The rapid growth of smartphone and tablet penetration in 2011 is being felt by retailers, with shoppers increasingly using mobile devices to hunt for bargains, find product information and purchase items on their shopping lists. However, most retailers have not adopted an effective mobile strategy to address this growth, according to a new report from Altimeter Group.

In the report “Make an App for That: Mobile Strategies for Retailers,” Altimeter found that many retailers rushed into mobile with under-functioning apps that are frustrating and alienating users.

“Many household name brands are simply not ‘there’ when it comes to mobile strategy,” said Chris Silva, mobile industry analyst at Altimeter Group, San Mateo, CA. “Brands like Land’s End and Abercrombie and Fitch are providing mobile applications that are little more than brochure wear, showcasing high design mobile concepts with little or no tools to help shoppers shop.

“Meanwhile, online retailers like Amazon, who have mastered the design on the buy/ship interaction model for smartphones and tablets are going after brick and mortar retailers directly with campaigns like that from Amazon this past December which rewarded shoppers with a discount for buying a product online when using the Amazon Price Check app to feed competitive pricing information back to Amazon while in stores,” he said.

“In short, there’s a great chasm between retailers like Amazon, Best Buy, and Zappos that are doing exemplary jobs with mobile apps and the many others who are too focused on the features in mobile and too little focused on the actual shopper problems – finding stores, navigating stores and getting product information – that shoppers face daily.

Form over function
The problem with many of the initial retail apps in the market is that retailers focused on the features possible in mobile without giving enough thought to the customer pain points or other business problems that mobile can help them solve. As a result, many are now on their second or third iteration of their mobile strategy.

For example, major retail brands such as Abercrombie & Fitch and Longhorn Steakhouse offer apps that heavy on design and mobile tricks but lack utility and shopping-centric tools, according to Altimeter. The A&F mobile app shows very little of the brand’s apparel while the Longhorn app does not provide directions to a restaurant.

“The most surprising finding for me was that many retailers are on their second or third iteration of a mobile team and mobile strategy,” Mr. Silva said. “Many of those in this position have finally gotten mobile right but only through costly experiments in trying to build apps from scratch internally, with various parts of the business like marketing, ecommerce and IT involved.

“We all knew mobile strategy could be costly, but many brands have not made the requisite investments and, as a result, are not reaping the returns they had expected,” he said.

Getting it right
The best mobile strategies are from retailers who have aligned mobile with marketing loyalty programs and ecommerce teams, such as Starbucks did when it built its successful app to address long wait times in stores and make it easy for customers to make a purchase.

Successful retail mobile strategies also are focused on what users are seeking, such as Best Buy did when it built an app that features up-to-date information about price and local availability to address the growing number of third-party apps disseminating similar information.

Retailers also need to allocate the resources necessary to make mobile successful, such as Walgreens did when it became the first among its competitors to create an app that scans a prescription bar code to initiate a refill.

Retailers also need to recognize that mobile means multiple platforms, such as Zappos does by being one of the few retailers to have built a tablet and smartphone version of its app and a fully featured mobile Web site.

“I believe that 2012 will be the year that retailers get serious about having a strong mobile strategy,” Mr. Silva said. “The overall pressure in terms of the number of shoppers coming to a store expecting to use their mobile device means it is do-or-die for retailers as far as mobile goes.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York