M-Commerce Not Always Synonymous with Showrooming

By October 09, 2013 1 comment

Researchers have identified five distinct types of ‘mobile-assisted’ shoppers and uncovered a variety of opportunities for retailers to reap benefits from the widespread use of connected mobile devices.

Exploiters, Savvys, Price-Sensitives, Experience-Seekers and Traditionalists – we might soon be hearing these terms much more frequently, given the ongoing growth of m-commerce, which promises revenue but also presents challenges for bricks-and-mortar retailers. A survey carried out by Columbia Business School in conjunction with global loyalty management specialist Aimia has identified these five m-shopper segments, at the same time debunking a number of myths. It appears that 21% of all consumers in the US, UK, and Canada are ‘m-shoppers’, i.e. they use mobile phones inside stores to enhance their shopping experience. However, this trend is not confined to ‘digital natives’, Millennials and Generation Y-ers but has taken hold more widely across the population. In fact 74% of m-shoppers are over 29 years old.  Another interesting finding is that 48% of the m-shoppers polled said that being a member of a store's loyalty programme makes them more likely to purchase products in-store, even if online prices are cheaper. Meanwhile 60% say they are more likely to buy in-store if they find product reviews on their smartphones, and 55% stated they would join a loyalty programme if the benefits were made available on their smartphone. So it would seem that the mobile retail business is not entirely dominated by the ‘showrooming’ phenomenon but can be tapped as a growth driver for bricks-and-mortar retail outlets. However, retailers need to know who their customers are and what sort of incentives to use.

Exploiters, Savvys and Price-Sensitives most volatile but least numerous

‘Exploiters’, who make up just 6.1% of all mobile-assisted shoppers, are the most difficult group to bring back to in-store shopping. They are archetypal ‘showroomers’ who go into stores to look at products with the premeditated intention of buying more cheaply online later. They are moreover receptive to classic features of online shopping such as free delivery and returns. The ‘Savvys’, who accounted for 12.6% of m-commerce respondents, also plan their showrooming but state that they are not dead against buying in-store even when they can find a lower price online. The ‘Price-Sensitives’ make up a substantial percentage of the sample (19.4%) and are the shoppers who put the greatest pressure on retailers. The main difference between them and the Exploiters is that they do not (as yet) plan to go out showrooming. Looking at these groups, it is clear that all these customers are very sensitive to price elasticity. In order to dissuade their customers from moving towards online purchasing, retailers will therefore have to base their sales pitch on purchasing convenience. They should offer home delivery, making this option part of a loyalty programme, invest more in the area of guarantees and repairs and provide the means for customers to pay with their smartphones and mobile wallets. Last but not least, to dissuade the Savvys from becoming thoroughgoing Exploiters, the CBS/Aimia experts recommend enticing them with classic m-shopping offers, i.e. discounts, special local deals, added-value information, plus brand apps with barcode and QR code readers.

Helping Experience-Seekers and Traditionalists with their digital experience

The largest segment (31.7%) among those surveyed by CBS/Aimia was the ‘Experience-Seekers’. These are ‘connected’ people who may nevertheless decide to purchase in-store even when they know that the item can be bought more cheaply online. The overall purchasing experience is the key, so it is vital to engage with them, enabling them to really interact with the brand and providing ideas and suggestions to improve the shoppers’ total in-store experience. They are the kind of people who are likely to take the lead in sharing their experience with others and so help to promote the brand, so retailers need to win and keep their trust and loyalty.  The same holds true when it comes to keeping the ‘Traditionalists’ in the store. These shoppers basically prefer to buy in-store rather than take advantage of online offers so it is up to the retailer to provide them with excellent customer-care, conveying a feeling of exclusivity by giving them priority choice of new products, special early-peek opportunities and so on. These shoppers are after all well aware that their loyalty is now a rare commodity and they want to be rewarded for it, point out the CBS/Aimia pollsters.

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1 Comment

Business growth increases national income, which contributes to social development.

Submitted by Michael Bian (not verified) - on November 09, 2013 at 11:30 am

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