Smartphones influence 5.1% of offline retail sales

Influencing USD159 billion of offline retail revenues in US

Smartphones are influencing 5.1% of retail stores sales in the US, equal to revenues of USD159 billion, as consumers increasingly use their phones for activities such as product research and price comparison, according to research by Deloitte. The advisory firm says that while retailers are concerned that the growing penetration of smartphones is negatively impacting bricks-and-mortar stores as consumers increasingly use their devices to buy goods, the opposite is in fact true. The report found that in fact smartphone shoppers are 14% more likely to make a purchase in-store than those that don’t use their phones. They are also more likely to eventually make a purchase, with 59% of those using a smartphone going on to buy the product in the future, versus just 22% for those that didn’t use a phone in the shopping process.

Consumers’ store-related mobile activities are contributing to – not taking away from – in-store sales,” says Alison Paul, vice chairman of Deloitte’s retail and distribution division.

This means that mobile is an important tool for retailers to incrementally drive traditional in-store sales, strengthening the relationship between retailer and consumer to increase engagement and loyalty.”

Deloitte forecasts that smartphones’ influence on shopping will only increase in the coming years as more consumers make the switch from feature to high-end phones. By 2016, the firm predicts that smartphones will have an impact on almost a fifth of offline store sales, the equivalent of USD689m in revenues. This is far higher than the amount of shopping that will actually be done on smartphones, which Deloitte estimates will hit just USD30bn in 2016.

Mobile devices’ influence on retail stores sales has passed the rate at which consumers purchase through their devices today,” says Paul.

Smartphones appear set to have a big impact on the retail market, enabling users to browse, compare and buy products and services wherever and whenever they want. However, a number of studies are finding that the impact is not on sales, with consumers still reticent to make purchases on smartphones due to security fears and a poor user experience. A recent study by Monetate of more than 100 million online shopping experiences found that just 1.39% of visits to e-commerce stores from smartphones resulted in a purchase, compared to 3.23% for tablets and 3.51% for PCs.

The figures suggest that retailers must look at ways to get consumers engaged via mobile, be that through apps or loyalty programmes, to make the most of the opportunity around smartphones. Deloitte found that nearly 37% of smartphone owners used a third-party shopping app on their last shopping trip, with a third accessing a retailer’s own app.

Retailers that do not engage shoppers through specialised mobile applications or targeted smartphone-based promotions leave the door open for competitors to reach a customer,” says Kasey Lobaugh, principle and direct-to-consumer and multichannel leader. “To make the connection with consumers, retailers need to understand how mobile shoppers are willing to interact with their specific store category, format and merchandise, both inside and outside the store, and customise their mobile strategy around the shopper’s needs and experience.”

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