Opinion: Online retailers need to wake up to 'me time'

Christian Kugel
By Christian Kugel | 5 May 2014

Let’s be honest: Aussie retailers have been behind the eight ball when it comes to online retail.

Deloitte described their progress as “snail-like” in a report at the end of last year. Companies were worried about competition from overseas, but most expected only a tiny amount of their sales to come from online and store expansion was seen as the primary growth driver.

Yet, Roy Morgan, in its State of the Nation Report last June, estimated that 9% of the $258 billion retail market is spent online – and the number of people using smartphones to make purchases had doubled in the previous 12 months. It’s highest amongst tablet owners, with AOL’s Tablet Shopper report showing that 73% of owners had shopped on their device.

We can expect mobile devices to become even more popular with shoppers as time goes on – providing an opportunity, or a threat, to retailers, depending on how you approach the issue. Frankly, it’s a massive advantage for local retailers because it extends shopping hours without paying extra overheads.

These numbers also further the support the notion that phones no longer serve a pure utility function. Today they are entwined in our lives, used to help us unwind, escape and relax as much as for managing schedules and communications. And, what do we do when we unwind and relax? Well, for a chunk of that time, we shop.

So, having a place on mobile devices is as vital an environment for a retailer to inhabit as a spacious air-conditioned shopping mall with piped music designed to open our wallets. They’re always on, we’re always using them and the more chances people have to shop, the more they will shop.

In fact, shoppers on tablets are 35% more likely to shop at least weekly compared to shoppers on computers.

Thankfully, these days, most major retailers are wise to the trend and have mobile e-commerce sites. But, the biggest danger is treating online shopping as nothing more than a process. While you need to ensure it’s easy to make a purchase, you also need to influence the decision path of the customer.

Almost half of the time spent on a mobile device is what AOL calls 'me time' – compare that to the 19% spent socialising. During 'me time' we want to be entertained, made to laugh and find content relevant to our interests. It’s motivated by the need to unwind, relax and escape from the worries of the day.

For retailers, this is the early phase in the sales cycle, where buyers can be influenced using the power of brands and be made aware of new products that will enhance their lifestyle. Conventional thinking has been that mobile devices are really best suited to last-minute impulse purchases, when, because we’re tied to our mobile devices, we can implement smarter ad campaigns that influence purchase decisions very early on.

Until recently, we used our 'me time' relaxing in the lounge room in front of the TV. That was great news for advertisers because they could reach prospects when they were relaxed and ready to receive information.

Now, people are turning to their mobile devices – 68% of all the minutes spent on these devices are spent at home (excluding voice, text and email). Tablet usage peaks from about 7pm, just as desktop web usage starts to wane. Mobile web usage, obviously strong during the day, strengthens even more in the evening.

There’s another obvious strength mobile offers the e-tailer – we have it in our hands over the weekend, when we have more me time and, hence, more time to consider a purchase and follow-through with it. A study of major campaigns served by AOL showed that 39% of mobile conversions happen on the weekend, a large increase compared to weekdays.

For advertisers the message is clear – don’t treat mobile only as a mechanism to complete a sale. These are rich media devices capable of assisting with the buyer’s product discovery. We browse, we research, we buy, sometimes all on the one device, often within a 24-hour time frame. Retailers have caught up to the need to make buying easy, but buying more influence early on will reap significant returns.

Christian Kugel
VP Consumer Analytics and Research

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