Friday, January 21, 2011

Mobile Shopping and the Just-in-Time Consumer:

U.S. consumers are changing the way they shop, and one has to wonder what role mobile shopping applications could have in the future, based on those changes. It isn't just that people can use, and do use, their mobiles for product research and evaluations. There is a physical dimension as well.

A study by Nielsen finds that consumers are making more small trips to the store, even as they also increase trips to big-box supercenters and club retail channels for larger purchases. Both behaviors are typical of the most-affluent shoppers, not just the rest.

Trips with a smaller sales volume are of greater importance to the grocery, drug, convenience, gas and dollar channels, but trips resulting in larger purchase voluems are gaining ground. Here too there are differences across income classification, providing opportunities for retailer/store-specific and consumer segment trip-type solutions.

Shopping trips are segmented into four types, according to Nielsen. "Immediate" trips tend to be conducted for low-value products for which there is an immediate need, and tend to average sales of $15 per trip. "Fill-In" trips feature slightly higher value baskets averaging $51 per trip.

"Routine" trips are weekly, high-value shopping trips averaging $98 per trip while "Stock-up" trips average $242 per trip.

By household income, affluent households ($100,000 or more) ncreased the percentage of smaller trips within supercenters and club stores, and drove more frequent and larger trips in smaller formats such as drug, convenience and dollar stores.

The $70,000 to $99,000 income households reduced larger trips across most channels, but increased smaller trips within supercenters and club stores. Stock-up trips were generally off among these households.

$50k – $69.9k – Middle income households ($50,000 to $69,900) shopped less frequently overall while increasing their trips to value-centric supercenters and dollar stores.

Households in the $40,000 to $49.900 income range decreased trips across most channels, but these households increased their immediate, fill-in and routine trips to club stores, with smaller and stock-up trips to dollar stores also up.

Households in the $30,000 to $39,900 income range increased the number of small trips and supercenter trips, but stock-up trips declined by 10 percent in that channel.

Households in the $20,000 to $29.900 range slightly increased trips to smaller supercenter and club trips, while stock-up trips declined by 10 percent. Dollar stores are performing well among this income group that retailers are targeting.

Households with income less than $20,000 made drastic cutbacks on small grocery trips, while increasing larger grocery and club trips. This may be indicative of pay period buying behavior. This income group shows big drops in larger supercenter trips and softness in dollar store trips.

One might argue that mobile marketers should focus on the fewer trips with higher volume. Those trips tend to be for "repeat" purchase items where a chance to switch brand preference could have long-lasting impact. But one might also argue that there are truly few products, even those bought on "immediate" trips, that do not have brand preference angles. In fact, even before a shopper has a chance to choose between brands on the shelves, a prior decision has been made to visit a particular retail outlet.

The issue is the role mobile marketing can play in shifting locational preference before a shopper is physically in aisles, and then to shift brand preference while shoppers are in the store, shopping. Obviously, mobile marketers will, by default, wind up focusing more on higher-income households to a large extent, because those are the homes with smartphones. But that is going to change over time, as the smartphone becomes the standard device.

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