Mobile shopping is one of the most transformative trends in the retail industry. Not only does it craft more immediate and convenient shopping experiences, but mobile changes consumer shopping behaviors. Mobile shopping, whether in-app or on a mobile site, is habit-building, meaning it can encourage consumers to shop more regularly and nurture them towards greater brand loyalty.
Rebecca Wang, a professor of marketing at Lehigh University and a research scholar at Spiegel Research Center of Northwestern University, conducted extensive research on this phenomenon and found that mobile shopping is an invaluable tool for growing customer loyalty and increasing revenue. Wang analyzed sales for an online grocer that launched its first mobile shopping app in October 2012. Comparing shoppers who downloaded the app versus those that didn’t, Wang uncovered key insights around mobile shopping behavior, like how it increases shoppers’ average order value as well as the frequency with which they shop.
Wang also uncovered key trends around omnichannel shoppers–shoppers who make purchases across mobile, desktop, and physical stores. These shoppers have fully integrated the retailer’s brand into their day-to-day lives, making them the most valuable consumer type. In Wang’s view, all retailers should develop marketing strategies that target and grow this segment.
In this interview, Wang shares some of her most important findings from her research and explains how retailers can develop their own app solutions that elevate customer value. She also shares tips for growing the highly lucrative mobile shopping and omnichannel shopping consumer segments.
Ellen Harvey: What type of data were you analyzing in your research on mobile shopping behavior?
Rebecca Wang: Spiegel Research Center partnered with an internet grocer in the United States. It’s one of the largest online grocers in the U.S., and certainly the earliest. It started operating in 1990. They provided us with consumer information, including demographics, their purchase history, and essentially their lifetime customer activity up to that point, which was 2013.
The time frame that I looked at was 2012 to 2013, because in October of 2012, the online grocer launched an advertising campaign across a number of train stations to promote their new mobile app. In certain train stations their ads included barcodes which you could scan and the item would be automatically be added to your cart.
I used the October railroad campaign, and basically my assumption is, “If you see this campaign, some people will adopt the mobile app and some people won’t. So, now let’s compare mobile shopping adopters to non-adopters. Do their behaviors change?”
So before October 2012, everyone was a PC shopper, and after October 2012, some people became mobile shoppers as well, and then some people stay PC. I compared these two groups to see if they differed.
EH: The findings were pretty interesting in this research, because I think there’s a misconception among retailers that mobile shoppers aren’t as valuable as desktop or in-store shoppers. That’s not necessarily what your research found. Could you explain your findings?
RW: Yes. If you become a mobile shopper then you actually become a better customer overall. And the reason is because mobile devices are a type of enforcement tool. Just think about your morning today. When I woke up this morning the first thing I do is I check my phone. So mobile devices are with us all the time. Mobile is portable, it’s functional, it’s very personal, and it’s everywhere.
If your brand is on the device, whether it’s through social media, whether it’s through mobile website and, better yet through your own branded mobile app, you are now more likely to be able to engage with this customer on a habitual basis because the mobile device itself is a habit for the consumer. If a customer uses a mobile channel, their purchase frequency increases. This is actually true across various customer segments. As you become a mobile shopper and you’re a previously low-spending shopper, your basket size increases. If you’re already spending a lot, your basket size actually doesn’t go up using mobile.
EH: So mobile is a good way to build that brand loyalty and increase shopping frequency?
RW: Exactly, yes. It’s a habit reinforcement tool. It essentially retains customers. It increases purchase frequency. And for previously low spending, low engagement customers, mobile is very good growing tool. Retailers should use their mobile apps to grow their customers into more brand loyal shoppers.
EH: Do these shopping behavior trends change significantly when you’re looking at a mobile website versus an app?
RW: Yes, this is a good question. A mobile website behaves functionally like a PC website. So, in terms of session time, in terms of the products they purchased, they are more similar to what they would do on the PC website.
That being said, if the mobile website is not optimized, it’s actually not sticky. People will leave the site as soon as they arrive. This is detrimental because downloading an app and using an app is almost like committing to a brand. To put it in customer relationships terms, that’s almost like I’m marrying a brand. Before I marry a brand, I might check it out, and the mobile website very well may be my first mobile interaction with a brand. And if your mobile website is not optimized, then my first impression is not that great, and the likelihood of me returning to the mobile website becomes slim, let alone downloading the app because my first impressions is not great to begin with.
EH: So the goal is to get consumers to your mobile website, and make sure the mobile website experience is positive. But then the next crucial step is actually getting them to download your app. Do you have any insights on the best ways retailers can to do that?
RW: Yeah, so app discovery and app downloads are some of the biggest challenges that retailers face. There are certain things you can do. You can make your presence larger in the App Store, launch advertising campaigns, or invest in search marketing. But putting that aside, I think there are two equally important, if not more important, things that a brand should consider.
One is that your app has to have a goal. So let’s put all technologies aside; think about what you want to do with your customers. You want customers to engage with you on a habitual basis, but what’s stopping that from happening? Identify that bottleneck, and then think about how an app can help with that bottleneck.
For instance, if you’re a grocery store, and your hope is that customers come back to the store to browse for products, to shop for products, and hopefully transact the basket, then think about how an app can help do that. Maybe you have something that allows customers to shop anytime, anywhere. If your app is designed in a very fast, and fluid, and functional way, then advertise that. And then that is your selling point for customers to use the app so that they help your brand.
And then my second piece of advice is from an app design perspective. Again think about what that goal is, and then don’t go beyond and don’t go below. This is what we call a 3Fs, so fast, fluent, functional. So make sure your app is able to achieve all three. Putting too much on the app is actually a huge cognitive load on the consumers’ part. Have that goal and then have the app achieve that goal. And your goals may change which is why you have various releases going forward, and that’s fine.
EH: Another part of the research that I found interesting was that consumers tended to purchase certain types of products on different platforms. Can you describe a little bit how the device can influence what type of products consumers actually purchase?
RW: Mobile devices are not a great platform to learn from. Mobile devices tend to have small screens, and you can only open one browser window at the time. So it’s kind of hard to compare products and do that actual learning.
If a mobile device is the only channel you use to make purchase decisions, then you are more likely to buy things that you’ve used before–habitual things, risk-averse type of things. So it can be milk, it can be bread, it can be water. These are things that you normally use in short consumption cycle, things you’ve purchased before, or things created by major brands.
If it’s a product by a manufacturer that I’ve experienced before, like Coca-Cola, I might still take a chance on my mobile device. If it’s a completely new or a secondary player, then it’s actually important to not just focus marketing on mobile but also focus on other platforms as well.
EH: So if you’re launching a new product, mobile is not necessarily the main platform where you’re going push it?
RW: Exactly. If you are launching a new product you cannot be mobile-only, especially if you’re a secondary manufacturer.
EH: What are some strategies that you’ve seen retailers employ successfully that can encourage customers to keep returning to the app and keep visiting the online store?
RW: I think this is similar to the how retailers get people to download in the first place. So again, really look at your own core products and actual products and offerings. You know, are they delivering the value that you’ve promised? Are they competitive in the marketplace?
And then, secondly, I think it’s important to understand the different customer relationships, and different types of customers. They will interact with you differently. For customers who are already very loyal to you, it’s actually okay if they don’t stick with the mobile app. If they’re really very loyal, and they use PCs only, and they’ve been doing that for a long time, then they can continue to do that.
Getting people to build a habit with the app — that strategy is really for people who are not very loyal, and they shop once in a while. It’s those people you hope to trigger with the app by giving them, not coupons or discounts, but real value. Identify why are they not loyal yet, and then communicate that.
For instance, if you are a reseller, and you have customers who seem to buy in bulk, but just once in a blue moon. And if you analyze their transaction data you can conjecture that maybe they buy in bulk because the order placing procedure is too cumbersome. So you tell them that, “I have an app that can help you streamline your ordering process so you can order anytime, anywhere. I’ve stored the items of your past orders, so you can basically just finish the transaction in five minutes if you use this app.” Then communicate that and offer those features within the app. That’s what will get these less loyal shoppers to come back.
EH: In you research you found that omnichannel shoppers, people who shop across mobile and desktop, are actually the most valuable for retailers. Could you describe some of the trends that you saw with these omnichannel shoppers and why they’re such a valuable segment?
RW: Yes, they are extremely valuable. Let’s say I’m a new customer and I come into the retailer as a mobile-only shopper, and I stay mobile-only. I actually don’t grow. So it is very important to push for omni-shopping.
Omnichannel shoppers are so valuable because they truly incorporate the brand into their lives. They may think while their waiting for the bus, “Oh, I may need bread and milk,” and add it to their cart on mobile. Then when they get into the office, they may think, “I just remembered I need lotion and tissues,” and add those items to the cart on desktop.
EH: If you’re a retailer who wants to encourage more shoppers to become omnichannel shoppers, is that a matter of creating a consistent experience across different channels?
RW: I think being frictionless goes without saying. I feel like in today’s day and age, if you don’t have that functionality or that interface, then you’re pretty much dead in the water. But how to convince customers — again, this is where customer analytics come into play. You look at what customers are buying or not buying and give them the right message and right content to persuade them.
So for instance, brands like Shutterfly, they have an app that allows you to create photo books and customize those products using the app itself. That’s pretty brilliant because the bottleneck is time, and people are not willing to spend time to develop products like photo books. So if Shutterfly can use the app, and further develop the app so that the entire process is as streamlined and easy as possible, then that’s beneficial for their customers.
I do think that in terms of pushing customers — so going from PC to mobile, and then mobile to PC — I think product can be a very good strategy. If you are mobile-only there are certain types of things you’re not buying. So a retailer should offer you a good deal on typically PC-bought type of product. Normally, it’s something that you have to learn about, or something you don’t buy very frequently.
EH: Have you conducted research on other factors that can have an impact shopping behavior?
RW: Yes. I recently published a paper that looks at loyalty programs. It’s focused on in-app loyalty programs. Loyalty programs are very prevalent in marketing and in consumers’ lives, but aren’t very sticky. My research shows that when you launch an app, and when customers adopt the app, they actually also become stickier with the loyalty program, which then means they increase their spending.
In loyalty programs, the app and the type of rewards go hand in hand. You shouldn’t be afraid that people are going to redeem that reward. Use the app to communicate your core products. If you have a loyalty program, be very upfront, for example “This is how many points you have, and these are your rewards.” Encourage them to browse because when they redeem rewards, they actually are more loyal to the brand. They become more loyal to the brand because they’ve now experienced the value, and they feel like the promised value has been delivered to them.
EH: What is your top piece of advice for retailers who are looking to improve their existing app, or maybe create a new app?
RW: It’s important to remember that these are branded apps. These are not paid apps. The goal of paid apps is to do everything because that’s why consumers are paying for it. You offer branded apps free of charge with a single purpose in mind. The goal is not to get revenue or promote the app itself per se, the goal really is about your brand, whether that’s building loyalty or increasing engagement. So, identify that goal and then think about how the app can achieve that.
Second, I think going forward customization or personalization for the individual shopper will be critical. Retailers need to use data analytics to facilitate features that adapt depending on who’s using the app.
EH: Are there any emerging technologies that you think might impact how we shop on mobile in the near future?
Rebecca: The problem with mobile shopping is really the screen real estate. You have to scroll, you have to zoom to really see certain products. That limits my ability as a consumer to compare between brands and learn about products. In the next few years, as artificial intelligence improves, as interfacing with mobile devices becomes easier, I think mobile shopping will pick up even more. Customers will become less risk averse going forward.
So today you might not be making your purchase decisions solely on mobile devices if you’re buying a big ticket item, but maybe going forward that might change as interfacing becomes better, as artificial intelligence becomes better. If you can just ask Google or Alexa, “I want to compare shop Samsung versus Sony TVs. Read me off the pros and cons for both,” that will completely change the dynamic for mobile shopping.
EH: What trend or technology do you think will have the biggest impact on retailer’s strategies in 2019?
RW: I actually believe it’s analytics. I think you have a lot of data now. Even your mid-sized retailers have database programs today. They can track what customers are buying or not buying, browsing or not browsing, what device they’re using, etc.
I think it’s important to use analytics to figure out what types of customers you have, and customize and personalize your communications and recommendations to them. Then you can push them to become omnichannel customers or grow them in some other way that’s valuable to your brand. That’s really the biggest opportunity.