Article

Research: Half of Americans with mobile phones using them to shop

Users are comparing prices, reading reviews, downloading coupons and making purchases on their phones.

April 12, 2011

The following is an excerpt from a recent conversation on RetailWire, with comments from its panel of contributors.

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.

RetailWire BrainTrust comments:

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. - Richard Seesel, principal, Retailing In Focus LLC

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 percent 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. - Richard J. George, professor of food marketing, Haub School of Business, Saint Joseph's University

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. - Phil Rubin, CEO, rDialogue

This is an insightful study. Arc finds of the 90 percent of shoppers 18-64 who have mobile phones, 10 percent are heavy mobile shoppers and 40 percent are light. Further, 5 percent of the 40 percent may be convinced to be heavy.

This 5 percent 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 percent.

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. - Dan Frechtling, vice president, DS-IQ

With all respect for the work that was obviously done on this study, I can't help thinking that the numbers are overstated.

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 behaviors.

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 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? - Doug Stephens, president, Retail Prophet

(Photo by Funkdooby.)