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Top Predictions for Mobile Disruptions for Brick & Mortar Retail in 2013

Posted by Todd Sherman on January 10th, 2013 at 3:48 pm

As we dive into the new year, Point Inside has spent some time looking back at 2012. Between what we’ve learned, what we’ve observed, and the trends we saw taking shape during the past year, we’ve come up with our top predictions for what we believe will happen between mobile and brick & mortar retail. So hang on, folks: it’s going to be a wild ride.

1. Seven of the top 10 retailers will launch mobile apps with compelling “in-store modes.”
The customers are restless. Most retailers just don’t know it yet.
Forward-thinking retailers are looking for ways to take help customers with smartphones by providing connected in-store shopping. It’s a lot more than simple “mobile-optimized websites.” Walmart and Meijer stores have already announced that their apps will include detailed store maps, detailed product locations and real-time personalized offers. Other top retailers have similar plans for 2013 and will gain significant competitive advantage over those who don’t.

2. The in-store customer app experience will become VERY personalized.
Know thy customer… and give them what they really want.
The pressure is on to deliver personalized and mobile in-store shopping experiences. Apps can know a lot about each shopper, from buying habits to brand preferences to the kinds of offers they’ll respond to. The apps are also the way to effectively deliver highly targeted suggestions, offers and even advertisements. In 2013, retailers will take advantage of this situation and will use apps to develop highly personalized relationships with their customers.

3. Retailers will bring big and deep data into the stores.
Big data is knocking… and it’s coming in. Literally.
The age of big data is here, and for mobile it’s heading into the traditional brick and mortar stores. More than 60% of the US population now has smartphones, with 80% of those phones being used for shopping activities. That’s creating a wealth of data that provides deep insights on how to increase sales, serve customers better and boost loyalty. Mobile will become the window that allows traditional retailers to finally know what’s really happening inside their stores. The question is: which retailers will best take advantage of the opportunity?

4. Mobile advertising will change significantly: it will become about context, context and more context.

The shift of dollars to mobile advertising is already happening but there are three significant challenges that will start to be fixed in 2013.

First, mobile users are much more task-oriented than online users. They are trying to get to the finish line and do not want interruptions that divert or delay them from their goals. To that end, everything that is presented needs to help them reach those immediate goals. Non-relevant messages will not be ignored -- they will instead create a negative impression.

Second, to present relevant messages to each user, mobile ad targeting needs to improve significantly. Current targeting on mobile platforms is much more limited than traditional online platforms (e.g., no cookies inside of apps, no sharing between apps). While there are advances happening on both iOS and Android platforms, they are still at the operating system level. The real opportunity is for the ad networks to take advantage of the deep data from inside the apps themselves.

Third is presentation. Mobile devices have much smaller screens that make traditional banner ad presentation difficult. Even the smaller banner ads seem to take up more room than they are worth and tend to evoke users’ ire. (Studies show users are more tolerant of TV ads than mobile ads.) The solution is to abandon the idea of banner ads and incorporate relevant “helpful suggestions” in the flow of the app itself.

All three of these issues will begin to be addressed in 2013 and will launch a new era of mobile advertising.

(As a side note, what’s not working is the coarse geolocation currently being touted. Geolocation does not know if I’m in the drugstore down the block, the Starbucks on the corner, in the gym or looking to buy furniture. It’s like a carnival barker trying to get anyone–ANYONE–to come into their store.)

5. Analysts will FINALLY separate tablets from smartphones and stop referring them both as a monolithic segment called “mobile devices.”

It’s time to be clear about what’s what. Smartphones are mobile devices that have connectivity everywhere, fit in your pocket and top the list of “things I can’t afford to lose.” They’ve spawned unique apps and uses. Tablets, on the other hand, are much closer to being casual PC-replacements. Lighter, cooler, touch-screen, neat apps… but still more of a PC-replacement. 2013 will be the year we stop grouping them together just because they both are different than traditional PCs.

So there you have it. This is what we’re betting on in the year ahead. We’re excited to continue to play a major role in the expansion of branded mobile apps for retailers.

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