Upward Mobility Whitepaper


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Commission by Shopper Marketing Institute with Arc World Wide and Augme Technologies (Prior to Augme Technologies discontinuing managed services in favor of IP Litigation, company is no longer operational) in 2011, this white paper takes a deep dive into mobile engagement in store and strategy to understand planning and limitations.

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Upward Mobility Whitepaper

  1. 1. INDUSTRY REPORT PRESENTS: Upward Mobility: Developing an Effective Mobile Shopper Marketing Strategy The “First Moment of Truth” has“Thirty million times a become a continuous information loop. day … P&G brands face The now-legendary phrase – the rallying cry for in-store communication as an integral aspect of brand marketing – is undergoing a dramatic transformation their First Moment of now that consumers are standing at the shelf with smartphones in hand.Truth, when consumers For one, there’s now a good chance that the final purchase decision of which Lafley spoke was already made at the store entrance, in the parking lot, or in the stand in front of a store car on the drive to the store – influenced by marketing touchpoints that didn’t shelf … and decide even exist in 2002. Perhaps more significantly, the purchase decision won’t necessarily conclude whether to buy a P&G at the shelf – or at least that particular shelf: after scanning the packaging’s UPC, brand, or a competing the shopper may discover that a retailer down the street offers the same product at a cheaper price; once she gets there, she might download a coupon for a product.” competing product by scanning a shelf-sign QR code. – A.G. Lafley, Thanks to increasingly sophisticated mobile devices, the consumer has become an ever-moving target that is never more than one click, ring, text or Procter & Gamble, tweet away from entering “shopper mode.” But, for better or worse, the shopper then-CEO, 2002 that she becomes is savvier and much better informed than her predecessors, due to the growing number of on-the-go tools at her disposal. A supplement to Shopper Marketing magazine
  2. 2. INDUSTRY REPORT Welcome to the Mobile World always on,” says Molly Garris, manager of digital strategy Procter & Gamble already understands these changes, at Arc Worldwide, the Chicago-based marketing services which is why the packaged goods company (and industry arm of Leo Burnett. “It lets marketers truly engage bellwether) devoted a great deal of resources in 2010 consumers by making the message far more relevant and to launching smartphone apps for Tide, Always and personal.” other brands, providing downloadable coupons for top Mobile marketing has, of course, been around for retailers such as Kroger and Safeway, bolstering its charity years, and has been prevalent in other parts of the world initiatives through third-party apps like CauseWorld, and such as Japan and Israel for more than a decade. Initial even selling Pampers through Facebook. forays in the U.S. were hampered somewhat by strong Other packaged goods manufacturers such as Kraft consumer backlash to unsolicited phone calls, but the Foods, Kellogg Co., Kimberly-Clark and Unilever also emergence of text messaging in 2001 made marketing have been mining the mobile space for several years – communication far more palatable. In the last few years, although all of the above would likely admit that they texting has become a standard promotional tool for haven’t yet fully cracked the code on best practices. many marketers, particularly when targeting younger Numerous other product marketers are following suit consumers. because of the tremendous potential that the mobile It was the emergence over the last seven-odd years channel presents. of the “smartphone” and its computer-like functionality “Mobile is the first marketing technology that can be – Internet access, email, file downloading – that sparked used through the entire purchase cycle,” says Anthony marketers to really begin examining the possibilities, Iacovone, founder and chief innovation officer of Augme however. “There are things you can do with feature Technologies, a New York-based company specializing in phones such as text messaging, but with smartphones, mobile marketing technologies and services. “You start we can really take it to the next level,” says James Schuh, with a mobile call to action in a TV ad, and you finish with global digital marketing manager for Kimberly-Clark. a text-message reminder about the incentive in the store.” And it was Apple Inc.’s launch of the iPhone in 2007 A mobile phone “is always with you, and it’s almost that began turning the smartphone into a must-have technology and a cultural Overall Mobile Activity phenomenon. The only questions remaining for % who do the following activities at least once a month from their mobile phone marketers are, when will smartphone penetration100 100 100 100 99 99 97 97 97 96 91 97 97 95 95 98 reach critical mass, and 94 how many U.S. consumers 93 93 92 89 87 will use their devices as an 85 87 essential shopping tool? 82 82 81 81 80 77 77 77 79 76 By all accounts, 72 76 70 the answers to those questions are “very soon” 68 66 62 60 and “a lot.” Roughly 59 51 53 one out of four mobile subscribers already 48 owned a smartphone by 40 October 2010, according 33 to comScore Inc. More significantly, that means 20 nearly 20% of the U.S. 16 16 16 14 13 population had one. 12 And The Nielsen Co. 12 10 9 7 predicts that 51% of 6 5 0 e s the population will be lls S S et ail gin ic s s es ite es e ca SM SM tern e gin g us ew ap sit bs vic erc ne g/ g/ em ga m sa en dm rn rm eb we er m carrying one around by ho gin gin eI n ive ya es rch de ero so dw n. e ds co m p sa sa th ce Pla tm ea a th on te ge as r the end of 2011. ive es es to /re an as nlo ea cti era er -b go ce m e m cess nd t ing w w ire en s on in /re xt ur Se Ins do ck pd nu ati nk ake Te ict Ac fo us to he ku se rg to loc ba The ability to browse M P pi n ten C Lo o it u ten So r ob ile ku Lis Vis on GP the web on mobile o arec M Lo Sh devices – something that Non-Mobile Shoppers Potential Mobile Shoppers 36% of the 234 million U.S. Light Mobile Shoppers Heavy Mobile Shoppers © 2010 Leo Burnett and Arc Worldwide 2
  3. 3. mobile subscribers already do, according to comScore – various tools and technologies but few have developed initiated their use as a shopping tool. The ongoing launch a comprehensive strategic plan. A spring 2010 survey and adoption of smartphone applications that specifically conducted by Forrester Research/Shop.org, for example, or indirectly facilitate shopping – by locating stores, found that only 20% of retailers had implemented a delivering coupons, organizing lists mobile marketing strategy. and offering trip incentives, to name Product marketers may be a little further along. A a few – has taken the concept to November survey conducted by the In-Store Marketing new heights. Institute found that 35% of consumer product marketers And with AT&T, T-Mobile are already working with smartphone apps, 30% with USA and Verizon Wireless jointly mobile coupons, 21% with QR codes and 13% with building a network aimed at location-based services. And better than 40% of the non- turning smartphones into “mobile users plan to implement those tactics in the near future. wallets” within 18 months, the What’s more, in a spring survey from MediaPost’s future of mobile as a critical Center for Media Research and InsightExpress, 40% of P&G on CauseWorld shopper marketing tool seems companies said they would boost mobile ad budgets by uncontestable. “I can’t find one campaign where having 30% or more in 2010. a mobile component doesn’t make sense,” says Iacovone. “Mobile is a chew toy and we’re all teething,” says“Anytime you are making a call to action, it needs to be David Apple, chief marketing officer for Augme. “The mobilized.” tendency is to do something because it’s buzzy. But I’d say that 50% of program executions right now are poor.”The Speed of Change The singular fact that consumers are migrating to aDespite this rapid evolution, mobile shopping – and, mobile lifestyle – more than 30% of mobile subscriberstherefore, mobile shopper marketing – is still a relatively use their phones as the sole “computer” for theirnew concept. When it comes to employing their mobile household, according to Morgan Stanley – makesdevices as a shopping tool, “10% of users are generating embracing the channel an imperative for marketers. But80% of the volume right now,” says Carrie Newman, mobile marketing is an ideal vehicle for several otherresearch manager at Arc, which conducted extensive reasons as well.consumer research on the subject in September 2010 (see For one, it facilitates the targeted, relevantpage 8). “Most people are dabbling, still learning what’s communication that is the essence of shopper marketing.available and how to use it.” (For a comprehensive list of As a corollary to that, it also eliminates waste: rathermobile shopping activities, see the chart below.) than distributing 40 million FSIs to anyone who buys a The same holds true on the marketing side of Sunday newspaper, a brand can deliver one million tothings, where many companies are experimenting with the smartphones of consumers who’ve asked to receive Mobile Shopping Activities CROSS-CATEGORY (mobile-related activities that transcend categories) PORTABILITY VIRTUAL SOCIAL SHOPPING Use a search engine to get information during shopping process Gather/Share opinions about a product or store from friends/family Look up store address, store hours or store location Receive/Share photos of products from friends/family MORE ADOPTED (advanced activities) Refer back to retailer emails you have saved in your inbox Receive/Share text messages about products from friends/family LESS ADOPTED Receive notifications about in-store promotions, events or offers Text or tweet price details to see if the deal is worthwhile (core activities) Receive/Share content about products/stores on user gen. websites FUNDAMENTAL SHOPPING TASKS SPECIALIZED SHOPPING TASKS Compare products from your mobile phone Use gift cards, reward cards, or gift registries Look at prices on a retailer’s website Use gift guides (e.g., look for a ‘gift under $100’ or a ‘gift for mom’) Search elsewhere when a product is out-of-stock Compare payment plan options (e.g., mortgage calculator) Compare store prices with online prices when shopping in a store Use retailer comparison, selector or customization tools Read customer ratings or reviews of a product Utilize virtual shopping tools that help you visualize the product Visit a retailer website (e.g., bestbuy.com, potterybarn.com) View product demos Look up online product information while shopping in a store Add a product to a wish list or favorites Read customer ratings or reviews about a store Browse store circulars Check in-store availability of a product Use a coupon Look for deals for nearby stores Browse coupons Check on the status of an order Place an order ahead of time to ensure a quicker pick-up Visit a manufacturer website (e.g., whirlpool.com, fisherprice.com) Participate in a sweepstakes, game or promotion offer Calculate price comparisons for different size products Use barcodes or scanning to get pricing or product information Make a shopping list Use an app or mobile shopping application CATEGORY-SPECIFIC © 2010 Leo Burnett and Arc Worldwide (shopping-related activities that don’t transcend categories) 3
  4. 4. INDUSTRY REPORTthem. (A second implied corollary: mobile marketing Rule No. 2: Don’t treat it as a separate function.often is significantly cheaper than comparable, traditional Effective mobile marketing will be fully aligned withadvertising methods.) digital marketing as a whole and, beyond that, the overall For another, it lets marketers send calls to action strategic marketing plan. “Right now, mobile is still anin the “immediate proximity to where the purchase afterthought, something that gets tacked on at the end ofdecision is being made,” says Daniel Cooke, director of the planning stage,” says Iacovone.digital shopper marketing at Kellogg Co. “We refer to this “We don’t think you should have a distinct ‘mobileas ‘point-of-service,’ and it’s the primary reason why we strategy,’” Garris says. “It should be aligned with yourbelieve so strongly in the prospects for mobile.” overall marketing strategy.” “Retailers and brands have been working at online That, of course, is easier said than done, sincemethods of driving consumers to stores. But what’s been marketing organizations historically have kept their siloslacking is a way to drive them right to the sale,” says fortified and usually seek comfortable, pre-establishedIacovone. “Mobile is the first technology that can deliver homes for new concepts. (A key reason why digitalthat.” shopper marketing – and shopper marketing in general Mobile marketing also “is unprecedented in its ability – hasn’t fully taken flight is that it forces marketers toto return behavioral data, which can then be correlated break down those silos and align advertising, consumerwith purchase data. And the more we know about promotion and trade promotion.)consumers, the better we’ll be able to communicate with Most digital marketers come from the advertisingthem,” says Iacovone. side of the organization, which means sales-driving However, the time for non-strategic experimentation promotions, retail collaboration and other tactics forwith “buzzy” tools is passing quickly. Marketers now need which mobile is well-suited are foreign territory for manyto develop a comprehensive strategy that maps out a of its practitioners.vision for mobile marketing and its role in the overall “Shopping crosses so many different touchpoints, somarketing plan. Marketers looking to do so should fully everyone in the organization has to work together,” saysconsider the following rules: Garris. “Mobile is just one of the tools – although it’s the only one that’s with the consumer all the time.”Rule No. 1: Make a full commitment. Many retailers andmarketers are launching mobile programs simply to be Rule No. 3: Don’t expect it to differentiate your brand.trendy or keep pace with the competition – but without It’s extremely important to understand that the mediumsetting a long-term vision: retailers launch perfunctory itself is definitely not the message.apps with store locators, a website link, and little in the The newness factor that currently makes scanningway of real shopper value; brands add a QR code to print a QR code or downloading an app unique for shoppersads that send consumers online to watch a 30-second will fade quickly, and using them won’t score points withTV spot, which might drive some site traffic but won’t consumers for very long. In fact, employing mobile toolsengender long-term engagement (or even a repeat visit). solely as a stunt may ultimately alienate more consumers These examples illustrate the fact that “Let’s do than it attracts. “You have to make sure that you providesomething mobile” is not a sound strategic plan, says value,” says Schuh.Iacovone. “There are numerous internal needs you should Sooner rather than later, all brands and retailers will beconsider before you ever get to the consumer-facing involved in mobile marketing. Apps among supermarkets,activity.” for instance, could well become as commonplace as The first step is “a commitment from upper-level frequent-shopper cards, which means they will have littlemanagement that runs across brands, builds mobile into intrinsic value. Already, both Tide and Clorox offer appsthe overall path-to-purchase strategy and fully spells that deliver on-the-go stain removal tips, so neither brandout where it fits,” he says. Ideally, this internal alignment has gained a competitive edge through the technologyincludes agreement on a single structural platform that itself.allows for shared data and processes. “Some companies are looking at mobile as a A fully thought-out plan will also help companies differentiator,” Michael Ross, vice president-marketing,avoid common mistakes, such as using a QR code to pricing and consumer insights for Meijer, said at adirect consumers to a traditional, mobile-unfriendly recent industry gathering. “We’re looking at mobile as awebsite (see page 6). media channel. What we do with our brand is what will The evidence suggests that many companies are in differentiate us.”need of such alignment: Only 45% of respondents to a fall2010 Forrester survey claimed to have “a shared mobile Rule No. 4: Focus on the audience, not the tool. “Thevision” within their organizations. mistake that many companies make is thinking about the tactic first, then trying to make the tactic fit the brand.4
  5. 5. mobile experience fast and easy. “You never want to create more hurdles for the shopper,” says Garris. “You only have her for a minute.” “Unless the value matches the effort required, your message will seem like a disruption,” adds Masha Sajdeh, Arc’s chief shopper strategist. “We should not be forcing consumers to do anything,” such as downloading an app or emailing a photo, to enter a promotion, says Augme’s Apple. “They need to be able to do things naturally with the technology that they Walgreens sends text messages when prescriptions are ready already have.” Many of the current barriers to mobile shoppingThat’s usually not the path to success,” says Schuh. “You involve relatively basic issues with speed, functionalityneed to start with the consumer and her needs, and and visual aesthetics (see chart, page 15). Another issue isdetermine how that aligns with the brand strategy. It the fragmentation of available technology: “The presenceneeds to make sense.” of numerous proprietary applications and subsequent “You have to identify the shopper first. Then you can lack of standardization often forces consumers to makedetermine the tools and methods for reaching them,” technology decisions rather than shopping choices,” sayssays Iacovone. “You probably don’t need to incorporate Augme’s Apple. Any mobile campaign should seek toaugmented reality if you’re trying to reach Baby Boomers. avoid – if not alleviate – these obstacles.But for teenagers, it might be perfect. You start with thetarget, not the technology.” Rule No. 7: Pull smartly, push gently. Just because The primary goal is not to “wow” shoppers with the mobile shoppers are always “available” doesn’t mean theytool itself, but with the solution that it delivers. “You need should be contacted relentlessly. The best strategy oftento understand shopper needs and pain points, and solve may be to give them access to problem-solving tools, butfor them,” says Garris. An app from Walgreens that lets let them decide when and how to use them.shoppers remotely order prescription refills and receive Arc, for one, is more an advocate of a pull strategy.text notification when they’re ready for pickup is a great “You can create a lot of context and a lot of technicalexample “because nobody wants to wait in the store for a shortcuts for people to use – when they want to,” saysprescription,” she says. Garris. Relevance is key, and many brands have establishedRule No. 5: Assess your brand’s role realistically. Part enough equity among consumers to legitimately seek aof understanding target shoppers is identifying the role deeper role in their lives. Consumers may very well viewyour brand plays in their lives. “You need to engage them Kimberly-Clark’s Pull-Ups as the logical provider of a pottyin a meaningful way, to give them the information that training tool for parents, or Nestlé-Purina as a crediblethey need when they need it,” says Garris. source for information about pet-friendly hotels and Simply put, the average shopper will have little need restaurants (see page 14). But will they accept PepsiCo’s(or interest) for an app for every brand that she buys, let Propel as the ideal aid for helping them map out errandsalone might buy. (On the other hand, apps may soon (as the brand is attempting to do)?become as necessary a tool for retailers as websites have As for push marketing, “You have to be reallybecome, regardless of how many consumers feel the thoughtful,” suggests Garris. “The content should beneed for them.) highly customized if you are delivering to a phone. But if “You have to be relevant enough that they want you understand shopper needs and pain points, you canto engage with your brand,” advised Mike Boylson, provide relevant content and start to influence behaviorJCPenney’s chief marketing officer, at an industry without offending anyone.”conference last summer. Part of the issue here involves a timeless marketing For examples of retailers and brands that are solving albatross: ad clutter, and the subsequent negative effectconsumer needs and establishing a deeper, relevant role it has on consumer response. Since the mobile phone isin their lives, see pages 12 and 14. such a personal device – “For a woman, it’s her purse. For a man, it’s his wallet,” says Augme’s Apple – an unwantedRule No. 6: Keep it simple. Consumer research at message could be more off-putting than ever before.Hewlett-Packard has found (among other things) that However, this problem ultimately may be solved bymobile shoppers prefer to select from option links rather consumers themselves, who now have an unprecedentedthan make requests by typing. ability to ignore, delete or block any unwanted That’s just one example of the need to make the communication, and will be consciously selecting the vast (continued on page 15) 5
  6. 6. TACTICAL REVIEWHYPE VS. HOPE traditional web, says Apple. “Every organization with a traditional website should have a mobile-ready version.”Augme evaluates some of the more prevalent mobile Smartphone Applications:communication tools. Creating an “app” that can be downloaded onto a smartphone is an effective way to establish an exclusive,Text Message/SMS (short message service): ongoing exchange with theWith all the recent industry buzz surrounding target audience. But doingsmartphones and apps, the “old-school” text message so “assumes that peoplehas taken a bit of a backseat in the minds of marketers. care enough about yourBut it’s still the brand to carry around yourcommunication tool content all the time,” saysdelivering the greatest Apple. Consumers with timereach (68% of mobile constraints – not to mentionsubscribers use it) storage limitations – shouldand a technology soon reach a saturation pointwith which most on the number of apps they’reconsumers have even willing to download, letdeveloped a high alone use on a regular basis.level of comfort. It’s (And, they have to be willing toalso still the social download any future upgradestool of choice for as well.)younger consumer What’s more, “There are very few times when an app isgenerations. really necessary,” says Iacovone. “Most functions that you Augme strongly encourages its clients to include a would deliver through an app can be built on a mobiletext-message option in all promotions – no matter what website, and that’s more scalable.” Even if smartphoneother “cool” response mechanism might be deployed penetration does reach 51% of the U.S. market by the endotherwise. “Every mobile device can send and receive an of 2011, that still leaves 49% of consumers who will haveSMS, so it’s already scalable,” says David Apple, Augme’s no way to interact if an app is the only option.chief marketing officer. “If you exclude people because oftheir devices, you might alienate them. And 200 million is Barcode Scanning (2D, UPC):a lot of people to alienate.” With an estimated 65 million smartphones expected to hit the market with embedded readers in 2011, scanning Mobile of packaging and P-O-P materials could soon become Websites: standard behavior. (Penetration levels in some foreign Optimizing markets are already quite high.) Although usage rates are your website for still relatively low – Forrester reported in September 2010 mobile viewing that fewer than 1% of consumers had ever scanned a code (or building a – Iacovone suggests that marketers begin using them “to full-scale mobile stay on track with version) is a consumer behavior.” must for any Augme sees a consumer-facing bright future ahead organization, for barcode scanning,Anthony Iacovone, Augme’s founder and chief innovation but advises its clientsofficer, advises. On-the-go consumers have little patience to avoid proprietaryfor traditional websites, which were designed for access codes and insteadfrom computers with more memory, faster connections, use QR codes or UPCsgreater visual capacity and much larger screens. One – the most widelyunsatisfactory encounter on a clunky website may be readable types in theenough to drive consumers right to the competition. market. “There’s a lot By 2014, more people will access the Internet via of confusion relatedmobile devices than by desktop computers, according to multiple codeto a forecast by Morgan Stanley. “The mobile web is types, primarily in-as important as – if not more important than – the store,” says Iacovone.6
  7. 7. Adding to this confusion is the common categorization of deployed barcode imagers at“snap and send” technologies – which require consumers the point of sale.)to take a picture, use email or MMS [multimedia message The other category,service] to send it to the address provided, and wait for a “mobile coupons,” should beresponse – as “barcodes.” But that technology has a high categorized as brand-specificfailure rate (for image captures) and slow response times, and can be redeemablewhich “substantially limits capabilities and increases across stores, according toconsumer frustration,” Apple says. Augme. Redemption options generally are limited due toLocation-Based Networks: the lack of POS technology;Third-party operators such as Shopkick, Foursquare and some retailers have adoptedGowalla can deliver established audiences that, at least methods of making thefor now, seem to be relatively engaged in the process offers downloadable toof checking in at retail to earn loyalty cards, with redemption occurring when therewards. Whether or not these shopper presents the card (instead of a phone) atservices survive long-term will checkout. While that works well for retailer-specificdepend largely on the value campaigns (at least at the 15-odd chains that have thethat they deliver – and that will capability), there currently is no easy way for brandsonly come through widespread to conduct a national program, aside from workingparticipation from retailers and through multiple technology vendors. Augme is amongproduct marketers (or, perhaps, a few companies that are working to aggregate theby how deeply larger entities marketplace.like Facebook, Google andTwitter move into the space). In-store Technology: “You don’t need a third- In large part, the smartphone “can become a personalparty app to run a location- kiosk for each shopper,” says Iacovone, which eliminatesbased program – or any app at some of the need for in-store deployment of otherall,” says Apple. “The same capabilities – namely, GPS and devices. Meijer’s Michael Ross says that the chain plans todevice IP [Internet protocol] – can be leveraged through “leave the hardware in the hands of the shopper.”a mobile website or consumer-response technologies like Still, nearly 80% ofSMS, or 2D and 1D codes. And that way, you can brand the marketers believe that in-storeexperience yourself.” technologies “will work in tandem with personal devicesMobile Coupons: to deliver relevant, targetedPaperless coupons delivered to feature and smartphones communication.” Kioskshave served as the mobile “toe-dip” for many marketers or digital signs that deliverfor multiple reasons: they’re a tangible, recognizable shopper-specific messagescompanion to a traditional marketing tactic, they deliver when activated by a phoneeasily measurable results, and they have been quickly could very well become aembraced by consumers. (They also hit the cultural common offering at retail –zeitgeist during the recession, which didn’t hurt.) and would save marketers “They may not be sexy, but the fact of the matter from launching unnecessaryis, all 248 million mobile devices can interact with them apps.right now,” notes Apple. While the numerous systems and “I may not really careservice providers available, and the resultant lack of scale enough about your brandor standards, make the marketplace a bit confusing at the Monday through Friday,” saysmoment, penetration rates and intention levels – as well Apple. “But I do care enoughas early redemption rates – suggest that marketers should about it on Saturday, when I’mbe diving in fully. in that retail environment, to Augme divides the marketplace into two categories: respond to your offer.”A “mobile offer” is a discount on a product or a sale When choosing tactics, the single most importantpresented by a specific retailer. The consumer either point to remember is that “your audience will determinereceives a numeric code on her phone via SMS, or a the technologies you use,” says Iacovone. “Your consumerbarcode that can be scanned at checkout. (The latter will determine their mode of communication with yourmethod is only possible at retailers like Target that have brand.” 7
  8. 8. BEHAVIORAL RESEARCH MOBILE SHOPPERS ARE were tracked for more than one week as they performed various shopping tasks on their phones. (The inventive BORN, NOT MADE. study concluded with six subjects conducting all of their Black Friday shopping on their smartphones.) In the mobile shopping universe that Arc uncovered “There are some consumers who are inherently wired to through the study, 49.1% of consumers can be classified do this,” says Masha Sajdeh, chief shopper strategist for as “mobile shoppers,” having engaged in one or more Arc Worldwide, the Chicago-based marketing services relevant activities monthly (see chart below for the list arm of Leo Burnett. Sajdeh is referring to the 10% of of qualifying activities). Of those, 10% are “heavy” and U.S. consumers who, based on the agency’s proprietary 39.1% are “light” users, based on the penetration and survey, have been classified as “heavy mobile shoppers.” frequency of their activities. Of the remaining 50.9% of In September 2010, Arc surveyed 1,000 mobile phone the population, 40.6% have yet to engage in any mobile owners aged 18 to 64 about their mobile usage, then shopping tasks, and roughly 10.3% don’t own mobile enhanced that sample with another 800 surveys of phones. smartphone owners who had engaged in at least one Depending on your outlook, that means half of U.S. mobile shopping activity. The agency then conducted consumers already are involved in mobile shopping, an intensive qualitative study of 36 consumers who or “that half aren’t shopping,” says Leo Burnett and Arc Mobile Shopping Activity Penetration 100 % who do the following activities at least once a month from their mobile phone 93 94 93 91 85 86 86 84 83 83 82 81 80 78 79 78 74 73 73 73 71 70 70 68 67 64 65 63 63 62 61 61 60 59 59 57 58 54 52 47 40 40 32 31 25 24 23 22 21 21 21 20 20 19 20 19 19 17 16 16 15 15 14 14 13 13 13 11 11 11 10 10 9 9 9 8 8 6 0 ) ) ) ) ct on ess ers m ite ed re re ct m ily list es er re ne ck cts tes ily ct ne on fo ne ily ne er up ile ols ies os tes m’ or ati oc off y.co ebs sav a sto n-sto rodu l.co /fam ing stor ord a sto pho f-sto odu n. si /fam rodu pho icati ct in pho /fam pho n off ick- hwh n to gistr dem vori mo ulat rodu loc pr s/ u w ve n , i p oo s p y an t e o r e s p e pl u e s e io r p rt io e t fa r lc p or ing tion estb iler’s ha ile i ices of a irlp iend hop earb s of bou obil out- ize p ser g iend of a obil ap prod obil iend obil mot icke wo izat ift r duc t or ift fo e ca the rs p o b u h r h r s a s r g fr is g o s g g e ou op om e.g. reta ls yo n w ne p iews g. w m f ke a at n statu ws ur m ct is ent on u m f ility ur m pin g or ur m om ur m r pro a qu eal stom s, or pr sh li r a ‘ rtga aliz s, h r sh pr ( a ai tio li ev (e. fro a als e ie o u r s ro ib o p n o r o d u M de th r rev m y rod diffe tore cts f vail m y sho rici m y ore f m y me o sure the or c card Vie a w 100 . mo vis w i ’o u dres you tore bsite s on r em rma h on or r site cts n o p a o e p o o n f o r $ e.g ou ad ring in-s we rice aile info wit ings eb rodu for k o s o s fr he for ts/s du re s fr obil get n fr ct/st rs fr s, ga to e ee i ctor ard tt ( y re t r p t s w p ok ec ing ct n t ns uc pro sto n o u la e e s le ew uc de ns elp to du ou ile at re ct ice rat er t o Lo Ch r rat odu he riso rod s of k in- upo or m ng t oup rod ircu stak tim ls to , se ds, r od un io h p s ine s ab reta ook k to rodu e pr mer ctur bou e r e w pa t p to c o p ni a c p c p f i on ar pr ‘gift opt hat u g n ok en io isit a L ac e p tor to ufa ts a m are p er m ou ho Che se c ap an se ut a ore wee ad o deta aris ft c d a a an ls t Lo rch cat b s us an ex sto p h co b p ow an sc U abo se st a s ahe rice mp e gi Ad k for t pl too V fer lin al c t cu m sew ice t a re Br Use s or en ing ea tifi Re p on ysic ead t a m are ad Co h el e pr nten /Sha e s w in er t p co Us loo a s e no u ph R isi /Sh Re c at co ve od ion Bro pate ord tex iler .g. paym opp eUs ceiv ok re V ve ar l i arc in ci an t or reta e s ( re l sh Lo pa i Se alcu are ece op rti Light Mobile Shoppers Re ce C /Sh R eb re Pa lace wee Use ide pa a Co m Re Us ha P T gu om virtu ive /S ift C ze Heavy Mobile Shoppers ce er g ili Re th Us e Ga Ut © 2010 Leo Burnett and Arc Worldwide 8
  9. 9. research manager Carrie Newman. Either way, it suggeststhat there is plenty of room for steadily increasing The Mobile Shopper Universeadoption levels as the penetration rate of smartphones % of Total US Adult Population Ages 18-64rises and consumers become more familiar with thevarious tools at their disposal. Arc’s group of heavy mobile shoppers is “dramatically” Hvyyounger than the general population, with 67% aged Mobile 10.0%35 or less, according to Newman. They also skew Mobileslightly higher toward male and single, which aren’t Shoppersthe demographics you’d typically find at the high-end Light 49.1%of a shopping survey. But that fact suggests growth Mobile Phone Mobile Owners Shopperspotential, she says. “Smartphones are more conducive to 89.7% 39.1%shopping than standard feature phones, so we anticipatethe number of mobile shoppers to increase along withsmartphone penetration.” Mobile But the study finds that mobile capabilities so far Non-Shoppersare not dramatically changing general behavior, as 40.6%consumers largely are using their phones to perform theshopping tasks they used to carry out on a computer (orelsewhere) rather than altering their habits to any great No Mobile Phone 10.3%degree. Heavy shoppers, for instance, have two definingcharacteristics. First, they qualify as heavy mobile © 2010 Leo Burnett and Arc Worldwideusers in general, utilizing their phones extensively for awide variety of activities such as making calls, texting,conducting searches and playing games (see chart on to purchase beyond their traditional confines so that, forpage 2). Second, they also are habitual heavy shoppers, instance, price comparisons previously conducted on aconsumers who are more likely to shop generally by home computer before the trip began are now beingvisiting a mall or using their home computers. handled right in the store. This trend “implies a prolonged For these heavy shoppers, “nothing is off the table. ability to influence the purchase decision. The phone isThey love experimenting” with new tools, as their usage very important in this respect,” says Newman.levels for a vast array of mobile services illustrates, says The trend also implies that shoppers are becomingSajdeh. Light shoppers, on the other hand, “have a much less diligent about their pre-trip research. If a good dealmore functional relationship with their phones,” both for of the information will be readily available at the shelf,shopping and in general, and therefore generally engage then strenuous research online beforehand is muchat much lower levels, she says. less necessary. “They can be more casual about their Based on those two criteria, Arc identified 5.8% of the homework since they always have their phone,”light shoppers as the likeliest candidates to “move up” to Sajdeh says.heavy, based on the fact that they rate as heavy shoppersaway from the phone and as heavy mobile users when Mobile Shopping Definedit comes to non-shopping activities. (That assessment, In addition to obtaining insights into shopping behavior,however, does not dismiss the potential for other “lights” the study also gave Arc an opportunity to scope outto become heavy shoppers as well, Newman notes.) a clearly defined “universe” of all the activities that So far, then, the smartphone has not turned any comprise “mobile shopping,” and then develop somecasual shoppers into mobile shopaholics. However, theories on how marketers should respond to them.there are two behavioral changes that do seem to be Arc’s parameters go well beyond making a purchaseinfluenced by the devices, according to the study. to include product and price searches, comparison The first is a phenomenon that Sajdeh referred shopping, product research and “gathering anyto as the “shopping blip,” in which smartphone users information at all about a product or store,” the reportbrowse online during what used to be “down time” in explains. In all, Arc identified 37 mobile shoppingsuch captive situations as the doctor’s waiting room or activities.the train (in what might be considered the 21st century These activities were then statistically classified intoversion of window shopping). four types based on their level of adoption by consumers, The second is that the smartphone’s omnipresence their uniqueness to the mobile (or digital) environment,is allowing shoppers to extend the steps along the path and their role in shopping. They are: 9
  10. 10. BEHAVIORAL RESEARCHPortability: Four activities unique to the digital world less often, both through the phone and during theirthat involve searching for information about stores or “traditional” shopping process.products, or receiving information from retailers and The first two activity types “transcend productother sources on promotions, events and other offers (see categories because they come from the digital world,”chart below). having “translated quite nicely” from computer to phone, These “Info on the Go” activities are the ones most according to Sajdeh. As such, marketers might be betterfrequently utilized by both heavy and light mobile off “adopting a pervasive tool” from a third-party sourceshoppers. Among heavy shoppers, their penetration rather than “creating a unique solution” in these areas,levels are extremely high. she says. As an example, Sajdeh pointed to Best Buy’s “Twelpforce” technical service hotline, which uses Twitter Portability Uses, by Penetration Levels as its communication platform rather than a proprietary system. The retailer “would never be able to get the reach Light Heavy on its own that it does through Twitter,” she says. 47.3% Look up store address, Fundamental Shopping Tasks: Fourteen tasks that put hours or location 93.2% a mobile twist on collecting the information needed to Use a search engine during 40.2% inform the purchase decision (see chart below). your shopping process 94.2% Fundamental Uses, by Penetration Levels Receive notifications about 32.1% in-store promotions/offers Light Heavy 85.2% Refer back to retailer 24% 30.6% Visit a retailer website emails you have saved (e.g. bestbuy.com) 77.8% 91.1% 0 20 40 60 80 100 Look at prices on a 25.1% Source: 2010 Leo Burnett and Arc Worldwide retailer’s website 92.8% Look up online product 23.1% information while in a storeVirtual Social Shopping: Five actions involving 86.1%gathering and sharing information about stores and Compare physical store prices 22.4%products with family, friends or the public at large (see with online prices, in-store 84.1%chart below). 21.1% Read customer ratings Such “Sharing and Advice” activities are employed or reviews of a product 86.1%extensively by heavy shoppers, at nearly the same 20.7%penetration levels by phone as by computer and, in Visit a manufacturer website (e.g. whirlpool.com,) 79.1%one case – texting or tweeting the worthiness of a priceoffer – at a higher level. Light shoppers use them much Make a shopping list 20% 73.3% 19.5% Virtual Social Uses, by Penetration Levels Look for deals at nearby stores 82.7% Light Heavy Check on the status 19.3% of an order 81.2% 21% Receive/Share texts about Read customer ratings or 18.8% products from friends/family 72.9% reviews about a store 74% 15.8% Receive/Share content about 18.5% Compare products from products/stores on user gen. sites 71.2% your mobile phone 84.5% Receive/Share photos 15.1% 16.5% Search elsewhere when the of products from friends/family 70.5% product is out of stock 82.3% 13.2% Calculate price comparisons 16.2% Gather/Share opinions abouta product/store from friends/family for different size products 67.1% 67.6% Check in-store availability 15% Tweet or text price details 10% of a product 78% to see if the deal is worthwhile 60.8% Source: 2010 Leo Burnett and Arc Worldwide Source: 2010 Leo Burnett and Arc Worldwide10
  11. 11. These “Products, Prices and Reviews” activities are Specialized Uses, by Penetration Levels conducted extensively by heavy mobile shoppers, often Light Heavy at levels at or near those for general shopping. Light mobile shoppers, on the other hand, partake at relatively 14.2% low levels, despite the fact that they perform the tasks Browse coupons from your mobile phone 72.9% through other channels. Retailers should strongly consider investing in the Use an app or mobile 13.6% shopping application development of proprietery solutions for these tasks, 63.6% Sajdeh advises. By extension, this is also the area in which Use bar codes or scanning to 13.5% product manufacturers can provide the most assistance. get pricing or product info 59%“A single retailer doesn’t have the expertise across the 13.4% Use a coupon from entire store,” she says, “so it’s a perfect opportunity for your mobile phone 57.5% product marketers to deliver their own category-specific 11.4% understanding.” Browse store circulars from your mobile phone 70.2% Sajdeh notes that Target gained support from multiple product vendors when developing its Participate in a sweepstakes, 11.1% game or promotion offer smartphone app, which directly addresses several of 61.7% these fundamental tasks. Place an order ahead of time 10.8% to ensure a quicker pick-up 58.1%Specialized Shopping Tasks: The final 14 actions Use retailer comparison, selector, 9.6%encompass a variety of shopping tasks that either require or customization tools 64.7%the unique capabilities of a smartphone or are being 9.2%reinvented by the devices (see chart, right). Use gift cards, reward cards, or gift registries 63% These “Specialized and Specific” activities enjoyrelatively high levels of usage among heavy shoppers View product demos 8.8%(64% have used an app; 59% have scanned a barcode), 59.3% Add a product to abut very low levels among the light group. wish list or favorites 8.5% Since they “come from the shopping world,” these 62.9%last two types don’t transcend product categories, and Use gift guides (e.g. look 7.9% for a ‘gift under $100’therefore need to be tailored to address any unique or a ‘gift for mom’) 53.7%characteristics in the category’s shopping process, Sajdeh 7.8%says. Compare payment plan options (e.g. mortgage calculator) 61.3% Because they are “on the fringe” in terms of consumerengagement, Sajdeh suggests collaborating with an Utilize virtual shopping tools that 6.1% help you visualize the productoutside partner to develop solutions. (Target’s barcode 51.5%scanner, for instance, was developed by RedLaser, whichalso has its own app.) Source: 2010 Leo Burnett and Arc Worldwide In large part, “all of the analog shopping behaviorsthat first migrated online are now moving to mobile,” saysSajdeh. But some, such as price comparisons, “are nowon steroids” because of increased ease of use and greaterproximity to the purchase decision, she notes. While significant aspects of the path to purchase maylargely become a mobile function, there are still aspectsof the shopping process that will long require the physicalenvironment. For this reason, “Don’t fear the mobilephone, embrace it to enhance the store experience,”Sajdeh says. 11