Mobile Commerce Report 2011

Mobile
in Retail
The consumers’ perception of the
HotShopper pilot and Opportunities and
challenges for brand owners and retailers

1. Mobile Commerce Report 2011: Mobile in Retail

 Mobile Commerce Report 2011

Mobile
in Retail
The consumers’ perception of the
HotShopper pilot and Opportunities and
challenges for brand owners and retailers

2.
A cooperation between:
MobileMobile
Commerce
Commerce
ReportReport
2011: 2011:
MobileMobile
in Retail
in Retail 2.
Table of Contents

Table of Contents
01. Executive summary 4

02. Introduction 6

03. Trial background 8

04. Vocabulary 10

05. The consumers’ perception 12

of the HotShopper pilot
5.1. Mobile phones are already a part 12
of many consumers’ shopping experience
5.2. HotShopper: well received as a concept 12
5.3. The scanning experience must be improved 14
5.4. More integration requested 14
5.5. Mobile apps for other kinds of shopping 16
5.6. Conclusion: Consumers want integration on 17
three levels but where does it start?

06. Opportunities and challenges for 18

brand owners and retailers
6.1. A new marketing tool with many advantages 18
6.2. Why are mobile apps so interesting for brand 18
owners and retailers in the FMCG-sector?
6.3. Potential barriers for brand owners 21
and retailers

07. Extended packaging information 22

requires an effort
7.1. Standardized and non-standardized 22
information
7.2. Cooperation and standardization 23
– competitive advantages

08. Are you ready to get started? 24

09. Contributors to the report 26

10. About us 28

Mobile Commerce Report 2011: Mobile in Retail 3. 3.

 01. Executive Summary
Executive Summary
Mobile phones are becoming part of the shopping experience.
Even in a small country like Sweden, we see around one million
SMS users in grocery stores every day of the week. When smart-
phones become ubiquitous, mobile internet access will change
how consumers shop for groceries.
In order to see what opportunities exist for using the
mobile phone to enhance consumers’ shopping experi-
ence, we ran a live mobile commerce trial at ICA Maxi
Lindhagen Hypermarket Store in Stockholm in September
2010. In the trial, 35 consumers equipped with a Android-
based Hot­Shopper mobile app scanned Arla dairy products
in order to find more detailed information about ingredi-
ents and additives; to get inspiration for recipes; and to get
special offers, among other things.
In summary, the respondents were convinced that a
HotShopper type of service would soon become reality.
They immediately recognized the relevance for their daily
shopping: Simply put, they perceived the information in the
phone to be better than on the package.
Consumers in the study expressed the following shop-
ping experience needs:
1. A need for integration of all information
in the grocery store: packaging, and
price info, self-scanning, special offers,
loyalty cards and payments.
2. A need for better integration of grocery
shopping into everyday life: scanning
ads at home, writing shopping lists, in-
store shopping convenience, and using
recipes in the kitchen.
3. A need to extend the shopping conven-
ience and control provided by the Hot-
Shopper app beyond grocery shopping.
4. Mobile Commerce Report 2011: Mobile in Retail
These three needs open interesting opportunities for brand
owners as well as for retailers, since mobile apps are a
comparatively cheap way to communicate directly with the
consumer. Mobile apps also move the store closer to the
consumer, by being present even if the consumer is else-
where than in the physical store – and gives “retail” a much
wider scope compared to what it has been up to now.
We will see – and have already seen - some industry play-
ers moving relatively quickly into mobile apps and extended
product information. Cooperation around distribution of
packaging content would already now improve cost ef-
ficiency, and early standardization would improve scalability
of solutions.
One important focus of the HotShopper-project has been
to enable brand owners, retailers, mobile operators, soft-
ware developers, service and solution providers and organi-
zations to work together. The project has clearly shown that
this is possible, and that collaboration gives good results. In
addition, standardization and the use of widely-spread and
future-proof technologies are often both cost-efficient and
sustainable ways to go. It is now up to the parties in each
industry to move forward with standardization and collabo-
ration in relevant areas.
5.
 02. Introduction
Introduction
What are the opportunities for using the mobile phone
to enhance consumers’ shopping experience? And how
can we benefit from the fact that the mobile phone is
already a part of many consumers shopping experience?
Europeans shop for grocery products 3-5 times a week
on average – and for other things only once per week.
Among Europeans who do grocery shopping, around
30% were daily SMS users already in 2008. Even in a small
country like Sweden, this is translated to around one million
SMS users in grocery stores every day of the week. We have
seen in different studies that some of that mobile commu-
nication takes place in stores, meaning that good in-store
coverage for mobile phones has been an important matter
for retailers for several years already. Given that the mobile
phone has become a natural part of everyday life for a large
majority of people, having bad in-store coverage means
having fewer customers. And with in-store mobile phone
coverage, customers also communicate with other family
members about their actual shopping, possibly increasing
sales even more.
So, it is important to understand that the mobile phone is
already an integrated part of the grocery shopping experi-
ence, and it is already affecting sales. What we are seeing
now in Europe is the explosive rise in popularity of a new
generation of “smartphones” that are fundamentally built
around having mobile internet access (such as the iPhone
and Android phones like the Sony Ericsson X10) and mobile
internet access increasingly integrated into everyday life.
For a majority of European consumers, the internet is now
used on a 24/7 basis, meaning that there are few walks of
6. Mobile Commerce Report 2011: Mobile in Retail
life not being affected by the internet. Many analysts predict
that internet in mobile phones will become just as perva-
sive as it now is on computers. Given that we have already
seen this happening in other markets (notably Japan where
roughly 70% of all mobile phone owners now access the
internet on a daily basis), we agree with this prediction.
When smartphones become ubiquitous, mobile internet
access will of course affect the grocery shopping experience.
But rather than just letting consumers bring their own mo-
bile internet experiences into the store, should the retailers
take a more active part in this? And if so, what can they do
to actively enhance the shopping experience? Those were
the questions we had when entering into the HotShopper
trial. Not only did we find very compelling reasons for retail-
ers to take an active part in the in-store mobile experience,
we were also able to witness first-hand how consumers
by downloading a multitude of apps (small mobile phone
applications) that are directly related to all various walks of
everyday life – shopping included – are now actively taking
part in transforming the very foundations of the internet
itself. We are witnessing the rise of an internet where eve-
ryday mobility is becoming the fundamental focus for app
development: An internet where most if not all mainstream
usage is focused on what we do differently in different loca-
tions. This fact will of course have implications on and give a
lot of opportunities for retail business.
7.
 03. Trial background
Trial background
Ericsson Research and GS1 Sweden/ECR Sweden have to-
gether with Arla Foods and ICA Sweden – both representing
ECR Sweden – run a live mobile commerce pilot in a relatively
new ICA Maxi Hypermarket Store in Stockholm, ICA Maxi
Lindhagen, in September 2010. The purpose of the trial was to
explore if and how mobile phones can facilitate shopping of
consumer goods, primarily grocery products.
A prototype system for extended packaging, i.e. retriev-
ing extended product information via the mobile phone,
was developed especially for the trial.
In the trial, 35 consumers tried out the HotShopper mobile
app in the ICA Maxi Lindhagen-store during a time period
of two weeks per individual. All participants were given
SonyEricsson Xperia X10 phones pre-loaded with the Hot-
Shopper mobile app and instructed to scan Arla products
in the dairy department of the store.
The consumers involved in the test were young couples
(20-30 years old) and families with children at home (25-55
years old). The participants were rather frequent mobile
phone users but not all of them had used smart phones
prior to the test. The group comprised a mix of men and
women with different levels of education and income. All
consumers were frequent customers of the ICA Maxi Lind-
hagen store and were members of ICA’s loyalty program.
The technique used in the HotShopper app is based
8. Mobile Commerce Report 2011: Mobile in Retail
on barcode scanning with the help of the camera of the
mobile phone.
The trial has been evaluated by an external research
institute. As the study was limited to a small number of
consumers living in the same type of housing area in
Stockholm, it was decided to use a qualitative method
to evaluate the trial. The research institute conducted a
number of studies with the consumers that participated
in the trial: pre-study, shop along, post-study and focus
groups. It is not possible to make statistical conclu-
sions from the study, as the population was limited to
35 consumers. Instead we have obtained an extensive
understanding from a consumer point of view about how
mobile apps can enrich the shopping experience today
and in the future.
This report covers a summary of the consumer studies
as well as analyses carried out by the project team on how
mobile in retail may affect brand owners and retailers.
Fig: 1 Examples of screenshots from the HotShopper app.

The HotShopper app consists

of the following main features:

Find
Find information of a product’s
contents, e.g. ingredients, additives
and eco-labelling information

Inspire
Get inspiration from recipes as well
as some other information about
the products

Share
Share your experience with family
and friends through Facebook
updates

Save
Find special offers

Avoid
Avoid a certain additive

9.
 04. Vocabulary

Vocabulary

4G is the fourth generation of mobile network standards, also referred to as LTE (Long-
4G Term Evolution). The next evolutionary step of mobile technology allowing data rates
above 100 Mbps.

The player that provides the content to the mobile app, for example brands providing
Content provider
product information, recipes etc.

FMCG Fast Moving Consumer Goods.

HotShopper The prototype mobile app developed for the trial presented in this report.

Software installed on the mobile phone that interacts with the network to deliver a
Mobile app
service to users.

Barcode scanning using the camera on the mobile phone and software to decode the
Mobile barcode scanning
content of the barcode.

Mobile Internet Refers to access to the internet from a mobile devise such as a smartphone.

Everything you can do with a mobile phone. In this report we mainly focus on apps and
Mobile services mobile web, but mobile services are for example also SMS and voice (i.e. the basic fun-
ction of being able to talk in a mobile phone).

A wireless short-range communication technology that has an operating distance of a

NFC
few centimetres (simply hold two devices close to each other). NFC can be used for both
– Near Field Communication communication and identification.

Service provider The player that offers the mobile service to the consumer, e.g. a retailer or a brand owner.

Shopper A consumer in the purchasing situation, for example in a grocery store.

A smartphone is a mobile phone that offers more advanced computer ability than an
Smartphone average mobile phone. In this trial a smartphone specifically means a phone that uses the
HotShopper app and scans a barcode.

10. Mobile Commerce Report 2011: Mobile in Retail

11.
 05. The consumers’ perception of the HotShopper pilot

The consumers’ perception of

the HotShopper pilot
When testing a prototype or a new concept, it is often more
interesting to include a smaller population of test pilots rather than a
big one. A small population makes it possible to go into depth into a
number of key issues and considerations. This chapter aims at summa-
rizing the results of the HotShopper trial from the point of view of the
participating consumers. What were their opinions? Did they find the
information that they received in the app useful? Would they like to use
a HotShopper-like mobile app if it became reality? In which situations?

5.1 Mobile phones are already a part of many empowered to make the right choices: Empowered to be
consumers’ shopping experience
When testing a prototype software system “live” on
normal consumers, the rule of thumb in the market research
industry is that everything that can go wrong in fact will
go wrong. And even if users are able to actually try out the
system on their own, they are quite often more interested
in talking about things that the testers are not interested in –
such as the colour or shape of the mobile phone rather than
the app they were supposed to evaluate. Only rarely does
not only the system work as intended, but the users also
focus on what the testers are interested in finding out.
The HotShopper trial is one of those rare success cases.
Although respondents had to use another phone than their
own during the trial, this turned out to be very little of an
issue. Many already had a smart phone and those who did
not yet have one had already grown accustomed to seeing
other people using smart phones everywhere and in all
kinds of situations. The general perception of smart phones
among the respondents was that they were easy to use and
that they set a standard for what one can do with a phone.
Grocery shopping today involves balancing a lot of infor-
mation. Even purchasing a single banana means making
decisions about origin, pesticides, ecologic standard, fresh-
ness, fair trade and so on. In such mildly stressful everyday
situations consumers feel an even stronger need to be
in control and confidently making active choices, while still
getting a good price.
With smart phones increasingly being perceived as easy-
to-use internet in your pocket devices, respondents in our
study overwhelmingly saw the smart phone as fitting quite
naturally into shopping activities. The more advanced re-
spondents in the trial were in fact already building their own
service in a similar vein to what we tested with HotShopper,
by using a combination of different apps already available.
They are building this “service” piece by piece as the needs
occur and they look for specific apps to fill specific needs.
But it turns out that smart phones are not exclusively
for advanced users. Even the users of more basic mobile
phones in the trial easily adapted to the smartphone mind-
set and were surprisingly able to take advantage of the
HotShopper functions.
5.2 HotShopper: well received as concept
The respondents were convinced that a HotShopper
type of service will soon become reality – in fact already
within a year. They immediately recognized the relevance
for their daily shopping as they perceived extended product
information delivered though the mobile phone as adding
value, compared to similar or same information available
elsewhere (on package, through advertisements, etc.)
Simply put, they perceived the information in the phone
to be better than on the package. Not only was it easier to

12. Mobile Commerce Report 2011: Mobile in Retail

 “The best result you can wish for in a focus
group discussion is that respondents sponta-
neously have a lot of ideas of how to improve
the service they have tested. This means that
they have fully accepted the basic service they
tested and already to a large extent integrated
it with their daily routines. And this is exactly
what happened with HotShopper.”
HotShopper focus group moderator
read due to its generally larger size but it also became more
valuable since it was structured in a standardized way. It was
easier to find what one was looking for and the extended
information not available on packages was useful.
All respondents that we talked to in fact perceived
benefits from using HotShopper, although they represented
several different types of shopper profiles: Structured and
unstructured shoppers; fast and slow shoppers. They also
found different benefits depending on the type of shop-
ping activity: Routine shopping, complementary purchases
and shopping for special occasions.
Thus, individual preferences in shopping styles, lifestyles
and ambitions determine which functions are found to be
most valuable and/or most likely to be used. So whereas
health conscious respondents feel strongly about Avoid and
Find for avoiding additives, those with allergies want to avoid
harmful ingredients. But interestingly, both organized shop-
pers and unorganized shoppers would like to benefit from
increased organization of their shopping. And both organized
and unorganized shoppers had a unanimous interest in using
the recipes of the Inspire part of HotShopper app to gain
more inspiration about what to cook and, consequently, what
to buy. New recipes not only created a chance of breaking
the boredom and routine, it also saved time normally spent
trying to think of something new in a stressful and sometimes
uninspiring situation. In fact, the recipes functionality in the
HotShopper app had no downsides at all!
Also the Save function of the app was tried out and was
appreciated by most consumers in the trial. Most respond-
ents already received personalised offers from ICA in their
mail boxes. The concept of receiving these in the HotShop-
per app was perceived as a considerable improvement.
Not only would the offers not be forgotten at home. Offers
could also be considered in the actual shopping context
and compared with alternatives.
“Suggestions of new recipes are just great when
you are standing in the store both hungry and
clueless of what to buy.”
Mita, 43
“I liked it a lot and I tried to scan all the products
in the section to find a good offer. It felt a little
like a treasure hunt.”
Jenny, 29
There were naturally some issues as well. Many were
concerned about battery consumption – and this gripe is
something we see in basically all smart phone related stud-
ies. Some who had previously never used touch screens
also had some initial usability problems, but managed to
overcome them. Touch interfaces have a learning curve,
but our study shows that this is not a barrier for adoption
and that touch interfaces are intuitive to use once one gets
used to the concept.
13.
 05. The consumers’ perception of the HotShopper pilot
5.3 The scanning experience must
be improved
More uniquely related to the HotShopper app, how-
ever, were barcode scanning issues. Some comments were
related to the novelty of using one’s phone for scanning;
other shoppers might wonder what you are up to. While
using self-scanners is established as being an alternative
way of shopping and paying for ones groceries, scanning
with a mobile phone does not carry an obvious interpreta-
tion. Some respondents wonder if other shoppers think
they might be doing something suspicious like trying to
find something especially cheap (indicating that the per-
son scanning is poor) or maybe gathering data for some
experiment. But respondents realized that this novelty
phase would soon fade away and did not see this as a
barrier.
However, the self-scanning system was used as a point
of reference for many, and in this comparison the phone
was seen to be lacking somewhat in ergonomics and
scanning speed.
“It was too difficult to juggle two devices at the
same time, the self-scanner and the phone.”
Mita, 43
When scanning, the phone has to constantly be taken out
of/put back in pocket/handbag. Self-scanners have a prop-
er handle, and in comparison the phone was regarded as a
bit unwieldy to use and harder to grip. Some also expressed
fear of forgetting the phone in the shopping cart. While
most respondents found the speed of mobile phone scan-
14. Mobile Commerce Report 2011: Mobile in Retail
ning acceptable, it was still too slow to replace self-scanners
in an everyday stressful shopping situation. Scanning
barcodes with the phone camera was somewhat awkward.
It takes time, feels imprecise, demands practice and is
dependent on in-store lighting conditions – and there is no
“guiding red light” as with the self-scanning systems. One
should however bear in mind that the HotShopper trial was
a test and that the prototype used was not an optimal solu-
tion in terms of ergonomics. It is also important to point out
that new technology, such as Near Field Communication
(NFC) may improve usability and ease to use.
Based on the speed of scanning with the SonyEricsson X10,
respondents thought they would use the mobile phone
mainly for extended product information on specific prod-
ucts, whereas today’s self-scanners are viable for scanning
of all intended purchases – indicating that some optimiza-
tion of this technology may still be needed. On the other
hand, if the speed and ease of scanning was the same,
most respondents said they would prefer to use their own
phone – especially if scanning using the mobile phone
shows more information.
5.4 More integration requested
Many of the requests and wishes for future development
of HotShopper were related to the issue of integrating dif-
ferent functions into the mobile phone.
Even those who have assembled some of the HotShop-
per functionality using other apps in their phones request
extended integration – and they see opportunities rather
than problems if the retailer makes the integration. For
 HotShopper
Fig: 2 Typical functions that people wanted to integrate.
most, this opportunity was expressed as a chance to inte-
grate the self-scanning system now available in many gro-
cery stores, and every product in the store (not just Arla), as
well as the ICA membership card. But also payment as well
as the integration of money saving offers into HotShopper
where seen as good opportunities rather than intrusive
functions. And as most grocery shopping ultimately is
for food to be prepared, integration and management of
recipes was seen as very important, preferably combined
with a shopping list function. Respondents thought that a
phone based shopping list would not only replace scraps
of paper one writes when planning purchases, it could also
automatically align planned purchases with store layout
to avoid unnecessary running back and forth in the store;
and ultimately it could coordinate purchases with other
family members. Although Facebook had been integrated
in the app in the Share function, this was not seen as useful
– instead communication functionality should be focused
on the family, such as shareable shopping lists, and possibly
user profiles so that needs of different people could be met.
“I would like to add a shopping list function so it
would be easier to keep track of what to get. It
would be good if it was structured according to
the layout of the store.”
Jenny, 29
Why then, this need for integration? The answer partly has
to do with a wish for a convenient way of having every-
thing at hand when needed. But more uniquely there was
also an unspoken need to make grocery shopping and
the grocery shop itself a more integrated part of activities
throughout the day, and not just when in the store.
With the spreading ubiquity of the internet, we have
seen consumers becoming increasingly well-informed and
demanding. As the internet makes information available
to consumers wherever they are, this seemingly makes it
natural for the grocery store to also be available to consum-
ers wherever they are!
In this trial, the HotShopper app would save location
information whenever the scanning function was used. What
we saw when the information came in astounded us: Almost
half of the scans where from locations outside of ICA Maxi
Lindhagen where the trial was performed! There were scans
from all over Stockholm – in fact there even were some scans
from the south of Sweden!
Further analysis led us to the conclusion that these scans
where following the everyday micro-mobility of the respond-
ents, with clear scanning peaks not only at ICA and other
stores but also at home and possibly at commuter stations.
We were witnessing how respondents were already in-
tegrating HotShopper into their everyday activities, already
performing some of the activities they had expressly wished
for: Scanning products at home to look at recipes when
cooking, scanning in other stores for comparison, possibly
scanning in a 7-Eleven store on the way to work in order to
start thinking about what to go shopping for in the after-
noon. And so on.
What respondents then really where asking could be
interpreted as an invitation for the grocery store to enter their
everyday mobile life. Rather than having an internet that
replaces physical stores with online shopping, we saw the
complete opposite. An app that complements and enhances
the presence of the physical store by mobilizing the store and
making it integrated in the respondents’ everyday mobile life.
15.
 05. The consumers’ perception of the HotShopper pilot
5.5 Mobile apps for other kinds of shopping
However, consumer shopping needs are not limited to
a single grocery store: Many respondents also wanted and
expected the HotShopper app to work across all grocery
stores, and not just those in the ICA chain.
When asked about how it would be to use a similar app
when shopping for other goods than groceries and what
those situations would be, respondents at first found it a
bit difficult to adjust to the idea given that the design of
the trial had been very focused on groceries. But when
prompted with shopping examples most respondents soon
warmed to the underlying idea of feeling more in control of
one’s purchasing behaviour. Furthermore, smartphone users
among the respondents were already using their phones to
enhance shopping via the browser or specific apps – and
thus found the mental step-up to a more integrated solu-
tion relatively easy to take.
For clothes shopping at places like H&M and MQ, re-
spondents suggested checking for country of origin, specific
dyes and other chemicals used, and Fair Trade certificates.
Many thought that care instructions would be practical
to read on the phone, as well as getting inspiration about
matching apparel.
“I would like to be able to check if a particular
item is available in my size in this store and if
not, where I could find it. It would save time
looking for a clerk.”
Mita, 43
16. Mobile Commerce Report 2011: Mobile in Retail
The normal shopping procedure with home electronics
seems to be that research is done at home, before going
to the store. However, due to the fact that the consumers
do not always find the information about various models
objective, there was an in-store need to check for model
specific details and comparisons as well as getting explana-
tions for technical terminology.
“I would like to be able to simply compare two
TVs that stand next to each other. Why one
costs 5 000 SEK and the other 12 000 SEK when
I can’t see any difference in the picture.”
Bengt, 52
When shopping for plants at places like Plantagen, there
was a need to get watering instructions and other info
related to how plants should be treated.
Allergens were high on the list when shopping for
cosmetics, together with animal testing info; and a
HotShopper-like app could provide guidance in drug
stores in general when staff was not available, as well as
sorting through all the fine print and possibly also check
for harmful combinations of drugs.
“I would like to get help when choosing be-
tween different pills for headaches.”
Tova, 22
5.6 Conclusion: Consumers want integration
on three levels – but where does it start?

To sum up, we see three distinct areas of improvement that

consumers are looking for:

1. First of all, respondents expressed a need for

integration of all information in the grocery store:
From packaging information, via price info and
self-scanning to special offers, membership cards
and payments.

2. Secondly, consumers express the need for better

integration of grocery shopping into everyday life:
From the ability to collect offers at home, write
shopping lists and get inspiration for evening meals
during daytime, to being more in control over one’s
activities in the grocery store, to using recipes in
the kitchen.

3. Thirdly, and finally, there was also a need – albeit

not as readily obvious to respondents – to extend
the shopping convenience and control hinted at
by the HotShopper app into just about every other
category of shopping.

Given the overwhelming response to the HotShopper app

in this trial, it may be easy to conclude that grocery chains
can build their own branded apps without feeling pressure
of competition. However, as the most common reference
to similar apps among our respondents was the Pricerun-
ner type of app, it may well be that price comparison apps
could take this space if grocery chain apps are late or do not
live up to expectations. Furthermore, some respondents
were already aware of independent barcode scanning apps
– and it may well be that user generated barcode informa-
tion could become good enough or even better than what
manufacturers or chain stores provide, thus obviating the
need for chain branded apps if they are too slow in coming.

17.
 06. Opportunities and Challenges for brand owners and retailers

Opportunities and Challenges

for brand owners and retailers
The summary of the consumer studies presented in previous chapter
clearly show that the consumers believe that mobile apps enrich their
shopping experience. The HotShopper app was mainly focused on
extended packaging, but there are also other areas of interest for the
consumer, such as shopping lists and self-scanning.
This chapter aims at treating opportunities and challenges for brand
owners and retailers from a more general point of view. Why are mobile
apps so interesting from a business perspective? How can mobile apps
improve the communication with the consumer? Which areas for im-
provement can be noticed?

6.1 A new marketing tool with
many advantages
Mobile marketing is a rather new marketing tool are in practice hardly any delays for distribution.
– especially the use of mobile apps – and has a number of
advantages compared to traditional marketing possibilities.
Mobile apps give the brand owners and the retailers the
possibility to communicate directly with the consumer. It is
a marketing tool that is very efficient for building customer
loyalty, in particular if combined with other marketing tools
such as loyalty programs and direct marketing or advertising.
A mobile app is available for the shopper at the very
moment of truth – when she is in the store, in front of the
shelf, with the product in her hands. A mobile app can add
value to the physical product and makes it possible for the
brand owner to communicate aspects that are hard to com-
municate on the packaging. An example of this is extended
packaging information such as the explanation of what a
certain additive really means.
Mobile apps are comparably cheap. It does not require
an enormous marketing budget to develop a mobile app.
Also, the apps are distributed via for example App Store or
Android Market free of charge. One should however not
under-estimate the fact that apps need to be maintained.
Maintenance often costs both in terms of money and
brain effort!
Mobile apps are fast and efficient. Once the brand owner
or the retailer has decided to disseminate a message or an
offer, it can be immediately communicated to consumers,
who receive it at the moment it has been produced. There
A more strategic advantage, in particular for retailers, is
that a mobile app can move the store closer to the con-
sumer, by being present even if the consumer is elsewhere
than in the physical store. The consumer can shop, or look
for information, 24/7, from home, on the way to the physi-
cal store or being anywhere where he can be connected.
Consequently, it gives “retail” a much wider scope compared
to what it has been up to now.
6.2 Why are mobile apps so interesting for
brand owners and retailers
in the FMCG-sector?
The retail environment has developed enormously
over the years, especially since self-service stores were
introduced more widely on the market. Brand owners
and retailers have together gained a lot of experience and
insights about consumers and, more lately, about shoppers.
The most skilful business partners know rather well how
to meet the needs of a certain target group, in a specific
category, in a shop of a certain format. The knowledge is
based on a lot of experience gained from “trial and error”
in the stores. However the technical knowledge developed

18. Mobile Commerce Report 2011: Mobile in Retail

 “I used it to find out if there are any additives in
some yoghurt. I would also like to use this to
scan baby food for our 8 months old son.”
Ola, 32
over the years has also contributed to the progress. The in-
troduction of barcodes made it possible to achieve point of
sale data deriving from the scanning of products at check-
outs. More recently, the development of loyalty programs
has generated the possibility to learn more about shoppers,
not at least in terms of individual shopping patterns.
There are already many different marketing tools avail-
able for brand owners and for the trade, with various levels
of sophistication. There are however two major constraints
linked to traditional marketing tools. First, they only com-
municate with the consumer at one (or a few) physical
place at the time (e.g. at home in front of the TV, in the mail
box, or at the store). Secondly, they only permit one way
communication.
Mobile phones can in theory be used by businesses to
reach consumers anytime, anywhere and this fact funda-
mentally changes the possibilities for brand owners and
retailers to do business.
The HotShopper trial clearly showed that not only
consumers, but also retailers and brand owners appreciate
the possibilities given by extended packaging. Extended
packaging can give the brand owner the possibility to pro-
vide additional and more in-depth information compared
to information printed on the packaging. One example
could be clear and accurate information about additives. It
can also include inspiration, such as recipes. Mobile apps
including extended packaging give the brand owner a
possibility to communicate a message which is limited in
time. This may in particular be of importance during a situ-
ation where a product recall is needed, or where the brand
owner for other reasons would like to communicate directly
with the consumers about the contents of a product. The
HotShopper trial furthermore showed that the extended
packaging part of the mobile app can be a great help for
the staff in the store when replying to product requests
from the consumers.
A global GS1 publication from 2009 has identified a
number of consumer touch points, i. e. places where the
consumers interact with the store (for example pre-store
planning, outside store, in aisle/at shelf, at checkout and
usage at home). All these touch points represent an oppor-
tunity to communicate via a mobile app and thus to enrich
the shopping experience for the consumer. The business
perspectives of the functions may, in addition to extended
packaging, include for example coupons and discounts,
loyalty programs, advertising and promotion.
19.
 06. Opportunities and Challenges for brand owners and retailers
Consumer Touch Points
Places where the consumers interact with the store.
Coupons and discounts:
Mobile coupons and discounts can be directly linked to
the shopping situation or even to a certain location. They
appear on the mobile screen at the moment when the
shopper scans the barcode (or another tag) and give the
retailer the opportunity to for example give the shopper
an individual “3 for 2”-offer. Using mobile phones is cost ef-
ficient as they can be used to capture, manage and redeem
coupons and discounts.
Loyalty programs:
Mobile phones can provide more personal services and be
used in a more tailor-made way to communicate with the
individual loyalty program members. The benefits and the
possibilities with the loyalty programs will be able to ex-
pand when combined with the possibilities of the mobile
smart phones. Offers that are restricted in time or to a cer-
tain shopping location can be distributed to the consumer
via the mobile phone. The consumer is getting more and
more mobile so why only reaching the consumer when
she is doing her weekly shopping in her favourite store?
Maybe you would like to attract her to visit the store of
your retail chain in the village where she spends her vaca-
tion? Or to tailor make a communication to the consumers
who intend to buy a certain category? Or even a specific
brand? You can also build in functions like voting in order
to encourage a two-way communication with your loyal
consumers. Or why not using the possibility of a quick
research to find out what your consumers think about a
new product, a new commercial or something else that
engages the consumer and make them feel being a part
of your brand? Mobile phones will replace physical loyalty
cards when combined into one function. This will most
likely decrease the likelihood of the consumer forgetting
to bring her “card” to the store.
The number of retail related mobile services will continue to increase. Exactly what kind of services are difficult,
even impossible to foresee. What we know is that there will be infinite combinations and possibilities available.
20. Mobile
20.
Commerce
Mobile
Report
Commerce
2011: Mobile
Report in
2011:
Retail
Mobile in Retail
Advertising and Promotion:
The mobile phones encourage more efficient and direct
communication with the consumers as the ads are sent
directly to the mobile phones. Mobile advertising also
includes the possibility of location based advertising and,
in particular if combined with loyalty programs, advertising
targeted to certain groups.
Payment:
With mobile phones, there may in the future be a ubiq-
uitous possibility to make payments anywhere, anytime
including at retail check-outs.
Self-scanning and Self-checkouts:
The combination of self-scanning and self-checkout with
the help of the mobile phones transfer the human effort
currently made by the store to the consumer. One mobile
device instead of two will consequently reduce the stores’
need to invest in and administer scanning equipment.
Social media:
Social media is already considered to be a significant
marketing channel. It may be of higher importance in
businesses other than groceries, like durable or lifestyle
products. Social media give, just like the mobile apps,
brand owners and retailers the possibility to communicate
directly with consumers. The possibility of combining the
two by integrating social media into the apps will lead to
many new and highly interesting into the apps will lead to
new and highly interesting applications.
Store location, in-store navigation and shopping-list:
Store location, which can help the consumer to find the
stores in a certain area where a certain product is stocked,
can increase the possibility of driving traffic to the store. In-
store navigation, which facilitates for the consumer to find
a product in the store, may together with a shopping-list
function build customer loyalty and encourages repetition of
a purchase. The best results for using store location, in-store
navigation and shopping-list functions will be achieved if
these mobile apps are combined with other functions.
6.3 Potential barriers for brand
owners and retailers
The competition in the mobile app world is fierce.
There is a magnitude of shopping apps currently available
in the different app stores, and there are more to come.
One obvious restriction with mobile apps is that the posi-
tive benefits that evidently exist will only become reality
if and when the consumer decides to download your app.
However, if combined with other marketing tools, the possi-
bility that the consumer decides to download and use your
app actively will increase.
A possible barrier with mobile apps is that questions
about the integrity of the consumer may arise if using infor-
mation about individual consumer patterns as a basis for
your communication. In the HotShopper trial, it became evi-
dent that the integrity issues were not a matter of concern
for the consumers that participated in the trial.
“I would not mind getting the offers in my
phone. ICA knows everything about my habits
anyway.”
Roger, 47
The integrity issue was rather widely discussed a couple
of years ago, but less so nowadays. Many experts believe
it is partly due to the fact that the consumers are so
used to making fragments of their daily lives public via
Facebook and other social media. Others claim that the
consumers are ready to make a trade-off between private
integrity and good offers. No matter what reason, it is
important to remember that many companies have far
from the same relationship with their costumers as ICA
has with theirs. There may furthermore be legal aspects
that have to be considered. A piece of good advice is
therefore to think cautiously through how and when
to use facts and figures about the consumers when
communicating with them and to ensure that there is
consumer consent.
In-store coverage is another possible barrier for efficient
use of mobile apps. In-store coverage is suboptimal in many
stores, and can also vary from operator to operator. In this pi-
lot, signal strength and data bit rates were measured before
the test to ensure good coverage. In order to ensure good
service performance it is vital that the store provides good
coverage. This is not just important for mobile services like
HotShopper. Various studies reveal that consumers already
today use their phones in-store for voice calls and for send-
ing SMS. Shoppers expect that the mobile phones will work
inside the store and good in-store coverage can be seen as
a hygiene factor for retailers.
Retailers need to investigate their particular situation and,
if required, either put pressure on the operators to improve
the in-store coverage or invest in an own solution that
provides good coverage for all shoppers.
Three other problematic issues that came up during the
trial were the somewhat awkward handling of the phones,
the scanning ability and the fear of running out of batteries
when scanning.
As for the handling of the phones, a shopping cart holder
for mobile phones could be one solution to improve the
usability of mobile phone scanning.
When it comes to the scanning ability, fully developed
(non-prototype) apps, improved cameras and potentially
also NFC-tagging will increase scanning speed considerably.
Finally, as for lack of batteries, a solution could be
to offer “quick charging” power outlets in-store free of
charge, i.e. the possibility to charge a phone for a couple
of minutes in order to be able to complete the shopping
trip. Phone chargers are currently being standardized after
pressure from the European Union and this will eliminate
the need of using adapters for different phone models.
The battery problems is a general issue for the whole mo-
bile phone industry, implying that there is a high motiva-
tion for finding improved solutions and that development
is continuously ongoing.
21.
 07. Extended packaging information requires an effort

Extended packaging information

requires an effort
What are the implications of extended packaging information from a
business perspective? How will the information reach the consumer?
Can the retail business benefit from standardization? There is clearly a
desire from consumers to obtain extended packaging information via
their mobile phones. There are also from a business point of view many
advantages of using mobile apps as a part of the marketing mix. It is most
likely that extended packaging in many cases will be the basis of the
content in the retail mobile apps that are and will be developed.

7.1. Standardized and
non-standardized information
The HotShopper trial has shown that the consumers
find it attractive to receive and read product information –
extended or not – in the mobile phone. This requires that
the product information that is available for the consumer
is univocally correct. Any divergence can result in irritation
in the best of cases but have disastrous consequences for
the individual consumer in the worst of cases. The negative
impact on the brand can in all cases be substantial. All
information about the products that is available in the apps
should therefore be quality checked. This could initially
mean an investment both in terms of time and in terms
of budgetary resources. However, the disadvantages of
providing incorrect information are much bigger than the
initial efforts that are needed for the quality checks.
The information included in a mobile app currently reach-
es the consumer in many different ways. It can be trans-
mitted by the Internet application providers (e.g. Google,
Microsoft, eBay), or by the brand owners and retailers that
have developed own mobile apps (e.g. ICA, or Arla Foods).
One normally differentiates standardized information (e.g.
product name, manufacturer name, product image and
ingredients) from non-standardized information (e.g. pro-
motional, advertising, price comparisons). It is plausible that
the non-standardized information will continue to flow in
many different pipes. The price of a product is, for example,
hardly ever set by the brand owner and it varies from one
retailer to another. There are however many advantages of
having standardized information stored in one standard-
ized data pool and to have this standardized information
quality checked.
Standardized brand data delivered by Internet applica-
tion providers is in many cases not directly provided and
controlled by the brand owners. The information comes
from multiple sources (e.g. manual data entry by consumers
or by the Internet provider, searches on the internet, retailers’
information, etc.). Some of these sources provide inaccurate
or malicious information. Consumers, brand owners and
Internet providers are likewise very interested in connecting
to accurate sources of trusted data.

“In a world of increasing transparency, inac-

curate and incomplete product information
reduces consumers’ trust in Brands and Brand
owners.”
Source: GS1 US/Cap Gemini B2C Work Session

22. Mobile Commerce Report 2011: Mobile in Retail

 App provider App App
provider
provider App App
provider
provider App provider App provider App App
provider
provider App App
provider
provider App provider

Content provider Content

Content
provider
provider Content
Content
provider
provider Content provider Content provider Content
Content
provider
provider Content
Content
provider
provider Content provider

Standardized Technical Interfaces

Standardized Technical Interfaces

No standardized
No standardized
interfaces interfaces Info broker Info
A fewbroker
info brokers A few info brokers

Standardized Technical Interfaces

Standardized
& Business
Technical
agreements
Interfaces & Business agreements

App provider App App

provider
provider App App
provider
provider App provider App provider App App
provider
provider App App
provider
provider App provider

Fig: 3 Non-standardized solution requiring direct Fig: 4 Standardized solution with a few central info brokers
communication between all content providers and standardized interfaces.
and all app providers.

It is in this context that GS1 has been given the task from
the FMCG-industry to be the actor that enables the distri-
bution of quality checked and correct brand information in
an efficient and secure way.
There is clearly a need for extended packaging informa-
tion from a consumer point of view. It would be possible
in theory that each and every brand owner provided the
extended packaging information to each and every app
provider that asked for it. However, there is another option
which would be more suitable in practice. GS1 Sweden
has already a business service in place, Validoo™, that
quality checks and distributes item information from the
brand owner to the retailer. This system can be extended
to include also other standardized information such as
information about ingredients or the level of carbon dioxide
emissions.
GS1 can thus be the actor that quality checks and dis-
tributes extended packaging information in a standardized
way. It is however up to content provider (a brand owner or
sometimes a retailer) to decide what content to distribute
and to which parties.
7.2 Cooperation and standardization
– competitive advantages
As with all newly launched products and services,
some players within the mobile service industry will be the
fast movers. It is often the case that the early movers do
not have time to wait for a standardization process to be
adopted. They simply prefer creating their own solutions
to reach the market among the first. There are of course
advantages connected to being a fast mover and new
innovative solutions can also inspire others to follow. The
reverse of the medal might though be fragmented and
cost-inefficient solutions affecting both the industry and
the consumers in disadvantageous ways.
Going forward, a number of key questions have to be
taken into account.
• How will the content be distributed in a cost-
efficient way? By whom?
• How to secure that the infrastructure behind
the mobile app becomes scalable and easy to
develop further?
More specifically, the problem is the technical integration
of many sources of content through non-standardized
interfaces, see figure 3. If each solution requires a different
data format, this will be both costly and cumbersome and
if each added content provider has new interfaces and
requires integration, there will be a need for direct com-
munication between a content provider and the provider
of the mobile app. This process will not scale.
There is also a business aspect as it is both time-con-
suming and expensive to make agreements between all
individual app providers and content providers.
One way to address these questions is that a resolution
service (an “info broker”) keeps track of where content is located
and is capable of directing apps to this content. (see Fig: 4)
A solution like the one described above needs to be stand-
ardized so that all actors involved are capable of communi-
cating with each other. Preferably, standardization should
cover data formats (how the product data is encoded), and
communication interfaces (how data is transported in the
network). This is an urgent need and something that needs
to be dealt with before extended packaging can become
really successful.

23.
 08. Are you ready to get started?

Are you ready to get started?

Or maybe you are already there but would like to take the
next step? Hopefully you have found useful information in this
report that will help you with your strategic decisions when
considering how to use mobile apps in your business.

Other mobile commerce projects Important focus

There are also many other mobile commerce projects that One important focus of the HotShopper-project has been to
are run in different countries all over Europe (and in the rest enable brand owners, retailers, mobile operators, software
of the world). There is a lot of insight that you can take part of developers, service and solution providers and organiza-
by studying these projects. Some of the information can be tions to work together. The project has clearly shown that
found at: this is possible, and that collaboration gives good results. In
addition, standardization and the use of widely-spread and
future-proof technologies are most often also both cost-
www.gs1.org (The global web page of GS1) efficient and sustainable ways to go.
www.gs1.eu (The web page of GS1 in Europe) It is now up to the parties in each industry to move for-
www.ecr-all.org (The web page of ECR in Europe) ward with standardization and collaboration in relevant areas.
If you are a brand owner or a retailer: talk to your national
GS1 or ECR organization about collaboration and ways to
share information efficiently right down to the consumer.
Collaborate with other stakeholders to fully understand busi-
ness and consumer issues and to create a value chain where
all can benefit.

24. Mobile Commerce Report 2011: Mobile in Retail

25.
 09. Contributors to the report
Contributors to the report
Project Team
Michael Björn Ericsson ConsumerLab
Cecilia Gyldén GS1 Sweden/ECR Sweden
Jakob Saros Ericsson Research
Karin Wollbrand Ericsson Research
Steering Committee
Gerhard Bley O. Kavli
Christofer Elofson ECR Sweden
Peter Jansson ICA Maxi Lindhagen
Andreas Keymer ICA
Leif Olausson Arla Foods
26. Mobile Commerce Report 2011: Mobile in Retail
Other contributors
Ylva Heivert ICA
Mats Hvalgren ICA
Jeremy Morton GS1 Sweden
Bo Raattamaa GS1 Sweden
Peter Ripp Arla Foods
Marika Stålnacke Ericsson Research
Consumer Research
The field work (pre- and post-interviews,
shop along and focus groups) was performed by:
Augur Marknadsanalys.
Literature and articles Photos
Mobile in retail – Getting your GS1 (2009) Olof Holdar
retail environment ready for mobile
Design
Marknadsföring i mobilen Jonas Marking (2010) Cab Reklambyrå

27.
Mobile Commerce Report 2011: Mobile in Retail

About us

GS1 Sweden is a part of a global not-for-profit organization that

develops global standards for the identification of goods and services.
GS1 helps businesses and organisations to improve the efficiency of
their supply and demand chains by adding useful information to any
exchange of goods or services.
Our standards and services include barcodes, eCom standards and
EPC, our standard for RFID.
Around 10 000 companies and organizations in various businesses are
currently customers to GS1 Sweden.

www.gs1.se

Ericsson is the world’s leading provider of technology and services

to telecom operators. Ericsson is the leader in 2G, 3G and 4G mobile
technologies, and provides support for networks with over 2 billion
subscribers and has the leading position in managed services. The
company’s portfolio comprises mobile and fixed network infrastructure,
telecom services, software, broadband and multimedia solutions for
operators, enterprises and the media industry. The Sony Ericsson and
ST-Ericsson joint ventures provide consumers with feature-rich personal
mobile devices.
Ericsson is advancing its vision of being the ”prime driver in an all-
communicating world” through innovation, technology, and sustainable
business solutions. Working in 175 countries, more than 90,000 employ-
ees generated revenue of SEK 203.3 billion (USD 28.2 billion) in 2010.
Founded in 1876 with the headquarters in Stockholm, Sweden, Ericsson
is listed on OMX NASDAQ, Stockholm and NASDAQ New York.

www.ericsson.com

ECR Sweden is a joint trade and industry body that aims at making the
grocery sector as a whole more responsive to consumer demand and
promotes the removal of unnecessary costs from the supply chain.
ECR Sweden organizes projects in order to explore new areas of work-
ing together and deepen existing experiences in order to fulfill consumer
wishes better faster and at less cost.

www.ecr.se