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1 Altimeter Group Webinar #appforthat March 2, 2012 Chris Silva Industry Analyst, Mobile Make An App For That: Strategies For Winning Retail Mobile Strategies

Make An App For That: Webinar

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Altimeter Group Webinar #appforthatMarch 2, 2012

Chris SilvaIndustry Analyst, Mobile

Make An App For That: Strategies For Winning Retail Mobile Strategies

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© 2012 Altimeter Group

Smartphones And Tablets Are Where Users Turn When Shopping

© 2012 Altimeter Group

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Over 2/3 of smartphone users took them to the store with them this past holiday.

They spent on average $71 per order when purchasing on their smartphones.

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People can’t buy smartphones fast enough

iPhone 4s: 4M devices in its first weekend, bests Kinect as fastest

selling device ever!

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Smartphone Ownership Continues Meteoric Rise

The new mobile customer is

overwhelmingly a smartphone customer.

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Tablets are quickly following

Apple’s iPad sold at a rate of 14.8/hr on Black

Friday 2011. The pile – if stacked – would be measured in miles.

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We’re Seeing These Shoppers Grow Rapidly

Source: Comscore, Q4 2011

Week Ending Dec. 25

Free Shipping Day (Dec. 16)

Green Monday (Dec. 12)

Cyber Monday (Nov. 28)

Thanksgiving Weekend (Nov. 26-27)

Black Friday (Nov. 25)

Thanksgiving Day (Nov. 24)

0 500 1000 1500 2000 2500 3000

U.S. Online Holiday Spend: 2011 vs. 2010

20112010

Millions ($)

2011 2010

35274

30591

Overall Holiday Spend (Nov.1-Dec. 26)

Mill

ions

($)26% YOY increase

22% YOY increase

15% YOY increase

2011 saw gains on every major

shopping day over 2010.

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If You Build It… They’re Already There

© 2012 Altimeter Group

More than 50% of adults are buying on

smartphones today, more than 2/3 have the device in-store, still many aren’t

being served.

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Why Many Are Lagging In The Race

© 2012 Altimeter Group

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Not All Brands Are “Flying High”Altimeter Identified 3

Phases Of Mobile Maturity, Which One

Does Your StrategyFeel Most like?

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The First Step Is Choosing The Right Path

Look complicated? It’s not but needs to be

undertaken carefully to get on the right path.

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The Second, Choosing The Right App

ENGAGE

Engage strategies can provide product information, post-purchase support, or help to provide a presence for retailers

and brands with a fully online presence. The focus is on bringing

shoppers closer to the brand to drive interaction, not just spend.

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Different Apps Serve Very Different Purposes

ENRICH

These strategies are focused on driving transactions and

measured in total purchases, purchase size or frequency, and purchase-per-store metrics. The

ROI model is simple — drive purchases and grow the

business.

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© 2012 Altimeter Group© 2011 Altimeter Group

Image by Zoagli used with Attribution as directed by Creative Commons http://www.flickr.com/photos/zoagli/49894253

What Winning Looks Like

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© 2012 Altimeter Group

Engage: Sephora-To-Go app serves up the ultimate palate of engagement

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Sephora-To-Go designed to be the Go-To• “Try on” products virtually • Watch expert tutorials and product demos• View Sephora staff “obsessions” • Scan in-store barcodes and QR codes• Access >1m+ ratings and reviews• Fully integrated with Sephora Beauty Accounts• Locate the nearest Sephora via GPS• And more!

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Engage: Home Depot designs multi-channel QR code campaign to aid the considered purchase— online and off

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Home Depot’s campaign spans online and offline media, in-store signage, local

events, and more. Once activated, shoppers can access

how-to videos, product demos, relevant accessories, buying guides, project

guides, even make a purchase.

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© 2012 Altimeter Group

Engage: GE’s Moodometer helps you find just the right bulb

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Enrich: Overstock.com develops mobile app to promote, complete with scratch-off daily coupons

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Enrich: Taco Bell joins forces with MTV to offer exclusive sneak-peak award show music and video content

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As a sponsor of MTV’s Video Music Awards, Taco Bell seized the opportunity to engage

customers directly with the product by promoting MTV’s; The campaign yielded nearly

a half million scans in a mere 4 weeks.

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© 2012 Altimeter Group

Enrich: Redbox’s 10 Days of Deals mobile campaign drives mass awareness, engagement, sales

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Using multiple channels to drive awareness:

• 1.5 million texts in 10 days• 400,000 unique participators• 200,000 new Redbox

customers

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© 2012 Altimeter Group

Enrich: Tesco customers scan and purchase goods in virtual subway supermarkets

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Customers scan QR codes to purchase products for same day delivery while in the subway. More than 10K consumers visited

using their smartphones. New members rose by 76% after the first implementation and online sales increased by 130%.

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© 2012 Altimeter Group© 2011 Altimeter Group

Focus On Goals, Path Then App

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Next steps: Where Are You Now?23

Where are you today?

What is your endgame?

What should the app be?

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© 2012 Altimeter Group

Next Steps: What Is The Business Seeking?24

Where are you today?

What is your endgame?

What should the app be?

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© 2012 Altimeter Group

Next Steps: Building The Best Tool25

Where are you today?

What is your endgame?

What should the app be?

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© 2012 Altimeter Group

Know thyself• What is the status of mobile today, is this .5 of strategy or iteration

4.5? What have you learned, where are resources allocated?

Business goals• Focus on end goal, enrich and engage can coexist, but should not

necessarily do so from the start;

• What metrics matter, go beyond downloads to look at active users, cross channel pull through, segmented sales metrics.

App design• Four models are most popular in mobile today among winners

doing things differently, there will be more;

• Novelty of Experience is most important, solve actual – not perceived – user problems

Choosing strategy26

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THANK YOU

Chris SilvaIndustry Analyst, [email protected]: 802dotchris

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Altimeter Group is a research-based advisory firm that helps companies and industries leverage disruption to their advantage.

Visit us at http://www.altimetergroup.com or contact [email protected].

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