The New Mobile Shopper - From "Armed to Charmed"

News provided by

Apr 27, 2011, 09:00 ET

Research suggests opportunity for mobile CRM programs to win consumer trust

NEW YORK, April 27, 2011 /PRNewswire-USNewswire/ -- Shoppers will become increasingly sophisticated in their use of mobile phones to inform buying decisions and facilitate purchases while in the retail environment, according to new research. Rather than regarding these shoppers as potential threats, Ogilvy advises marketers to adopt a mobile CRM (mCRM) approach by shifting their perspective from "armed to charmed" and embrace openness and transparency to build trust and maximize long-term customer value.

OgilvyOne and OgilvyAction conducted research among 1,500 shoppers in the US, UK, and Singapore revealing that Innovators are advanced users of mobile phones in the retail environment, foreshadowing mainstream consumer behavior*:

Not surprisingly, 85% of Innovators searched Google from a phone while in a store to get information on a product. Already 24% of the Early Majority are doing this, with the number increasing to 50% of the Early Majority who own Smart Phones
77% of Innovators scanned a barcode or QR code with a mobile phone while 19% of the Early Majority are already doing this, increasing to 40% of the Early Majority who own Smart Phones

Widespread adoption of online buying behaviors also foretells of rapid transfer of these behaviors to the mobile environment*:

85% of Innovators looked at a product in-store and then ordered it online while 71% of innovators looked at a product in-store and then ordered it from a phone while still in the retail environment. While 66% of the Early Majority have looked at a product in store and ordered it online, only 8% have ordered it from their phone, suggesting this is an area of growth
79% of Innovators asked a store to match a price by showing a web page from a print-out while 71% of Innovators asked a store to match a price by showing a web page from a phone. 45% of the Early Majority have asked for a price-match using a web page print-out, but only 12% of the Early Majority have used a phone to display a web page at the point of purchase

Phil Buehler, OgilvyOne New York's head of planning, said, "While the behavior of the Innovators gives a clue of where the mainstream might be headed, it's the behavior of the Early Majority that clearly indicates that consumer engagement with mCRM is a trend, not just a fad. We can also observe that mobile activities follow online behavior, which gives us a good way of predicting where mobile behavior in the retail environment is headed."

Martin Lange, Ogilvy's global head of mobile, said, "The future of retail is at an interesting inflexion point and marketers should heed the lessons learned from the music industry. Rather than adopt an adversarial approach by taking defensive action, brands and retailers should turn customers from 'armed to charmed' by understanding what the unmet shopper needs are and addressing these by offering utility and transparency. What you win is trust, the basis for maximizing lifetime customer value. This has the potential to elevate mobile shopper marketing from being a price-driven, tactical, one-off channel to become a tool to activate shoppers and build long-term loyalty. "

The research showed that "better customer service" and "loyalty points" were the top two reasons that respondents had for "checking into" a retail store. 55% of mainstream consumers wanted better customer service while 50% seek loyalty points, indicating strong consumer demand for mCRM, the practice of building relationships with customers through the mobile channel.

Gareth Ellen, Director of Digital for OgilvyAction, said, "Mobile is now an essential shopper marketing and retail activation touchpoint. It is clear from our research that shoppers are using mobile sites, apps and utilities to assist in their purchase decisions and as a result, we see a huge opportunity in using mobile technology to both activate sales and then build longer term customer loyalty."

Four recommendations for effective mCRM

Mobile, even more than online, forces marketing to refocus from pure messaging to offering unprecedented levels of service, utility, and value in an open and transparent manner.

1. Be holistic

Integrate mobile into the overall CRM and marketing program
Understand mobile as an accelerator rather than a separate silo

2. Assimilate data

New dimensions have been added e.g. location, companions, etc, to the already existing set of data, allowing for a much better prediction of context and intent within this context
Ensure data collected via mobile is integrated into broader CRM channels (and vice versa)

3. Integrate into social strategy

Nurture recommendations through existing social platforms via the mobile device
Monitor sentiment around brand, according to both time and location variables

4. Provide value beyond price

Extend the perception of value beyond price to encompass utility, information and education e.g. inventory, origin, ingredients, etc, and customer service

To gain some insight into how consumers are using their mobile device at retail, visit sellorelse.ogilvy.com to watch a two-minute video filmed in San Francisco, London and Singapore.

*Source: OgilvyOne & OgilvyAction Global Mobile Retail Study. US figures only.

SOURCE Ogilvy