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L.E.K. Consulting Report Identifies How Retailers and Brands Need to Address the Mobile Shopper
BOSTON, MA—(Aug 17, 2011) - Retailers and brands will need to shift their sales and marketing strategies to respond to the growing influence of mobile devices on consumer behavior, according to the new L.E.K. Consulting Mobile Commerce Survey. Broadly, two-thirds of smart phone or tablet owners today have used their devices to make purchases and more than 80% have used them to assist in purchasing decisions through product research at least once during the past year.
Digging deeper, L.E.K. found that 39% actually make purchases with their handheld devices at least every month (excluding music and video downloads), with 60% using smart phones to research purchases each month in a variety of ways—we refer to these consumers as “Active Mobile Consumers” and those smart phone owners who shop less frequently as “Mobile Window Shoppers.”
“Mobile is the enabler: consumers using mobile for shopping have new expectations for pricing standardization across channels, require a steady stream of promotions to remain engaged, and want to capitalize on powerful tools that enable them to access independent recommendations, price comparisons, the opinions of friends, and reviews anytime, anywhere,” said Jon Weber, Vice President of L.E.K. Consulting. “Now is the time for retailers and brands to ensure that they meet the needs of the new mobile consumer, and are ready to compete in this new marketplace.”
The L.E.K Consulting Mobile Commerce Survey identifies four key findings that will impact businesses:
1. Driving Price Harmonization: During the past six months, more than half of Active Mobile Consumers surveyed reported using at least one mobile coupon app (e.g., Coupon Clipper), nearly one-third checked a pricing comparison tool (e.g., RedLaser), and 29% tapped a loyalty or similar tool (e.g., Shopkick). And they did this while standing in store aisles.
This new level of price transparency across stores and channels provides consumers with added impetus to seek out the best deals—and demand that pricing be consistent across a retailer or a brand’s distribution channels.
2. Fostering Deeper Customer Relationships: More than half of Active Mobile Consumers are willing to share their location with brands in exchange for real-time offers when they “check in” via Foursquare or similar geolocation-based apps, which is twice the rate of Mobile Window Shoppers. And 37% of Active Mobile Consumers are willing to have brands track them all the time in order to receive special deals. By contrast, only 14% of Mobile Window Shoppers are willing to do the same. Based on our broader work in this area, it appears that privacy concerns significantly outweigh the allure of special offers for this group.
However, brands must provide the right incentives to keep mobile consumers engaged and willing to share certain information. Marketing tactics with an immediate payoff resonate strongly with this consumer group (e.g., coupons, discounts, rewards or loyalty points).
3. Increasing the Influence on Social Media: Active Mobile Consumers are much less influenced by traditional information sources than their older counterparts. Instead, they turn to independent reviews, friends and family for recommendations before making purchases; and mobile puts these powerful influences in the palm of their hand in the aisle.
4. Enabling Flash Retailers: The immediacy of mobile shopping creates new opportunities for consumers to keep up with the latest deals on flash sales sites like Gilt Groupe and Rue La La. More than 40% of Active Mobile Consumers use flash sites, which is more than twice the percentage of Mobile Window Shoppers.
Importantly, flash sites are also disrupting the market by capturing share of planned purchases from other channels. L.E.K. found that flash sites are successfully penetrating traditional purchasing decisions for Active Mobile Consumers, and driving conversion given the immediacy and perishability of the mobile flash proposition.
Implications “While the dollars being spent on mobile devices today are still small, our research shows that the influence of mobile devices on the behavior of consumers is much more significant and has more immediate implications for both retailers and brands,” said Alan Lewis, Vice President of L.E.K. Consulting. “Our research also highlights that these trends apply across all categories as consumers have a similar mix of category purchases on their mobile devices as they do on the web.”
The report is based on L.E.K.‘s survey of 1,600 U.S. consumers to better understand how mobile technology is changing consumers’ decision-making and purchase behavior. Additional findings are available in the L.E.K. Executive Insights report titled, “The Marketplace of the Mobile Consumer: What to Expect.”
About L.E.K. Consulting L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and analytical rigor to help clients solve their most critical business problems. Founded more than 25 years ago, L.E.K. employs more than 900 professionals in 20 offices across Europe, the Americas and Asia-Pacific. L.E.K. advises and supports global companies that are leaders in their industries— including the largest private and public sector organizations, private equity firms and emerging entrepreneurial businesses. L.E.K. helps business leaders consistently make better decisions, deliver improved business performance and create greater shareholder returns.
L.E.K. helps retailers, consumer goods companies, food & beverage brands, and restaurants improve the value and relevance of their brands to consumers. We uncover unmet customer needs and neglected industry segments. The result is insights and ideas to help our clients optimize their brands through the best possible combinations of product features, service offerings and pricing for targeted customer segments. For more information, go to www.lek.com.
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