Mobile: The smart approach to in-store shopping

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By Pat Bakey, global retail EVP, SAP 

It's beginning to appear that smartphones aren't as great as they seem. They can create problems in relationships, ruin our attention spans and, if you believe the hype, cause big problems for brick-and-mortar retailers. But, is that really the case?

It no surprise there's no getting over our smartphone addiction. According to JiWire a massive 85 percent of smartphone owners use their devices while shopping in stores. Of that 85 percent, 49 percent use their smartphone for comparison shopping and 41 percent used it in searching for product reviews.

Those stats probably don't come as a shock since showrooming has cast a large shadow over brick-and-mortar retailers for years – making smartphones public enemy number one for many store managers. But, they don't need to be.  

A recent study by GfK revealed showrooming is actually on a slow decline. In fact, the trend is reversing, with more customers reportedly participating in webrooming, or researching products online and then heading into a physical store to make the purchase. According to Forrester Research analyst Sucharita Mulpuru, webrooming will result in an estimated $1.8 trillion in sales by 2017. Which is great news for nervous retailers. 

But, that's not quite the end of the smartphone story. Today's singing, dancing, all-knowing mobile handsets have also created another new trend in shopping – wallet-less payments. 

While many shoppers have yet to warm up to the concept of leaving their wallets at home and paying with their phone, Google Wallet and Apple Pay are attempting to change their minds. Looking toward the future, I think wallet-less payments will have a huge impact on the way we shop. Research firm, Gartner, seemingly agrees: estimating mobile payments will top $720 billion a year by 2017. 

So, with smartphones set to play a greater role in shopping, should retailers be worried? Will it become harder to capture shoppers' attention with strategic merchandising, in-store promotions, and exceptional customer service? Will it become too difficult to understand and predict shopping behavior? And, will sales suffer as a result? Not at all!

We know that today's consumers expect highly personal, relevant and targeted shopping experiences. Well, smartphones can be the key to achieving that. With the right mobile-enabled technology, retailers can map where customers go in a store, analyze their dwell time at different areas, and even see how long they hang around the shop front looking at signs/advertising before deciding whether or not to walk in. 

With this insight, retailers can offer in-store shoppers the sort of hyperlocal, contextually-relevant, real-time experiences they've been getting online for years. They will be able to understand their customers and target products to meet their needs like never before. For example, they can connect with shoppers at key consideration moments and employ tactical offers to push through a sales conversion. In addition, by looking at the collective insight of all their shoppers, retailers can revolutionize their in-store merchandising and layouts, maximizing sales opportunities.

To put it simply, all retailers need to do is embrace technology. It's already in place, so retailers should use it to their advantage. They should be open with their shoppers and, in return the shoppers will be happy to share information to reap the rewards.

If that's not argument enough to get you to love your smartphone-addicted shoppers, I'll leave you with this thought from an article I read recently: 

"While many businesses might assume that smartphone use in store drives shoppers to seek better prices elsewhere and order online, we found that the opposite was true. We compared the in-store purchases of moderate and frequent smartphone users and found that basket sizes of frequent mobile shoppers were 25-50% higher."

It seems shoppers who use mobile in stores really are buying more. So, my advice? Embrace the smartphone – it's the clever approach for brick-and-mortar retailing.