Mobile shopping for advanced consumers
BY JANINE EGE
(Published in The Produktkulturmagazin issue 3 2016)
Shopping was still relatively simple in the nineties. Now, however, technical achievements such as the smartphone and changing consumer behaviour are transforming the shopping process. According to a study by Demandware, a Salesforce company, the traffic channel that brings in the most customers for retailers is mobile. So the smartphone is a key contributor to growth in digital trade.
“Retailers definitely have to assume that the traffic through mobile channels will continue to expand and that even more customers will engage in mobile shopping,” explains Christian Ziegfeld, a partner at OC&C Strategy Consultants. By the end of 2017, it is to be expected that more orders will be placed via smartphone than via other devices. For the fourth quarter in a row, smartphones contributed over 90 percent to website growth. Last year, mobile phones accounted for around a third of traffic, in a head-to-head race with tablets in terms of the share of orders. Since then, smartphones have been largely responsible for the increase in visitors, the growth in shopping carts and the rise in orders.
With regard to the operating system, the iPhone increased its share of both traffic and orders in the markets analysed by Demandware. In particular in Germany, where Android devices still enjoy a clear lead, the gap was further reduced. Nonetheless, 56 percent of mobile traffic and 60 percent of orders can be attributed to Android devices.
Overall, 50 to 70 percent of all customers shop via mobile channels, generating a 15 to 30 percent share of total order volumes. That does not sound like much at first, but it represents a share of several billion euros. “Shopping behaviour will become even more mobile in future, and also more personal in the process,” says Dr. Ludwig Voll, a partner at OC&C Strategy Consultants. “For that reason it is essential to prepare for a mobile world and to achieve a sharper focus on relevance and personalisation, in order to reach this growing target group.”
It is primarily young people, so-called millennials, who are driving mobile shopping. Millennials is the name given to those born between around 1980 and 2000. They are also called generation Y and they are the first generation that grew up in the digital world. This also influences the way they shop. They display impulsive purchasing behaviour, and if they like something they want to have it immediately. Social media also have a very great influence on this generation. Of those surveyed, 75 percent make a purchase after a like-minded person has liked and shared a product. The younger the individual, the greater the probability that he or she will respond to the recommendations of people of the same age with an impulse buy.
It is also clear that recommendations via social media increase the sales of a brand. The same also applies to retailers: In the last 12 months, 59 percent made an impulse buy online when goods from a retailer or a brand were recommended to them. Around 40 percent of all smartphone users are active on social networks; 28 percent of them actually every day. Around 75 percent of buyers even use their smartphone while shopping. More than half of the customers prefer to look up certain information online, instead of speaking to a salesperson. So social networks and apps, combined with an online presence and local stores, offer retailers plenty of opportunities.
However, to develop a mobile strategy the retailer should not only focus on the development of an app. Mobile applications can form the center of customer engagement strategies. By extending website functions, these can be integrated into the customers’ favourite apps. A constant presence in social networks and on other channels helps retailers to respond more quickly to customer requests and to reduce delivery times. The Demandware Shopping Index also revealed that the attention span of mobile customers is shrinking: Year-on-year the time spent on a website has fallen by 8 percent to just under eight minutes.
The ever shorter mobile visits mean that the standard sequence of the classic customer journey is becoming less and less important. “The customer journey of many online shops is not mobile-compatible; customer-unfriendly processes are crammed into screens in the form of king-size postage stamps,” says Ruppert Bodmeier, Director Business Development of dgroup GmbH, criticising the actions of many retailers in e-commerce. But there are opportunities to react to people’s shorter attention spans and new expectations in two different ways. Firstly by simplifying the customer journey. The five phases of awareness, familiarity, consideration, purchase and loyalty have to be considerably shortened so that there are fewer steps on the way to the checkout and the final purchase. Bodmeier pleads for simplified checkout processes, improved checking of user data for smart services and the establishment of personal feed streams for customers. It should be possible to draw a link between a customer’s various visits to a retailer – irrespective of how many devices were used for the visits.
Each new technological change influences the retail trade more quickly and with greater impact than the one before. It is not enough merely to keep pace. Instead, retailers have to expand their capabilities and competitive advantages in order to secure a significant benefit at an early stage. “Disruptive products and services such as the iPhone or the Tesla Model 3 really rub our noses in the fact that the entire value added chain has to be reexamined. The next Amazon or Zalando will emerge from a purely mobile mindset – with a large number of differentiation features,” postulates Ruppert Bodmeier. The Demandware Shopping Index measures the growth in digital retail sales on the basis of the purchasing activities of over 400 million customers. It takes into account the following factors: purchasing frequency, conversion, average order values and net change in the number of buyers. The random sample of online shops considered in the report represents over 800 websites and covers 40 regions. Around 60 percent of the websites come from the USA, Great Britain, France and Canada.
Demandware, a Salesforce company, is the category-defining leader of enterprise cloud commerce solutions, empowering the world’s leading retail brands to continuously innovate in the complex, consumer-driven world.
Picture credits © Eva Katalin Kondoros/Getty Images