I have a dog with very picky eating habits. He also has some pretty severe skin allergies that will flare up if he gets food with the “wrong” ingredients in it. On a recommendation from a friend who has decades of experience in pet nutrition, we bought him some new food – and overnight (literally), his skin allergies cleared up and he gobbled up his food twice a day with very little prompting.
Only problem was, this food is pretty expensive. The local pet market sells it for one price, and my neighborhood big box retailer sells it for another. Instead of driving from one place to another in a vain search for lower prices, I simply took out my smartphone, searched for the food on my favorite shopping app, and 24 hours later, it was sitting on my doorstep at $15 less than what I would have paid locally.
This scenario might seem familiar to most of us these days; we use our smartphones and tablets on a regular basis to do these kinds of seemingly mundane shopping errands. But think back to five years ago; this sort of activity would have been revolutionary, and in fact, it was. Nowadays, mobile app shopping behavior is changing the way that stores market to their customers, putting the power squarely in the laps of connected consumers.
People are increasingly using shopping apps (like the one I described in the scenario above) to find lower prices, but they are even taking it one step further, using price checking apps that will actually scan barcodes and find cheaper prices at another store – yes, right there in the store aisle. Many consumers are able to save significant time and money because of easy access price comparisons made possible by these shopping apps; there’s no longer the need to go from store to store, it’s just a matter of taking out the mobile device and finding something better.
How does this affect retail, brick and mortar stores? Immensely; in fact, many stores – especially “big box” retailers – are completely revamping their marketing strategies to be more mobile/digital friendly. Mobile apps can actually drive sales for retailers; people can buy items directly from their apps (rather than visiting the store in person), or they can use their devices to get a little bit more research done that can then enable them to make a more informed purchase. For example, say you’re looking for a very expensive set of golf clubs. You could look up reviews of these golf clubs on Amazon, and then use that information to then visit your local golf pro and make a more informed purchase decision.
Many stores have also created their own native shopping apps that are only for their store; think of Old Navy or Target or Home Depot as a good example of this. To further pull in consumers, these apps will offer free shipping or easy in-store pickup for large online orders.
Reviews are definitely important when making a shopping decision via mobile apps, but price is still the biggest determining factor when it comes to pulling the trigger on a purchase. If an app can help you find something cheaper somewhere else, most consumers find that that app has already served its primary purpose.
What are consumers looking for?
Apps that serve a specific purpose are what consumers are looking for when shopping for shopping apps. Does it help me save money? Does it help me find meaningful reviews on the products I’m looking for? Can it help me save time or effort? If the answers to any of these questions are “yes”, the app is more likely to be downloaded. Gigaom released a research paper on this very subject, finding that mobile apps can significantly improve the consumer shopping experience:
- A sizable number of consumers (nearly 1 in 2) are not happy with their shopping experience. Fortunately, mobile apps — especially those that make shopping easier and more rewarding — improve the experience and lift customer satisfaction.
- Although use of mobile shopping apps is significant (approximately 1 in 4 smartphone owners currently use one or more mobile shopping apps), interest in the most valued types of apps is considerably higher. Almost two-thirds of consumers are “very interested” in apps that save time and money.
- By a wide margin, the two types of apps that consumers value most — mobile coupon and price comparison apps — involve saving money.
- Apps that allow consumers to manage loyalty and rewards are also highly valued.
- Making shopping easier is a common thread in the two next most valued types of apps (product finders and apps that allow consumers to skip checkout).
Outlook for holiday sales
Mobile shopping apps are greatly influencing the industry sales outlook:
“eMarketer projects that retail ecommerce holiday sales in the US will rise about 15% again this year, matching last year’s gains. In total, US retail ecommerce sales for the holiday season—defined as November and December—are expected to reach $61.8 billion, up from $53.7 billion last year….. In total, eMarketer predicts retail mcommerce sales will reach $41.68 billion this year and by 2017, retail sales made on mobile devices will climb to well over $100 billion.” – “Mobile Devices Boost US Holiday Ecommerce Sales Growth”, emarketer.com
Take a look at any app store lately, and you’ll see a resurgence of “big box” retailers heavily investing in their mobile apps, offering improved usability across the board to consumers who are looking for shopping apps that will help them score a bargain.
Different form factors impacting sales outlook
Mobile sites optimized for a great shopping experience – for example, Amazon.com – have seen their sales skyrocket due to increased consumer usage. Tablets are especially great for this kind of content consumption, since people tend to use tablets in a casual environment, like sitting on the couch. These bigger screens make shopping easy and fun, and it’s something that users can do while they’re actively watching TV as well. A few mobile shopping stats from the New York Times that bear this out:
- Mobile shoppers spend an average of $329 per order when they are on tablets, $250 on phones
- Shopping on tablets far surpassed phones last year, with $13.9 billion spent from tablets, and $9.9 billion from phones
- By 2016, shopping done from mobile devices is predicted to account for $87 billion, or a quarter of all e-commerce
According to eMarketer, smartphones and tablets are neck and neck for sales growth due to increased consumer usage of mobile shopping apps to enrich their shopping experiences:
- Tablet retail e-commerce sales are predicted in 2013 to hit $26.05 billion, or 62.5% of US retail m-commerce sales overall. That’s up from last year when tablets took a 56.2% share of mcommerce retail sales.
- That will leave smartphones with a 35.0% share of mcommerce sales, a percentage that will continue shrinking throughout the forecast period as sales on tablets maintain far higher growth rates. In 2017, smartphones will account for 27.0% of retail mcommerce sales, eMarketer predicts. But actual sales dollars spent on purchases made via smartphones will continue growing at healthy double-digit rates. This year, retail sales made on smartphones will total $14.59 billion, and that figure will more than double to $30.66 billion by 2017.
We are still definitely using the desktop as part of our shopping experience, but research is increasingly showing that consumers move along a device track, so to speak; they start out researching an item on the desktop, with the end result (purchasing the item) being accomplished on the mobile device. We also tend to purchase more “affluent” items using these form factors:
- A study recently released by comScore shows desktop share of online shopping is down 84% since 2010. The study also showed a lot of overlap: shopping begins on the desktop, and then transitions to the mobile device.
· 32,000 mobile users and 7,000 tablet users were surveyed in March.
· The survey found more than half the mobile shoppers were men -- 52% vs 48% women. 48% use an Android phone while 45% use an iPhone. Tablet users tend to be more affluent, with more than 50% with household incomes in excess of $75,000.
· Other factors influencing mobile purchasing habits include customer reviews, coupons, store rewards, and a store sponsored social site.
· Topping the list of non-digital purchases is clothing, tickets, printed books, delivered or picked up meals, and consumer electronics.
Consumer habits continue to drive the marketplace
The busy shopping season is just starting to get going, and many consumers are already gearing up, downloading shopping apps in record numbers and taking full advantage of the power that this gives them. It’s not enough for retail stores to simply put up an ad in the local newspaper anymore; in order to be truly competitive; stores have to offer apps that give customers more shopping options.