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Deloitte: Smartphones Helping, Not Hurting, Retail Sales

People may be using their smartphones as a shopping tool in the stores, but that doesn’t mean they’re buying less from the retailers. In fact, the influence these mobile devices will have on annual in-store sales is expected to increase more than threefold over the next four years.

According to a new study from Deloitte, the “mobile influence factor” (or effect of smartphones on in-store sales) on retail purchases will increase to $689 billion (or 19% of total store sales) by 2016, up from the current influence factor of $159 billion (or 5.1% of sales). (Mobile sales, meanwhile, are only expected to be $30 billion at that time.) Further evidence suggests smartphone shoppers are 14% more likely to make a purchase in the store than non-smartphone users.

“That might go against conventional wisdom,” Kasey Lobaugh, principal and multicultural channel for Deloitte, tells Marketing Daily. “[Retailers] need to provide the right information and functionality consumers are looking for. It’s really a great opportunity to aid in purchasing.”

The spike in mobile influence will likely come as smartphones become even more prevalent among consumers, along with people’s comfort level with the devices. According to the survey, 40% use the device for store-related shopping after they have owned the phone for six months. After using it, however, they consistently use their phones on more than half of their shopping trips.

According to the survey, nearly half (48%) of U.S. consumers said their phones have influenced their decision to purchase an item in-store, with usage highest at or near the point-of-purchase in a retailer. More than 60% of them use their smartphones in the store, and more than half have used them on their way to the retailer.

Regardless of where they use their phones, people who use their smartphones as a shopping aid are more likely to make a purchase than those who do not. Nearly three-quarters of smartphone users (72%) said they made a purchase on their most recent shopping trip, compared with 63% who didn’t use a phone.

The way people are using their phones is of particular importance to retailers. According to the study, 37% of smartphone owners used a third-party shopping application, while only 37% used a retailer’s mobile application. Lobaugh suggests people may not be getting what they’re looking for from the current incarnations of retailer apps.

“Most retailers are serving up their Web site on a mobile device. I would argue the Web site isn’t what they’re looking for in the conversion process,” he says. “You have consumers who are trying to make complex decisions. The more information they have at their fingertips the more likely they are to make [a purchase] decision.”

via MediaPost Publications Deloitte: Smartphones Helping, Not Hurting, Retail Sales 06/28/2012.


5 Things You Need To Know About The Next Generation of Consumers

Why should you care? Because there are 62 million of them and they already have nearly $143 billion in buying power. And they will have even more by the time you finish this article. In fact, we found this generation important enough to our business to form an additional practice group focused on marketing to them. So here are five things you, brand marketers, need to know to be successful with this generation.

1. They’re Not Brand Loyal

Unless you happen to be Apple, endearing your brand to Gen We for the long term won’t be easy. They left MySpace for Facebook. They abandoned Guitar Hero for Angry Birds. And they dropped “High School Musical” like a bad habit when “Glee” came along.

They’re more concerned with value and function than brand because they were molded by the largest global recession in recent memory. Where my generation wore Abercrombie & Fitch because of the brand, this generation will buy from a brand only if its products meet their economic and functional needs.

The point is: keeping a brand relevant to this audience is tough. To do so, you will have to evolve with them, demonstrate value to them, and market yourself in non-traditional ways.

2. They Expect Brands to Fit Their Mold. Not the Other Way Around.  

A great example of this is characterized by how this generation responds to technology and information architecture. My generation was willing to learn to click the “start” button to shut down our computers (remember Windows 95?), even though it made no sense to do so.

Not this generation. They won’t blame themselves or stick around when products and brands don’t perform the way they want or expect them to – they will blame the brand and go elsewhere.

Just look at 10 mobile phones owned by Gen We’ers. You’ll see 10 completely different wallpaper schemes, 10 different collections and configurations of apps, 10 different ringtones, 10 different cases, and the list goes on.

Tailor your brands and products to them, or allow them to do so. They won’t be okay with doing it your way.

3. They Care About the World and What Your Brand is Doing For It

This generation grew up with Dora the Explorer and Diego, and is the first generation to experience “green” in the mainstream. They’re not going to be a group of tree-hugging hippies, but they do care about the world and want to associate themselves with individuals and brands that care as well.

Consider the 13 year old that started his own manly scented candle business – ManCans (featuring scents like Bacon, New Catcher’s Mitt, and Campfire). He makes his candles in soup cans and donates the soup to a local food bank. He’s received thousands of orders.

Or the 12 year old who wanted to do something about obesity and started a mobile dance studio in an old school bus. On afternoons after school, Amiya’s Mobile Dance Academy travels to kids who couldn’t otherwise afford dance lessons and teaches them everything from ballet to hip-hop.

Consider how your brand treats the world, because Gen We will.

4. They Expect You to Entertain Them

Conditioned by things like ToonTown and Club Penguin, this group expects to be entertained – even by brands. They have much shorter attention spans than previous generations, and an uncanny knack for processing massive amounts of information.

For example, when I rode in my mom’s car as a child, I looked out the window. I might have even conversed with my mother. Not this generation. They watched cartoons on the SUV’s video system, played with their DS’s or played with Mom’s iPhone. And the more tech savvy of them probably played Toyota’s “Backseat Driver” app – which uses GPS to create a virtual driving route that mirrors the actual road and integrates real world landmarks into the game.

The point is, this group has always been entertained. And they will expect entertainment from you if you hope to connect with them.

5. They Actually Listen to Their Parents

via MediaPost Publications 5 Things You Need To Know About The Next Generation of Consumers 06/22/2012.

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