Look East to See the Future of Mobile-Powered Retail
It used to be that the physical retail store was the destination for shoppers; a place to browse the selection, take advice from a sales clerk and accept whatever promotion might be available. Today, a store is just one of many stops along the shopper’s journey. Smart phone or tablet in hand, consumers begin shopping long before entering the store and, once inside, quickly turn to taking pictures and comparing prices – the kinds of show rooming activities that lead consumers to look in one store and buy elsewhere.
Yet, leveraged properly, mobile also offers retailers an opportunity to provide on-the-spot marketing to match the consumer’s needs and preferences – and to continue the relationship long after purchase. Retailers who are hesitant to invest in mobile now should consider what will happen at store level when nine out of ten consumers has a smart phone or tablet in hand while shopping. Or, to be more specific, what will happen when more of the world catches up to Singapore in terms of smart phone penetration.
An affluent market on the front lines of mobile-enabled retail
Not surprisingly, a nation that loves shopping and smart phones is also on the front lines of mobile-enabled retail. First, Singapore is an affluent market with a well-established tradition of shopping as recreation. In 2006, Nielsen found that nine out of 10 consumers claimed to go shopping as a form of entertainment. The love of shopping seems fitting for the nation ranked tenth in the world by WealthInsight for the most number of millionaires – an impressive feat considering the population of only 5.3 million.
And then there’s the technology. Singapore is tied with Hong Kong for the world’s highest smart phone penetration at 87% according to Neilsen. Tablets are also exploding in popularity, with penetration up from 17% in 2012 to 47% in 2013. Additionally, while other markets run small-scale trials of Near Field Communication (NFC) technology, which enables the contactless exchange of data between devices, Singapore is home to one of the world’s largest infrastructure deployments. Built by a consortium of telcos, banks, and technology providers, NFC is now available at over 20,000 point-of-sale terminals nationwide, as reported by Mobile World Live.
A market of early-adopters ready for the next innovation
The well-developed retail culture coupled with widely available technology has produced a market of early-adopters ready for the next innovation. Shopping is an occasion for checking in on Foursquare, getting opinions over WhatsApp, checking retailer pages on Facebook and hunting for deals on Groupon. Sixty-three per cent of Singaporean mobile users already use location-based services versus 19% worldwide, according to TNS, and over half of the mass market stays in touch with friends for advice while shopping, as found by an Ogilvy study. And, unlike other markets where receptiveness to mobile wallets has been slow to build, two out of three Singaporean consumers are interested in using their smart phone as a payment tool, according to Datamonitor Report.
Retailers respond with investment and experimentation
Malls, department stores and other retailers have answered the mobile opportunity by with social media ecosystems, apps, and a few have even toyed with seasonal virtual stores. The most interesting innovations, however, revolve around Singapore’s NFC infrastructure. Telcos, banks and credit card companies are leading the way with mobile wallets and virtual credit and loyalty cards. Singapore has also become home to a community of mobile marketing start ups like Sprooki, MOGI, and around!, each offering a myriad of ways to get closer to consumers through their smart phones.
Singapore shows us a market primed for a mobile relationship between consumers and retailers. The upside is significant: Shoppers who use mobile more tend to buy more, according to Google. Even more importantly, mobile gives retailers the opportunity to extend the shopping experience beyond the store walls. Whether retailers are ready or not, the arrival of the truly mobile shopper is inevitable. It’s time to get ready for tomorrow’s consumer.