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Smartphones will influence 19pc of retailers’ sales by 2016: studyBy Chantal Tode
The influence of smartphones on in-store sales is far outpacing direct mobile commerce sales, with a new report from Deloitte forecasting that mobile’s influence will grow to 19 percent of total store sales by 2016, representing $689 billion in mobile-influenced sales.
While smartphones currently influence only 5.1 percent of annual retail stores sales, that number is expected to jump up significantly over the next few years driven by smartphone penetration and consumers’ propensity to use the devices for shopping, according to the report from Deloitte. In comparison, direct mobile commerce sales will pass $30 billion by 2016.
“The real value of mobile is not just to drive incremental mcommerce sales,” said Kasey Lobaugh, direct-to-consumer and retail multichannel practice leader at Deloitte Consulting LLP, New York. “Mobile is much more valuable as a tool to drive decision making and transactions that occur in a store.
“Many retailers take mobile and attach it to their dot com business, which is already focused separately from their store business,” he said. “This degrades the ability of the technology and how we use it to influence the largest part of our business.
“The question is how do you put the right capabilities in place so you can more effectively influence your business and how do you think about deploying mobile to drive a material bottom-line impact. How do you put tools in the hands of consumers to aid in their decision making process.”
Higher conversion rates
The study is based on a survey of United States consumers about how they use their smartphones to shop today and measures the impact of smartphones on in-store sales. This includes in-store sales driven by consumers’ store-related smartphone activity such as product research, price comparison or other mobile application use.
For 2012, Deloitte forecasts that smartphones will influence $159 billion in retail sales.
Other key findings include that smartphone shoppers are 14 percent more likely to convert and make a purchase in the store than non-smartphone users.
“If a consumer is using a retailer’s mobile app, they are actually 21 percent more likely to convert in the store,” Mr. Lobaugh said. “This shows the power of owning that interface with the consumer as opposed to allowing them to go to a third party interface while in the store.”
The findings suggest that once smartphone owners get a taste of mobile shopping activities, they want more.
Smartphone use for store-related shopping increases 40 percent after the first six months of ownership, with smartphone owners consistently using their phones for 50 to 60 percent of their store shopping trips, depending on the store category.
The mobile influence is strongest among younger shoppers, with 67 percent of smartphone owners between 14 and 34 years old having used their devices to shop, and 55 percent indicating that their smartphones have influenced their decision to make a purchase.
Additionally, 48 percent of smartphone owners surveyed say their phones have influenced their decision to purchase an item in a store, with consumers’ smartphone use highest at or near the point of purchase.
The report also found that 61 percent of smartphone owners who use their devices to shop have done so while shopping at the store, and 52 percent reach for their phones on the way to the store.
Another key finding is that smartphone consumers are more likely to purchase. When asked about their most recent shopping trip, 72 percent of smartphone owners said they had made a purchase on that day, compared with 63 percent of respondents who did not use a phone. Additionally, among those who did not buy anything on their last trip, 59 percent of those who used a smartphone eventually made a purchase, compared to only 22 percent of those who did not use one.
The results also show that mobile applications are an important strategy for consumer engagement, with 37 percent of smartphone owners who used the device on their last shopping trip having engaged with a third-party mobile shopping app while 34 percent used a retailer’s app.
“We’ve known for some time that ecommerce has an influence on in-store shopping because people browse online before going to the store,” Mr. Lobaugh said. “What’s more powerful about mobile is that you have the functionality at the point of need.
“Today, not a lot of retailers have unleashed the right functionality or the right information to aid their shoppers in a material way,” he said. “Retailers have mobile enabled their Web sites but is that really the information or functionality that consumers need when they are in the store?
“We have to be more specific about the decision making process and how we surface the information to aid in that decision.”
Chantal Tode is associate editor on Mobile Commerce Daily, New York
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