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- 23 Dec 2010
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Why Mobile Holds the Key to the Future

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Just like the e-commerce and blog sceptics before them, those who doubt the importance of m-commerce and mobile marketing will be exposed as short-sighted


Contrary to popular belief, mobile is not just a new medium that will win attention. Instead, it represents a continued trust in a brand and its values which translate to a new channel for marketing and commerce. And as more consumers transfer their online shopping habits to mobile devices, this means the biggest beneficiaries will be those luxury brands which consumers trust across all channels – mobile included.

“Affluent and wealthy consumers are embracing mobile functionality and mobile applications,” said Milton Pedraza, CEO of the Luxury Institute in New York. “Right now they’re doing it for things that are a little mundane, but also for important things like financial services and financial information, and they have downloaded luxury brands’ apps.”

“Younger consumers have downloaded more than older consumers, but as devices get easier to use and as more people buy mobile devices with better screens, I think you’ll see mobile becoming a far more important device – even more important than the PC in terms of interacting with consumers,” he said. “It’s going to become a mobile world and luxury brands need to be really prepared.”


Finding the fit

All indications point to more luxury brands starting to advertise on mobile ahead of a fully-fledged mobile commerce presence over the next couple of years.

Prestige players such as Polo Ralph Lauren and Toyota’s Lexus have made waves and moved the needle. Each has taken an early initiative in targeting consumers with mobile advertising and each by integrating interactive components.

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Neiman Marcus’s Christmas Book, Lexus advertising page on Esquire and R.L. Gang, the Ralph Lauren’s storybook for its children line


For example, Lexus placed a full-page rich-media ad in the launch edition of male lifestyle magazine __Esquire__’s iPad application. The unit prompted users to manipulate a digital graphic using their fingers to launch a 30-second video shot for the brand’s national “Drive Precision” campaign. Consumers could then find out more information about Lexus’ IS line of sedans and locate nearby dealerships to schedule an appointment.

Ralph Lauren, which was awarded 2010 Luxury Marketer of the Year, launched a shoppable storybook called “R.L. Gang” that promoted its children’s fashion line. The company placed a banner ad in The New York Times’ Editors Choice iPad application that drove awareness of, and traffic to, the initiative.

The storybook ran a plot narrated by entertainer Harry Connick Jr. that featured characters wearing Ralph Lauren items. Users could click the characters to shop the items online or on their iPads. The feature was viewed 131,000 times across channels, generating more than 100 million impressions worldwide, and drove a 250% increase in sales over the corresponding period in 2009.

Other luxury brands such as the automaker Bentley and watch manufacturer IWC Shaffhausen have converted their branded magazines into interactive applications. Mercedes-Benz even integrated the iPad into its point-of-sale system, enabling dealers to conduct transactions on the showroom floor using the mobile technology.


Retail detail

Another example of a luxury brand looking to navigate the new marketing ecosystem by integrating mobile into its sales strategy is the storied US luxury department store chain Neiman Marcus.

“Even if you do have a great contact strategy, it doesn’t matter if your customer is disappointed with your lack of multichannel integration,” said Gerald Barnes, president and CEO of Neiman Marcus Direct, at the Luxury Interactive conference in New York in June. “Multichannel integration is key to prove that we’re customer-centric, 21st-century luxury retailers.”

“When you think about the customer, the customer just really expects you to get the merchandise from wherever the merchandise comes from,” he said. “You need to be able to move back and forth between your own channels.”

The retailer fully mobilized its entire product catalogue this summer, making it available on a mobile commerce site compatible with any web-enabled handheld device.

“Our strategy is to enable our customer to shop with us anywhere she wants to, any time she wants to, from any place she wants to,” said Ginger Reeder, vice president of corporate communications at Neiman Marcus. “To that end, NeimanMarcus.com is on a mobile-friendly site and we are seeing increased usage.”

 Multichannel integration is key to prove that we’re customer-centric, 21st-century luxury retailers 

Additionally, the brand has launched two mobile applications: NM Editions for the iPad and NM Gift for the iPhone. NM Editions creates a unified platform for viewing all of Neiman Marcus’ publications such as its annual Christmas Book that was released in early fall. Consumers can select and buy items from the catalogues within the application, which is available for free in Apple’s App Store.

The NM Gifts application lets consumers browse and buy from Neiman Marcus’ full selection of holiday gifts. It also integrates the iPhone’s accelerometer technology to create a more interactive shopping experience, letting consumers shake their devices to generate gift suggestions at random.

“When you look at the way [luxury retailers] reach and connect with consumers today, the old model where consumers are loyal to one channel of distribution has gone by the wayside,” said Pam Danziger, president of US-based firm Unity Marketing. “Marketers need to be reinforcing relationships across all channels, because that’s how consumers are shopping.”

“Neiman has done a whole lot of work in understanding this cross-channel mix and bringing the channels together into a unified marketing strategy,” she said.


Just check in

While success stories abound of luxury brands effectively tapping mobile’s potential for driving conversions, the actual development process can be tricky.

“I think the challenges are, specifically, when you first build a mobile site or application, it’s the first time you have done something,” said Christoph Oberli, vice president of e-commerce at the Mandarin Oriental. “You basically don’t know what you don’t know, and the learning experience can be a challenge.”

Mandarin Oriental had to address such concerns early in the development process for its slate of mobile properties, which includes a website and an iPhone app, as well as a forthcoming iPad app. One challenge the company faced was in understanding what its target consumers wanted out of a mobile offering.

“You really need to understand your customer if you want to build a mobile presence – and even more so because it’s such a small screen,” Oberli said. “When you’re in such close proximity to your customer, you need to really understand the customer and what it is they want to do on a mobile site and build around that. That’s a prerequisite more than a challenge.”

The Mandarin Oriental PC website has the most content and images, whereas the mobile site is a spare experience that focuses on maximizing utility and minimizing clutter by providing only relevant information for individual travellers. Meanwhile, the application includes information dedicated to bringing destinations surrounding the brand’s hotels and serves more as a travel guide than the other platforms, while also enabling bookings.

“Our mobile site was a big push first, and led to a lot of visits and a decent amount of bookings,” Oberli said. “The application was built in a later stage and was more of an engaging tool.”

“All three of our platforms – the website, the mobile site and the app – are trying to form online touch points for our customers, and have slightly different purposes,” he said. “In other words, there is some consistent content across all three platforms, then some very specific items for each platform.”

Another challenge is development.

“We’re a small company, so we don’t have in-house development teams,” Oberli said. “With virtually everything we do, we work with a third party. The beauty of that is, as a luxury brand, you need to build the absolute best. Whatever you do has to be top quality everywhere.”

“In our case, we have worked with solid partners who built apps and mobile sites before, so we could alleviate some of that danger [of inexperience],” he said.


What now?

The luxury industry, at large, faces a few challenges in terms of mobile engagement. The first is that many luxury brands are still working to understand how to execute e-commerce strategies. Marc Jacobs and Donna Karan have only launched e-commerce-enabled websites in 2010. For such brands, mobile will be a catch-up game.

What’s more, many other luxury brands are reticent to adopt mobile commerce strategies for fear that they might lose some of their prestige and mystique by making items available on a sales channel even further removed from the traditional showroom experience than e-commerce is. Consumers, however, are shopping across channels. And mobile is becoming a bigger piece of the equation.

“Mobile enables luxury brands to reach consumers at each step in the marketing funnel – awareness, trial, persuasion and loyalty,” said Mickey Alam Khan, editor in chief of Luxury Daily (1). “The consumer is already on mobile – don’t fall too far behind.”

(1) Luxury Daily is a trade publication covering luxury marketing and retail


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