In Part 1 of this 2-part series on the digital path to purchase (DP2P), I explored why some analysts believe that digital technologies have forever altered the business landscape. Kevin Glacken believes, “Society is rapidly approaching a complete digital state.” As a result, he writes, “There’s never been a better time for marketers for to see, understand and respond to the customer journey.” [“Mapping the Customer Journey with Social Intelligence,” Social Media Today, 25 May 2013] He explains:
“Today’s ‘open social age’ has created a ‘looking glass’ for companies to understand the complex nature of their customers as millions of them are broadcasting their opinions, attitudes, behaviors, experiences and even unmet needs on a real-time basis. … New technologies have transformed the way people work, learn, communicate and share. And consumers freely share their opinions and experiences on social networks, blogs, micro-blogs, message boards, forums, mainstream news sites and a variety of other online platforms. According to Dimensional Research, over 90 percent of these consumers rely on independent reviews of products and services before they make a purchasing decision.”
The “looking glass” through which companies view their customers is constructed from big data and analytics. Glacken asserts, “While many within the marketing realm point to the customer journey fragmenting between the offline and online worlds, the mobile revolution is actually pulling these worlds more closely together than ever before.” Although that may sound counterintuitive, Glacken states the reason for this convergence is that consumers are “no longer … tethered to their computers.” He continues:
“According to a Morgan Stanley study, 91 percent of mobile users keep their device within three feet of them 24-hours per day. Mobile devices are now widely a standardization of life; people watch TV with them, make medical decisions with them and certainly shop with them. This ‘always on’ state that mobile online accessibility facilitates is particularly transforming the way we all undertake traditional offline shopping activities, from conducting product comparisons and identifying best prices to locating coupons or offers and getting opinions and reviews. This, along with the all-time accessibility of mobile devices has made the wealth of information ubiquitous in the ‘offline’ world.”
In this post, I want to examine why mobile technologies are receiving the kind of attention Glacken discusses as well as look more closely at which consumers are likely to embrace DP2P mobile technologies. Although mobile technologies (e.g., tablets and smartphones) are often lumped together, Monica Ho asserts, “User behavior by device differs greatly – from experience to expectation.” [“Smartphone vs. Tablet Commerce: 3 Essential Behaviors You May Be Overlooking,” Search Engine Watch, 22 May 2013] She explains:
“With evolving features and functionality, as well as situational needs to consider, there are many unique differences in user behavior by device that can provide marketers with insights on not only the when and where – but how consumers use smartphone and tablet devices for their specific research and purchase-related needs.”
Ho reports that even though PCs account for two-thirds “of all time spent in digital media, … consumers are starting to rely heavily on their mobile devices, utilizing either smartphone or tablet based on distinct needs.” Like the analysts discussed in Part 1 of this series, Glacken asserts that the digital world “creates a myriad of paths customers can take towards their purchase.” As a result, consumers are becoming more empowered and retailers are finding the business landscape more complex. “The key to driving success,” Glacken explains, “is for marketers to deeply understand consumers, continually map the journey and leverage this insight to drive messaging, education, promotions and innovation to align with the customers’ needs (met and unmet) and wants.” He continues:
“The basis of understanding the customer journey today is mapping it with advanced social intelligence. To adequately accomplish this it must be derived from the ‘big data’ mining of millions of daily consumer social conversations. Simple in concept, but challenging in technical execution. This is why so many leading brands are turning to advanced, streaming ‘big data’ solutions to deliver deep market and customer insights on rapid basis. The ability to analyze millions of customers and prospects allows for deep insights and the construction of key strategic journey components, which enables the organization to strategically drive decisions and innovation.”
Although Glacken’s emphasis on mobile technology is understandable, Ho points out, “Just 22 percent of mobile users complete a purchase directly via their smartphone or tablet, and therefore the full impact of mobile cannot be measured without tracking conversion activities beyond the mobile device.” According to Ho, “26 percent of research and decision activity conducted in tablet will drive sales online via PC, while that number for smartphone is just 9 percent. This revelation affects everything from targeting strategy to mobile ad creative.” That means that the vast majority of purchases are still made in person and that realization has some profound implications for marketers and retailers. For one thing, smartphones are more likely to be used in a hybrid path to purchase (i.e., digital/in person) than a tablet. Ho explains:
“Consumers are rarely without their smartphones, constantly relying on them to access information while on the go, while tablet usage is typically done at home or work. This difference in typical usage location leads to a different type of user intent related to consumer expectation of distance. … Nearly 50 percent of smartphone users leverage their device to look up a business locale or directions, and 20 percent look for a business phone number. While, tablet users typically utilize their devices for research or information, generally unrelated to location, including price comparisons, coupons, and reviews. But this doesn’t mean that location is irrelevant to the activity conducted by tablet users. One-third of tablet users do indeed look for information related to their location – be it local events, area restaurants, or even a business phone number. While the immediacy of physical location may not be as important to a tablet user, location is an essential contextual element that should drive relevancy in everything from ad creative, to targeting strategy.”
Ho concludes, “Your mobile consumers are essentially telling you what they want and how they want it, and by identifying mobile user activity related to device during the length of their path to purchase, you can better engage and guide their split mobile audiences throughout their interaction with your business – and reap the benefits.” That statement begs the question: “Who are your mobile consumers?” It should come as no surprise that different generations have embraced digital technologies in much different ways. To over-generalize a bit, the younger the generation the more likely it is to embrace digital technologies. Consumers from the Baby Boom generation and those known as Generation Xer’s have certainly embraced technology, but not to the same extent as following generations.
Generation Y consumers, also known as “Millennials,” are often described as the first generation of “digital natives.” Even so, a study by the Urban Land Institute (ULI) determined that many of them still embrace a hybrid path to purchase. An article in Consumer Goods Technology reports, “Despite being far more tech-savvy than previous generations, Generation Y, the 80-million strong cohort of Americans between the ages of 18 and 35, has not forsaken shopping in stores for online purchasing — as long as retailers keep their offerings ‘fresh’ and interesting.” [“New Gen Y Shopping Preferences Revealed,” 20 May 2013] The generation following Gen Yer’s appears to be even more connected to technology.
The Coca-Cola Company certainly believes this and recently announced an all-digital, mobile campaign focused on teenagers. [“Coke Runs First All-Digital Effort, Focusing on Teens and Mobile,” by Christopher Heine, AdWeek, 23 April 2013] According to Heine, Pio Schunker, Senior Vice President of integrated marketing communications at Coca-Cola North America, told an online press conference, “This is going to mark the first all-digital campaign by Coca-Cola. And critically, this signals a whole new way in which we’ve decided to create marketing content. … Mobile phones are [teens’] lifelines. It’s not that they don’t watch TV. But mobile is their first screen.” Another indicator that mobile technologies (especially smartphones) represent the future of the digital path to purchase is that “Hispanic shoppers are more likely to use their mobile devices to make purchases than general market consumers.” [“Mobile Important For Hispanic Shoppers,” Marketing Daily, 23 May 2013] Age also plays a role in that demographic. Armand Parra, director of insight and strategy at The Integer Group, told Marketing Daily, “The median age of Hispanics in the U.S. is roughly 10 years younger than the total population. This younger population are adopting technology at a faster rate than the older general population. Secondly, for the majority of Hispanics, mobile is their primary access point to the Web and therefore their whole Web experience is based around a mobile tool set versus the PC-based Web experience.”
That description could also apply to much of the developing world. “Mobile phones, which are proliferating and increasingly used to access the Internet in Asia, are becoming a powerful tool for both marketing and market research as they tap into key consumer trends,” writes M. Hafidz Mahpar. [“Smartphones seen becoming the ‘centre of digital’ marketing,” The Star, 4 February 2013] James Fergusson, global head of TNS, told Mahpar, “Mobile phones connect location, voice, social, and m-commerce more than any other device. Mobile is becoming the center of digital. If you are a market research supplier, mobile has to be your primary area of investment. If you don’t have a mobile strategy, you’re not going to grow.”
As the target audience for manufacturers and retailers moves down the generations, the importance of mobile technology and the digital path to purchase are going to move up.