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Richard is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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Mobile Drives Retail Purchases This Holiday Season

Written on
Dec 14, 2012 
Author
Richard L. Tso  |
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Mobile Drives Retail Purchases This Holiday Season

Holiday shopping can be brutal, but this year, millions of shoppers elected to circumvent the mall, breaking out their mobile phones instead. This year, Black Friday and Cyber Monday still proved to be high-transaction days of the year where most companies were able to sneak their way into the black in terms of yearly revenue. As people demand lightning quick results, this year in particular, there has been a pivotal shift toward consumers looking to mobile as a vehicle for completing their holiday purchases.

According to the global digital performance agency iProspect, they typically see monthly spend in Q4 double for mobile. “Last your our brands spent the same amount in Q4 as they did the first three quarters of the year,” said Kerri Smith, director of mobility at iProspect. “$586 billion in holiday sales is projected this year, with online holiday sales expected to reach $54.5 billion, a nearly 17 percent increase from 2011.”

2012 Black Friday/Cyber Monday Results

In a recent report by IBM, mobile traffic grew by 67 percent as people took advantage of early Black Friday sales and online sales during Thanksgiving grew by 17.4 percent and sales on Black Friday increased by 20.7 percent over last year. (Click repeatedly on the graphic to enlarge.)

Here are some additional highlights from the report:

  • Mobile Shopping: Mobile purchases soared with 24 percent of consumers using a mobile device to visit a retailer’s site, up from 14.3 percent in 2011. Mobile sales exceeded 16 percent, up from 9.8 percent in 2011.
  • The iPad Factor: The iPad generated more traffic than any other tablet or smart phone, reaching nearly 10 percent of online shopping. This was followed by iPhone at 8.7 percent and Android 5.5 percent. The iPad dominated tablet traffic at 88.3 percent followed by the Barnes and Noble Nook at 3.1 percent, Amazon Kindle at 2.4 percent and the Samsung Galaxy at 1.8 percent.
  • Multiscreen Shopping: Consumers shopped in store, online and on mobile devices simultaneously to get the best bargains. Overall 58 percent of consumers used smartphones compared to 41 percent who used tablets to surf for bargains on Black Friday.
  • The Savvy shopper: While consumers spent more overall, they shopped with greater frequency to take advantage of retailer deals and free shipping. This led to a drop in average order value by 4.7 percent to $181.22. In addition, the average number of items per order decreased 12 percent to 5.6.
  • Social Sales: Shoppers referred from Social Networks such as Facebook, Twitter, LinkedIn and YouTube generated .34 percent of all online sales on Black Friday, a decrease of more than 35 percent from 2011.

Since mobile shopping is taking off in popularity resulting in a high-volume of online sales for retailers, just how much revenue is this taking away from in-store purchases? According to a survey completed by the National Retail Federation: nothing. The NRF reported that 247 million shoppers visited stores and websites over Black Friday weekend, up from 226 million last year. Making sure to take advantage of retailers’ promotions to the full extent, the average holiday shopper spent $423 that weekend, up from $398 last year. Total spending reached an estimated $59.1 billion.

“From green beans to great deals, millions of Americans found time this Thanksgiving to make the most of retailers’ promotions and enjoy a special family holiday,” said NRF President and CEO Matthew Shay. “To keep their customers excited about holiday shopping, retailers will continue to offer attractive promotions through December, and provide strong consumer value with low prices, enhanced mobile and online offerings, and unique product assortment.”

The Black Friday/Cyber Monday shopping extravaganza wasn’t limited to stores; consumers also spent more of their holiday budget online. According to the survey, the average person spent $172.42 online over the weekend, or approximately 40.7 of their total weekend spending, up from 37.8 percent last year.

Bridging Online Sales and In-Store Retail Purchases

When asked about how advertisers could be optimized to get people to come into retail brick-and-mortar stores, Smith of iProspect said, “The success of a brand’s mobile media budget should not be based solely on direct mobile-commerce or e-commerce conversions. 40 percent of mobile searches are local – indicating intent to visit a physical location. Twenty percent of women take pictures of products to share with friends/family – indicating a potential intent to purchase. Evaluating the specific revenue influenced by these non-traditional consumer ‘responses’ can be difficult though they’re undoubtedly impacting the consumer’s ultimate decision to convert or not.”

Smith referred to a recent report issued by Google and Compete that was specific to the retail category that revealed 57 percent of purchases in 2012 were web-influenced.  The reasons stated for consumers to purchase online are because it is convenient (50 percent), 40 percent found lower prices and 37 percent said it’s because of online only deals. This is really then a combined influence between the retail brand and the consumers needs.  They also found that 1 in 4 purchases online are impulsive.

The report identifies the typical profile of a mobile shopper:

  • 36 percent are making a purchase on their phone while they are in-store, Always or Almost Every Time.
  • 83 percent are between 18-44 years old.
  • 72 percent are smartphone owners.
  • 54 percent are male/46 percent are female.
  • 52 percent make more than $50K a year.
  • 32 percent make more than $75K a year.
  • 83 percent of heavy mobile shoppers look for deals for nearby stores.

Programmatic advertising company RadiumOne also expects to see a major shift in campaign strategy that is increasingly focused on reaching mobile audiences – and recommends that advertisers take notice. The company recently launched a series of mobile advertising surveys aimed at examining people’s behaviors around how they interact with mobile ads and reliance on mobile devices when making purchasing decisions.

“The gap between in-store and online shopping experiences is rapidly blurring because consumers are ‘always connected’ and that connectivity creates a bridge like never before,” said Kamal Kaur, VP of Mobile and Display at RadiumOne. “Several studies, including one from RadiumOne, reveal consumers are comparison shopping on their devices while in the aisle. In order for brands and retailers to capitalize on this phenomenon, they need to build campaigns that harness geo-capabilities on mobile devices to drive in-store purchase behavior. While a potential consumer is inside a store, offer enticing deals that can be downloaded to devices and redeemed at checkout. Walgreens is a great example of taking advantage of this with their loyalty program and coupon integration as part of Apple’s iOS 5 Passbook, which has driven record app downloads and purchases in store.”





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