"Brick-and-mortar retailers can influence the customer journey in their favor with cross-platform apps"

Interview with Professor Niklas Mahrdt, Media Economics Institute

02.03.2015

What consequences do Smartphones and other mobile devices have on consumer behavior? Retailers today need to deal with this question. They need to look for new ways to reach the customer. For a recent study, Professor Niklas Mahrdt of the Media Economics Institute researched possible reactions of brick-and-mortar retail on the increasing mobile Internet usage at the POS. He talks about his findings on this subject in this interview.
Photo: Professor Niklas Mahrdt; © Media Economics Institut

Professor Niklas Mahrdt: "All options of location-based marketing should be exploited"; © Media Economics Institut

Professor Mahrdt, one result of your study is that 60 percent of respondents use their Smartphone only rarely or never at the POS to shop and many don’t see any impact of the device on their consumer behavior. Where can mobile marketing measures start in this case?

Niklas Mahrdt: Our study findings show that the so-called ”customer journey" already begins long before a visit to the brick-and-mortar store. Ninety percent of respondents owned an Internet ready Smartphone at the time of the study. More than 70% used a mobile device to access the Internet. Before a purchase, several contacts (touchpoints) are already being made within the scope of researching online offers. This begs the questions of where brick-and-mortar retailers can enter the field.

Among other things, brick-and-mortar retailers can influence the customer journey in their favor with the help of search engine optimization, social network activities, excellent added services as well as cross-platform apps. Retailers need to get back into the customer’s “relevant set”. Incidentally, potential added services that are offered by the brick-and-mortar retailer on-site should also be communicated online or via social networks.

What’s more, all options of location-based marketing should be exploited. This includes all measures that brick-and-mortar retailers can take on the Internet or on search engine results pages to also make products available and interesting to customers, who are near the brick-and-mortar store with their Smartphone.

Nevertheless, Smartphones are becoming more important and increasingly garner a role as an important contact point to the customer. What solutions are best for retailers to reach a customer via his or her Smartphone?

Mahrdt: Our study also refers to consumer behavior in so-called SHOPPING ENVIRONMENTS, meaning not just in brick-and-mortar stores, but also in pedestrian streets, in shopping centers, in strip malls as well as shopping malls.

We distinguish between two basic situations: what do customers do with their Smartphone, if they are not directly at the POS and what do customers do with their Smartphone at the POS. For situations outside the POS, the already mentioned measures are recommended. Our study yielded interesting results on the customer group that uses Smartphones in the brick-and-mortar store: almost half of them like to take pictures of the products to get feedback from their friends via text messages, WhatsApp Messenger or posts in social networks for instance. More than 40% use search engines at the POS to compare products or prices or they visit other online shops. You cannot ignore this fact.

That said, brick-and-mortar retailers have the customer right on site and can score with excellent service. After all, customers want to touch, feel and try out the products and take them home right away. However, the sales staff should be familiar with the trends for competing products and prices on the Internet and ideally also with the corresponding online customer reviews and opinions.

I realize that this is very time-consuming and requires significant education and training, but the customer is doing the exact same thing when he or she is searching for more information at the store. However, customers are prepared to buy at the actual store and pay more if need be, if they get great service and think they are in great hands with the sales staff. Our study has shown that customers at the POS don’t appreciate it when sales associates appear clueless when asked questions about online product reviews. The complete sales argument needs to be more relaxed and flexible when it comes to those topics that relate to online offers.

When the customer uses his or her Smartphone at the store, it is often for “showrooming“. What options does a retailer have to prevent customer churn?

Mahrdt: On the one hand, showrooming carries the real risk of customers leaving the store and buying at other online retailers. On the other hand, the retailer already has the customer right at the store and can persuade the customer to buy by clever use of mobile trends. Customers appreciate mobile coupons for example. For retailers with existing cross-channel marketing (that being a brick-and-mortar retailer operating an online store), sales staff at the store should also consider issuing cross-channel coupons.

In addition, it’s important for customers at the store to check online customer reviews with their Smartphones or talk with friends in social networks about an impending purchase. For the latter option, it is important for the brick-and-mortar retailer to have built a lively fan page. The social peer group of the customer in the store then sees that the customer is at a retailer’s local store and checks the fan page for interesting offers. In short, the retailer gains relevance with the peer group of the customer at the store with a fan page, while the retailer can even turn the customer at the store into a brand ambassador.

What role do QR codes play in mobile marketing? So far, the codes have not gained wide acceptance.

Mahrdt: Our study showed that less than 20% of respondents ever interacted with QR codes. Yet I also notice that commercial incentives connected with QR codes have so far not been fully utilized. It would be conceivable for example for a cross-channel-oriented retailer to send customers a QR coupon code per mail. The customer can then decide whether he or she wants to redeem the coupon at the actual store or online.

Several companies have already made bad mistakes in their use of Facebook et al. How can social networks be used as an effective marketing tool?

Mahrdt: Unfortunately, I am unable to give you a general five-element concept as an answer to your question. However, depending on the objective, there are a number of possible contents and measures in social networks and blogs. With social networks like Facebook for example, it is essential to find a smooth way of addressing Facebook fans – and treat them as equals. Small talk and product suggestions can then take turns with polls, votings or sweepstakes. This takes time however and the road resembles a learning curve with trial and error.

In contrast, I see blogs as more utilitarian in their topic choices, whereas YouTube is very well suited for tutorials (e.g. instructions for use) or employer branding. Our study has shown that at best, there are early connections between product-oriented posts on Facebook and subsequent impulse buying at the POS in the 14-19 year old target group.

Interview: Daniel Stöter; EuroShop
First publication at iXtenso.com