Paper Topic: How Do People Use Smartphones to Enhance the In-store Shopping Experience?

The paper topic I am interested in writing about is concerning the mobile shopping experience. Specifically, how people use their smartphone to enhance the shopping experience while physically in a brick-and-mortar store, otherwise known as in-store mobile engagement. This mobile engagement can start outside the store as well. I want to know what drives people to use their smartphones to aid in their shopping experience? What information are they looking for when they access information on their smartphone while in store? Who is the customer that is using their smartphone in the store? How do they like to shop? What items would they buy with the assistance of their smartphone? Does empowering customers with information in-store make them more likely to buy? Are they responsive to offers pushed to them via a smartphone application?

I became interested in the future of mobile last year when looking for my summer internship. I knew I wanted to do an internship in high-tech marketing, and mobile seemed like a fast-paced area that is still in development. I secured an internship with Digby, a venture capital backed firm in Austin that provides mobile commerce and mobile engagement solutions for retailers. Digby works with mostly big-box retailers like Costco and Toys R Us on their mobile strategy. They started out providing mobile-optimized websites which allow users to browse and buy products on an interface appropriate for a smartphone. A mobile-optimized website is customized for the mobile browser experience, avoiding the annoying “pinch-and-zoom” problem people encounter when they browse a non-optimized website on their smartphone. It is usually smaller, has less-detailed blocks of text, has fewer navigation buttons, and has fewer graphics. Below is a comparison of a non-mobile optimized website versus a mobile-optimized website for Hotels.com. You can see that mobile-optimized one has no graphics on the main page, only categories for browsing items.

Digby is a leading provider of mobile-optimized websites for retailers, but for the past few years has been moving toward a total mobile engagement solutions provider business model. The mobile-commerce provider business is becoming increasingly commoditized, with many providers offering similar services, making it a “race to the bottom” type of situation. To stay competitive, Digby has expanded its offering with products such as a mobile product catalog, store locator, and location marketing manager. The Location Marketing Manager product allows the retailer to create a geofence around the physical store. When a customer enters the store and opens that retailer’s app, Digby can then track metrics such as entries/exits or UPC/QR code scans. Perhaps most valuable, it lets the retailer tailor marketing messages and offers to push to customers while in the store. Retailers can use this information to then customize the in-store experience for each person walking through the door.

While Digby knew having this information was valuable to retailers, they had a difficult time quantifying the benefits when negotiating the price to charge for the product. One of my main projects for the summer was to figure out a compelling way to sell the Location Marketing Manager product using information provided by customers, such as download rates and in-store foot traffic. I created a dashboard to estimate the return on investment for use by the sales team. Although it used a lot of inputs from the retailer, it still included a fair amount of assumptions for the level of engagement. During my research, it was difficult to find a lot of definitive data because in-store mobile engagement is still in its early stages.

A great source I found was a study that Think Insights with Google released called “The Mobile Movement.” Some of the data may already be outdated, but some interesting findings from the study are:

· 77% of consumers use their smartphone in a store

· 20% of consumers are willing to give up cable TV before internet usage on their smartphone

· 74% of consumers have purchased in-store as a result of information found on their smartphone

As smartphones become more common, I would think these figures will only increase and we will get more specific data about how smartphones are influencing consumer shopping behavior.

Source: http://www.thinkwithgoogle.com/insights/library/studies/the-mobile-movement/