The Mobile Effect - The impact of smartphones & tablets on impulse buying

Transcription

1 The Mobile Effect - The impact of smartphones & tablets on impulse buying A Rackspace Market Study & Analysis Report The Mobile Effect - The impact of smartphones and tablets on impulse buying PAGE: 1

2 TABLE OF CONTENTS DESCRIPTION PAGE Executive Summary 3 Research 5 About Rackspace 10 The Mobile Effect - The impact of smartphones and tablets on impulse buying PAGE: 2

3 Executive Summary We ve seen some exciting and significant developments over the last few years as mobile technology and the latest online innovations continue to shape everyday life. According to the latest Ofcom findings (The Communications Market, July 2012), smartphone owners in the UK now represent 40% of the adult population, or almost 20 million people 1, and tablet computers are owned by 11% of UK adults. What s more, two-fifths of UK adults say their phone is the most important device for accessing the Internet. In the retail sphere, smartphones and tablets are fast becoming key tools for browsing and purchasing. According to Ofcom s report, over half of smartphone owners use their phone in some way when out shopping. The mobile channel or m-commerce obviously represents a huge opportunity for retailers, with websites and the mobile Internet crucial to its exploitation. That s why we ve focused on this area in this report and in particular the impulse buying behaviour of smartphone and tablet owners. After all, the impulse purchase is, arguably, the epitome of mobile shopping, when everything must come together the discount voucher code (the main incentive behind making impulse purchases according to our research), the link, the browser search, the website inventory, the e-commerce engine, the QR code scan, the secure payment and so on in perfect harmony. Crack this, making it easy, convenient, seamless and secure for consumers, and you re onto a good thing. Our study of over 2,000 UK adults who own a smartphone and/or a tablet shows that 48 per cent of consumers who use mobile devices to make purchases online buy things on impulse more now as a result of having the technology at their disposal. In total, we estimate that this extra spend amounts to 1.1 billion each year. When you consider that this amount is generated by only 17% of smartphone and tablet owners, and these devices are becoming increasingly popular, the opportunity for retailers is clear. There is plenty of work to do, however. Our study shows that a resounding 60% of smartphone and tablet owners do not make purchases at all using these devices. Security fears are preventing more than a quarter of those from shopping online, while the majority simply prefer to use their laptop, PC or Mac. Focusing on security and privacy issues, over half of all respondents are wary of, or uncomfortable with, storing their credit card details online, and nearly a quarter are concerned that retailers will share their details with others. And yet, out of the consumers who don t store credit card details online, 43 per cent believe that they would spend more using a mobile device if they felt comfortable storing their details. A major challenge for brands and retailers therefore will be to change the perceptions of consumers who are wary of mobile shopping. While our study shows that mobile services have yet to be accepted by the majority of consumers, for those who have already embraced it, the benefits are proven and there is no turning back. 1 ONS projections,

4 To capitalise on today s mobile e-retailing opportunity, retailers need to demonstrate that making purchases using a smartphone or tablet is secure and simple. Delivering an excellent online experience across all channels will build customer loyalty and trust, which in turn helps to maximise profits. Fabio Torlini, VP of Cloud, Rackspace 4

5 1. % of consumers who buy online using a smartphone or tablet The flood of smartphones and tablets that has taken over the market is changing the way people are buying things online. Almost half the UK adult population who own smartphones (40%) are now using their mobile devices to make online purchases. It also appears that tablets may be more conducive to online shopping compared with smartphones: double the proportion of tablet owners made online purchases using that device. 2. % of consumers who impulse buy due to availability of mobile purchasing The availability of mobile purchasing is driving impulse purchasing, with nearly half of those who mobile shop claiming to impulse buy more due to the availability of m-commerce. As expected, members of the more decisive and tech-savvy younger generation (18-34 year olds) are the most avid mobile shoppers. It is important to note that a substantial amount of 55+ consumers interviewed, three in 10 in fact, are also using their smartphones to impulse buy. 5

6 3. Estimated increased spend due to impulse buying Impulse purchases in the UK have increased by an estimated 1.1 billion a year thanks to the online shopping convenience offered by smartphones, ipads and other tablet computers. On average, impulse buyers have increased their monthly spend by or 329 in total per year. 4. Reasons for impulse spending on smartphone or tablet For the approximately 3.35 million UK consumers who say mobile devices have increased their on-the-spot purchasing, 71% believe that the main reason for the upswing in spending is because the process is so simple and the technology is so easy to use. Over a quarter (27%) of these consumers says that using mobile devices is better than shopping in store. The study reveals that mobile shoppers are using technology in the hunt for better bargains: almost a third (32%) claims that the main incentive behind making impulse purchases is to use promotional codes that save money. 6

7 5. When impulse purchases are made using smartphone or tablet The research shows that almost one in five mobile shoppers (18%) makes spur-of-the-moment purchases at work during their lunch break, while the majority (62%) turns to their smartphones and tablets when at home relaxing. 6. Most commonly bought items when impulse buying on smartphone or tablet Clothes are the most popular impulse buy for 41% of mobile shoppers, followed by books (35%), music (32%) and fast food or takeaways (14%). Women are most likely to buy clothes (47%) while men are most likely to buy music (38%). 7

8 7. Most likely time to impulse buy on mobile device One in five respondents who shop online stated that they would buy at any time of the day. However, the most common time to impulse buy using a mobile device, according to the research, is between 5pm and midnight. This correlates with above finding that shows the majority of consumers turn to their smartphones and tablets when at home relaxing. 8. Reasons for not buying items on smartphone or tablet The main reason behind shoppers not using mobile devices to shop online is preference. The majority of this group (84%) simply prefers to use their laptop, PC or Mac. More than a quarter (27%) said security fears prevent them from mobile shopping. 8

9 9. How people feel storing credit card details with online retailers The study suggests that companies at the front line of e-retailing today need to build trust in the security of online shopping. Over half of the smartphone or tablet owners surveyed (59%) are uncomfortable with, or wary of, storing their credit card details online. About the research The research was carried out by independent research company, Vision Critical, in August 2012 and involved 2,009 UK adults who own a smartphone and/or a tablet. It is representative of the UK adult population of smartphone/tablet owners. 9

10 About Rackspace Rackspace Hosting (NYSE: RAX) is the open cloud company, delivering open technologies and powering more than 190,000 customers worldwide. Rackspace provides its renowned Fanatical Support across a broad portfolio of IT products, including Public Cloud, Private Cloud, Hybrid Hosting and Dedicated Hosting. The company offers choice, flexibility and freedom from vendor lock in. Rackspace has been recognised by Bloomberg BusinessWeek as a Top 100 Performing Technology Company and is featured on Sunday Times list of 100 Best Companies to Work For. Rackspace was positioned in the Leaders Quadrant by Gartner Inc. in the 2011 Magic Quadrant for Managed Hosting. For more information, visit Rackspace Hosting Global Headquarters 5000 Walzem Road San Antonio. TX Phone: Intl: UK Office Rackspace Ltd. 5 Millington Road Hyde Park Hayes Middlesex, UB3 4AZ Phone: Intl: +44 (0) Benelux Office Rackspace Benelux B.V. Teleportboulevard EJ Amsterdam Phone: Intl: +31 (0) Hong Kong Office 9/F, Cambridge House, Taikoo Place 979 King s Road, Quarry Bay, Sales: Support Australia Office Suite 3, Level 7, 210 George Street, Sydney, NSQ 2000 Phone: The Mobile Effect - The impact of smartphones and tablets on impulse buying PAGE: 10