Digital and mobile technologies have dramatically transformed the ways people connect—and the ways they shop. Shoppers are wielding tablets and smartphones to research products and purchase them at the best value. As a result, technology is shifting power to the shopper.
But does this mean retailers and manufacturers are the losers in this transformation? Not necessarily. We need to start thinking about technology as a positive. This is the world we now live in. We need to embrace it.
Here are some basic shopper facts:
Smartphones have penetrated more than 50% of the population, and tablet growth has doubled
41% of smartphone owners use their mobile phones to help them shop
48% of tablet owners use their phones and 58% use their tablets to help them shop
23% of all consumers use a mobile phone to help them shop.
These trends are still on the increase. Shoppers who own digital devices are using them to make purchase decisions, whether to compare prices, locate a store, look for information or reviews, search for coupons, or for “showrooming” — that is, to see and touch a product in the store before buying it elsewhere or online.
Navigating the Xtreme Shopper
A byproduct of new technologies is a new shopper profile: the “Xtreme Shopper” who is wired (with a mobile device), optimistic, but fiercely competitive. They want to deliver better value to their family—more to bring them a sense of accomplishment than out of any financial desperation. They take pride in looking at the money they saved. They like being in control. It is something of a sport for them.
About half of these leading-edge shoppers say they are less loyal to any one retailer because they need to shop around for value. They want to be rewarded. They expect to be rewarded.
Showrooming? Dwindling loyalty? How can retailers and manufacturers expect to win in this new age of the “connected” shopper? It starts with embracing technology and leveraging its power. Here are a few ways that organizations are turning the tables, and embracing the Xtreme shopper:
1. Co-creation: Partner with consumers to develop your product offering. Shoppers are more loyal to a retailer or manufacturer who lets them help shape the offering they buy. The percentage of consumers who agreed with this more than tripled in 2012 vs. 2011, according to our GfK research.
2. Customization: Another way is via customization of offers, either while the shopper is online or in the store. Younger consumers (in the age range 18 to 34) in particular appreciate a tailored offer — they see it as a value exchange. To win their loyalty, give them more input, using social networks to communicate with them. Build a relationship.
3. Exclusive offers: Unique product offerings and special promotions can be particularly effective in combatting showroom behavior. Promote store label products or offer discounts on shoppers’ mobile devices while they are in store.
4. Fully define value: Shoppers, retailers and suppliers alike realize that “value” is not just about getting the best price—quality, service and convenience all play important roles. Combining incentives with education on the full “bundle” can often sway shoppers to reconsider, and feel satisfied with their choice.
Mobile is happening—but it doesn’t necessarily have to happen to you. The key is to have it happen with you. Embrace mobile technology. Start by purchasing a state-of-the-art tablet, and using at least one shopping app for five minutes every day. After a few weeks, you’ll get it. It’s not something you can read about—so jump in personally, fingers first!