Mobile in-store shoppers bring higher traffic, conversion and spending: Deloitte
Mobile-influenced sales in the store have reached $593 billion, with consumers who use a smartphone or other digital device during their shopping journey converting at a rate 40 percent higher than those who do not use a device, according to a new report from Deloitte Digital.
The findings in the report, The New Digital Divide, underscore that rather than fearing showrooming, retailers should be embracing mobile-enabled shoppers as they have a dramatic impact on traffic, spending and loyalty. In comparison, mobile commerce sales are estimated at $40 billion, pointing to how mobile’s influence is more significant on in-store behavior than ecommerce sales.
“The big news is in how retailers think of mobile as an asset,” said Kasey Lobaugh, principal at Deloitte Consulting LLP and Deloitte Digital’s chief retail innovation officer, New York. “Our data reveals that the big value – by far – for retailers is to think about how digital supports the overall consumer experience, instead of thinking of mobile as a channel.
“For example, mobile’s influence on in-store sales is nearly $600 billion dollars which makes mobile commerce sales pale in comparison at $40 billion,” he said. “However, the vast majority of retailers today are focusing and measuring their mobile investments against the on-device sales.”
With 90 percent of retail sales happening in bricks-and-mortar stores, key findings from the report include that 84 percent of store visitors use their devices before or during a shopping trip and 22 percent of consumers spend more as a result of using digital, with just over half of these shoppers reporting spending at least 25 percent more than they had intended.
Additionally, 75 percent of respondents said product information found on social channels influenced their shopping behavior and enhanced loyalty.
“When consumers use digital as part of their in-store shopping process, including using smartphones in the store, the conversion rate goes up – by 40 percent,” Mr. Lobaugh said. “This is contrary to conventional wisdom which would view in-store smartphone usage, often referred to as showrooming, as a threat to bricks-and-mortal retailers.
“For those that do use digital as part of their shopping process, roughly 84 percent of shoppers, they spend 22 percent more,” he said.
“So, if used correctly, mobile becomes a lever to drive in-store sales.”
A key takeaway is that each mobile interaction is an opportunity for a retailer to enhance the customer experience and tell its brand story.
However, according to Deloitte, many retailers still measure success solely on how many items they sell through their Web or mobile sites and therefore may be underestimating mobile’s influence on sales.
For example, retailers might regard online shopping cart abandonment as a failed conversion when it may actually represent a customer who started a wish list in the online basket, but chose to purchase the items in the store.
Looking at the digital space more broadly, Deloitte found that digital interactions influence approximately $1.1 trillion in in-store sales. That number is expected to reach 50 percent of every dollar spent by the end of 2014 or $1.5 trillion in sales.
The surge in digital influence is putting pressure on retailers to redefine their marketing, the role of the store associate and in-store technology.
For example, the report found that 80 percent of consumers prefer to obtain product information on their own device or from an in-store device such as kiosk rather than ask a sales associate.
Digital’s influence is highest in specialty stores, with devices influencing 58 percent of store sales in the electronics/appliance category, 56 percent for furniture and 50 percent for sporting goods.
Digital devices influence 35 percent of sales in the health/personal care/drug store category, 29 percent in grocery and 23 percent in general merchandise/department/warehouse club stores.
“The results outline a fundamental shift in how retailers think about mobile…and all digital assets for that matter,” Mr. Lobaugh said. “Digital is no longer separate.
“Digital isn’t a channel, but rather is fundamental to the entire retail enterprise,” he said. “This is a significant swing and requires a different organizational alignment and different prioritization, but it unleashes significant opportunity for the retail.
“However, this will require investment through the lens of the customer, not the channel.”
Chantal Tode is associate editor on Mobile Commerce Daily, New York