Consumers Take Phones on Shopping Trips
Today, roughly 90 percent of Americans between 18 and 64
have a mobile phone. Roughly half of those are using their phones to shop,
according to research conducted by Arc Worldwide.
William Rosen, president
and CEO of Arc, told Reuters, “The idea
of a single path to purchase is dead. There are many paths to purchase, and
mobile technology is enabling people to shop in different ways, (and) take
different routes to a transaction, than we’ve ever seen before.”
Consumers
using mobile to shop, as has been previously documented, are doing price comparisons,
reading reviews, downloading coupons and making purchases with their phones.
Mobile
shoppers are broken down into heavy and light users. According to the study, “Heavies
are forever attached to their mobile device and love experimenting with new
apps. Lights are just the opposite, viewing their mobile as an inferior on-the-go
version of their computer, doing basic mobile shopping activities including,
looking up store hours and locations.”
Eighty percent of consumers who
use mobile devices to shop are considered light users.
“If these light mobile shoppers really start engaging and evolve into
heavier mobile shoppers, that’s going to increase the mobile shopping population
by 50 percent,” Molly Garris, digital strategy manager at Arc, told Reuters.
Mr.
Rosen said retailers and brands need to develop their own mobile programs and
promote them in traditional media and stores.
“There is the risk of them (consumers) using someone else’s app and literally
getting snatched out of the aisle,” he said.
Discussion Questions
Discussion Questions: How long will it be before the highest percentage of mobile phone shoppers are classified as heavy users? What can retailers do to avoid having shoppers “snatched out of the aisle” by competitors via mobile technology?
The current levels of usage may be overstated, but there is no doubt that smartphones’ market share continues to soar. Along with it comes related technology such as scanning and QR apps, empowering the consumer in ways probably not foreseen ten years ago. The best way for retailers to avoid having competitors “snatch consumers out of the aisle” is to be proactive instead of playing defense. In particular, make sure that you are inviting as many of your existing customers to opt into text offers, use the social networking tools that are already driving e-commerce, and get in front of emerging technologies like QR apps. And–most importantly–execute! There is no substitute for having wanted product in your store on a timely basis at the right price, whether your customer carries a smartphone or not.
Most mobile phones today are still not being used in a direct shopping capacity except for the occasional call to someone at home to ask again which brand or size they wanted for purchase. However, the trend is starting to get a lift right now from the use of mobile phones for scanning and an increasing number of useful consumer deals. The trend will not rocket but it will gradually grow to a point where ten years from now most shoppers will use their mobile phones as a major part of the shopping and selection experience.
This learning curve is not as rapid as the use of the Internet for shopping purposes. However, as the percentage of smartphones increases significantly over the next couple of years, smartphone shopping usage will increase dramatically. Currently, I am engaged in a study of Mature Millennials (older Gen Y) and Mature Baby Boomers (older Boomers) and the preliminary results show that about 15 to 20% of both generations are using smartphones for tasks such as, customer ratings and reviews, product and price information, comparison shopping, coupons and promotions, and alerts for online sales.
The Internet has demonstrated the value of these online tasks, now smartphones will facilitate same.
There hasn’t been a single path to purchase for most customers in most categories for a long time, hence the idea of integrated marketing. While different consumers react to different messages, channels and offers, the universal truth is that value is the key, now more than ever.
It’s increasingly mandatory for retailers to think omni-channel not only in terms of commerce but in terms of customer experience and communications too.
As we heard last week from a number of companies, including Starbucks and Best Buy, data is still a huge challenge. Even these companies are still only segmenting their files for communications (e.g., email versioning) into two groups! It’s going to take retailers seeing the data and being able to use it, especially customer behavioral data, before they fully appreciate both the challenge and the opportunity vis a vis mobile.
This is an insightful study. Arc finds of the 90% of shoppers 18-64 who have mobile phones, 10% are heavy mobile shoppers and 40% are light. Further, 5% of the 40% may be convinced to be heavy.
This 5% both use their phones a lot and shops a lot. If retailers could just get them to do both together, mobile shopping might grow 50%.
But a big barrier to shifting these lights isn’t informing them of mobile capabilities. It’s getting them to change their habit of using their PC.
Making lists, comparing prices, and finding deals are simply easier for them to do on their PC. These individuals are more likely to be near a PC and find it faster and easier. They also likely prefer to do these activities before they shop.
Getting these shoppers to convert requires retailers to emphasize the things a PC can’t do, such as in-store deals, or searching on the retailer’s online site when a product is out-of-stock.
Two other factors will help. Some retail segments will be more successful than others because of shopper attitudes. Contrast apparel stores, for example, with pharmacies. And the aging of the <17 set brings a generation that often prefers mobile to PC.
With all respect for the work that was obviously done on this study but I can’t help thinking that the numbers are over-stated.
I think part of the problem is that there are some people out there who pride themselves on being “super-users” whether they really are or not. So, they tend to claim to do a lot more with their mobile device than they may really do. If we followed these users around for a week or two, I suspect we’d see a lot less of the claimed behaviours.
Here’s a non-scientific test. Go to a mall, buy a large coffee and actually watch people for an hour or two. Take a look at how much product scanning, mobile coupon redemption and location based offer searching is going on. Not much…I assure you. Not yet anyway.
I’m not suggesting that it isn’t growing rapidly and will certainly hit a tipping point but studies like this always foster the impression that the studied behaviors are rampant. After all that makes a good story, doesn’t it?
Usage has more to do with categories shopped and country of residence, rather than age, actually. Far less research goes into food purchases than non-food. The heavier the durability of the goods, the more research, of course, goes into the purchase. Also, outside the US, people utilize the technology in a far greater depth of understanding than Americans in general.
All of this will continue to grow exponentially, and Americans, like a handful of other advanced nations, will use their phones for more and more tasks, as currency disappears.
We are at the earliest stages in the development of mobile phone as a commonly used consumer shopping and selection tool. It’s potential market potential is quite large but largely undeveloped. This is primarily because there isn’t or aren’t yet technologies and applications which are capable of supporting a wide spread use of mobile enabled selection.
The popularity of concepts such as Groupon show how marketing can be enabled through technology to generate sales through and within a “virtual marketplace.”
This is a case where the imagination of what “can be” will serve as a catalyst to those who will develop the “how to.”
Smartphones will bring about another revolution in shopping that will transcend current online purchasing practices from a static home bound experience to a dynamic one where decisions are made virtually wherever the consumer may be.
What will this look like? How about this scenario: imagine that a group of mobile smartphone consumers with no formal organization, could at any place or at any time “create” a localized demand for a product which could place local providers in immediate competition to fill their combined demand for a product at a promotional price.
Amazing….
Sometimes less is more and with mobile shopping apps, I think it is true once again.
There is surely a “top 10” form of inquiry or purpose of interaction when consumers open up a mobile app. I would advocate that retailers seek to serve up answers to those top 10 questions in order to engage and satisfy the light users and leave the rest to be found by heavy users.
We have to define “mobile app” and, to me, most retailers would read this as a subset of their web site optimized for smartphone use. I am not sure if building a separate mobile app makes sense for retailers beyond those that have an established fan base.
The mere act of seeking, downloading, and installing a mobile app on my phone speaks volumes and indicates that I am highly curious about a brand or a fan/advocate. For the rest, I’ll just check their web site via my browser and that’s place that I want be able to find location, directions, store hours, phone numbers, and specials without having to search and click.
Some people would say that as the current tweens and early 20s crowd gets older, the apps for shopping will increase. I say the the younger the consumer is proportionate to the amount of patience they have for shopping–little to none. Therefore, the right approach is not to use the iPhone in-store but get the messages to them before they get there.
This is “phone” focused which is reasonable for today as we are seeing the big shift from cell to smart(er), however, any projection forward needs to be taking into account tablets. The potential impact of an estimated 200 new offerings and 200 million units being sold just this year can not be ignored.
The tablet’s larger (than smartphone) screen and form factor opens up additional opportunities for innovation in customer touchpoints–especially moving beyond simple point scan type interactions to more immersive–think augmented reality and live video.
These numbers appear to be very odd. 90% of adults actually seems low, since it leaves 10% without phones…Perhaps most importantly the place of shopping applications for phone usage is very low, and the numbers of people who take their phone with them to use as part of their shopping experience is even lower than what the article suggests. The majority of phone users take their phone with them as a way for them to stay connected to the outside world, and how to reasonably determine the impact of phone usage in the future which would apply for just shopping is dubious at best.