Mobile and retail: the upside of showrooming
For retailers, the specter of "showrooming" — in which consumers browse in a physical location but use their smartphones to buy at a cheaper online-only competitor — has become a topic of great concern as the number of smartphone-toting shoppers has increased. No retailer wants to think a competitor, especially a virtual retailer without the overhead of a brick-and-mortar location, has effectively set up shop in their store. But up to now, it hasn't been clear just how big a deal showrooming really is.
It turns out it's huge. And it also turns out that shoppers with smartphones might not be the threat retailers thought they were.
According to a new study from the Google Shopper Council, a group of shopper marketing experts, 84 percent of mobile shoppers use their phones to assist them in their shopping while in physical stores.
The council's new report, "Mobile In-Store Research: How in-store shoppers are using mobile devices," said the single largest task for devices in store, as reported by 82 percent of respondents, was using mobile search to find information about products. Other activities included comparing prices (53 percent), finding offers and promotions (39 percent), finding locations of other stores (36 percent) and finding the hours of the store (35 percent).
What's more, the Google report said that web surfing on a mobile device wasn't just used for expensive or "high consideration" purchases. Instead, the report found that in every category, from household items to pet care, 70 percent of smartphone users consulted their devices in-store.
Not surprisingly, interaction with a smartphone has replaced interaction with store personnel. The study found that one-third of respondents would rather consult their phone than ask a person for information in store.
The silver lining
Even with all the reliance on smartphones while shopping, the Google Shopper report uncovered some surprising good news for retailers: the basket size, i.e., the amount of a shopper's purchase during any one trip, was 25 to 50 percent higher for frequent smartphone users than moderate smartphone users. Whereas the average user spent $250 per trip, frequent smartphone users spent $350 per trip.
"(U)nderstanding and embracing this new retail behavior can open up new opportunities for brands to connect with customers in key consideration moments," said Adam Grunewald, product marketing manager for mobile ads at Google, in a post on the Google Mobile Ads blog.
Grunewald said that stores are responding to this behavior with a number of marketing tactics meant to retain smartphone-using shoppers. "Whatever tactics marketers choose, it's clear that smartphones are changing the in-store experience, and that winning the key decision moments at the physical shelves means owning the digital shelves too," he said.
The Google Shopper Council study was completed with the help of M.A.R.C. Research. It included qualitative research conducted during the third quarter of 2012 as well as a quantitative survey. The survey was conducted during the fourth quarter of 2012 and included 1,507 U.S. smartphone owners.
The full presentation of the report is available at Google's Think Insights blog.
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Photo credit: Google