Why Should Your Retail Business Have a Mobile App: Some Lessons From South Korea?
A mobile app can be the perfect substitute for a retail megastore. The retail industry is getting fragmented into different modes, with each mode representing a niche segment of consumers and is gaining momentum both in the online and offline modes, mobile application development services specific to handheld devices are also gaining momentum. For the traditional buyer who believes in enjoying the customer valued experience of going to a brick and mortar store, the market located downtown is still the place to be. Then there is the segment of tech-savvy yet busy working professionals who spend a great deal of time sitting in front of their desktops and laptops in offices. The third segment is that of the trendy impulse buyers who carry their world in their smartphones. Which of these segments represents the biggest opportunity to retailers? While mobile commerce may still be restricted to cities only leading retail enterprises to undermine the importance of mobile applications, there are some interesting lessons they can learn and adapt from the success of South Korean retailers.
Some Valuable Insights from South Korea
Very recently the business research and consulting major McKinsey conducted a survey on the recent mobile commerce boom in South Korea and the buyer behavior patterns that are shaping the retail landscape there. A preliminary status check of South Korea’s digital economy reveals that it has the largest smartphone penetration in the world. More than two-thirds of South Koreans own one, compared with 47 percent of Americans, 57 percent of Australians, and 52 percent of Britons. South Koreans are also big users of their smartphones. Sales of goods purchased using mobile devices have jumped more than fourfold since 2012 to about 10 trillion won, or $9.8 billion. Using smartphones to buy products and services has become so common that nearly two of every three people have done so at least once. By comparison, just one in four American and Australian consumers have had a mobile shopping experience. There are four critical areas that companies seeking to tap into the mobile revolution need to consider.
Appreciate the Uniqueness of the Consumer Who Shops on His Mobile
The demographic features of the South Korean women consumers are as follows. South Korean women account for 60 percent of transactions. Additionally, most are in their 30s and are likely to have preschool-age kids. They are also, somewhat surprisingly, likely to be full-time housewives. There has been an assumption that m-commerce is dominated by busy working moms; in fact, working mothers spend much more time in front of a PC, mostly at their jobs, while housewives and mothers with young kids are more likely to use their smartphones to shop. The research suggests that among those who shopped on a mobile device, 13 percent did not shop in stores, and 53 percent did not shop online. It was also seen that offline and in-store marketing motivates only 7 percent and 2 percent of mobile purchases, respectively. Yet mobile advertisements or promotions influence three out of four mobile purchases. This implies that these consumers can be reached out on their smartphones.
Increase Impulse Purchases with Well Crafted Offers
The size of the screen of a smartphone does not really make for a good comparison among products being offered by competing retailers. In comparison to smartphone screens, laptop and desktop screens make for better viewing and thus aid research for online purchases to a higher extent. The underlying implication is that smartphone users are prone to making impulse purchases that provide instant gratification as opposed to online consumers. While online retailers are required to maintain a long product line to facilitate comparison, targeting mobile-savvy consumers is a different ball game. The key to providing instant gratification is a well-crafted offer.
Increase the Entertainment Quotient of Shopping
The valued customer experience varies across channels. While online consumers dig into the details of offers and are price sensitive, mobile consumers are different. Mobile consumers look for great comfort value and user-friendliness in the mobile apps of retailers. If it takes rocket science for a user to navigate across a mobile application that is cluttered with information but lacks an intuitive interface, it is likely that the user may opt-out of the app and consequently the purchase decision. Smart retailers do not bombard the user with information but make it easy for the consumer to reach straight to the decision box. Ease of use triggers quick information processing and thus decisive purchase behavior. Mobile shopping is not just about making the consumer price-sensitive through penetration pricing. It is about putting consumer decision-making and purchase behavior on the Ferrari lane.
The moral of the story that we have just read about the South Korean retail experience is not just limited to mechanistic mobile app development services. It is about injecting smart design thinking into the development of mobile apps to offer the user the highest comfort value. The success of retailers in South Korea is as much a triumph of sensibility in mobile applications development service as it is about sound business logic. When the two harmonize, what you get is consumer delight.
