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Mobile puts an end to back-to-school profits: Deloitte

Formerly one of the most important times of the year for retailers, back-to-school campaigns are losing their significance as consumers are less likely to rush to shop for supplies now that mobile offers immediate purchasing options and convenient product information, according to the latest edition of Deloitte’s annual back-to-school survey.

Mobile has had a significant impact on the retail industry, through the variety of options and information consumers now have right at their fingertips, at anytime. The back-to-school shopping season is one of the areas of retail that has been affected by the digital freedom, and retailers should adjust their strategies to coincide with the shift.

“Digital interactions are important for both online and in-store sales, and can help retailers capture the back-to-school sales that may no longer fall in the July and August timeframe,” Kasey Lobaugh, chief retail innovation officer and omni-channel retail practice leader for Deloitte Consulting LLP. “For example, apparel and electronics categories are largely influenced by the devices consumers use before and during their shopping trips.

“According to our recent study, Navigating the New Digital Divide, last year, nearly half, 49 percent of every dollar spent on apparel in brick-and-mortar stores was digitally-influenced, a number that jumped to 62 cents of every dollar spent in the store in the electronics category,” he said. “While more sales continue to occur in the in-store channel, more than 90 percent, mobile is a significant influencer of those sales, and that is only going to increase.

“In five years of our back-to-school survey, we have seen smartphone ownership more than double. The survey also indicates that, among all the devices people plan to use for back-to-school shopping, they are reaching for their smartphones most often.”

Technological influence
Mobile and digital technology now allow users to shop with greater access to information, creating a more immediate shopping experience. For back-to-school retailers, this means vastly different consumer behavior compared to pre-mobile integration.

Consumers are now able to keep track and purchase anything they need through their devices at anytime, anywhere. This means parents and students are replenishing their school supplies throughout the year, and no longer wait for that rush right before fall.

It is much easier for school shoppers to look for deals at anytime, now that mobile offers numerous platforms featuring specials, discounts, coupons and lower pricing. Shoppers no longer have to wait for the back-to-school discount blitz at bricks-and-mortar locations and can receive these substantial discounts all throughout the year.

Retailers previously regarded the back-to-school season as a crucial shopping event, similar to Black Friday. The months leading up to September and the start of the school year incited a valuable number of shoppers flocking to stores to stock up for the year, but as a result of mobile integration, this is no longer the case.

The rise of smartphones
The impact mobile has had on back-to-school is continuing to grow at a rapid pace. For instance, the percentage of those surveyed whose smartphones have impacted their purchasing decisions has risen six percent from last year.

Consumers planning on using their smartphones in the back-to-school shopping process make up 80 percent, compared to last year, in which only 49 percent of purchases were influenced by mobile or digital. This is mostly due to the increase in smartphone owners, which has almost doubled since 2011, according to Deloitte’s findings.

These mobile consumers are using their devices primarily to search for information and not for purchasing. Users visit retailer’s mobile Web site 44 percent of the time and view product information 42 percent.

“[Consumers] are making their decisions before they reach the point of sale, and quite frequently, through their phones,” Mr. Lobaugh said. “If retailers continue to focus only on the place where a transaction occurs, they have already lost the opportunity to influence a sale.

“Instead, they should meet the customer when they are seeking inspiration and information, and while families may be shopping differently or at other times throughout the year, those sales are not necessarily lost,” he said. “This is another disruptive shift for retailers, but is illustrates why it is important for retailers to meet the customer at the moments that matters in the shopping journey, which may no longer be through offers during a limited-time shopping season.

“Similarly, the upward trend in overall digital usage has accelerated, and retailers that prioritize and design digital functionality with the sole purpose of driving sales in an e-commerce or mobile commerce channel may miss the opportunity to influence the consumer at the time and place they are ready to purchase.”

Final take
Brielle Jaekel is editorial assistant Mobile Marketer