What Retailers Don’t Know About The Way You Shop Online
Online shopping drove nearly 50 percent of the growth in retail last year and has been steadily climbing each year. But retailers have long discounted the importance of mobile devices in online shopping because, even though smartphone use has exploded in recent years, data show that the majority of consumers still use their desktops or laptops to make purchases. This misses the full picture of the shopping process, says P.K. Kannan, a marketing professor at the University of Maryland’s Robert H. Smith School of Business and co-author of new research that sheds light on consumers’ path to online purchasing.
Think about the way you shop online: You need to buy something, so you pull out your smartphone and browse for the item. It may take you a few browsing sessions before you decide to buy, and you may switch between your phone and your computer before completing a purchase.
The researchers find that consumers who switch from a more mobile device (smartphone) to a less mobile device (laptop or desktop) are much more likely to make a purchase than those who started out on less mobile device. This switching effect is especially strong when the purchase seems more risky, for more expensive products, and when customers have never purchased from the retailer previously. Switching devices also leads to more purchases when a consumer’s shopping sessions are closer together in time.
Kannan says consumers turn to fixed desktops and laptops to make purchases when they perceive a higher risk in the transaction. Maybe they are worried about others seeing their payment info when ordering in a public place. Or perhaps it might be easier to see product specs or enter detailed payment information on a larger screen. Whatever the case, risks can cause some consumers to put off making a purchase on their mobile device until they can complete the transaction on a laptop or desktop.
The perceived risks go down considerably for consumers when they are repeat customers on a website. So if you have a history of purchasing on Amazon, then you may have no problem clicking the “buy it now” button on your smartphone.
Kannan says if retailers fully understand how consumers shop, they can organize better marketing efforts. Online retailers shouldn’t base their marketing investments and budget allocation for different devices just on a customer’s last click, because this approach ignores the fact that the combination of devices can lead to a higher likelihood that they’ll make a purchase.
Kannan says retailers can strategically retarget consumers with ads from device to device if they pay more attention to their shopping habits from browsing through purchase. Marketers can also make better timing decisions on when to send email messages with discounts to push shoppers to complete a purchase, so you’ll receive those banner ads and abandoned shopping cart reminder emails when you’ve jumped on your laptop and you’re ready to pull out your credit card. And they can make it easier for consumers to switch devices when shopping by having an online basket that carries over from one device to the next.
Read more: Device Switching in Online Purchasing: Examining the Strategic Contingencies is featured in the Journal of Marketing.