It’s not too late to inject mobile into your Q4 holiday strategy as a retailer. But the window is closing.
With consumers now spending 4.5 hours per day on their smartphones, the mobile device is the future, as well as the here-and-now, for retailers.
Most have seen the data behind ecommerce’s more than 32% leap in total retail sales in 2020, according to eMarketer. But are retailers paying enough attention to similar trends in mobile? Americans’ mobile media consumption and screen time took a 14% leap forward in 2020, according to eMarketer, with an average of 31 more minutes spent on mobile per U.S. adult.
Consumer behavior has changed
After embracing new ways of shopping over the last 18 months, the hardest thing in marketing has happened: Consumer behavior has changed. Consumers now expect convenience and choice—all controlled through the device held in their hand. Case in point: 76% of consumers changed stores, brands or channels in 2020, according to McKinsey.
The retailers that have fully aligned their ecommerce and fulfillment experiences have been the big winners in courting new customers and taking market share. This has been done primarily by improving the shopping experience for their customers by building for a mobile-first experience.
Let’s take a look at mobile’s influence on the current state of retail, how leading retailers are seeing success today and charting the future of retail.
The current state of retail
There have been three strategic phases of the pandemic for retail, and currently we’re in the third phase.
In the first phase, there was a shift to an ecommerce-dominant model, powered largely by the ease and convenience of mobile in-app ordering, with a significant drop in in-store channel sales during lockdown. Pureplay ecommerce, marketplaces and brick-and-mortar retailers that invested in their online and mobile experiences were the winners at this point.
During the second phase, there was a shift to a modular model that provided consumers with choice in fulfillment—largely with the rise of Buy Online Pick-Up In-Store (BOPIS) or drive-up/curbside pickup. This allowed retailers to leverage their in-store inventory and consumers to get products the same day with minimal contact.
In the third and current phase, we’ve seen a shift to accommodate a return to in-store shopping along with an increased adoption of mobile ecommerce and same-day services for staple items, such as personal care or apparel basics. By the end of this year, Americans will have spent $360 billion on goods and services via their mobile phones, roughly a billion per day.
In other words, convenience has changed what we buy and how in a physical vs. digital location, and consumers aren’t showing signs of giving up the newfound ways to shop.
As we continue to move through this third phase, which will carry into the holiday season, we are seeing that retailers who have invested in their mobile app and ecommerce experiences are continuing to be the winners.
How mobile helps retailers win, and the new opportunity for brands
Walmart, Target and Best Buy were exemplary in their execution throughout each of the three phases. All three of the retailers invested in connecting and improving their e-commerce, mobile app and in-store experiences well before the pandemic. Across all experiences for these brands, the focal point is their mobile app.
The mobile app is the connective tissue to a consumer’s experience within their stores and their ecommerce experience. It allows the retailer to seamlessly keep items in a cart for user’s who are logged in, message the individual, and help them navigate how to discover or pick-up their items at a local store—to name a few examples.
The data bears this out, with 84% of consumer survey respondents expecting to sustain the current level of in-app mobile ordering post-pandemic, as InMobi has reported. This much time and attention focused on the phone gives not only retailers but brands of all kinds an unprecedented opportunity to reach and engage their target audiences and make meaningful connections with new prospects seeking the ease and convenience of mobile.
No wonder we have seen the explosion of retail media offerings that help CPG, fashion, and food brands leverage the available space in retailers’ sites and apps to connect and engage with consumers directly. With mobile’s “always on” status in shoppers’ pockets, scrolling through mobile retail apps is no longer just a digital shelf and is quickly becoming the new window shopping on Main Street.
Charting mobile’s future in retail
We are closer to the future of retail today than we were during the first two phases. While it remains early days, this phase in retail is starting to show us just how far the regression may pull back.
For example, consider Target. The retailer reported its Q2 2021 earnings in August, and 95% of total sales—either in-store or via online transactions—came from orders ultimately fulfilled by its stores. Same-day services, which includes in-store order pickup of online purchases, curbside pickup and Shipt, all grew by double digits. This is off the back of 235% growth in 2020 of these services. This is a glimpse into the future of retail.
For brick-and-mortar retailers, the classic truisms in retail remain.
Convenience: The ability to pick up an item the same day, vs. having to wait for it to be shipped, is still key for consumers. You forgot to buy the right ingredient for your family dinner? Purchase it on your app and drive to the store to quickly get it.
Touch, feel and smell: The ability to see how a new chair looks in your living room through AI-enabled app features doesn’t replace sitting in the physical chair and imagining how it feels with your morning coffee. However, the app probably still got you to the store and likely closed the sale.
Customer service: The ability for an associate, using a mobile device, to point you to the right aisle as you make the missing-ingredients dinner run or to check you out on the store’s point-of-sale system in the aisle makes for a better experience.
Consumers have shown they’re ready for a better retail experience. And increasingly, these improved experiences are underpinned by mobile apps. The retailers that understand how to leverage mobile and use it as the connective tissue for the kind of shopping experiences that consumers are now embracing will win this holiday season and beyond.
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Justin Sparks joined the InMobi team in January 2021 and leads the company’s new vertical strategy function for the North America region focusing on building vertical-specific partnerships and solutions in the mobile ad tech space for our advertisers.
