ONLINE INSIGHTS Mobile Shopping Behaviors In-Store Activities and Plans for the Upcoming Holiday Shopping Season November 2014

Copyright 2014 BOSTON

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Overview This study was conducted by Burst Media and Rhythm NewMedia—companies that help brands connect with consumers across connected devices. Conducted in the first half of October 2014, we surveyed 786 US online adults aged 18 or older. The study focuses on why consumers use mobile devices while shopping within a brick-and-mortar store location as well as how and when they plan to shop this year for the “traditional” December holidays such as Christmas, Hanukah and Kwanza. As was the case in 2013, Cyber Monday again falls in December this year—and it’s clear that shoppers are raring to go.

Key Findings Consumers use mobile devices in-store to help make purchasing decisions. Among respondents who use mobile device(s) inside physical retail locations to help with the shopping experience, one-half (53.8%) research and compare prices of different stores—and 41.5% research and compare the features of different brands. Push notifications received in physical retail locations drive retail purchases. Three-quarters (76.8%) of respondents who report receiving mobile push notifications for in-store promotions read the alerts when they come through—and 67.2% usually redeem what is being offered. As of mid-October, more than one-quarter (27.2%) of respondents have started shopping for the holidays. This figure nearly doubles our 2013 finding for the same period. Planned use of a desktop device for holiday shopping has dropped sharply. In 2014, one-third (32.7%) of respondents report using desktops for online holiday shopping—compared to 47.8% in 2013. Mobile continues its ascent. One-third (34.2%) of respondents who use a smartphone and/or tablet to shop will use their mobile devices more this holiday season versus last. Retailers will see the impact of purchases made via mobile devices. One-third (33.0%) of respondents who use a smartphone and/or tablet to shop for holiday gifts will make purchases directly on their device(s). Consumers shop online to avoid the stress of waiting on large lines in stores. One-quarter (24.9%) of respondents say their favorite aspect about shopping digitally is that it’s “relaxed.”

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #1: Shoppers Rely on Mobile for In-Store Help What Shoppers Do In-Store on Mobile Devices Men

60.1%

58.3%

50.3%

50.6%

47.7%

Women

46.9% 41.2% 34.7%

33.5%

33.6%

30.4% 21.5% 21.0% 14.2%

13.7%

11.3%

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Chart #1 Burst Media and Rhythm NewMedia, Oct 2014 n = 473 Margin of Error = +/- 4.5%

One-half (50.1%) of men and women (50.6%) use mobile devices inside physical retail locations to help make purchasing decisions. Interestingly, it is only among the youngest (aged 18-24) and oldest (aged 65 and older) segments that we see fewer than one-half saying they use a mobile device while in a retail location. Among these two segments, 39.4% and 22.4% respectively say they use a mobile device within a retail location to aid in their shopping process. In addition, the majority (58.8%) of respondents reporting a household income (HHI) of $100,000 or more also use mobile in this regard. Mobile Devices Help Consumers Research Options, Compare Products and Make Decisions Among respondents who use mobile device(s) inside physical retail locations to help with the shopping experience, one-half (53.8%) use their devices to research and compare prices of different stores— however more women than men (58.3% vs. 47.7%) say they engage in this behavior. [See chart #1.] The divide is even greater among the genders when it comes to the second most-cited (48.8%) behavior: more than one-half of women (60.1%) vs. one-third (33.5%) of men turn to mobile devices in retail locations to access coupons and/or sales promotion codes. Women are also more likely than men (30.4% vs. 14.2%) to use a mobile device to access a retailer’s loyalty or rewards account. Men do not always take the back seat when it comes to in-store mobile use, as they are more likely than women to research/compare product features (50.6% vs. 34.7%) and product reviews (50.3% vs. 33.6%). Interestingly, 40.0% of 18-24 year-old men report using a digital payment system (e.g., Google Wallet, Apple Pay, etc.) inside physical locations—a figure that’s far above the overall finding for men (13.7%) and women (11.3%).

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #2: In-Store Push Notifications Drive Retail Awareness and Sales Push notifications—which can be in the form of badges, sounds or custom text messages—are playing an increasingly important role in the in-store retail shopping experience. Among all our respondents, twofifths (41.7%) of women and 28.4% of men report having received alerts on their smartphones for in-store deals, incentives and/or coupons while shopping in brick-and-mortar locations. Among respondents who have received push notifications on their phones while in-store, a whopping three-quarters (76.8%) read the alerts when they come through. Only 20.4% say they ignore the alerts. Most notably, of respondents who read a push notification they have received on their phone in a store, 2-in-3 (67.2%) say they usually redeem what is being offered. Men are more likely than women (74.8% vs. 63.6%) to redeem these incentives or act on special offers, deals, etc.

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #3: Compared to 2013, Holiday Shopping Has Started Early Respondents to our survey are ready to take on the 2014 holiday shopping and spending season. In fact, more than one-quarter (27.2%) of respondents have already started shopping for the holidays (i.e., started prior to Halloween). This figure nearly doubles our 2013 finding of 14.3% for shoppers that started during the same period. Women more so than men (30.7% vs. 23.1%) report that they have already started shopping for the holidays. One-fifth (20.8%) of women and 14.5% of men plan to start holiday shopping after Halloween but before Thanksgiving, and 38.0% of all respondents (39.6% men; 36.6% women) plan to start after Thanksgiving but not wait until the last minute. Like every year, there will be stragglers—and 15.5% of men and 9.2% of women say they’ll wait until the last minute but shop before Christmas Day. Men Plan to Spend More Than Women This Season Overall, one-fifth (20.7%) of respondents plan to spend more on gifts for this year’s holiday season vs. last—a slight uptick from our 2013 finding of 18.7% (vs. 2012). Interestingly, more men than women (26.2% vs. 16.1%) report they’re planning to spend more on the holidays this year vs. last. Two-fifths (38.8%) of respondents plan to spend about the same this year as they did last, and one-quarter (25.6%) plan to spend fewer dollars on holiday gifts in 2014 as compared to 2013.

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #4: Desktop Usage Drops Significantly for Online Holiday Devices Used to Go Online and Shop for the Holidays 56.8%

Men

49.5%

Women

47.4% 42.5% 35.0% 30.6%

14.0%

10.3%

7.5%

Mobile

Laptop

Desktop

Connected TV

5.2%

Gaming Platform

Chart #2 Burst Media and Rhythm NewMedia, Oct 2014 n = 786 Margin of Error = +/- 3.5%

The vast majority (85.7%) of respondents to our survey goes online and uses digital channels to research and/or shop for holiday products and gifts. Among these digital holiday shoppers, three-quarters (77.4%) will make an actual holiday purchase online. The finding is consistent among gender and most age segments with at least 7-in-10 purchasing products online. The one segment that is an outlier is men aged 18-34; only 2-in-3 (67.8%) will buy a product or gift online this holiday season. Mobile Devices and Laptops Own the Holidays, and Desktops are Losing Ground More than one-half (53.4%) of respondents say they will use a mobile device (i.e., a tablet and/or smartphone) to go online and research and/or purchase products this holiday season. Among these mobile users, one-fifth are either smartphone users only (21.5%) or use both a smartphone and a tablet (19.7%). Just 12.2% use a tablet exclusively. Perhaps most notably, nearly 3-in-10 of these mobile shoppers (33.3%) will make holiday gift purchases directly on their mobile devices—more men than women (39.7% vs. 28.1%) report they will do this. Women are significantly more likely than men (56.8% vs. 49.5%) to say they will use a mobile device to shop this holiday season. [See chart #2.] The most mobile segment is women aged 18-34—among this segment, nearly two-thirds (63.1%) will use a mobile device to shop for the holidays. Additionally, there are significant pools of mobile holiday shoppers among all household income (HHI) segments. However, planned mobile use does increase with income and tops off at a 70.3% reading among respondents reporting HHI of $100,000 or more.

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #4 (Continued) Interestingly, planned tablet use for holiday shopping has dropped from our 2013 finding of 41.3% to 31.9% this year. Laptops are very much a vehicle for holiday shopping with 45.1% or respondents noting that they plan to use one. However, desktop computer usage is in decline. In 2013, 47.8% of respondents reported using desktops. This year, that figure drops to one-third (32.7%). Among 18-34 year-olds, less than one-quarter (23.2%) use desktops for online holiday shopping. Conversely, at 43.1%, the 55+ set is relatively active with desktop use—including 49.7% of men this age and 38.4% of women. Compared to 2013, Mobile Users Will Use Their Devices More for Holiday Shopping More than one-third (39.5%) of respondents who use a smartphone and/or tablet to shop will use their mobile devices more this holiday season versus last. This figure includes 20.9% who report they will use mobile devices significantly more than last year and 18.6% who will use mobile devices slightly more than last year. More than one-third (34.4%) will use their smartphone and/or tablet about the same amount this year as compared to last year for holiday shopping. Among 18-34 year-olds, two-fifths (44.3%) will use mobile devices more this year to shop for the holidays, vs. last—including more than one-quarter (28.4%) who report they will use devices significantly more. Respondents reporting HHI of $75,000 or more also plan to increase their mobile holiday shopping this season, with fully one-half (52.5%) saying they will conduct more shopping activities on a mobile device.

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #5: Retailers Will See the Impact of Purchases on Mobile Devices Researching and Purchasing Holiday Gifts on Mobile Devices 63.3%

52.3%

Men

49.3%

Women

44.0% 39.7%

28.1% 24.3%

Research Before Purchasing Online

Research Before Purchasing In-Store

Purchase Gifts Directly

26.8%

Locate the Nearest Store

Chart #3 Burst Media and Rhythm NewMedia, Oct 2014 n = 473 Margin of Error = +/- 4.5%

Mobile holiday shoppers will use their mobile devices for a number of shopping related activities. The shopping activity most frequently cited by mobile holiday shoppers as one they will likely conduct on their mobile device(s) is comparing prices of products (61.5%). This activity is closely followed by researching holiday items/purchases (55.5%). Among respondents who will research holiday items/purchases on their mobile devices, 58.8% say they will do so to assist in making online purchases and 46.2% say they will do so to help with offline purchases. Interestingly, women are much more likely than men to say they will conduct product research on their mobile device to assist in making an online purchase, 63.3% versus 52.3% respectively. [See chart #3.] The finding is not as dramatic between the genders for mobile research for off-line purchases – with half (49.3%) of women and 44.0% of men saying they will do so. Other holiday shopping related activities that will be conducted on a mobile device(s) include: search for and read product reviews (54.2%), find nearest store location (51.2%), view promotions and deals (51.1%), visit a store’s mobile website (46.4%) and download a store’s free web app (19.6%).

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ONLINE INSIGHTS

Mobile Shopping Behaviors

Insight #6: Stress Avoidance Tops the List of Favorites for Going Online Favorite Reason for Holiday Shopping Online and/or With Apps

Men

Women Relaxed

25.2%

24.6%

Convenient

13.8%

22.4% 10.9%

Efficient

17.5%

Always Open

14.5%

12.0%

Budget Friendly

11.1%

7.6%

Other Reason(s)

6.8%

9.1%

Chart #4 Burst Media and Rhythm NewMedia, Oct 2014 n = 654 Margin of Error = +/- 3.8% ”Prefer not to say” not included

Consumers go online to avoid the typical holiday shopping stresses of dealing with store crowds, finding parking spaces at the mall, waiting in long lines and more. To this end, one-quarter (24.9%) of respondents overall say their favorite aspect about shopping digitally is that it’s “relaxed” and helps them avoid stress. The second most popular reason for online holiday shopping, at 18.2%, is convenience— but more women than men (22.4% vs. 13.8%) say this is their favorite reason. In this case, we defined convenience as not having to go anywhere or even get dressed to shop. [See chart #4.] Interestingly, more men than women (17.5% vs. 10.9%) say efficiency is their favorite reason for turning to online channels and apps to shop; they find they “shop more quickly and effectively” online.

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ONLINE INSIGHTS

Mobile Shopping Behaviors

How You Can Use This Information Time spent with digital devices has seen a significant shift over the past few years, with a very clear move from tethered devices to mobile devices. This shift has had a dramatic impact on consumer behavior— most notably in the fact that mobile devices (i.e., tablets and smartphones) are now an essential element of consumers’ shopping process whether at home or in a physical store location. This holiday season will very clearly be impacted by the rise of the “mobile consumer” and their use of mobile devices to research products and/or make holiday purchases. To be successful this holiday season, marketers must embrace making consumer connections on mobile platforms. These connections can be accomplished and amplified through owned and operated platforms (i.e., mobile optimized websites and mobile apps) as well as through mobile advertising opportunities and mobile extensions to television and interactive display campaigns. When paired with mobilized sites on browsers or within installed apps, mobile rich media specifically can be a very effective branding and direct marketing vehicle—especially when location-based targeting (e.g., geo-fencing within a mile radius of a physical retail location) is applied. Additionally, mobile in-stream video can be an extremely effective tool to massively distribute a brand’s message with sight, sound and motion. Brands might also consider beaconing technology—devices installed in brick-and-mortar locations that can “beam” coupons and branded content to nearby smartphones via app push notifications. Our research does show that consumers do pay attention to these types of offers and do redeem them. Just as important as creative and technology is the context of where advertising and marketing messaging appears. The independent web and mobile platforms comprise a wealth of highly segmented and focused communities. Marketers must ensure their messages target audiences in content that engages consumers and promotes awareness and/or action.

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ONLINE INSIGHTS

Mobile Shopping Behaviors

About Burst Media Founded in October 1995, Burst is a full service provider of digital advertising solutions for independent web publishers and brand advertisers. We’ve grown up in the digital space and clearly see how it fosters vibrant and diverse communities that are redefining the way brands must communicate, interact and engage with consumers. For Burst nowhere is the power of communities more current than in the independent web—and the independent web is what Burst believes in. Where we succeed is bringing the independent web to brands that want to reach loyal, highly segmented audiences—no one does it better and at greater scale than Burst. Burst is the independent web—and through our direct publisher relationships and our cutting-edge creative solutions we bring success to publishers, advertisers and audiences alike. In addition to our digital media offerings, we also market AdConductor, an ad management solution, to ad-supported businesses such as ad networks, technology providers, portals and individual websites. Visit us at www.burstmedia.com or call +1 (781) 852 5200 for more information. @BurstMedia www.facebook.com/burstmedia www.linkedin.com/company/burst-media

About Rhythm NewMedia Rhythm is a leading premium mobile video advertising technology company, focused exclusively on smartphones and tablets. The company connects brand advertisers with highly engaged mobile audiences by selling and serving video, rich media and other immersive advertising formats. The company’s core expertise lies in the delivery of impactful brand advertising campaigns against high quality content for targeted, relevant audiences. Rhythm has partnered with more than 50 premium media companies, across a portfolio of 200+ properties. For more information please visit www.rhythmnewmedia.com.

About Online Insights Trends in Internet use and consumers’ online purchasing behaviors are constantly evolving, so it can be very difficult to stay up to speed. That’s why Burst Media publishes Online Insights—our research series that highlights emerging trends in online media and ecommerce. Findings reported in Online Insights are based on an online survey fielded across our collection of sites.

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