Retailers and Consumers Embrace Mobility to Increase Customer Experience

1. Going Mobile November 2010
Retailers and Consumers Embrace Mobility to
Increase Customer Experience

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3. contents
4 Summary of Findings
5 Introduction
Background and Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Report Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7 A Look at Consumer Use of Mobile Technology
Who Responded? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
What Type of Phones Do Consumers Use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
What Features Do Consumers Seek for Their Mobile Phones? . . . . . . . . . . . . . . . . . 7
Who Pays for All This? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
How Do Consumers Typically Use Their Phones? . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Do We Use Our Phones To Make Purchases? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Future Devices Consumers Want . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
14 Currently, Where are Retailers with Mobile?
Which Platforms Are Currently Supported (and Which Ones Going Forward)? . . . 14
How and When Will Retailers Engage the Customer with Mobile? . . . . . . . . . . . . . 16
What Future Development Can We Expect? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
19 Where are Vendors in Their Response?
What We Hoped to Learn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Which Platforms Do They Support for Consumers? . . . . . . . . . . . . . . . . . . . . . . . . 19
Which Platforms Do They Support for Store Associates? . . . . . . . . . . . . . . . . . . . . 19
Web Functionality – How Much is Lost? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Where Do Vendors Stand on Consumer Applications? . . . . . . . . . . . . . . . . . . . . . . 22
24 Conclusions

4. SUMMARY OF FINDINGS
This report is a summary of a much more Verizon or some other carrier. 56% they will have the ability to not only
detailed study that can be found at of current smartphone users are deliver coupons electronically to their
www.ihlservices.com. That being said, seriously considering the iPhone as customers’ mobile phone, but also to
here are a number key findings that are their next device. Current market scan the coupon into the POS directly
contained in this summary. share for iPhone from other studies from the mobile phone’s screen. This
shows at less than 25% today. 44% capability requires an optical scanner,
• This is a study with a high concentra- are seriously considering an Android, a device which currently only has a
tion of smartphone users, the very which should also see increased 2% penetration in US POS lanes.
people that retailers and marketers share. And only 24% are considering
want to reach with their mobile a Blackberry and 10% a Windows • Your boss wants his reports on his
efforts. Seventy-seven percent (77%) Smartphone for their next device. iPhone. While Blackberry (52%)
of those surveyed indicated that they is the most common platform
used a smartphone. This is in contrast • 52% of smartphone users in the study supported by retailers for their
to data for the US population as a have paid for an additional application. management team today, this is
whole, for which less than 25% use a 65% use their smartphone to update quickly shifting to the iPhone and
smartphone. Facebook. iPad for the future. Today only 19%
of retailers support the iPhone and
• Texting is near universal and is seen • Security is a real concern, however, 10% the iPad, but 12 months from
as the faster and more reliable email with cell phones being lost or stolen now that rises to 60% for iPhone and
as there are no spam filters for texting. more than any other electronic device. 47% for the iPad. Once again a similar
Ninety-seven percent (97%) of all 44% have accessed their bank account jump occurs for Android, from 14%
respondents claim that they have from their smartphone, but very few today to 33% in one year.
sent or received text messages on have a strong password on their
their mobile phone in the last 12 phones. • The biggest mismatch between
months. where Consumers see their next
• 35% of smartphone users have phone and retailer’s and vendor’s
• There is essentially no difference received and/or redeemed a coupon plans to support them resides with
in the percentage of texting use they have received via text message. Windows Mobile. Fifty-three percent
between the youngest members of (53%) of retailers and sixty percent
the sample (teenagers) and the 46-55 • 41% have checked competitive prices (60%) of vendors claim they will be
year-olds. There is likely a difference on their smartphones while in a retail providing support for Consumer’s
in volume of texts, but no difference store either with Amazon, Red Laser, Windows Mobile phones going
in terms of number of plans. We sur- or other comparison engine. forward, yet only 8% of Consumers
mise the 46-55 year olds are using plan to make a Windows Mobile
text as a way to communicate with • Outside of work, we love to use our phone their next purchase.
their kids. phones for entertainment options.
Sixty-three percent (63%) of mobile
• Standalone GPS is an endangered phone users have used their phone
species. Sixty-six percent (66%) of all to check on show times or explore
smartphone users have used the GPS dining options.
application on their phone in the past
12 months. • It’s good to be a scanner company as
mobile phones are issuing in a new
• The Apple iPhone could likely double generation. 54% of all retailers sur-
its market share when released on veyed indicated that within 12 months
4

5. INTRODUCTION
Background and Objectives Vendors, for their part, will be able to using the most advanced consumer
For this report, IHL partners with Retail utilize the data in the survey as a tool to technology.
Connections in an effort to truly understand gauge the most likely areas of investment
how consumers, retailers and vendors are by retailers. The survey consisted of a variety of questions.
currently utilizing mobile phones and All respondents answered 10 consumer-
devices. Additionally, the authors strive This study presents findings in three sep- centric questions. There were an additional
to anticipate how those same groups will arate categories. The first category, upon 10 questions for anyone identified as a
look at mobility in the future. which the bulk of the report focuses, retailer, and an additional 10 questions
addresses the consumer side of mobile. for anyone identified as a vendor. The
Several recent studies have shown the Following that, we examine what vendors topics covered included:
penetration of cell phone usage to be in are currently doing in terms of their
the 90% range of the total U.S. population. mobility offerings. Finally, we take a look Consumer/General Questions
Standard cell phones are not only capable at what retailers are doing today, with a • Demographic Information –
of making and receiving calls, but also of heavy emphasis on where they anticipate Gender, age range
doing the same with text messages. Many spending their mobile IT dollars in the future. • Current cell phone and plan –
of these standard cell phones can also Type of device, who pays for the plan,
take, send, receive and store pictures and The survey used as the basis for this study length of contract, etc.
video. Smart phones not only do all of the generated a tremendous amount of data, • Past and Future use of phone –
above, but also act as music libraries and and this study presents an overview of texting, GPS, payment, etc.
web portals, while allowing users to be that data, along with several key findings. • Future purchase considerations
geo-located and continually connected A more comprehensive report will be
to multiple email accounts. Clearly, retailers published by IHL in November 2010, Vendor Questions
and technology vendors have a vested and it will include additional insight into • Current mobile offerings –
interest in understanding consumers’ use specific consumer behavior. Applications, platforms
of these devices and developing strategies • Functionality
to leverage the technology. With so many Report Methodology • Future applications and functionality
retailers facing steep competition from The data for this study were obtained by
all sides, the ability to put discounts, performing a web-based survey), the Retailer Questions
special offers, and other key information invitations for which were distributed • Retailer demographics –
directly into the hands of core customers through IHL and RetailConnections during Vertical, annual revenue
is rapidly become a differentiator in the the August-September 2010 timeframe. • Current mobile offerings –
market. To best understand how to lever- The survey was then distributed virally, Applications, platforms
age this, retailers and vendors must first through contact lists, Facebook, and • Future plans
understand how consumers currently other social media. All told, we were able
use their mobile devices. to use 570 responses. Respondents were When the response timeframe expired,
offered the opportunity to win an iPad we set about compiling and analyzing the
In addition to understanding consumer (one entrant drawn at random from pool data. The key summary points from the
use, this study also seeks to quantify of all respondents) and were notified that data are delivered within this document.
what retailers and technology vendors every completed survey would result in a Additional detailed analysis work is
are currently doing with mobility, as well monetary donation to a sponsored charity, currently underway, and the results of
as where they see the technology going RetailROI (www.retailroi.org). The time- that effort will be made available by IHL
in the future. Retailers can utilize the data frame of the survey allowed for it to be in a more comprehensive report to be
to measure their own perceptions against conducted after the release of the iPhone published in November 2010.
what their customers are anticipating, as 4, Droid X and during the Droid 2 release,
well as what other retailers are considering. allowing for responses from consumers
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7. A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGY
Who Responded? indicated that texting was part of their
In order to get an understanding of who current plan. Texting is essentially the
was using mobile phones and how they new, faster email, and from a business
were using them, we asked some standard perspective it has a several positive at-
demographic questions of the survey tributes. Texts can more often be sent or
pool. Data were collected from everyone received in areas with minimal signal
from teenagers to those past retirement strength, and communication can be
age. The responses indicated that the quicker than email as fewer steps are
average respondent was a 46 year-old involved in the transmission and delivery
male who uses a smartphone and who process. Further, a text message always
pays for his own plan. We didn’t want to makes it to the recipient, whereas email
limit ourselves to that characterization,
however, since we wanted to paint as
broad a picture as possible of the demo- Figure 1 - Age of Respondents
graphics of the respondents. That said, a
majority of the respondents (57%) were
Over 65 - 2% 2% - Under 25
male, and a heavy majority (66%) were
between the ages of 36 and 55. The Under 56–65 26–35
25 and Over 65 crowds each represented 15% 15%
just 2% of total respondents.
What Type of Phones Do Consumers Use?
Of note here is the fact that men had
35% 31%
more smartphones than women (86% to
64% respectively), but further analysis
suggested that mobile behavior has more 46–55 36–45
to do with the device itself and not the
gender of the user. That said, other IHL
studies have given a clear indication that
when it comes to IT, men tend to be more Figure 2 - Phone Type by Gender
rapid adopters in a given situation.
Gender Standard Cell Phone Smartphone
What Features Do Consumers Seek for Male 15% 85%
Their Mobile Phones?
We also wanted to find out what kinds of
Female 36% 64%
features consumers chose to be included Overall 23% 77%
in their mobile phone plans. For instance,
heavy texting is often associated with often gets caught in Spam filters and is
teenagers, with recent surveys suggest- never seen. It seems as though a vast
ing that one third of teenagers send majority of cell phone users are now
greater than 100 texts per day (one of utilizing texting as part of their cell phone
the authors is a first-hand witness to a plan. In our survey, we were surprised to
middle-school student who was found to see that texting plans were every bit as
have sent over 900 texts during the first common for the 36-55 age demographic
month his parents had texting added to as they are for the youngest age group
their plan). Fully 94% of all respondents in the survey.
7

8. A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGY
Additional findings regarding service plan?” Fifty-nine percent (59%) claim that
plans show that 80% of users have email they pay their own cell phone bill, while
included in their plans, 78% are able to 50% reported that their employer pays at
browse the internet, 48% have video least some of the bill (many respondents
texting and 45% can view video. Seeing had two (or more) cell phones; one for
the raw numbers in terms of computing business and one for personal use).
ability should both amaze and give pause Whether or not the business pays has no
to readers. Think about it…email and the impact on the use of text messaging as
internet truly went mainstream less than 94% of all users have texting in their plan.
15 years ago, and today 78% of people Where separation occurs however, is in
are surfing (or at least have the ability the additional plan features. Fully 95% of
to surf ) the internet on mobile phone respondents whose businesses pay for
devices. For those who might be suspect cell service utilize their mobile device to
on the role mobility will play in retail, send and receive email. Video texting and
they discount it at their own peril. To put mobile video are relatively close as plan
it in proper perspective, who would have features, regardless of who pays the bill.
thought fifteen years ago that Amazon,
who had just opened their doors for
business, would be a willing participant Figure 3 - Features Included in Mobile Phone Plan
in (indeed, an enabler of ) competitive
price checking while their customer was
standing in the brick and mortar store Texting 94%
of a competitor?
Email 80%
By now, we’ve all heard a version of the
joke that says, “The iPhone/Droid/etc. is Mobile Web 78%
great, so long as you don’t want to make
a call.” In the distant past (say the 1990s,
Video Text 48%
early 2000s) cell phones were used for
making calls from places where landline
phones were not available or convenient. Mobile Video 45%
Today, while such calls are certainly still
made and many Americans have even
transitioned to landline-free homes, it is However, additional separation is seen
clear that much, much more is expected between business and personal plans
from phones. More detail for this and where Mobile Web is a feature. 92% of
other sections will be available in the business-paid plans include the ability to
expanded version of this report, available surf the internet, compared with just 68%
in November 2010. of personal accounts. The bottom line is
that email access is the driving feature for
Who Pays for All This? business-paid plans, but the users enjoy
Having all those features can cost some the texting, mobile web, and entertain-
dough, so we asked the respondents ment benefits of the plan for their own
“Who pays for your current cell phone personal use.
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10. A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGY
How Do Consumers Typically Use the activities discussed above. Clearly,
Their Phones? business users in that age range are likely
Nearly every respondent sent or received to be mid- to senior-level executives who
a text message in the 12 months prior to travel. This age range would also include
the survey. While it is not surprising that many who have lived and worked
the least text friendly group were those through the adoption of various tech-
over the age of 65, it is a bit surprising nologies in the workplace. The fact that
that the Under 25 crowd did not have the these “older folks” might be slightly more
highest rate of response. In fact, 99% of experienced and adept at handling the
those from 36-55 in our study said they technology (compared to those in the
had sent or received a text message youngest age ranges) should not be
within the last 12 months, making that overlooked by developers and marketers.
age range the most text-friendly.
As seen before, email is pervasive, as is Figure 4 - Respondent’s Cell Phone Activity
the use of phones for GPS navigation.
The numbers are so high in fact, that we
would declare standalone mobile GPS Text 97%
units as an endangered species. A clear
benefit of utilizing phones for GPS is the Email 79%
ability to receive a location name via
email or text, search for information GPS 66%
regarding it utilizing a mobile browser,
and then mapping it on the internal GPS
Movies or Dinner 63%
application. In fact, 66% of consumer
respondents reported having used their
cell phones as GPS devices. TXT Coupon 30%
When it comes to going out on the town, Download Ringtone 28%
many people utilize their browsers and
installed applications to check on movie TXT to Charity 14%
show times as well as investigate dining
options. This would highlight the impor-
tance of small, independent restaurants
having a web presence suitable for Figure 5 - Social Media Usage
mobile surfing. Since 63% of those
surveyed utilized their phones for this Facebook Twitter MySpace Four Square
purpose, the impact of not having a web
presence is clear; if a consumer doesn’t 52% 24% 2% 5%
know a restaurant is there or can’t find it,
they certainly won’t dine there. Given that “social media” is one of the
hottest topics concerning smartphone
Perhaps the most interesting finding use, we were interested in the social aspect
regarding usage by age, is the fact that of mobility, as well as the commerce
adults in the 36-65 age range showed aspect of engaging consumers through
some of the highest overall utilization of those social media formats. The term
10

11. A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGY
“social networking” is freely bandied consumers engaged in commerce with conveniences that consumers are
about in today’s press. One limitation of their mobile devices. The results over- looking for with their mobile devices.
the term however, is that it tends to whelmingly indicate that consumers are
focus attention only on certain sites or ready and willing to use their mobile One issue often raised surrounding the
services like Facebook, Twitter, etc. devices for more and more activities, question of paying via cell phone is the
However, social connectivity has a much but it must be convenient to do so. question of security. However, it would
broader meaning and helps differentiate appear as though security isn’t too big
behavior. Beside social networking sites, More than four out of ten consumers of a concern for consumers as fully
social connectivity can include the use of have used their mobile devices to 35% of respondents reported having
Figure 6 – Types of Mobile Phone Financial Transactions
Paid with Paid for Movie Accessed Bank Competitive Free App Paid App Checked In for
Phone Account Price Checked Travel
6% 9% 35% 41% 66% 40% 44%
GPS, user review sites such as Yelp, conduct competitive price checks of a accessed their bank account informa-
texting for communication or to donate retailer’s offering. This places intense tion from their mobile device. One of
to a charity, or even looking up movie pressure on retailers to have adequate the authors does all of his banking
times or looking to make dinner reserva- inventory at a competitive price, and to online and through his mobile phone
tions through a site such as Open Table. have those inventory levels and prices including paying all recurring bills. Not
available online for consumers to find. only is it now an expectation that banks
Before Foursquare, before Twitter, and Furthermore, bricks-and-mortar retailers will always provide this service, but the
before Facebook, there was MySpace. have the added burden of having to ease and convenience of banking this
In a stark reminder that what once was consider changing the way in which they way far surpasses any question of
big will not always be big, MySpace goes do business. For instance, they might security.
virtually untouched by mobile users in have to allow their sales staff to “deal”
the survey. Clearly Facebook’s 500 million with a purchase-ready consumer who Interestingly, after spending several
worldwide users enjoy staying up to has found a better price from the hundred dollars for a smartphone,
date while on the go, as 52% of the total competitor down the block. This may consumers are 50% more likely to
surveyed population has utilized the site enable the consumer to complete a download and install a free app for
from their mobile device. The heaviest transaction in a timelier manner; they their mobile device than pay for an app.
users of Facebook were under the age do not have to go home, review prices, While this may be in response to all of
of 55. Only a quarter of those over 55 then make a decision. This can work in the digital noise that consumers are
had accessed Facebook on their a retailers favor by perhaps eliminating continually bombarded with, it could
mobile devices. a portion of the traffic that is merely also be in response to some lack of
window shopping. fear regarding an infected or unsafe
Do We Use Our Phones To application, that maybe somehow
Make Purchases? For those that travel, 44% have utilized their phone isn’t like their PC. Of course,
Another aspect of consumer behavior their device to check in on a plane or this is a tough way to learn that you
that we wanted to investigate was how subway. This helps to highlight the get what you pay for.
11

12. A LOOK AT CONSUMER USE OF MOBILE TECHNOLOGY
Future Devices Consumers Want considering Blackberry are considering
Full Disclosure: Sometimes after a study is the iPhone.
concluded, questions you wish that you
had asked come to mind. While we did ask What seems even clearer is that HP/Palm
for future cell/smart phones under consid- will have to take drastic steps to make
eration for the next purchase, we failed to themselves a viable option going forward,
ask for specifics regarding brand and as a mere 1% of consumers surveyed are
model of current phones used. That said, considering them for future purchase.
we were still able to quantify the devices While not quite as dismal, Windows mobile
that consumers are considering for future
purchase.
Figure 7 - Next Phone Under Consideration
The clear leaders here are iPhone and
Android, with 49% and 40% (respectively)
of survey respondents considering them iPhone 49%
for their next device. Certainly there is
some overlap here as there are likely con- Android 40%
sumers who enjoy a particular cell carrier
which the iPhone is not currently a part of. Blackberry 22%
While rumors abound as to the next net-
work that will land the iPhone (Verizon is
most often mentioned), at the time of this
Windows 8%
writing no definitive announcement had
been made. However, it seems a foregone Standard Cell Phone 8%
conclusion that eventually iPhone will
make a debut on another network outside HP/Palm 1%
of AT&T. The question will then become
how many iPhone users will migrate to
Android devices on Verizon’s advertised phones are not highly desired by
superior network, or how many Android consumers. In fact, consumers find the
users will happily embrace the newly prospect of purchasing a Windows phone
available iPhone. Perhaps in part, an on par with purchasing a standard cell
answer to that lies in the fact that of those phone, as only 8% of those surveyed are
consumers that are considering an considering either for their next purchase.
Android, 57% are considering an iPhone, Also a challenge is the simple fact that
while 48% of those considering an iPhone over 57% of those few consumers that are
also would consider an Android purchase. considering a Windows smartphone are
considering either an Android or iPhone
Research in Motion’s Blackberry devices as well.
have long been the dominant player in
smart phones due almost exclusively to Whatever the future purchase considera-
their best in class email service. However, tion, it seems evident that Apple, through
it would seem as though the power of the its iPhone, is on track to one day become
iPhone, and increased email efficiency and the market leader. Whether or not the
function, has made huge headway against competitive push that Apple is receiving
RIM’s long established dominance. Fully 61% from Android can continue, or if and when
of those considering Blackberry are consid- the iPhone becomes available on Verizon
ering an Android. Likewise 51% of those (or T-mobile), remains to be seen.
12

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14. CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?
In terms of what retailers are doing, this Clearly, retailers see Apple’s platform
study sought to determine what current as being around for the long haul, as
platforms were supported, what future increases in support are forecast for all
platforms were under consideration, devices. Additionally, Android makes a
and what key functionality retailers were significant jump from 50% support to a
looking to leverage to engage their cus- planned support of 79%. The 18 point
tomers. Perhaps the greatest opportunity increase in Blackberry support probably
for retailers in terms of mobility is also
the greatest challenge; truly engaging
customers beyond the occasional Figure 8 - Consumer Mobile Platform Support
informational text or coupon.
The original pool of 570 respondents was 85%
iPhone or iPod 88%
reduced to 66 respondents who identified
themselves as retailers. These 66 answered
55%
iPad 72%
not only the initial 10 questions that
consumers were asked, but an additional
50%
Android 79%
10 questions which touched on demo-
40%
graphics (retail segment, annual revenue), Blackberry 58%
mobile applications (types already
10%
deployed and how they are deployed), Symbian 14%
platforms (current & future), and
23%
consumer-oriented mobile. HTML 5 23%
18%
Which Platforms Are Currently WAP 23%
Supported (and Which Ones 43%
Going Forward)? Windows Mobile 53%
It seems everyone truly does have “an 23%
app for that”, since the vast majority of Windows CE/7
35%
retailers already support iPhone/iPod 5% Current
applications. What’s truly amazing about Other
2% Future
that level of penetration is the fact that
while only 25% of the cell phone market
is comprised of smart phones, only 28% reveals a realization of deficient support,
of those smart phones are iPhones. rather than a true belief in the future
This means that the leading platform success of the product. While it would
supported by most retailers is for a device seem obvious that Blackberry has
that commands only 7% of the market. significant challenges ahead, it still
Blackberry, which still has the largest represents such a significant portion
share of the smartphone market is of the market (particularly in business
only supported by 40% of the retailers circles) that it is unlikely to disappear
surveyed. Android, while much newer altogether.
than either of the previously mentioned
platforms, is already supported by
50% of retailers.
14

15. CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?
Prior IHL research indicates that providing employee schedules, see inventory data,
associates with better tools is a key priority and track specific sales data from the
for retailers. The retail IT community sales floor can only be viewed as a
clearly recognizes that a successful store positive. It would appear as though the
experience goes beyond having great increased investment in supporting that
tools. There is a critical relationship activity reveals a realization of something
between the tools themselves and the very simple. In fact, IHL has been pleading
ability for them to be both accessed with vendors for years to engage in the
and utilized properly. Databases full of practice of walking around and seeing
information can be great, but they are
absolutely useless without the correct
insight into how to make the information Figure 9 - Store Associate Mobile Platform Support
contained within them actionable.
From the figures above, it is clear that a 42%
iPhone or iPod 67%
significant portion of retailers see the
potential for Apple mobile products to 11%
iPad 44%
play a key role in accessing that information
and delivering actionable customer 26%
Android 41%
service within the store. Recently, there
was a LinkedIn discussion which focused 47%
Blackberry 52%
on the “cool factor” of sitting down at a
five star restaurant and having the full wine 5%
Symbian 4%
list presented in visual form on an iPad.
Additional utilization of this technology
16%
HTML 5 11%
could include the ability to see additional
16%
color/style combinations at a soft goods WAP 15%
retailer, or to show a digital photograph
42%
of what a room would look like after a Windows Mobile 41%
particular paint was selected at a hard
26%
goods retailer. All of these examples are Windows CE/7
22%
taken from currently available software
11% Current
products, the idea of making them Other
11% Future
available to store associates on the
floor with a modern, sleek, and user
friendly device simply makes good
business sense. their technology in use. This helps
vendors to see what works in real world
Management platforms and store applications and what doesn’t. The
associate platforms are of course closely same is clear for retailers; enable your
related. That said, a true management managers to be on the front lines where
platform would also allow managers to they can engage the customer as well
access key back office functions. The ability as work with the store associates on
to view, adjust and modify upcoming delivering exceptional service.
15

16. CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?
How and When Will Retailers Engage
the Customer with Mobile? Figure 10 - Management Mobile Platform Support
There is often talk of utilizing various
media to ensure that retailers have a
presence in their customers lives. The 19%
most successful retailers take it to the iPhone or iPod 60%
next level and actually engage their 10%
customers. Survey results indicate that iPad 47%
there are numerous ways retailers are 14%
attempting to make that engagement. Android 33%
52%
While the to-be-released extended version Blackberry 50%
of this study will examine the above 0%
Symbian 0%
graphic in greater detail, perhaps the
number one takeaway here should be 10%
HTML 5 3%
the mobile screen coupons. Fully 54% of
retailers plan to offer this within the next 5%
WAP 3%
year, while 70% will have the capability
within 2 years. The importance of this is 19%
Windows Mobile 27%
the fact that if the coupon contains a bar
code, it will need to be read by an optical 14%
Windows CE/7 10%
scanner, a device that currently only has
achieved a 2% rate of penetration in retail. 10% Current
Other
This foretells a potentially massive increase 7% Future
in the number of scanners that will need
to be installed in order to leverage the
new method of coupon delivery.
What Future Development Figure 11 - Consumer Engagement Methods and Implementation Plans
Can We Expect?
While the potential benefits and requisite
plans to use mobile to engage the customer Coupons on Mobile Screen 16% 38% 16%
are obvious, and while we have previously
encouraged the act of enabling retail Text Coupons 25% 47% 9%
managers to have more floor time, our
survey also revealed the applications Regular Bar Code 22% 22% 22%
for which retailers plan to focus future
development. This goes beyond the 2D Barcode 21% 23% 17%
2%
question of device or platform, instead
focusing on specific functionality that
RFID for Payment 9% 17% 8%
retailers hope to achieve. This is important
Consumer Self-Checkout 9% 9%9% Already Use
because while customer engagement is
7% Next 12 Months
key, these functions go to the heart of Competitive Pricing 18% 7% 8%12-24 Months
the retailer’s operations, both at the store
level and throughout the supply chain
and home office functions as well.
16

17. CURRENTLY, WHERE ARE RETAILERS WITH MOBILE?
For Business Intelligence/Decision Namely, stores would utilize the newfound
Support, retailers are clearly seeking ways mobility of associates in an effort to
for those vast databases to be leveraged on provide greater, more efficient and
the floor, in the field, and throughout all effective customer service.
aspects of the supply chain. That said, BI has
the highest percentage of retailers who From a consumer’s perspective, there are
claim to have absolutely no plans to its use. few things more frustrating than trying
to find a sales associate on the floor.
Fully one-quarter of the responding Once one is found, inquiring about the
retailers revealed that they already had a availability of a different color/size/etc.
mobile POS application deployed. With of an item (or even the correct price of
an additional 35% planning to undertake the item) can generally result in a wildly
that capability within the next 2 years inefficient process that involves moving
(with 22% planning it within 12 months), from one end of the store to the other,
clearly M-POS is an area that is ripe for perhaps interrupting the checkout
expansion. More than three-quarters procedure at a POS terminal, and the
(78%) of the retailers surveyed anticipate associate having to fend off other
Figure 12 - Consumer Engagement Functionality Plans
Future Already Next 12 12-24 24-36 No Plans
Functionality in Use Months Months Months to Use
BI/Decision 12% 30% 14% 8% 36%
Support
Mobile POS 25% 22% 13% 20% 22%
Inventory Lookup 16% 30% 20% 12% 24%
Price Lookup 16% 35% 22% 8% 22%
having M-POS within the next 3 years. customer requests or questions during the
There is clearly significant advantage to process. How many sales have been lost
having associates who are able to walk or negatively affected by this process?
the floor, assist customers with decisions While we don’t have an answer, we would
or selections, and then close the sale on ask the reader to consider his/her own
the spot. Some might argue that this experience with such activity, and
would be an affront to the labor force, as whether or not it affected future trips to
stores would look to decrease the number said retailer. By enabling associates or
of paid employees by eliminating cashier managers to handle this process on the
positions, but we believe that a more floor, with the customer engaged, in a
likely scenario would be what we see in timely manner, customer satisfaction
retail applications of self-checkouts. can only increase, as will sales.
17

19. WHERE ARE VENDORS IN THEIR RESPONSE?
What We Hoped to Learn and Vendors. Interestingly, Blackberry’s
As mentioned in the Methodology sec- strength is matched fairly well between
tion, survey respondents who identified Vendors and Retailers for Store Associates.
themselves as a mobile application ven-
dor were asked an additional 10 questions While this is truly an area for deeper
upon completion of the consumer survey. analysis in the expanded version of this
We found 55 individuals who identified report (available November 2010), it is
themselves as vendors, and we wanted to plainly obvious where the heaviest area
glean information on three topics from of Windows Mobile investment is.
them. We wanted to gain insight into
what platforms are and will be supported,
the functionality that is currently attained, Figure 13 - Vendor’s Current Phone Platforms - Consumers
and what current and future consumer
applications will (or will not) be supported.
66%
iPhone or iPod 70%
Which Platforms Do They Support
for Consumers?
34%
iPad 53%
Each mobile device brings with it a
different set of challenges for configuring
38%
Android 77%
applications to run properly on the
45%
device. The interesting thing to note here Blackberry 60%
is the level of disconnect that appears
when one compares the Consumer’s Symbian 21%
13%
plans for their next phone with the Vendor’s
24%
plans for supporting Consumers in the HTML 5
30%
future. Simply, Consumer expectations
14%
for use of Blackberry and Windows smart- WAP 17%
phones are way overmatched by the 62%
Vendor’s investment in those platforms. Windows Mobile 60%
Windows certainly has an opportunity to 41%
gain significant market share if Microsoft Windows CE/7 37%
can find a way to translate the popularity 14% Current
seen here to the consumer facing side of Other
13% Future
mobile business. The fact that 21% more
vendors support iPhone than do Blackberry
is a further indicator of Blackberry’s Business Intelligence, Mobile POS, and
perceived decline. Clienteling applications underscore the
fact that Windows Mobile has the potential
Which Platforms Do They Support for to remain strong in business settings, if
Store Associates? not in the minds of consumers. Clearly,
Vendors currently show Windows Mobile as the areas of support reveal the focus on
the preferred platform for Store Associates, the two of the prevalent themes in
and there is nowhere near the mismatch today’s retail environment; investment in
between Retailers and Vendors going BI applications and giving floor associates
forward as there is between Consumers access to all of a retailer’s technology tools.
19

20. Research Event
Retail ROI Super Saturday - PwC Auditorium, Manhattan
Saturday, January 8, 2011 • 9:00am – 3:30pm
New York’s big show starts on Saturday this year! We’ve brought together retail’s most prominent thinkers for
revealing discussions on store technologies, business intelligence, PCI and security issues, IT Forecasts for 2011,
Wall Street’s view and engaging the consumer’s mobile device.
Deborah Weinswig Steve Bozzo Other speakers currently include:
Managing Director, CIO 1-800-Flowers
Retailing,
Ed Rennemann - CIO, Crate & Barrell
Citi Investment
Research Virginia Wright - VP Application Development, Kohl's
John Mitchell - CIO, Pep Boys
Timothy Kasbe Jon Kubo Lori Schafer - Co-Author “Branded: How Retailers
CIO, Sears Holding CIO Wet Seal Engage Consumers with Social Media and
Corporation
Mobility”
Kevin Sterneckert - Research Director, Consumer
Centric Retailing, Gartner
Jeff Roster Austin Gutwein Lee Holman - VP Product Development, IHL Group
VP Global Industries Hoops of Hope
Retail, Gartner Jim Crawford - Executive Director, GREC
Cathy Hotka - Retail Diva, Cathy Hotka & Associates
Greg Buzek - President, IHL Group
Joe Skorupa Evan Schuman
Group Editor in Editor, To Register for this event, go to
Chief, StoreFront
RIS News BackTalk
www.retailroi.org/SuperSaturday2011.aspx
Registration is free to retailers. Sponsor money generated at the event benefits the Retail Orphan Initiative, a retailer-led
charity that funds feet on the street charities helping vulnerable children. To get on the mailing list, drop a note to
cathy@cathyhotka.com. To see more about the Retail Orphan Initiative, visit www.retailroi.org.
Retail Orphan Initiative | www.RetailROI.org | info@RetailROI.org | +1.615.591.2955

21. WHERE ARE VENDORS IN THEIR RESPONSE?
Ensuring that associates are able to fully
leverage technology on the floor also Figure 14 - Vendor’s Current Phone Platforms – Store Associates
encourages store management to move
beyond the back office and interact with
both the customers and employees. From 50%
a basic service and business standpoint, iPhone or iPod 65%
it is wise to enable your highest paid, 36%
most trusted store personnel to be iPad 47%
actively engaged on the front lines. 23%
Android 63%
What is noteworthy here is the increased 32%
attention that store associate mobility Blackberry 47%
for the iPad and iPod/iPhone is seeing 9%
from vendors. While some analysts have Symbian
14%
expressed doubt and confusion with the 11%
HTML 5
infatuation many have with those devices, 16%
it is clear that they really are game changers. 9%
WAP 9%
Vendors see these devices as having a
strong, continued, and real presence in 61%
Windows Mobile 65%
retail formats. Lest anyone think that
Apple is the only player, clearly vendors 43%
Windows CE/7 44%
are hedging their bets with equal
attention being directed towards 9% Current
Other
Android devices. 9% Future
Web Functionality – How Much is Lost?
Anyone who has used a mobile site or
Figure 15 - Web Functionality, Full Site vs. Mobile Site
application for which a full site exists knows
that a there is generally some limitation
to the mobile version. IHL sought to
Activity Percent Functionality
quantify what percentage functionality of Full PC Version
vendors expected from the solutions that
they supported.
Business Intelligence 61%
B2B 64%
Not surprisingly, all activities showed a
degree of degradation in service, but Knowledge Management 69%
activities were able to gain close to 60% Merchandising/Inventory 62%
functionality of the full version. It would
stand to reason that retailers would like Mobile POS 53%
to see the most improvement in the Clienteling 61%
Mobile POS area, as we see that as an
area with explosive growth potential in Time & Attendance 57%
the coming years. Overall 57%
21

22. WHERE ARE VENDORS IN THEIR RESPONSE?
Where Do Vendors Stand on distinct differentiation where vendors
Consumer Applications? are going to focus on their core offerings,
Through this survey we also sought to and perhaps not invest extensive, if any,
see which consumer mobile applications capital into entering new areas.
vendors already supported, and which
ones they planned to in the future. The second noteworthy result is a little
more confusing. While it is clear that social
As we looked at this data, there were two media is a constantly changing landscape,
results that caught our attention. First, the fact that almost 20% of surveyed
when looking at Geolocation, Regular vendors have no plans to engage in
Barcodes, RFID and NFC Payments, as well as supporting consumer applications in that
Consumer Self-Checkout, there are virtually area seems quite high. On the flip side,
the same number of vendors that have the 46% that already support social
no plans to support those applications media make it the 3rd most supported
as those who expect to support them activity. And to be fair, within the next
in the next 12 months. It would seem 12 months, fully 81% of vendors plan to
as though we are entering a period of have social media support.
Figure 16 - Mobile Applications for Consumers
Activity Already Use Next 12 Months 12-24 Months 24-36 Months No Plans To Use
Social Media 46% 35% 0% 0% 19%
Geolocation 21% 38% 0% 4% 38%
Local Search 44% 30% 4% 4% 19%
Read Regular Barcode 50% 23% 7% 0% 20%
Read 2D Barcode 48% 24% 7% 0% 21%
RFID for Payment 15% 35% 19% 0% 31%
Coupons on Mobile Screen 34% 41% 9% 3% 13%
Coupons by NFC/RFID 21% 29% 25% 8% 17%
NFC Payment 22% 30% 13% 9% 26%
Consumer Self-Checkout 21% 28% 21% 7% 24%
22

23. 2011
The must-attend premier Summits
and
retail event lineup for the year! Conferences
Feb 27– March 1 s Fourth Annual Business Executive Summit
Fairmont RetailConnections’ signature Summit has grown and prospered every year and now stands
Turnberry Isle as the premier industry event that draws up to 100 senior retail executives for an extraordinary
Resort & Club two days of intense yet casual networking and learning. This congenial congress of Presidents,
Miami, Florida CEOs, CFOs, COOs, CMOs, CIOs, SVPs and VPs from across the enterprise serves up a wide
range of perspectives. Summit workshops, roundtables, general sessions, receptions, dinners
and golf give rise to fresh thinking and new relationships. A peer-to-peer, senior management
share group experience.
May 16 – 18 s Second Annual Fresh Forum
Renaissance
Few product categories in all of retailing today offer more profit potential and safety scrutiny than
New Orleans
Fresh Foods. Do it right, and even small improvements have major impact on top line revenues
Pere Marquette
Hotel and more importantly, bottom-line profits. RetailConnections’ second annual Fresh Forum will bring
New Orleans, together retail leaders in the perishables area, government officials and other thought-provoking
Louisiana presenters to explore key strategies for success in Fresh.
June 2011 s Second Annual Retail Mobile Executive Summit
The mobile revolution is well under way. Consumers leverage wireless devices to shop for lowest
prices, instantly access product reviews and order/pay for goods at the touch of a button. These
changes are revamping fundamental areas of retail operations, from marketing through the supply
chain. This groundbreaking Summit will explore the many sides of the mobile retailing revolution
to reveal opportunities to exploit new shopping trends and bolster profits.
October 2011 s Second Annual Business Executive Summit West
RetailConnections, whose signature Summit is held annually in south Florida, will host the
second annual Business Executive Summit West in 2011. This version of the popular winter
event was a smashing success in its first year, with considerable growth evident for 2011.
Summit West will bring together senior executives from across the retail organization. This mix
of Presidents, CEOs, CFOs, COOs, CMOs, CIOs , SVPs and VPs creates an unusually charged
two days of learning and networking. Attendees will hear fresh perspectives and come away
with new business ideas and industry friends. Summit West features workshops, keynotes,
roundtables, elegant receptions, dinners and golf.
Throughout s Regional Forums And Executive Dinners
the year In addition to its four major Summits, RetailConnections hosts regional executive dinners and
forums in major cities throughout the year on a wide variety of cutting-edge topics relevant to
senior-level retail executives.
About RetailConnections:
RetailConnections, LLC, focuses on live events that bring top management executives together for learning and sharing. The company also has a
communications arm that creates out-of-the-box concepts and collateral for getting your message and deliverables in front of the executives you
most want to reach.
For information on sponsoring any of these or other senior-level RetailConnections events, contact Tia Potter at tia@retailconnections.biz or
LuAnn Hallberg at luann@retailconnections.biz. For information about speaking at or attending any of these or other senior-level events, contact
Denise Power at denise@retailconnections.biz. For any questions, contact Marc Millstein at marc@retailconnections.biz or 914-620-5947.

24. CONCLUSIONS
The data delivered from this survey (and which will be explored
further in IHL’s upcoming expanded study), yields several key
results. Perhaps the most important result is the least quantifiable.
It is the distinct realization that consumers, vendors, and retailers
alike recognize the power that mobility has as a tool. Like all
tools, it is truly as effective only as the artisan, craftsman, or
worker who wields it.
As a new tool, there will be many successes and failures in the
coming years. As any avid iPhone user knows, for every earth-
shattering, astounding app, there are three or four forgettable
ones. But, it seems clear that those who take bold, decisive
action and embrace the power of mobility will reap great
rewards. Those who choose to ignore it will certainly suffer
as smartphones, tablets, and other mobile devices become
more and more pervasive in our connected culture.
24