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How app-centric consumers are transforming retail

Shopper on a mobile device

The retail customer journey has usually been a fairly predictable process.

Step 1: See advertisement for item on television, radio or in a magazine.

Step 2: Browse reviews of item online.

Step 3: Go in-store, potentially be up-sold by staff.

Step 4: Purchase item.

But for today's app-centric, "always on" shoppers, those clear-cut steps are beginning to blur. Instead of browsing reviews on their personal computer, consumers are scrolling through complaining customer Tweets as they stroll through store aisles. Instead of clipping coupons at the kitchen table, they're receiving deals and codes straight to their inbox.

The age of the smart shopper has arrived - and it's rocking the retail industry to its core.

"You have to be mobile-ready as a retailer," says Lauren Freedman, president of the Chicago-based e-tailing group, Inc., who helped UPS analyze the results of the 2016 UPS Pulse of the Online Shopperstudy, in which comScore surveyed 5,300-plus online shoppers about their shopping behavior.

"The thing to remember about always-on shoppers is that they are using their devices to buy, check customer reviews and comparison-shop right there in the aisle," she says.

Notably, four-of-five mobile shoppers have used a retailer's app instead of a retailer's website, according to study findings. "Apps can be very effective, especially for loyal customers, because you can complete a transaction much faster," Freedman says. App use also skews toward the most frequent "power shoppers," 42 percent of whom say they always/often use a retail app.

Freedman cites Target's Cartwheel as a game-changing app. "It moves the customer to the sale quickly and easily because of fast access to stored profile information, strong personalization and marketing before and during store visits," she says.

She also cites The Home Depot's app. "When you go into Home Depot having placed an order for store pickup, you will know exactly which aisle to find the light bulbs. All of this goes to improving the customer's shopping experience and saving time," Freedman says.

"Customer experience will always trump efficiency in a store environment," says Jonathan Spooner, retail strategist at Intersection, a Manhattan-based urban design and technology company. "Shaving microseconds off checkout time can seem like a win, but if you can get people to stay in your store to watch a cooking demo, you are going to do way better."

He cites an experiment conducted at UGG brand retail stores last holiday season using Intersection's WindowShop technology to improve the shopping experience. After a customer tries on an UGG boot, sensors in the carpet underfoot read RFID tags on the boot and display similar styles, available colors and info about items other customers have bought on a nearby touch-screen monitor. "Stores with that platform in place had 30 percent more sales through online channels," Spooner says.

Capitalize on "snackers"

A recent Microsoft study of Canadian technology users found that online attention spans have dropped down from 12 seconds in 2000 to eight seconds in 2013. But another fascinating result is that 77 percent of younger participants said that when nothing is occupying their attention, they reach for their phone. And that 52 percent check their phone at least every 30 minutes.

Spooner calls this "snacking" behavior - and it's an opportunity retailers can take advantage of.

"Retailers haven't thought about mobile this way, but customers who are spending time playing Candy Crush or texting could just as easily be opening apps, responding to discount coupon offers or accessing websites designed with mobile in mind," he says. "Retailers can sneak in via mobile, get in front of customers this way, and bring some of them into the store."

What can smaller retailers do?

"The first thing you need is a website that showcases what you offer and gives people a sense of your personality," Freedman says, adding that it's also important to understand how much traffic and revenue is coming your way via mobile. "For some retailers, it's as high as 50 percent of yearly revenue, so how your site renders on smartphones is a key consideration," she says.

Freedman then recommends capturing e-mail addresses to market directly to online shoppers. Another option is to blog about subjects your customers care about, integrating product favorites.

"The real advantage for smaller retailers is going to come from forming a trusting relationship and having customers rely on you," Spooner says. You can't compete with the big box stores on price, but you can stand out by building around a community feeling and providing a positive shopping experience, he says. "A smaller company will always win by connecting one-on-one using communication, messaging and stellar service."

For more details on the many ways digital shoppers have evolved, and insight on the new logistics challenges retailers face as a result, download the full study in an easy-to-read e-book format.

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