The rise of mobile commerce is going to give traditional retail stores a headache. Results from a survey done by the Pew Internet and American Life Project shows that 25% of cellphone owners used their phone to look up the price of a product before buying it at a store. More than half of cellphone owners used their phones to determine what product to buy while in a retail store.
Pew’s research only touched on the notion of consumers researching products before buying them. The survey did not include a segment on mobile payments, where consumers actually paid for the retails goods in-store with their cellphones. That is an important distinction. Retail stores could stem the tide of users researching products on their phones and buying the product elsewhere if the industry were to combine the research process with the actual transaction.
About 38% of American cellphone owners called a friend for advice about a purchase while shopping. 25% looked up prices for a product found in a store while 24% looked up product reviews. The cumulative total was that 52% of U.S. adult cellphone owners used their cellphones while shopping over the holiday season and 33% use their cellphones specifically for online information of physical goods.
According to Pew, one in five of these “mobile price matchers” would eventually make a purchase online instead of at the retail store. That translates into 5% of all cellphone owners who made purchases online after stepping foot in a retail store. That may not seem like a big number but when it comes to big retail, each percentage point could mean millions if not near billions of dollars. The old retail adage of “just get them in the store” is starting to slip as easy access to information sits in every consumers’ pockets.
Of the mobile price matchers, 37% decided not to purchase the product t all, 35% purchased the product at the store, 19% purchased the product online and 8% purchased the product at another store.
The biggest takeaway from Pew’s findings is that mobile commerce starting to significantly affect the conversion rates of physical retail stores. How can retail stores stem the tide of consumers deciding to make a purchase elsewhere once they already have them in the store?
The strategy revolves around having a strong mobile Web presence. That does not necessarily mean an actual native app. If you are in a retail store researching with your phone and you Google the product, the retail store should be one of the first results. With the location abilities of smartphones, the search could even tell you what store or neighborhood you are actually in. The retailer could then be able to offer a deal or an incentive to buy and offer to complete the transaction through the device. The mobile Web app could hook into your mobile wallet and bill you directly or instruct the consumer to see the cashier where payment could be made by either near field communications (NFC) or by scanning a QR code. The idea is to control both the research and the transaction. Channel the consumer to your product.
Did you research your holiday spending on your phone? How have your shopping habits changed since you bought a smartphone? Let us know in the comments.
