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Mobile And Impulse Purchases: Perfect Together
That’s true for some items, but not true for others. It’s true for clothing, games and small electronics. But what about one of this season’s hottest products: HDTVs?
You go into a store, compare screen resolution and decide that you want the one on the second shelf, fourth from the right. You now have to flag down an associate (good luck!), get it brought out from the back, wait in line to pay for it, wait in line for it to be placed in your car, drive it home (avoiding bumps) and then somehow lug it inside.
Or you could whip out your mobile device, order it online at any place that waives shipping charges (very easy to find these days) and walk out of the store. Tomorrow or the next day, some FedEx employee will lug it into your front door. You might have not closed that deal in-store, but mobile makes it so much easier, you just might. Hello impulse. The store creates the impulse, but the phone allows you to easily consummate the purchase.
Getting back to the research-reduces-impulse-purchases argument, human nature says different. For people who enjoy the act of shopping, stopping for research can be a killjoy. (Retailers love these consumers.) The fact that they have the Encyclopedia Britannica of product research in their pockets won’t change that.
Check-in and other geolocation and geofencing services also will sharply increase impulse purchases of a different kind. These are the discovery kind of impulses, where a text message will promote a 40 percent off sale for the next 20 minutes. Yes, indeed, that’s 40 percent off something you never really wanted—but at such a bargain, why not get two?
Some chains have been discussing the idea of linking mobile to CRM databases. This approach would allow someone to scan an item and then get instant promotions on related items.
Mobile has yet another pro-impulse-purchase aspect. Because of its small screen and keyboard, mobile sites and applications have had to prioritize ease-of-use much more than traditional Web sites. That means there will be better memorization—either on the mobile device itself or stored on a retailer’s server—of address and payment card data.
Not so ironically, that fact will fuel much faster transactions on a mobile device compared with a desktop device and much faster transactions versus waiting in line for an associate and a stationary POS. (If the associate is using a line-busting mobile POS, that’s cheating, as The Gap is now doing, along with Home Depot.)
In other words, for every impulse purchase that mobile research kills, it will enable 10 new ones.
I’m not at all worried about the highly profitable impulse purchases going away because of mobile. As long as humans are emotional and impressionable shoppers, those impulse margins are quite safe.
-Marc
December 9th, 2010 at 4:01 pm
The mobile experience will certainly supplement web commerce, it will have a PROFOUND and DRAMATIC affect on consumer’s ability to quickly make purchase decisions at the point of sale, both validating and/or tempering the impulse nature of a purchase. People are still people: “I want it NOW and my wife is in a good mood” isn’t affected by application form.
December 21st, 2010 at 12:14 am
I agree with you that mobile will enable a whole new level of impulse shopping, such as the Amazon example, but I also agree with Nick that mobile will empower consumers to perform more comparison shopping in advance of their purchase, especially for larger ticket items. That said, there are things that retailers can do to encourage impulse purchases, even for larger ticket items. For example, a comprehensive and well-executed price match policy can remove all doubt from the shopper’s mind directly at the point of sale, and enable them to buy with peace of mind. Such a policy should include not only price matching against the store’s own website and all competitors’ local stores and websites, but additionally protect the shopper against price drops for the period of the price match policy (e.g. up to 30 days after the purchase).
Imagine an experience where you get no hassles when you claim your price match, or even better, where the store sends you a gift certificate when the price drops after you bought a product there – the positive word of mouth would be at least as great as the negative word of mouth currently experienced so often when you have to jump through hoops to get your price match, and it becomes clear that the retailer is not living up to its word.
Mobile is a great enabler, and greatly reduces the information asymmetry that has historically existed between retailers and consumers. The key issue for retailers is not to ask how they can react to the changes brought about by mobile, but rather to think ahead and ask themselves how they would serve the customer if the customer knew everything about their business – because that’s pretty much going to be the case within the next few years.
January 6th, 2011 at 12:04 pm
Results are out. Mobile sales have proved higher total market baskets, LESS off pricing (so are we assuming price matching is paramount?)and increased gross margin. Current mobile shoppers have greater dispensible income, and because once they know they need or want something, they buy it! Less price comparing!
The transparency of social media will put retailers “back on their toes”, this SHOULD result in better trained store staff. And also a “smoother” ecommerce transaction.
Happy New Year!
January 6th, 2011 at 12:14 pm
Mark’s stats are fair, but let’s put this into historical context. M-Commerce is still relatively new for consumers and their behaviors will change. Today, it’s still fun to see a purchase on their iPhone or Android and to click and know it’s enroute. One interesting advantage (temporarily) of the phone is it’s LACK of convenience. It’s ultra-effortless on a laptop or desktop to click away to another site on a whim. But the keyboard and screen of a mobile device makes it more of a hassle. Hence, the consumer is more open to simply buying.
As tablets replace–or supplement–some of the smartphones and as some of those phones start getting larger screens and keyboards–AND as consumers get over the novelty–we’re going to see mobile behavior more closely mimic today’s desktop behaviors. It’s unlikely to ever fully get there (so Mark’s point is still quite valid), but don’t get too used to today’s numbers. All of those behaviors will moderate over the next year or so. (Then again, I could be wrong, as my wife is quick to remind everyone.)