Commission by Shopper Marketing Institute with Arc World Wide and Augme Technologies (Prior to Augme Technologies discontinuing managed services in favor of IP Litigation, company is no longer operational) in 2011, this white paper takes a deep dive into mobile engagement in store and strategy to understand planning and limitations.

1. INDUSTRY REPORT
PRESENTS:
Upward Mobility:
Developing an
Effective Mobile
Shopper Marketing
Strategy
The “First Moment of Truth” has
“Thirty million times a become a continuous information loop.
day … P&G brands face The now-legendary phrase – the rallying cry for in-store communication as an
integral aspect of brand marketing – is undergoing a dramatic transformation
their First Moment of now that consumers are standing at the shelf with smartphones in hand.
Truth, when consumers For one, there’s now a good chance that the final purchase decision of which
Lafley spoke was already made at the store entrance, in the parking lot, or in the
stand in front of a store car on the drive to the store – influenced by marketing touchpoints that didn’t
shelf … and decide even exist in 2002.
Perhaps more significantly, the purchase decision won’t necessarily conclude
whether to buy a P&G at the shelf – or at least that particular shelf: after scanning the packaging’s UPC,
brand, or a competing the shopper may discover that a retailer down the street offers the same product
at a cheaper price; once she gets there, she might download a coupon for a
product.” competing product by scanning a shelf-sign QR code.
– A.G. Lafley, Thanks to increasingly sophisticated mobile devices, the consumer has
become an ever-moving target that is never more than one click, ring, text or
Procter & Gamble, tweet away from entering “shopper mode.” But, for better or worse, the shopper
then-CEO, 2002 that she becomes is savvier and much better informed than her predecessors,
due to the growing number of on-the-go tools at her disposal.
A supplement to Shopper Marketing magazine

2. INDUSTRY REPORT
Welcome to the Mobile World always on,” says Molly Garris, manager of digital strategy
Procter & Gamble already understands these changes, at Arc Worldwide, the Chicago-based marketing services
which is why the packaged goods company (and industry arm of Leo Burnett. “It lets marketers truly engage
bellwether) devoted a great deal of resources in 2010 consumers by making the message far more relevant and
to launching smartphone apps for Tide, Always and personal.”
other brands, providing downloadable coupons for top Mobile marketing has, of course, been around for
retailers such as Kroger and Safeway, bolstering its charity years, and has been prevalent in other parts of the world
initiatives through third-party apps like CauseWorld, and such as Japan and Israel for more than a decade. Initial
even selling Pampers through Facebook. forays in the U.S. were hampered somewhat by strong
Other packaged goods manufacturers such as Kraft consumer backlash to unsolicited phone calls, but the
Foods, Kellogg Co., Kimberly-Clark and Unilever also emergence of text messaging in 2001 made marketing
have been mining the mobile space for several years – communication far more palatable. In the last few years,
although all of the above would likely admit that they texting has become a standard promotional tool for
haven’t yet fully cracked the code on best practices. many marketers, particularly when targeting younger
Numerous other product marketers are following suit consumers.
because of the tremendous potential that the mobile It was the emergence over the last seven-odd years
channel presents. of the “smartphone” and its computer-like functionality
“Mobile is the first marketing technology that can be – Internet access, email, file downloading – that sparked
used through the entire purchase cycle,” says Anthony marketers to really begin examining the possibilities,
Iacovone, founder and chief innovation officer of Augme however. “There are things you can do with feature
Technologies, a New York-based company specializing in phones such as text messaging, but with smartphones,
mobile marketing technologies and services. “You start we can really take it to the next level,” says James Schuh,
with a mobile call to action in a TV ad, and you finish with global digital marketing manager for Kimberly-Clark.
a text-message reminder about the incentive in the store.” And it was Apple Inc.’s launch of the iPhone in 2007
A mobile phone “is always with you, and it’s almost that began turning the smartphone into a must-have
technology and a cultural
Overall Mobile Activity phenomenon. The only
questions remaining for
% who do the following activities at least once a month from their mobile phone
marketers are, when will
smartphone penetration
100 100 100 100
99 99
97 97 97
96
91
97 97
95 95
98
reach critical mass, and
94
how many U.S. consumers
93 93
92
89
87
will use their devices as an 85
87
essential shopping tool?
82 82
81 81
80 77 77 77
79
76
By all accounts,
72
76
70
the answers to those
questions are “very soon”
68 66
62
60 and “a lot.” Roughly 59
51
53 one out of four mobile
subscribers already 48
owned a smartphone by
40 October 2010, according
33
to comScore Inc. More
significantly, that means
20 nearly 20% of the U.S.
16 16 16
14
13
population had one.
12
And The Nielsen Co.
12
10
9
7
predicts that 51% of 6
5
0 e s the population will be
lls S S et ail gin
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the end of 2011.
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Non-Mobile Shoppers Potential Mobile Shoppers 36% of the 234 million U.S.
Light Mobile Shoppers Heavy Mobile Shoppers © 2010 Leo Burnett and Arc Worldwide
2

3. mobile subscribers already do, according to comScore – various tools and technologies but few have developed
initiated their use as a shopping tool. The ongoing launch a comprehensive strategic plan. A spring 2010 survey
and adoption of smartphone applications that specifically conducted by Forrester Research/Shop.org, for example,
or indirectly facilitate shopping – by locating stores, found that only 20% of retailers had implemented a
delivering coupons, organizing lists mobile marketing strategy.
and offering trip incentives, to name Product marketers may be a little further along. A
a few – has taken the concept to November survey conducted by the In-Store Marketing
new heights. Institute found that 35% of consumer product marketers
And with AT&T, T-Mobile are already working with smartphone apps, 30% with
USA and Verizon Wireless jointly mobile coupons, 21% with QR codes and 13% with
building a network aimed at location-based services. And better than 40% of the non-
turning smartphones into “mobile users plan to implement those tactics in the near future.
wallets” within 18 months, the What’s more, in a spring survey from MediaPost’s
future of mobile as a critical Center for Media Research and InsightExpress, 40% of
P&G on CauseWorld
shopper marketing tool seems companies said they would boost mobile ad budgets by
uncontestable. “I can’t find one campaign where having 30% or more in 2010.
a mobile component doesn’t make sense,” says Iacovone. “Mobile is a chew toy and we’re all teething,” says
“Anytime you are making a call to action, it needs to be David Apple, chief marketing officer for Augme. “The
mobilized.” tendency is to do something because it’s buzzy. But I’d
say that 50% of program executions right now are poor.”
The Speed of Change The singular fact that consumers are migrating to a
Despite this rapid evolution, mobile shopping – and, mobile lifestyle – more than 30% of mobile subscribers
therefore, mobile shopper marketing – is still a relatively use their phones as the sole “computer” for their
new concept. When it comes to employing their mobile household, according to Morgan Stanley – makes
devices as a shopping tool, “10% of users are generating embracing the channel an imperative for marketers. But
80% of the volume right now,” says Carrie Newman, mobile marketing is an ideal vehicle for several other
research manager at Arc, which conducted extensive reasons as well.
consumer research on the subject in September 2010 (see For one, it facilitates the targeted, relevant
page 8). “Most people are dabbling, still learning what’s communication that is the essence of shopper marketing.
available and how to use it.” (For a comprehensive list of As a corollary to that, it also eliminates waste: rather
mobile shopping activities, see the chart below.) than distributing 40 million FSIs to anyone who buys a
The same holds true on the marketing side of Sunday newspaper, a brand can deliver one million to
things, where many companies are experimenting with the smartphones of consumers who’ve asked to receive
Mobile Shopping Activities
CROSS-CATEGORY
(mobile-related activities that transcend categories)
PORTABILITY VIRTUAL SOCIAL SHOPPING
Use a search engine to get information during shopping process Gather/Share opinions about a product or store from friends/family
Look up store address, store hours or store location Receive/Share photos of products from friends/family
MORE ADOPTED
(advanced activities)
Refer back to retailer emails you have saved in your inbox Receive/Share text messages about products from friends/family
LESS ADOPTED
Receive notifications about in-store promotions, events or offers Text or tweet price details to see if the deal is worthwhile
(core activities)
Receive/Share content about products/stores on user gen. websites
FUNDAMENTAL SHOPPING TASKS SPECIALIZED SHOPPING TASKS
Compare products from your mobile phone Use gift cards, reward cards, or gift registries
Look at prices on a retailer’s website Use gift guides (e.g., look for a ‘gift under $100’ or a ‘gift for mom’)
Search elsewhere when a product is out-of-stock Compare payment plan options (e.g., mortgage calculator)
Compare store prices with online prices when shopping in a store Use retailer comparison, selector or customization tools
Read customer ratings or reviews of a product Utilize virtual shopping tools that help you visualize the product
Visit a retailer website (e.g., bestbuy.com, potterybarn.com) View product demos
Look up online product information while shopping in a store Add a product to a wish list or favorites
Read customer ratings or reviews about a store Browse store circulars
Check in-store availability of a product Use a coupon
Look for deals for nearby stores Browse coupons
Check on the status of an order Place an order ahead of time to ensure a quicker pick-up
Visit a manufacturer website (e.g., whirlpool.com, fisherprice.com) Participate in a sweepstakes, game or promotion offer
Calculate price comparisons for different size products Use barcodes or scanning to get pricing or product information
Make a shopping list Use an app or mobile shopping application
CATEGORY-SPECIFIC
© 2010 Leo Burnett and Arc Worldwide (shopping-related activities that don’t transcend categories)
3

4. INDUSTRY REPORT
them. (A second implied corollary: mobile marketing Rule No. 2: Don’t treat it as a separate function.
often is significantly cheaper than comparable, traditional Effective mobile marketing will be fully aligned with
advertising methods.) digital marketing as a whole and, beyond that, the overall
For another, it lets marketers send calls to action strategic marketing plan. “Right now, mobile is still an
in the “immediate proximity to where the purchase afterthought, something that gets tacked on at the end of
decision is being made,” says Daniel Cooke, director of the planning stage,” says Iacovone.
digital shopper marketing at Kellogg Co. “We refer to this “We don’t think you should have a distinct ‘mobile
as ‘point-of-service,’ and it’s the primary reason why we strategy,’” Garris says. “It should be aligned with your
believe so strongly in the prospects for mobile.” overall marketing strategy.”
“Retailers and brands have been working at online That, of course, is easier said than done, since
methods of driving consumers to stores. But what’s been marketing organizations historically have kept their silos
lacking is a way to drive them right to the sale,” says fortified and usually seek comfortable, pre-established
Iacovone. “Mobile is the first technology that can deliver homes for new concepts. (A key reason why digital
that.” shopper marketing – and shopper marketing in general
Mobile marketing also “is unprecedented in its ability – hasn’t fully taken flight is that it forces marketers to
to return behavioral data, which can then be correlated break down those silos and align advertising, consumer
with purchase data. And the more we know about promotion and trade promotion.)
consumers, the better we’ll be able to communicate with Most digital marketers come from the advertising
them,” says Iacovone. side of the organization, which means sales-driving
However, the time for non-strategic experimentation promotions, retail collaboration and other tactics for
with “buzzy” tools is passing quickly. Marketers now need which mobile is well-suited are foreign territory for many
to develop a comprehensive strategy that maps out a of its practitioners.
vision for mobile marketing and its role in the overall “Shopping crosses so many different touchpoints, so
marketing plan. Marketers looking to do so should fully everyone in the organization has to work together,” says
consider the following rules: Garris. “Mobile is just one of the tools – although it’s the
only one that’s with the consumer all the time.”
Rule No. 1: Make a full commitment. Many retailers and
marketers are launching mobile programs simply to be Rule No. 3: Don’t expect it to differentiate your brand.
trendy or keep pace with the competition – but without It’s extremely important to understand that the medium
setting a long-term vision: retailers launch perfunctory itself is definitely not the message.
apps with store locators, a website link, and little in the The newness factor that currently makes scanning
way of real shopper value; brands add a QR code to print a QR code or downloading an app unique for shoppers
ads that send consumers online to watch a 30-second will fade quickly, and using them won’t score points with
TV spot, which might drive some site traffic but won’t consumers for very long. In fact, employing mobile tools
engender long-term engagement (or even a repeat visit). solely as a stunt may ultimately alienate more consumers
These examples illustrate the fact that “Let’s do than it attracts. “You have to make sure that you provide
something mobile” is not a sound strategic plan, says value,” says Schuh.
Iacovone. “There are numerous internal needs you should Sooner rather than later, all brands and retailers will be
consider before you ever get to the consumer-facing involved in mobile marketing. Apps among supermarkets,
activity.” for instance, could well become as commonplace as
The first step is “a commitment from upper-level frequent-shopper cards, which means they will have little
management that runs across brands, builds mobile into intrinsic value. Already, both Tide and Clorox offer apps
the overall path-to-purchase strategy and fully spells that deliver on-the-go stain removal tips, so neither brand
out where it fits,” he says. Ideally, this internal alignment has gained a competitive edge through the technology
includes agreement on a single structural platform that itself.
allows for shared data and processes. “Some companies are looking at mobile as a
A fully thought-out plan will also help companies differentiator,” Michael Ross, vice president-marketing,
avoid common mistakes, such as using a QR code to pricing and consumer insights for Meijer, said at a
direct consumers to a traditional, mobile-unfriendly recent industry gathering. “We’re looking at mobile as a
website (see page 6). media channel. What we do with our brand is what will
The evidence suggests that many companies are in differentiate us.”
need of such alignment: Only 45% of respondents to a fall
2010 Forrester survey claimed to have “a shared mobile Rule No. 4: Focus on the audience, not the tool. “The
vision” within their organizations. mistake that many companies make is thinking about the
tactic first, then trying to make the tactic fit the brand.
4

5. mobile experience fast and easy. “You never want to
create more hurdles for the shopper,” says Garris. “You
only have her for a minute.”
“Unless the value matches the effort required, your
message will seem like a disruption,” adds Masha Sajdeh,
Arc’s chief shopper strategist.
“We should not be forcing consumers to do anything,”
such as downloading an app or emailing a photo, to
enter a promotion, says Augme’s Apple. “They need to be
able to do things naturally with the technology that they
Walgreens sends text messages when prescriptions are ready already have.”
Many of the current barriers to mobile shopping
That’s usually not the path to success,” says Schuh. “You involve relatively basic issues with speed, functionality
need to start with the consumer and her needs, and and visual aesthetics (see chart, page 15). Another issue is
determine how that aligns with the brand strategy. It the fragmentation of available technology: “The presence
needs to make sense.” of numerous proprietary applications and subsequent
“You have to identify the shopper first. Then you can lack of standardization often forces consumers to make
determine the tools and methods for reaching them,” technology decisions rather than shopping choices,” says
says Iacovone. “You probably don’t need to incorporate Augme’s Apple. Any mobile campaign should seek to
augmented reality if you’re trying to reach Baby Boomers. avoid – if not alleviate – these obstacles.
But for teenagers, it might be perfect. You start with the
target, not the technology.” Rule No. 7: Pull smartly, push gently. Just because
The primary goal is not to “wow” shoppers with the mobile shoppers are always “available” doesn’t mean they
tool itself, but with the solution that it delivers. “You need should be contacted relentlessly. The best strategy often
to understand shopper needs and pain points, and solve may be to give them access to problem-solving tools, but
for them,” says Garris. An app from Walgreens that lets let them decide when and how to use them.
shoppers remotely order prescription refills and receive Arc, for one, is more an advocate of a pull strategy.
text notification when they’re ready for pickup is a great “You can create a lot of context and a lot of technical
example “because nobody wants to wait in the store for a shortcuts for people to use – when they want to,” says
prescription,” she says. Garris.
Relevance is key, and many brands have established
Rule No. 5: Assess your brand’s role realistically. Part enough equity among consumers to legitimately seek a
of understanding target shoppers is identifying the role deeper role in their lives. Consumers may very well view
your brand plays in their lives. “You need to engage them Kimberly-Clark’s Pull-Ups as the logical provider of a potty
in a meaningful way, to give them the information that training tool for parents, or Nestlé-Purina as a credible
they need when they need it,” says Garris. source for information about pet-friendly hotels and
Simply put, the average shopper will have little need restaurants (see page 14). But will they accept PepsiCo’s
(or interest) for an app for every brand that she buys, let Propel as the ideal aid for helping them map out errands
alone might buy. (On the other hand, apps may soon (as the brand is attempting to do)?
become as necessary a tool for retailers as websites have As for push marketing, “You have to be really
become, regardless of how many consumers feel the thoughtful,” suggests Garris. “The content should be
need for them.) highly customized if you are delivering to a phone. But if
“You have to be relevant enough that they want you understand shopper needs and pain points, you can
to engage with your brand,” advised Mike Boylson, provide relevant content and start to influence behavior
JCPenney’s chief marketing officer, at an industry without offending anyone.”
conference last summer. Part of the issue here involves a timeless marketing
For examples of retailers and brands that are solving albatross: ad clutter, and the subsequent negative effect
consumer needs and establishing a deeper, relevant role it has on consumer response. Since the mobile phone is
in their lives, see pages 12 and 14. such a personal device – “For a woman, it’s her purse. For
a man, it’s his wallet,” says Augme’s Apple – an unwanted
Rule No. 6: Keep it simple. Consumer research at message could be more off-putting than ever before.
Hewlett-Packard has found (among other things) that However, this problem ultimately may be solved by
mobile shoppers prefer to select from option links rather consumers themselves, who now have an unprecedented
than make requests by typing. ability to ignore, delete or block any unwanted
That’s just one example of the need to make the communication, and will be consciously selecting the vast
(continued on page 15)
5

6. TACTICAL REVIEW
HYPE VS. HOPE traditional web, says Apple. “Every organization with a
traditional website should have a mobile-ready version.”
Augme evaluates some of the more prevalent mobile
Smartphone Applications:
communication tools.
Creating an “app” that can be downloaded onto a
smartphone is an effective way to establish an exclusive,
Text Message/SMS (short message service): ongoing exchange with the
With all the recent industry buzz surrounding
target audience. But doing
smartphones and apps, the “old-school” text message
so “assumes that people
has taken a bit of a backseat in the minds of marketers.
care enough about your
But it’s still the
brand to carry around your
communication tool
content all the time,” says
delivering the greatest
Apple. Consumers with time
reach (68% of mobile
constraints – not to mention
subscribers use it)
storage limitations – should
and a technology
soon reach a saturation point
with which most
on the number of apps they’re
consumers have
even willing to download, let
developed a high
alone use on a regular basis.
level of comfort. It’s
(And, they have to be willing to
also still the social
download any future upgrades
tool of choice for
as well.)
younger consumer
What’s more, “There are very few times when an app is
generations.
really necessary,” says Iacovone. “Most functions that you
Augme strongly encourages its clients to include a
would deliver through an app can be built on a mobile
text-message option in all promotions – no matter what
website, and that’s more scalable.” Even if smartphone
other “cool” response mechanism might be deployed
penetration does reach 51% of the U.S. market by the end
otherwise. “Every mobile device can send and receive an
of 2011, that still leaves 49% of consumers who will have
SMS, so it’s already scalable,” says David Apple, Augme’s
no way to interact if an app is the only option.
chief marketing officer. “If you exclude people because of
their devices, you might alienate them. And 200 million is
Barcode Scanning (2D, UPC):
a lot of people to alienate.”
With an estimated 65 million smartphones expected to
hit the market with embedded readers in 2011, scanning
Mobile of packaging and P-O-P materials could soon become
Websites: standard behavior. (Penetration levels in some foreign
Optimizing
markets are already quite high.) Although usage rates are
your website for
still relatively low – Forrester reported in September 2010
mobile viewing
that fewer than 1% of consumers had ever scanned a code
(or building a
– Iacovone suggests that marketers begin using them “to
full-scale mobile
stay on track with
version) is a
consumer behavior.”
must for any
Augme sees a
consumer-facing
bright future ahead
organization,
for barcode scanning,
Anthony Iacovone, Augme’s founder and chief innovation
but advises its clients
officer, advises. On-the-go consumers have little patience
to avoid proprietary
for traditional websites, which were designed for access
codes and instead
from computers with more memory, faster connections,
use QR codes or UPCs
greater visual capacity and much larger screens. One
– the most widely
unsatisfactory encounter on a clunky website may be
readable types in the
enough to drive consumers right to the competition.
market. “There’s a lot
By 2014, more people will access the Internet via
of confusion related
mobile devices than by desktop computers, according
to multiple code
to a forecast by Morgan Stanley. “The mobile web is
types, primarily in-
as important as – if not more important than – the
store,” says Iacovone.
6

7. Adding to this confusion is the common categorization of deployed barcode imagers at
“snap and send” technologies – which require consumers the point of sale.)
to take a picture, use email or MMS [multimedia message The other category,
service] to send it to the address provided, and wait for a “mobile coupons,” should be
response – as “barcodes.” But that technology has a high categorized as brand-specific
failure rate (for image captures) and slow response times, and can be redeemable
which “substantially limits capabilities and increases across stores, according to
consumer frustration,” Apple says. Augme. Redemption options
generally are limited due to
Location-Based Networks: the lack of POS technology;
Third-party operators such as Shopkick, Foursquare and some retailers have adopted
Gowalla can deliver established audiences that, at least methods of making the
for now, seem to be relatively engaged in the process offers downloadable to
of checking in at retail to earn loyalty cards, with redemption occurring when the
rewards. Whether or not these shopper presents the card (instead of a phone) at
services survive long-term will checkout. While that works well for retailer-specific
depend largely on the value campaigns (at least at the 15-odd chains that have the
that they deliver – and that will capability), there currently is no easy way for brands
only come through widespread to conduct a national program, aside from working
participation from retailers and through multiple technology vendors. Augme is among
product marketers (or, perhaps, a few companies that are working to aggregate the
by how deeply larger entities marketplace.
like Facebook, Google and
Twitter move into the space). In-store Technology:
“You don’t need a third- In large part, the smartphone “can become a personal
party app to run a location- kiosk for each shopper,” says Iacovone, which eliminates
based program – or any app at some of the need for in-store deployment of other
all,” says Apple. “The same capabilities – namely, GPS and devices. Meijer’s Michael Ross says that the chain plans to
device IP [Internet protocol] – can be leveraged through “leave the hardware in the hands of the shopper.”
a mobile website or consumer-response technologies like Still, nearly 80% of
SMS, or 2D and 1D codes. And that way, you can brand the marketers believe that in-store
experience yourself.” technologies “will work in
tandem with personal devices
Mobile Coupons: to deliver relevant, targeted
Paperless coupons delivered to feature and smartphones communication.” Kiosks
have served as the mobile “toe-dip” for many marketers or digital signs that deliver
for multiple reasons: they’re a tangible, recognizable shopper-specific messages
companion to a traditional marketing tactic, they deliver when activated by a phone
easily measurable results, and they have been quickly could very well become a
embraced by consumers. (They also hit the cultural common offering at retail –
zeitgeist during the recession, which didn’t hurt.) and would save marketers
“They may not be sexy, but the fact of the matter from launching unnecessary
is, all 248 million mobile devices can interact with them apps.
right now,” notes Apple. While the numerous systems and “I may not really care
service providers available, and the resultant lack of scale enough about your brand
or standards, make the marketplace a bit confusing at the Monday through Friday,” says
moment, penetration rates and intention levels – as well Apple. “But I do care enough
as early redemption rates – suggest that marketers should about it on Saturday, when I’m
be diving in fully. in that retail environment, to
Augme divides the marketplace into two categories: respond to your offer.”
A “mobile offer” is a discount on a product or a sale When choosing tactics, the single most important
presented by a specific retailer. The consumer either point to remember is that “your audience will determine
receives a numeric code on her phone via SMS, or a the technologies you use,” says Iacovone. “Your consumer
barcode that can be scanned at checkout. (The latter will determine their mode of communication with your
method is only possible at retailers like Target that have brand.”
7

8. BEHAVIORAL RESEARCH
MOBILE SHOPPERS ARE were tracked for more than one week as they performed
various shopping tasks on their phones. (The inventive
BORN, NOT MADE. study concluded with six subjects conducting all of their
Black Friday shopping on their smartphones.)
In the mobile shopping universe that Arc uncovered
“There are some consumers who are inherently wired to
through the study, 49.1% of consumers can be classified
do this,” says Masha Sajdeh, chief shopper strategist for
as “mobile shoppers,” having engaged in one or more
Arc Worldwide, the Chicago-based marketing services
relevant activities monthly (see chart below for the list
arm of Leo Burnett. Sajdeh is referring to the 10% of
of qualifying activities). Of those, 10% are “heavy” and
U.S. consumers who, based on the agency’s proprietary
39.1% are “light” users, based on the penetration and
survey, have been classified as “heavy mobile shoppers.”
frequency of their activities. Of the remaining 50.9% of
In September 2010, Arc surveyed 1,000 mobile phone
the population, 40.6% have yet to engage in any mobile
owners aged 18 to 64 about their mobile usage, then
shopping tasks, and roughly 10.3% don’t own mobile
enhanced that sample with another 800 surveys of
phones.
smartphone owners who had engaged in at least one
Depending on your outlook, that means half of U.S.
mobile shopping activity. The agency then conducted
consumers already are involved in mobile shopping,
an intensive qualitative study of 36 consumers who
or “that half aren’t shopping,” says Leo Burnett and Arc
Mobile Shopping Activity Penetration
100 % who do the following activities at least once a month from their mobile phone
93 94 93
91
85 86 86
84 83 83 82
81
80 78
79 78
74 73
73 73
71 70
70
68
67
64 65
63 63
62 61 61
60 59 59
57 58
54
52
47
40
40
32 31
25 24
23
22 21 21 21
20 20 19
20 19 19
17
16 16
15 15 14 14
13 13 13
11 11 11
10 10 9 9 9 8 8
6
0
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© 2010 Leo Burnett and Arc Worldwide
8

9. research manager Carrie Newman. Either way, it suggests
that there is plenty of room for steadily increasing
The Mobile Shopper Universe
adoption levels as the penetration rate of smartphones % of Total US Adult Population Ages 18-64
rises and consumers become more familiar with the
various tools at their disposal.
Arc’s group of heavy mobile shoppers is “dramatically” Hvy
younger than the general population, with 67% aged Mobile
10.0%
35 or less, according to Newman. They also skew Mobile
slightly higher toward male and single, which aren’t Shoppers
the demographics you’d typically find at the high-end Light 49.1%
of a shopping survey. But that fact suggests growth Mobile Phone Mobile
Owners Shoppers
potential, she says. “Smartphones are more conducive to 89.7% 39.1%
shopping than standard feature phones, so we anticipate
the number of mobile shoppers to increase along with
smartphone penetration.”
Mobile
But the study finds that mobile capabilities so far Non-Shoppers
are not dramatically changing general behavior, as 40.6%
consumers largely are using their phones to perform the
shopping tasks they used to carry out on a computer (or
elsewhere) rather than altering their habits to any great No Mobile Phone 10.3%
degree.
Heavy shoppers, for instance, have two defining
characteristics. First, they qualify as heavy mobile © 2010 Leo Burnett and Arc Worldwide
users in general, utilizing their phones extensively for a
wide variety of activities such as making calls, texting,
conducting searches and playing games (see chart on to purchase beyond their traditional confines so that, for
page 2). Second, they also are habitual heavy shoppers, instance, price comparisons previously conducted on a
consumers who are more likely to shop generally by home computer before the trip began are now being
visiting a mall or using their home computers. handled right in the store. This trend “implies a prolonged
For these heavy shoppers, “nothing is off the table. ability to influence the purchase decision. The phone is
They love experimenting” with new tools, as their usage very important in this respect,” says Newman.
levels for a vast array of mobile services illustrates, says The trend also implies that shoppers are becoming
Sajdeh. Light shoppers, on the other hand, “have a much less diligent about their pre-trip research. If a good deal
more functional relationship with their phones,” both for of the information will be readily available at the shelf,
shopping and in general, and therefore generally engage then strenuous research online beforehand is much
at much lower levels, she says. less necessary. “They can be more casual about their
Based on those two criteria, Arc identified 5.8% of the homework since they always have their phone,”
light shoppers as the likeliest candidates to “move up” to Sajdeh says.
heavy, based on the fact that they rate as heavy shoppers
away from the phone and as heavy mobile users when Mobile Shopping Defined
it comes to non-shopping activities. (That assessment, In addition to obtaining insights into shopping behavior,
however, does not dismiss the potential for other “lights” the study also gave Arc an opportunity to scope out
to become heavy shoppers as well, Newman notes.) a clearly defined “universe” of all the activities that
So far, then, the smartphone has not turned any comprise “mobile shopping,” and then develop some
casual shoppers into mobile shopaholics. However, theories on how marketers should respond to them.
there are two behavioral changes that do seem to be Arc’s parameters go well beyond making a purchase
influenced by the devices, according to the study. to include product and price searches, comparison
The first is a phenomenon that Sajdeh referred shopping, product research and “gathering any
to as the “shopping blip,” in which smartphone users information at all about a product or store,” the report
browse online during what used to be “down time” in explains. In all, Arc identified 37 mobile shopping
such captive situations as the doctor’s waiting room or activities.
the train (in what might be considered the 21st century These activities were then statistically classified into
version of window shopping). four types based on their level of adoption by consumers,
The second is that the smartphone’s omnipresence their uniqueness to the mobile (or digital) environment,
is allowing shoppers to extend the steps along the path and their role in shopping. They are:
9

10. BEHAVIORAL RESEARCH
Portability: Four activities unique to the digital world less often, both through the phone and during their
that involve searching for information about stores or “traditional” shopping process.
products, or receiving information from retailers and The first two activity types “transcend product
other sources on promotions, events and other offers (see categories because they come from the digital world,”
chart below). having “translated quite nicely” from computer to phone,
These “Info on the Go” activities are the ones most according to Sajdeh. As such, marketers might be better
frequently utilized by both heavy and light mobile off “adopting a pervasive tool” from a third-party source
shoppers. Among heavy shoppers, their penetration rather than “creating a unique solution” in these areas,
levels are extremely high. she says.
As an example, Sajdeh pointed to Best Buy’s
“Twelpforce” technical service hotline, which uses Twitter
Portability Uses, by Penetration Levels as its communication platform rather than a proprietary
system. The retailer “would never be able to get the reach
Light Heavy
on its own that it does through Twitter,” she says.
47.3%
Look up store address, Fundamental Shopping Tasks: Fourteen tasks that put
hours or location 93.2%
a mobile twist on collecting the information needed to
Use a search engine during
40.2% inform the purchase decision (see chart below).
your shopping process 94.2%
Fundamental Uses, by Penetration Levels
Receive notifications about 32.1%
in-store promotions/offers Light Heavy
85.2%
Refer back to retailer 24% 30.6%
Visit a retailer website
emails you have saved (e.g. bestbuy.com)
77.8% 91.1%
0 20 40 60 80 100 Look at prices on a 25.1%
Source: 2010 Leo Burnett and Arc Worldwide
retailer’s website 92.8%
Look up online product 23.1%
information while in a store
Virtual Social Shopping: Five actions involving 86.1%
gathering and sharing information about stores and Compare physical store prices 22.4%
products with family, friends or the public at large (see with online prices, in-store 84.1%
chart below). 21.1%
Read customer ratings
Such “Sharing and Advice” activities are employed or reviews of a product 86.1%
extensively by heavy shoppers, at nearly the same
20.7%
penetration levels by phone as by computer and, in Visit a manufacturer website
(e.g. whirlpool.com,) 79.1%
one case – texting or tweeting the worthiness of a price
offer – at a higher level. Light shoppers use them much Make a shopping list
20%
73.3%
19.5%
Virtual Social Uses, by Penetration Levels Look for deals
at nearby stores 82.7%
Light Heavy
Check on the status 19.3%
of an order 81.2%
21%
Receive/Share texts about
Read customer ratings or 18.8%
products from friends/family 72.9%
reviews about a store 74%
15.8%
Receive/Share content about 18.5%
Compare products from
products/stores on user gen. sites 71.2% your mobile phone 84.5%
Receive/Share photos 15.1% 16.5%
Search elsewhere when the
of products from friends/family 70.5% product is out of stock 82.3%
13.2% Calculate price comparisons 16.2%
Gather/Share opinions about
a product/store from friends/family for different size products 67.1%
67.6%
Check in-store availability 15%
Tweet or text price details 10%
of a product 78%
to see if the deal is worthwhile
60.8%
Source: 2010 Leo Burnett and Arc Worldwide Source: 2010 Leo Burnett and Arc Worldwide
10

11. These “Products, Prices and Reviews” activities are Specialized Uses, by Penetration Levels
conducted extensively by heavy mobile shoppers, often
Light Heavy
at levels at or near those for general shopping. Light
mobile shoppers, on the other hand, partake at relatively
14.2%
low levels, despite the fact that they perform the tasks Browse coupons from
your mobile phone 72.9%
through other channels.
Retailers should strongly consider investing in the Use an app or mobile 13.6%
shopping application
development of proprietery solutions for these tasks, 63.6%
Sajdeh advises. By extension, this is also the area in which Use bar codes or scanning to 13.5%
product manufacturers can provide the most assistance. get pricing or product info 59%
“A single retailer doesn’t have the expertise across the 13.4%
Use a coupon from
entire store,” she says, “so it’s a perfect opportunity for your mobile phone 57.5%
product marketers to deliver their own category-specific
11.4%
understanding.” Browse store circulars
from your mobile phone 70.2%
Sajdeh notes that Target gained support from
multiple product vendors when developing its Participate in a sweepstakes, 11.1%
game or promotion offer
smartphone app, which directly addresses several of 61.7%
these fundamental tasks. Place an order ahead of time 10.8%
to ensure a quicker pick-up 58.1%
Specialized Shopping Tasks: The final 14 actions
Use retailer comparison, selector, 9.6%
encompass a variety of shopping tasks that either require or customization tools 64.7%
the unique capabilities of a smartphone or are being
9.2%
reinvented by the devices (see chart, right). Use gift cards, reward
cards, or gift registries 63%
These “Specialized and Specific” activities enjoy
relatively high levels of usage among heavy shoppers View product demos 8.8%
(64% have used an app; 59% have scanned a barcode), 59.3%
Add a product to a
but very low levels among the light group. wish list or favorites 8.5%
Since they “come from the shopping world,” these 62.9%
last two types don’t transcend product categories, and Use gift guides (e.g. look
7.9%
for a ‘gift under $100’
therefore need to be tailored to address any unique or a ‘gift for mom’) 53.7%
characteristics in the category’s shopping process, Sajdeh
7.8%
says. Compare payment plan options
(e.g. mortgage calculator) 61.3%
Because they are “on the fringe” in terms of consumer
engagement, Sajdeh suggests collaborating with an Utilize virtual shopping tools that 6.1%
help you visualize the product
outside partner to develop solutions. (Target’s barcode 51.5%
scanner, for instance, was developed by RedLaser, which
also has its own app.) Source: 2010 Leo Burnett and Arc Worldwide
In large part, “all of the analog shopping behaviors
that first migrated online are now moving to mobile,” says
Sajdeh. But some, such as price comparisons, “are now
on steroids” because of increased ease of use and greater
proximity to the purchase decision, she notes.
While significant aspects of the path to purchase may
largely become a mobile function, there are still aspects
of the shopping process that will long require the physical
environment. For this reason, “Don’t fear the mobile
phone, embrace it to enhance the store experience,”
Sajdeh says.
11

12. BEST PRACTICES
RETAILERS outfitted with the technology required to send offers to
shoppers after they enter a store.
Best Buy also runs Twelpforce, a customer service
Mobile websites and apps are becoming commonplace
program that launched in summer 2009 via Twitter but
among retailers. But the following companies already are
will soon expand to Facebook and other digital platforms.
moving beyond store locators and facile product searches
The service gives mobile users near-instant access to
to offer tools that are truly designed with on-the-go
technology experts.
shopper needs in mind.
Best Buy Meijer
It should be no surprise that the nation’s top electronics Last summer, the privately held Midwest supercenter
retailer would be leading the migration to digital shopper chain launched a mobile coupon program called
marketing. Among its numerous initiatives has been the “mPerks” that lets registered
deployment of QR codes as a standard component of shoppers redeem pre-
product signage, and a regular feature in circulars as well. selected coupons at
The codes generally provide access to product, service checkout by entering their
and promotional offers on the chain’s website. mobile phone numbers.
The chain also has launched several apps, including The deals are selected on a
one specifically for video game enthusiasts (for which it microsite linked to Meijer’s
also runs a special loyalty program, Facebook group and home page, and stored on
Twitter account), and another that delivers enhanced frequent-shopper cards
content about theatrical and home-video movie releases. until they are redeemed or
Elsewhere, Best Buy was a charter sponsor of the expire.
Shopkick location-based rewards app that launched In a handful of stores,
in August 2010. (Macy’s and The Sports Authority also Meijer also is testing “Find-
joined for the launch; Target, American Eagle and Crate & It,” a smartphone app that
Barrel soon followed.) By Oct. 1, 257 locations had been helps shoppers locate
12