Analyzing The Mobile Consumer: Shifting Behaviors And Preferences Create Opportunities For Innovative Retailers

  • February 21, 2012 at 3:14 PM EST
  • By Alicia Esposito
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The following article is Part I of a two-part series covering Analyzing The Mobile Consumer: Shifting Behaviors And Preferences Create Opportunities For Innovative Retailers. Part II will appear in the February 28 Newsletter.

The smartphone’s increasing affordability and accessibility make it a must-have tool for consumers across age segments and geographic locations. On Christmas Day alone, 6.8 million smartphone devices were activated, a 140% increase from 2010, according to findings from Flurry Analytics.

The 2011 holiday shopping season also emphasized the growing prevalence of mobile commerce. In September 2011, PayPal predicted that nearly half (46%) of consumers planned to make a holiday purchase on a mobile device. PayPal analysts said that with growth of “couch commerce,” retailers promoting and encouraging mobile purchases were poised for success. Results from IBM indicated that during December 2011, 14.6% of all online sessions occurred on a mobile device, a 7.5% boost over 2010. Mobile purchase rates also increased from 5.5% in December 2010 to 11% in 2011.

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There are countless outlets for retailers to interact with shoppers directly through their mobile devices. However, many retailers are challenged to determine the optimal tools to reach and engage with digitally savvy, price-focused shoppers, according to Dianne Kremer, Senior Analyst for BIGinsight.

“Mobile technologies have altered the shopping experience in significant ways, since shoppers now can cross-shop and compare competitors’ prices without leaving the store,” Kremer told Retail TouchPoints. “In many ways, mobile shoppers are bringing the competition with them when they shop.”

Specifically, the concept of “Social, Mobile and Local” (“SoMoLo”) has made it commonplace for shoppers to receive relevant and personalized information via mobile and across social networks. Before finalizing a strategy, merchants first must understand the browsing/buying behaviors and overall expectations of today’s modern, hyper-connected consumer.

shutterstock_95600065The Rise Of SoMoLo Increases Shopper Expectations Of Retail Experiences

The continual penetration of smartphones has altered the way shoppers receive information and interact with brands. Google’s Android and Apple’s iPhone have the strongest hold on consumers, according to research from comScore.

Data from comScore’s November 2011 U.S. Mobile Subscriber Market Share revealed that 47% of smartphone users were subscribed to Androids, versus 19% in November 2010, while Apple held 29% of market share, versus 27% in the year prior. To keep pace with the continued shift to a mobile-focused lifestyle, merchants must understand and be quick to react in the competitive retail marketplace, according to Dan Lowden, VP of Marketing for Digby.

“In 2012, retailers are seeing a new consumer demand they need to meet: the integration of the in-store shopping experience with mobile engagement,” Lowden said. “Consumers are using their phones in store more frequently to aid their purchase decisions. As retailers understand the true significance of this opportunity, developing a mobile commerce/mobile marketing strategy that fits with the unique ways in which shoppers use mobile in the store is imperative to staying relevant to consumers.”

Overall, there is a growing demand for easy access to product information, images, pricing and purchase history via smartphones, as well as the ability to participate in mobile marketing activities, such as QR codes, applications and SMS campaigns. A recent study sponsored by Commerce In Motion indicated that more shoppers are participating in mobile browsing and buying activities, and in turn, are expecting retailers to keep pace by delivering a relevant, engaging experience.

Key findings from “The Social, Mobile, Local Imperative” from Commerce In Motion revealed shoppers’ top expectations of smartphone experiences, including the ability to:

  • Receive discounts (57%);
  • Place orders (46%);
  • View product pricing and availability (43%);
  • Scan QR codes to access product content (40%); and
  • Obtain department-specific messages and offers while in store (28%).

If retailers don’t provide an information-rich experience that is optimized for mobile consumers, this emerging breed of shopper quickly will go elsewhere to complete purchases. 

“The emergence of the mobile phone as a mainstay of so many shopping journeys has put significant pressure on retailers to respond,” said Dave Bruno, Director of Commerce Studies for RedPrairie and Editor of Commerce In Motion. “Shoppers are looking to their phones for detailed product information, user reviews, social content and product availability. Retailers that deliver better ‘conversion’ information to the mobile device have a definite opportunity to gain competitive advantage over slower movers in the mobile arena.”

Along with standard mobile behaviors, such as sifting through inventory, many shoppers are challenging the brick-and-mortar environment by comparing prices in store, and going home to complete purchases via tablets/computers. Due to unstable economic conditions, shoppers are more focused on finding optimal deals, and are willing to go to great lengths to do so, according to the “Prosper Mobile Insights Mobile Survey, December-11,” a study released in partnership with BIGinsight. 

This report surveyed 360 smartphone and tablet users from Dec. 29, 2011, to Jan. 3, 2012. Results spotlighted the prominence of comparison shopping: Approximately 41% of consumers compared prices in-store then purchased from another retailer’s physical store. Nearly 26% of shoppers compared item prices in the aisle, then purchased from another retailer’s web site via a smartphone or tablet. Other shoppers read product reviews to decide between products (36%), scanned a QR code to obtain more product information (30%), and “checked in” to a store to receive a discount (27%).

“In today’s economy, both ‘mobile shoppers’ and ‘every day’ shoppers are deal-oriented and price conscious,” Kremer said. “They are similar in that they do the majority of their product research before heading to the store. However, since mobile shoppers are able to do quick price comparisons on their mobile devices, they may be more apt to change their shopping plan at the last minute and head to the retailer offering the best deal at that particular time.”

The New “Always On” Engagement Paradigm

The interactive, always-on nature of mobile technology has brought forth a new era of engagement. From shopping on streamlined apps and optimized sites, to signing up for SMS campaigns and push notifications, shoppers are more eager to interact with their favorite brands anytime and anywhere. These developments are hard to ignore, but while merchants acknowledge the continued growth and importance of leveraging mobile tools, many are struggling to determine the optimal strategy to roll out. 

Retail Systems Research (RSR) revealed in a recent report, titled “Keeping Up with the Mobile Consumer,” that a vast majority (92%) of winning retailers are striving to keep up with consumers’ growing dependency on their mobile devices. Many retailers recognize the customer-facing benefits of mobility: 42% indicated that they’re seeing significant online traffic from mobile sources and need to respond, while 38% say store sales are “getting cannibalized,” and mobile can help them stay afloat.

Due to the range of capabilities and features of smartphone technology, simply determining when and how to develop a mobile strategy is a large hurdle for many retailers. According to RSR findings, 38% of winning retailers believe mobile technology is moving too rapidly for them to keep up. Other top difficulties winning merchants face in creating a differentiating mobile experience include:

  • 64% have trouble understanding and accommodating how different customer segments engage with retailers;
  • 60% have difficulty coordinating with other channels to create a seamless cross-channel experience; and
  • 44% say the consumer technology landscape evolves too quickly.

These sentiments have led to lackluster attempts at mobilization and hindered planning processes. To create an engaging mobile experience, retailers must investigate their target consumer base and its top mobile behaviors then utilize personalized, relevant communication.

“Smartphone technology has democratized the availability of information and increased competition among retailers, and made it more difficult to hide bad service or product experiences,” said Bruce Warren, VP of Marketing for Empathica, a provider of customer experience management programs. “Consumers now have access to product information at their fingertips, whether they’re in store and reading reviews from a mobile browser, comparing prices for similar products at different retail brands, or texting a friend for the latest coupon.”

Consumers’ growing dependence on their mobile devices to obtain and share information has altered their views of the in-store experience. As a result, it is vital for retailers to utilize more interactive tools, such as smartphones and tablets, leading to more attentive and knowledgeable store associates in stores. By converging the in-store experience with mobile devices, retailers will create a brand experience that is hyper-connected and, in turn, will foster greater loyalty and overall purchase rates.

Part 2 of “Analyzing The Mobile Consumer” will appear in the February 28 newsletter.

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