The Pew Internet and American Life Project shed light on one of the biggest challenges for retailers: more than half of U.S. adult cell phone owners used their mobile phone during the recent holiday season to get in-store help for their purchases. The figure highlights the rise of what my colleague Om called the “smart buyer” who wields their phone to ensure they get the best price and most information when buying in store.
In a new study of 1,000 adults conducted earlier this month, Pew found that 38 percent of mobile users called a friend while in store for buying advice while 24 percent of cell phone users used their phone to obtain product reviews on line. And 25 percent of adult cell phone users looked up prices online for products in store in attempt to find the best deal online and in other stores. Altogether, 52 percent of all adult cell owners relied on their phone for one of these purposes and 33 percent specifically turned to their phone for online information while shopping inside a store.
The numbers are consistent with a survey Deloitte did prior to the holiday season, which found that 27 percent of US smartphone users said they planned to use their smartphone while in-store for holiday shopping.
Pew said that mobile consumers 18-49 are much more likely to use their phones for online product reviews than older cell phone users. And urban and suburban users are about twice as likely to look up online reviews from their phone than rural cell phone owners. Non-white and more educated consumers were more likely to use their phone for in-store research.
Of the people who conducted online price research, Pew found that 35 percent still bought the product in the store while 19 percent purchased online. Another 8 percent went to another store to buy and 37 percent decided not to buy at all.
This last piece of data shows the challenge for retailers, who lost about 5 percent of transactions that began with online price research, even though they have the customer in-store. That’s something that retailers have been increasingly sensitive about, especially with promotions like Amazon’s holiday offer to knock off $5 from certain products if users checked prices through Amazon. But the data also show how retailers can fight back. They obviously need to be aware of prices online, and they may look at ways to lower prices or match online prices in-store to remain competitive. They can also look at advertising online and through price-shopping apps such as ShopSavvy, so users can get routed to that retailer’s online store instead of its competitors. Or they can pick off competitors’ customers who price shop through apps.
ShopSavvy and RedLaser have also started to institute scan-and-buy options, so users can scan a product from the aisle and buy them right from online retailers, having their purchases sent home to them. That can be another challenge for a local store but also offers a way for retailers to still compete for that transaction if they price competitively. Aislebuyer and PayPal have been talking up similar kinds of options for retailers to offer buying from an aisle. Having that kind of an option may soon be a necessity for retailers.
The challenge is still considerable for retailers of all sizes. Having consumers walk in with connected computers in their pocket means many of them can find a potentially better deal online or in another store. But retailers should be thinking about how to satisfy their customers’ shifting buying patterns. Saving a couple dollars may be enough to abandon a local store, but if that retailer can provide more convenience, better in-store service or the ability to haggle on some products, a consumer may still want to buy immediately. It’s definitely going to be harder for physical retailers in this new mobile-enhanced shopping era but there’s still ways to compete as buyers get a lot smarter.