Tuesday, December 18, 2012

Own the Future of Shopping via Digital/Mobile

Apple iPhone 3GS, Motorola Milestone and LG GW60

Shopping is changing radically because of digital/mobile technologies. Shoppers are wielding tablets and smartphones to research products and purchase them at the best value. As a result, technology is shifting power to the shopper.  Both manufacturers and retailers need to get ready.

“We need to start thinking about technology as a positive. This is the world we now live in. We need to embrace it,” said Alison Chaltas, Executive Vice President, GfK Shopper & Retail Strategy.   

“Value-seeking cuts across a big swath of the population,” said Rob Barrish, Senior Vice President, GfK Shopper & Retail Strategy. “It’s not just about getting the best price, but also finding the best product and information – in store, online, and along the way.” 

The executives outlined the impact of technology-enabled shoppers and how marketers and retailers can come to grips with such a major change in the marketplace. They spoke in a presentation recently in Chicago at the Shopper Marketing Expo hosted by the Path to Purchase Institute. 

Research by GfK revealed the following: 
  • Smartphones have penetrated more than 50% of the population, and tablet growth has doubled
  • 41% of smartphone owners use their mobile phones to help them shop 
  • 48% of tablet owners use their phones and 58% use their tablets to help them shop 
  • 23% of all consumers use a mobile phone to help them shop. 

Shoppers who own digital devices are using them to make purchase decisions, the executives said. Many of these shoppers are using mobile devices to compare prices, locate a store, look for information or reviews, search for coupons, or for “showrooming” — that is, see and touch a product in the store before buying it elsewhere or online. 

Twenty-two percent of those who use a mobile phone or tablet while shopping admit to showrooming, said Barrish. “Keep an eye on this and develop a strategy,” he urged. For example, to “beat showrooming, promote private label or offer discounts on shoppers’ mobile devices while they are in the store.

A byproduct of new technologies is a new shopper profile: the “Xtreme Shopper” who is wired (with a mobile device), competitive and optimistic, Chaltas noted. “Don't talk to them in store about how tough times are — focus more on offering solutions, be a glass-half-full type. Tell them, ‘Here is how we can help you.’”

Xtreme Shoppers are competitive. “They want to deliver better value to their family. This is not being done out of desperation. It brings them a sense of accomplishment. They take pride in looking at the money they saved. It has to do with control. It becomes something like a sport,” she said.  

GfK research found that half (52%) of Xtreme Shoppers say they are less loyal to any one retailer because they need to shop around for value. “Xtreme Shoppers want to be rewarded,” Barrish pointed out. 

One way to address the loyalty issue is via co-creation, Barrish noted. Consumers will be more loyal to a retailer who lets them help shape the offering they buy. The percentage of consumers who agreed with this more than tripled in 2012 vs. 2011, GfK research found. 

Another way is via customization of offers, either while the shopper is online or in the store. Younger consumers (in the age range 18 to 34) in particular appreciate a tailored offer — they see it as a value exchange. To win their loyalty, Barrish suggested providing them with more input, using social networks to communicate with them, and building a relationship.

“Value seeking cuts across a big swath of the population,” he noted. “It's not just about getting the best price, but also finding the best product.”

When it comes to making the purchase or completing the transaction, the executive said, the use of smartphones and tablets starts to trail off. Those receptive to the mobile wallet concept tend to be under age 35. Mobile commerce may be a good fit for them. For those age 50 and older, there may be more resistance. They may try, fail and then back away from it, citing concerns about security and complexity.


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