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The Digital Path to Purchase takes Center Stage

July 29, 2014

A study published earlier this year by UPS, comScore and the e-tailing group concluded, “Digital channels are now the method of choice for both product research and purchasing.” The survey found that “82% of US digital buyers preferred to research products from multichannel retailers on the internet via desktop/laptop (61%), tablet (11%) or smartphone (10%), compared with 13% who said they would rather research items in a physical store.” [“Consumers Choose Digital for Product Research, Purchases,” eMarketer, 24 June 2014] The article continues:

“Digital devices were favored for purchasing products from multichannel retailers, with 55% of respondents preferring to use a desktop/laptop, tablet or smartphone when buying items, vs. 41% who liked to do so in brick-and-mortars. Though smartphones and tablets trailed PCs by a long shot for the preferred digital buying method, that didn’t mean they weren’t seeing any action: 46% of users had made a purchase on such devices.”

Although I don’t believe that we should write eulogies for brick-and-mortar stores, clearly the digital path to purchase has made omnichannel sales a must for most retailers. The article notes that, if the fight for survival wasn’t hard enough, brick-and-mortar stores must now face a new threat with Amazon’s release of the Fire Phone, which includes Firefly, an app that promotes showrooming. Clint Boulton (@ClintBoulton) clearly describes the threat. He writes:

“Showrooming has been a thorn in retailers’ sides for the last couple of years, as shoppers peruse the aisles and study the merchandise, only to later purchase products online for a lower price. Although retailers are trying several tricks to beat back showrooming, Amazon.com Inc. Wednesday unveiled new technology that makes it easier for the ecommerce giant to poach customers from brick-and-mortar rivals. One of the key selling points of Amazon’s new Fire phone is Firefly, software that allows consumers to take a picture of a product in a store from their smartphone and then generates a link to that product featured on Amazon.com. Firefly can recognize 70 million products, including household items, books, and video games.” [“Amazon’s Fire Phone Aims For ‘Showrooming on Steroids’,” The Wall Street Journal, 19 June 2014]

Zach Eberhart asserts that mobile shoppers behave differently than desktop shoppers. He writes, “As mobile becomes an unavoidable force in nearly every industry, the identification of a certain profile is essential for the success of your mobile marketing efforts.” [“19 Characteristics & Activities of Today’s Mobile Shopper,” Compete Pulse, 10 October 2013] He continues:

“Because mobile shopping is yet to be ubiquitous, the behavior, attitude and interests of consumers who engage in mobile shopping differ from traditional desktop shoppers. Although initially the different consumer behavior may seem like it will add a layer of difficulty to marketing your product, embracing their behavior and catering your marketing to it may prove to increase sales and help you better understand your customers.”

Eberhart notes that mobile shoppers exhibit certain biases. For example, he notes, “Compared to desktop shoppers, mobile shoppers are more likely to consume tech, media, travel, leisure, and lifestyle content. Other categories like news, weather, finance, navigation, and productivity don’t demonstrate this mobile bias.” He goes on to note a few other biases:

  • Mobile shoppers are 4 times more likely to be tech enthusiasts than desktop shoppers
  • 4 times more likely to be bargain hunters
  • 3.5 times more likely to be music enthusiasts
  • 3 times more likely to be health and fitness enthusiasts
  • 3 times more likely to be gaming enthusiasts
  • 3 times more likely to be movie enthusiasts
  • 2.5 times more likely to be dining enthusiasts
  • 2.5 times more likely to be television enthusiasts
  • 2 times more likely to be travel enthusiasts
  • 2 times more likely to be college and education enthusiasts

“As you can see, there can be a clear distinction between the mobile shopper and the desktop shopper. Taking these trends into consideration and using them to develop customer relationships, loyalty, and advocacy pays in dividends and allow you to gain an edge over the competition.”

If the biases demonstrated by mobile and desktop shoppers are different, Eberhart notes, then we should expect their behaviors and activities to be different as well. “Desktop shopping,” he reports, “is focused primarily on research and consideration and mobile is more heavily oriented around store and product information such as location and the prices of the competition.” He goes on to point out other activity differences:

  • 55% of mobile shoppers use a phone or tablet to find store information
  • 50% compared prices
  • 43% reviewed a product description
  • 40% made a purchase
  • 37% looked for coupons
  • 35% checked the status of an order
  • 34% checked to see if an item is in-stock at a specific store
  • 30% looked up shipping information
  • 27% looked at product reviews

“Awareness of the primary activities mobile shoppers are engaged in is invaluable when optimizing for mobile. Placing these functions at the forefront of your mobile site or app – or at least making them easily accessible – will not only help improve your mobile UX [user experience], but it will also help to strengthen the relationship that you have with your customers and improve retention.”

Not just marketers are making adjustments as the digital path to purchase widens. A DHL study entitled Global E-Tailing 2025 concluded, “Logistics companies are set to play a key role in providing vital supply chain management solutions that are able to evolve with consumers’ changing shopping habits.” [“Four Ways E-commerce May Change by 2025 – And How Logistics Must Keep Pace with Online Shoppers’ Demands,” SupplyChainBrain, 23 June 2014] As I’ve noted in previous articles, the mobile digital path to purchase is going to play an even larger role in developing countries than it does in developed countries. That’s because most consumers in developing countries use mobile technologies exclusively to connect to the web. The DHL study notes:

“A strong global economy and stable middle class establishes a true model of ‘Everywhere Commerce’ where smartphones and tablets remain consumers’ constant companions. Interactive displays are ever-present in city streets, serving as interfaces to the virtual world, and the retail sector targets customers through a variety of channels, such as these interactive displays, as well as offer their goods online and in stationary stores, which results in consumers being able to access and purchase products at all times.”

The study also notes that artificial intelligence could play an increasingly significant role in the digital path to purchase. In the future, the report concludes, consumers will receive the “support of virtual consultants, which will not only check the authenticity of a product and monitor purchase and delivery but also place the actual order online.” That conclusion appears to take the next step beyond Amazon’s Firefly app.

 

The study admits that there is no guarantee of a strong global economy in the years ahead. Nevertheless, it is generally optimistic in its conclusions. Sumesh Rahavendra (@sumesh023), head of marketing for DHL Africa, notes that “e-tailing has exploded globally, especially in emerging countries and despite the various possible future scenarios, it is clear e-tailing will continue to boom.” He notes:

“Currently, e-commerce already makes up 8 percent of the overall trading volume in Europe. Depending on the scenario, this share could rise up to 40 percent in developed countries and up to 30 percent in today’s emerging markets. The factor which all scenarios have in common is that the competition in electronic retail, whether on global, national or regional level, will become more intense. We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector, both online and offline, is changing and that logistics will be a focal point of these change processes. While e-tailing can facilitate the transaction of the changing consumer trends, the delivery of the product needs to be considered. Many retailers put significant focus to attract customers, but more effort needs to be paid to facilitating flawless delivery to customers. Even more so when deliveries begin being measured in minutes, as opposed to hours and days. This will require logistics to adapt, as well as deliver competitive advantages, such as offering same day delivery and flexible returns. In the future, logistics will take over the role as an enabler for online retailers even more so than today.”

One thing seems clear, the digital path to purchase has taken center stage and it is unlikely to relinquish the spotlight in the years ahead.

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