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Know what the customer wants: The importance of mobile marketing for inner-city retail.

of Guest author on May 30, 2018 in News, Trends & Analyzes

From Prof. Dr. Gerrit Heinemann (eWeb Research Center)
and Frederic Handt (Bonial)

What does the future of stationary retail and city centers look like? For the fifth year in a row, the Niederrhein University of Applied Sciences asked more than 2,000 consumers about their smartphone and shopping behavior in the “Large Retail Study”. The current, representative survey on behalf of Bonial Germany and the German Retail Association (HDE) shows: There are high expectations of the digital range of retailers in city centers. The use of the mobile Internet has achieved outstanding importance - in preparation for shopping and generating frequency for inner-city retail.

Smartphones play a key role in the future of stationary retail

The smartphone is undoubtedly playing a key role in the current “change in retail”. More than 83 percent of adult Germans are already using the mobile Internet and would like to prepare their purchases on site using mobiles or tablets. This impressively shows the digital universe in 2017 (see Figure 1). The majority of non-food purchases already follow this pattern, and the trend is rising - also for groceries. Retail products and offers should therefore be made available in a mobile-optimized form. Shoppers prefer interactive advertising platforms, which 34 percent of customers access at least once a month via the app and 27 percent via the website. The content presented here should primarily be price (86 percent) and availability (72 percent).

Fig. 1: Digital universe in 2017; Illustration: Heinemann 2018 based on the "kaufDa study 2017"

The study also shows: The use of the mobile web as a shopping aid is relevant for almost all customers and age groups today. This is a great opportunity, especially as dark clouds are gathering for inner-city retail and especially for small and medium-sized retailers. That is why there is no way for stationary retailers to avoid being present on the internet. Anyone who wants to assert themselves in the market must definitely check whether they are going into online trading themselves, which is certainly overwhelming for many traders. You don't always have to launch your own online shop. In any case, every dealer should at least be able to be found on the Internet. Location-based services or app-based advertising platforms such as kaufDA offer excellent solutions that are verifiably rewarded by customers.

Reasons for shopping in the city center

The main reason for visiting the city is therefore to need a certain product and to get it specifically. 48 percent, and thus almost half of the customers, give this as a reason for visiting the city center. In contrast, a stroll through the city center is only a reason for visiting the city for 28 percent and thus a good quarter of customers. This contradicts the thesis that inner-city retail mainly lives from experience shoppers and illustrates the risk that online purchases in particular can be largely substituted for on-demand purchases. The latter is usually more convenient for customers. That is why cities must not neglect the convenience aspect - that is, accessibility, accessibility and the availability of parking spaces.

When it comes to shopping and leisure activities, visiting the city center is also in competition with “leisure surfing on the Internet”, but also in competition with other leisure activities that cities should focus more on (“cities as theme parks”). In addition to the shopping experience, customers expect excellent and individual advice from stationary retailers. This applies above all to customers over 50 who also want to touch the goods in the shop and try them out. For specialized, smaller dealers in particular, it is a matter of maintaining personal contact with customers and delivering perfect service. The much-discussed theft of advice is an overestimated topic in this regard, because customers only get information in brick-and-mortar stores for 1.4 percent of all retail spending.

The opposite is much more common, namely that customers first get an overview on the Internet and then shop in the store. Younger customers under 50 in particular use search engines, shopping platforms, price and product comparison sites, blogs and online test sites to find out more about what to buy. The majority of non-food purchases already follow this pattern, and the trend is rising - also for groceries. It is therefore becoming increasingly important for retail companies to give customers the opportunity to prepare their stationary purchases. This is undoubtedly the key to saving the city center. For this reason, the current time series also deepens the topic of inner-city shopping and the reasons for stationary shopping, i.e. the “drive to store”.

Expectations on digital offers in the city center are high

In general, when shopping in the city center, there is an increasing tendency to find out more about what to buy and to use a device and / or an app (32 percent). Around three quarters of those surveyed already think the information on the Internet is better. There is a need for action here in order not to lose customers to online providers due to incorrect assumptions. Because the expectations of digital offers in the city center are high. Almost half (45 percent) would like all information about shops in the city to be available online. More than half of the people surveyed would use the service to have unavailable goods from shops in the city center delivered to their home free of charge (52 percent). The same number of respondents think that the product availability of the stores should be recognizable on the Internet.

However, it does not work well if customers are informed by retailers about offers via push notifications without being asked (rejection with 51 percent), even if these have a local reference (rejection with 17 percent). The expectations of customers clearly show that pull offers are more attractive to them than push notifications. After all, 45 percent of those surveyed would prefer to get information on their own via mobile devices and 43 percent of those surveyed are annoyed when unsolicited advertising is displayed (top answer), which is why even 20 percent use ad blockers. This does not apply to segmented push messages that are based on user preferences or behavior and promote the “drive to store” desired by retailers with superior conversion rates. For this reason, they are also used by Bonial or kaufDA and MeinProspekt, which also enable customers to be addressed in the vicinity of a market with the use of geo-targeting and push messages.

Customers prefer interactive advertising platforms such as kaufDA, which 34 percent of them access regularly via the app and 27 percent via the website (at least once a month). The kaufDA platform thus plays an outstanding role as a feeder for inner-city retail. This also illustrates the importance of comparable “pull-oriented location-based services” which can be used by customers in a self-determined manner. The content conveyed via these channels should primarily be price (86 percent) and availability (72 percent). That is why it seems essential that stationary customers can access offers in digital and mobile-optimized form via mobile.

Customers think information on the Internet is better and more credible

One in five would already think it would be good if all retailers were available on kaufDA. However, a lack of knowledge about existing location-based services still prevents 39 percent of customers from using such services, even though they are already using their smartphones intensively to prepare for purchase. From the consumer's point of view, on the other hand, there are many reasons for more intensive use of the Internet to obtain information. Around 82 percent “find better information on the Internet”. The answers "The staff cannot find the information that is important for me" (37 percent) and "I think the staff is incompetent" (22 percent) and "The staff cannot be found according to the expectations of customers" show a need for action in the consulting concepts of the stationary trade (see Figure 2).

Fig. 2: New customer expectations for information

The question about the “basic requirements for dealers” leads to the realization that “friendliness / courtesy” still comes first. In addition, reasonable prices, expertise and in-depth information remain important. In the current study, the "large selection of (available) goods" is mentioned for the first time. Obviously, the selection made on the Internet has already influenced customer expectations.

In summary, the study is a clue for brick-and-mortar retail:
From the customer's point of view, there is no way around making all relevant information about the business accessible on the Internet via the pull function, namely with regard to product range, product availability, opening times, availability and special offers. In addition, customers want delivery options. This also applies to the collection of selected products online in the store, which has increased significantly compared to 2016. It is a challenge for brick-and-mortar retailers to cope with the bad image of personnel competence.

Conclusion

Marketing has changed more in the last two years than it has in the last 50. In a world where customers educate themselves, apps are the personal managers for local shopping. A mobile-first perspective is therefore essential for stationary retail and for the frequency in city centers. Mobile presence and mobile optimization are far more than just nice-to-have: Today, “mobile only” is more and more the case. It is essential for retail companies to give customers the option of preparing their stationary purchases via smartphone. This is undoubtedly the key to saving the city center.

Editor's note

The article comes from the “Handbook of Future Trade”, which you can read, download and order on the following page: Handbook of Future Trade


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