Article

NRF: Target, Walgreens execs talk mobile strategy

Executives discussed their strategic approach to integrating mobile with the in-store, online experiences.

January 9, 2011 by James Bickers — Editor, Networld Alliance

NEW YORK - In a Monday afternoon NRF session, executives from Target and Walgreens discussed their strategic approach to mobile payments and integration of mobile devices with their in-store and online experiences.

"Our experience has evolved much like you see in the overall marketplace," said Phil McKoy, vice president of marketing and technology for Target. "When I think back to two three years ago when we were starting our mobile efforts, it seemed like a small band of ragtag fellows, running around and trying to convince the enterprise that this mobile thing was something we should try."

Today, that ragtag team has brought about a highly lauded iPhone and Android app, as well as mobile couponing and integration with rising proximity marketing service Shopkick.

But McKoy emphasized that mobile isn't just a fad or a phase for Target – rather, it's a channel strategy that makes business sense.

"It's not just a question of traffic and attention for us," he said. "The economics are attractive as well. We know that our mobile users make more store trips, and we know that they spend more. Mobile makes sense."

Denise Wong, CIO, retail division for Walgreens, discussed multiple apps that the retailer has implemented, including one that allows shoppers to upload photos from their phones, share them with friends, and then order prints to pick up in-store. She pointed out that this on-the-app/in-store convergence calls for a higher level of operational finesse and customer service.

"We really need to make sure that we're ready to hand the pictures to her with a smile (when she gets in-store)," she said. "To do that, we totally integrated our apps into the workflow of the photo department. You can't just entice a customer with a fun app – you have to deliver in-store."

She said Walgreens is also looking at mobile wallets, noting that "they're coming."

"Our customers are going to come into our stores, expecting to pay with their mobile phones," she said. "They will expect to earn mobile loyalty points, receive coupons, redeem coupons, all using the mobile device. There's been a ton of creativity in the past few months, and it's going to continue to grow. We're going to have to change store operations in order to deliver the services that our customer expects."

She also said that Walgreens is using mobile apps for internal operations – for instance, executives have a mobile app that lets them view specific store data while in the field.

"As you can imagine, store visits have become more interesting now that our executives have all that data in the palm of their hand, and can drill down with the store managers," she said.

The "four types" of mobile retail apps

Also on the panel was Pratik Pal, vice president and global head of retail for Tata Consultancy Services. He said there are four discrete types of mobile retail apps, four opportunities for using the technology:

Mobile apps as part of an enterprise-wide multichannel or digital strategy.He gave, as an example, a "universal cart" system in which consumers could begin shopping at home, continuing the process on the mobile handset, and completing the trip in-store – or some other configuration of any or all of those elements.
Mobile apps as in-store applications to improve customer experience. Examples would include product locators, aisle locators, or ratings/review apps.
Extension of CRM. This includes location-based apps that tap into known information about an individual shopper's tastes and preferences, coupling that information with location-based insight and then using them together to deliver customized offers.
Efficiency for in-store associates. This includes apps for use by retail employees, such as Home Depot's "First Phone" initiative. This could include things like return-to-vendor transactions and inventory look-ups.