Close Video

Science & Tech

The Rise of mCommerce

An increasing number of shoppers are turning to their smartphones – not clerks – when they’re deep within the sales funnel. According to a Nielsen report in 2012, nearly two-thirds of Americans ages 24-35 own an Internet-connected smartphone. Another survey by the Pew American and Internet Life Project indicates 52 percent of those users access their devices while inside a store to help them reach a purchasing decision.

Consumers are researching product information and transacting on their mobile devices, which include tablets. According to Retrevo, 43 percent of smartphone users downloaded a retail app, such as Target’s mobile app. While retail engagement on mobile devices remains strong, according to the Mobile Marketing Association, shoppers are ultimately using their devices to get the best prices and take advantage of limited time deals or coupons. A sense of urgency motivates them to complete transactions on-the-go rather than waiting until they have access to a computer.

Urgency, as noted in a Google report in 2011, is a compelling use-case for mobile devices. During the 2011 holiday season, 44 percent of search queries on last-minute gifts came from mobile devices. According to Compete, approximately 25 percent of consumers used their mobile device to purchase gifts during the past holiday shopping season. While these numbers are higher during the peak season, they mark an inevitable shift toward year-round mobile commerce (mCommerce).

According to global mobile ad network InMobi, the type of information customers are looking for on their phones differs from what they search for when using their computers. One-third of mobile users surveyed by the firm are interested in updates on sales and promotions, which have a short window of opportunity. Another 27 percent use their device to obtain store hours and directions. The bulk of users seek product information and availability, with an emphasis on product photos.

Nearly one-third of surveyed users indicated they use their mobile devices to discover and learn about new products. An additional 27 percent use their smartphone when making the final purchasing decision, all at the cost of brick and mortar stores. Fifteen percent of those surveyed said they made a purchase while inside a retail store this past shopping season. A larger group of more than 21 million users went beyond the research phase and made purchases on their mobile device.

Most notably, however, customers are using their smartphone to compare prices. Given the current cash-strapped economy, finding the best prices remains one of the core concerns for shoppers. Price comparison website Nextag.com noted an increased spike in traffic on their mobile site during Black Friday 2011 compared to the previous year. Users want to know if they’re getting the best deal, whether online or offline.

ShopSavvy, a price comparison app for iOS and Android, discovered a new model for diverting local traffic into online traffic. ShopSavvy is part of the Startup Spotlight at ad:tech SF, which takes place April 3-4, 2012, in the Moscone Center.

Using ShopSavvy's mobile wallet feature, users can convert without leaving the mobile application to visit a retailer’s website. According to the company’s published statistics, Barnes and Noble experienced a 13 percent drop in offline conversion, while Target only noticed a 6 percent decline. The service is gaining traction with iPhone (iOS) users 10 times quicker than Android users. The real “zinger” for retailers is that 87 percent of ShopSavvy Wallet purchases were made within their establishments. For users, though, the savings are substantial. The company claims users save on average 32 percent compared to offline prices.

Mobile commerce is here and it isn’t going away anytime soon. As users shift to their post-PC era devices for daily work, retailers must adapt their technologies, too. The number of mobile shoppers is expected to rise exponentially in the coming years. Can traditional retailers embrace the change? Or will they be left in the cold as customers find better deals on their phone?

This article is part of Allvoices’ series on ad:tech, the largest digital marketing and technology conferences and expositions. Check out allvoices.com/adtech for more of Allvoices’ ad:tech San Francisco event coverage. This series is supported by ad:tech.