Mobile devices change shoppers' habits, retailers’ strategies

The Atlanta Journal-ConstitutionDecember 21, 2012 

Tamara Lewis uses her iPhone to search for Christmas presents for her daughter while waiting in the carpool line. At night, while watching the news in bed, she looks for boots on eBay from her iPad.

From the Walmart parking lot, the 50-year-old Sandy Springs, Ga., resident Googled “dance games for Wii” on her phone. When a store employee told Lewis the game she wanted was sold out, she said she might see if a nearby Target had it. If not, she would probably buy it online.

“I love the Internet,” Lewis said. “I probably use it more and more.”

As smartphones and tablets become ever-present, constant access to the Internet is tearing down the walls between online and in-store shopping. It means purchases that begin with an online search from an iPad at a child’s soccer game can finish with a coupon offer sent to your phone, and a subsequent trip to the store to buy.

Mobile devices promise smarter shopping and potential savings, but people also spend more on average when they buy from a tablet or smartphone than they do from a computer.

Even consumers without those devices will notice changes, as retailers adjust to the always connected shoppers. For instance, stores like Home Depot are updating what they have in stock and reducing the number of generators or outdoor tractors, while Nordstrom is removing some standalone cash registers in favor of mobile checkout.

About half of Americans own smartphones, according to a study by consulting firm Deloitte. Nearly 60 percent of those smartphone owners said they have used them for store-related shopping.

“There’s been a sea of change,” said Anuj Nayar, a PayPal spokesman. “Holiday 2012 is going to be the year it will go mainstream. It has gone mainstream.”

Mobile sales on Black Friday alone have increased from 2.3 percent in 2010, to 16 percent of all online sales, according to IBM Smarter Commerce. That follows a rise in traffic on mobile devices. On Thanksgiving, 25.3 percent of all online traffic came from mobile devices, a 66 percent increase from the year before.

The ability to research price on the go can be a advantage to shoppers, said Mechel Glass, vice president of community outreach for credit counseling organization CredAbility. But the ease of buying from a device could be problematic for those who are inclined to overspend.

“There are dangers associated with easy access to technology,” Glass said. “It doesn’t give you that ‘think about it’ time to ask, ‘Do I really need this?’ ”

While people are still most likely to hit the “buy” button from a computer, tablet purchases are not far behind. People are likely to spend the most when they shop on smartphones – an average of $97.82, compared to $96.84 when shopping on a tablet and $91.76 when buying on a computer, according to data from Monetate, a firm that provides personalization services for online marketers.

That doesn’t always mean that a purchase is made from a device, though. It simply means that shoppers like Atlanta resident Nathan Koskovich, who in the past would have left a store without buying a book if he couldn’t decide between two biographies, now will pull out his phone to read the reviews.

“It’s pretty helpful. I plan a little less ahead of time,” Koskovich said. “I’m probably more likely to buy it.”

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As more people use mobile devices, it is likely that a relatively small percentage of retailers will ultimately succeed in blurring the lines between online and in-store shopping, said Christine Barton, a partner at the consulting and business advisory firm Boston Consulting Group. Stores have varying abilities to spend money on technology and adapt their physical spaces.

In the long term, that could affect how many options shoppers have, which could in turn impact prices. As more shoppers get used to ordering items online, stores could shrink and could choose to sell fewer items – perhaps limiting colors or sizes – meaning it might be harder to walk in and out of a store with a specific item.

Although mobile purchasing is still a relatively small percent of all online buying, the influence of devices is such that all shopping will in some way be tied to the Internet, whether the purchase is made there or not, said Kasey Lobaugh, a principal at Deloitte Consulting.

“It really starts to be a game-changer,” he said. “It’s not economical to have 50 styles of blenders in one store.”

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