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Magnus JernPresident, Mobile Application Solutions DivisionDMI
DMI (Digital Management Inc.) is a creator of retail and other mobile apps for brands worldwide. Magnus Jern, president of the Mobile Application Solutions Division at DMI, spoke with eMarketer’s Sean Creamer about how mobile apps simplify the process of comparing, researching and selecting goods to be shipped to the home.
eMarketer: What functions do retailers want for their apps? How are they beneficial to the consumer?
Magnus Jern: One of main reasons retail brands have an app is to bolster loyalty and reward it with special offers. It basically replaces the plastic cards that most retailers give away. The conversion rate of people who use a card that’s sent to them is actually pretty low.
The average consumer today has about 35 different loyalty cards. And there’s no way anyone could carry that many. Brands are keen to replace the plastic cards and convert the loyalty programs into a mobile service.
eMarketer: How will brands aim to attract customers to go through the steps of downloading an app rather than agreeing to be handed a loyalty card at the register?
Jern: People are pulled in by exclusivity. For H&M loyalty customers, for example, those using the app would get a pre-invitation to see their new collection. Another key incentive is being able to self-scan an item to get more information about a product, or if you’re in the store and you can’t find the product you want in the size you want, to be able to look it up online.
eMarketer: How likely are UK consumers to consult an app when researching a product prior to making a purchase of a service or product?
Jern: This is tricky, because consumers are likely to do this, but probably not through a brand’s app. Products are generally searched for through another app, which tends to be Amazon or something like that.
[Brand] apps are more for price comparison for when consumers are at the store—if it’s cheaper online, then that is where they’ll purchase the item. There are users who will use apps for research before going to a grocery store, but I would say a lot of the research is done either through an online retail app like Amazon while at the store to compare the prices.
eMarketer: Do UK brands want consumers to make purchases in-store or on the app?
Jern: I think it’s both, because consumers don’t make the distinction—they just want a product or service. We figured this out after testing with H&M. So a customer would walk into the store, scan the product and then look it up. And then they saw an order button and they [figured] that they could buy it through their mobile phone while in the store.
They didn’t actually make the distinction that they’re suddenly buying something online. People think that all of these things are just connected. The expectation from the consumer is that everything works together.
eMarketer: Is omnichannel behavior increasing?
Jern: Omnichannel is certainly prevalent and becoming increasingly popular. One behavior you see is people scanning items in-store with their phones to be purchased at a later date. Even though they are actually in the store, they are scanning things and putting it into their online shopping basket because they don’t want to carry them home. So it can be because you’re buying a large amount of water or it can be a huge amount of toilet paper or whatever.
eMarketer: Can you discuss peak mobile app usage times in the UK and the factors behind the usage? Do those peak times change depending on the industry?
Jern: The morning happens to be the most popular, which probably doesn’t come as a surprise. It’s typically commuting and buying your morning coffee, like using your loyalty card from Starbucks or whatever it might be. Lunch hour is the next one. So it’s finding a lunch spot, finding discounts for something that you need to buy.
If you look at banking, they have a peak during the same period around lunchtime. Another peak is at the end of the day when people get off work and commute home. And then actually we see a final fourth peak sometime near bedtime, so after dinner. Those are typically the peaks that we see. And obviously the peak times differ depending on what kind of application it is.
eMarketer: Since consumers expect all of these platforms to be tied together, how are brands responding to that need for streamlining?
Jern: Retailers sometimes make the split between online and offline. It is important for retailers to offer one interface to reach the consumer across all channels. Now it’s more a question of what’s the roadmap for making that work. It is a quite complicated task on the back-end, because systems are not tied to one another. They typically build an ecommerce platform, which is completely separate from the in-store inventory platforms.
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