Webrooming – All you need to know about driving mobile commerce sales – in conversation with QuanticMind’s Chaitanya Chandrasekar

With mobile device penetration increasing, security and network connections improving and people increasingly relying on smaller screens to deliver on daily needs, mobile commerce sales have skyrocketed.

According to eMarketer research, US mCommerce sales on smartphones will increase 65% in 2017, up from 58% in 2016.

However, many of the commerce actions performed on mobile are still related to browsing versus purchasing. Mobile continues to be dominantly used as a research tool versus purchasing tool. Whilst shoppers spend 59% of their time browsing on a smartphone, just 15% of retail dollars are coming from mobile purchases.

Called “webrooming”, the trend “refers to the practice of skipping out on visiting physical, brick-and-mortar showrooms and instead doing the shopping virtually by browsing products, photos, videos and specifications online, particularly via mobile”.

Recent Wired research highlights that 69% of 18-36 year-old smartphone users have previously webroomed, compared to 71% for the 37-48 year bracket.

So what can mobile advertisers, brands and retailers do to drive mobile sales? We’ve spoken with Chaitanya Chandrasekar CEO and Co-Founder of predictive advertising firm QuanticMind to find out more.

1. Why do purchases remain low on mobile? What is driving this discrepancy?

Sadly, [this questions is] accurate for merchants putting tons of effort into their virtual storefronts, as BusinessInsider points out that in the US, adults spend 59% of their time on mobile devices, but only 15% of their money.

While there isn’t necessarily a single answer to why purchases aren’t higher on mobile, there are logistical issues that cause online shoppers on any platform, mobile included, to hesitate to purchase. Accenture’s 2016 holiday retail survey found that shoppers in the US are deterred by shipping costs (62%), and in Canada, shoppers are unhappy with the inability to see and touch their products up-close (55%) and with shipping delays (40%).

However, there are also constraints of the mobile platform as it is now, such as security and mobile connectivity. Not all shoppers feel completely comfortable making online purchases via their mobile devices for security reasons – they may feel their desktops/laptops, equipped with anti-virus and anti-malware software are more secure for purchasing. They may also be concerned about transmitting purchase info over spotty Wi-Fi or 3G/4G/LTE connections that may not reliably or completely transmit their transactions, leading to errors and headaches like double-charges.

2. How could mobile marketers entice consumers to finish their purchases on mobile devices?

From a macro level, it seems to me that, in terms of user experience, Western markets are behind markets in Asia where smartphone penetration/proliferation is much higher, and where mobile user experience is, quite frankly, significantly further ahead. In such markets, users confidently use their mobile devices to shop.

Quick example: PWC Global’s 2016 Total Retail Report shows that for China’s Single’s Day (November 11 – a sales-heavy shopping holiday comparable to America’s Black Friday), in 2015, leading online retailer Alibaba (BABA) recorded sales of $14.3B – a 60% increase over the previous year, while transactions jumped 69% year-over-year in the same period. (As CNBC reports, Alibaba went on to report a record $17.8B in sales for Single’s Day 2016.)
In another sense, marketers working on mobile need to consider the growing trend toward online-to-offline conversions. Selling things online isn’t simply limited to the traditional Amazon.com-like model of ordering something from a web interface, and having it magically appear on your doorstep. In fact, Amazon.com itself is going to local outlets, with brick-and-mortar bookstores as well as the much-publicized purchase of Whole Foods. As mentioned, many impatient shoppers aren’t interested in waiting for shipping (or paying for it) – one of the most important emerging solutions to bridging the mobile gap is to have a brick-and-mortar storefront where shoppers can see, touch and take your products home.

3. What are the options for mobile advertisers across Google Shopping?

There are already inherent features in Google Shopping that heavily favor mobile merchants. For starters, Google Shopping ads – also known as Product Listing Ads or PLAs – rule the roost in terms of screen real estate on mobile SERP. Don’t take my word for it. Do a specific product search on your phone right now for a specific type of product and add your ZIP code for specificity. You’ll note that these ads take up more or less the entire screen above the fold – not even the #1 organic search result on mobile can rival this placement.

In addition, Google is also building out new ad functionality specifically for mobile devices, such as Showcase Shopping Ads. These are ad units designed to address the approximately 40% of all product queries that are non-specific. In other words, while some shoppers who are ready to purchase may be actively searching for “long-tail” queries such as “Men’s Nike Air 2017 Blue Size 11,” more than two-thirds of all product-related searches on Google are purported to be generalized queries, along the lines of “men’s shoes,” “kitchen furnishings” and so on. For these, Google surfaces Showcase Shopping Ads – ad units provided by merchants that show a large primary image and two smaller, secondary images off to the side which can be pinched to zoom in and zoom out. These ad units are specifically built for mobile, and the publisher magnanimously refrains from charging advertisers when customers only zoom in on the images – it’s only once customers click that Google steps in to levy its ad fees.

Another Google Shopping feature that enables active shoppers is Local Inventory Ads (LIA), which let merchants display their current product inventory directly within ad units. This past weekend, I was interested in getting some biking gear, and figured I’d just stop by my local outdoor sports shop. However, I took a moment to do a quick online search, and found out, through my local shop’s LIA inventory, that the store was out of stock for the items I needed. Instead of wasting my afternoon going to a shop that didn’t have what I needed, I checked inventory at some competing stores in the area and within 20 minutes, I went in, came out and had purchased everything I needed.

4. Do you think that new location-driven technologies could trigger a rise in showrooming, given the 24/7 reach on mobile devices?

Absolutely. We’re already seeing savvy advertisers take advantage of techniques like location-based ads to appropriately vary their messaging to be exactly relevant to customers depending on their locational context. One advertiser that has really impressed me is the consumer electronics retailer Best Buy. Best Buy’s ad strategy includes parsing user browsing history to know that I’ve been looking at, for instance, a specific 4K Ultra HDTV from Sony. The company’s intelligent use of location-based ads also helps it understand when I’m in the vicinity of a Best Buy, changing its messaging to me to point out that the exact TV I was looking at is in stock now.

And keep in mind, there isn’t necessarily even a hard-and-fast line between the webroom and the showroom anymore. Smart use of location-based technology can not only drive more foot traffic to physical storefronts – Google points out that 50% of all customers who perform a local search visit a storefront within 24 hours – it can also drive more purchases in-store. In the same article, Google points out that 82% of shoppers consult their phones in-store just before they make a purchase. This is absolutely the time for savvy advertisers – who are using location-based ads that understand potential shoppers are within their store – to start experimenting with additional tactics to close more sales, such as offering exclusive in-store promotional deals to help wavering customers feel confident about their pending purchases.

5. What solutions does QuanticMind offer to boost ad reach for brands and businesses looking to drive their mCommerce?

QuanticMind offers full support for Google Shopping campaigns for advertisers looking to capitalize on this exciting, rapidly developing channel. Our platform uses a completely unique combination of data science and machine learning to intelligently parse information for every single stock-keeping unit (SKU) that our customers sell, even for enterprise-scale merchants with hundreds of thousands or millions of products on offer. By tracking and managing advertising bids at such a granular level, our solution can track down the most accurate bids for each of your products, using smart automation to help you not only sell more product, but also realize higher profit margins as you set bids at ideal level for your highest-margin items, significantly growing your profits.