IBM study: Sales from mobile devices up 15% in Q2; social shopping drops
ARMONK, N.Y. — Mobile shopping rose in the second quarter while social media sales fell, providing an indication of where U.S. retailers may invest in order to capture the attention and loyalty of the digital consumer, according to a new report from IBM.
The IBM Retail Online Index, a cloud-based analysis of the online retail sector, reported that retailers experienced 15% growth in sales from mobile devices but saw a 20% decline in sales traced to social media based on a much smaller base over this three-month period.
The report identified several trends of importance to chief marketing officers, e-commerce leaders and customer service professionals. Over the second quarter, consumers continued to embrace mobile devices as a shopping tool, with mobile commerce accounting for 15.1% of all online purchases, an increase of more than 14%. Despite this momentum retailers are still struggling to sustain substantial success with their social media efforts, evidenced by a more than 20% drop in social shopping.
One explanation for social commerce’s failure may be the absence of a CMO and CIO alliance, which is critical as marketing and online commerce become increasingly technology-driven, the IBM study reported. The lack of this alliance hinders the deployment of integrated technologies capable of fueling effective social media efforts.
A second factor is marketing’s inability to form a clear consensus on how to utilize social channels. As a result, the retail online index saw a decline in positive sentiment around social media, which according to the online index dropped from 25.1% in the first quarter to 18.6% in the second quarter. Leading factors for this shift were the lack of deals being offered by retailers through these channels, which were more prevalent in the first quarter.
“Shoppers today are shifting from a singular online approach to a multi-channel experience that includes both mobile and social media,” said Craig Hayman, general manager at IBM Industry Solutions. “As a result, retailers must be prepared to connect with their customers on all fronts, or lose them to the competition. As we enter the home stretch for the 2012 holiday season, we will continue to watch how CMOs and CIOs tackle these challenges and create social media efforts that deliver value to the customer while driving revenue for the business."
In other key findings:
Total online sales for the quarter were down 2.3% over first quarter 2012;
The second quarter grew by 2.3% and the average number of items per order increased by 2.6%; and
While the iPhone continued to rank one for mobile device retail traffic at 8.2%, Android surpassed the iPad, which finished at 6.8% and 6.7%, respectively.
Americans use smartphones before, during and after in-store visits
TORONTO — A recent survey of more than 6,500 U.S. consumers found that Americans consult their social media applications before, during and after retail store visits.
The survey, conducted by customer experience management solution provider Empathica, found that mobile and social customer experience strategies are becoming more important than ever for brands, with nearly 3-in-4 consumers using Facebook to make retail and restaurant decisions.
The findings also showed that 27% of smartphone owners consult reviews before making purchases, and another 55% use their mobile devices to check prices while shopping in-store. Other popular mobile actions include scanning a QR code (34%) and writing a review (9%).
“Today’s consumers routinely perform a variety of in-store activities on smartphones and mobile devices,” Empathica chief customer officer Gary Edwards said. “Whether it’s comparing prices or scanning a QR code for a discount, brands that ignore the use of mobile technology in customer and guest experiences will miss key opportunities to connect with a large pool of potential brand advocates.”
The Empathica Consumer Insights Panel also showed that consumers are relying on social media as an important tool in decision-making. Nearly three-quarters of consumers use Facebook to make retail or restaurant decisions, while half of consumers have tried a new brand due to a social media recommendation.
For retailers and restaurants that post all user-generated content online, negative reviews don’t necessarily dissuade consumers from trying a brand, especially if it has a generally positive online presence. Only 26% of consumers indicated that they would definitely avoid shopping at a store if they first read a negative online review.
Other key findings of the survey include:
More than one-third of survey respondents (37%) have visited a brand’s webpage using a mobile phone;
Although 55% of consumers are willing to “like” brands on Facebook, women (64%) tend to use the “like” button more than men (47%); and
Approximately 89% of people who have shared a positive experience with a brand via social media in the last three months also “liked” a brand on Facebook; only 36% of those who have not shared a positive experience with a brand via social media in the last three months “liked” a brand on Facebook.
Eighty-two percent of consumers are willing to engage retail and restaurant brands in online conversations if they believe it will improve future experiences, but only 62% believe that brands monitor online conversations and just 30% think that brands act on customer feedback.
99 Cents Only opens Santa Barbara store
CITY OF COMMERCE, Calif. — 99 Cents Only Stores is opening a new store in Santa Barbara, Calif., on July 26.
The new store — located at 424 State St. between Haley and Gutierrez Sts. — is approximately 12,900 sq. ft. and will feature a perishable food department, including produce, dairy and frozen foods.
99 Cents Only currently operates 301 stores, including 220 stores in California, 37 in Texas, 29 in Arizona and 15 in Nevada.