Ready or not, retailers are being propelled into a new digital realm distinguished by “markets of one.”
Along with retail industry publication RIS (Retail Info Systems), we surveyed 5,000 consumers across North America to learn more about their shopping behaviors, technology preferences, attitudes and activities. We also analyzed secondary research from a number of premier sources. From these efforts, we gleaned some key findings that support our belief that mobile is huge, getting bigger, and changing everything:
The growth rate of mobile commerce is set to leave e-commerce in the dust.
Globally, mobile commerce now represents 34% of e-commerce transactions, with the compound annual growth rate (CAGR) projected to increase by 42% between 2013 and 2016.
Mobile shoppers are sophisticated, knowledgeable and extremely price-sensitive. They behave very differently than e-commerce (computer-based) shoppers, and thus require different sales, marketing and service strategies.
Mobile shoppers are bargain hunters. If they think the price of a product in a store is too high, they look for a better deal online. They even scan barcodes to learn more about products — at a rate 47% higher than computer shoppers.
The mobile market is a “market of me’s.” For retailers, mobile consumers are not one homogenous market; quite the contrary. The millions (billions) of individuals who make up the “market of me’s” differ widely in their behavior, depending upon their age, gender, technology preferences and education level.
The mobile market is at the forefront of the “personalization vs. privacy” dichotomy. Mobile shoppers want the benefits of personalization without the downsides. This must be recognized and exploited in retail strategies.
Code Halos are key. There are many emerging business opportunities for innovators to introduce new products and services based on advanced data collection and Code Halo™ strategies, which inform meaning-making initiatives and power competitive outperformance.
Cutting through the Chaos
The upsurge in mobile commerce signifies a sea change for retailers – creating turmoil as consumers’ buying behaviors continue to change at unprecedented speed. Today’s shoppers can choose an increasing number of digital purchase paths – smartphones, tablets and other devices – from virtually any location, at virtually any time of the day.
Our survey found that 56% of consumers use multiple platforms and mobile devices when shopping online. As a result, many retailers feel under siege as they see their path-to-purchase strategies crumbling. Once-predictable shopping environments and experiences have been usurped. Swarms of customers now peruse and purchase from both physical and virtual aisles and shelves, across various mobile channels. They have instant visibility into pricing, competing products, inventory levels, locations and user reviews. Traditional marketing and selling strategies and techniques simply don’t work for today’s mobile consumer.
Engaging with Markets of One
As our research confirms, many of the steps in a path-to-purchase journey are completed before retailers are made aware of a consumer’s interests. These “blind spots” deny businesses the chance to promote their products and services and influence consumers in their target markets. Retailers that take immediate steps to remove these obstructions and actively engage with individual customers throughout their purchasing experiences will gain a significant competitive advantage.
This requires harvesting and harnessing huge quantities of data, and developing an intimate understanding of its meaning. It also means striving for continuous business and IT transformation at the same pace as consumers adopt new mobile technologies and shopping behaviors. Asking developers to merely reformat existing e-commerce websites to accommodate mobile screens and operating systems undermines the behavioral patterns associated with mobile commerce. (See Figure 2).
Recognizing the unique characteristics and patterns of various demographic segments, then personalizing experiences for each person in that segment, requires a Mobile Me (MME) strategy — designed around the only experience consumers cares about.
We recommend that enterprises implement 3D-Me data strategies (three dimensional), which rely on three data-rich sources to deliver deeper insights and greater personalization than ever before possible:
Digital. Mobile apps and websites.
Physical. Wearables and IoT sensors that measure and monitor physical environments and objects.
Personal. Historic and current data — personal, preference and transactional —volunteered by the consumer.
Yet value is only realized when 3D-Me data is combined with contextually-relevant opportunities, moments and environments (CROME) to trigger a just-in-time Mobile Me experience.
The cost of supporting mobile commerce may ultimately involve rethinking, reengineering and redesigning the entire business. If consumers are adopting mobile shopping at a rate faster than a retailer can keep up with, there is an opportunity for a more nimble competitor to step in and take the lead.
To find out more about Cognizant’s 2015 Shopper’s Survey and our ongoing research and consulting work with clients worldwide, view the report, Cutting through Chaos in the Age of Mobile Me or visit the retail industry section of our website. To learn about our groundbreaking research and latest thinking, visit Cognizant’s Center for the Future of Work.