Impulse purchases in the UK have increased by as much as £1.1 billion a year thanks to the online shopping convenience offered by smartphones, iPads and other tablet computers.
A study, conducted by Rackspace Hosting (NYSE: RAX), the open cloud company, indicates that nearly half (48 per cent) of UK adults who use smartphones or tablets to make purchases online admit to buying things on impulse more frequently now by using their connected handheld devices – spending on average £329 extra per person per year.
Impulse shopping on the rise
For consumers who say mobile devices have increased their on-the-spot purchasing, 71 per cent claim that the main reason for the upswing in spending is that the process is so simple and the technology is so easy to use. Over a quarter (27 per cent) of this group also say that the experience of shopping with smartphones and tablets is better than shopping in store.
Rackspace’s research reveals that mobile shoppers are using technology in the hunt for better bargains: almost a third (32 per cent) claim that the main incentive behind making impulse purchases is to use promotional codes that save money. It also suggests that the younger generation is more decisive and tech savvy, with 62 per cent of 18-34 year-olds buying things on-the-spot today, compared to 32 per cent of 55+ year-olds.
“As more consumers turn to their mobile devices for impulse and on-the-spot purchases, retailers must make it a priority to provide the highest quality, most efficient user experience possible,” said Michael Neidhoefer, CEO of Netbiscuits, a leading cloud platform for developing and delivering mobile web apps. “We have seen this first hand as one of our mCommerce focused clients increased sales more than 1300 per cent by ensuring the customer experience was optimised across all connected devices. This survey shows that retailers’ failure to deliver a mobile shopping experience that meets customers’ high expectations will ultimately drive those loyal customers away.”
Sofa surfing shoppers
The study shows that almost one in five respondents (18 per cent) make spur-of-the-moment purchases at work during their lunch break, while 62 per cent turn to their smartphones and tablets when at home relaxing. Between 7pm and midnight is the most popular time for making immediate on-the-spot purchases on mobile devices.
Clothes are the most popular impulse buy for 41 per cent of mobile shoppers, followed by books (35 per cent), music (32 per cent) and fast food or takeaways (14 per cent). Women are most likely to buy clothes (47 per cent) while men are most likely to buy music (38 per cent).
Consumer brands are traditionally fast on the uptake when it comes to adopting new technology, as they seek to cater to a new generation of sophisticated ‘on the move’ IT-savvy consumers. Domino’s, for example, is the UK and Republic of Ireland’s leading pizza delivery company with over 730 stores. They combine a fun approach to ordering pizza (either through their Apps or website) with a Rackspace cloud computing solution that can cope securely and efficiently with huge influxes of orders at peak times. It’s a cost-efficient combination of creativity and technology which, together with some pretty special toppings and sauces, has been a key contributor to their success.
Colin Rees, IT director at Domino’s, says: “Since launching our pizza apps, we’ve seen an increase in orders through our mobile service, as customers realise how easy it is to use whenever and wherever they are. More than 52 per cent of our UK delivered sales are currently taken online, so having a reliable hosting solution is absolutely essential and a fundamental driving factor in our on-going business growth.”
Storing credit card details causes security concerns
Despite many UK consumers embracing the mobile shopping experience, 60 per cent of those surveyed do not shop online at all using their smartphones or tablets. When asked about the reasons why not, more than a quarter (27 per cent) of this group said security fears prevent them and 84 per cent simply prefer to use their laptop, PC or Mac.
The study also suggests that companies at the front line of e-retailing today need to build trust in the security of online shopping as over half of smartphone or tablet owners surveyed (59 per cent) are uncomfortable with, or wary of, storing credit card details online. Nearly a quarter (22 per cent) of respondents are concerned that retailers will share their details. More than a third (37 per cent) admit that, although they are wary and have security concerns, they do it because they have to.
Of the 29 per cent of respondents who don’t store credit card details online at all, two in five (43 per cent) believe that they would spend more using a tablet or smartphone if they felt comfortable storing their details.
Fabio Torlini, VP of Cloud at Rackspace, says: “We’re a nation of bargain hunters, so tablets and smartphones make it easier than ever for consumers to keep their eyes open for great deals and snap things up wherever they are. This is good news for retailers in general of course, but our study provides some additional insight here. The retail trade still has work to do in order to convince the majority of the British public that using mobile devices to shop online is a safe, preferable and attractive alternative to logging on from their PC or visiting a store.”
Battle of the brands
When it comes to the battle of the brands, iPhone users are UK’s biggest mobile shoppers. The study reveals that 69 per cent of consumers with an iPhone use it to shop online. This is compared to 37 per cent for Android, 32 per cent for Windows Phone and 33 per cent for RIM Blackberry.