Earlier this week Nielsen released a study that found just about a third of smartphone users turn to their device for shopping-related activities. The study, conducted during the third quarter of 2011, gives a good picture of how we’re using smartphones in stores. One thing the study highlights is that while not everyone is using their phone in this way, many more would like to.
Below I’ve combined Nielsen’s results with a primer on how you can get in on the trend of being a savvy shopper with your iPhone(s AAPL) specifically using apps that are available in Apple’s Apple Store.
38 percent are comparison pricing aka “showrooming”
Nielsen found that 38 percent of survey respondents use their smartphone for comparison shopping while in a physical store. This is encouraged by online retailers, and last holiday season Amazon(s AMZN) gave a 5 percent discount on certain products to users who scanned retail items using the Amazon app. Big box stores like Target are annoyed by this new trend, however — so much so that they are asking manufacturers to modify their product offerings to prevent comparison shopping.
As a consumer, I love the ability to find the best price for an item so long as I am willing to wait for it to ship. As a small business owner who works with other small businesses, I see this as driving revenue away from our local communities and hurting the local tax base. I try to shop local when possible, but to me, I see a big box “brick and mortar” and an online retailer as synonymous. When the bargain is good enough, it’s hard to resist.
If you want to get in the middle of this war between physical and online retailers, some of the top apps for comparison shopping are RedLaser, ShopSavvy, Google Shopper(s GOOG) and Amazon’s Price Check. Both Red Laser and ShopSavvy also allow you to find an item locally, but ShopSavvy and Google Shopper provide reviews — which are the next most popular shopping-related activity we do with our phones. If you search online, you might want to stay away from the in-store Wi-Fi as it can show different prices since you could be redirected to an “internal” version of the website with slightly different pricing or be blocked entirely from a competitor. Use your 3G signal to play it safe and make sure your surfing isn’t being intercepted.
32 percent are reading online reviews of products
For more in-depth research, I found the Consumer Reports App lacking, and I prefer to access their website, which requires a separate paid subscription from the magazine (a discount is given to current print subscribers). Many of us like to know what the crowd thinks of a product rather than trusting a salesperson (after all, it’s in the job title to sell us something). Mobile phones are ideal for this, and 32 percent of us use our phones for product review research. Google Shopper and Amazon’s Mobile App make it easy to find what others have to say about millions of products. Amazon carries practically everything, so it’s the place I start for online reviews.
24 percent are searching for and using online coupons
We all want to save money, so why not use your iPhone? The king of coupons is Grocery iQ, owned by Coupons.com. If you regularly shop at a grocery store or other retailer, be sure to install their app as they often offer coupons or special sales directly via their app. Don’t assume coupons are just for the big retailers. Individual stores often have their own apps featuring coupons. Even groups like AAA offer discounts.
A hidden place for coupons and direct savings is check-ins via foursquare or Facebook. In particular, American Express has a program in which you check in via FourSquare to both small businesses and national chains to receive a discount. I use this quite often and can tell you it works. I get free cupcakes at my locally owned Cupcake Construction Company as well as national retailers like Whole Foods. If available in your area and where you shop, Shopkick is a great way to earn rewards and discounts.
22 percent are purchasing products
Whether it’s because the store is out of stock or the pricing is better online, shopping on your phone is fun and easy. It gives you instant gratification. A friend suggests a book to you at the coffee shop, you buy it right then and there. Your spouse tells you that the water filter needs replacing while you are waiting for a table at the restaurant. Bam. Problem solved. But considering this usefulness, this number is still rather low — 0nly 22 percent of the people who are using phones for shopping are actually making purchases.
What’s interesting to note is how this behavior changes when we’re talking about shopping on a tablet. Tablet shoppers are three times more likely to purchase an item compared to smartphone users, and they spend more, according to a recent study by Adobe(s ADBE).
A caution while shopping via a mobile device: because public Wi-Fi is unprotected, I use 3G while making purchases so nothing is intercepted. I’m also careful of prying eyes when pulling out my credit card. Read my article about how to keep your credit card number hidden in plain sight in your address book so you can cut and paste, keeping your card in the wallet.
18 percent are using location-based services to find a retail location
“Yes, we have no bananas” is a fun song, but a lousy thing for a clerk to say when you need bananas. Instead, by using Google Shopper or one of the other purchasing apps mentioned at the beginning of the article, you might be able to find the product locally or find other retailers that have it.
9 percent are paying via smartphone — but 71 percent are interested in paying via smartphone
Talk about a missed opportunity, in particular for the brick-and-mortars losing out to online retailers. NFC (near-field communications) has been discussed for a while for the iPhone, and Ryan Kim believes Apple could take the lead on this in the U.S. Meanwhile, Kevin Tofel is already using his Google Wallet and his Galaxy Nexus.
The closest thing we have currently to NFC on the iPhone is the Square Card Case, which merchants can use for seamless transactions via an app. I tried it out this weekend in St. Louis, and it really was a blast to say “put it on my tab!” The app uses your GPS location and the location of the merchant, and when you are close enough, it notifies the merchant of your presence. The only caveat is that the merchant must use Square’s popular credit card processing system.
So while we’re making progress in what kinds of activities we’ll do with our phones, we’re still a ways off from mainstream acceptance of the phone as a shopping tool and a payment tool. When you think about it, it’s odd that we fancy up our phones with fun cases and apps, but then we use our credit card the same way we always have since the 1950s. The Square experience comes close to modernizing this process — every merchant I know who uses Square, including myself, sees the giggles of glee and fascination when customers sign with their finger and have a receipt texted to them.