Predictions for 2014: Smartphones, Showrooming, and Micro-location

I recently had the privilege of taking part in the U.K. Trade and Industry delegation to China, headed by Chancellor of the Exchequer George Osborne. Its mission was to forge business links between the two territories and its success was a clear indication that there’s a bright future for China and the U.K. when it comes to collaboration between businesses across all industries.

Of course, technology has played a significant part in opening the doors to closer trade links, erasing geographical barriers, allowing for ease of communication and encouraging a greater understanding of cultural and economic considerations for both countries. So, while we’re focussed on the future and as we approach the end of the year, I’d take the opportunity to look at what we can expect from digital in 2014.

1. The Rise of the Smartphone

At the beginning of 2013, China officially became the world’s biggest smartphone user, knocking the U.S. off the top spot. And there are signs that it’s only going to get bigger. According to research firm IDC,China is set to ship in over 450 million smartphone devices in 2014 – that’s more than 25 percent up on this year. This predicted growth is driven by the government’s issue of 4G licences and in a market currently dominated by Samsung and Lenovo, the expectation that the world’s largest wireless operator China Mobile will start to carry iphones in the next 12 months.

What this means for brands: Increased access to smartphones and access to the Internet as a result, particularly in more remote territories, is likely to lead to a boost in engagement with brands as their audience widens. Those with comprehensive mobile marketing and commerce solutions will be able to capitalize on a new wave of shoppers, equipped with the technology to make purchases whenever and wherever they choose. Those without a strategy for mobile engagement need to act fast to put one in place or they’ll find themselves falling behind in the race to be relevant to shoppers in China.

2. Making Showrooming Behaviors Work

One outcome of the growth in smartphone use is the increase in showrooming, where shoppers visit physical stores to check out the products, then use their mobiles to find better prices elsewhere. Smart retailers have realized that it’s a behavior that isn’t likely to disappear any time soon and are taking steps for 2014 and beyond to embrace showrooming and make it work for them and the consumer.

For example, Adidas has taken advantage of “always on” mobile activity to add value by embedding a lace jewel with an NFC chip in the shoelaces of its Boost running shoes, which delivers product information and social comment to the phone when “tapped”. And Burberry has improved its in-store shopping experience by equipping sales associates across China with iPads, with the aim of delivering the best of both online and in-store worlds. Luxury retailer Coach has taken a similar approach, introducing mobile POS to its stores to maximize retail space and to offer a more personalized service to customers.

What this means for brands: Over the next 12 months, it will be vital for brands in China to make their in-store experiences more compelling than ever. The technology already exists to provide a consumer led purchase journey that enhances their experience and exploits sales opportunities. For example, apps offering value-added content and deals in-store, sales staff equipped with mobile devices, advanced POS and services designed to meet individual customer needs, and it should be an integral consideration when brands are planning for the future.

3. Micro-Location and Personalization

The launch of Apple’s iOS7 saw the advent of iBeacons, which are essentially “GPS for indoors”, allowing for personalized, micro-location based notifications and alerts. They use BLE (bluetooth low energy) technology to transmit data to a compatible mobile device. Currently, that includes iPhone 4S and 5, iPad 3, new BlackBerry and Android 4.3 phones. They could prove revolutionary for retailers in 2014, bringing together the mobile and in-store experience in a way that enhances the path to purchase for the customer and embraces their desire to “showroom” (check products in-store, then use their mobiles to purchase elsewhere). For example, supermarkets with BLE technology installed can pick up and monitor shoppers’ mobile activity and use that intelligence to guide their activity right down to aisle and shelf-level, providing personalized in-store offers and deals delivered via mobile. Naturally, Apple has started using iBeacons in its stores around the world, and Macy’s has just introduced the technology to selected stores in the U.S. – others are bound to follow suit over the course of the year.

What this means for brands: This low-cost, high-impact technology has the potential to unify the digital and physical customer journey, and brands would be wise to consider it for their overall retail strategy. The hardware is cheap and easy to maintain, accessing functionality requires no effort from shoppers (unlike QR codes, for example), and it’s great for customer identification and data collection. In a competitive retail environment, the ability to pinpoint customers with this kind of accuracy and target them with tailor-made promotions will be invaluable.

Of course, it’s impossible to predict what the future holds with total confidence – the next technological game changer is undoubtedly just around the corner and we need to be ready for it, whatever form it takes. But, given the enthusiasm for trade in China on both the supply and demand sides of the equation, it’s safe to say that the advances listed above will have an increasingly important part to play in 2014.