Bricks + Mobile 2011 - So Just Who Is The Mobile Shopper

So Just Who Is The Mobile Shopper????

16 years e-commerce consulting Author, It’s Just Shopping 50+ years traditional retail and

catalog experience Fortune 500 client projects

ranging from strategic planning, merchandising, marketing, to technology development and messaging

Cross-category projects spanning specialty retail to departments

Proprietary research studies on mystery shopping, merchandising, mobile and consumer behavior

The Voice of Cross-Channel MerchandisingStraight talk from “in-the-trenches” online merchandising experts

Today’s Presentation

• I. The Merchant Speaks: Highlights from the e-tailing group’s 2011 Merchant Survey

• II. The Mindset of the Mobile Shopper

I. The Merchant SpeaksHighlights from the 10th Annual Merchant

e-tailing group Merchant Survey

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Merchants of all sizes (annual sales)33% $<$1M to $20M20% $20M to $100M30% $100M to $1B17% $1B to $5B>

Senior level participation43% CEO/President/Principal or VP/

General Manager45% Director, Senior Manager /Mgr12% Analyst, Specialist, Assistant or Other

Selling through a mix of channels 98% Internet78% Email52% Store44% Catalog36% Mobile30% Social 7% TV

32 categories of products and services40% Apparel/Accessories/Shoes/Luggage/Jewelry25% Home & Garden/Home Improvement/

Tools/Appliances/Furniture/Organization15% Sporting Goods/Outdoor Gear11% Business to Business (B2B)10% Consumer Electronics10% Food & Beverages10% Toys/Kids 9% Health & Beauty/Seniors 8% Books/Music/Video 8% Computer Hardware/Software/Peripherals 7% Arts & Crafts/Hobbies/Party 7% Gifting/Greeting Cards/Food & Wine 7% Office Supplies/Office Furniture 6% Entertainment 4% Business Services 4% Collectibles 4% Digital/Virtual Merchandise 4% Educational 4% Pets 4% Travel

Profile of 200 Survey Respondents

e-tailing group 10th Annual Merchant Survey, 2011

Traffic from mobile is reported in the low single digits

6

Q34


28% > 3%

Revenue is less than 1% for most retailers

7

Q35


Mobile investments are mixed with many merchants just beginning to test the mobile waters

8

Q32


mCommerce sites are top-of-mind while iphone apps also see strong penetration particularly for brand-centric merchants

9

Q33

Which mobile and SMS capabilities does your company employ or plan to employ?

Employ TodayPlan to Employ in the Next 12

Months

Considering for Future,

Beyond 1 Year

No Plans to Employ

mCommerce site 25% 34% 22% 19%

Android application 9% 22% 23% 46%

Blackberry application 8% 14% 22% 56%

iPhone application 20% 20% 26% 34%

SMS 14% 22% 24% 40%

Mobile usage w ithin the retail store via associates 5% 13% 18% 64%

Mobile as an opt-in preference via email or checkout 10% 19% 24% 47%

Opt-in promotion codes in print advertising 7% 12% 24% 57%


SMS and Android applications appear next on the horizon

Mobile features begin to see value among merchants

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What mobile initiatives do you have in place and what kinds of successes have you seen? What’s slated going forward?

• Key strategic area; learn about what people are trying to do, what they expect-Crutchfield

• About 10% of traffic; a lot of engagement; mostly looking for stores; created snow app + rei app; -REI

• Didn’t expect much; over last 2 months have seen doubling of sales; initially go find locations; lots of people purchasing same # of products as shopped onsite (16); Party big box retailer

• Driving in-store business; mobile couponing significant; capturing mobile phone # including on web-Top 10 IR retailer (department store)

• Figuring out roi; where to put budget towards and what resources to allocate-Staples

II. Mindset of The Mobile Shopper Survey

Sponsored by CoffeeTableiPad’s ecommerce enabled catalog marketplace

Sample Methodology• Online survey fielded to 1000 consumers in February 2011

where consumers:• Spent $250 or more online annually

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Owners Browsers BuyersPhone 830 623 400Tablet 417 324 282

e-tailing group/COFFEETABLE Mindset of the Mobile Shopper Survey

Sample - Demographics

14e-tailing group/COFFEETABLE Mindset of the Mobile Shopper Survey

I. SMARTPHONE: Topline• Room for improvement in mobile shopping experience exists as 68% have

reported less than a “very satisfied” experience citing usability, security and connectivity challenges

• Shopping and aggregator app usage is relatively limited• Mobile’s role in locating stores, products and competitive prices pre-store

visits and while in the store is significant and a “game changer” relative to shopping behavior

• 64% of smartphone users have made a purchase on their phone with commodity product (books/magazines, music, tickets) and clothing/accessories topping the list

• Despite today’s challenges consumers expect to purchase more in the near future

15e-tailing group/COFFEETABLE Mindset of the Mobile Shopper Survey

57% of consumers surveyed have downloaded individual retailer or aggregator services though usage appears limited

16

Q3 - 830


Relative to shopping smartphone usage starts with store locators while 1 in 3 consumers takes an aggressive stance when researching

17

Q4 - 830

We would like to gauge your current usage of your Smartphone. How frequently have you done each of the following activities with your Smartphone over the past 6 months prior to visiting a physical store?

Frequently/ Often Sometimes Rarely/ Never

Looked up store information (hours, location, map, etc.)

44% 28% 28%

Checked for sales and specials 40% 20% 40%

Looked for competitive pricing at Amazon 38% 18% 44%

Browse an online store for product of interest 37% 26% 37%

Checked for product ratings and reviews 36% 20% 44%

Looked for competitive prices on products at retailers online other than Amazon

32% 23% 45%

Checked inventory of a product of interest prior to making a visit to the store

25% 21% 54%

Look for competitive prices on comparison shopping engines (PriceGrabber, Shopping.com, etc.)

24% 19% 57%


Store Locator And Product Pick-Up

18

Checked Inventory Of A Product Of Interest Prior To Making A Visit To The Store

19

Checked For Product Ratings And Reviews

20

Sales/Specials

21

Looked For Competitive Prices

22

Consumers also begin to utilize smartphones to competitive price, compare product and access ratings and reviews while in store

23

Q5 - 830

When visiting physical retail stores how likely are you to partake in the following behavior with your smartphone?

Frequently/ Often

SometimesRarely/ Never

Check for product ratings and reviews 26% 23% 51%

Look for competitive pricing at Amazon 29% 20% 51%Look for competitive prices on products at retailers online other than Amazon

26% 21% 53%Look for competitive prices on comparison shopping engines (PriceGrabber, Shopping.com, etc.)

20% 18% 62%

Access promotional coupons for redemption at the store 31% 20% 49%

Scan bar codes and compare prices to other retailers 24% 17% 59%Scan bar codes to learn more about a specific product (product information, product images, video, etc.)

22% 17% 61%Look on a retailer’s website for product beyond what they carry in the store

27% 20% 53%Check-in using ShopKick to receive reward points for visiting retail stores

13% 12 75%

Make a purchase on your phone at another retailer 15% 13% 72%


Amazon Competitive Pricing via App

24

Access Promotional Coupons For In-Store Redemption Based On Text Sent Via Email Link

25

Scan Bar Codes/Compare To Other Retailers

26

Scan Bar Code To Learn More About Specific Product Information

27

Check-In Using Shopkick

28

Smartphone usability is still awkward (49%) while credit card security (36%) and connection speeds (31%) top the list of challenges

29

Q6 - 830

“Other” was made up of those who prefer to shop in stores or via their laptops, have no knowledge of how to use their phones for shopping, have no desire to shop this way, or plan to do so in the future as well as those whose employers own phones

Awkward Shopping, Slow Connection And Error Messages

Unclear Imagery, Lack Of Or Unwieldy Product Information

Shoppers are evenly divided between heavy (daily/weekly), monthly and intermittent usage

32

Q7 - 830

22% Heavy

28% Monthly

25% Intermittent


400 of these consumers made purchases on their smartphones in the last 6 months; 1/3 did not make any purchases in this manner

33

Q8 - 623


84% will spend somewhat more to about the sameas current levels via smartphone this year

34

Q11 - 400


II. THE TABLET: Topline

• Tablets are perceived as ideal tools for researching products and browsing followed by purchasing

• Aggregator apps and single retail downloads see limited usage• Browsing and buying patterns show higher concentration of buyers in the

tablet segment as 68% of tablet owners vs. 48% of smartphone owners had made a purchase confirming its strong positioning as a shopping tool

• 78% of tablet browsers and buyers have purchased where favorite stores were dominated by Amazon followed by Best Buy, eBay and Target

• Shopping satisfaction is stronger on the tablets than smartphones• Core capabilities of CoffeeTable are seen as valuable by tablet owners

where browsing favorite catalogs and receiving alerts top the list

35e-tailing group/COFFEETABLE Mindset of the Mobile Shopper SurveyBased on 417 owners

To date Aggregator Services are the shopping apps most frequently downloaded to tablets yet they subsequently see relatively limited usage

36

Q13 - 417

How often have you downloaded and used the following types of shopping apps [for your tablet]?

11-20 Times

6-10 Times

1-5 Times

Never

Aggregator services (Netflix, iBooks) 12% 21% 35% 32%Comparison shopping engines (PriceGrabber, Shopping.com)

11% 15% 23% 52%

Standalone retail stores (Best Buy, Target) 8% 17% 35% 40%Group shopping (Groupon) 7% 16% 29% 48%Private sale (Rue La La, Gilt) 6% 11% 16% 67%


Tablets are perceived as an ideal tool for researching products and browsing followed by purchasing

37

Q14 - 417

Please provide your level of agreement with the following statements regarding your iPad or Tablet.

Strongly to Somewhat

AgreeNeutral

Somewhat to Stongly Disagree

The iPad/Tablet is an ideal tool to research products before making final purchases 59% 26% 15%

The iPad/Tablet is an ideal tool for browsing my favorite catalogs and retailers 56% 29% 15%

The iPad/Tablet is an ideal tool for purchasing from my favorite catalogs and retailers 49% 29% 22%

The ability to use my iPad/Tablet to interact more with the product (zoom, rotate, touch for additional info) means I purchase more product 40% 31% 29%

The ability to see the product bett er via my iPad/Tablet makes me want to shop more 38% 34% 28%

The portability of my iPad/Tablet means I purchase more product 32% 33% 35%

I only shop via my iPad/Tablet when I am away from home 28% 23% 49%


Tablet owners appear to use these devices to browse and buy online more frequently than smartphone owners

38Q7/15 – 400S/417T

76% of tablet owners use these devicesto browse or buy products online


Tablet owners use these devices to purchase online more frequently than smartphone owners

39

Q8/16 – 400/363


Over 100 different merchants were named as one of the last 3 stores where purchases were made via a tablet with Amazon, Best Buy, Target,eBay, iTunes and Wal-Mart topping the lists

40

Q17 – 324

Amazon 31% Amazon 12% Amazon 6%Best Buy 9% Best Buy 10% Best Buy 5%Target 7% eBay 8% Wal-Mart 4%eBay 5% Target 5% eBay 4%iTunes 5% Wal-Mart 5% iTunes 2%Wal-Mart 5% Apple 2% Sears 2%Apple Store 3% iTunes 2% Target 2%Barnes & Noble 3% Barnes & Noble 1% Apple Store 2%LLbean 2% Border's 1% Barnes & Noble 2%Kohl's 1% Macys 1% Borders 2%Netflix 1% Bed Bath & Beyond 1% Home Depot 1%App store 1% Cabela's 1% Kohl's 1%iBooks 1% overstock.com 1% Groupon 1%QVC 1% Staples 1% iBooks 1%JC Penney 1% Gap 1% LLBean 1%Sears 1% Groupon 1% Macy's 1%Verizon 1% Land's End 1% Staples 1%

What are the last 3 stores where you made a purchase on your iPad or Tablet?

Store 1 Store 2 Store 3TOP STORES

Amazon

Best Buy

Target

eBay

iTunes

Wal-Mart

Apple

Barnes & Noble


Note:-The categories purchased more with Smartphones are tickets and food-Tablet strongholds include clothing/accessories, and gifts and collectibles

41

Q9/18– 400/324


Shopping via a tablet delivers a more satisfactory experience than shopping via a smartphone

42

Q10/19– 400/324


69% of tablet owners report that their most recent shopping experiences via these devices was significantly to somewhat better than shopping with their smartphones

43

Q19 – 324


On the Horizon

• > consumer comfort with a myriad of mobile devices• > merchant investment in mobile • > traffic and revenue generation resulting from mobile• > expectations regarding a seamless shopping experience

ARE YOU READY FOR THE “m” FACTOR?

Q/ALauren FreedmanPresident, the e-tailing group [email protected]

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