This past holiday season saw a surprising surge in mobile commerce, which captured nearly a third of online sales. Yet the U.S. is actually still far behind mobile-loving consumers in other world markets.
In fact, while 22% of American shoppers make a mobile purchase on a monthly basis, shoppers in countries such as China (66%), India (59%) and Turkey (41%) are much more inclined to shop on their mobile devices that often, according to the PwC 2016 Total Retail report. With this in mind, it is clear that the bar is set very high for how far mobile commerce adoption could go in the U.S.
It appears that the relative lag in U.S. smartphone usage can be attributed to numerous cultural factors:
Consumers remain well-entrenched in purchasing online with a PC;
70% of U.S. respondents are concerned that their personal credit information could be breached during a smartphone purchase; and
The availability of more shopping options in the U.S.
Mobile Does More In World Markets
In markets like China, the availability of apps combining multiple consumer-friendly functionalities promotes much higher usage rates for mobile devices. The report highlighted a major source of China’s mobile explosion: WeChat. The mobile messaging app has been adopted by 650 million users in China, and serves as a means for consumers to chat with friends, buy products online, use as a mobile wallet and even hail a cab.
“I was in China in November 2015, and I was blown away by the mobile adoption rate throughout the country across all generations,” said Steven Barr, US Retail and Consumer Leader at PwC. “There is a very meaningful difference between how we’re using our phones in the U.S., compared to how they’re using phones in China. In the U.S., we use the phone more to access coupons and promotional codes, research products, compare prices and access loyalty programs.”
While it appears countries such as China are leading in overall mobile adoption, U.S. consumers use their mobile devices for different shopping-related reasons. Up to 63% of U.S. shoppers prefer to receive mobile offerings and coupons, while 31% are comfortable with geolocation technology tracking their phones — slightly higher than their global counterparts in both cases.
Millennials Make Presence Known
The surge of the Millennial population — shoppers aged approximately 18 to 34 — is becoming a greater factor in the global mobile push. More than a third of Millennials believe their mobile devices will become their main purchasing tool, and more than 80% already use their devices while shopping in the store. In comparison, just 55% of shoppers above age 35 use their devices to shop in stores.
“A common mistake is to think of Millennials only as a younger generation of late teens to early twenty-somethings,” Barr said in an interview with Retail TouchPoints. “As the Millennials age, there is a significant portion of them that are now in their prime shopping years, and are beginning to purchase homes, start families and figure purchasing decisions around larger, more expensive items.”
Online Shoppers Prefer Convenience Above All
Whether they are trying to shop online via a mobile device, a laptop or a desktop, U.S. consumers for the most part hope to complete their transaction as conveniently as possible. As many as 58% of American shoppers say convenience is the main reason they shop online, far outpacing the 32% identifying price as a key factor.
These consumers are willing to make tradeoffs for convenience as well. The report found that on average, consumers would be willing to pay anywhere between $62 and $108 for delivery of a $1,000 piece of furniture.
“As we experience demographic shifts, especially the emergence of Millennials in their prime shopping age and Gen Z not far behind, they are generations that expect to have their needs filled immediately,” Barr said. “That need is greater than their desire for the best price. It would be misleading to say they don’t care about price, but they are suggesting mostly that they’re focused on fulfilling pressing purchase requirements.”
With the online shopping experience catering to consumers’ taste for convenience, retailers now have to take extra initiative to get customers into the store. Once they’re in the door, the merchant has to then pull out all the stops to ensure they will stay. Since the actual act of buying often now takes place online, retailers must specifically ensure that the parts of the store experience that can’t be replicated online are functioning successfully.
The top steps for retailers to improve their in-store experience, according to respondents of the PwC survey, include:
Ease of checkout (46%);
Sales associates with a deep knowledge of the product range (41%);
Ability to check other store or online stock quickly (32%); and
In-store WiFi with fast, simple login (23%).
“There’s tremendous pressure on store-based retailers as a result of the growth of online only retailers,” Barr explained. “The stores have to have a clear identity stating their purpose and relationship with the consumer. These identities doesn’t have to be the same across all retailers, but the retailers have to communicate very clearly with the consumer so that the identity is well known.”