Mobile Retail Sector Takes Off; Advertising Spurs Participation, Drives Sales

Topic: Mobile Marketing | Author: Peggy Anne Salz | Date: June 8, 2011

mobile retail Mobile Retail Sector Takes Off; Advertising Spurs Participation, Drives SalesThe willingness of people to interact with brands on their mobile phones (and their growing reliance on mobile devices for shopping advice and assistance on the move) has jumpstarted a new phase in mobile marketing growth driven by retail brands and advertisers.

From department stores to computers & electronics retailers to luxury fashion brands, marketers are investing in mobile advertising to reach and influence people throughout the purchase funnel (awareness, engagement,  consideration, conversion and loyalty).

In fact, Millennial Media, a leading independent mobile advertising and data company, reports that ‘Retail’ was the top vertical on the Millennial mobile advertising network both globally and in the U.S. What’s more, spend by brands has skyrocketed, growing by a whopping 1300 percent for the period Q1 2010 to Q1 2011.

This development is the focus of Mobile Intel: Retail, a mobile intelligence report that draws from Millennial Media network data (data that was accumulated across 67 billion mobile impressions in 250 countries and territories) and consumer research conducted by comScore. The report is geared to brands, providing them insights to help identify key mobile retail opportunities and engage with the growing audience of mobile retail users, the segment of consumers using their mobile devices to research and purchase goods and services.

Mobile retail users

The vast majority of mobile retail users are tech-savvy digital natives between the ages of 18 and 35 for whom the mobile phone has become an indispensable part of their daily routine. However, these Millennials are not just more sophisticated; they also tend to be more affluent.

MobileRetailUsersByIncome resize Mobile Retail Sector Takes Off; Advertising Spurs Participation, Drives Sales

The data, which breaks down mobile retail users by income, shows that the percentage of mobile retail users is higher than the total audience in several income brackets. Interestingly, mobile retail users lead in the +$100,000 annual income bracket, providing retail advertisers — particularly those selling luxury goods — a significant audience that is likely to appreciate and respond to a mobile call to action.

All the better if this advertising is delivered with the smartphone user in mind. The report shows that smartphone penetration is on the rise, up 67 percent year-over-year. What’s more, the majority of consumers are interacting with mobile retail websites and most are using mobile browsers to access the content (and advertising) there, making it important for brands to include mobile web and in-app advertising in the mix.

Altogether, the number of consumers accessing retail content via mobile has increased 74 percent year-over-year to total over 13 million people (as of June 2010). Of the 13 million, “over 6.5 million accessed retail content on their mobile device up to three times per month, 4.2 million at least once a week, and 2.2 million consumers accessed some form of retail content on their mobile device almost every day.”

Mobile commerce opportunity

Mobile retail users are not just using mobile to help them identify and research what they want.

MobileUsedPurchaseProcess resize Mobile Retail Sector Takes Off; Advertising Spurs Participation, Drives SalesThey are also using mobile to make purchases (through a mobile browser on application). Specifically, 21 percent of consumers surveyed by comScore said they made a purchase using their phones in the last 30 days, not including app store application purchases. What did they buy? The majority were retail or travel related with consumer electronics and clothing/accessories leading the list.

The report also lists and ranks the broad range of mobile destinations that figure prominently in the regular routine of hard-core mobile retail users, insights that give brands and advertisers a clearer idea of the content (and campaigns) that will reach these mobile shoppers when it matters most.

The bottom line: mobile retail users are everywhere. But they also tend to spend time on sites featuring weather, maps, news and entertainment. Retail brands are therefore advised to develop campaigns and strategies that reach beyond the usual list of content sites and channels. And let’s not forget the importance of timing. Advertising that takes advantage of the window of opportunity around holidays and events (such as Mother’s/Father’s Day) can pay dividends.

Brand advances

The report confirms that mobile retail users are a significant and addressable audience that retail brands should not ignore. But are they taking advantage of the opportunity?

The report provides ample evidence of brand commitment and increased spend. For one, the number of retail advertisers on mobile has doubled, reaching 6,445 in June 2010 up from 3,045 in June 2009.

This observation is further supported by data from Millennial’s ad network, which shows that vertical ‘Retail & Restaurants’ was the number one ad vertical in Q1 2011, both in the U.S. and internationally. But it’s not just about more brands spending on mobile. Network data (from Aprill 2011) confirms more verticals within retail (luxury, DIY, specialty interest) are among mobile’s big spenders.

Calls to action

The report also confirms a key message in recent eMarketer research documenting mobile marketing best practices in Western Europe. (Disclosure: I am proud to have collaborated with eMarketer on this report.)

The eMarketer report found that verticals (including retail) are not only harnessing mobile to achieve their objectives. These advertisers are also changing the nature of the game, moving from one-off promotion campaigns focused on brand awareness to on ongoing campaigns aimed at driving customer engagement.

A close examination of Mobile Intel: Retail reveals that retail brand and advertisers are indeed harnessing the action-oriented nature of mobile to drive foot traffic and spur consumer participation.

My take:

Brands and advertisers are not only waking up to the mobile retail opportunity. They are grabbing on to it with both hands, a development confirmed by an increase in ad spend as well as the number of retailers getting in on the action. At the other end of the spectrum, people are relying more on mobile for shopping ideas and assistance. comScore data¬† provides valuable insights into the make up of the mobile retailer user. Generally speaking, they tend to be more affluent and mobile savvy than the general audience of mobile users. Retailers (particularly those in the luxury goods sector) who don’t use mobile to connect with this discerning demographic risk leaving serious money on the table. Since mobile users are also relying heavily (even exclusively) on mobile to research and purchase goods on the move, mobile advertising should make an effort to engage with these consumers throughout the customer journey and purchase funnel (awareness, engagement, ¬†consideration, conversion and loyalty). Finally, don’t think small. Consumers are buying big-ticket items including consumer electronics and clothing/accessories using their mobile phones. The right ad in the right context can drive foot traffic and sales.

This post is part of our Mobile Advertising Briefing Room, a thinking space dedicated to providing its community mobile intelligence, consumer research, case studies and industry best practices that equip marketers to reach and engage their target audience at scale. This discussion is hosted & sponsored by Millennial Media.

 Mobile Retail Sector Takes Off; Advertising Spurs Participation, Drives Sales

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