Customers use smartphones to make tills ring

17th May 2011

Marketers cannot afford to ignore a report published by Morgan Stanley that forecasts mobile internet access will overtake desktop PC access by 2014.

Consumers are already familiar with buying products online and are becoming more comfortable with purchasing on their mobiles. In the last 2 weeks, fashion retailers New Look and Brand Alley have both launched mobile buying technology, while Asos and John Lewis started selling smartphones last October.

According to research by consultancy Simpson Carpenter, shown exclusively to Marketing Week, 27% of people say they have used their mobile to make an online purchase and nearly 50% say they would consider buying goods in this way in the next year.

Hotels and travel will see the highest percentage increase in purchases by m-commerce in the next 12 months, followed by white goods, then groceries.

Currently just 11% of the 1,200 research respondent’s say they pay for hotel rooms and travel tickets on their smartphones, but this figure is set to treble in the next 12 months.

Meanwhile, 7% say they buy large appliances like fridges via their smartphone but the report predicts a 187% increase in people buying these products via m-commerce.

While groceries are among the most popular purchases via mobile, with 11% of consumers saying they have bought them in this way, there is still potential for supermarkets to tap into the trend. Over the next year the number of people using a smartphone to buy from a supermarket will rise by 132% according to research.

Rachael Fraser, director of the retail and consumer team at Simpson Carpenter, explains that people often need an incentive to buy via their phones. “People use smartphones to buy when they need to access specific promotions, make a last minute purchase or when they want something with limited stock” she says.

This is a trend seen by booking website Hotels.com. Marketing director Christelle Chan says consumer’s use mobiles and desktop internet in different ways. They book on their mobiles when they need a hotel room imminently, or use mobile to search for rooms, and then make final bookings on a desktop PC.

The research highlights that people are not necessarily moving away from one buying method towards another, but are using smartphones to complement what they are already doing.

More than 50% of respondents claim they have used mobile for research in the last year, while 88% say they have used desktop computers for the same purpose.

Simpson Carpenter account director Alan Ellerton comments “M-Commerce is being integrated into the shopper’s journey and is used as an additional tool to research and buy”.

The goods most likely to be bought online are small items such as books and DVD’s. This is not a surprise to Alun Williams, ecommerce director at TUI, who sees these items as commodity goods, unlike the offerings of travel companies such as his own.

The most popular m-commerce apps for buying these types of entertainment goods are Amazon, Ebay, Argos & Tesco, respectively.

Fraser at Simpson Carpenter says, “The best sites in consumers’ eyes offer a simple interface. By making buying easy, they overcome some of the biggest barriers to m-commerce”.

The main barriers to buying are screen size (43%), Clarity (41%) and connection (31%). This may seem quite obvious but there are several brands that have not yet optimised their websites for mobile. For some, it makes sense to develop an app first, as in the case of BrandAlley, which launched an IPhone app last month. Ease of use is absolutely key, says Ellerton. “Design improvements are needed to overcome they key barriers to mobile commerce. The major barriers are technical.”

This may go some way to explain why most mobile shopping actually happens when a person is stationary, according to the research. Two-thirds of people say they are at home, work or at a friend’s house while they are shopping via their smartphones, with the remainder (34%) saying they are on the move. “M-commerce is currently not that mobile” says Fraser. “The majority of purchasing is taking place at home or at work when buyers could use a desktop computer instead. The main reasons for this are convenience and speed”.

According to the report, the people most likely to buy on their phones can be classed as “smartphone enthusiasts”, who are likely to have got such a device before their friends and use it as a shortcut to buying things, rather than physically going into shops. These people frequently take advantage of discount vouchers and are likely to shop at the last minute. The group currently makes up 30% respondents, followed by “online addicts” (27%), who are impulsive and love technology.

And while the remaining 43% are made up of groups less keen on mobile shopping, they make up the four segments of consumers among the research identifies distinct behavioural characteristics. There is likely to be potential for targeting these groups individually and encouraging greater take up of m-commerce.

The message therefore is clear: brands without mobile websites should make developing one a top priority because the opportunities they present are huge.

Source: MarketingWeek