Can You Hear Me Now?

By Barbara Grondin Francella, Senior Editor

More than 40 percent of smartphone owners use them to assist with shopping in a store

The proliferation of smart-phones and zooming popularity of iPads have revolutionized the way people shop — and had a significant impact on what consumers expect from retailers and their in-store shopping experience, according to a recent survey by Deloitte and a study by Forrester Research.

More than 40 percent of consumers who own a smartphone have used it specifically in a store to assist with their shopping, according to the Deloitte Spring Consumer Pulse Survey of more than 1,000 consumers throughout the United States. Thirty-seven percent, however, mentioned they wanted to use their smartphone in-store, but couldn't because of Internet or other connectivity issues.

"Consumers increasingly are using and want to use their phones in the store," said Ellen Basilico, partner, Deloitte's retail practice. "There is a real opportunity for c-store operators to directly connect with their customers when they walk into the store and motivate them through direct offers as they shop."

What's more, consumers expect access to retailers via smartphones: nearly one-fourth of all survey respondents expect their favorite retailers to provide them with access to information via downloadable apps, social media and mobile alerts. In addition, 17 percent said retailers' use of social media, smartphone apps and mobile technologies has made it easier for them to shop.

Especially relevant for c-store operators: 25 percent of respondents who used smartphones downloaded coupons, discounts or sale information.

Some c-store operators are already using location-based applications that allow customers to quickly find a store, while others are rolling out apps that engage customers through product preferences, rewards and coupons. "Oftentimes, the c-store consumer is at the store for an immediate-use item, but some retailers are using smartphone technology proactively through text alerts; for instance, notifying customers of an upcoming gasoline price change," Basilico said.

Nice N Easy Grocery Shoppes is targeting text messages to participating customers around specific times of the day, special events and holidays. For instance, the chain may offer a deal on a slice of pizza or sandwich at lunchtime, but promote a discount on a whole pizza during the drive-home hours. Redemption of texted coupons has been between 2 percent and 8 percent, with some 50 customers opting in to the "text club" per week, the company reported. Retention has been more than 97 percent.

Nice N Easy also offers a mobile app that allows users to "check in" at a store and unlock a product discount or other offer after three check-ins.

This spring, Chevron ExtraMile stores in California, Oregon and Washington began offering "Take Off to Adventure" game cards with chances to win one of 12 Disneyland Resort vacations, ExtraMile Bucks and other instant prizes. Customers could play online at www.extramilegame.com, which was optimized for smartphones.

Still, the full potential of smart-phone marketing may be hampered by one of the c-store industry's oldest foils: systems integration.

"If you think about the consumer being able to engage at the pump, even pay with a smartphone, then system integration — checking out, providing coupons, providing discounts, talking to the point-of-sale and the gas pump at the same time — is a challenge," Deloitte's Basilico said.

Outside the c-store industry, some retailers are seeing immediate dividends from mobile marketing investments, while others are still in the speculative phase of mobile strategizing, according to "The State of Retailing Online 2011: Marketing, Social and Mobile," conducted by Forrester Research Inc. for Shop.org. More than 90 percent of the 68 responding retail companies — including store-based and Web-based general merchandise and other retailers — have a mobile strategy or are in development, up from 74 percent a year ago.

One big number jumps from the Forrester results: 21 percent of all mobile traffic is coming from tablets — amazing considering the iPad launched just a year ago. Still, the overall amount of mobile traffic and revenue has not increased dramatically in the past year, suggesting that investment levels in site optimization may still be inadequate, Forrester reported.

So far, nearly half of the retailers reported having a mobile-optimized website; 35 percent have deployed an iPhone app. Fifteen percent said they offer an Android app.

While more retailers claim to have a mobile strategy in place, many simply have shrunk their existing sites on smartphones. Forty-four percent of retailers surveyed said they had done nothing special about their mobile sites.

While smartphones are best for real-time offers that supplement in-store experiences, tablets are able to enrich the brand experience in a consumer's home, the study concluded.

"After spending the last few years learning how to capitalize on social media and new mobile technologies, one of retailers' main focuses right now seems to be leveraging the tremendous popularity of tablet devices, such as the iPad," said Fiona Swerdlow, Shop.org's head of research. "As sales channels continue to blur in retail, companies are creating mobile apps that make their brands seem current, entertaining or fun, while at the same time creating a unique opportunity to connect with more shoppers than ever before."

For comments, please contact Barbara Grondin Francella, Senior Editor, at [email protected].