• by Aaron Baar , March 14, 2011

The smartphone is changing the retail experience. More than half of smartphone owners use their handsets to assist them while shopping in-store, according to a report from Chadwick Martin Bailey and iModerate Research Technologies.

"As someone who uses [a smartphone for shopping], I'm not surprised by the results," Jeff McKenna, a senior consultant for Chadwick Martin Bailey, tells Marketing Daily. "What's surprising is that it reaffirms what I had expected so strongly."

The most-used apps on smartphones while shopping are barcode scanners, which are used by 44% of consumers, while 38% use a discount app (like Groupon or LivingSocial) and 31% use the Web browser to access review sites.

Not surprisingly, the use of smartphones while shopping is highest among the youngest demographic. Among those under 35, 28% have made purchases with a smartphone, compared with 23% of 35- to-49-year-olds and 10% of those 50 and over. Women are also more likely to use their phones to find discounts, while men are more likely to use them to check online reviews.

Nearly a quarter of consumers have purchased an item through their smartphone (a figure that increases to 41% among iPhone owners). The top smartphone purchases are entertainment choices such as music, movies and TV shows (46%), followed by banking (39%), electronics (29%) and online auctions (25%).

"Given how people are using these smartphones so close to the shopping experience, and how close it is to the transactional experience, [retailers] need to be paying attention to it," McKenna says. "Similar to the social media phenomenon, and how companies are working out how to handle it, this is a similar area."

The two options for retailers, McKenna says, are to either combat the smartphone shopping by creating exclusive deals and products (or by offering more house brands, which can't be compared to other retailers) or embrace it by empowering employees and stores with more information to close sales in the aisles. "At this point, retailers may be actually fighting it, because it's not very easy to do," McKenna says.

Either way, retailers are running the risk of falling too far behind consumers when it comes to smartphone shopping. "I can't say they're in denial, but the fact that we haven't seen much exploration into [smartphone shopping], tells me retailers have not been proactive about it," McKenna says. "Developers are quickly responding to unmet and underlying needs ... and retailers and brands are not necessarily thinking about those needs and being proactive about them."