Retailers are being warned that smartphones are a threat to their margins as customers shop in-store but buy from cheaper online-only competitors. But perhaps the devices aren't the enemy of retailers after all and instead provide the key to shoppers' wallets this holiday season by creating a better, stronger connection between retailer and customer.
According to Deloitte's annual holiday survey of consumer spending intentions and trends, half of consumers surveyed own smartphones, and nearly 7 in 10 (68 percent) plan to use their phones for holiday shopping this year. These shoppers will primarily use their devices to get store locations (62 percent), check and compare prices (58 percent) and obtain product information (50 percent).
Those are significant numbers, and retailers will be looking for any ways to activate mobile in-store. Here are some more interesting figures: Smartphone-toting holiday shoppers are expected to shell out 72 percent more than those who do not plan to use smartphones, spending a total $1,428 on the holidays across categories that include gifts, entertaining at home, socializing away from home, non-gift clothing, home and holiday furnishings, and other holiday spending.
"We anticipate that retailers will increasingly interact with mobile shoppers this holiday season," said Alison Paul, vice chairman, Deloitte LLP, and retail and distribution sector leader, in an announcement from the company. "Deloitte's research into smartphones' influence on in-store sales indicates that the conversion rate for shoppers who use a retailer's dedicated mobile application is 21 percent higher than those who do not. This holiday season, branded applications, Wi-Fi connectivity and personalized, location-based promotions from retailers can enable shoppers to make an immediate buying decision in the store."
This year, Deloitte anticipates that in-store sales influenced by consumers' smartphone use will account for $36 billion, or 5.1 percent of total holiday retail store sales.
So how can retailers tap into the mobile shopping trend?
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Mikail Damiani, CEO and co-founder of mobile marketing solutions provider Blue Bite, said near-field communications offers a ready avenue of mobile activation for digital out-of-home. While most are still focused on payments as the killer app for NFC, that is still some time away, but there are more immediate uses, he said.
"The near-term opportunity is simply about making physical/digital connections easier," Damiani said. "NFC is the most simple and intuitive bridge and allows for the delivery of the right content in the most relevant context. This will allow for targeted delivery of product information and offers which can be used right there and then."
In a recent blog post on Digital Signage Today, DOOH executive Joe Matriss said the reason why people love smartphones so much is "primarily because people love having access to everything when they want it, which is almost always right now. This trend is an enormous opportunity for digital out-of-home."
Matriss, the managing director of Park Cast Network, an ad-based DOOH network with screens in public parking facilities in New York City and Chicago, said that while much ink has already been spilled about the technical ways to integrate mobile into DOOH networks there are much more immediate ways to engage your viewers' mobiles and get them to plug in the information you want them to receive:
For example, people take photos of everything now. They photograph announcement boards, documents, plates of food (both whole and devoured) and sometimes even advertisements that capture their attention. The latter happens for two reasons: either because the information is highly relevant and needs to be stored, or because there is a reward, such as sharing something cool with friends or entering a contest.
One idea is to capitalize on the phone's camera and the viewer's desire to photograph. Create photo contests on the DOOH network. Show an image with a timer, and say that whoever takes a photo of this image and sends it to us will be entered to win something (like whatever the photo is, a product from a partner for example). If a consumer sees the message but misses the opportunity, they might wait through the loop to try it again. They also might tell their friends about it.
Alex Romanov, president and CEO of multiplatform location based messaging solutions provider iSIGN Media Solutions Inc., said that any retailer with digital signage should try simply prompting their shoppers to use their phones. Stores should have a brightly colored band or banner or a flashing message that tells shoppers to enable their Bluetooth or Wi-Fi for additional offers, Romanov said.
"We found that to be extremely successful: It's exciting because you don't know what you're going to get. So they're asking you to take another step, and if the offer is compelling, it's going to work," he said.
"People need to be constantly reminded that 'Hey, this phone is a lot more than just a talking device,' and if you're in a location and they prompt you to take look at your phone or go online or receive something by Bluetooth or Wi-Fi within proximity ... people will participate," he said. "It's a very simple conclusion or stat, but it seems to work; they just need a little bit of a push."
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(Photo by ChrisGonzalez90.)
This article originally ran on DigitalSignageToday.com. James Wester contributed to this article.