Commentary

Low Spenders The Best Mobile Target For Retailers

As anyone who has tried knows, breaking old habits can be difficult.

This has been found to be true with consumer behavior around mobile commerce.

While many retailers poured substantial resources into the development of mobile apps, most consumers tended to revert to using their mobile phones to seek out Web sites, essentially the same old behavior migrated from using personal computers.

However, somehow convincing a consumer to at least try making a mobile purchase can be well worth a retailer’s effort.

And what may seem counter-intuitive, retailers should aim low, with a focus on low spenders.

I came across a rather fascinating look at mobile shopping behaviors, in a study conducted by researchers at the Kellogg School.

Researchers there wanted to examine how customer habits change once they start using a smartphone to shop.

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In collaboration with an Internet grocery retailer that operates in 12 states, the researchers compared PC shopping patterns with the behaviors of those same shoppers after adopting the retailer’s mobile app. The goal was to determine how using the mobile app affected a customer’s ordering habits.

It turns out that the types of things bought via mobile device are different than the types of things bought using a PC.

The most frequently shopped categories among mobile shoppers were diet aids, beverages and fruit, the kinds of things that people buy regularly and use almost immediately.

Conversely, the least frequently shopped categories were stationery, stuffing, light bulbs and other electrical products, the kinds of things that people tend to buy only occasionally.

Mobile purchasing tended to be for things that have a short life cycle.

The key here is that for those items, the customer will likely buy again soon, with increased odds that the items will be purchased via mobile device.

Like many other studies, the content limitation by small screen size was seen as the primary drawback of mobile shopping. The upside, of course, is that mobile allows purchases to made from anywhere.

Interestingly, the researchers found that the average order size of low spenders increased after they started using mobile shopping. They ended up also placing more orders per year than they had using only a PC.

Among high-spending mobile shoppers, the size of the order remained about the same but the frequency of purchases also increased the more they used mobile for shopping.

Key is that even if a consumer uses mobile to make small purchases, the act of regularly engaging with a retailer has a powerful effect on customer behavior.

The most obvious example of this is the Starbucks app, which is designed for recurring usage.

Targeting by product category also is important, based on the study. For example, people use a PC rather than a mobile app when buying goods that require more thought and research.

Essentially, the impact of mobile adoption on low spenders is greater than the impact on high spenders. Low buyers over time can be converted into heavier buyers.

Mobile shopping leads customers to buy more frequently and to place larger orders.

Any retailer not looking for that can feel free to downplay mobile.

 

5 comments about "Low Spenders The Best Mobile Target For Retailers".
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  1. Ed Papazian from Media Dynamics Inc, March 30, 2016 at 8:18 a.m.

    I read this differently, Chuck. Since much mobile phone activity takes place when people are on the go and, often, away from home, such users tend to lean more towards "impulse buying" products and those whose ads are very basic in content--like beverages. In contrast, when the item is more "durable" in nature, involves learning more information and, probably, a bigger investment, then PC ads are more in play.

  2. laura buege from at&t, March 30, 2016 at 9:50 a.m.

    I personally liked this bite size analysis. Well written and easy to digest.

  3. Chuck Martin from Chuck Martin replied, March 30, 2016 at 10:15 a.m.

    Thank you Laura, much appreciated.

  4. Chuck Martin from Chuck Martin replied, March 30, 2016 at 10:19 a.m.

    I tend to agree with you Ed, especially regarding PC ourchasing behaviors. The study, however, did not address impuls behavior, per se, more focused on what categories the purchased from which device,

  5. Dyann Espinosa from IntraStasis, April 4, 2016 at 9:40 a.m.

    This gives some clarity as to the most likely demographic to be impacted by mobile ads. And the fact that they will come to use the phone/mobile for repeat purchases is a gold ring for local businesses and advertisers. 

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