Home » Business » The Growing Importance of Mobile Tech on the Digital Path to Purchase

The Growing Importance of Mobile Tech on the Digital Path to Purchase

June 9, 2014

supplu-chain

“Mobile is now dominating the consumer purchase decision process, yet nearly two-thirds of mobile-driven purchases happen offline, according to the 3rd Annual U.S. Mobile Path-to-Purchase Study findings released today by xAd, a leading global location ad platform, and Telmetrics, the leading call measurement technology provider.” [“xAd and Telmetrics Release 3rd Annual U.S. Mobile Path-to-Purchase Study Revealing Mobile Dominance in Consumers’ Purchase Decisions,” Digital Journal, 3 June 2014] The findings of the study are summarized in the following infographic.

 

 

Mobile technologies are playing an important role in the digital path to purchase around the globe, not just in the United States. Helen Leggatt reports that a survey conducted in the United Kingdom by Savvy Marketing, reveals that “today’s digital shoppers are more open to receiving mobile marketing messages and promotions on their devices than ever before.” [“Survey reveals scale, scope of shoppers’ demand for mobile marketing,” 9 May 2014] Leggatt notes that more than two-thirds of UK shoppers own a mobile phone and about the same percentage of households own a tablet computer and those percentages are rising. This growing access to mobile technologies has had an appreciable effect on UK consumers. Leggatt explains:

“More shoppers than in previous years are embracing being targeted with shopper marketing. Nearly two-thirds (64%) now say they like the idea of receiving targeted coupons on their mobile device, up from just 24% two years ago. Similarly, shoppers’ in-store expectations have changed. One in six (64%) were now open to receiving targeted mobile marketing or coupons in-store and 59% would like to be able to use their mobile device to find products in-store.”

Writing about the results of the same Savvy Marketing study, Angela Haggerty reports, “Other popular ways to use smartphones in the retail environment included using phones to find something shoppers were looking for in-store (59 per cent), replacing physical loyalty cards with mobile versions (58 per cent), receiving additional product information via smartphone on items of interest (53 per cent) and using smartphones to enter competitions (52 per cent).” [“64% of shoppers would like to receive targeted coupons to their smartphones while shopping in-store,” The Drum, 7 May 2014] I suspect that US and UK consumers are much like consumers in other countries when it comes to using their mobile devices. Their willingness (even eagerness) to receive targeted offers is one reason that the digital path to purchase has become so important to both online and brick-and-mortar retailers. At the same time, analysts at Kount Inc. report, “While the mobile channel grows in importance and revenue for merchants, so does their fear of fraudulent attacks and the realization that combating that risk requires specialized tools.” [“Mobile Shopping Continues to Grow, But So Does Fear of Fraud,” SupplyChainBrain, 1 April 2014] Concerning survey results, David Montague, president and executive consultant, The Fraud Practice LLC, stated:

“After establishing the benchmark last year, the 2014 Mobile Payment & Fraud Survey shows continued development in mobile commerce and risk management initiatives as well as changes in expectations and priorities for the mobile channel. Not only are organizations now more likely to find that the fraud risk associated with the mobile channel is higher than with standard web e-commerce, but organizations are also more likely to believe the mobile channel requires additional tools for managing risk.”

That’s quite a conundrum for retailers — fraud and vulnerability risks are rising along with one of their most promising marketing channels. McKinsey & Company analysts, Nicolo Galante, Eric Hazan, and Pierre Pont, believe that the profitability of the digital path to purchase will trump other considerations and encourage retailers to increase their efforts to make it a safe channel for their operations and for consumers. [“The multichannel journey: Profitably shaping the path to purchase,” Telecom, Media, & High Tech Extranet, 20 November 2013 (registration required)] McKinsey analysts like to the call the digital path to purchase the “consumer decision journey” (CDJ). The word “Journey” is an excellent descriptive choice for the digital path to purchase because, as Galante, Hazan, and Pont, note, “Each stage of the journey might be experienced in a matter of moments or could take years to complete.” They insist that “regardless of the duration, the journey usually spans five phases. Those phases are:

Consideration. Consumers assemble an initial set of brands and retailers to consider.
Evaluation. The consideration set evolves and preferences emerge as the shopper gathers information from a variety of online and offline sources.

Purchase. The shopper selects what to buy, where to buy it, and how to take delivery.
Experience. The new product owner reacts to the purchase and interacts with the product and brand.
Loyalty. After owning the product, consumers decide whether or not to select the same product or brand again.

They go on to note, “In the past, company efforts to sell more of their branded products by influencing the course of this journey have been both expensive and relatively ineffective. Operators lacked the granular information they needed to closely follow consumer activities, and they had few effective ways of interacting with customers. The rise of digital in retail, however, has made two things possible. First, consumers have new options, changing forever how, where, and when they shop. Second, the diverse set of channels has given retailers new and effective ways of interacting with and influencing their customers – close to real time – as they embark on their decision journeys.” And as the Savvy Marketing survey shows, consumers are increasingly seeking meaningful interactions with retailers. The Kount Inc. survey only strengthens this conclusion. Merchant insights gleaned from the survey include:

• The mobile channel accounts for 20% of their business, double that of last year.

• 66% of merchants surveyed now actively support mobile – up by 30% year to year.

• Merchants that offer a mobile app for online shopping more than doubled from 21% to 54%, while nearly half of merchants now offer a dedicated mobile website.

Don Bush, Vice President of Marketing at Kount, concluded, “Clearly mobile commerce is a source of tremendous opportunity for online retailers and their focus on this channel has grown considerably each year. Merchants also realize that fraud follows opportunity, and there may be no greater opportunity for fraud today than in mobile. Protecting and growing your business requires a fraud solution that integrates with all mobile platforms without any impact to the customer experience or your business.” Surprisingly, in all this discussion about the digital path to purchase, Big Data analytics have yet to be mentioned. Randy Bean, CEO and managing partner of management consultancy NewVantage Partners, insists that Big Data analytics is the most important tool ensuring that retailers can connect to consumers in meaningful ways. He writes, “Mainstream corporations are leveraging their Big Data and analytics capabilities to more effectively connect with customers and respond to their needs.” [“How Market Leaders Use Big Data to Enhance the Customer Experience,” Wall Street Journal, 24 March 2014] He continues:

“Businesses are aided in this quest by the growing availability of what MIT Professor Sandy Pentland calls ‘digital breadcrumbs,’ or customer-generated data such as call records, credit card transactions and GPS location fixes. For corporations focused on ways to enhance the customer experience, this ability to link behavioral, transaction, and customer interaction data provides vital insight into ‘always connected’ consumers. ‘Data is the marketer’s new best friend,’ comments Jive Software Chief Marketing Officer Elisa Steele. ‘Marketers must create a strategy centered on data and insights,'”

Targeted marketing based on personal information is field filled with landmines that are triggered by concerns about privacy (see my post entitled “White House Advisors Weigh-in on Big Data Privacy“). Leggatt reports, however, that a survey conducted in the UK by eDigitalResearch concluded that personalization and targeted marketing are growing in acceptance. She reports that almost half of the smartphone users who participated in the survey “are ‘very willing’ or ‘somewhat willing’ to allow retailers to send personalized messages to their mobile device.” She continues:

“Furthermore, 33% believe that receiving personalized messages on their smartphone while out shopping would ‘very likely’ or ‘likely’ have an influence on their purchases. Of that 33%, over three-quarters (78%) said they would be ‘extremely’ or ‘somewhat willing’ for data collected by retailers to be used to personalize communications.”

What appears to be happening is that consumers, as they obtain and use mobile devices, come to realize and appreciate how those devices can be used to enhance their shopping experience. This appreciation makes them more open to receiving personalized offers on their digital path to purchase. Almost all analysts seem to agree that omni-channel retailing will continue to grow in importance in the years ahead. And, as the xAd and Telmetrics study concludes, mobile is likely to be the most dominant channel in the years ahead.

Related Posts:

Full Logo

Thanks!

One of our team members will reach out shortly and we will help make your business brilliant!