How technology is impacting modern marketing
M-commerce is nearing maturity and the potential in social shopping is opening up new horizons for marketers, says Experian’s Danny Thompson.
As mobile tech adoption rises in the UK – Forecasts show that over 75% of the UK population will be using a smartphone by the end of the year – it is fundamentally changing the way consumers interact with brands, something which a major update to Experian’s Mosaic classification has emphasised, alongside demographic changes in ageing, population distribution and consumer habits.
Mobile devices have significantly contributed to the tectonic shift in consumer behaviour. We used to call them the ‘telephone’ but that no longer does it justice, does it? Since Alexander Graham-Bell spoke to Mr Watson the telephone has shrunk distance between people. Now it shrinks distances between decisions, actions, events – everything.
The reality is that since the smartphone and mobile internet was introduced we have fundamentally changed our behaviour. From brick to click, and now click in brick, we are an on-demand nation, 24/7, 52 weeks a year. Therefore it has never been more important for brands to understand their customers and their needs and leverage the right multi-channel strategy to engage people and then convert this engagement to realise actual sales.
Technology haves and have-nots
Take, for example, the mosaic type ‘student scene’, with smartphone adoption at 96%. They are full-time students who live in high density student accommodation close to universities and colleges. Their incomes are low but spending power can be boosted by part-time jobs and money from their parents in addition to student loans; however, 60% will use their phones to compare prices whilst in store to make sure they get the best deal.
Limited incomes don’t, however, restrict their ownership of technology. They have the highest ownership of smartphones, many have laptops and they can’t wait to get their hands on the latest technology.
In terms of attitudes to new technology, the mosaic type ‘Asian heritage’ – extended families with children in neighbourhoods with a strong South Asian tradition – leads the way in adopting new technology.
This is most likely driven by young adults and teens in the household, who enjoy the latest gadgets and regularly use smartphones and laptops for activities such as listening to music online. The group are also the most likely to shop online for groceries every day.
‘Aided elderly’ on the other hand express their dislike of technology and will only upgrade when absolutely necessary. They do not feel confident with technology and are the least likely to own a mobile phone. While some may go online it is usually when someone can show them what to do. They prefer to keep up-to-date with the world by watching TV news channels and reading newspapers.
Clearly, with such different attitudes permeating subsets within the population of the UK, it is important for marketers to fully understand how to reach their customers on the most effective channel.
Technology within the retail environment
The importance of understanding devices and their links to an individual becomes an increasingly important challenge for brands to overcome to ensure they can consistently engage and market to their customers.
Tied into this is location-based marketing; but simply using a location to serve content without considering the recipient on an individual basis will not show the return on investment that is possible.
Take the retail space for example. Mobile shopping is growing at an astonishing pace, with sales through mobile and tablet devices up by 138% in 2013, according to market analysts IMRG and Capgemini. To call this an upswing is an understatement. Currently sales through mobile devices account for about 30% of the total online retail market and that number is only expected to grow.
Technology has already made its mark with concepts such as “showrooming” taking hold, where clients browse in store, compare prices, and shop online. Leading UK retailers are increasingly testing out new technologies, introducing geofencing systems (recognising and registering consumers’ mobile phones using wireless networks when they are in close proximity to a store) and beacons to reach shoppers with targeted, in-store messages.
Social shopping is another area that can increasingly be harnessed by brands. Peer-to-peer influence has always been a major driving force in shopping behaviour, especially with the younger generation and now technology is opening up new ways for marketers to engage this demographic group.
Incorporating insight from social media and leveraging it through multiple channels can be just the right move to turn insight into actual sales. Finding out what appeals to different demographics by looking at the most shared items online and then putting them on display at physical stores can be a great way to use crowd-sourced recommendations and social insight to inspire people to buy.
Therefore it is no longer appropriate for retailers to have strategies for channel or strategies for digital. Rather, retailers need a strategy for the digital age.
Navigating a complex channel mix
The explosion in technology creates endless possibilities for brands to communicate with people. However, a true cross-channel strategy and consistent view of their customers is essential if these opportunities are to be maximised.
By understanding their customers across channels marketers can ensure that they are reaching people with messages that they want to hear and on a channel that is relevant to them – something that varies widely depending on customer preference and convenience.
Danny Thompson is head of product marketing – consumer insight & targeting at Experian Marketing Services