Top connected commerce priorities: Inventory and fulfillment

Most merchants understand the concept of connected commerce — providing a seamless shopping experience across channels and devices. But for merchants working with limited budgets and clunky standalone technologies, the goal can seem overwhelming and elusive.

New research suggests that inventory and fulfillment integration tops the list of consumer priorities. In a talk at this year’s Internet Retailer Conference and Expo, Lauren Freeman of The eTailing Group revealed results of a consumer survey that found . Specifically, consumers rated the following features as important influencers of their purchase decisions:

• Not surprisingly, nearly two-thirds of online shoppers — 62% — wanted the ability to have items purchased online delivered to their homes.
• But more than half of shoppers rated as important the ability to get the product within a day or two. Depending on the cost and availability of expedited shipping, for some shoppers the only way to meet this criteria is through in-store pickup or purchase.
• Fully 45% of shoppers wanted to know whether items researched online were available to purchase locally at a physical store.
• The ability to purchase online and pick up in store was rated as important by 33% of shoppers.

The upshot? For merchants still struggling to begin integrating business processes, inventory and fulfillment should top the priority list. Furthermore, those who already offer such capabilities should highlight them as a differentiator. Just over half of merchants offer in-store pickup for items ordered online, according to a new multi-channel report from RSR Research — and the percentage of merchants offering in-store returns of items ordered online has dropped compared with 2011.

To promote delivery flexibility and inventory visibility, consider the following tactics:

Put the emphasis on speed and savings. Most merchants offering in-store pickup position it as a free alternative to home delivery — a factor worth highlighting, given that most shoppers seek savings on shipping costs. In addition, merchants who can promise instant availability in stores should promote speed as a benefit so that shoppers understand they won’t need to wait for an item to be delivered to their local outlet. Sears promotes instant in-store availability in a global promotional banner which promises shoppers can “get it today with free in-store pickup.” The product page drives the message home with a tabbed display that highlights free in-store pickup along with current free home delivery offers.

Don’t forget mobile. The ability to view in-store availability and flexible delivery options is especially important for shoppers on the go, so  put in-store inventory and pickup front and center when designing your mobile commerce offering. Walmart gives “Find in store” equal footing with the “Add to cart” button on the mobile product page as well as displaying in-stock status and the ability to select free shipping to stores for online orders. Clicking “Find in store” displays inventory levels at stores within a 50-mile radius of the shoppers’ current location, with a link to store directions listed along with the phone number and item number.

Have you integrated in-store inventory and cross-channel fulfillment into your eCommerce site and mobile offerings? If not, what’s holding you back? If so, how do you promote the service?

Getting to know your mobile audience

With 84% of U.S. adults owning a mobile phone, mobile commerce is a huge opportunity — and should be a top priority for merchants in 2012. But before deploying a series of mobile tactics, it’s crucial to consider what’s right for the marketplace, your customers and your business.

After all, there’s no point designing a downloadable app if most of your customers prefer text alerts; and launching services without the capability to maintain them is folly regardless of the platform. To determine how your brand’s followers and customers use mobile phones:

• Study your Web analytics. Both fee-based tools such as Omniture and free services like Google Analytics have the ability to break out mobile traffic to your existing Web site. Pay particular attention to
• • inbound traffic from email marketing. If a significant number of visits to a custom  URL for an email promotion are from mobile devices, then your email subscribers are reading messages on their phones — and you should tailor your email content and design accordingly.
  • how social followers connect. Again, study those inbound links from social sites — if significant traffic to those pages is from mobile devices, you can infer that your brand’s social followers are using Facebook and Twitter on the go.
• Survey existing customers. Ask existing customers and followers to take a brief survey on their mobile phone usage habits, and solicit participation via email marketing, social outposts and even, for your most loyal customers, direct one-to-one communication.
• Size up the competition. While there’s no need to “keep up with the Joneses” when it comes to mobile development if your audience doesn’t require it, it’s helpful to survey the competitive landscape and understand what expectations exist for mobile services in your type of business and industry. In particular:
• • read reviews of competitors’ apps and study how many downloads they’ve achieved to determine whether and how you might follow suit.
  • use your phone to view competitors’ email campaigns and Web sites and track how many competitors are optimizing for mobile.

As you collect and review data, keep these key questions in mind:

Smartphone or SMS?

It’s certainly true that , according to the Pew Internet & American Life Project — suggesting merchants need to provide the kind of feature-rich experiences associated with Web browsing and custom-developed mobile apps. And tablet ownership has more than tripled in a year, from 3 to 10% of the U.S. populace, Pew found.

But a deeper look at the numbers reveals that there are plenty of demographic disparities in smartphone ownership. Pew found that while a majority of young adults aged 25-24 own smartphones, the percentage drops off steeply for audiences over the age of 45. At the same time, among income brackets smartphone ownership was highest among the highest earners.

One potential interpretation would be to recommend that luxury purveyors and youth-centric merchants focus on the smartphone environment, while merchants catering to bargain-hunbters on a budget would do well to include such basic services as delivery of promotional offers by text message.

But the right mix will ultimately be determined by your business and the needs of your core audience — and will likely include a mix of SMS/MMS messaging campaigns and feature-rich offerings to browse.

Apps or mobile Web?

While ad slogans such as Apple’s “there’s an app for that” have put mobile applications in the spotlight, the fact of the matter is that most mobile purchasing is transacted through the mobile Web — that is, the mobile-adapted Web sites users view through the browsers on their phones.

According to industry researcher Forrester, 44% of mobile purchases were transacted through the mobile Web, compared with 33% of mobile shoppers who reported buying via an individual retailer’s app and 17% who said they used other types of shopping apps. A recent study from Yahoo/Ipsos found an even greater disparity, with fully , versus 27% who used applications.

Here, too, the solution may not be either/or. While a mobile Web site is now a must, apps — like microsites — offer the ability to focus on a specific subset of products or to offer a solution to specific shoppers’ needs, such as new product alerts for the loyal brand followers who are more likely to download the app in the first place.

Putting it all together: developing a tiered strategy

To determine the best mobile strategy for your company in 2012, use the following grid to break out how shoppers can interact with your brand on their mobile devices — both in terms of technology, and in terms of their shopping goals. Based on their current behaviors and needs, you may decide to focus first on helping them research products by requesting information via text message codes, or share deals via social networks using the mobile Web.

We’ll take a closer look at how mobile can help shoppers achieve their goals in our upcoming mobile whitepaper.

Meantime, let us know: how do shoppers use mobile phones to access your brand? Have you developed an app? How do you determine future mobile development priorities?

Top 2012 priority: Mobile

Daily deals? Behavioral targeting? New SEO techniques? Social media?  With 2012 showing strong promise for sales growth — while still requiring merchants to operate on lean marketing and development budgets — focusing on core priorities is as tricky as it is essential.

But even amidst a constantly-shifting landscape, one priority has emerged that only promises to become more important over time: mobile commerce. The disruptive power and sales opportunities this medium offer are unparalleled — and should cause merchants to rethink not only specific tactics and techniques, but the way their businesses operate altogether across channels and devices.

It’s no surprise that most U.S. consumers are now equipped with mobile phones. Industry researcher Forrester estimates that 2012 will see the U.S. population of mobile phone subscribers reach more than 258 million, with 110 million of those being smartphone users whose devices can browse the Web and employ apps to enrich the user experience.

Furthermore, those mobile users will make $10 billion of purchases on their phones this year, according to Forrester — 3% of all eCommerce spending — and that revenue figure is set to more than triple by 2016.

Those who doubt the forecast should consider the recent 2011 holiday season, when mobile shopping played a significant role. Just a couple of statistics:

• Mobile shopping helped nearly four in ten U.S. smartphone users  locate the best deals, according to a poll by SapientNitro and GfK Roper. Fully 56% of tablet owners reported using their device to locate deals, the poll found.
• Traffic and sales from mobile devices on key shopping days increased exponentially over 2010, according to IBM CoreMetrics data. On Cyber Monday, for example, 10.8% of shoppers used a mobile device to visit a merchant’s Web site, compared to 3.9% of shoppers in 2010 — a more than 175% increase. Mobile revenues jumped 186%, from 2.3% of all online sales to 6.6%, according to CoreMetrics.

But it’s not just the dollars and cents of mobile commerce that merchants should take into account; it’s the way mobile devices have exploded traditional ideas of shopping — whether in-store or online. Mobile has:

• Disrupted the traditional “multi-channel” path to purchase. Shoppers who might once have researched at home online before visiting a bricks-and-mortar store to complete their purchases can now pause at any time and anywhere to compare prices, look up product information and potentially navigate elsewhere. In 2011, 56% of smartphone users reported firing up their devices to research products while in-store, according to WSL/StrategicRetail — a 60% increase from 2010.
• Liberated “eCommerce” from the computer workstation. Rather than being tethered to shopping online at the home computer (or surreptitiously at work), shoppers can not only peruse products on the go, but tablet devices offer a rich shopping experience in front of the TV and elsewhere around the house.
• Opened up possibilities for geographic targeting like never before. Robust store locators are only the tip of the iceberg; the ability to tap geo-location data has the potential to help merchants serve shoppers with more relevant products and offers than ever.

Given all the juicy potential mobile represents, merchants so far have been slow to seize the initiative. In June of 2011, Forrester found that just 29% of merchants have enacted a mobile strategy — while more than half, 52%, reported being in the pre-implementation stage, from developing a strategy to not having one at all.

It’s true that mobile commerce faces some significant hurdles. While shoppers freely use their phones to research products, they by and large remain dubious about purchasing in the mobile environment — expressing many of the same trust-inhibiting factors that stood in the way of eCommerce growth a decade ago.

Forrester found that the two leading inhibitions to mobile shopping are privacy — a concern for 45% of U.S. online consumers with mobile phones — and security of mobile payments, which struck a chord with 44% of respondents.

In addition, more than one in three consumers reported that mobile sites don’t offer enough content, features and functionality — a sentiment echoed in the 2011 MarketLIve Consumer Survey, which found that shoppers planned to avoid purchasing on mobile phones because “shopping is still too awkward on my phone”, and in particular offered too little image and product information to fuel purchase decisions.

But these concerns are no reason for merchants to throw in the towel. Rather, they must rise to the challenge so they can better reap mobile’s potential rewards.

Put another way, consumers’ expectations for privacy, security and a feature-rich environment no longer wax and wane depending on which device they use; they expect to encounter a seamless experience across all a merchant’s customer touchpoints, starting with mobile. Failure to meet these high expectations can result in bad publicity — and, worse, lost sales and loyalty.

Because we believe mobile is a cornerstone of connected commerce, we’ll soon publish a whitepaper that examines 2012 mobile strategies in-depth. Meantime, our next post will outline methods for prioritizing mobile development for your business.

Is mobile commerce a priority for your business? Why or why not? What mobile strategies have worked for you?