Buyers are now more advanced and have higher expectation and the retailers need to ensure that they have infrastructures in place to deliver a reliable and steady experience to their consumers. The good experience will support retention and in turn share of market which is important to their competitive advantage
According to a recent survey from IAB, 90% of parents who own smartphones expect to use them for shopping assistance while looking for gifts for their children during the holiday season.
Beyond shopping (cost comparison, referrals and recommendations, etc.), smartphones are also used for making purchases. Parents say they expect to use their phones for more than research. Forty-four percent said that they will likely purchase gifts for their children using their smartphones.
Once a luxury item when initially introduced, the threshold for smartphone ownership is continuing to drop. The cost of smartphone is rapidly dropping worldwide:
- The average price of a smartphone dropped from $364 in the third quarter of 2012 to $317 in the third quarter of 2013.
- Year-over-year, the average price went down for smartphones running on all operating systems except BlackBerry.
- The global average selling price (ASP) of iPhones decreased by 6%
- The ASP of smartphones running on Android decreased by 14%
- For BlackBerry, the ASP increased by 19%
- The ASP for Windows phones decreased by 10%
- The ASP of smartphones running on other operating systems decreased by 47%
Retailers need to cooperate with application developers to better market their offerings and improve in-store sales. This is increasingly important due to the showrooming phenomenon. Showrooming is the practice of checking out products in a traditional brick and mortar retail store without buying it and then shopping online to get a lower price for the same item. Online stores usually offer lesser prices than their brick and mortar counterparts, because they do not have the same overhead expenses. Showrooming can be expensive for retailers, not only in terms of the reduction of the sale, but also due to damage caused to the store’s floor samples of merchandise by constant examination from consumers.
Retailers need to cooperate with application developers in the following ways:
- Embrace, Don’t Fight, Showrooming
- Offer Unique Products
- Offer In-Store Reviews
- Focus on Brand
- Enable and Empower Showroomers
- Digitize Store and Employees
Buyers today want a higher level of personalization in their interactions with retailers, because of their online shopping experiences. Customers are willing to help retailers understand their needs, as long as it is a convenient and pleasant experience. Shoppers are also ready to spend time in providing information on their preferences for what they shop, the channel they use, and mode of communication but they provide this information only once. After that, they would like the retailer to learn from their activities and give them personalized offers and communications.
To provide the personalized marketing will mean that retailers need to analyze the information they have about shoppers and their buying patterns across all channels. Merchants will have vast amounts of structured and unstructured data, such as customer feedback, reviews etc. and Big Data analytics can play a major role here in tapping the untapped opportunity.
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