By Ryan Garner (GfK) and Alex Kozlof (IAB UK)

The irrepressible tide of smart, connected, mobile devices is changing the way we shop at every stage of the purchase process. This poses new opportunities and challenges for product marketers and retailers in both the online and offline world.

The ‘always on’ nature of smartphones – not just in your pocket but also connected to the internet – makes them the perfect companion for shoppers throughout the entire purchase journey, both online and offline.  Recent research by the IAB and GfK shows that while PCs (laptops and/or desktop computers) are still the most used devices throughout the online purchase process, smartphones are an increasingly important complement to existing methods of shopping. The number of shoppers using smartphones will inevitably increase, but this usage will in many cases be in conjunction with the PC or an aid to the consumer while in store. Indeed, the research showed that the most common behaviour was for the smartphone and PC to be used together in the purchase process rather than independently.

In an age when consumers research their purchases thoroughly online, talk to their friends for recommendations, and test out their potential purchases in store, exactly what role do store staff have to play beyond facilitating the experience? Recent research by GfK shows that the suitable mix of in-store recommendations and demonstrations, achieved by store staff training, can be highly effective at increasing sales.

A new GfK research programme has provided some unique insights into the ROI of store initiatives by combining mystery shopping results with individual store-level sales data. The programme reveals how the in-store experience translates into sales and shows the average uplift in sales resulting from different types of in-store activity. This is highly useful for brands that want to understand how to prioritise in-store marketing budgets, benchmark against competitors, negotiate better rates for display space, and calculate the ROI on in-store marketing spend.

So what are some of the key findings of this programme that are useful for marketers?

 

Declining consumer spend on physical music has forced the demise of many traditional bricks and mortar record stores. For the music industry, question marks remain about how, and even whether, the revenue generated by digital music can offset this loss. Rather than fighting this, the music industry first needs to ensure that the remaining retail consumers don’t drop out of its customer base altogether.

High street closures

The first album I bought was Happy Nation by Ace of Base. Yeah, I know. The format I bought it on – cassette – hasn’t aged any better than their distinctive (and, some would argue, inimitable…) brand of Swedish pop-reggae. And now, it looks like the record shop I purchased it from might be taking a similar slide into the field of “ha, remember them?” obscurity.

Exciting times lie ahead within the gaming industry and the buying options for new and used games have never been so wide. New game downloads are increasing at great speed and the used game market is strengthening, with Tesco, Asda and Argos all now offering a used game service. All this is great news for ‘gamers’ but the real opportunity is a platform which combines the two: trading online.

Electronic Arts CEO, John Riccitiello, recently claimed that 2011 will be the year revenues from downloadable games overtake the traditional out-of-box experience[i]. Being an avid gamer myself, a statement like this took me by surprise, especially coming from such a senior figure in the gaming industry. I have little doubt that this scenario will eventually happen, but this year?. There are two big reasons for my scepticism. First, the cost of new games – mixed with the widespread availability of cheap second hand games – and, second, limited storage space on consoles when used more widely in the ‘connected home’ rather than just for gaming.

For consumers there may have never been a better time to buy DVDs, with prices falling and new avenues for purchasing appearing almost daily, but how has this affected the consumer mindset and where does this leave traditional retailers?

Online retailing is by no means a new entry to the consumer electronics market; in fact it’s been five years since Online first overtook Supermarkets in terms of % market share [1]. Consumers have long since embraced Online and its ability to compete on both price and choice (with supermarkets and traditional high street retailers respectively), especially in the realm of high price purchasing such as consumer electronics. In this case, Online represents a step forward in consumer purchase planning, with the internet offering access to a range of price comparison websites, manufacturer specifications and consumer forums to collate information before purchasing, offering the consumer the chance to be more methodical in their decision making than in the pressure cooker environment of a Saturday afternoon trip to the local electronics department.