IDC Retail Insights completed a survey of over 1,000 U.S. consumers aged 19 years and older in September 2010 to determine how shoppers use mobile commerce now, and how they’re likely to use it in the near future. The results present nothing less than a clarion call for immediate and ongoing action. Let’s look at the study’s key findings first. We’ll conclude with their implications for success in 2011.
In mobile idioms, the report merits an OMG, not a LOL.
An Important New Customer Segment: Mobile Warriors and Wannabes
Mobile commerce is approaching mainstream status: 10% of U.S. consumers are “Mobile Shopping Warriors.” These hyper-connected types use the Web browsers of their smartphones, media tablets and other mobile devices, along with shopping applications downloaded on them, often and with great ease before, during and after they shop.
Not far behind this group, “Mobile Shopping Wannabes” already comprise 14% of U.S. consumers. They comfortably use their smartphones to research products while out and about, and occasionally in stores. These two groups accounted for 28% of 2010 holiday spending. Two other groups, “Mobile if I Must” and “What’s Mobile?” shoppers, use their smartphones occasionally or not at all.
The IDC survey found that young adults aged 19 to 25 years aren’t alone among the ranks of Warriors and Wannabes. They represent 13% of Warriors and 15% of Wannabes. Nearly a third of Warriors are 35 to 44-year-olds, and they account for about 25% of Wannabes. 25 to 34-year-olds represent slightly larger shares of both mobile shopper segments.
Surprisingly, younger Warriors and Wannabes aren’t as brash as their elders in applying the information advantage mobility affords them. Each older cohort of shoppers, in ten-year increments from 25 through 54 years old, is more inclined than the next-youngest group to ask a store associate for a better price to match one they found with their smartphone in a store. (See Figure 3.)
Warriors and Wannabes Change the Game
Stores are no longer bastions of concerted influence on consumer behavior securely under a retailer’s control. Any box is a glass box. Consumers outside a store can peer into it, checking prices, promotions, and inventory on their smartphones. Inside a store, at the moment of decision at the shelf, mobile Warriors and Wannabes can check out just about any alternative to buying what’s right in front of them.
The IDC survey explored the implications of mobile shopping apps, including Red Laser, ShopSavvy, and the new Amazon App for the iPhone and iPod Touch, on consumer behavior. Scores measuring the likelihood of the average smartphone-carrying shopper delaying purchases or buying an item at another store or online were about 3.7 on a scale of 1 to 5. And that’s among all smartphone carrying-shoppers. Remember, Warriors and Wannabes earned their monikers because they are more inclined to pull the trigger when a handy shopping app gives them an appealing alternative.
The Grand Unifier of Omnichannel Retail
IDC coined the term “Omnichannel Retail” a few years ago to characterize how a retailer has to unify all of its channels to meet the consumer’s expectation of a singular experience regardless of channel. IDC forecasts that Warriors and Wannabes are the vanguard of a rapidly approaching sea change that will put mobility at the center of the omnichannel retail experience. Mobility uniquely unifies all online channels and store channels, and for good measure adds social commerce into the mix, through space and time.
Consumer adoption of mobility will follow the familiar pattern that every technology innovation permeates our lives faster than the last. The vast majority of consumers already know how to exploit the Internet for a multitude of purposes. Even more think nothing of “reaching out and touching someone” with their phones. Adoption of mobile commerce is additive; it simply takes putting two well-worn behaviors together—behaviors that Warriors and Wannabes have already adopted en masse.
Technology will aid and abet consumers’ rapid adoption of mobile commerce. Like every other technology invention that has come before them smartphones will become better, faster, and cheaper.
Retailers themselves are empowering their customers’ mobile prowess by front-ending their websites with mobile gateways and building apps for the Apple iOS, the Android and BlackBerry operating systems. For example, over 65 major retailers have already done this with Usablenet, the category leader in mobile gateways smartphone app tools.
Mobility Isn’t Just Technology; It’s Brand
For the past several months IDC Retail Insights has been advocating that retailers realize two things. First, more and more of their technology and data is exposed to consumers—for example, the nutritional content of food products. Consumer ratings and reviews add another dimension to the product data that retailers manage and expose to consumers.
By definition, mobile platforms are exposed technologies. The survey validated a second reality of retail technology IDC has called to the fore—technology is inextricably tied to brand. It is no longer the handmaiden of a successful strategy deployed to meet the challenges of growth; it is part and parcel of the success of a retail strategy.
The IDC survey found that retailer’s mobile commerce competence influences consumer perceptions about brand and where they want to shop. Again, this relationship isn’t limited to young adults under 25 years of age. About 30% of consumers aged 25 to 44 years consider a retailer’s mobile competence a factor, or a major factor, in their perception of a brand. An easy-to-use mobile commerce site is important to a larger portion of these adults: 40% to 50% of these adults weigh mobile commerce competence as they decide whether to shop a retailer’s store or e-commerce channels.
“The Best Defense is a Good Offense”: Recommendations for Retailers
To be sure, the IDC survey found that conversations across social networks help shape the purchase intent of a sizable minority of people on Facebook and other social networks. But in something of a paradox, the IDC survey found that retailers still have power over three of the most influential forces bearing on a consumer’s final purchase decisions:
Greg Girard is Program Director, Merchandise Strategies at IDC Retail Insights, a business unit of International Data Corporation. The Retail Insights team provides an authoritative perspective on how retailers should use information technologies to achieve operational, tactical, and strategic business objectives in supply chain, merchandising, channel, and store management. He is a frequent speaker and has been quoted in Business Week, Forbes, The Financial Times, and other leading business media outlets.
- What people say on the retailer’s website
- What the retailer or manufacturer’s website says
- What sales people in stores say.
- This finding provides a good starting point for IDC’s essential guidance in view of the survey’s other findings:
- Double down on your mobile and social media investments and bring them to the top of your initiatives. Do not rely on traditional ROI metrics that presume returns from sales gained via these channels are the most important benefit these investments will yield.
- Make mobility the hub around which your customers engage you. It has the unique capacity to serve as a physical and behavioral conduit, spanning how your customers engage you across all other channels and as the platform by which they bring their online social network world into your bricks-and-mortar channel.
- Frame your approach to mobility and social media commerce within a broader realization that your technology, business, and overall brand strategies are inexorably intertwined.
- Find ways to use mobile social media (MSM) commerce to change the basis of competition in your segment to delight your customers in new ways
- Be clear that the purpose of your mobile commerce initiative is to build the behavioral hub, instantiated through a mobile-friendly commerce site and in smartphone applications, which brings all of your omnichannel strategy—stores, e-commerce, and social media commerce—together.