influence customer behaviour in an offline fashion is really, really interesting.” He added: “We’re seeing sustained sales uplift. Our hypothesis is we’re stealing share from competitors. We’re stealing visits from competitors because of the ability to see personalised, in-the-moment offers.”

Mobile is thus an important tool allowing to target consumers with offers that are relevant to them in order to boost footfall and sales. Other mechanisms such as product locators and store locators, click & collect and mobile couponing are also very efficient to attract consumers in-store.

A tool to facilitate the path to purchase

Mobile is also a critical tool to optimise the path to purchase and improve the customer experience, at every stage of the journey.

Tesco spin-off Jack’s aims to differentiate itself from low-cost competitors with its Jack’s Shop Smart app. The app allows customers to scan products as they add them to their cart so they can keep track of their spend, pack as they shop and checkout quickly at self-service tills, by simply scanning the barcode at the top of the till screen.

Mobile payment is still in its early days in the UK. However, it is one of the fastest-growing mobile technologies and it contributes greatly to simplifying the path to purchase. According to a Forrester study, in the 7 main European countries including the UK, in-store mobile payments are expected to grow by 26% a year to reach 27 billion euros in 2022.

Sainsbury’s started testing mobile payment last summer in order to enable customers to scan, pay and go using its smartphone app. Clodagh Moriarty, Chief Digital Officer for Sainsbury’s Group, told Mobile Marketing Magazine: “Technology and changing customer shopping habits have transformed the way people buy their groceries. Our teams are constantly working hard to bring new convenient shopping experiences to customers and we’re delighted to be the first grocery retailer in the UK to offer customers the ability to shop checkout-free. The latest version of SmartShop, with its new payment feature, will make it super quick for customers to get in and out of the store for those that want to scan, pay and go.”

Sainsbury’s has also just launched the UK’s first till-free grocery store, where customers can pay on an app and leave without going to the checkout.

M&S also kicked-off in-store mobile payments a few months ago. The service, named Mobile, Pay, Go, allows users of the M&S mobile app to pay for items without having to use a till. Users scan products as they go and then pay for the items (up to £30) via Apple Pay or a saved card on their M&S account.

Sacha Berendji, Retail, Operations and Property director at M&S, shared with Marketing Week: “Our customers – especially those who come to us for lunch – are so busy, any tech that can speed up the shopping experience is a massive benefit to them. Crucially, it also means our brilliant colleagues are freed up to offer great service in other parts of the store, helping to improve the overall experience in the lunchtime rush. We’re moving with pace and we can’t wait to hear what our customers think.”

Jim Cruickshank, Global Head of Digital Product and UX at M&S, added: “Mobile, Pay, Go is one of many new initiatives we’re developing as part of our digital transformation, with agile and lean practices at the core of our approach. We’ve worked hard to deliver the fastest and most friction-free customer experience possible.”

A tool to drive customer loyalty

Mobile can also contribute to customer loyalty. According to a study by YouGov and Mando-Connect,  77% of UK shoppers belong to a loyalty scheme and 65% belong to a supermarket loyalty scheme.

Loyalty schemes are very popular and have a strong influence on customer behaviours:

• 72% believe they are a good way to reward customers
• 47% of consumers spend more with a brand whose scheme they are member of
• 38% of consumers are more likely to recommend the brand
• 28% say they feel “emotionally connected” with a brand whose programme they belong to.

However, in a difficult context and with strong competition from discounters, many retailers are revamping their loyalty schemes. Tesco for example recently introduced changes to its Clubcard programme. Tesco CEO Dave Lewis, shared during a press conference: “Clubcard has always been a big part of Tesco. It’s fair to say we hadn’t invested as much in that in the right ways historically. We’ve gone through a process which is taking it away from just being a promotional tool and getting back to being a reward for loyalty”.

In an article titled “Are the days of loyalty cards numbered after Tesco’s change?”, the BBC points out that “The end of the loyalty card has been predicted many times before, but what is different this time is that smartphone apps are an obvious replacement for physical cards”.

Deloitte UK highlights the potential of apps in its report “Customer loyalty: a relationship, not just a scheme” claiming they open up endless possibilities for loyalty programmes. Deloitte says: “They offer location-based services to reward browsing and create highly targeted offers, mobile wallet for seamless payment and accumulation of points, gamification and social media. In addition, apps can integrate the camera for coupon scanning and receipt-based purchase validation. Smartphones are the platform on which new loyalty programmes are being built. Card-based systems now also need to offer a supplementary smartphone app.”

Mobile apps should play an even bigger role in the future in driving customer loyalty. 

As a conclusion, mobile is an important strategic channel for retailers faced with increased competition from online players and new customer behaviours. Mobile can allow supermarket chains to attract consumers in-store, facilitate the purchasing journey and drive loyalty.