Mobile is beginning to Dominate the Digital Path to Purchase

Stephen DeAngelis

December 1, 2014

A year ago Paul Marobella (@marobella), President of Havas Worldwide Chicago Group, wrote, “Six years after Apple’s first-generation iPhone kicked off the smartphone stampede, many people do not think twice about buying goods and services through their mobile devices — wherever, whenever.” [“Roadmap for the new path to purchase,” Mobile Commerce Daily, 2 October 2013] That statement rings even truer today than it did a year ago. Retailers need to keep that in mind as the holiday shopping season begins. To underscore that point, Melanie White (@melhwhite), Editor of ClickZ, writes, “The holiday shopping season has already begun. Who needs an in-store sales assistant when you can have your mobile?!” [“Mobile, the Ultimate Shopping Assistant, Says Google,” ClickZ, 13 October 2014] For members of Generation Y (who are often called Millennials), mobile platforms are the technologies of choice for both shopping and entertainment. That’s important for retailers to know since Millennials are quickly becoming the target audience of choice for many retailers. But they are not alone in their use of mobile technologies. Sarah Perez (@sarahintampa) reports, “U.S. users are now spending the majority of their time consuming digital media within mobile applications, according to a new study released by comScore.” [“Majority Of Digital Media Consumption Now Takes Place In Mobile Apps,” TechCrunch, 21 August 2014] She continues:

“That means mobile apps, including the number 1 most popular app Facebook, eat up more of our time than desktop usage or mobile web surfing, accounting for 52% of the time spent using digital media. Combined with mobile web, mobile usage as a whole accounts for 60% of time spent, while desktop-based digital media consumption makes up the remaining 40%. Apps today are driving the majority of media consumption activity, the report claims, now accounting for 7 out of every 8 minutes of media consumption on mobile devices. On smartphones, app activity is even higher, at 88% usage versus 82% on tablets.”

Perez included the following chart in her article showing the Top 25 mobile applications used by persons 18 and older in June of this year. I’ve read reports claiming that Facebook’s users are getting older and Snapchat’s users are getting younger; nevertheless, the chart provides a good indication of what apps people are using to communicate, get entertained & informed, and shop.

 

Although media consumption and shopping may appear to be very different activities, the line between them is blurring as more and more retailers include videos as part of their marketing strategies. Grace Chung reports that a study from Forrester Research supports the conclusion that consumers are using mobile technologies in greater numbers on their digital path to purchase. The study concludes that “consumers who access social-media sites through mobile are more likely to interact with brands than those accessing social media on personal computers.” [“Study: Mobile Users Who Engage With Brands Use Facebook Most,” Advertising Age, 23 July 2014] Chung continues:

“Not surprisingly, among users who engage with brands on social media on their mobile device, Facebook was the top destination in terms of time spent. Such users spent an average of 25 minutes on the site per day. Pinterest came in second with 22 minutes; YouTube in third with 12 minutes; and Instagram in fourth with 10 minutes. In terms of the penetration rate for smartphone users among the sites, Facebook led with 78%, YouTube held 50%, Instagram had 28% and Pinterest had 17%. Study participants were asked how they interact with brands they followed on social sites. Both PC and smartphone users had nearly identical answers: they want deals, discounts, special promotions or free samples.”

Gerald C. (Jerry) Kane (@profkane), an associate professor of information systems at the Carroll School of Management at Boston College, writes, “Social media is still new enough that many executives wonder what, if any, long-lasting impact it will have on how business is conducted. Is it worth jumping on the bandwagon? Or conversely, is it wiser not to jump, but to wait until there’s greater clarity on whether social is here to stay? Both these questions have a one-word answer. Jump.” [“Why Social Media Will Fundamentally Change Business,” MIT Sloan Management Review, 8 September 2014] He continues:

“Compelling reasons, rooted in fundamental concepts of economics and business strategy, support this belief that social media will fundamentally reshape not only individual organizations, but also the business environment as a whole. It should come as no surprise that social media technologies could have such a transformative impact on business, because information technology has been transforming the shape of modern business for decades. Its impact was first felt in the finance industry with the introduction of ATMs in the 1960s and 1970s and the dawn of high-speed trading algorithms in the 1980s. In the 1990s, enterprise resource planning (ERP) systems began to change the internal operations of companies across multiple industries. More recently, Internet technologies have allowed companies to integrate their information sharing more tightly with other organizations, creating opportunities for greater specialization, increased outsourcing and globalization. Social media is simply the next step in this trend of technology influencing the shape of business.”

White reports that a study from Google, concluded that the holiday shopping season starts before Halloween (with 28 percent of U.S. consumers in the U.S. conducting online searches for holiday gifts before that date). “Another 63 percent will research online before Thanksgiving, while 60 percent will purchase their items that weekend. And while there may be a slight discrepancy between who looks at what and when, one thing they will all have in common is the device they use to do these searches on: mobile.” Even though Thanksgiving weekend is now over, retailers can’t afford to ignore the digital path to purchase or the central role that mobile technologies play along that path. White continues:

“Mobile has become the ultimate shopping assistant, says Vineet Buch, director of product management at Google Shopping. It is no coincidence that between 2010 to 2013 in-store visits have dropped by 55 percent, yet retail store sales have increased by 13 percent. Meanwhile, 46 percent of shoppers who use their phone in a store still end up making a purchase. According to Buch, it used to be that shoppers came to the store with little knowledge and the sales associate educated them on products. Nowadays, shoppers are coming into stores with rich detailed information, and are turning to their phones as their own personal shoppers. One in three consumers uses their smartphone to find information instead of asking store employees.”

If those statistics don’t make you a believer in the power of mobile technologies for increasing sales, perhaps conclusions from another study will. Kristina Knight reports, “Mobile devices have been shown to push more interaction from shoppers in-store — from product research to coupon downloading — but one new study indicates there is a shift in m:commerce. The study, from Marin Software, indicates mobile is shifting from influencer to converter.” [“Study: Mobile ads pushing more purchases,” BizReport, 16 October 2014] Converting shoppers into buyers is the ultimate objective of all retailers. The study concluded, “The mobile conversion trend is consistent across channels, with similar increases recorded for search, social and display ads as consumers engage and complete transactions across the web from their smartphones and tablets.” Marobella adds:

“By 2017, eMarketer projects sales will hit $108.5 billion. Advertising in the medium is rising at a similar incline. As this retail channel grows, mobile technology and social media are not only changing the way we buy everything from food and clothes to electrical goods and cars — they are radically influencing the way we gather and share information about products and companies, as well as how we interact with brands. … As smartphone and tablet penetration increases, as the retail sector catches up with the channel, and as mobile payment technology is adopted and enhanced, mobile’s share of sales will skyrocket. These devices have become an extension of how we live, consume and communicate with our peers, communities, and cultures. Traditional models of the path to purchase will no longer hold true as the masses continue to embrace all things digital.”

That’s why Jerry Kane is correct when he tells retailers that it’s time to “jump” onto the digital path to purchase.