You don’t know your customer (unless you’ve mastered mobile)

Thanks to our ever-present mobile companions, we now have digital habits. The adoption of mobile is influencing behaviour across online activities from search to social media. With smartphones getting smarter, mobile online activity is only set to surge.

Search engine use on mobile is popular across developing and developed markets, with 65% of online users accessing it at least monthly, according to Google’s 2017 Consumer Barometer Study. The growth of high-speed mobile networks and more powerful smartphones have seen mobile become people’s most important, or only, computer.

In 2016, mobile web usage overtook desktop for the first time, a milestone which threatened companies reliant on traditional PCs. Mobile shopping (m-commerce) is growing at 25% each year – Forrester expects online retail sales in the US to reach US$480 billion (£347 billion) by 2019. The share of the m-commerce pie is also becoming larger: BI Intelligence forecast that m-commerce will reach 45% of the total US e-commerce market by 2020.

So here’s the question: are managers equipped for a mobile-first world? And how will seismic shifts in consumer habits hit soon-to-be obsolete, conventional online strategies? What are the likely effects on organisations’ bottom lines?

Forget online, offline. There are three channels now

Nitish Jain, Assistant Professor of Management Science and Operations at London Business School, is working on a stream of research to offer focused pointers to marketing and operations managers. Dr Jain believes firms must shape their strategies to maximise the potential of PC-online, offline and mobile-online.

“Mobile is not just another traditional online channel,” he says. “Its ubiquitous access, ability to track consumers closely and small-size constraints make it distinct. Managers need to know how a consumer behaves differently when they shop on mobile versus when they shop on more conventional online channels such as the PC.”

Over the last decade, organisations have observed consumer behaviour and bent their strategies to their customers’ will. Problem is, our behaviour on mobile is different from that on desktop computers and other larger devices. In other words, a mobile-dominant future demands a mobile-specific strategy, notes Dr Jain.

Our crystal-screen companion defines the way we search and shop. Having Deloitte tell us the average American checks their phone within five minutes of waking up leaves little doubt that our searching brain is always switched on. But there are major forces – from time and location to even the weather – shaping consumer purchase decisions.

Take, for instance, our commutes.

A typical day-in-the-life of regular people sees them wake up in the morning and tap their phone to read their emails before riding the 40-minute subway or tube to work. The carriage is always crowded. Every weekday, at roughly the same time, the average person stands with their mobile clasped in their hands; tapping, scrolling, escaping from the train around them.

Conventional wisdom says that stress from crowds in confined spaces does not make a pleasant shopping experience. Anindya Ghose, a professor of information, operation and management sciences and marketing at New York University, penned the book, Tap: Unlocking the Mobile Economy. He debunked the myth that crowdedness is bad for shopping. Ghose ran a large-scale field experiment on crowded subways in China, sending people offers on their smartphones. He found that as the level of crowdedness increased, people were more likely to accept and redeem offers on their mobiles. Redemption rates on mobile offers sent in crowded settings were, at times, twice as high.

Mobile immersion is a way for travellers to escape uncomfortable crowds and gain a sense of control over their privacy and space. Clever advertisers have cottoned on, offering a much-needed diversion.

The crowdedness phenomenon is just one example of a force powering new and unexpected behavioural patterns, says Dr Jain. Another is shopping during unsociable hours. “We find evidence of disproportionate mobile use versus PC use early in the morning and late at night.” If the upside of mobile is that it is expanding customer engagement, the downside is that crack-of-dawn and late-night shopping leads to more impulsive purchases.