Mobile phones have come a long way since their introduction over 30 years ago. Phones are smaller, weigh less, and do more, carrying data as well as voice. Phones not only make telephone calls, they send e-mail and text messages, take and send photographs, play games, and access and browse the Internet. And mobile phones are everywhere. By the end of 2009, mobile cellular subscriptions worldwide numbered approximately 4.6 billion. Neither age, nationality, nor economic status represents a barrier to owning and using a mobile phone. The first phones may have been novelties, but mobile phones now are a necessity, especially for the under-35 demographic.

Mobile phones are changing the way retailers conduct business. Because they are always with us—and always on—they connect retailers to current and potential customers regardless of location or time of day. In 2015, shoppers around the world are expected to use their mobile phones to purchase goods and services worth close to $120 billion. That amount represents about 8 percent of the total e-commerce market. In addition, payment for goods or services and money transfers initiated from a mobile phone will reach almost $630 billion by 2014, up from $170 billion this year. There is no doubt that mobile technology for retail is a hot topic worldwide.

1.1    Consumer Opportunities

Retailers have a unique opportunity right now to define how they want to interact with the mobile consumer. Mobile is not only considered the fourth retail channel (Figure 1), it tends to be an enabler for the other three channels as well. Consumers are already using phones and other mobile devices to not only pay for purchases, but also to interact with retailers in a variety of other ways. Mobile retail represents both a new way to shop and a new payment paradigm.

Consumers with a mobile phone can locate the nearest Starbuck’s, browse the available coffees, build a drink to be picked up on arrival, and pay using a Starbuck’s card on the phone. Whole Foods Markets customers puzzled by the use of an ingredient can use their phones to find and display recipes using that ingredient and even restrict their choices to cater to special food allergies or requirements, such as gluten or lactose intolerance. Shoppers headed for Target can search a friend’s gift registry for the perfect gift, locate the nearest store that has that specific item in stock (right down to the department and aisle location of the item within that store), and check the gift off the registry list—all on a mobile phone. Phones can store and display loyalty, reward, and club membership cards (which most retailers scan directly from the screen) and match a health condition with the correct over-the-counter medication.

Figure 1: Available Retail Channels

Using phones or other mobile devices for payment is advantageous for both consumers and retailers. Payment by phone can be combined with additional services to increase sales, speed up transaction times, and strengthen customer loyalties. Sales can close more quickly when shoppers looking at a product can access product information and reviews (for example, using their phones to read a bar code) and then pay for the product on the spot. Consumers using mobile phones as a payment method enjoy the convenience and security of not having to carry cash or a card. In Denmark, consumers can reserve seats on a train, purchase their tickets, and use those tickets to board the train while carrying nothing but their phones. When consumers pay by phone, payment information that adheres to ARTS standards can be integrated into the retailer’s back-office systems, coordinating all-important inventory, customer relationship, enterprise resource planning, and financial data.

The mobile phone market has moved from pure calling devices to so-called smartphones (capable of processing data as well as voice), providing consumers with more computing power in their purses and pockets than ever before. And just on the horizon are devices enabled for Near Field Communication (NFC), which are capable of short-range wireless interaction. Such phones allow retailers to implement mobile contactless payment and take advantage of attendant opportunities for new payment options. In the Asia Pacific/Japan region, mobile contactless payments are accepted in most taxis and trains and some stores. San Francisco Bay Area residents with NFC-enabled phones participating in a recent pilot program paid for a ride on the rapid transit system or a meal at Jack in the Box® using their phones—no purse or wallet required. Phones can be equipped with a mobile wallet, allowing consumers to carry payment and loyalty cards electronically. Consumers benefit—their cards are not only secure, they are easily cancelled and replaced if lost: one call does it all. Retailers benefit—mobile wallets can help solve the critical problem of wallet share and represent opportunities for new incentives for customers to purchase, new ways for customers to purchase, and new ways for customers to pay.

To achieve universal consumer acceptance, mobile processing must be standardized around the world. What works in the United States must also work in Asia, the Pacific Rim, Europe, the Middle East, and Africa. There is only one way to ensure that processing is the same everywhere, and that is by creating and adopting global standards. Fortunately, numerous organizations are already working to develop and promote these necessary standards. One product of this effort is this document.

1.2    Opportunities Within the Retail Establishment

The emergence of the mobile channel will affect the entire retail organization—distribution, operations, merchandising, marketing, human resources, and customer service. The mobile retailing landscape includes opportunities for associates as well as consumers (Figure 2).

Figure 2: Mobile Retailing Classifications

For example, making the point-of-sale mobile allows customers to avoid lines and retain receipts electronically, while retailers save on labor and materials costs, and sales associates can locate and assist customers anywhere in the store. Sales associates can also use mobile devices to clock in and out and request time away from the floor. Integration with workforce management capabilities, including appropriate labor forecasting, labor scheduling, and labor management and budgeting systems can optimize both daily internal operations and corporate-driven tasks at a store.

The retail supply chain will also benefit from the use of mobile technology, particularly when the manufacturers of specialized mobile devices incorporate new features into mobile phones such as better bar codes and RFID readers. Both data and voice can then be transmitted effectively to receive and pick merchandise and track merchandise movement from warehouses to stores and within stores.

1.3    How This Document Can Help

The Mobile Retailing Blueprint is the first phase of the NRF Mobile Retail Initiative. The mission of the Mobile Retail Initiative is to be a catalyst for mobile-inspired innovation that enhances the retail shopping experience and improves internal business processes. This retailer-led initiative will guide and direct the industry in the dissemination of mobile-related best practices and the development of standards and documentation for the purpose of maximizing benefits and minimizing implementation expense, ongoing costs, and fees.

The first phase of this effort involves retailers, vendors, analysts, and standards organizations. This blueprint captures the experience of retailers and vendors who have experimented with mobile applications, leverages their experience, and tailors it to retail. The blueprint was created by members of GS1, NACHA, the NFC Forum, the NRF and its ARTS, Shop.org, and RAMA divisions; RSPA, and the Smart Card Alliance to help retailers understand the current mobile retailing landscape, recognize what types of applications are on the horizon, and determine how best to embrace this trend.

Retailers should use this blueprint as a reference to understand what is possible using mobile phones. The blueprint can help readers answer the following questions:

• How can mobile retailing improve my business?
• What capabilities do mobile phones currently offer?
• What types of mobile applications help consumers shop?
• What are the choices for mobile payment?
• What types of mobile applications help associates be more efficient?
• What technologies and standards apply in the mobile field?
• What implementation options should be considered?

The reader will hopefully walk away with a better understanding of how mobile phones can and do affect retailing and more ideas about how this trend can help the reader’s particular business.

Section 2, “Introduction,” introduces the topic of mobile retailing in more depth. Section 3, “Mobile Marketing,” and Section 4, “Mobile Commerce,” describe some of the customer-oriented applications to which mobile retailing lends itself and explore options for implementing different applications. Section 5, “Mobile Payment,” explains the different mobile payment methods, their advantages and disadvantages, and the implications of adopting one method rather than another. Section 6, “Mobile Operations,” applies the concepts of mobile retailing to internal retail operations and illustrates how adopting a mobile approach can improve efficiency and reduce costs. Section 7, “Integrated Implementation Strategy,” focuses on implementation, detailing some of the challenges that implementation can entail. Section 8, “Mobile Standards,” describes the technology standards that underlie a successful implementation effort. Section 9 defines the terms and acronyms used both in this blueprint and in discussions of mobile retail in general.

Wading thru the 178 pages- all #smallbiz retail needs to look at this document. I think it will be the cornerstone for most to begin to understand the where, why, whoms of mobile device marketing.