Eric Schmidt of Google said, “If your company doesn’t have a mobile strategy, it doesn’t have a strategy.” This is a prescient observation but one that really rang true this year as London played host to the 2012 Olympic Games. Among the 430 million visits to Lonond2012.com, the 4.7 billion page views and 4.7 million social follows, the number that stands out is that 60% of this occurred from mobile devices. To visualise the growth rate of smart phone adoption and use, here’s a chart:
Figure 1. Smartphone penetration per capita by country. Source: VisionMobile
If charts aren’t you’re thing, here’s a summary: The US and UK have the most engaged smart phone users, which comprise between 30% – 40% of people in either given country. In real numbers, over 150 million people in America and 24 million in the UK download roughly 20 apps-per-phone today. Some reports indicate that over half of UK residents now have smart-phones, which would make that 24 million closer to 35 million. The challenges of data accuracy aside, the point is that this rise in the mobile audience undoubtedly influences our retail spending behaviour. Online sales now represent around 12% of the UK’s annual retail spend. Research by Barclays Corporate in 2011 predicts that mobile will come to represent around 5% of retail spending in the UK by 2020. Between now and 2016, they predict compound annual growth of 55% for mobile-based commerce (mCommerce) vs 8% for eCommerce (shorthand for online sales) and just 1.6% for in-store sales. But the attention of new mobile audiences is still notoriously difficult to capture.
Around 80% of branded apps get less than 1,000 downloads – and its very far from the simple case of replacing the online desktop experience. To quote Matt Biddulph @mattb, co-founder of Doppler, “mobile gives everyone superpowers!” Its always with us, and there are signals, and more signals, AND MORE SIGNALS telling us about what’s happening in the world. We can see what’s around the corner in the same feed next to what’s happening in Mumbai. And with a couple clicks we can see both points on a map, and chart a journey via bus. Mobile allows us to see, find, explore, share and transact in ways that we simply couldn’t previously: faster, with better curation and with limitless connections to like-content.
More on this later, but anecdotally, this week heralded my first time paying at an US coffee shop where the only pos system was an iPad using Square! Mobile has arrived.
LIVING IN THE AGE OF ENGAGEMENT
In 2000, £50 out of every £100 we spent went to High Street retailers. Today, it’s just £42.50. But mobile isn’t about replacing a pound for a pound, and it is one of the “channels” by which customers and retailers engage. Deloitte estimate that for every £1 of purchases made via mobile, the channel will directly influence £23 of spend. The challenge is finding the best ways to influence a mobile audience.
I was inspired by a recent talk by Alex Meisl, co-founder of Sponge at the Mobile Academy about living in the “age of engagement”. I found the following statistics particularly engaging:
– 81% of smart-phone users search for local data
– 34% of US smart phone users have cancelled planned purchase in stores due to information they got from their mobile phone;
– 25% claim to intentionally carry a smart phone when shopping to compare prices and find information (an activity commonly referred to as “showrooming”);
– 46% say research conducted on their phone led them to make a specific purchase at specific store.
Where previously a retailer would have had us captive once we crossed the threshold of a shop, now they are in constant competition for our attention – locally, nationally and globally – an observation that Simon Forster of Debenhams described in June 2012 as “effectively heralding the end of online versus in-store shopping”. It is not about which of those you are, but how soon you will be both – something that the UK’s 150k online-only retailers should take note of.
So what do people currently do on mobiles? Here is another chart. This one shows a recent breakdown of behaviours from Google:
Figure 2. User journeys from discovery to purchase. Source: thinkwithgoogle.com
Understanding this complicated journey of conversion is not only the key to understanding mobile – and channel conversion – its key to understanding the changing role of bricks-and-mortar.
Notice that 4 out of 6 journeys involve the physical store in relation to mobile. The temporal aspects of this engagement are also important, but not captured by the figure. For example, there is the immediacy of mobile, as Ashley Highfield @ashleyhi observers: “On average, the time difference between first search and purchase is one month on the web and one hour on mobile”.
However the main point is that the biggest opportunity lies in leveraging mobile AND the physical store AND online to shape the overall shopper journey.
The potential of journey and engagement was highlight at a presentation from Hellicar & Lewis that I attended recently at WhiteLable’s Future Gallery. They gave some wonderful examples of how people are willing to interact with different digital installations to enhance the emotional and social aspects of engagement. And it is the role of social advocacy and endorsement that is critical to the journey of conversion.
Unsurprisingly, Amazon research shows that 83% of us won’t buy having been exposed to critical comments. But much more interestingly, their research also found that 75% of us are unlikely to buy if there are no reviews.
Only one journey in the figure above ends in an in-store sale – but bricks-and-mortar plays a critical role in creating a platform for engagement to support discovery.
This is part of an ongoing series on The Future Of Retail. You can read the continuation of this supporting data here.
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