The document discusses how mobile technologies are changing consumer behaviors and retail experiences. It explores how mobile extends consumer capabilities like seeing, touching, sharing, and thinking. Retailers need to bring the best of the online world into physical stores by embracing consumers' mobile devices and allowing them to interact with in-store technologies and product information through their phones. Mobile technologies provide opportunities to enhance the in-store experience through augmented reality, product visualizations, and two-way sharing between consumers and brands.

2. About ThoughtWorks

3. About ThoughtWorks
Retail Clients
A D I A M O N D IS F O R E V E R
Other Clients

4. Agenda
1. New Behaviours
2. New Thinking
3. Role of Mobile
4. Lessons Learnt

5. ONLINE v. OFF
DOES IT REALLY MATTER?

6. All commerce is digital
Source: Forrester, EuroMonitor, Economist Intelligence Unit

7. CONSUMERS
NEW PARADIGM. NEW BEHAVIOURS.
WHY THE DIGITAL CHANNEL IS KEY

8. New behaviours, not new technology

9. New behaviours, not new technology
Consumer))
Slow Behaviour) Rapid
Predictable Unpredictable
Controllable Uncontrollable
Technology)

10. What is driving these new behaviours?
1
Consumers have unprecedented access
to information about products, services
and brands, which they share with Information
peers. Asymmetry
2
Newer technologies create more efficient Word-of- Self-Esteem
service paths, which has altered how Mouth
consumers value their time. This in turn
Self-
has changed expectations of
Actualisation
interactions with service providers -
customers want greater control over the
service experience. Velocity Autonomy
3
Societal norms are changing too, with
individuals forced to become more In
autonomous and self-reliant, and Control
customers now achieve a sense of self-
esteem through this new-found self-
empowerment.

11. You have to lose control to gain it
Consumers choose those channels
and interactions that get them to their
desired solution in the quickest, most
efficient manner.
On the whole, consumers now expect
more timely and efficient service from
service providers.
Importantly, consumers now expect
an element of self-control and
choice in all service interactions.

12. Continuous value innovation
Competing effectively in online retail
is not about technology...or price.
The adoption of the digital channel
should be about giving your
customers control.
Retailers that succeed in achieving
continuous innovation around
technology-enabled customer
experience - particularly self-
service - will win.

13. NEW THINKING
WHAT’S ON THEIR MINDS?

14. Principle #1 - Social is about selling
CONSUMERS’ ACTUAL REASONS BUSINESSES’ PERCEIVED REASONS
why they interact with why consumers follow them
companies via social sites via social sites
(61%) DISCOUNT LEARN ABOUT NEW PRODUCTS (73%)
(55%) PURCHASE GENERAL INFORMATION (71%)
(53%) REVIEWS & PRODUCT RANKINGS SUBMIT OPINION ON CURRENT
PRODUCT/SERVICES (69%)
(53%) GENERAL INFORMATION
EXCLUSIVE INFORMATION (68%)
(52%) EXCLUSIVE INFORMATION
REVIEWS & PRODUCT RANKINGS (67%)
(51%) LEARN ABOUT NEW PRODUCTS
FEEL CONNECTED (64%)
(49%) SUBMIT OPINION ON
CURRENT PRODUCT/SERVICES CUSTOMER SERVICE (63%)
(37%) CUSTOMER SERVICE SUBMIT IDEAS FOR NEW
PRODUCTS/SERVICES (63%)
(34%) EVENT PARTICIPATION
BE PART OF
(33%) FEEL CONNECTED A COMMUNITY (61%)
(30%) SUBMIT IDEAS FOR NEW EVENT PARTICIPATION (61%)
PRODUCTS/SERVICES
PURCHASE (60%)
(22%) BE PART OF
A COMMUNITY DISCOUNT (60%)
Source: IBM Institute of Value Social CRM Study (2011). 1056 customers, 351 business executives.

15. Principle #1 - Social is about selling
Consumers use social platforms for
entirely selfish reasons (as Facebook
is learning).
This doesn’t mean you should ignore
them - they play a key role in the
purchase journey, especially for
information discovery.
Taper your expectations, and design
interactions to address consumer
motivations - purchasing, special
offers and peer reviews.

16. Principle #2 - Desire for engagement is fleeting
Only 23% of consumers
reported having (or wanting) a
relationship with brands.
23%
The desire for on-going
engagement typically arises
when possessing a product/
service activates a higher-
77%
order need (e.g. status -
iPhone, Harley Davidson etc.).
Brand Relationship Oriented Not Brand Relationship Oriented
Source: Corporate Executive Board Study (2012). 7000+ participants globally.

17. Principle #3 - The purchase funnel is changing
FUNNELS SPINDLES TUNNELS
32% of purchases 31% of purchases 37% of purchases
I’m open to I know
I’m open to anything what I want
anything
I add more options
I narrow things down I find it
I change my
mind three or
four times
I buy it I buy it
I buy it
The shape of the ‘purchase funnel’ is changing radically. New
challenge is to simplify purchase choice for the ~2/3 of consumers
who start the process brand agnostic.
Source: Market Leadership Council Consumer Stickiness Survey (2012).

18. Principle #4 - Design for Utility
Customer’s*percep-on*of*value*
Usable'Interfaces'
Time%
Cost% Useful'Features'
Mental'Effort'
Desirable)Concepts)
Physical)Effort)
Give%Components% Get$Components$
(The%value%of%the%things%a%customer% (The%value%a%customer%believes%they%will%
Needs%to%give%to%get%a%service)% get%from%using%a%service)%

19. Principle #5 - Design to Inform
Consumers exist in a constant
state of “informed bewilderment”.
We have more access to
information than ever before, but
struggle to convert it into
knowledge and actionable insight
(made only worse due to growing
“appification” of the web).
Instead of simply adding to the
tsunami of data, provide tools for
managing data overload. Aggregate
options and help consumers
visualise them. Introduce “peer
data” to help simplify choices.

20. Principle #6 - Design for habits
Habits are formed to preserve
energy, and when activated prevent
the brain from fully participating in
decision-making.
To increase the success probability
of a new digital service, design it to
fit an existing habit, rather than try
to create new behaviour.
Once a habit is formed (good or
bad), it is hard to change them or
form replacement ones.
Source: The Power of Habit: Why we do what we do in life and business. Charles Duhigg (2012)

21. Principle #7 - Design for customer context
Focussed Browsing Partial Attention
(goal-oriented, (on the couch, (on the move,
long-medium term) medium-short term) want-it-now)

22. Principle #8 - Design helpful interfaces, but don’t over do it
People instinctively apply the
rules of human social
interaction to dealings with
computers, mobiles, robots
etc.
Clippy broke every norm of
acceptable behaviour. It
promised to do things it
couldn’t. It made the same
mistakes over and over and
pestered people who wanted
to be left alone.

23. Principle #9 - Design seamless - unified - experiences
EXPERIENCE SOCIAL
Traditional approach is to
design different experiences
PERIENCE
SOCIAL
EX for different channels.
Consumers are increasingly
BUSINESS BUSINESS
looking for a seamless
LOCAL MOBILE experience across all
channels, both to create a
EXP
CE
ILE
IE N
LO
comforting sense of
ER
NC L
OB
CA
XP M
ER
IE
E E
consistency and as a
demonstration of
authenticity.

24. OFFLINE
WITHER RETAIL STORES?
WHAT ROLE DOES THE OFFLINE CHANNEL PLAY?

25. Offline remains a key component
‘Need it Experiencing
Now’ the brand
convenience
Discovery
Community

26. The largest threat isn’t price competition
The biggest threat for offline retailers is the
growing prevalence of “browse not buy”
behaviour.
“Showrooming” - where customers go to a
physical store to test-drive products then go
online (web or mobile) to find the cheapest
supplier - is a growing threat.
How do you fight back?

27. Bring the best of the online world into the real world
JC Penney’s findmore service
launched in 120 stores across the
US.
In-store, 42 inch touch screens
allow shoppers to view the
retailer’s full online catalogue,
check inventory levels in local
stores, share products with
friends and scan product bar
codes to receive extra
information and complementary
product recommendations.

28. Bring the best of the online world into the real world
Problem: In-store technology is often hard
to use (multiple interfaces), in the wrong
locations, and prone to breaking.
Solution: Embrace Bring-Your-Own-Device!

29. Bring the best of the online world into the real world
Westfield Mobile app
Shoppers can search and compare
prices across retailers in their local
Westfield shopping mall, and call the
local retailers to check availability with
one click.

30. Bring the best of the online world into the real world
Canon Mobile Tags
Manufacturers are increasingly
incorporating mobile tags
(including QR codes) on
packaging to allow consumers to
access additional product
information, reviews and product
recommendations.

31. Bring the best of the online world into the real world
Apple EasyPay App
Allows customers to self-
checkout accessory purchases
in-store, by paying via an iPhone/
iPad app.
Also launched Personal Pickup,
which allows the customer to
browse, choose and pay for an
item via the app, then head to the
store for priority collection.

32. But....make sure you don’t hinder connectivity
Source: Deloitte consumer survey (2012)

33. MOBILE
SMART PHONES = SMART SHOPPERS?
HOW DO MOBILE TECHNOLOGIES FIT IN?

34. Technology both extends and amputates
“Every extension of mankind, especially
technological extensions, has the effect of
amputating or modifying some other
extension"
-Marshall McLuhan, Understanding Media: The Extension of Man

35. Technology both extends and amputates capabilities

36. Technology both extends and amputates
McLuhan proposed the “tetrad” framework for
assessing a technology’s impact:
• What does the technology extend?
• What does it make obsolete?
• What is gained?
• What does the technology reverse into if it is over-
extended?
-Marshall McLuhan, Laws of Media: The New Science

37. Technology as an extension of self
nt
me y He
ari
ug lit
A ea ng
R
mory
& Me ing
Seein
Think
g
Aw
ng
a
i
ch
re
n
u
es
To
s
Sharing

38. Technology as an extension of self
e nt He
gm ity
Au eal
ari
ng Hearing
R
Now: Currently capture and
communicate voice, music
mory
& Me ing
and other sounds.
Seein
Think
Future: Expect greater
g
audio perception and
speech-to-text. Explore
audio/voice pattern
recognition as a convenient
alternative to barcode
Aw
ng
scanning (e.g. Shazam,
a
i
ch
re
n
SonicNotify)
u
es
To
s
Sharing

39. Technology as an extension of self
e nt He
gm ity ari
Au eal ng Seeing
R
Now: Multiple cameras to
create videos/pictures.
mory
& Me ing
Seein
Think
Future: Expect improved
g
graphics manipulation,
including 2D->3D translation
for better product
visualisation.
Aw
ng
Also real-time image search
a
i
ch
re
for information retrieval.
n
u
es
To
s
Sharing

40. Technology as an extension of self
e nt He
gm ity
Au eal
ari
ng Touching
R
Now: Consumers very used
to multi-touch interfaces.
mory
& Me ing
Seein
Future: Expect demand to
Think
use own mobile/tablet
g
screen to drive other in-store
technologies.
Also an increasing
expectation of being able to
Aw
ng
interact with storefronts
a
i
ch
re
n
using device “bump”.
u
es
To
s
Sharing

41. Technology as an extension of self
Sharing
e nt He
gm ity ari Now: Sharing an entrenched
Au eal ng
R behaviour, via text/SMS, Facebook
etc.
mory
& Me ing
Future: Expect demand for two-
Seein
way sharing with your brand in-
Think
store (e.g. favourite an item, have
g
it added to shopping wish-list on
FB, with alert and discount).
Also expect interest in device-to-
device connectivity (e.g. mobile
Aw
ng
loyalty ‘card’ talking to inventory
a
i
ch
re
n
system to show availability and
u
es
To
cash register to negotiate
s
Sharing discounts).

42. Technology as an extension of self
e nt He
gm ity
Au eal
ari
ng Awareness
R
Now: Consumers still learning
about orientation/proximity
mory
& Me ing
sensors.
Seein
Think
Future: Explore uses of
g
vibration alerts to give tactile
reminders and guide shoppers
(e.g. walk past a store for
which they have a voucher or
discount or an item on their
Aw
ng
shopping list. (e.g. TW Shop-
a
i
ch
re
n
o-Map engine)
u
es
To
s
Sharing

43. Technology as an extension of self
Thinking & Memory
e nt He
gm ity ari Now: Consumers already
Au eal ng
R comfortable using mobile
devices for ‘cognitive’ uses,
blending apps/cloud (e.g.
mory
& Me ing
shopping lists, product search).
Seein
Think
Future: Expect consumers to
g
want to know all information
relevant to them (not just price,
availability etc, but ethical/
sustainable etc.).
Aw
ng
They will want to store/own that
a
i
ch
re
n
data themselves, so it can be
u
es
To
accessed independently of your
s
Sharing store/site.

44. Technology as an extension of self
e nt He
gm ity ari
Au eal ng Augmented Reality
R
Now: AR apps are still very
much in their infancy, due to
mory
& Me ing
Seein
their niche usage (e.g. virtual
Think
tours).
g
Future: Expect your products
to turn into a marketing
channel, as consumers want
to interact with them using
Aw
ng
digital devices to explore
a
i
ch
re
multi-dimensional information.
n
u
es
To
s
Sharing

45. LESSONS
LEARNT

46. Forget the web to make sense of mobile
The mobile platform is yet to
decide what it wants to become
when it grows up.
Like the web, it will evolve
through several more stages,
before it matures.
We need to abandon “web
thinking” to truly grasp its
unique capabilities and
opportunities.

47. Mobile first & responsive web design
As a minimum, organisations
should ensure their web site
content is mobile optimised.
Ideally, they should start
adopting “responsive” web
design approaches.
• Fluid proportion-based grids
• Flexible images
• Priority logic for service/
content presentation

48. mSite or App?
Data from the Top 5 US Retailers
(for Web/App usage) - Amazon,
Best Buy, eBay, Target and Walmart
- show that mSites are still the
dominant access point.
Why?
• No need to download App
• Often no functional differentiation
between App + mSite
• Enables serendipitous interest
Lessons?
• Understand the purchase journey
and your customer behaviours
before investing in Apps
Source: Nielsen (2012)

49. Take a portfolio approach
Avoid making “big bets”. Think of
mobile and social as “here today,
gone tomorrow”, rather than as a
traditional software application or
technology project with a 5-10
ROI window.
Don’t get distracted by product-
as-a-company start-ups (e.g.
Pinterest, Instagram,
DrawSomething) - few are
sustainable and have short life-
cycles.

50. “Big Data” is not a technology
Most retailers already have a sea of
customer data - and it is growing
rapidly:
• Sales data & forecasts
• Customer behaviour
• Sentiment on social media
Creating business and customer value
starts with hypothesis-led data
analysis to create actionable insight
that is converted into customer-
touchpoint action and experiences.
Be open to a wholesale redesign of
in-store and online processes.

51. “Big Data” is not a technology
Descriptive
Diagnostic
What is
Generate Predictive
happening
across each of hypotheses with Prescriptive
respect to why Create
your customer capabilities for
touch points. the observed
predicting what Establish
behaviours are
is likely to guidelines for
(Observe) happening.
happen for what you should
(Orient) given scenarios. do about your
predictions.
(Decide)
(Act)
Iterative
Enhancement
A useful OODA-style framework for considering how to build out your
business intelligence capabilities.

52. Focus on the “job”, not technology
Understand the “job” that customers
use your digital channel touch points
and to achieve, without being
distracted by technology issues
Ask yourself: Are they “hiring” my site/
service/app to buy something, seek
service or support, ask for help, or for
distraction and entertainment?
Understand this and you will have
greater clarity around technology
requirements.

53. Invest in products and services, not marketing
In today’s environment, your product
is your marketing.
Invest the right time and effort to get a
solid, well-targeted and value-creating
product/service out the door.
When marketing costs exceed
product budgets, up is down, black is
white.