Shopping becomes a hybrid experience, as stores and smartphones intersect
finding the patterns
Even in era of rising e-commerce, consumers still want the physical-store experience. And mobile phones have become the bridge between both worlds.
—Daniel Lamplugh remembers going shopping with his dad on Black Friday. “Waking up at 6 a.m. the day after Thanksgiving is what I grew up doing,” says the University of New Orleans film student.
A lot has changed since those childhood days. Online retailers have forced many chains out of business. Consumers are increasingly shopping with their smartphones. Some have said the days of Black Friday – and the physical store itself – are numbered.
But a funny thing happened on the way to the future: Most shoppers are not going all-digital. Surveys show they’re eager for good experiences at retail stores. And all those Millennials doing their shopping on their phones? It turns out that they’re skipping shopping on their desktops and taking their smartphones to the mall.
This November and December, for the first time ever, retailer websites will get more traffic from mobile users than desktop users, predicts Adobe Digital Insights.
Far from undermining physical stores, smartphones are blurring the line between bricks-and-mortar and digital shopping.
“We live our lives with a hybrid of the physical and the digital,” says Kit Yarrow, a consumer psychologist and author of the 2014 book “Decoding the New Consumer Mind.” Retailers have to reach consumers in both realms, too. “They have to understand it’s not a question of either/or. It’s a question of combining the two.”
Take Heather Howe, an MBA student at Boston University, who used to go to Kohls at midnight with her grandmother for the Black Friday sales. “Millennials like shopping on their phones and online because it’s more convenient and because there are more options and more customization,” she says. “I went to the Vans store to try on shoes and then I actually purchased them online while I was in the store.”
That’s a growing trend. Last year, Target saw its mobile sales soar 200 percent during the Thanksgiving weekend compared with 2015. So far this year, counting Thanksgiving and sales for the morning of Black Friday, mobile phones were accounting for right around half of all online retailer visits and, surprisingly, nearly a third of all revenue.
While mobile sales are growing, the most prevalent use of smartphones in stores is researching products or looking up product information (58 percent), closely followed by checking or comparing prices (54 percent), according to a June survey of 603 consumers by Retail Dive, an online news source.
“My phone plays a huge role in online shopping, because I am on the email list for all of my favorite brands, so I get many emails daily informing me of sales,” says Rachel Lynch, who works in digital design at a Boston public-relations agency. “Also ... Sephora has an app that allows me to save items to lists, view weekly deals, chat with other users about the products, and read reviews. Online reviews are one of the first things I look at when I am about to buy a new product.”
Shopping in a physical store remains important to consumers. According to Deloitte, 92 percent of mobile phone owners use their smartphone while going shopping.
“Electronics and kitchen equipment are definitely online purchases for me, since they’re bulky to get home on the subway and often cheaper online,” says Michael Miller-Ernest, a manager at Whole Foods in Brooklyn, N.Y., who plans to do half his holiday shopping in physical stores. “The most fun gifts are the ones that come from passing a shop window or a stand at a holiday fair and seeing something that immediately makes you think of someone. That’s a pretty difficult thing to replicate online.”
Some 86 percent of consumers say they like “experience stores,” places they can test products but buy on mobile or online, a GPShopper study of 1,200 consumers found.
It’s not just Millennials who are pulling out their phones to shop. Over the past two years, smartphone sales to consumers 55 and older have been growing at more than three times the rate for 25- to 34-year-olds, according to the Deloitte survey. And these older consumers are using their phones as often than their younger counterparts.
“It doesn’t matter how old you are,” says Ms. Yarrow, the author. “Everyone is shopping like a Millennial.”
For retailers, the surge in smartphone shopping is requiring big shifts in how they approach these hybrid consumers. The idea is that they first have to touch consumers at multiple points in both their physical and digital world. Online retailers such as Warby Parker (eyeglasses) and Bonobos (men’s clothing) are opening physical stores to boost their online sales. Amazon earlier this year bought Whole Foods in a blockbuster move to expand its reach into the grocery industry, currently led by Wal-Mart.
Physical chains, such as Target and Wal-Mart, have made their websites more mobile-friendly. This summer, Wal-Mart agreed to buy Bonobos, its third acquisition of an online retailer since 2016, which with ModCloth (women’s fashion), should allow it to begin to compete with Amazon, which this year is expected to pass Macy’s as the nation’s largest clothing retailer.
Tottering in the face of Amazon’s onslaught five years ago, electronics retailer Best Buy reinvented itself, embraced the merging of physical and digital shopping, and this Black Friday offered deals on laptops that Amazon could not – or would not – match. The retailer also offered early access to its deals for customers who downloaded its mobile phone app – a trick Wal-Mart used to great effect last year.
Wal-Mart and Target have begun shifting business away from Amazon’s web service, which gave both retail chains access to a huge digital marketplace.
Small stores are more nimble than the big chains, so they have the opportunity to adapt more quickly to their customers’ online preferences, retail experts point out. But if they don’t adapt, they are most at risk from consumers using them to try out items but purchasing them online from a cheaper, and usually bigger, retailer.
The new era is also testing the boundaries between cutting-edge marketing and consumer privacy. Retailers have sometimes gotten into trouble, for example, by tracking customers’ location as they move through a store or as they approach it.
Retailers’ next steps are still evolving as they move to reach consumers through social media – another mobile-friendly technology – and by offering experiences that shoppers can’t get online.
On Wednesday, for example, Nike and Foot Locker jointly opened a temporary pop-up shop on Fifth Avenue in New York, called Sneakeasy. Customers will each be paired with a “guide,” a staff member who will help them choose among 20 soon-to-be-released and limited-edition classic shoes.
Retail experts say stores are still struggling to accommodate the new mobile shoppers, especially since the technology keeps changing.
This fall, Wal-Mart began offering customers the option of buying goods through Google’s voice-ordering service, a partnership that could make mobile phones even more central to the shopping process.
“The mobile universe we have all grown to love – and think we understand – is shifting,” Deloitte concluded. “For all we know, we may just be on the eve of the next generation of mobile and a new growth spurt.”
– Joseph Dussault in New York and Bailey Bischoff in Boston contributed to this report.