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Leon Coetzer redPanda Software UK CEO

Mobile applications enabling innovation in brick-‘n-mortar

Leon Coetzer Monday, 25 June 2018

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Could mobile applications become the enabler for innovation in brick-‘n-mortar retail? Much attention has been given to the phenomenal rise of e-commerce, as consumers delight in the convenience of shopping from the comfort of their homes. And as e-commerce interfaces have become ever more slick and seamless, with one-click payment systems and smart, interactive platforms, shoppers have begun to use e-commerce on a daily basis. However, according to some statistics e-commerce sales only constitute between 10% and 18% of total retail sales, and that 93% of online shoppers also shop in-store.

In-store shopping is then still very relevant. This begs the question: how can we create a seamless experience for consumers across both of these channels? The concept of omni-channel is nothing new, but how can retail businesses achieve this without a ‘Rip and Replace’ strategy?

The answer lies in the proliferation of mobile devices, with the emphasis on ‘Mobility’. It allows us to unlock the benefits of e-commerce transacting in brick-‘n-mortar stores. By using mobile as an enabler makes it possible to unlock value from a myriad of innovative products and services in a controlled manner. You can test the waters, so to speak, without breaking the bank and without the risk of reputational damage.

Let’s look at a use case

Mrs Jane Smith is a regular customer at retailer X. The retailer knows what the preferences of their customers are, but at a macro level. They don’t know who Jane is, or what her needs are.

To learn more about Jane, the retailer implements a loyalty program. Jane registers for the loyalty program, but instead of issuing a physical card, Jane is asked to download the retailer’s branded mobile application. Points can be accumulated or redeemed from a digital wallet which uses a QR code to uniquely identify Jane. The cashier scans a QR code on the mobile phone for each transaction, which updates the loyalty balance and provides valuable information about Jane’s buying habits.

The retailer can now start building a personal profile on Jane by using her transaction history. It becomes possible to create a personalised marketing campaign that targets Jane with offers she will most likely act on. She already has the branded mobile application, so the retailer has a direct line of communication with her. The promotions can be redeemed at a point of sale by scanning the same QR code as before, closing the loop on the marketing campaign, and providing real-time feedback on the campaign’s effectiveness.

Now that the retailer knows who Jane is, they look at ways to make the brick-‘n-mortar experience as frictionless as possible. Self-scanning, product information lookups and mobile payment capabilities are added to the branded application. Jane can now get more information about an item by scanning it, then adding it to her basket, paying for it with her mobile device and then leaving the store without having to wait in queues, or having to ask anyone for assistance.

Which technologies can be used to achieve this?

Branded mobile applications are usually built from scratch for each retailer. The development is not as complicated as other line of business applications, so the costs and the timelines are usually reasonable. The technology landscape has normalised, so there are only two main platforms to target, which is IOS and Android.

The next decision is to decide whether you want a very responsive application with exciting visual acrobatics, or whether a web based functional application is good enough. There is a considerable difference in cost due to the effort required in creating a native version of the software for each platform, or a web-based version which is less performant, but faster to build.

Loyalty products have been around for a long time. Getting an off-the-shelf offering that suits the retailers needs won’t be difficult to find. A small amount of development work will be needed to access the loyalty system from the mobile application. Some of the product providers even provide cloud-based loyalty products, reducing the need for support and maintenance, and future-proofing the product with regular upgrades.

The business landscape is changing at a rapid pace due to the advancements in ‘Big Data’ and ‘AI‘(Artificial Intelligence). Omni-channel can only truly be achieved when customers have a unified and consistent experience with a brand across all their channels. This means that there needs to be a personal profile for each customer. The personal profile should not be static and needs to be updated every time the consumer interacts with the brand.

‘Big Data’ can be used to collect the data from each of these interactions with the business in real time. ‘Data Science’ can then be applied to create a personal profile and using predictive analytics to create hyper-personalised marketing campaigns and recommendations. The technologies available to achieve this is very mature, and the time to market much shorter than with traditional data marts and warehouses. One of the biggest benefits is that data in any format can be accommodated including social media, emails, voice recordings, transactions, locations and many more to create a holistic view of the consumer.

Self-scanning and product lookups can easily be achieved by connecting the mobile application to the centralised stock and order management system. The customer can now report when stock is not available by scanning the shelf label. The same product information you find on e-commerce sites can be made available on the mobile device.

There is an abundance of mobile payment options these days. It is a matter of integrating them into the mobile application which can generally be done in a couple of days. Some vendors are even offering ‘Pay-By-Bank App’ functionality where the user clicks on a simple button which opens their banking provider’s mobile app to execute the payment in a seamless way.

We are in the midst of some of the most exciting technological advancements in history and this use case can easily be extended with even more value unlocking products and services. I look forward to sharing more insights in follow up articles.

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By Leon Coetzer, CEO UK redPanda Software

Leon has more than 20 years in the software development industry, successfully delivering both enterprise and greenfield software systems. Responsible for strategy and operations in the UK, Leon brings a unique blend of technical and business knowledge to redPanda Software

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