January 20, 2012
The Fallacy of the Connected Consumer’s Love of Mobile Apps
William Gibson, the science fiction author who invented the term “cyberspace,” is often attributed with saying, “The future is already here. It’s just not evenly distributed yet.” It’s a pronouncement that may apply to the less-than-balanced approach retailers are taking with the various digital channels. Many marketers appear to be making assumptions about consumer shopping preferences based on the skyrocketing adoption rates of new technology, namely tablets and smartphones. However, a new study on the habits of “connected consumers” indicates that focusing too intently on mobile commerce apps is not fully warranted.
The report, Meet the Connected Consumer: How Tablets, Smartphones and Facebook are Changing the Ways Consumers Shop, was commissioned by digital catalog experts Zmags. For the study, Equation Research interviewed 1,500 consumers, all of whom own a computer, smartphone and/or tablet. The stand-out stat: only four percent of survey respondents choose smartphone or tablet apps as their preferred method of browsing and discovering new products. An overwhelming 87 percent would first choose to do so via a website on their PC or laptop. For these tech-oriented consumers, online browsing even beat out in-store shopping (71 percent).
The low acceptance numbers for mobile apps may shock retailers and brands, many of which jumped on the bandwagon early, at a point when mobile website development was still rather clumsy.
“People thought that it was the silver bullet to mobile e-commerce,” W. Sean Ford, Zmags COO and CMO, told RetailWire. And that, for many retailers, has caused things to become “unevenly distributed” (as per Mr. Gibson).
“The app is an important part of the e-commerce and mobile commerce ecosystem but it cannot support the weight of it and if you’re an innovative retailer you have to acknowledge there are different pieces,” said Mr. Ford.
What may be holding apps back is the lack of convenience for mobile shoppers. Mr. Ford imagines a Nordstrom shopper who, having seen an attractive pair of shoes, decides to buy it later online.
“You don’t think, ‘I’m going to go to the app store to download the Nordstrom app to buy those shoes. Oh, by the way I see the reviews of that app … uh, only 2-1/2 stars! I already have hundreds of apps on my phone. I don’t want to add another app.’ So it becomes a non-intuitive process.”
The improvements in interface design for mobile web browsing made possible by HTML 4 and, soon, HTML 5, are putting that option on par with apps, shifting retailer investment to that area, according to Mr. Ford. He also points out that while most retailers of any significance now have smartphone apps, far fewer have taken the step to create tablet-optimized products or a social-optimized products.
“We’re just trying to say you have to make sure you understand each function or each tool or each channel has strengths,” said Mr. Ford. “Play to those strengths and integrate them to get the most out of mobile commerce.”
Discussion Questions
Discussion Questions: What place do mobile tablet and smartphone apps have in the overall “e-commerce ecosystem?” How can retailers better sensitize themselves to the device preferences of their shoppers?
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This is behavior that is evolving over time. Trying to be ahead of the curve may take you off the road entirely. Staying in lockstep with consumers is probably the best tactic for the immediate term, while developing solutions that can be applied for the future. Yet, “experts” will be hired to push the retailer into mobile/smartphone territory. It’s partly sizzle and partly the allure of low risk investments.
The advice by Mr. Ford to play to the strengths of the channels and integrate them is key.
Smartphones are not very conducive to browsing product selections. They fit nicely into a multi-channel retail strategy when they are used to give personalized offers and experiences to the shopper, or to help them find and obtain what they already know they are interested in.
Tablets should continue to eat into PC share as it relates to in-home browsing, while in-store digital displays (tablets, kiosks, and other digital displays) will be positioned as branded experiences and will be used by store associates to increase service and shopper engagement.
In-store will remain a strong persuader and experience for shoppers to engage with.
NRF’s Big Show touted the great wave of technology and mobile, yet articles like these are continuing to pop up like 1% of users represent 50% of mobile.
While many will say it is the wave of the future, maybe it will take much longer to get to shore.
Great insight though not surprising at all. All the euphoria over mobile apps is like watching your kids get all excited about a new toy Christmas morning. A day later it lies unused in the closet. It’s also not unlike people feverishly buying a best selling book, 98% of which will never be read. Having it and using it are totally different things.
Apps for smartphones and tablets should play in integral role in marketing and e-commerce for every retailer. It’s all about reaching a potential customer through multiple touch points. At the same time, retailers should not abandon their traditional marketing methods (FISD, email, direct mail). Less than 50% of consumers have smart phones and a much smaller percentage have tablets.
With the proliferation of digital options, it’s harder than ever for a retailer to market itself to consumers. That’s why basic principles still apply.
— Get the word out in as many ways and locations as possible
— Offer items at a fair price
— Have items in stock
— Treat consumers with respect before, during and after a transaction
The goal is to insure that every customer has a positive experience.
Don’t underestimate the value of the app. For organizations looking to the next generation of shoppers, working on meaningful mobile solutions now will pay dividends in the future.
Forward-thinking retailers should be planning for the next wave of consumers … and they are connected! And a thoughtful, integrated multi-platform strategy will be essential to long-term growth and to capturing share of wallet.
Mobile and tablet marketing are still in early days. Apps appeal to marketers because they reside on a device which constantly accompanies the shopper, and which is fairly easy to set up.
The role of apps vs. extended digital destinations will be revealed as we get accustomed to having these amenities available. But — by then, new devices will come into being and the whole process will begin again.
Smartphones and tablets will remain a supplemental device in the shopping process until the process of evolution yields a genetically superior set of eyes. Trying to navigate those relatively tiny screens is a pain. I own all the e-toys of course, and even use them a fair amount — especially my smartphone. But I will defer looking at the weekly special emails from my favorite shopping sites until I get to a PC or my laptop simply for the better viewing/shopping experience.
There is no question that mobility is a key technology that retailers must address in order to be successful in the future. However, it is clear from the study referenced above and many others, that mobility itself will not be the key to retail success.
Without understanding the customer, providing a differentiated shopping experience, delivering clear value (the right combination of price, selection, availability), and driving customer experience in the store and out, investments in mobility will be largely wasted.
As I write this on my smartphone, it strikes me that the great expectations for mobile apps in the commerce ecosystem were founded on three things: portability, geolocation and transactions.
The beliefs were portability equals convenience which means greater use of the mobile device than PC for anything that was done on the PC. In reality, small screens and slower speeds mean simple content viewing can make the leap but shopping has not.
Proponents of geolocation believe where you are mostly determines what you want, so advertising and offers at the point of place have higher relevance. Unfortunately, study after study shows consumer interests trump location in signaling what products and services are most relevant.
Lastly, the dream of transactions consummated in the palm of your hand requires a conducive in store experience to gain traction. But it is stymied by a proliferation of different standards, both software and hardware, that has prevented a critical mass from forming around any one solution. The card companies, credit card companies, consortia and pure plays will continue to make this a crowded field.
Of the three, the killer app lies in transactions. Unlike the primaries, it will take several years for the marketplace to elect a winner.
Staying on top of the tools and their functions is important. However, it is just as important to understand YOUR consumers and how they use those tools. The landscape is ever changing so the answer to these two questions changes constantly.
I’ll say it again — retail is a play-to-participate environment, not just play-to-win and mobile apps are one of the better examples of the shift. I doubt that any retailer created an app under the expectation that it would quickly jump ahead of other browsing and purchasing options. Retailers must participate in mobility if they are to be relevant to the next generation(s) of shoppers. Better to work out the bugs now.
Apps are great for some things and I do think they can be for shopping … but they aren’t right yet. It just doesn’t make sense to have the number of apps you would need to conduct your shopping in the way most people do.
However, I do see the dynamics changing that could flip the model at some point in the future (likely multiple years away). For instance:
1. Products finding you … social shopping where the product finds you and the app connects you to purchase
2. e-wallet … in which you embed apps as well as payment methods and loyalty memberships to help you shop smarter
Clearly there are others beyond these 2, and likely some new innovations that will have major impact.
While being close to innovations and emerging consumer needs is vital, I do think some businesses have put too much emphasis on this kind of technology relative to their loyal customers’ needs.
Two variables seem important to me.
1. Does a retailer create a mobile application or enable the mobile web, i.e. make their web site work well on a small screen?
2. Is there a significant difference between targeting future hopes on smartphones or tablets?
To me, optimizing the mobile web is the foundation as it precludes making consumers download yet another app.
Screen real estate is important and the tablet should have better adoption rates for shopping than smartphones over time. The problem, tablet penetration is lagging behind phones (duh) and even if they were being adopted at equal rates, fewer consumers would find it easy to carry a tablet everywhere they go.
The dramatic growth of smart phone adoption and tablet purchasing in the United States has led many retailers to assume that customers would prefer to purchase using these devices rather than in the retail environment. In this case, those retailers are exactly half right.
The smart phone provides little real estate to permit consumers to easily comparison shop or browse for items. In the case of the smart phone, consumers will use the device to make repeat purchases or to purchase specific items that they had already decided to purchase in the first place.
The tablet, however, is often being used as a replacement for the PC for casual usage, which includes e-commerce browsing, comparison-shopping and purchasing. The increased real estate on these devices permits additional functionality that is not present in smartphones. So tablets will eventually become more of an opportunity than the smart phone for smart retailers. However, since tablet penetration is dwarfed by smart phone penetration, that time has not yet completely arrived.
Retailers can gain a better understanding of the channel preferences of their customers in a simple way: by asking them. If you have strong relationships with loyal customers, they will provide you with the “canary in the coal mine” warning of when these devices will become bigger in your purchasing ecosystem.