American Consumers Ready to Go Mobile

Discussion
May 28, 2009
George Anderson

By George Anderson

The idea of using cell
phones for shopping is starting to catch on with American consumers.

According to research
by Harris Interactive, 45 percent of those polled would be willing to use
their cell phone to shop if they believed transactions could be completed
safely.

Younger adults, as might
be expected, were more likely to find the notion of shopping with a mobile
device appealing. Nearly 60 percent of those between 18 and 34 were comfortable
that they could shop securely using their cell phones.

"There’s clearly
a large U.S. population of consumers open to the idea of making purchases
via their cell phones," Andy Kleitsch,
CEO of Billing Revolution, the
firm that commissioned the research, told Mediaweek. "With consumers
getting more comfortable navigating the web from mobile phones,
mobile commerce is poised for explosive growth, and consumers are very
much leading the charge in this direction."

"It’s
just a few years before we’re all buying products on the phone we typically
buy on the web," Michael Dulong, co-founder
and senior vice president of business development at Billing Revolution,
told The New York Times.

"If
anything, the economy is heating up demand for mobile check-out mechanisms
as companies are leveraging mobile to supplement e-commerce," Mr. Dulong added.

Discussion Questions: Will we see an acceleration in the use of
cell phones for retail transactions in the near future? How do you
see smart phone apps influencing demand? How big an issue will security
concerns be in terms of consumer adoption of the technology for shopping
purposes?

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20 Comments on "American Consumers Ready to Go Mobile"


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Max Goldberg
Guest
11 years 11 months ago

There has been talk about using mobile phones for transactions for years. Concern has always been about security and ease of use. Using mobile phones for transactions makes sense. The devices are ubiquitous and with the adoption of smart phones, information and applications to make purchases are at consumers’ fingertips.

Consumers are concerned that someone will be able to read and copy the payment information they are using to make purchases. This is the key issue that needs to be addressed. When it is solved, and it will be within the next few years, expect mobile phone transactions to take off.

Doron Levy
Guest
Doron Levy
11 years 11 months ago

Mobile apps is the way to go for retailers now. We are actually toying with the idea of setting up an app for a smaller client of mine that sells ultra trendy shoes and handbags (just by visually counting at the store, most of her customers have iPhones).

Coding an app is not out of the realm of the small merchant. An easier way is to actually text promos to your customers. It’s a great gimmick that gadget people will embrace. No coupons, just flash your phone with a number or graphic barcode to the cashier. I think previous attempts were clunky and not customer friendly but the GUI on the iPhone and Blackberries is much easier to use now so shopping on a handheld can be fun.

Anne Howe
Guest
11 years 11 months ago

OMG! Consumers are very ready to use their mobile devices to buy products at retail. Many shoppers today are so tech savvy that they just don’t “get” why the security issues are such a barrier still. The prevailing thought is, “get it done” and move on. Ask just about any 20-something shopper and they’ll tell you it’s the marketplace lagging consumer desire.

Gene Hoffman
Guest
Gene Hoffman
11 years 11 months ago

Technology is causing the world to move so quickly that when those people saying cell phone retailing won’t happen will be interrupted by a world of younger adults effecting it.

Kenneth A. Grady
Guest
Kenneth A. Grady
11 years 11 months ago

The iPhone and similar mobile devices being introduced by other companies (e.g., BlackBerry’s new device) continue to drive acceptance of the device as a multipurpose tool. At least one airline is testing use of the device as a mobile ticket where swiping an image on the phone is used for check-in instead of a paper ticket.

The question on using mobile devices for checkout in the US isn’t if, but when. Outside the US (e.g. Japan) this is old news. The real question for retailers is how to make this more than a convenience app? What information could the retailer send to the mobile device that would help the consumer? Should your receipt (with all the itemization) be uploaded so that it can pour into an analytical tool helping you understand where you are spending your money?

Nikki Baird
Guest
Nikki Baird
11 years 11 months ago

Smart phones are playing a huge role in accelerating demand for mobile shopping apps, whether search, locate, or purchase. But I have to confess, I don’t hear a lot on the street from my fellow consumers about security issues. In fact, it makes me wonder if the phone is so personal that people forget it is actually attached to a network!

Mel Kleiman
Guest
11 years 11 months ago

The question is not will it, but when will it? At the rate technology is moving, 3 years at the outside will see major acceptance.

Liz Crawford
Guest
11 years 11 months ago

BRING IT!!! The US is lagging Asian markets and Europe. This is a key growth step for retailers and consumers, not only from a technological perspective but from an economic one.

Ralph Jacobson
Guest
11 years 11 months ago

The US is truly a laggard here. ONLY 45%? Even with a security guarantee? Ugh. That’s still way too low a rate of consumer awareness and the willingness to embrace. There are and have been a couple pilots in the US, but no one has gone all out with a commitment. Apple Stores should give it a try. I like the way they introduce new technologies to the store customers (i.e., emailing receipts, etc.)

Phillip T. Straniero
Guest
Phillip T. Straniero
11 years 11 months ago

When we discuss this opportunity with the students in my Food & CPG Marketing Issues and Strategies class there is very little participation at the current time mostly limited to ordering a pizza using mobile technology. Although the students talk about wanting to more actively participate in mobile technology they have an almost universal fear of privacy violation and credit card misuse associated with keying in their card numbers on their cellphone. If these issues can be managed in a secure environment this technology will explode in a similar fashion to what has been seen with online commerce.

David Dorf
Guest
11 years 11 months ago

m-Commerce is here to stay, but I question why people would use a phone to purchase something when the PC is so much easier to use. Yes, the mobile phone is great for product information, coupons, payment, etc. but I just don’t get purchase. Time will tell.

Herb Sorensen
Guest
11 years 11 months ago
There is a spectrum of “shopping assistant” devices, stretching back to VideoCart (the first “internet in the store” device.) All of these devices rely on connectivity, screens and usually keyboards and some type of visual recognition–scanner/camera–plus some type of location technology. The most advanced version of this today, relative to capability, is MediaCart which is essentially a full size “lap top” on a cart. Also well advanced is the Modiv Shopper, and deployed in a much larger number of stores. But these devices are owned by the retailer with proprietary advantages/disadvantages. (Kiosks fit into this space as well.) Moving across the line to shopper-owned devices, PDAs have the most potential, but cell phones are more ubiquitous. In every case, it is essentially the “internet” moving into the store. However, some of the discussion in this thread doesn’t really require a bricks-and-mortar store for applicability. Think Amazon. Amazon is one of the finest retailers in managing online offers and acceptances. They lack the immediacy of the merchandise being available for personal interaction in the real world… Read more »
Phil Rubin
Guest
11 years 11 months ago

Mobile devices are ultimately going to be the only way to engage and transact with Millenials as well as other younger and forward thinking, tech-savvy customers. Part of the problem is that most marketers are increasingly endeavoring to cling to old marketing communications models. Witness the challenges that the cable companies are having trying to get Project Canoe up and running. Customers are ready, merchants and marketers need to increase their willingness to adopt new technologies and especially new customer channels.

John Bajorek
Guest
John Bajorek
11 years 11 months ago

American consumers are definitely ready to go mobile and numerous brands ranging from Victoria’s Secret to Safeway are leveraging mobile devices today to expand their customer relationships. The important decision for every retailer is to consider and understand what their digital strategy should be and why. For some that may end with a mobile site or couponing through Cellfire, for others that could mean the ability to transact through mobile devices. We have a tremendous opportunity to understand how the consumer would like to engage with our brands and then provide an efficient and safe way to satisfy their need.

Mike Romano
Guest
Mike Romano
11 years 11 months ago
To all retailers/grocers/manufacturers out there: If you’re not aggressively engaged in mobile advertising or mobile marketing yet, then you are already far behind the curve–by at least 2 years. Statistically, out of SmartReply’s 90 retail clients 50% already have a mobile database and are regularly sending out text message offers/coupons/alerts, 20% are involved with mobile advertising on our mobile ad network of 1,300 radio stations and 10% are active with mCommerce–the ability to browse and pay via their mobile device and use their cell phone as a credit card. Coupon response rates AVERGAGE 6%. Some average even much higher. Mobile marketing is not a FAD nor is it a novelty, this is a real viable channel that is experiencing high consumer receptivity and usage. So, if you are not involved in mobile–do your research now, contact your agency, get your in-house marketing team focused on digital media and get to it now–because every day you are falling behind your retail colleagues and competitors. You can find case studies on this information from your RetailWire panelists–just… Read more »
Joel Warady
Guest
Joel Warady
11 years 11 months ago

I just returned from PLMA in Amsterdam, and had the opportunity to meet with some Finnish retailers. They have been allowing consumers to pay with their mobile phones for a number of years, and it has become so commonplace, there is no longer a novelty factor to the process. We will see the same thing here, and all it takes is for the first retailer to implement the system and the rest will follow.

I’m old enough to remember when you couldn’t use a credit card in the supermarket. Then, in the supermarket in which I worked, we accepted MasterCharge only, and had to call in via phone for each transaction to gain approval. At the time the thinking was that people would never adapt to using credit cards for groceries. Now look at us. Change is inevitable; it is simply a matter of how quickly the change is executed.

Tim Henderson
Guest
Tim Henderson
11 years 11 months ago
M-commerce certainly has great growth potential, and younger, more tech-savvy consumers will likely be the early adopters. Security is/will undoubtedly be an issue, given it only takes a few well-publicized security breaches to scare consumers. That said, security is likely to become less an issue as the channel grows, as more consumers adopt m-shopping and as more providers enter the industry with newer and better apps and security protocols are adopted. So “yes,” in the future we’ll see more purchasing of product via mobile devices. That said, the key, unanswered question is, what will consumers actually purchase via m-commerce? Personally–and given how m-commerce is largely structured right now–I find it hard to believe that consumers will begin purchasing hardware, furniture, etc., via their handhelds. The “cheap, frivolous” product cited by the NYTimes seems more likely, at least for the near future. Still, it’s hard to be certain about such, given this remains a shopping channel in its infancy, at least stateside. The way most of us are currently thinking of m-commerce may not be the… Read more »
Kai Clarke
Guest
11 years 11 months ago

This is not only a question of willing, but there are also many other issues that still need to be addressed including personal security, safety, and the most important one of all, privacy. Although this is just one study, it doesn’t address these issues in full detail, nor does it mention how or even if they were brought up to the respondents. This is, and continues to be 3 of the key areas which this technology needs to addressed before we can even start to consider any type of large-scale implementation.

William Dupre
Guest
11 years 11 months ago

NFC phone technology has been around for some time. MobileLime was a thought leader in this space after recognizing what the rest of the world was already doing. Someone mentioned Japan, where everyone uses their phones for retail purchases. Like most technology I think the equipment and service providers will drive this initiative.

Christopher P. Ramey
Guest
11 years 11 months ago

The ability to do something and the desire to do it don’t always match. Mobile phones remain personal tools for certain activities as defined by its user. We’re still creatures of habit. The transition to broad mobile commerce will not happen quickly.

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