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Free shipping offers lure in mcommerce shopping, while mobile-driven offers grow

Free shipping offers have traditionally been one of the top strategies for online retailers to entice shoppers to make purchases during the busy holiday season. However, as consumers increasingly turn to their smartphones for shopping needs, marketers need to ensure they have consistent offers on both desktop and mobile.

The growth in mobile shopping is also increasingly opening the door for different kinds of offers that take advantage of how consumers shop via smartphones. For example, there are a growing number of flash sales this holiday season luring in shoppers with limited time and/or limited quantity offers.

“More than anything, I think retailers are trying to make sure that whatever promotions they offer are consistent across all channels – so if the eCommerce site is offering free shipping that had better be available via mobile too,” said Nikki Baird, managing partner at RSR Research, Miami, FL.

Mcommerce grows
While the majority of shoppers are not going to make a purchase via mobile this holiday season, among those who are, 75 percent indicated they want to take advantage of free shipping, according to a recent survey for PriceGrabber. This shows that free shipping offers are a strong incentive to encourage consumers to purchase via mobile.

Additionally, 76 percent said they will shop via mobile because they do not want to fight the crowds in bricks-and-mortar stores and another 75 percent said they enjoy the convenience of shopping around the clock. Seventy-two percent of consumers noted that they like the simplicity of price comparison shopping via mobile.

PriceGrabber’s data reveals that 16 percent of consumers  are planning to shop from a mobile device this year, compared to 13 percent last year and 9 percent in 2010.

“Free shipping is definitely still one of the top go-to retailer tactics that helps drive online purchases,” said Rojeh Avanesian, vice president of  marketing and analytics at PriceGrabber, Los Angeles.

“We expect to see a similar or increased amount of free shipping offers this holiday season compared to last year,” he said.

Of the shoppers who are not planning to purchase via mobile, many will still be using mobile to help them find the best deals and going online for a variety of activities, giving retailers an opportunity to reach them with free shipping offers and other offers intended to drive conversions.

PriceGrabber’s survey results show that 74 percent of mobile shoppers plan to check prices online before making an offline purchase, 66 percent plan to make purchases online from their mobile phone, 55 percent plan to use comparison shopping applications and 54 percent plan to view retailer emails with coupons or discounts while shopping in stores.

App-based offers
In addition to free shipping, mobile provides an opportunity to take advantage of location-based services and the always-on characteristics of mobile to deliver offers.

For example, shopping apps are increasingly popular with consumers, giving retailers a way to geofence shoppers and drive location-based calls-to-action using apps such as shopkick, ShopSavvy and eBay’s Red Laser.

Mobile shopping applications have seen a surge in popularity this year with 31 percent of survey respondents indicating they already have shopping apps on their smartphone, according to PriceGrabber’s research. Of the 31 percent of consumers that already have apps on their phones, 82 percent said they plan to use shopping-related apps to save money this holiday season, and 32 percent said they are planning to download more shopping-related apps this year.

“The ability of mobile apps to geofence shoppers means that driving location based calls to action is increasingly valuable,” said Scott Engler, chief revenue officer and co-founder of Longboard Media, San Francisco. “Geofencing allows a retailer to understand that a shopper is within five miles of a bricks-and-mortar store and drive deals appropriately.”

Retailers and brands are also leveraging the point-of-purchase bar code scanning capabilities of these apps to deliver special offers for a specific product based on what a shopper is scanning. As a result, shoppers are seeing offers relevant to a product they have shown an interest in.

“We’re also seeing an increase of deals utilizing ShopSavvy’s ability to target specific products based upon point of purchase bar code scanning to drive extremely relevant brand messaging,”  Mr. Engler said.

“Challenges with regard to mobile lie in the issue of scale,” he said. “There are few mobile shopping apps that possess real scale to allow brands to target a large enough group of shoppers.

“ShopSavvy has over 20 million users utilizing the bar code scanner every month so it’s one of the few able to target with such massive scale.”

Flash sales
There are also a growing number of daily deals offerings from retailers, some of them exclusive to mobile that take advantage of the fact that these devices are always within arms’ reach of users.

The strategy includes offering steep discounts on a limited number of products, and only for a limited amount of time. However, retailers can run into challenges making these kinds of offers work on the back end.

For example, RSR Research’s Ms. Baird recounts receiving a flash sale offer on a mobile device but having to go to the retailer’s desktop site to complete the transaction because the mobile shopping cart would not take a gift card.

“Given those kinds of complexities, I think that if retailers want to drive mobile traffic this holiday season, they need to focus on strong use cases – inventory availability, save the sale, wish list management – and deliver on consistency across channels more than anything else,” Ms. Baird said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York