Smart phones are reshaping consumer purchasing habits

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

Broadly, two-thirds of smart phone or tablet owners today
have used their devices to make purchases and more than 80 percent have used
them to assist in purchasing decisions through product research at least once
during the past year.

39 percent actually make purchases with their handheld
devices at least every month (excluding music and video downloads), with 60
percent 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

“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,” Weber added.

During the past six months, more than half of Active
Mobile Consumers surveyed reported using at least one mobile coupon app nearly
one-third checked a pricing comparison tool and 29 percent tapped a loyalty or
similar tool 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

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 percent of Active Mobile Consumers are willing to
have brands track them all the time in order to receive special deals.
By contrast, only 14 percent 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.

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.

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 percent 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.

“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.

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.

By Team
[email protected]