Accenture Mobile Consumer Survey RILA Sneak Preview: Multi-Channel Shoppers in a Mobile World. Title Here. June 2011

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1 Title Here Accenture Mobile Consumer Survey 2011 RILA Sneak Preview: Multi-Channel in a Mobile World June 2011 Copyright Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

2 Study Objectives Over the past 12 months, the rapid adoption of smartphones has given rise to a new, more empowered multi-channel consumer. At the same time, emerging mobile technologies such as location-based services, NFC, and mobile wallets are poised to radically alter the shopping experience, but may require significant investment and introduce new risks associated with data privacy. As many retailers begin to develop a mobile strategy, Accenture sought to build on previous research by gaining a better understanding of the new multichannel consumer landscape and the current and future mobile shopper, specifically: How do consumers use channels to shop and who is the Mobile Shopper? How do they shop across categories and channels today, and how is that likely to change? How will this influence and impact adoption of experience-enhancing technologies such as location-based services, NFC, and mobile wallets? 2

3 Segmentation Methodology 2,220 Survey respondents 2000 US 220 Canada Results weighted based US & Canadian Populations Regional Quotas 50% yrs old/ 50% % male/female Survey issued by Lightspeed Research in April variables across the following categories Survey on Mobile Shopping Behaviors and Preferences General Shopping Attitudinal/Behavioral General Technology Attitudinal Shopping In-store vs. Mobile/Online Making Payments with Phone Attitudinal Feelings on Sharing Personal Data New Mobile/Shopping Technologies Attitudinal Shopping with Smartphone Attitudinal Expected Future Shopping Habits Profile Data (demographics, phone type etc ) Survey results determined 6 natural clusters for segmentation Multivariate K-Means Clustering Each of the six segments has certain attitudes and behaviors towards shopping, technology adoption, and the use of mobile technology 3

4 Who is the Mobile Shopper? Late Adopters Functional, disengaged shoppers Lag in technology adoption Open to using mobile to shop if there is benefit Mission- Avoiders Want to get in & out Avoid technology in life and shopping Disproportionately Baby Boomers Privacy- Service Seekers Copyright 2010 Accenture All Rights Reserved. 15% Value service over price Comfortable with tech, but highly concerned about privacy Sees little benefit in using mobile to shop 13% % of Total Population 13% 26% 18% 15% Enthusiasts Value-Focused Heavy information-seekers Earliest Adopters Heaviest mobile shopper Value tech-enhanced shopping experience Savvy Social Youngest; Tech savvy but not obsessed Like shopping and store is still relevant for human interaction Use mobile to interact in and out of store Early Majority technology adopters More price sensitive Like finding a good deal and willing to use tech to get one Value social aspects of the store shopping experience 4

5 What are their attitudes and behaviors? (Page 1) Selected Shopping Behaviors Data Hungry Enthusiasts Savvy Social Value- Focused Privacy- Service Seekers Mission- Avoiders Late Adopters Typically do lots of research before making a big purchase I don t enjoy shopping and only go to the store when I have to Typically buy the cheapest product when presented with a choice Selected Technology Attitudes I am usually one of the first amongst my friends and family to buy new technology I am always looking for ways that technology can make my life easier or better Numbers Indicate Index to Mean (100) >115 <85 5

6 What are their attitudes and behaviors? (Page 2) Selected Reasons for Shopping In Store I enjoy chatting with the store employees I enjoy the social aspects of shopping in an actual store I can see and feel the things I am buying first hand (Apparel) Selected Smartphone Attitudes Look forward to a time when mobile phones become part of my day to day life I am concerned that smartphones will erode my privacy Data Hungry Enthusiasts Savvy Social Value- Focused Privacy- Service Seekers Mission- Avoiders Late Adopters Numbers Indicate Index to Mean (100) >115 <85 6

7 Today s Most Prevalent Mobile Are Younger Age Distribution By Segment to % to to Enthusiasts Savvy Social Value-Focused Privacy- Service Seekers Mission- Avoiders Late Adopters Q.2 To which of the following age ranges do you belong? 7

8 While Household Income Is Less Variable Across Segments Household Income By Segment Less Than 25K 16% 16% 19% 12% 22% 21% 100% 26-50K 30% 22% 31% 28% 31% 31% 51-75K 24% 29% 23% 27% 21% 22% K K 150K+ 14% 12% 5% 16% 12% 5% 15% 11% 2% 13% 12% 8% 16% 7% 3% 15% 7% 4% Enthusiasts Savvy Social Value-Focused Privacy- Service Seekers Mission- Avoiders Late Adopters Q.31 Please indicate your household income 8

9 Enthusiasts and Social Are likely to reach smartphone saturation this year; Service Seekers and will begin to close the gap % Likely To Purchase in Next 12 Mths Smartphone Ownership & Intent to Purchase & Smartphone Penetration By Segment Average Smartphone Ownership = 40.4% % Own Smartphone Enthusiasts Savvy Social Value-Focused Privacy- Service Seekers Mission- Avoiders Late Adopters 1. Android (39%) 2. iphone (34%) 3. Blackberry (21%) 1. iphone (37%) 2. Android (31%) 3. Blackberry (25%) 1. Android (39%) 2. iphone (28%) 3. Blackberry (18%) 1. Android (31%) 2. Blackberry (30%) 3. iphone (28%) 1. iphone (24%) 2. Android (21%) 3. Blackberry (20%) 1. Android (35%) 2. iphone (27%) 3. Blackberry (24%) Q.5 What type of mobile phone are you currently using? Q.6 Which type of smartphone(s) do you own? 9

10 Electronics is the most multi-channel category; while Data Hungry Enthusiasts and Savvy Social are the most multi-channel shoppers % Channels Regularly Shopped - Consumables % Channels Regularly Shopped - Apparel Enthusiasts Savvy Social Value- Focused Privacy- Service Seekers Mission- Avoiders Late Adopters Enthusiasts Savvy Social Late Adopters Value- Focused Mission- Avoiders Privacy- Service Seekers % Channels Regularly Shopped - Electronics % Channels Regularly Shopped Home Items Enthusiasts Savvy Social Late Adopters Value- Focused Regularly shop in physical store Mission- Avoiders Privacy- Service Seekers Enthusiasts Regularly use a computer Savvy Social Late Adopters Value- Focused Mission- Avoiders Regularly use a mobile phone Privacy- Service Seekers 10

11 Over the next 12 months, Enthusiasts are likely to expand their multi-channel behaviors, while Value-Focused intend to increase use of online and mobile channels to shop 54 Expected changes in Multi-Channel Shopping Behaviors (% Indicating Expect Increase or Significant Increase ) Avg 17% Avg 17% Avg 25% Times use your mobile phone in store to help shop Enthusiasts Savvy Social Time s use your phone away from the store to compare, get coupons, etc. Privacy- Service Seekers Value-Focused Times use a computer to compare, find bargains, etc. Mission- Avoiders Late Adopters Q.30_5 Over the next 12 months, how would you expect the following shopping activities to change? 11

12 Data Privacy and security remain a concern amongst consumers, however our key segments see benefit in shopping with a smartphone, indicating an opportunity to better educate consumers 58% I am concerned that smartphones will erode my privacy 57% However. 88% I do not feel comfortable using my smartphone to make payments Of Enthusiasts 39% Of Savvy Social 52% Of Value-Focused Said mobile phones could enhance the instore shopping experience (Electronics Category) Q.27s_2 To what extent do you agree or disagree with the following statements about the routine use of smartphones as a shopping aid? Q.28s_2 For each product category below, please use the 1 to 5 scale to indicate how much the smartphone could enhance your in-store shopping experience. 12

13 Deals and offers tested most positively as uses of personal data on the mobile phone Top Tested Uses of Personal Data To Enhance Store Experience (Top 3 of 17 By Segment, Top 2 Box) Enthusiasts Savvy Social Value-Focused 90% 1. You are offered special prices for particular goods based on your past purchases in this the store 86% 2. You can order things in advance and have them packed and waiting for you when you enter the store 58% 1. You receive a special offer of rewards points based on your past purchases in this store 54% 2. You are offered special prices for particular goods based on your past purchases in this the store 75% 1. You are offered special prices for particular goods based on your past purchases in this the store 73% 2. You receive a special offer of rewards points based on your past purchases in this store 86% 3. You receive a special offer of rewards points based on your past purchases in this store 52% 3. You can order things in advance and have them packed and waiting for you when you enter the store 71% 3. You are offered special prices for particular goods based on your past purchases you have made in other stores and the Web Q.25As more people buy smartphones and use them while shopping in stores, one of the things retailers are concerned about is how they should and should not use the data they have about individual shoppers (such as your name and purchase history) into smartphone apps that personalize and enhance the in-store shopping experience. For each of the items below, please use the one-to-five scale to indicate if you feel it is a good or bad use of your personal data 13

14 While deal-oriented capabilities also tested well as uses of NFC touch-less services, features that help bridge the experience across channels were also highly rated Top Tested Uses of Hot Spot Enabled Experiences In Store (Top 3 of 16 By Segment, % Top 2 Box) Enthusiasts Savvy Social Value-Focused 91% 1. A [grocery] product display sends a money off coupon to your smartphone 86% 2. Hotspot at the store s entrance sends your smartphone money-off coupons for featured items 48% 1. Hotspot at the store s entrance sends your smartphone money-off coupons for featured items 46% 2. A [grocery] product display sends a money off coupon to your smartphone 75% 1. A [grocery] product display sends a money off coupon to your smartphone 65% 2. Hotspot at the store s entrance sends your smartphone money-off coupons for featured items 79% 3. Hotspot at the entrance of the store allows you to pull up a shopping list you made online 35% 3. An [electronics] item that sends reviews and online prices to your smartphone 53% 3. Hotspot at the entrance of the store allows you to pull up a shopping list you made online Q.26 The next generation of smartphones will let you communicate with in-store services by simply waving your phone over hotspots that are located throughout the store on the shelves, on product labels, on displays, at checkout, etc. Each time you activate a hotspot it sends a message to an app on your smartphone. Using the 1-5 scale, please indicate the usefulness of the following in-store hotspots. 14

15 Enthusiasts are most likely to adopt mobile-wallet related capabilities; Value-Focused followers demonstrate significant interest in loyalty-related services Usefulness of Mobile Wallet-Related Capabilities (% Top 2 Box By Segment) Automatically apply loyalty points to purchases wheneve Use phone rather than credit/ debit card to pay Transfer loyalty points from one merchant to another Use phone rather than cash to make small purchases Exchange loyalty points for cash Review loyalty points from merchants where you shop Q29.The next generation of smartphones will also have the ability to make payments at checkout and manage the loyalty points awarded by many merchants. Using the 1 to 5 scale please indicate how useful you would find these smartphone capabilities. Enthusiasts Savvy Social Privacy- Service Seekers Value-Focused Mission- Avoiders Late Adopters 15

16 Preliminary Take-Aways Know your customers. Retailers need to understand which segments shop their stores, understand the needs and attitudes driving their behavior, and tailor a mobile solutions to meet those needs Invest with a customer focus. Next generation mobile capabilities have a higher degree of difficulty and risk when it comes to implementation, integration and operation. As such, it is critical to listen to the customer when developing a mobile strategy Think about education and incentives to drive adoption. While certain segments of consumers expect to increase their use of mobile and demonstrate strong interest in next generation mobile services, adoption of mobile coupons and payment will require awareness, education and motivation efforts in and out of the store to change long standing shopping behaviors 16

17 Want to Know More? Key Contacts Jason Buechel Accenture Senior Executive, Retail Industry Natt Fry Accenture Senior Executive, Retail Industry 17