© 2012 Karthik Ethirajan, all rights reserved

Mobile Levers to Enhancing “in-store” Experience for Retail Customers Karthik Ethirajan July 2012

© 2012 Karthik Ethirajan, all rights reserved 2

Agenda

3. Challenges Retailers Face in Multi-Channel Commerce

4. Mobile Influence on “in-store” Retail Sales

5. Leverage mCommerce Investments

6. Mobile Enabled “in-store” Levers for Retailers (1/2)

7. Mobile Enabled “in-store” Levers for Retailers (2/2)

8. Tapping into mCommerce Ecosystem

9. Case Study 1: Macy’s

10.Case Study 2: Target

11.Next Steps Recommendation

© 2012 Karthik Ethirajan, all rights reserved 3

Challenges Retailers Face in Multi-Channel Commerce

In today’s multi-channel shopping environment, mobile can be a threat as well as an opportunity for retail store sales

Retail Store

Online

How to get the customers to visit the store ? How to get them to buy in the store ? How to turn the tide on “showrooming” effect ?

Everyday Challenge Retailers Face

There are many Smartphone enabled “in-store” levers available to retailers to improve shopping experience

These are some of the same levers needed to boost mobile commerce

How can mCommerce Enhance “in-store” Experience ?

2012 Sales ($ in Billion)

Mobile

Multi-Channel Commerce

Source: Mobile Shopping from In-Store, eMareter, Jun 2010; US Online Retail Forecast, Forrester, Mar 2010

© 2012 Karthik Ethirajan, all rights reserved 4

Mobile Influence on “in-store” Retail Sales

Levers can enhance “in-store” experience

Retail Store

Online

Source: The Dawn of Mobile Influence, Deloitte, Jun 2010; Mobile Consumer Shopping Preferences, 2010: U.S., Gartner

2012 Sales ($ in Billion)

116 138

158 176

192

0

50

100

150

200

250

2012 2013 2014 2015 2016

Mill

ion

s

U.S. Smartphone Users

Mobile influence on store sales will increase from 5% today to 19% by 2016

Smartphone shoppers are 14% more likely to make a purchase in the store than non-smartphone users

Mobile

Location / GPS App Camera Wi-Fi Sensors

Mobile Capabilities

Product Scanner Mobile Wallet POS Terminal Social m-Coupons

“in-store” Levers

Mobile can help engage, immerse and personalize customer “in-store” experience through a myriad of mCommerce features

Two-third of all Smartphone owners use their mobile while shopping in a store

© 2012 Karthik Ethirajan, all rights reserved 5

Leverage mCommerce Investments

Levers can

enhance

“in-store”

experience

Retail

Store Online

2012 Sales ($ in Billion) Realize synergies between mCommerce

investments to boost mobile channel sales and

mobile-influenced store sales

Many of the “in-store” mobile levers are the same capabilities needed for enabling mCommerce sales channel

Mobile 10.7%

6.5%

6.1%

2.8%

1.4%

1.4%

79.4%

Use mobile advertising to promote…

Have an m-commerce site

Have an iPhone app

Distribute mobile coupons

Use mobile search ads

Have search apps for other mobile…

Not using m-commerce

M-Commerce Features Offered by US Multichannel Retailers

Opportunity

Gap

Majority of the retailers do no have ANY mobile

capabilities, pushing shoppers towards using

competitor or price comparison apps

Source: Mobile Shopping from In-Store, eMareter, Jun 2010; US Online Retail Forecast, Forrester, Mar 2010

© 2012 Karthik Ethirajan, all rights reserved 6

Mobile Enabled “in-store” Levers for Retailers (1/2)

Mobile Levers Consumer Function Market Examples

Wi-Fi Hotspot

• Free in-store broadband connectivity

• Consumers can browse product

videos and user reviews with ease

and convenience

37% of retailers offer Wi-Fi today

with additional 37% planning to

offer within 24 months*

Mobile Wallet

• Store Loyalty card

• Redeem e-Giftcards

• Checkout merchandise

• Keep purchase history

Wal-Mart has teamed up

with credit card

companies & carriers to

form a mWallet solution

Social Integration

• Post reviews on Facebook wall from in-

app

• Award tribute badges to identify and

reward brand advocates

• Other social plug-ins such as Like

button

Beauty retailer has a

mobile optimized site with

over 1 million reviews,

retrievable using SKU

number

Integrated Supply

Chain

• Check product availability

• Buy items unavailable in stores on a

mobile kiosk

• Store pickup

Kmart allows ordering online

and picking up at store the

same day

Source: 2012 State of In-Store Mobility Survey Results

© 2012 Karthik Ethirajan, all rights reserved 7

Mobile Enabled “in-store” Levers for Retailers (2/2)

Mobile Levers Consumer Function Market Examples

Walmart’s incubator

focused on data mining

and creating a social

profile

Analytics

• Get product recommendation

• Maintain wish list / shopping list

Proximity and

Presence

Detection

• Help locate products

• Push/notify coupons to encourage

impulse buying

• Create a geo-fence

Targeted Offer Gap offered 25% off coupon

after two store check-in’s

• Get relevant m-Coupons through push

or pull mechanisms

• Add rewards points for checking in

There is a 79% potential

reach of consumers who are

interested in receiving a

location-based coupon or

offer according to Vibes

Media

• Scan barcode to provide product

information

• Provides VAS (e.g., virtual dress fitting

app, m-Coupon app)

Target’s mCommerce app,

among the nation’s first, can

handle barcode scanning,

customer reviews, shopping/gift

list, daily deals, etc.

Multi-function App

• Offer daily deals

• Private sale / preview Targeted Campaign

Groupon sold 445,000

coupons in one day for

half off a $50 purchase

at Gap

© 2012 Karthik Ethirajan, all rights reserved 8

Tapping into mCommerce Ecosystem

• Placecast offers mWallet

capabilities and ShopAlerts

when within a geo-fence

• RedLaser offers barcode

scanning APIs

• Social plug-ins such as Like

buttons are freely available

• Escalate offers PocketKiosk

app with many functions

Technology Enablers Service Providers Strategic Alliances

Key Benefit: Provide a viable

content distribution channel

Key Benefit: Marketing

benefits & fill strategic gaps Key Benefit: Provide turn-key

technology solutions

• App discovery can be greatly

facilitated if national carriers

distribute apps by preloading

them on to devices

• Publishing apps on major

storefronts such as Apple

and Google Play is another

way to distribute apps

• Forging strategic partnership

with major brands effecting

mCommerce such as credit

card companies, Google or

Microsoft

• Retailers can be perceived

as early adopters of this

evolving technology when

they play an active role in

industry consortiums

Mobile Commerce

Project

© 2012 Karthik Ethirajan, all rights reserved 9

Case Study 1: Macy’s

Engage

Immerse

Personalize

Mobile

Levers

Implementation

Status

Wi-Fi Hotspot

Mobile Wallet

Social Integration

Integrated Supply Chain

Targeted Offer

Analytics

Proximity and Presence

Targeted Campaign

Multi-function App

Targeted campaigns

with m-Coupons

Barcode scanning

Create and manage

gift registry

© 2012 Karthik Ethirajan, all rights reserved 10

Case Study 2: Target

Engage

Immerse

Personalize

Mobile

Levers

Implementation

Status

Wi-Fi Hotspot

Mobile Wallet

Social Integration

Integrated Supply Chain

Targeted Offer

Analytics

Proximity and Presence

Targeted Campaign

Multi-function App

Log into Facebook

from within Target

app

Choose pallets for e-

Giftcards

Loyalty points from

ShopKick partner app

© 2012 Karthik Ethirajan, all rights reserved 11

Action Points for Retailers

Next Steps Recommendation

• Put together a mobile strategy for enhancing “in-store” shopping experience

• Pick the mobile levers and customize a suite of mCommerce features as part

of the go-to-market strategy

• Tap into the eCommerce ecosystem and select partners to speed time to

market

Desired Results

• Delight store patrons by providing them with an engaging, immersive and

personalized shopping experience

• Fend off competitors and 3rd party shopping applications

• Drive revenue growth by enabling multi-channel commerce