Commentary
Mobile Research Starts The Purchase Cycle; 78% Buy Within The Day
- by Chuck Martin , Staff Writer, October 26, 2016
Once a consumer starts researching products on their smartphone, the actual purchase of a product is pretty closely behind.
In the U.S., the final purchase is most likely to occur in a physical store, which is not the case in some other countries.
While different countries have varying degrees of penetration, the smartphone is considered the most important device for retail research by almost a third (30%) of all retail shoppers, according to a new report.
The Global Mobile Path to Purchase study was conducted by xAD and Millward Brown and examined shopping behaviors in five countries (U.S., U.K., Germany, China and Japan).
The importance of the smartphone as a research tool for retail purchase varies by country, with the device taking on more importance than desktops in China. Here’s the breakdown of where mobile is the most important device for shopping:
- 50% -- China
- 44% -- Japan
- 32% -- United Kingdom
- 31% -- United States
- 29% -- Germany
There are a wide range of items that people are shopping for on phones. Consumers in Japan and China use phones for grocery shopping way ahead of other countries. In China, 88% of consumers use phones for grocery shopping and 63% of consumers in Japan.
By contrast, just over half (57%) of U.S. consumers use their phones for grocery shopping, with clothing and apparel talking the top spot. Here’s what consumers in the U.S. use their phones for when shopping:
- 58% -- Clothing and apparel
- 57% -- Grocery
- 41% -- Electronics
- 39% -- Home goods and improvement
- 37% -- Beauty and wellness
- 31% -- Games and entertainment
- 23% -- Sports and leisure
While more consumers in Japan make purchases on their phones, U.S. shoppers head to the store for that final purchase. For example, 67% of consumers in the U.S. make a trip to the store to complement their mobile research compared to fewer than half (45%) in Japan.
The real key in all of this is that once consumers start researching on their phones they are in the market to make a purchase relatively soon. Mobile research is the beginning of the intent to purchase cycle.
Chinese and U.S. consumers are the quickest to convert while Japanese consumers tend to take a bit more time. When shoppers start their mobile researching, here’s the breakdown of how many make a purchase within the day or sooner:
- 86% -- China
- 78% -- United States
- 78% -- United Kingdom
- 73% -- Germany
- 49% -- Japan
After they start their mobile research, more than half (54%) of U.S. consumers end up making the purchase in a physical store. In China and the U.K., more consumers make their final purchase via mobile rather than in person or via desktop.
This may be a factor in the adoption of mobile payments, at least in stores.
In the U.S., in-store mobile payments account for only 2% of all retail transactions, according to new research form GfK. In China, it accounts for 24% of transactions.
Shoppers in the U.S. may pass on mobile payments and prefer to make most of their purchases in a physical store, but that doesn’t leave mobile out of the process.
Smartphones are used all the way to the final purchase, for comparing products and checking prices of competitors. The consumer may end up buying at the store, but they likely used their smartphone to determine the product, the store and the timing of the buy.
Chuck Martin is Editor of the AI & IoT Daily at MediaPost and writes the daily Connected Thinking column. He is a NY Times Business bestselling author and his latest book is “Digital Transformation 3.0” (The New Business-to-Consumer Connections of The Internet of Things.) He is CEO of Net Future Institute and a frequent keynote speaker internationally. Follow him on Twitter @chuckmartin and contact him at Chuck@MediaPost.com.
Give me a break. The wording suggests that these incredibly high percentages apply just about everytime a consumer is exposed to an ad on a smartphone, when, it all probablilty, the question asked was something like this , "Have you ever ( or "recently" ) made a purchase just after seeing a mobile ad?"This kind of research is blatent propaganda and assumes that advertisers and agencies are gullable idiots. Sure, a certain, but small and unknown, amount of immediate purchase is generated shortly after a mobile ad is seen and this might be a modest plus for advertisers peddling impulse buying products, particularly when the "audience" is near a store or is willing to pause and make a buy online. But to imply that this happens most or almost all of the time, no matter what product the ad is for, is silly.
The smartphone activity typically is research looking at and for products, Ed, not to do with mobile ads.
Chuck, whether it's doing research or actually making a buy, I believe that the data presented in this manner is intended to imply that you---the advertiser---get nearly instant action just about every time you show an ad to a consumer via mobile. That's true, sometimes but not most, let alone al,l of the time. It's just a promotional exageration.
That may be a by-product, but the study had nothing in it regarding mobile advertising Ed. It also is consistent with other research on mobile shopping patterns.
I think the problem here, Ed, is that this appears to be self reported. And we have decades of experience that consumers are horrendous at giving accurate reports of the behavior that led them to purchase.
My guess is that cell phones are their mental fall back for what they did - that stock answer to give the researcher something to write down.
What really happened? If I'm right, we certainly won't find it out here. And we can be certain it's far far different from what's reported in the research summary.
Here's what they say: "Results from the 3rd Annual U.S. Mobile Path-to-Purchase Study are based on data from an online survey of 2,000 U.S. smartphone and tablet users and actual observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users." http://www.telmetrics.com/news/xad-and-telmetrics-release-mobile-path-to-purchase-study-revealing-mobile-dominance-in-consumers-purchase-decisions/
First, online research only. Second self reported. And using this panel to attempt to make it more solid. "Actual observed data" is quite the classic sounds important but probably isn't data. Ed might know what they are talking about. I don't know the content of those panels...
Net out: Its a study I recommend we ignore.
Thjanks, Doug for those comments. My issue with this kind of research, aside from technical reservations about response reliability, etc. is the implication that the findings apply---on average---to every set of ad exposures. Imagine the way it would work. The millennial is happily walking down a street chatting away on his/her smartphone, when an ad appears. Suddenly---within minutes?---this causes the smartphone user to stop the call in order to research the advertiser's ad, go to its website and/or make a purchase. Meanwhile another ad appears, then another, and another and almost every time, these ad exposures trigger some sort of response. Tha's a nightmare scenario. People don't operate in such a disjointed manner and ads aren't that effective at stimulating a response. Also, with so much disruption using smartphones--prompted by knee-jerk reactions to so many ads---I suspect that most users would either go nuts or, if they wanted to continue using their devices for their own personal use, they would stampede to install ad blockers.
Thoroughly agree with your points, as well. Having started my career in tech, I think a part of the problem we have is that tech folks, even tech marketing folks quite often, have a far better sense of tech than of human nature. And the true chaos and fun of consumer lives frustrates them rather than enlightens them.
Those are broad suggestions and there are clearly exceptions. But I spent my 10 years inside the geekiest of tech, did human-computer interaction work, then evolved my way out through sales then marketing. And have continued to work with many tech companies. It's a struggle for any company in tech to develop a healthy sense of truly human behavior.
Doug, does that mean or imply that the survey of 2,000 wasn drawn from Nielsen's 6,000 panel? I'm confused. Here in Australia,our National Privacy Principles would make that illegal.
Long time, no talk Chuck! I'm currently here in Shanghai (& many years in Japan) and given the large diversity among the countries mentioned I started to think about the "why" behind the usage metrics above. I think some key factors include:
1. Gap between info/content available online vs. in-store. Ex: From my limited experiences, info from Associates in-store in China is limited.
2. Mobile penetration & Screen size. I believe Japan has the highest ratio of phones to population. Also bigger screens lead to easier shopping research experience.
3. Data speed, price & subscriptions. Less of a factor in the more developed markets
4. Online prices, delivery fee & shipping days. Most of the things I buy here in China are $0-1 delivery fee and arrive in 1-2 days.
5. Rural vs. Urban population & car ownership/usage. The US's high car usage rate may be a factor in maintaining higher in-store rates. In a remote village, eCommerce will have great convenience.
6. Mobile payment penetration & ease of use. One you are in the Wechat/Alipay ecosystem, it becomes tremendously easy to pay for eCommerce, O2O and in-store
7. Loyalty/community connection with stores. In Japan, there is normally a community of shops near your local subway station (outside of Tokyo) which shoppers build loyalty and relationships with (perhaps the same in Germany)
8. Materialism & sustainability concerns. Japanese typically seek high quality products that will last (perhaps 1 factor in their longer 'consideration' phase). Societies with more disposable consumerism would be less concerned about quality and more likely to buy online sight-unseen.
9. Types of products being purchased. Considered purchases (generally more expensive product categories) are more likely to be bought online than impulse product categories (like fast-moving CPG). Richer countries would be buying more bigger purchases.
10. Brand consciousness/importance. Nielsen has reported that Asia-Pacific is the most brand conscious region in the world and that consumers in China and Japan are happy to pay a premium for specific brands and products. Could favor the "infinite aisle" that exists online.
Jeremy
Thanks, Jeremy all very good points, as usual (what are you doing in China? Email me). The markets really are different, though all mostly marching in the same mobile direction.