Phones: not just for talking, now for shopping

Groceries & clothes, sporting goods & furniture, with a slide of the finger and a tap of a button, users are going to their phones for these purchases. Think it’s not your product their shopping for? I would think again.

Last time I spoke about the strength of eCommerce for retailers and the benefits it serves to the customers. However, we can’t stop at the desktop; it’s now time to move to the hand. And, seeing that 5.9 billion out of the 7 billion people (87%) worldwide already have mobile phones, it makes clear sense to start going mobile.  Not to mention, mobile commerce is expected to experience significant growth by 2015 from the six previous years — jumping 99-fold from $1 billion in sales in 2009 to more than $100 billion. 

In a recent study, 59% of smartphone users believe that it is as least somewhat important to be able to buy something using the device. So, let’s help them! Let’s take the shopping online. There are apps for coupons, comparison shopping, and apps that allow users to shop from your store through a different community and people are using these, addictively! Pair your mobile shopping experience with the apps that are already on the phones, and watch the sales come-in. In addition, 77% percent of people use their phones for searching, and 9/10 of those searches result in an action, i.e., in-store visit, purchase, etc. I want to make sure those actions are taking place with your company.  

Last week I highlighted three key steps to creating a leading website shopping experience from the computer, and many of those rules stand for mobile shopping, as well. But, people don’t want to shop on their phones from your computer based website, so there need to be adjustments. Below are three simple steps you can take, to make sure customers are shopping from you all the time.

1. The most important first step is to create a mobile-friendly shopping website. Your goal is to make the mobile version of your website as inviting and easy to use as your regular site, while taking into account the constraints of mobile devices. More info here

2. Products: To add to user experience and satisfaction, the mobile version should also offer them other features such as full product specs with quality photos included. More info here

3. Mobile Checkout: Because mobile Web transactions are often done in public, people feel even less secure about entering credit card and other personal information. Integrating a professional checkout service that stores this data online can make a big difference. More info here

Your shoppers are on their phones: playing games, checking Facebook, text messaging friends—why not take advantage of the addiction to the smartphone and make a sale. Implementing a thoughtful mobile shopping experience is not only going to benefit the customer, it will in turn benefit your ROI and you will look smart doing it.

Annie Kessler is a graduate student in the Northwestern Medill IMC marketing program and has a passion for digital and interactive advertising and marketing. Annie will be graduating in December 2012. Annie can be reached on twitter using the handle @asugark 

3 Simple Steps to Save Your Money and Become a Rational Shopper

           Shopping is one of the major parts that consist of our lives. Especially for housewives, grocery shopping is one of their daily chores. Moms need to go to a grocery shop--Trader Joe's, Safeway, Walmart, etc...-- almost everyday, and even to big retailers--Target, Home Depot, Bestbuy-- occasionally to buy household neccessities. However, these frequent shopping trips don't always leads to satisfactory shopping. Recall how many times you regretted after impulsive or unnecessary purchases.

Is there a way to avoid those regrets? Yes, by becoming a rational shopper! Then how do we become one? As a Northwestern student majoring in psychology, I've taken several courses on cognitive psychology and decision making, and below I listed three main cognitive biases that I learned to be keeping us from making rational choices. Understanding these three biases is the first step to become a rational shopper.
1. Sunk cost bias
2. Anchoring effect
3. Barnum effect

            Sunk cost is the cost that has already been paid and is not refundable, and thus should not be considered when making decisions. However, we tend to “honor” the sunk cost and therefore it usually plays a huge role in making decisions. “I’ve already spent money on stocking up five razor blades for Gillette, so I will stick with it in order not to waste those five razor blades that I already bought, although I found a much cheaper razor that I like better.” is a common rationale of shoppers who fell into the trap of suck cost bias.

            Anchoring effect is a human tendency to focus too heavily on limited piece of information. We are often “anchored” by initially given information, even if it is only small portion of entire information. Big retailers such as Costco or Sam’s Club utilize this concept to design their product shelving. They place their value products, which are produced from their own factories and therefore cheaper than brand products, right next to brand products, which are placed closer to the entrance so shoppers get to see the price of brand products first. Therefore shoppers who first see the price of brand products are likely to be anchored by that high price and perceive the next price of value item to be much cheaper.

Barnum effect is a human tendency to regard very general characterizations or arguments to be accurate and tailored specifically for him/herself, although those characterizations are vague enough to be applicable to everyone. Informercial or home shopping programs that sell vitamins are typical example of Barnum effect. If you take a close look at their description of vitamin products, you will notice that all the benefits of the vitamin are very vague—alleviating fatigue, boosting up concentration, etc—that they are applicable to everyone. However, still we tend to think that this vitamin just fits our needs and buy it.

            Are there any solutions for these biases? For many of human cognitive biases, simple but strong prescription is to take at least few seconds to think “why” you want to make certain decision, before blindly putting stuffs into your cart. So next time when you go for a shopping and saw a deal or product that you think is really good, why don’t you take a few seconds to contemplate over why you think it is a good deal, and reason your logics step by step? 


Jake Kim, Undergraduate Northwestern IMC, @JakeKim4