Friday 09 December 2016

Connected, Social Shopping in the Palm of Your Hand – Emerging Trend Worldwide

The following post is an excerpt from Edelman Consumer Marketing’s 12on12, a compilation of essays from some of our consumer marketing leaders around the globe. We will be publishing an article from the series for the next four weeks. To read more essays from the 12on12 series, visit the Edelman Digital SlideShare channel.

Riding Hong Kong’s shiny MTR subway trains, an observer is immediately struck by the number of commuters wired into (or playing with) their mobile phones. The city’s buses are Wi-Fi-enabled, and taxi drivers often have three or more mobile phones on their dashboards.

Despite its proximity to the global manufacturing giant, Hong Kong is not China. Social media sites like Facebook and Twitter, banned in the communist behemoth, thrive in Hong Kong. Accordingly, Hong Kong’s 7 million citizens have their own unique cell phone culture. Here, the devices are as ubiquitous and inexpensive as dim sum dumplings, and most citizens therefore indulge in more than one. The Office of the Telecommunications Authority Hong Kong reports that the city’s mobile penetration rate is 200.6 percent.

Hong Kong: Connected

Because of its geography, population density, and unique history, Hong Kong also has a distinctive culture, one that trickles down into how locals use their mobile phones. Denizens’ twin passions, shopping and eating, also have unique mobile practices.

To better understand how people in Hong Kong use their cell phones to shop for goods and services, Edelman conducted survey that asked about smartphone use related to shopping.

 

Edelman Survey: Shopping via Smartphone Still Developing

Despite the high penetration in the community, 35 percent, the direct impact of smartphones on shopping is still developing. Smartphones in Hong Kong are heavily used by a younger demographic (aged 21-29) for researching and on-the-go information gathering of products and services (e.g., places to eat out, finding phone numbers, and reading movie reviews). Comparing prices and sharing pictures of intended purchases (or of meals about to be devoured) is also common.

However, on the whole, these smartphone users do not make purchases on their devices, with only a small percentage saying they had done so. Those that do confined those purchases to what they consider low-risk items (cheap and easy to obtain products, generally priced under US$20). Fear of lack of payment security, and possible fraud, increases reluctance of making purchases by smartphones.

When probed further, most respondents stated that they preferred to go to a shop and try a product themselves, even if they were relatively sure about its reliability beforehand. In fact, most stated that they find storefronts to be more convenient and fun places to shop when compared to online buying.

Shopping: A National Pastime

This brings the discussion back to environment. Hong Kong is a high-density urban city with easy and ready access to retail brick-and-mortar outlets and malls with long operating hours (10 a.m. to 10 p.m. in many cases). It’s a busy, crowded place. Physical shopping is often social and a family event – in fact some laugh that it a national pastime much like sports in other countries! As the average size of a Hong Kong home is generally small, shopping locations serve a role as places to meet, socialize, and eat meals with friends. In addition, the tactile nature of shopping at a store is still important here – people trust a product more if they can feel it in their hands, especially if the product is expensive.

Not surprisingly, Hong Kong consumers closely evaluate risks versus rewards when shopping. This, coupled with retail outlet saturation, means that local storefront shopping is convenient and reliable. Their shopping habits related to online purchases and, therefore, are culturally and environmentally informed. Given the market conditions, there is good reason to believe that opportunities to grow the mobile purchasing marketing Hong Kong exist.

Risk-aversion and a propensity to experience products firsthand before buying are obstacles, but not insurmountable ones. Building consumer trust will be a major factor in breaking through the barrier of apprehension. Companies and well-established brands, with known and reliable brick-and-mortar storefronts, are likely to be more trusted by shoppers to safely conduct mobile and online purchases. Companies without these advantages are likely to have more difficulty.

Building Brand and Consumer Trust

While having a trusted, established brand and a multitude of stores is helpful, it does not eliminate the need to motivate customers to change their well-entrenched purchasing habits. Those that make it easier to scroll through meaningful information on phones by creating comprehensive online and mobile-ready catalogues of their wares will likely fare better in Hong Kong. Further, market networking, offering discounts for online and mobile purchases, sale campaigns, and couponing also will help win early adopters. In fact, more than 75 percent of respondents to the Edelman survey answered that a mobile coupon could convince them to make purchases on their phone. Location-based deals or real-time offers during key shopping times will incentivize and sway purchases to brick-and-mortar outlets.

Mobile Payments Internationally

Mobile payment service providers, too, should be ready and willing to show their reliability to gain the trust of early adopters, and to build trust in their brands and services. Despite the fact that 75 percent of respondents in the Hong Kong mobile shopping survey said they never use their mobile phones for banking, the industry is expanding rapidly. PayPal alone projects $3 billion in transactions from its PayPal Mobile service in developed nations next year.

It is only a matter of time before more trusted mobile payment platforms are available in Hong Kong. As they arrive, these service providers will help bring down risk associated with executing monetary transactions on mobile phones, leading to wider adoption of the trend.

Mobile and online buying has potential to be explosive, but retail will survive. They may adopt mobile purchasing platforms, but Hong Kongers will always find a thrill and sense of accomplishment from lugging multiple shopping bags home like trophies after a long Sunday shopping marathon.

Social Shopping in the US

Meanwhile, in the United States, the shopping experience starts well before you ever step foot near the local mall. And consumerism is no longer static, tethered to your house or your favorite store. It’s dynamic and constantly changing, able to go wherever you do and stay on your schedule. It’s not exclusive, but inclusive, and most of all, it’s portable.

Once upon a time, we read a magazine or the Sunday paper, and we spotted something that we absolutely had to own. So we read a little more and we discovered how we could buy this shiny new life-changing item. Then we drove to the appropriate retailer with credit card in hand. It was that simple. But too often we flew in optimistically blind. Armed with sparse legitimate information, we found ourselves at the mercy of the retailers and paid the price, quite literally.

But let’s buy something today. Where do we start? At our computer? Sure. Maybe we search Google or take a look around eBay* or Amazon. But we’re all busy. There’s no time and not a minute to waste. Most likely, we’re out the door and in our cars before the computer even turns on. Luckily, we can do all of our shopping with that little thing in our pockets.

Mobile Shopping Research: Staying Connected

And our mobile devices don’t merely provide us gateways to our favorite retailers, they allow us to interact with these venues in more efficient ways. They inform us about the products we want to own, with intelligence we wouldn’t have dreamed possible before. They connect us to communities of other shoppers, many discerning, plenty more critical. They even offer us incentives and deals for purchasing the very items we would have bought anyway.

For example, let’s say I zoom out the front door, messy hair, make-up partially applied, on the quest for the local Starbucks**, of which there are actually six. On this block. The official Starbucks app not only directs me to the closest store, it allows me to build a triple-shot Venti Latte, and then pay for it from my phone.

Now it’s off to the mall to pick up a birthday gift for my nephew, and maybe a new outfit for myself while I’m there. A quick check of the IGN app shows that the new Legend of Zelda Wii video game scored a 10 out of 10. The app also lets us know that the game is rated E for everyone, which means that it’ll pass the parent check, too. A map search of ‘videogame’ returns a nearby GameStop. That’ll do. Ten minutes later, I have the game in hand, but it’s nearly seventy bucks. Is that really the best deal available? I boot up my eBay RedLaser app to find out. It seamlessly uses my mobile’s camera to scan the Zelda package’s barcode, showing the cost of the game at eBay, Buy.com and other online retailers, as well as brick-and-mortar retailers nearby like Best Buy. A few clicks later, and the video game is purchased, and en route to my mailing address.

All of this shopping for others reminds me that I haven’t purchased anything for number one. The Gap is nearby. A half hour later, I’ve got four outfits waiting in a dressing room for my perusal. Mirrors can’t always be trusted, there are no girlfriends to accompany me on this outing and the salespeople will naturally swear that everything looks absolutely fabulous.

So, again, I turn to my smartphone and take a few snapshots of each outfit in the mirror, striking my best poses in the process. The Go Try It On app uploads photos of my potential outfits and allows other like-minded fashionistas to instantly vote and comment on them. Within minutes, I have honest feedback, and I’m two outfits lighter. I text pictures in group chat to four of my best friends. Studies show that 10 percent in the U.S. with smartphones have texted photos or videos prior to purchase. I use my phone to quickly scan Gap.com to see if I can find the same items for less, which I do, so I negotiate with the store clerk to give me the online price. I check out, using the mobile check-out feature (and receipts emailed to me!), and am so excited about the deals I just scored that I post the sale on my Facebook page and “like” the Gap’s FB page while I’m at it.

Checking-In and Checking Out

Shopping accomplished, and best of all, I checked in via Shopkick and earned some ‘kicks’ that I can redeem for movie tickets later. Now it’s time to eat, so I load Yelp’s monocle feature, which augments retailers over my camera screen appositionally aware real-time, and choose a five-star-rated Chinese restaurant. I need some cash, so I use Google ATM Finder app to find the closest and safest ATM from my mobile.

This is a snapshot into the connected shopper not of the future, but of the present. All consumers need is a mobile phone and the ability to download some apps, which do all the heavy lifting.

Consumers are already using their phones to complement or bypass traditional brick-and-mortal retailers. According to data from IBM, mobile traffic increased from 5.6 percent in 2010 to 14.3 percent in 2011 during the Black Friday shopping time frame. Meanwhile, on Cyber Monday, 10.3 percent of shoppers used a mobile device to visit a retailer’s site, which is up from 3.9 percent the year before. That survey of 1,000 consumers found that more than half (62 percent) would be willing to make a purchase on their mobile device this holiday season if prompted by coupons, discount offers, text alerts, gift cards, or loyalty points. In a similar survey conducted by Sybase 365 a year ago, only 32 percent of respondents said that mobile incentives would encourage them to make a purchase on their device.

As our mobile devices become more powerful and more capable, we turn to them again and again (and at increasing rates) to interface with our digital world. In the U.S., our phones are increasingly extensions of our selves, and we rely on them, even with their limitations. A dropped signal or slow data speeds are acceptable caveats as we browse our favorite retail store from a public park bench.

Forrester reports that by 2012, almost every mobile phone in the U.S. will, in fact, be a smartphone with an Internet connection. 3G and 4G data speeds will slow up some commerce, but perhaps not for too long. By 2020, we’ll be connecting at speeds of 1 gigabyte per second, or approximately 500 times faster than we do today, according to Google.

So, whether you are shopping in Hong Kong or Nashville, chances are your smartphone is coming with you. It is our job as marketers to understand the relationship our target audiences have with their technology and leverage that to our client’s best advantage.

Edie Kissko assisted with the composition of this article.

*eBay is an Edelman client.

**Starbucks is an Edelman client.

Article source: http://feedproxy.google.com/~r/EdelmanDigital/~3/Kn_8-UQrrq8/