Study: Mobile Strategies Geared Towards Branding, Not Sales

Retailers and service providers are focusing their mobile strategies on increasing brand loyalty, not increasing the number of sales made via smartphones and tablets, according to a new study by digital marketing firm EPiServer.  Many mobile insiders had assumed that most corporate marketers are motivated to expand their presence to mobile in order to increase their sales transactions.

However, research shows that businesses are seeing improved customer loyalty and personalization rather than sales conversions on mobile.  According to EPiServer, 46 percent of retailers who have a mobile strategy in place and three-quarters of those who are planning to implement a mobile strategy in the coming year are using mobile primarily to increase customer loyalty and provide a more personalized experience for consumers.

Here are other findings:

• 22 percent of the businesses surveyed said that mobile transactions account for more than 20 percent of their sales
• 60 percent said mobile transactions account for less than one-fifth of their sales
• 40 percent said that mobile commerce made up only between 20 and 40 percent of sales
• 60 percent of businesses plan to spend the most money over the next five years on their website
• 35 percent of businesses will place the majority of their resources into new mobile strategies.

“As e-commerce powerhouses like Amazon and eBay make it increasingly difficult to compete on price, retailers are using mobile as a way to differentiate themselves through convenience and brand loyalty,” said Bob Egner, vice president of Product Management at EPiServer. “Furthermore, retailers are realizing a higher return and an increase in repeat business when they provide their customers with a positive experience that fosters loyalty and convenience, rather than when they build out a complex transaction model.”

Companies are prioritizing customer loyalty – which results in recurring revenue – over one-time sales.  Branding is also becoming increasingly important given the weak U.S. economy, according to Phil Davis of Tungsten, a North Carolina-based firm that helps clients optimize their company names and brands.

“Alignment begins with clarity, and that clarity of mission and purpose brings decision and action,” said Davis, in a July 1 interview with InvestmentUnderground.com.  “Business owners [should] tell their story through their name, tag line and visual identity.  Once an entrepreneur has their story straight, they become a powerful and potent force.”

Given that retailers are seeing more customer loyalty – rather than sales – on mobile, what might be the most effective branding strategies in these emerging platforms?  Davis suggests that branding clarity will help businesses more easily engage with its customers.

“We look to create more than just a name, we work to create a marketing ‘platform’ where the name is just the beginning of a deeper conversation,” said Davis.  “The right name should really get out of the way of itself and allow customers to easily engage with the client. So it’s not about having the craziest or whackiest names, our focus in more about creating insight and clarity in the identity so that potential customers can self identify with the brand and connect in a more natural and intuitive manner.”