Rapid consumer adoption of smartphones impacts retailers in many ways. While store-based sales can be hit by the rise of m-commerce through showrooming, there are still positive outcomes as, thanks to smartphones, retailers with a multi-channel strategy also have the option to create a point of sale virtually anywhere. Using below-the-line advertising outside stores is a good way to promote new brands or products; it also represents a favourable environment for impulse purchases.
The power of wait marketing
Wait marketing means to engage with consumers where and when they are most available and receptive. An example of wait marketing includes Ikea revamping bus stops and underground stations in many cities, furnishing the public transport space with its furniture and the slogan “Good design can make the everyday a little better”. Similarly, wait marketing is also evident with Canadian home and garden retailer Canac installing palisades between public urinals, together with the message “For more intimacy with your neighbours”. This type of advertising coupled with mobile internet retailing could potentially transform such wait marketing interactions into sales.
Comptoir des Cotonniers’ advertisement campaign is a good example of how advertising can be combined with sales. There is real potential for retailers to capitalise on wait marketing where m-commerce is high, usually in markets with significant internet retailing sales combined with high adoption rate of smartphones.
Whether it is the need to keep active or feel connected, many urbanites tend to use their smartphones while waiting. This is the type of environment where retailers can create an opportunity to interact with consumers, while they have little more to do than shop. As a result, anywhere busy city dwellers are waiting, such as public transport stops, or any street furniture, such as advertisement billboards, could potentially become a point of sale.
Creating opportunities for impulse purchases
Impulse buying has always been a feature of retail. Thanks to new technologies and changing consumer habits, impulse shopping is not restricted to stores anymore and shopping on-the-go could rapidly become a habit like checking your phone while waiting for the bus. However, the act of purchase has to be fast and easy in order not to discourage consumers. Technologies such as QR codes answer that need and offer the advantage of adding products to your virtual basket in seconds. In the UK, retailers such as Tesco, John Lewis and Ocado have put the technology into practice, offering virtual shops to their customers. Some smartphone applications such as PowaTag also offer a one-click payment, which usually mean less time for consumers to change their mind before checking out.
Newly-released Apple Pay services will have a similarly positive impact on adoption of mobile internet retailing by wider consumer groups. Apple has a track record of delivering easy to understand products and services, and seamless integration of the service with its own software and hardware, but also third party developers.
Offering consumers the possibility to purchase through off-line adverts is one thing; however, there is a limitation in terms of how many products can be displayed on one advertisement medium such as a flyer or even a billboard. These marketing campaigns must, therefore, be targeted and focus on selected products, such as new, seasonal or special edition products.
Top 20 Mobile Internet Retailing Per Capita Market and Penetration of M-commerce within Internet Retailing in 2013
Capitalising on wait marketing in markets where m-commerce is high
M-commerce is in the rise – in the US, the market where sales through mobile devices are the largest, it is expected to more than double by 2016, to represent US$51 billion. Looking at mobile sales per capita, only three markets are over US$100 per capita in 2013; the UK, Ireland and Japan. In the UK and Ireland, high adoption of smartphones combined with good 3G coverage, not to mention commuting times, have participated to the growth of mobile internet retailing. In addition, both countries are characterised by high sales of apparel and footwear, a market where m-commerce is most significant, and also contributing growing sales through mobile devices.
In Japan, online fashion retail is also boosting sales through m-commerce, which continues to grow thanks to Japanese online players, such as Rakuten, focusing on m-commerce sales, supporting its development. As a result, sales through mobile devices represented 35% of total internet retailing sales in 2013. Technology and high mobile internet subscription are essential to reach such high penetration but it is worth noting that Japanese consumers are also more familiar with QR codes than most other users on the planet. As a matter of fact, smartphones in Japan come with a QR code reader application already installed and ready to use.
Room for growth still exists, as m-commerce penetration is still low in most countries. In South Korea for instance, where it represents under 15% of total internet sales, sales through mobile continue to grow thanks to the wide adoption of smartphones. In addition, the underground network in Seoul offers 3G and Wi-Fi capabilities, allowing the capital’s commuters to browse mobile shopping sites easily.
Alongside the development of technology, consumers are also changing the way they purchase. The retail environment must therefore adapt to consumers’ new shopping habits and integrating a multi-channel approach has become essential for retailers. In this context, wait marketing is an innovative way to communicate and to reach a new generation of technophiles and connected consumers.
Learn more in our white paper Internet vs Store Based Shopping: The Global Move Toward Omnichannel Retailing