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Smartphones changing how customers and stores interact

Lauren Abdel-Razzaq
The Detroit News

The customer who searches a store's website for a coupon. That person who uses the Amazon app to price-match. The spouse who texts a photo of a product to a husband or wife, making sure it's the right item.

There's no question that mobile technology has changed the way people shop. But it's also changing how stores invest in reaching their customers.

"The numbers on how much time people are spending on mobile devices is staggering," said Hyaat Chaudhary, CEO of Carbon Media Group, the world's largest digital media company focused on outdoor enthusiasts. "Whether you're a retailer, a brand, or a media company like us, I would say everyone is trying to scramble to figure out a mobile strategy."

Digital analytics company comScore estimates consumers will spend $61 billion this month and next month shopping online, up 16 percent compared to the same time last year.

Desktop sales, long established as a method for shopping, make up most of that total, with $53.1 billion, or 14 percent more than last year. But comScore also says mobile sales should jump 25 percent this year, to $7.9 billion.

Chaudhary says this is another sign to retailers that they need to invest in mobile technology to meet their customers where they are.

"More and more people are using their phones not only as avenues for the Internet but as tools for everyday," said Chaudhary, whose Bingham Farms-based company provides digital advertising tools for retailers like Cabela's and Gander Mountain. "Everyone is trying to figure out how to interact with consumers on their phones. In general we're seeing a shift to digital overall because more and more people are spending time on mobile devices. All these advertising dollars are moving away from print products and going to digital."

'They should embrace it'

According to eBay Enterprise's 2014 Holiday Retail Audit, retail stores surveyed said mobile commerce was their top competitive weakness. At the same time, 68 percent did not have plans to invest in mobile infrastructure for the upcoming shopping season.

The audit is a survey of more than a thousand e-commerce and marketing professionals from U.S. retailers with revenues of $5 million to $250 million. It looks at how much the companies are investing in their infrastructure in preparation for holiday shopping.

"Retailers don't have to fear this. They should embrace it," said Craig Peasley, head of product marketing at eBay Enterprise, which helps thousands of clients to create a mobile presence. "It's a way to create a competitive advantage. Those well-positioned with mobile will be able to do better this holiday and the holidays after that."

With the proliferation of smartphones and tablets, and the fact that consumers are just now starting to feel more comfortable about spending, the time is perfect for retailers to offer apps, particularly ones with coupons and deals, says Linda Wiechowski, a professor of finance and economics at Walsh College.

"With the downturn in the economy, a lot of people had no choice but to cut back and look for ways to save," said Wiechowski. "Some of those habits they picked up are things they continue to do now."

She says she even urges her students to use apps and online sites to look for coupons and price matching when they are out shopping.

"Ideally, if you want to be fiscally sound and save money and not go over your head with holiday spending, plan and do your research ahead of time," she said. " But when you go out to the stores keep researching. Why spend more than you have to spend?"

Phone checks for coupons

Dearborn resident Samia Bazzi is a fan of Black Friday. And when she's out shopping, she says she's sure to keep her phone close, checking for any additional coupons or deals.

"We go out at night with the kids and they enjoy it," said Bazzi, who was out shopping with a coupon on her phone Thursday at the JC Penney at Fairlane Town Center in Dearborn. "It's nice that all the places are open."

At any given time, about 44 percent of shoppers use their smartphones while they're shopping, and more than a third of those are doing price comparisons, according to a report from McKinsey & Company published in the Harvard Business Review in June 2013.

In order to determine how much that trend affects Black Friday sales, this year Mobidia Technology, a cell phone data aggregator, looked at how usage changed for Black Friday in 2012 and 2013.

The picture was clear: more people are using their smartphones for holiday shopping. Use of mobile shopping applications increased by 48 percent and 86 percent respectively for Thanksgiving and Black Friday compared to the rest of the 2013.

"It's just easier. You can be more efficient," said Chris Hill, senior vice president of marketing at Mobidia.

Some retailers are doing a great job reaching their customers though effective apps, like Target, Wal-Mart and Kohl's, Hill says. But others have work to do.

"They need to be careful. It could be a missed opportunity if you wait too long," he said. "Consumers are ready. That is clear from some of the leading apps out there."

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