The Local Mobile Advantage of Retailing

A Snapshot of How Mobile Untangles and Enhances the Path to Brick and Mortar

2The Local Mobile Advantage of Retailing

Table of Contents

Introduction .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Methodology & Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Major Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Survey .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Conclusion .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

About G/O Digital and Key Ring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

The Local Mobile Advantage of Retailing

3The Local Mobile Advantage of Retailing

Introduction Retail shopping today – in a world where digital and mobile devices are the norm – is no longer just about reaching people faster and more effectively. It’s about reaching them in more personal, targeted and meaningful ways. Because of the benefits afforded by this new “always on, always connected” way of life, some analysts believe mobile has complicated the path to purchase. However, that is far from the case. The path to purchase – traditionally ordered from discovery to consideration to purchase to loyalty – is no longer what it once was. As more and more consumers divide their attention across multiple devices and screens – at home, at work and on-the-go – it’s become even more difficult for retailers to connect, engage and build meaningful, long-term relationships with consumers. For many retailers, these challenges have caused them to approach their marketing with a channel-specific strategy. However, this is a missed opportunity and one that fails to drive sales from online and mobile channels to brick-and-mortar stores. This opportunity – as we see it – will rest heavily on how brands and retailers leverage iBeacons and push-notification technology to deliver more contextually relevant and proximity-aware advertising to shoppers in real-time. The end goal should be to create a seamless, customer-focused shopping experience – from the second screen to physical stores – that is as easy-to-use, intuitive and engaging as possible.

Methodology & Objectives In order to gain insight into the digital and mobile shopping preferences of US adults, Key Ring, a G/O Digital company, conducted a research study to understand how consumers use their smartphones and tablets in the pre-store, in-store and post-store shopping stages. The study was fielded from May 27, 2014 to June 2, 2014 and garnered a total of over 13,000 responses from Key Ring app users, aged 18 years or older, who own at least one desktop/laptop computer and a smartphone or tablet.

4The Local Mobile Advantage of Retailing

Mobile shopping lists facilitate in-store purchases. of mobile shoppers indicated they “always” create a shopping list before they shop and another 39 percent do so “often.”

4The Local Mobile Advantage of Retailing

Major Findings

Purchase influencers are not identical across retail categories.

Smartphones promise greater “list making” convenience than tablets. of respondents reported that their smartphone is the most convenient device to create a shopping list prior to visiting a physical retail store. This is in stark contrast to only

6.1 percent of respondents who prefer to use their tablets and 4.7 percent of respondents who find their computers to be most convenient.

Beacons and push-notification technology have the power to untangle and enhance the path to brick-and-mortar. When asked to identify the type of device that is “easiest to use” for

shopping in a physical store, a whopping

of respondents identified their smartphones. 90%

Mobile acts as conduit for

saving money.

Saving money in research stage leads to

in-store transactions.

overwhelmingly ranks as the Number 1 mobile shopping activity (35.86 percent), ahead of “buy item online” (12.05 percent).

Nearly half of respondents (47.4 percent) say they are most likely to purchase an item in-store that they have been researching or planning from their mobile device “when the item goes on sale” or “when I find a coupon.”

“Search for a coupon”$

The convenience of everyday low prices (20.7 percent) trumps discounts for grocery shoppers.

Apparel and shoe shoppers, on the other hand, set their sights on sales and clearance items (60.7 percent).

Meanwhile, ratings and reviews (54.4 percent) top the list of influencing factors for electronics and technology purchases.

20.7% 60.7% 54.4%

89.3%

22%

5The Local Mobile Advantage of Retailing

Match the type of device that is easiest to use for the following activities:

Making Grocery Lists

Shopping In-Store While Cooking

To Plan Meals Browsing Deals, Coupons & Sales

Finding Recipes

80.6%

90.7%

24.1%

25.3% 27.4%

21.9%

50.7%

31.6%

43.1%

18.5%

29.1%52.4%

9.3%

10.1%

4.2%

53.9%

22%

5.1%

ComputerTabletMobile

Beacons and Push-Notification Technology Will Untangle & Enhance Path to Brick-and-Mortar When asked to identify the type of device that is “easiest to use” for shopping in a physical store, a whopping 90 percent of respondents identified their smartphones. Meanwhile, over three-quarters of respondents (80.6 percent) believe their computers are easiest to use when browsing deals, coupons and sales. What this should tell brand marketers and brick-and-mortar retailers is that digital and physical do not have to butt heads. In today’s “Age of the Customer,” consumers want and expect the shopping experience across every single channel and device to be highly personal, relevant and targeted to their local needs – and in real-time too. That means retailers must understand how and where their consumers are interacting with their brands, services and products – across every stage of the shopping experience. This is where iBeacons and push notification technology will prove to be a critical tool in helping both sides – marketers and brick-and-mortar – deliver hyperlocal, contextually relevant ads in real-time to ultimately facilitate in-store transactions. In fact, a recent study conducted by our partner inMarket found that the use of beacons in retail stores caused a 19-time increase in interactions with advertised products, a 16.5-time increase in app usage in-store and a 6.4-time increase in the likelihood that a shopper kept an app that sent them a beacon message on their phone.

Mobile Acts as Conduit for Saving Money According to our study, “search for a coupon” overwhelmingly ranked as the Number 1 activity (35.86 percent) that respondents perform when shopping on their mobile devices. Coming in as the Number 2 and Number 3 most popular mobile shopping activities are “access shopping list” (25.61 percent) and “buy item online” (12.05 percent), respectively. Clearly, mobile acts as a conduit for helping consumers save money. Retailers and brand marketers must first understand the role mobile devices play across the entire shopping funnel before they can create shopping experiences and advertising that is tuned into their needs at the most personal, contextually relevant and local level.

Search for Coupon

Accessing Shopping List

Buy Item Online

Browse Deals and Sales

Compare Prices

Check Ratings & Reviews

What types of shopping activities do you perform on a mobile device?

35.86%

25.61%

12.05%

9.22%

6.32%

10.32%

Note: Figures may not add to 100, due to rounding.

Note: Figures may not add to 100, due to rounding.

Beacons and Push-Notification Technology Will Untangle & Enhance Path to Brick-and-Mortar

6The Local Mobile Advantage of Retailing

Saving Money in Research Stage Leads to In-Store Transactions

100

Research

an Item

What types of activities do you perform when you need to buy something?

When are you most likely to purchase an item you have been researching or planning to buy?

When do you search for offers and deals?

Compare

Prices

Search for

Coupons

Add Items to

Shopping List

Make Purchase

In-Store or Online

75

50

25

0

70.5%81.1%

73.3%

59.6%54.7%

Every time I Plan

a Shopping Trip

When I am

Shopping In-store

Frequently in

my Free Time

Only When I Need

Something Specific

Right Before I Purchase

Something Online

75

50

25

0

7.8%39.6%

29.6%23.0%

When I find a coupon

When the item goes on sale

When I need the item

When I am finished comparing the item to the other similar items

36.7%29.2%

39.3% 43%49.2%

100

Research

an Item

What types of activities do you perform when you need to buy something?

When are you most likely to purchase an item you have been researching or planning to buy?

When do you search for offers and deals?

Compare

Prices

Search for

Coupons

Add Items to

Shopping List

Make Purchase

In-Store or Online

75

50

25

0

70.5%81.1%

73.3%

59.6%54.7%

Every time I Plan

a Shopping Trip

When I am

Shopping In-store

Frequently in

my Free Time

Only When I Need

Something Specific

Right Before I Purchase

Something Online

75

50

25

0

7.8%39.6%

29.6%23.0%

When I find a coupon

When the item goes on sale

When I need the item

When I am finished comparing the item to the other similar items

36.7%29.2%

39.3% 43%49.2%

Due in large part to the convenience and instant connectivity of mobile devices, shoppers today are prone to do their fair share of investigating, researching and comparison-shopping before stepping into a physical store. As a result of this webrooming behavior, the study found that 39.6 percent of respondents are most likely to purchase an item they have been researching or planning to buy “when the item goes on sale” and 23 percent of respondents are most likely to do so when they are finished comparing the item to other similar items.

7The Local Mobile Advantage of Retailing

Smartphones Promise Greater “List Making” Convenience than Tablets In today’s digitally ruled and interconnected environment, mobile devices have become a natural extension of consumers’ lives across every stage of the shopping experience – from pre-store to in-store to post-store. Interestingly, the study found that smartphones dominate as the most convenient device in making shopping lists. In fact, 89.3 percent of respondents reported that their smartphone is the most convenient device to create a shopping list prior to visiting a physical retail store. This is in stark contrast to only 6.1 percent of respondents who prefer to use their tablets and 4.7 percent of respondents who find their computers to be most convenient. These findings should reassure retailers of the value of mobile devices in the path to in-store purchases. More importantly, it should dispel the myth that mobile poses a threat to brick and mortar. That is not the case. Instead, retailers should first understand how shoppers are using each device in each stage of the shopping experience. From there, it’s important for retailers to deploy the type of advertising across their mobile sites and apps that simplifies and improves the shopping experience – and ultimately, moves shoppers from the second screen into physical stores. That should be the metric of success for today’s retailers.

10.9%

60.7%

9.4%

7.9%

Having a coupon or offer

Item being on sale or clearance

Wide selection

Brands

None of the above 11.0%

GROCERY: Convenience & Quality Trump Coupons

Having a coupon

Everyday low price

Item is on sale

Quality of item

None of the above

13.1%20.7%

29.8%

26.4%

10.1%

APPAREL & SHOES: All Eyes Are On Sales and Clearance Items

Brand

Item Being on Sale

None of the Above

Reviews & Recommendations

Having a Coupon or Offer

15.2%

21.1%

54.4%

3.4%

5.9%

ELECTRONICS/TECHNOLOGY: Reviews and Recommendations Matter Most

Purchase Influencers Are Not Identical Across Retail Categories What’s crystal clear from our research is that purchase influencers are not identical across retail categories. Interestingly, the convenience of everyday low prices (20.7 percent) far outweigh the benefits of a coupon (13.1 percent) for grocery shoppers. For shoppers in search of clothing and shoes, on the other hand, sale or clearance items rank as the top purchase influencer at 60.7 percent - this is in stark contrast to having a coupon or offer (10.9 percent). Meanwhile, reviews and recommendations (54.4 percent) tops the list as the most important influencing factor for shoppers buying electronics and technology. To retailers, this presents a huge opportunity to align content organization and presentation on the web, mobile and social media with these purchase influencers.

If you were to create a digital list, which device is the most convenient for you?

ComputerTabletMobile89%

6%5%

Note: Figures may not add to 100, due to rounding.

Note: Figures may not add to 100, due to rounding.Note: Figures may not add to 100, due to rounding.

8The Local Mobile Advantage of Retailing

Conclusion In a recent Forrester Research blog, analyst Sucharita Mulpuru professed that digital and physical are not the death of each other. To put it in her own words: “The web keeps doing what it has always done well: it provides huge assortments of products, at comparable, often lower, prices than physical stores, with 24/7 access and often free shipping. For many categories like media products or electronics, we’ve already observed a heavy shift to the web channel away from physical stores. Add to that the ubiquity of mobile devices and that drives even more shopping in more instances and places. In fact, we’re projecting that $87B of that $294B will happen on phones and tablets in 2014, and that doesn’t even include another $28B in additional mobile transactions on sites and apps like Uber and Domino’s Pizza that aren’t even in that aforementioned mobile commerce number.” Because we live in an era of empowered shoppers, brand marketers and brick-and-mortar retailers do not have an easy order to fill. As consumers juggle with multiple devices and across channels to simplify and improve their shopping experience – from start to finish – it will not be worthwhile to invest marketing dollars and resources into creating personalized content and advertising if it is not locally targeted and contextually relevant to the real-time needs of consumers. Only then will it be possible for both sides – brick-and-mortar and digital – to partake in significant pieces of the revenue pie.

Mobile Shopping Lists Facilitate In-Store Purchases As evidenced by the study, shopping lists help today’s increasingly mobile-first shoppers browse, research and prepare prior to stepping inside a physical retail store. In fact, 22 percent of respondents indicated they “always” create a shopping list before they shop and another 39 percent do so “often.”

We’re projecting $294B in eCommerce sales across 30 retail categories in 2014, expected to grow to $414B by 2018...Add to that the ubiquity of mobile devices and that drives even more shopping in more instances and places.”

- Sucharita Mulpuru Vice President, Prinicipal Analyst, Forrester Research

“

Do you create a shopping list before you shop?

Often

Sometimes

Always

I Don’t Create Lists

39%

34%

22%

5%

This is further proof that mobile shopping is gaining momentum in parallel to the growth in smartphone and tablet adoption and usage worldwide. It also signals to retailers a tremendous opportunity to create location-based targeted advertising that makes the mobile shopping experience easy, intuitive and engaging and most importantly, personalized and locally relevant. By doing so, retailers will not only see their mobile-specific engagement and sales grow, they will also experience a significant uptick in local store sales.

9The Local Mobile Advantage of Retailing

About G/O Digital The G/O Digital vision: To Transform Local Marketing and #WinLocal. For Local Businesses, G/O Digital, a Gannett company, is a one-stop shop for local businesses looking to connect with consumers through digital marketing, from search to social and everything in between. For National Brands and Agencies, G/O Digital delivers local digital activation at national scale with push-button simplicity powered by G/O Digital brands Shoplocal, BLiNQ Media & Key Ring

G/O Digital partners with more than 5,000 of the nation’s top brands and retailers, including P&G, Target, Walmart and Walgreens and leads digital marketing programs with thousands of local businesses across more than 110 local markets. For more information, visit godigitalmarketing.com.

About Key Ring Key Ring, part of G/O Digital, a Gannett Company (GCI), delivers leading mobile solutions to attract, engage and reward customers. The #1 shopping app for consumers, Key Ring has more than 10 million downloads and more than 50 million loyalty cards uploaded across industries from retail to airlines, grocery and restaurants. Key Ring also provides shoppers with on-the-go, mobile access to interactive shopping list development and digital promotions from 160 retailers representing more than

2,000 loyalty programs in 27 retail categories. Key Ring leverages its cutting edge technology and expansive user base to drive in-store transactions, increase customer engagement, digitize loyalty programs for retailers, and promote CPG products to hyper-targeted audiences. For more information about Key Ring, visit keyringapp.com.

Contact UsFor Corporate Marketing, Please Contact: Addi McCauley, Director of Marketing Key Ring, A G/O Digital Company Tel: 214.721.0955 Email: addimccauley@keyringapp.com

@godigitalmarketing

For Corporate Communications & Media Relations, Please Contact: Ragini Bhalla, Director of Public Relations & Content G/O Digital, A Gannett Company (GCI) Tel: 312.216.1423 Email: ragini.bhalla@gannett.com

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