The Digital Path to Purchase is Becoming the Smartphone Path to Purchase

Stephen DeAngelis

August 15, 2016

“Shopping is going digital,” assert analysts from UPS, “and digital is moving to smartphones.”[1] For years, the digital path to purchase has moved increasingly from personal computers to mobile technologies. In the mobile arena, the smartphone is becoming the dominant player. Staff writers at eMarketer admit, “While mobile still accounts for a small share of total retail sales, retailers are feeling the impact of these devices.” The impact of mobile technologies is only going to increase as both digital natives and mobile technologies mature. According to comScore, between 2013 and 2015, time spent shopping on smartphones in the United States nearly doubled.[2] Brian Brunk, a principal at consulting firm Boston Retail Partners (BRP), told UPS, “That’s the big story in retail. Mobile devices are driving what we call the anywhere, anytime, anyhow customer shopping.” The rise of the digital path to purchase has empowered the consumer as never before. James LeTart (@JLeTartcomm), Director of Thought Leadership at JDA Software, bluntly asserts, “There’s a new boss in town and she is tougher than any boss you’ve had before. She wants what she wants, when and where she wants it. She’s the new digitally-empowered consumer and she is dictating how retailers and consumer goods companies must transform their supply chains to serve her.”[3]

One doesn’t have to look very hard to find the impact that the digital path to purchase is having on retail. UPS analysts report, “Foot traffic at brick and mortar stores is falling: Store visits declined 6.2 percent year-over-year from April 2015 to April 2016, according to analytics company RetailNext, Inc.” When asked why shopping in physical stores is declining, Bala Ganesh, senior director of UPS Strategy, stated, “As screen sizes get bigger, it becomes easier to shop via a mobile device. Retailers have learned to improve the shopping experience they provide on their website. And most importantly, more consumers are using the phone to buy things.” Ease of use is one factor that has led to increased smartphone shopping satisfaction. Commenting on the latest UPS Pulse of the Online Shopper™ survey, Ganesh stated, “For the first time in our five years conducting this survey, we found that for the avid online shopper, one out of two products were purchased online.” Ganesh reports that Marc Andreessen (@pmarca), entrepreneur, investor and cofounder of Netscape, believes the smartphone is even more important than most people think. “The smartphone revolution is under-hyped,” Andreessen insists, “more people have access to phones than access to running water.”[4] Ganesh adds, “Pocket-sized communication devices seem to be taking over our lives — and exercising our thumbs — more than many retailers realize.”

FJ Miller, co-founder and chairman of Liefery, told Nye Longman (@MrNLon) that too many retailers focus on the front end of the digital path to purchase (the mobile experience) and forget that the last mile of the process can undo all of the good work that goes into making the mobile experience a good one.[5] He explains:

“In the world of online shopping, technology is constantly evolving. Buy Buttons, retained payment details and personalised re-engagement techniques are just some of the developments that have made the buying process considerably more straightforward and stress-free than it used to be. This leaves delivery as the crucial ‘last leg’ of the booking process. It is essential that the delivery stage doesn’t become a glitch in the process — consumers will not be content with their shopping experience until the item has safely made its way to their door. … It’s an accepted truth that today’s consumers are trained to believe in convenience and flexibility when it comes to shopping, both on and offline. Ultimately, a negative delivery experience will equate to a negative retail experience, so it’s important that both logistics and retail services are coordinated in their goal to deliver customer service that is fast, flexible and in line with consumer demand.”

One of the tactics retailers have used to attract shoppers is loyalty programs; but, Lars Albright (@larsalbright), CEO of SessionM, claims, “Mobile is shaking up the traditional loyalty model, just as it’s shaken up so many other things.”[6] He explains:

“The mobile phone has become the remote control for life, and we’re using it to change channels on our loyalty programs as well. More and more digitally-savvy consumers are giving up on traditional one-size-fits-all loyalty programs and choosing mobile-driven offerings that fit their specific needs. And that’s very good news for brands. Because the mobile phone is where brands can reach consumers anytime and anywhere — where they’ll find engaged users who are ready to receive valuable and relevant messages. … WalMart and Walgreens are using apps to make personalized offers to shoppers right as they’re in the store. The apps also keep track of past purchases, brand preferences and where people like to shop. Starbucks has a wildly successful mobile payments app that saves coffee drinkers money while giving them great offers they really want on — surprise! — coffee. You probably have other brands and programs on your own phone. And you’ll notice that besides being direct and easy to use, they all rely on — and even revel in — data. … Mobile is the glue that unites traditional offline with new online programs in a way that is far more meaningful and relevant to each consumer.”

Albright isn’t alone in pushing the idea that mobile-based loyalty programs are good for business. Erik J. Martin (@Martinspired) reports, “Many [marketers] believe there are smarter ways to engage mobile users, including old-school strategies that can be adapted to digital and that aim squarely at consumers’ wallets-literally: the coupon and the loyalty card.”[7] He continues:

“According to the ‘2016 Mobile Consumer Report’ by Vibes, coupons and loyalty programs provide compelling incentives for consumers to engage with brands via mobile. Here are some of the report’s important findings after polling smartphone owners: 82% reveal that digital coupons are convenient versus printing out paper coupons and taking them to the store; 59% indicate their estimation of a retailer would be improved if they began to receive offers and coupons that could be saved on their mobile phone. Additionally, 32% currently use a mobile wallet, such as Android Pay and Apple Wallet, and 82% are inclined to save personalized mobile wallet coupons and offers. Another 73% are very or somewhat interested in saving loyalty cards to their smartphones, and 87% have at least one loyalty card.”

The bottom line is that the smartphone is becoming an integral part of most consumers’ shopping experience. Google analysts bluntly state, “When people shop, their smartphone is now their go-to advisor and assistant. For retailers, this means big opportunities to be there and be useful in shoppers’ micro-moments.”

Footnotes
[1] UPS, “Tech-Savvy Shoppers Are Transforming Retail,” The Wall Street Journal, 21 July 2016.
[2] Retail & Ecommerce, “For Many Shoppers, Mobile Is Essential When Researching and Purchasing Products,” eMarketer, 7 January 2016.
[3] James LeTart, “How Consumers are Transforming Supply Chain,” Logistics Viewpoints, 1 December 2015.
[4] Bala Ganesh, “The Smartphone Is Changing Retailing for Good,” Longitudes, 8 June 2016.
[5] Nye Longman, “What does the retail experience really look like for the consumer?Supply Chain Digital, 23 March 2016.
[6] Lars Albright, “Mobile Is Shaking Up Traditional Loyalty Marketing Programs,” AdAge, 9 December 2014.
[7] Erik J. Martin, “How Mobile Marketers Can Build Brands via Coupons and Loyalty Programs,” EContent, 23 May 2016.
[8] “How Mobile Has Redefined the Consumer Decision Journey for Shoppers,” Think with Google, July 2016.