Retailers need mobile strategy to leverage earnings

The growing penetration of smartphones and easy access to the Internet has influenced almost every aspect of consumer’s life, including shopping. Big companies in the world are obviously taking advantage of the fact that consumers are doing more than just searching for product information on the web, but turning to online portals for making a final purchase.

According to a study, overall 67 percent of millennials and 56 percent of Gen Xers prefer to shop online rather than in-store. Electronic (e-) commerce, a way of doing business over large electronic networks such as the Internet, should be leveraged by retailers who are out to earn more, Bertrand Schmitt, App Annie CEO, said in an interview, stating that retailers with a clear mobile strategy are seeing this reflected in their earnings whereas those which don’t, are “in big trouble”.

Schmitt, pointing to Amazon and Alibaba as examples of success stories stated that “Consumers love e-commerce and they love m-commerce even more. At this stage, you better have a very strong mobile strategy if you are in retail.”

Schmitt’s statement can be reflected in Nigeria, where the e-commerce market worth has risen to $13 billion in January 2018, according to Jumia’s Nigeria mobile report released Friday.

The report indicates a gradual adoption of online marketplace by consumers, where the country remains the largest mobile market in Africa, with about 162 million subscribers and a penetration rate of 84 percent. This according to Juliet Anammah, the chief executive officer, Jumia Nigeria, speaking at the launch of the Mobile Report in Lagos, is the multiplicity of affordable smartphones and a growing market for second-hand devices.

She also said, “the multiplication of easy payment options such as credit or debit cards payment, or even cash on delivery; and the increasing use of social media sites (active social media users) are playing major roles in driving the e-commerce sector in Nigeria, or Africa at large.

The Jumia report revealed an 11 percent increase in the number of Nigerians who visited the Jumia website via their mobile phones – 79 percent in 2017 versus 71 percent in 2016. Meanwhile, those who used their desktop computers or laptops dipped to 18 percent in 2017 compared with 29 percent in 2016.

This upward shift from desktop to mobile, seen as a positive development, is attributed to the increase in the number of mobile phone users as a result of the multiplicity of affordable smartphones, particularly the Asian mobile brands which continue to build on their Africa-specific strategy by introducing lower price points’ smartphones adapted to the profiles of African users.

Taking a cue from the Jumia’s report, it is revealing that customers demand a more seamless experience in getting whatever they need and for many businesses, customer experience is the new battlefield—a competitive advantage that attracts and keeps customers.

For instance, when wholesale manufacturers sell through retail distributors, they have very little say in how the product is sold. They’re at the mercy of the distributor to ensure that the customer leaves the store happy and satisfied. By selling directly to consumers, companies can envision how the customer journey should take place and execute the tactics required to make that vision a reality, according to Claire Hopwood in an article dated April 6, 2016.

Selling directly to customers, however, doesn’t necessarily translate to the better customer experience. If companies don’t have the necessary insight, processes, and culture in place, they won’t be able to provide a seamless customer experience. An understanding of the end consumer is required to ensure that any direct sales effort improves the customer experience.

E-commerce, including the mobile app, allows consumers to be more interactive with brand, as seen in Jumia’s. Investing in enhanced mobile apps can help retailers retain control of the customer experience and proactively support what information consumers need at each stage of the shopping process. This helps insulate the customers from outside influences and can significantly boost retailers in-store conversion rates. An ABI Research survey shows that 40 percent of US respondents who had downloaded a retailer app said they bought more of that brand’s products. 46 percent also said the app caused them to visit the store more often. Walmart customers who use its app spend 40 percent more than customers who don’t.

According to study, the conversion rate in the store for shoppers who use a retailer’s dedicated app is far higher than those who don’t, most likely because such apps can provide a more relevant and tailored shopping experience that helps people make an immediate buying decision.

A mobile app can use push notifications to immediately inform users of information, updates or other relevant news, as this, get customers informed the available products in your store, as a retailer, aside the fact that an app can utilise the smartphone’s inbuilt technology (camera, ibeacon, NFC) to make in-store payments a breeze. Forget contactless payment, imagine not even needing a card at all.

Consumers spent more time in retailer apps than apps in any other shopping category, according to Schmitt, who touted UK retailer Asos’ mobile strategy: the company’s mobile app is number three in App Annie’s ranking of the country’s retail apps.

“They have done a great job of creating a great consumer experience and are being rewarded for it through a significant increase in revenue year-over-year,” Schmitt said.

Schmitt also gave a sneak peek into an app monetisation report the company will publish in April, revealing consumers spent $86 billion in app stores during 2017, a 100 percent rise in spending in 2015.

Olubayo Adekambi, the chief transformation officer of MTN Nigeria said, at the unveiling of the Jumia report that “the expansion of E-commerce into a dual business model that blends the physical and the digital to create an ecosystem between brands and consumers across the two worlds”, as among the major factors fueling the increase in adoption of smartphones, which retailers have leverage to expand their income.