While the general tone in consumer attitudes has improved slightly over the last year, it’s their emerging new shopping habits that retailers need to pay closer attention to as we ready ourselves for the new year.
Though the recession has surely played a major role in changing these habits, for a large percentage of U.S. consumers there is an even more influential factor at play today—the web, along with the continued evolution of the mobile web.
I know, you’re sitting there thinking that last statement is old news. Well, I’m here to tell you that you need to take a closer look at just how big a factor the Internet, mobile and desktop, has become when consumers think about making purchases these days. Try these numbers on for size: over 75% of consumers now use the web to research products and prices before visiting a retail location; over 50% use social network sites as part of their buying process; approximately 33% are forsaking bricks and mortar and doing more online shopping than just a year ago; and over 25% now turn to their web-enabled mobile phones for help.
All the above was taken from a recent Deloitte study on consumer shopping behavior, and the results show a rather dramatic increase over the same period last year.
This same study also looked at consumer confidence, and those numbers, while riding a bit of a roller coaster over the course of the last year, are also encouraging, if a bit guarded. The Deloitte study showed that 55% of consumers think the economy is indeed recovering from the recession (however slowly).
“The consumer confidence figures of late are up and down, but retailers need to focus on the things they can control,” George Witt, a New Jersey-based consumer strategist said. “All this research regarding changing consumer shopping habits today is important to keep an eye on. They’ll be coming into retail with a stronger sense of what they want. Smart retailers will not only make sure they get it but also make sure they leave the store knowing a few things they didn’t know before they walked in.”
The fact the numbers have spiked so high with regard to those consumers who are now shopping online only (33% according to Deloitte) and for those now using their mobile phones for shopping help (25%) should offer a warning to retailers that they best have their shops in order as well.
“Retail has really become a three-pronged approach today,” added Martha Refik, a retail consultant in New York. “That in-store experience still has to be exceptional and memorable, but you need to have your website working for you and a mobile strategy in place as well. You’re not firing on all cylinders if you don’t.”
A recent survey by the web-shopping site Retrevo.com seems to back up Refik’s claims. The study revealed that 47% of those surveyed responded that they already had (20%) or were planning to soon (27%) make a purchase using their mobile phone. Of the 20% that had made a mobile purchase, 42% did so using applications capable of transactions (as opposed to using mobile web). Further, the iPhone was the most popular type of smartphone when it came to mobile shopping.
As result of all these behavioral changes, the distinction between cyberspace and the brick-and-mortar world in retail is becoming less definable.
“The lines (between online and off-line shopping) are blurring as people use devices to find the best prices and who has the products they want before they hit the road,” said eBay CEO John Donahoe at the recently concluded Web 2.0 Summit in San Francisco. “The wall between e-tail and retail is crumbling as consumers now carry the Internet with them all the time.”
Also interesting to note in the Retrevo survey was this: mobile users are still apprehensive about transferring credit card information to their phone. When asked what would make them more likely to buy something from a retailer via cell phone, 24% said not having to provide credit card information, and 13% said if credit card data was already stored with a particular retailer. The latter part of that equation is certainly worth noting.
While the pot is still simmering with regard to mobile shopping, recent data appears to suggest the boiling point may not be very far off. What’s even more important to take from all of this is the fact that your sales approach better not be stuck in 1998. Understanding what makes today’s consumer tick, and what various stimuli are driving purchasing decisions, will go a long way toward retaining current customer relationships as well as forging some new ones. Not a bad New Year’s resolution if you ask me.