Research: Mobile retail apps have massive growth potential

E-retailers are just starting to get their feet wet when it comes to offering mobile applications for cell phone users to enhance the in-store shopping experience. As part of our annual research on the Top 40 e-retailers by sales volume, we decided to study how and when shoppers are using mobile applications.

The vast majority of online shoppers in our survey have mobile phones (91 percent), but only about a third of respondents have used them while shopping.

The majority of shoppers who did use a cell phone as part of their shopping experience did not make heavy use of retailer-originated mobile apps or Internet-based product information. Most used their phone to get a simple opinion about a purchase. This may indicate that mobile apps are very much on the "bleeding edge," rather than the leading edge, of technology.

One in four shoppers who used a cell phone while shopping used it to look at comparison prices, while 15 percent used it to go online to check product reviews. These numbers make up 7 and 4 percent of our total respondent pool, respectively. This is not an insignificant number, considering the small but growing use of smart phones and the fact that many retailer mobile apps were new this holiday or still in beta testing. For the 2009 holiday shopping season, I wouldn't be surprised if we see this number double, at least.

Are mobile phone users more valuable customers?

Satisfaction is a proven predictor of certain future behaviors. We know through countless studies that a satisfied shopper is more likely to purchase, recommend, and return to the store or Web site. But how does mobile phone usage impact those same future behaviors?

We found that people who use mobile phones while shopping are not more loyal, more satisfied, or more likely to recommend top retailers' Web sites. In fact, of all the behaviors we study, only one was different for this group: greater likelihood to purchase offline. All the other scores are identical for those who shop with or without a mobile phone.

Given the indications in Fig.2 that people are using phones more often to actually call someone to get an opinion or to send a picture of an item (and less for price comparison shopping or store-initiated mobile apps), it would seem that, more often than not, the opinion they get encourages them to buy the item. Perhaps stores should consider "phone-a-friend" promotions to encourage this kind of shopping behavior.

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Conclusion

Mobile apps offer a huge opportunity for retailers to encourage in-store purchases. Shoppers who use a mobile phone as part of an in-store shopping experience are 6 percent more likely to buy something in the store. That's valuable knowledge in a tight economy when any advantage helps.

Going forward, retailers should encourage smart phone users to adopt retailer-generated mobile apps, not only to ask about a product or send a picture of a product to a friend, but to compare online prices, remember specs of something they were researching online, and identify the proper model or version of a wish list item.

It will be a while before we see huge penetration of cell phones being used as part of the in-store experience, but I expect it to double next year and continue growing from there.

Larry Freed is an expert on Web site effectiveness and online customer satisfaction, and president and CEO of ForeSee Results. With over 30 million survey responses collected to date and benchmarks across dozens of industries, ForeSee Results captures and analyzes online voice-of-customer data to help organizations increase sales, loyalty, recommendations and Web site value. The company uses the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI).