Retail's love-hate relationship with mobile device-equipped customers

Retail's love-hate relationship with mobile device-equipped customers

Summary: More than a third of people will walk into a brick-and-mortar retail store, scope out a product, then buy it online for less. But plenty are not. Blessing, or curse?

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There's an interesting bit of information tucked into market reseatch firm ForeSee's latest Mobile Satisfaction Index.

No, it's not the fact that Amazon continues to dominate digital retail channels -- you probably knew that already. (As an aside, I abstain from using the awful term "e-tail." No, I won't do it. You can't make me.)

And it's not the fact that shoppers find the "mobile retail experience" improving, because, well, of course -- new technology gets better as it matures.

No, the most interesting bit in this brief report is the trend that retailers like to call "showrooming" -- that is, scoping out a product in person, then buying it online -- usually for less -- from a rival, using a mobile device. Often, this happens from within the brick-and-mortar store itself. (As far as screwing a company over goes, it doesn't get any more flagrant than this.)

But you can't blame shoppers -- they do what they're incentivized to do. And the incentive of an online retailer is that it's often cheaper, more convenient and less of a hassle than dealing with the often-poor or lacking service found in many big box retail stores. (Circuit City or Best Buy, anyone?) The ability to drive or walk a mile and put your paws on the product is just icing on the cake.

ForeSee's statistics offer some granularity to how widespread this trend is.

It found that, during the 2012 holiday season:

  • Nearly 70 percent of shoppers used a mobile phone while in a retail store;
  • 62 percent of shoppers accessed the website or app of the store in which they were standing;
  • 37 percent of shoppers accessed the website or app of a competitor to the store in which they were standing.

This presents both opportunity and risk, ForeSee says.

"Retailers need to engage their customers equally well through all channels, especially through mobile sites and apps, or risk losing customers and sales to competitors that do a better job of meeting their needs," report co-author Eric Feinberg said.

Translation: mobile devices allow consumers to instantly level the playing field. Retailers can no longer hope that they won't comparison shop due to distance, inconvenience or any other such factor.

People are definitely using mobile devices more frequently as they shop.

According to ForeSee:

  • Shoppers find desktop and mobile shopping experiences similar.
  • 57 percent of them visit the retailer's website as a first step to shop.
  • Still, just 6 percent of them visit the retailer's mobile offerings as a first step to shop.

The retail king of mobile? Amazon, of course, with Apple and QVC close behind.

Here's a look at some of the rankings, arranged according to the company's satisfaction index score:

  • 85 - Amazon.com
  • 83 - Apple, QVC
  • 80 - NewEgg, Victoria's Secret
  • 79 - Barnes & Noble, Footlocker, HSN, Costco
  • 78 - HP, Kohl's, SportsmansGuide.com, Best Buy
  • 77 - Buy.com, J.C. Penney, Macy's, One King's Lane, Staples, Target, Walmart
  • 75 - Gilt.com
  • 74 - Overstock, RueLaLa, Sears

This itself is interesting. Amazon tops the list but it has every incentive to make its online platform easy to use; so does NewEgg. Apple and Victoria's Secret, of course, have a two-pronged approach and aren't worried about using their stores to showroom for their own websites, since they have strong control over their products. And Barnes & Noble is treading carefully -- its brick-and-mortar footprint has been shrinking, but it needs to ensure it doesn't hand customers to Amazon as people move to digital book buying.

What can retailers take from all this? That people don't feel strange about buying online, even via their mobile phones, if it's easy and intuitive. But they still want to touch something.

Photo: Michael Senchuk/Flickr

Topics: E-Commerce, Amazon, Mobility

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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7 comments
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  • This isn't new!

    When I was growing up in Portland Oregon, we would often go to the Montgomery Ward store and catalog outlet. We kids would try on clothes in the retail part of the store, and once our parents new what our current sizes were, we'd troop down to the catalog distribution center, place our orders for substantially less than the store prices, then wait just a few minutes for the order to be processed.
    Lowe's claims to be willing to match competitors prices, but on several occasions when they were *much* more expensive than Amazon, they haven't made any effort to actually match. I think they may be giving up to on-line for small things.
    Brick and Mortar stores have, for a long time, sought customers who didn't know much, as they didn't comparison shop. The comparisons are easier now.
    danson@...
  • It is only Going To Get Worse...

    With Apps like Red Laser that will shop many websites and nearby local stores for lower prices, things are going to get much worse for many retailers that aren't being competitive.

    I have used Red Laser and found out that a product was cheaper right next door to where I was, in some cases even cheaper than online. But the bottom line is I will get the item for the best available price, if that's in the store, great, if that's online great. I have used the app on Black Friday and found items that were what I would consider dirt cheap in the store to be half the price or less online.

    Now, sometimes the price difference is so small that the convenience of getting it right then and there is worth a little extra, but I generally won't pay more than a dollar or two extra for that.
    cmwade1977
  • Reviews...

    I feel guilty diong the above, but I do appreciate being able to read reviews of products I am considering buying.

    My guess is that to survive, more and more brick and mortar retailers will negotiate exclusive distribution agreements so that the products they carry can on ly be bought in stores.

    Case in point: the ASUS Q200E Windows 8 laptop. It can only be purchased through Best Buy. Yes, online retailers carry similar models. Amazon, for instance has a very similar ASUS laptop with a newer Core i3 processor that is about $50.00 more expensive. But if you want this particular laptop, which is about the cheapest touch-screen Windows 8 laptop around (and a danged nice looking machine, IMHO) you've got to buy it at a Best Buy.
    dsf3g
  • I usually end up buying in store

    I do my bit of web access while shopping, but it's usually to find out more about the product that I'm interested in as a lot of store display very bad technical information. For example you see a laptop for sale and all it says for processor is "Intel dual-core"... that really doesn't tell me much, there's like a thousand different dual-core processors from the original Core2 to the latest Core i7 passing by Atom and others... at least I knew it was an Intel :-)

    Anyway, most of my online shopping is done for things I know won't break (CDs, DVDs) or that I can exchange locally (Bestbuy online, if broke go back to the store, no need to ship it back). The thing with doing exchange with online shops is that while you send it back and they send a replacement, you don't have it. Going to the store you can get a replacement on the fly (if they have it in stock).

    And I also prefer human interaction while shopping, it's more comforting.
    lepoete73
  • You need to give people a reason to patronize you

    I suspect that chain stores will have a bigger problem with this than independents who can develop a personal relationship with their customers.
    John L. Ries
  • You Balk At "E-Tail"...

    ...yet you have no shame about saying "incentivize".
    ldo17
  • thank you man

    thank you man

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