May 22, 2013
Walmart's Global Head of Mobile, Gibu Thomas, just got off stage here at CTIA in Las Vegas. He offered an overview of Walmart's approach to mobile which, based on our research, is dead on. It's solid. (I dropped in a partial/paraphrased transcript below; read the details if you'd like, but a summary/analysis is up top here). At times I felt like he was following our research stream because the language was so similar; he even quoted James McQuivey from 1999: "When consumers adopt new technologies, they do old things in new ways. When they internalize technology, they begin to do new things."
(And I'll sound like a bit of a broken record here as I've said so much of this before. The difference now is that retailers like Walmart are implementing and talking about the results.)
– Mobile opportunity ($) > eCommerce opportunity. The opportunity in mobile is not primarily mCommerce, a number that Sucharita Mulpuru and Forrester Research put at 8% of eCommerce sales in 2016. In 2016, eCommerce will be about 10% of retail sales. The mobile-influenced number at more than $700B (forecast) in the US makes mobile-influenced sales the bigger number. The opportunity in mobile is a combination of a) influencing sales ($$$) and b) giving consumers the ability to buy anywhere/anytime ($). You can't just shrink/squeeze an experience onto a small device; this is too mini-eCommerce-centric and misses the bigger opportunity.
– Consumers who use mobile devices are more engaged and spend more. OK: there is a bit of a chicken or egg here. Do more loyal, frequent shoppers download your app? Or do consumers become more loyal once they download your app? The answer is both. At Walmart, mobile app users spend 40% more each month and make two more trips per month. Our highly engaged users spend 77% more each month and make four more trips per month than the non-mobile user.
– Context is powerful. Walmart joins a growing list of retailers, including Apple and Target, offering "store mode." They geo-fence the stores in Walmart's case (some retailers trigger from Wi-Fi connects) and switch to an experience relevant to an in-store shopper once someone is in the store. There's a big difference between what consumers need from you (the retailer) in store versus at home planning a trip. As a small example, Walmart's shopping app transitions from assistance with list creation to assistance with wayfinding, tallying your basket, helping you manage your budget, and then checking out/paying. Walgreens does this also re: the shopping list.
– Be customer-centric. My colleague Ron Rogowski and I are writing a new piece of research, "The Outside-In Approach To Your Mobile Strategy." The next generation of mobile strategies will be built upon the customer experience strategy; mobile will enhance touchpoints in the customer journey.
– Consumer expectations are shifting. They want information and services when they need it – in the moment in the store, for example. Consumers want the confidence that they are making the right product choices and paying a fair price. As a retailer, can you deliver?
– Mobile is transforming your business (more to come).
– A final note: This blog post was mostly about the Walmart speech. But if you look at the other companies named – Apple, Target, Walgreens – who doesn't shop at a Walgreens, Target, or Walmart in a given week or month? Leading retailers are setting consumer expectations – very quickly evolving their expectations around services in a retail environment. You (as an eBusiness professional) don't have to keep up, necessarily, but pay attention. Do what is right for your own customers and what aligns with your core business objectives.
From Gibu's Speech:
The right information at the fingertips of customers – make their shopping trip efficient.
1) Changing customer
2) Transforming retail
3) What it means for the customer
In our world, there is too much talk of channels – online, omnichannel, multichannel, etc. We serve customers through stores, through online, through online and in stores, etc. Mobile is powerful because it can deliver “all of Walmart.” Mobile brings the Web to the store. Our customers no longer have to choose between the advantages of shopping online or shopping in the store.
Google says that 89% of shoppers use their mobile phone while shopping for groceries. Since we are the largest grocer in the US, this is exciting to us. More than 50% of our customers have smartphones. About one-third of Walmart.com’s traffic is mobile. It was as high as 40% over the holidays. Mobile app users spend 40% more each month and make two more trips per month. Our highly engaged spend 77% more each month and make four more trips per month than the non-mobile user. Mobile shoppers are some of our most loyal shoppers.
How is a smartphone combining online and store giving consumers the best of both worlds? How are we saving our customers time and money?
Ultimately, it is not about this capability or that capability; it’s about how mobile seamlessly fits into your customer’s hand.
By 2016, mobile will influence 20% of all retail sales ($789B). eCommerce will be 10% of retail sales. mCommerce will be 8% of eCommerce sales.
We want to create tools that are indispensable for our customers. Mobile will fundamentally change consumer behavior. We want to provide assistance with every element or step of the customer experience in shopping – from planning a trip through checkout. We need to create services with mass appeal.
And then he QUOTES our JAMES MCQUIVEY … old things in new ways versus doing new things.
More than 90% of consumers have a shopping list, for example. We make creating shopping lists easy. Predictive text. Voice recognition. This has to be as frictionless as possible – more convenient than pen and paper. Then we add value that pen and paper can’t offer. We can show you local prices and tell you in which aisle it is. We also have a running total of how much a customer is spending. Going forward, we’ll help those with peanut allergies avoid foods with peanuts. We’ll show you manufacturer coupons without the consumer digging through the Sunday paper. We’ll also start to generate shopping lists based on past behavior and predictions.
Consumers use mobile differently at home – they lean back. It’s about eCommerce and planning. On average, our customers spend 30 minutes in our stores. We want to make this time efficient. Two different situations, but they didn’t want two apps. We change the experience based on where consumers are – in the store or at home. We have geo-fenced all 4,000 stores in the US. The app enters “store mode.” The experience becomes much more relevant to the store specifically – so price checker, local ads, wayfinding in the store, shopping list mapped to the specific store, etc. If a customer is in the toy department, we’ll show a customer toys based on what fits their budget. If you are in the women’s clothing department and want to know what top goes with what pants, we’ll show you what consumers are buying – which shirts and pants are being purchased together.
Now checkout. We have been testing “scan and go” since the beginning of the year. Then at self-checkout with a single scan, they can pay for the entire basket/cart of goods. This gives our customers more control over their budget. The important thing here is not about the specific features. These are simple features. We just launched them and they are already being used by millions of consumers.
This isn’t about a single technology or feature. This is about a very customer-centric approach. You need to innovate at scale and not at the edge. To innovate at scale, you have to have a customer-centric approach – you can’t start with technology. Think incremental, not massive home runs. Innovation does not have to equal invention. If you are not comfortable innovating on the edge, you may miss the next big thing.
Our core principle is about helping our customers save money. So we’ll pay attention to Google Glass – it could be the next big thing. We have to strike the right balance though with what is best for our customers.