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17
Jan
2014

Retail via Tablets Rise as Smartphones Showroom Furbies

POSTED BY Windsor Holden
As my colleague Sian Rowlands observed in her most recent blog, UK viewing on tablets overtook that on PCs and laptops on Boxing Day, possibly because a population encumbered by excess turkey were unable to walk the five yards or so to the desktop computer, possibly because the desktop is rarely accompanied by a sofa on which you can sprawl while browsing. And as people are spending more time on tablets, they are also spending more while on them. On Cyber-Monday in the US, nearly 12% of all online sales occurred on a tablet device, while combined sales via mobiles and tablets approached $390 million on that day alone. Furthermore, the Cyber-Monday phenomenon has now extended to markets such as Canada and the UK, with a sharply rising proportion of transactions occurring on a smartphone or tablet. In our recent report on remote mobile purchases for digital and physical goods, we argued that in several developed markets – such as the US and UK - retail purchases on mobile devices would overhaul purchases made on desktop and laptop within five years. This is due to the following factors. Firstly, there is a clear migration from desktop/laptop to tablet/sofa; second, as consumer affinity with mCommerce has increased, much of the net new spend is occurring on tablets as those devices becoming increasingly mass market; third, the scale of purchases made on tablets are, on average, marginally higher than those on PCs. In short, it wasn’t just my wife’s iPad that was busy on Amazon this Christmas. One further point is worth observing at this juncture: that while purchases on tablets now substantially outstrip those made on smartphones, the smartphone is increasingly used within the storefront environment for comparative purposes. In this process – known as showrooming – the shopper (let’s call him Windsor) goes into a store, looks at several different varieties of Furby Boom, takes a sharp intake of breath at the price (a particularly sharp intake as all four offspring want one of the wretched things), plucks out his smartphone, and checks the price against those of several well-known online retailers, before nipping back home and spending what still amounts to a small fortune, but a slightly smaller fortune than would have otherwise been the case, via a tablet. Interestingly, a number of retailers are now introducing strategies which recognise showrooming and are trying to use it to their advantage. Rather than the customer having to look up the price, Target has equipped its sales assistants with iPads to compare pricing for them: it will then match the prices for identical products from Amazon.com, BestBuy.com, Walmart.com, local retail stores and its own website, Target.com. Best Buy operates a similar policy, but compares a wider selection of online retailers. This process then reaches its zenith when these tablets can be used to enable consumers to purchase the items on the spot, rather than having to queue: the UK retailer John Lewis is currently trialling this option at three of its London stores. What is apparent from the shift in consumer behaviour is that mobile devices are now integral to a successful retail strategy: retailers that fail to offer mobile channels – for browsing (both in and out of store), for purchase and for engagement will be left trailing their competitors. Meanwhile, I now have four Furbies bouncing and burbling around my house. Deep joy.