How We Shop Differently on Our Phones
Skip to content
Marketing Data Analytics Strategy Dec 7, 2015

How We Shop Dif­fer­ent­ly on Our Phones

What’s in your cart? Depends on the device you are using.

Our mobile consumer behavior determines how we shop on phones.

Yevgenia Nayberg

Based on the research of

Rebecca Jen-Hui Wang

Edward Malthouse

Lakshman Krishnamurthi

Con­sumers have come to love their mobile devices — that much is cer­tain. But how does the tech­nol­o­gy shape their shop­ping behavior?

Add Insight
to your inbox.

We’ll send you one email a week with content you actually want to read, curated by the Insight team.

Mobile shop­ping is no longer a future trend. It is hap­pen­ing now,” said Rebec­ca Jen-Hui Wang, a mar­ket­ing Ph.D. can­di­date at the Kel­logg School. Though the impor­tance of mobile shop­ping is wide­ly rec­og­nized, and pri­vate com­pa­nies undoubt­ed­ly have their own data about mobile orders, few aca­d­e­m­ic researchers have looked at how cus­tomers’ habits change when they pick up their iPads and smartphones.

Until now. In recent research, Wang and her coau­thors — Lak­sh­man Krish­na­murthi, a pro­fes­sor of mar­ket­ing at the Kel­logg School, and Edward Malt­house of Northwestern’s Medill School of Jour­nal­ism — find that mobile tech­nol­o­gy has very dis­tinct advan­tages for retail­ers. But it also has dis­tinct disadvantages.

It gen­er­al­ly does not lead peo­ple to search out new items, they found, or to care­ful­ly weigh their options. When cus­tomers shop with a mobile device, they tend to pur­chase things that are famil­iar and that they buy reg­u­lar­ly — mean­ing that mobile is prob­a­bly not the best plat­form for intro­duc­ing a new product.

On the oth­er hand, mobile shop­ping is very effec­tive at build­ing loy­al­ty between a cus­tomer and a retail­er. It fos­ters what mar­ket­ing experts call stick­i­ness” — the ten­den­cy for shop­pers to pre­fer, and keep return­ing to, brands and retail­ers that they trust.

For retail­ers, prob­a­bly the great­est ben­e­fit of mobile tech­nol­o­gy is the way it builds and strength­ens rela­tion­ships with cus­tomers who buy at a low vol­ume. Mobile shop­ping leads them to buy more fre­quent­ly — and to place larg­er orders.

The more oppor­tu­ni­ties you give a cus­tomer to inter­act with a retail­er, the more the val­ue of the retail­er goes up.”

The impact on the low spenders is much greater than the impact on the high spenders,” Krish­na­murthi said. If you’re a loy­al buy­er, I have you any­way. But what I’d like to do is con­vert the low buy­ers over time into heav­ier buy­ers. And [mobile shop­ping] can cre­ate some stick­i­ness, so that you buy more than you used to. And we can build on that. So, over the long run, this can be quite valu­able to a retailer.”

Mobile Shop­ping on the Rise

The wide­spread adop­tion of smart­phones dates to 2007, when Apple unveiled the iPhone. Google launched the Android oper­at­ing sys­tem the fol­low­ing year. By 2016, an esti­mat­ed 2 bil­lion peo­ple — about one in four peo­ple on the plan­et — will use smart­phones. On Thanks­giv­ing Day 2014, 52 per­cent of brows­ing and online shop­ping in the U.S. orig­i­nat­ed from smart­phones and tablets. And these growth trends seem cer­tain to con­tin­ue. Rev­enue from mobile com­merce will increase from $72 bil­lion in 2013 to an esti­mat­ed $245 bil­lion by 2017, accord­ing to an analy­sis by the Boston Con­sult­ing Group.

Research into the effects of mobile shop­ping has been lim­it­ed by the pro­pri­etary nature of the infor­ma­tion. Com­pa­nies like Google and Face­book track con­sumer behav­ior, of course, but they use it for their own pur­pos­es. And since sta­tis­tics are hard to come by, researchers tend to rely on con­sumers’ self-report­ed inten­tions — not their behav­ior — in ana­lyz­ing the effects of mobile shopping.

Wang and her coau­thors solved the prob­lem of self-report­ing by col­lab­o­rat­ing with an inter­net gro­cery retail­er that oper­ates in 12 states and Wash­ing­ton, D.C. The retail­er agreed to share its sales data with the researchers. We’re using empir­i­cal data that reflect actu­al behav­ior,” Wang said.

They divid­ed the firm’s data into two peri­ods. The first peri­od began in June 2012 and end­ed in Octo­ber 2012, when the retail­er launched an adver­tis­ing cam­paign that encour­aged peo­ple to use its mobile app. The sec­ond peri­od stretched from Novem­ber 2012 to June 2013.

The researchers com­pared the behav­ior of shop­pers who used a per­son­al com­put­er in the first peri­od with the behav­ior of those same shop­pers after adopt­ing the mobile app in the sec­ond peri­od. (Wang also used a sta­tis­ti­cal method to cre­ate a con­trol group” of cus­tomers who did not adopt the app — but were sim­i­lar in oth­er ways to those who did adopt it.) How did using the mobile app affect a customer’s order­ing habits?

Karen Freese
Sticky Fin­gers

The small screen size is the pri­ma­ry draw­back of shop­ping with a mobile app, since it reduces the amount of infor­ma­tion on a page. In many respects, it’s actu­al­ly eas­i­er to maneu­ver and learn new mate­r­i­al on a PC com­pared to a mobile device,” Wang said.

But the great­est lim­i­ta­tion of mobile tech­nol­o­gy is also its great­est strength. The porta­bil­i­ty of smart­phones and tablets allows cus­tomers to make pur­chas­es from any­where they have an inter­net con­nec­tion. And even if they use their devices to make small pur­chas­es, the act of reg­u­lar­ly engag­ing with a retail­er has a pow­er­ful effect on cus­tomers’ behavior.

The researchers found that the aver­age order size of low spenders (defined as shop­pers whose total spend­ing was less than the medi­an in the first phase) increased after they adopt­ed mobile shop­ping. They also placed more orders per year than they had using only a com­put­er. Among high-spend­ing mobile shop­pers, the size of the order remained about the same. But, as with the low spenders, the fre­quen­cy of their pur­chas­es steadi­ly increased the more they used their mobile devices for shopping.

The more oppor­tu­ni­ties you give a cus­tomer to inter­act with a retail­er, the more the val­ue of the retail­er goes up,” Krish­na­murthi said. And the more the sales rev­enue from that cus­tomer goes up.”

Build­ing Relationships

The upshot is that retail­ers should think of mobile tech­nol­o­gy as one way to build strong, durable rela­tion­ships with cus­tomers. But it is best viewed as com­ple­ment to — not a replace­ment for — oth­er forms of cus­tomer engage­ment. For exam­ple, peo­ple are like­ly to use a com­put­er instead of a mobile app when they buy goods that require more thought and research.

Wang and her coau­thors found that the most fre­quent­ly shopped cat­e­gories among mobile shop­pers were diet aids, bev­er­ages, and fruit — the kind of things that peo­ple use almost imme­di­ate­ly and buy reg­u­lar­ly. Among the least fre­quent­ly shopped cat­e­gories were stuff­ing, sta­tionery, light bulbs, and oth­er elec­tri­cal prod­ucts — the kind of things that peo­ple tend to buy only occasionally.

If a bas­ket is com­posed by a lot of PC ses­sions, it tends to have things that require more con­sid­er­a­tion,” Wang said. With mobile ses­sions, the order is more like­ly to include things that have a short life cycle.”

The short life cycle means that the cus­tomer will like­ly buy it again soon, and the odds are increas­ing­ly good that she will buy it using a mobile device. Retail­ers that con­sis­tent­ly deliv­er a pos­i­tive expe­ri­ence to such shop­pers will be well posi­tioned to prof­it from mobile technology’s recent, rapid rise — while build­ing a loy­al cus­tomer base for the long run.

About the Writer

Theo Anderson is a freelance writer based in Chicago.

About the Research

Wang, Rebecca Jen-Hui, Edward Malthouse, and Lakshman Krishnamurthi. 2015. “On the Go: How Mobile Shopping Affects Customer Purchase Behavior.” Journal of Retailing 91 (2): 217–234.

Read the original

Suggested For You

Most Popular

Organizations

How Are Black – White Bira­cial Peo­ple Per­ceived in Terms of Race?

Under­stand­ing the answer — and why black and white Amer­i­cans’ respons­es may dif­fer — is increas­ing­ly impor­tant in a mul­tira­cial society.

Leadership

Why Warmth Is the Under­ap­pre­ci­at­ed Skill Lead­ers Need

The case for demon­strat­ing more than just competence.

Most Popular Podcasts

Careers

Pod­cast: Our Most Pop­u­lar Advice on Improv­ing Rela­tion­ships with Colleagues

Cowork­ers can make us crazy. Here’s how to han­dle tough situations.

Social Impact

Pod­cast: How You and Your Com­pa­ny Can Lend Exper­tise to a Non­prof­it in Need

Plus: Four ques­tions to con­sid­er before becom­ing a social-impact entrepreneur.

Careers

Pod­cast: Attract Rock­star Employ­ees — or Devel­op Your Own

Find­ing and nur­tur­ing high per­form­ers isn’t easy, but it pays off.

Marketing

Pod­cast: How Music Can Change Our Mood

A Broad­way song­writer and a mar­ket­ing pro­fes­sor dis­cuss the con­nec­tion between our favorite tunes and how they make us feel.