JUNE 4, 2010 - Dave Sikora - Founder & CEO Digby
Digby is a provider of mobile commerce and marketing solutions for retailers. Founder and CEO Dave Sikora spoke with eMarketer about how retailers can leverage in-store mobile as more consumers shop in physical retail stores with their smartphones.
eMarketer: How can smartphones improve consumers' in-store shopping experience?
Dave Sikora: Our premise is that retailers have three channels: catalogue, the physical store front and their Website. We believe that mobile is not only the fourth channel, it's a unique channel in and of itself that unifies the other three. There are some really interesting opportunities, particularly in-store. The retailer is creating a more engaging experience in many ways that really demands the use of the phone or mobile device.
Take the scanner. Consumers can shop in the store, use their phone to scan a QR code or a barcode and get more product information. When they do that, the retailer might offer a promotion for the product scanned. Consumers can add scanned products to a wish list or registry, that kind of thing. Going forward, I think we'll see more and more use of these types of bridge apps that retailers develop or hire someone to develop that are specifically designed to engage people in the store and have nothing to do with the retailer's Website.
eMarketer: How can retailers keep people in the store engaging with their app versus price-comparison apps?
Sikora: That's a great question. There are really two kinds of apps. There's an app that's designed for the consumer where there's no brand affinity whatsoever. It's more of a price-comparison tool and you might use that. Retailers care that you have it but they want certain capabilities in their own app. They want their own app. In the context of that app, retailers can create an engaging experience and take the opportunity to keep you in the store.
"Retailers can create an engaging experience and take the opportunity to keep you in the store."
For example, say you have an app on your iPhone or BlackBerry, and there's a command on the app to check into the store. I check into the store, and now the retailer has created a branding event. By pressing that button, we've taken the logo of that retailer and posted it to various social media networks. And the screen will say, "Dave has now checked into xyz retailer."
Simultaneously, I sent a message to the retailer so now they have a merchandising opportunity while the consumer is in the store. It's entirely up to the retailer what they want to do with it. They know they have you in the store so they can interact with you, send a text message, an e-mail or an alert within the app. For example, the alert might notify a consumer that if they purchase a particular product, they can get 50% off a related product.
eMarketer: What's the difference between apps like Shopkick and the kind of service Digby is working on?
Sikora: Our view is that if you're a retailer, you're going to have your own branded app. It's like your affinity card. Like a frequent-user card. It's multidimensional and allows you to check into stores and accumulate rewards points and time-sensitive discounts. You can use the scanner to obtain more product information, but it emanates from your branded application.
"If you're a retailer, what you really want is to have your logo on the deck of the consumer's device."
We learned early on that there are two kinds of use cases in mobile. There's the consumer-branded application, like a Shopssavvy or a Shopkick, and they have retail partners. But if you're a retailer, what you really want is to have your logo on the deck of the consumer's device.
eMarketer: But there are so many apps now and people don't necessarily have the bandwidth or inclination to download dozens of apps, let alone use them. Is it realistic to think that a consumer will download to their mobile device and actually use dozens of retailers' apps?
Sikora: Why not? If you're a retailer, you want to be directly involved with high-affinity customers, the top 5% or 10%. When they answer their phone or text you want them to see your logo in the corner of their eye, right? And you want to engage these customers. If you're a top Best Buy customer and spending $5,000 a year with Best Buy, I want to get that average annual purchase value up by engaging with you via my mobile app.
eMarketer: What does a retailer do to lower the threat of consumers coming into the stores and using their smartphones to comparison shop? How retailers use an in-store mobile strategy to lower that threat?
Sikora: You have to have an in-store mobile strategy that's application-based. You have to have a mobile strategy that provides significant value over and above what people can do just by walking into your store and doing a price check. It's easy to go into Best Buy, pull out your phone and do comparison-shopping on Amazon. That's a threat.
But If I'm a retailer, I've got to find ways to negate this and provide value over and above buying on price. Maybe I decide to add video or Wi-Fi in my stores and I'll have video feeds around certain products. Or maybe I'll add real-time collaboration directly from the phone so that if customers are looking at a specific product and have questions, they can get answers from someone who's not even in the store. There are lots of possibilities.
"We tell retailers they don't want to become Amazon's off-balance-sheet showroom. Mobile can, to some extent, be the revenge of the physical retailers."
We tell retailers they don't want to become Amazon's off-balance-sheet showroom. Mobile can, to some extent, be the revenge of the physical retailers, because they have the investments in these stores, they have people coming into the stores and knowledge of those customers. They have some tremendous new ways of creating affinity with these folks. A lot of the retailers we're talking with view in-store mobile as a significant differentiation opportunity.
http://www.emarketer.com/mobile/article_m.aspx?R=1007736
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