Mobile Retail Outlook for 2015
By Navneet Loiwal, Shopular
Mobile was all the rage during the 2014 holiday buying season. But the mobile buzz of late hasn’t just been about mobile purchasing. More consumers are now retail deal-hunting by mobile than in previous years – creating an entirely new paradigm for handheld devices as it relates to information gathering and comparative shopping, versus the act of completing an actual purchase.
The growing retail research opportunities afforded by mobile have also created a new dynamic that puts more discretionary buying power into the hands of the consumer than ever before. This shift to giving shoppers more control over their chosen purchase price certainly altered the way retailers rolled out sales throughout the 2014 holiday period – and will continue, at least to some measure, to guide browsing metrics and spending behavior in coming months.
So, as we look ahead to 2015, how exactly will consumers incorporate mobile technology into their retail experience?
While there have been many advancements in how we shop, mobile technology is not disrupting shopping in the way that many mobile market players, and even retailers, have indicated. Instead, we are continuing to see mobile as a strong discovery and research tool – serving as an enabler for purchase, rather than the mode of purchase.
Why is this? For one, the notion of “mobile traffic” has not been clearly labeled. When we hear about references to “mobile traffic,” often tablet and mobile phones are grouped together – when, in reality, these metrics should be examined separately. Tablets remain the main purchase drivers over smartphones. IBM states “…when it comes to mobile sales, tablets continue to win the shopping war – driving 16% of online sales compared to 11.8% for smartphones, a difference of 35.5%.”[1]
Because browsing and purchasing off of a smartphone device is still challenging (whether we like it or not), the process of checkout in particular on mobile phones remains cumbersome for many. In fact, a recent study conducted by 451 Research revealed that 54% of those surveyed were not interested in making a purchase from a mobile device.
This leaves a different market opportunity at present for smartphones. Consumers now are strongly viewing mobile as an invaluable research tool. A National Retail Federation survey found that 45.4% of smartphone owners say they used their phone (instead) to research purchases. Perusing deals and retail opportunities is a central element of digital shopping behavior.
Additionally, consumers continue to love the physical experience of “touching and feeling” merchandise in-store to evaluate purchase options. Research shows that 64% of consumers will opt for buying in the retail storefront in 2015 [Shopular.com, Mobile Retail Outlook Consumer Study, December 2014]. So while the bulk of purchases are still not being made through the mobile phone, mobile influence will continue to grow as a catalyst for impacting purchases in a variety of different ways.
What are other dynamics and more progressive applications for smartphone technology in 2015?
Apple Pay and other methods that ease conversion on mobile phones are slowly rolling out. But as checkout on phones continues to be difficult, most conversions from mobile devices will still take place elsewhere. At present, and even well into this year, the majority of actual purchases on phones will emerge from purchase-enabled apps. While these applications are appealing for highly sticky customers that frequent one brand regularly (such as Starbucks), consumers in the long-term (as the craving for more streamlined mobile purchasing grows) are not going to download an app for each retailer they patronize. This is simply impractical for consumers with an appetite for multiple retail brand experiences. The market will likely ebb and tide until a fully ubiquitous purchasing platform such as Apple Pay has reached complete maturation.
In lieu of purchases as the dominant use case for mobile, the near-term marketplace will likely see more of the following:
Enhanced retail deal discovery: By knowing a shopper’s location, mobile phones can suggest deals, promotions and other retail events to users. Couple this with preference data, and consumers can receive personalized shopping information based on their exact shopping location.
Reserve It! Functionality: The market will see a growing number of retailers starting to allow “Reserve It” functionality where the customer can find an item at a store near where they are and then more conveniently retrieve that item in-store. The functionality of mobile is perfect for detecting where a shopper is and allowing them to virtually “grab” an item before other, non-virtual in-store shoppers snatch it from retail floor shelves. Merchants not only avoid shipping fees, but also have the opportunity to market other wares to the consumer while they’re in-store facilitating their pick-up.
A “shop anywhere” mentality: Since the browsing phase of shopping can now be conducted via mobile influence (to scour for deals, vet bargains and so on), the location of “window shopping” is shifting to anywhere that the user has a mobile device in hand. Ideally, this research phase takes place in close proximity to the intended retailer to help enable the actual purchase phase, but the browsing process is no longer dependent on being physically in-store.
Growing use of omnichannel retail aids: As consumers’ adeptness at accessing and juggling multiple integrated technologies increases, the use of mobile as a growing primary browsing and “pre-shopping” tool will become part of the fabric of digital tools that are irrevocably changing the retail landscape (including online ordering, in-store digital marketing, social media, etc.).
Mobile as a retail pulse point: As mobile shopping continues to swell and the technology continues to advance to provide more reliable real-time data, retailers will increasingly look to the role of mobile influence (its performance and metrics as it relates to consumers’ shopping preferences) to be a valued weathervane and barometer for the marketplace.
In summation, it is clear that this is an exciting and extremely vibrant time within our industry. It’s safe to say that – while we can’t read the crystal ball with regard to every element of the market landscape – mobile influence will help to advance and shape a retail arena that is highly integrated and technology-enabled and that takes shopping research, distribution and fulfillment possibilities to an entirely new level.
Navneet Loiwal is the CEO and co-founder of Shopular.com, a mobile shopping app for Apple and Android.