Mobile’s influence on physical is growing

Discussion
Jan 14, 2015
Tom Ryan

A recent survey by Deloitte of 2,000 customers found smartphones influencing 19 percent of sales at physical stores. That’s up from only five percent in 2012.

At the session entitled, "The New Digital Divide," at the NRF Big Show, Alison Paul, vice chairman and U.S. retail and distribution leader at Deloitte, said such findings show that retail needs to rethink how it "measures, organizes and invests in both digital and physical."

The survey held strong implications for the link between digital and in-store traffic, with 84 percent claiming they use a mobile device either before or during a shopping trip. For those using a digital device, the conversion rate was 40 percent higher at the store. With cross-sell and upsell, order size was 22 percent higher for digital-wielding in-store shoppers. Eight in 10 prefer to use their device or a kiosk versus talking to an actual human being in a store.

Overall, digital technologies — including PCs, tablets and smartphones — influences 36 percent of in-store sales and that will likely increase to 50 percent by the close of 2015, according to Deloitte’s research.

Ms. Paul said part of the problem is that digital is often thought of as e-commerce only. The mobile team similarly is often only responsible for the less than two percent of sales that go through a mobile phone.

Shopping cart abandonment is also becoming a more nebulous statistic. Many customers browse with no intention of buying online, but that online experience eventually brings them to a store to make that purchase.

Ms. Paul said such findings show not only that "digital should no longer be a separate part of retail" but also that customers should be measured "across the entire journey" rather than with a particular emphasis on one part or another.

Among her suggestions for bridging the digital divide:

  • Tailor the digital strategy to the store. Deloitte research shows that digital influences twice as much of sales in the electronics category than in general merchandise;
  • Deliver a consistent brand experience across physical and digital;
  • Embrace social media with a "creative and confident approach to promoting relevant product," and don’t underestimate friends & family recommendations, which she considers often "even more critical than a great sales clerk";
  • Focus on "creating shopper journey tools, not just conversion engines" by understanding that different features and functions will be sought at different parts of the journey.

What changes might operators of physical stores need to make to adapt to digital’s growing influence of in-store shopping? Do you see an easy path to rethinking related measurement, organization and investments?

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7 Comments on "Mobile’s influence on physical is growing"


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Bob Phibbs
Guest
4 years 5 months ago

And how do friend and family recommendations usually start? “I had a great experience at X! They were so helpful and Y did a great job.” I would tend to disagree with the comment that they are “even more critical than great sales clerks.”

I have to wonder how much time is spent trying to track how great digital is performing along the vast shopper’s journey compared to actual sales effects?

Digital doesn’t have to be an either/or, it can be an and, of course. I just hope that with all the energy coming off NRF15 enough brands can look in the mirror at what a customer’s journey actually is in their store. There’s a reason so many would rather use a smartphone than talk to someone.

Training, it’s what smart retailers are concentrating on for 2015.

James Tenser
Guest
4 years 5 months ago

I believe accumulated experience will teach us that there are natural levels of digital influence on purchasing, which will vary by product category and purchase occasion. Summary statistics, like “50% of all purchases … ” are interesting but not diagnostic.

So Ms. Paul’s observation, “Tailor the digital strategy to the store,” is highly significant. I would add, “Make digital strategy occasion-aware.”

I was also glad to see her revised interpretation of digital shopping cart “abandonment,” a statistic that I believe has been too often misconstrued.

Physical store operators must continue to refine how their digital channels can capture and guide shopper interest and support a superior service experience. A highly reliable virtual inventory system is an important enabler. (“Is that item in my local store today?”)

Finding ways to link digital pre-shopping data with in-store purchase data will separate the winners from the also-rans. This is a pretty tough objective, I think, but not optional.

Roger Saunders
Guest
4 years 5 months ago
Little question that mobile devices will play a growing role on the influence of shopping. It is vital that retailers start with a consumer-centric approach—who are these consumers and how do they use their mobile devices for shopping. In addition, those retailers have to consider the merchandise category they are marketing. As the Deloitte study shows, electronics sales are more greatly impacted by mobile than general merchandise. The same has to be said of grocery, shoes, pharmaceuticals, home improvement, toys and HBA. The Prosper Media Behaviors & Influence (MBI) Study of 15,000-plus adults, and the monthly consumer survey of 6,500-plus adults uncovers the fact that 16.1 percent of Millennials have shopped for electronics via a mobile device in the past 30 days. Only 5.5 percent of Boomers and 11.7 percent of Generation X used a mobile device to shop for electronics in the past 30 days. Looking at the apparel category, 11.6 percent of Millennials used a mobile device in the past 30 days for their shopping needs. In building plans for investment, organization and… Read more »
Craig Sundstrom
Guest
4 years 5 months ago

“Honey, what size did you say you wanted?” How about checking a store’s hours while on the way to the gym? Did digital “influence” those shopping excursions? With no links to the actual survey, it’s hard to say, but my reading of it is that it piled one vague term on top of another to the point I’m unclear on what was being measured…if the point was to show “text/mobile ads work!” then I think the standard of proof is lacking.

Amar Kulkarni
Guest
Amar Kulkarni
4 years 5 months ago

Mobile and digital should definitely not only be seen as a sales channel, but an influencer of purchase, along with store locating, targeted messages, product finding and point of purchase. Though retailers and categories vary in the level of influence that digital plays, it is becoming more critical that retail operators adopt because customers and employees demand it and that is our behavior now. Just ask your friends and family, how many people use apps to price match, bundle products, locate nearby deals or find product reviews? Retailers are falling behind and will need to adopt to these full cycle digital purchase patters in order to be competitive with today’s customers and employees.

Mark Price
Guest
Mark Price
4 years 5 months ago

To adapt to the role of mobile, retailers will have to design apps that can improve customer experience in-store as well as facilitate e-commerce. Such features as SKU loop, inventory checks, product comparison and features, as well as product support will serve to augment a customer experience in-store that is generally considered to be substandard.

By measuring digital engagement within the geo-fenced store location, it is possible to attribute sales to that engagement. Such technologies as iBeacon will also help drive the value of mobile to retail, by reporting on traffic patterns and behavior by customer segment.

Herb Sorensen
Guest
4 years 5 months ago
Color me as totally skeptical—not that a digital shopper is not likely to buy more, but that the share of shopping is anything near the numbers cited here. After the industry has spent billions of dollars to adopt smart phone technology in stores, surprise, someone will vouch that it is actually WORKING. Doesn’t mean that the hyperbole is true, or that any meaningful statistic is being compiled—like what share of sales in ANY store is actually happening with smartphone assistance—actually proven during the shopping experience. This is a statistic that must be measured, by actually tracking 100% of shoppers and detecting what percent of sales are being driven by a smartphone in the store. And a survey in this situation, given the bias to find that, surprise, mobile works, is worth less than nothing. If I’m wrong about this, let’s have some straight measurement data, not double-talked reporting that strives mightily to say “it works,” without actually demonstrating that it works. Look, I am not totally against smartphone sales. I analyzed data years ago from… Read more »
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