Who do you trust? Is it an advisor that can excite a conference room with sampled data and compelling predictions, or the professional that relies on analytics and a rational approach to reach a conclusion?
Let’s examine an issue about the behavior of smartphone owners. According to comScore, smartphone owners overwhelmingly report that they prefer shopping online over shopping in a physical store. We’ve seen numbers clearly stating that three out of four smartphone owners prefer online shopping and are increasingly turning to their smartphones for this. With more than 150 million smartphone owners in the US (fast approaching 60% market penetration), these preferences are highly significant. With this kind of empirical evidence, we should close down the malls, divest our retail stocks and double-down on eCommerce competency.
But hold on…aren’t some physical stores still turning a profit? And while big box stores may be downsizing, it is in favor of opening retail shops with smaller footprints, less overhead, and an updated, more intimate shopping experience. While mall retail space may be light in some areas, other stores continue to thrive. I still go there to shop, and I see my friends there. Are we the last ones?
While the evidence in question strongly suggests that smartphone users love the idea of internet shopping and report that “they prefer it”, a bit more research reveals that they are more likely to browse online and actually shop in physical stores, according to Wave Collapse, a specialty market research firm. In fact, 87% of smartphone users actually shopped in a store last week and if they buy regularly, the numbers are even higher.
As it turns out, 84% of smartphone owners use them to enhance their in-store shopping experience. The vast majorities of smartphone shoppers read reviews (73%), compare prices with other retail outlets (71%) and scan QR codes to get more product details (57%), according to Nielsen Research.
Although smartphones usage is growing and dynamically changing how we integrate mobile into the marketing plan, it does not suggest that retail is dead to 75% of the 150 million smartphone users.
Bold statistics used to drive the bandwagon forward can create the illusion of a compelling trend. This is not new. However, the reminder here is that we must look at the numbers through a well-balanced and thoughtful filter, and depend on good judgment to enable creative solutions that work. Surveys and charts tell an important story when balanced by reason and educated instinct from experienced business people.
At Trellist, we depend on analytics and data to make good decisions…. but the data is always part of a balanced decision-making process by experienced business-savvy professionals, operating in consensus and using sound business judgment.
So, don’t shut down the malls just yet and look at the numbers carefully.
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Great article, Jim. Thanks for posting.
I personally prefer ’shopping’ (viewing, testing, deciding which product to buy) in a physical store. However, once I have that tangible experience and have decided which product to purchase, I almost always go online to buy it. Why? Two reasons: #1) the ability to find the store with the cheapest possible base price, and
#2)(a reason people tend to leave out of the equation when conducting this kind of research)to search for online coupons and exclusive ‘e-deals’ and discounts before making the actual purchase from the store I chose from reason #1.
Good comments, Ian. I think a lot of people have similar behavior. However, while there may be some items where it would be worthwhile to research the lowest possible price, there is something to be said for the immediacy of getting the item right then and there. How much are you saving with “eDeals” - how much will you ultimately shave off the cost of the item? Some consumers just decide the amount of time put into researching the lowest price doesn’t necessarily get them the best savings when you include the value of personal productivity. (i.e. how much is my time worth)
Even in circumstances where the item is “big ticket” enough to make it worth the comparison shopping online, I tend to see other items in the store when I’m there in person, which are worth picking up right then and there so I don’t have to make a virtual shopping list.
I think that the retail environment won’t ever go away entirely, but the landscape is changing as businesses try to cater toward the needs of a more mobile and e-Savvy consumer base. Stores are introducing things like “touch screens” where users can bring the virtual browsing experience into the store. QR codes are also allowing them to blend the concept of online/mobile purchases while in the retail location. The businesses that will survive and eventually thrive will be those who are able to successfully embrace new technologies into the brick and mortar shopping experience.
My issue with the online shopping is that I don’t have the patience to wait for my things to be delivered unless I am purchasing songs thru my iPhone because it’s instant service.