When it comes to online shopping, the UK takes the lead worldwide, and with 60% of the population owning a smartphone, it’s no surprise that consumer shopping habits are now shifting in the direction of mobile.
We are seeing a huge increase in the amount of time spent in retail apps and research from Flurry confirms this with consumers spending five times longer in retail apps
in December 2012 than in December 2011. As more retailers are considering their mobile strategies, we think there will be a huge increase in consumers using their smartphones to assist with buying decisions, as well making purchases directly through transactional apps.
Below we’ve summarised some of the key ways mobile is changing consumer behaviour in the retail space and the trends we expect to see grow in the coming year.
In-store consumer intelligence
We are now at a stage where consumers can compare the prices of products or services in seconds, as well as being able to find out whether people are rating a product positively or not. According to Vibes Mobile Consumer Report
, 33% of smartphone owners compared prices to a competitor’s site whilst in-store, while 31% looked up product reviews.
Retailers need to be embrace rather than fight this change and think about the ways in which their in-store experience can be enriched through the use of mobile technologies. For example, why not use simple QR codes to engage customers and give them more information to make their buying decision easier? In a recent Mobile Consumer Report, 27% of respondents said they had scanned a QR code for more information while in-store.
Self-service is a standard feature in many stores across the world and we think this will gradually be extended to mobile self-service moving forwards.
Some retailers are already trialling mobile self-service. Last year, Walmart trialled an iPhone-based ‘Scan & Go’ system in 70 of their stores. This allowed customers to scan all of their shopping on their iPhone as they made their around the store, and then pay at a checkout station on their way out. It is rumoured that Walmart will be expanding this service to more than 200 stores across the US, and possibly extending their offering to Android.
In the UK, well-known department store Marks & Spencer, is also trialling mobile payments in a selection of their coffee shops. New menus will be designed that are compatible with mobile payment app Paddle. The app allows customers to scan QR codes and then instantly pay for something using saved payment methods.
These in-store mobile payment methods are saving consumers time and also driving major efficienies for retailers. We think the number of retailers trialling mobile payments will continue to increase, especially as more NFC-enabled devices enter the market.
It’s hard to talk about how much opportunity there is in mobile loyalty programmes without mentioning Starbucks. Their app, which ties together loyalty points and payments, has had huge amounts of success. The mobile app now has more than 10 million active users, with 100,000 downloads added to that figure every week. As for payments through the app, Starbucks is now taking in 3 million mobile payment transactions every week!
Starbucks made a very clever move by encouraging their customers to top up credit on their app through a loyalty scheme as they can now gather data on their customers and push through exclusive offers to them on their mobile devices. Customers who do make the decision to interact with brands through their mobile devices tend to be more loyal as smartphones are so personalised.
The opportunity in mobile loyalty programmes is clear; increase engagement by creating a mobile loyalty experience that makes customers feel valued and in turn, increase sales and client engagement.
All consumers like discounts, which is why accessing coupons and gift vouchers on mobile devices is so popular. According to a Direct Marketing/Toluna study released late last year, half of UK consumers searching for retail information on their smartphone were looking for discounts or vouchers.
Karen Millen, a high street fashion retailer based in the UK, used mobile vouchers to help maximise their gift voucher sales and also to reduce their carbon footprint by saving on paper and postage costs. When customers purchase a gift voucher in-store or online, they are given the option to have it issued via their (or someone else’s) mobile device, in the form of an SMS with a special PIN number. This PIN number can then be entered at the checkout process either online or in-store. This method proved successful for Karen Millen as mobile gift voucher sales outstrip the paper version 3:1 and the company is now able to gather more insight on customers, to develop their mobile strategy even further.
Everyone loves to feel like they’re getting a deal and this is an area which is certainly expected to grow over the coming year with more competing voucher platforms, large and small, taking the stage.
The retail space is changing like never before, and whether you’re an independent retailer or a large chain, mobile is an opportunity that all businesses should at least be considering. With a growing and demanding audience, it’s essential that businesses are exploring how mobile is impacting the retail landscape, and what businesses can do stay ahead of their competitors.
Emma Pengelly, Planner