The mobile shopping revolution: Redefining the consumer ...

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The mobile shopping revolution:Redefining the consumer decision process

David J. Faulds a,*, W. Glynn Mangold b,y, P.S. Raju a, Sarath Valsalan a,z

aCollege of Business, University of Louisville, Louisville, KY 40292, U.S.A.bArthur J. Bauernfeind College of Business & Public Affairs, Murray State University, Murray,KY 42071, U.S.A.

Business Horizons (2017) xxx, xxx—xxx

Available online at www.sciencedirect.com

ScienceDirectwww.elsevier.com/locate/bushor

KEYWORDSConnected shoppers;Digital marketing;Mobile marketing;Consumer decisionprocess;Retail innovation

Abstract The use of mobile devices by consumers and the accompanying responseby retailers is rapidly revolutionizing the retail environment. In the past, retailershave focused primarily on the outcome (to purchase or not to purchase) of theconsumer decision process, but now mobile technologies give retailers the opportu-nity to more actively influence the entire consumer decision-making processes. Theincreasing use of mobile devices by consumers makes shopping a continuous ratherthan discrete activity that requires retailers to engage with their customers atcritical touch points of the decision process in order to provide a more customer-centric experience. This change in focus from the decision outcome to the decisionprocess signifies an important paradigm shift for the retailing industry. After anextensive review of the literature, we identify four pillars that form the foundationfor the mobile shopping revolution and represent the essential ways and meansthrough which retailers can engage with consumers during the decision process. Wealso discuss the different areas in which the pillars can enable retailers to achieve asustainable competitive advantage in the mobile shopping era.# 2017 Kelley School of Business, Indiana University. Published by Elsevier Inc. Allrights reserved.

1. Dr. Gonzales: The new connectedconsumer

Dr. Kailey Gonzales, a busy practicing physician,enters the parking lot of Woodman’s Supermarket

* Corresponding authorE-mail addresses: [email protected] (D.J. Faulds),

[email protected] (P.S. Raju)y W. Glynn Mangold passed away May 25, 2016z Graduate student

0007-6813/$ — see front matter # 2017 Kelley School of Business, Ihttps://doi.org/10.1016/j.bushor.2017.11.012

in Madison, Wisconsin for her weekly shopping trip.She plans to purchase the items that routinelyappear on her shopping list, stored on her smart-phone, in addition to several other items for herparty on Saturday night. While exiting her SUV, shereceives a digital prompt from Woodman’s welcom-ing her to the store and informing her of that week’sset of customized coupons for items she regularlypurchases as well as a few items she seldom buys.

Entering the store’s produce department, shechecks her shopping list on the store’s app andnotes that kale appears first. She selects a bunch,

ndiana University. Published by Elsevier Inc. All rights reserved.

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places it on the digital scale, scans the weight andUniversal Product Code (UPC) into her phone, tapsthe purchase button to record the transaction, andthen places the kale in her environmentally friend-ly, reusable shopping bag inside her cart. As she isleaving the produce section, she hears an alertmessage from her smartphone indicating that thestore’s app has detected that she is leaving theproduce section without buying bananas, an itemthat she purchased on her previous four shoppingtrips, and she quickly returns to purchase thisforgotten item. Pressed for time, she uses hersmartphone to locate the next two items onher list: sockeye salmon and salad-seasoningpowder. The in-store app immediately displays amap of the store’s layout, including her locationwithin the store and the location of the salmon onaisle 5 and seasoning powder on aisle 9.

A store associate who is monitoring Dr. Gonzales’sshopping activities using his mobile device, whichinterfaces with the store’s beacon technology,approaches her and offers further assistance inlocating the sought-after items.1 He also noticeson her shopping calendar that she is seeking topurchase cookware items that Woodman’s doesnot stock, so he locates these items for her at anearby cooking specialty retailer and informs her oftheir availability.

Checking her phone, she notices that shereceived a 2-for-1 coupon for organic gluten-freepizza, made with locally sourced ingredients, andthen proceeds to aisle 3 to make the purchase, thuscompleting her grocery shopping. As she bypassesthe line of shoppers at the checkout counter, shetaps the Pay Now button on her phone screen, whichsecurely charges her credit card and displays anitemized receipt.

Dr. Gonzales’s hypothetical shopping experienceis not set in the distant future, but is occurring nowin selected test markets located in Stamford, Con-necticut; Madison, Wisconsin; Palo Alto, California;and Seattle, Washington. This industry-drivenphenomenon, known as queueless shopping (QLS),has been described as a high-tech checkout make-over in which consumers utilize mobile devices(smartphones and tablets) to record their groceryitems as they shop, receive and respond to in-store

1 Beacons are “low-powered radio transmitters that can sendsignals to smartphones that enter their immediate vicinity, viaBluetooth Low Energy technology” (Martin, 2014). Beacons allowmore precise identification and targeting of individual consu-mers than other location technologies. With this powerful newtechnology, “marketers can lead and direct customers to specificareas and products within a store or mall” (Martin, 2014), thusresetting the consumers’ path to purchase.

promotional features (coupons), and instan-taneously record their purchases to their creditcard account, thus bypassing the time-consumingcheckout queue. Amazon recently announced thatit is test marketing QLS in Seattle, Washington(Weise, 2016), and industry experts are anticipatingthat, in the near future, Walmart will roll out aversion of QLS.

After loading her groceries into her SUV, Dr.Gonzales proceeds to the cooking specialty retailerthat the Woodman’s store associate located for herin the nearby mall. Entering the store, she spotsthe cookware section and views the selection ofsteamers available. The 5-quart, 3-piece All-CladStainless Steel Steamer set, with a list price of $149,catches her eye, and she quickly scans in the UPCusing her smartphone to locate nearby retailers andonline suppliers who carry the same item. Withinseconds, she is able to compare the price chargedfor the steamer and notices that Amazon carries thisexact item for $99.

The retail store manager approaches the doctorand offers assistance. She informs the managerthat she has been well satisfied with the store’smerchandise in the past and is now interested inpurchasing a 5-quart steamer. However, when sheshows the manager the $99 offer at Amazon dis-played on her phone screen and asks her to match it,the manager, obviously taken aback, explains thatthe store has long enjoyed its standing as a premiumcookware retailer and, as such, does not engage inon-floor price negotiations. Before the managercould complete her explanation, Dr. Gonzales, usingher smartphone, places the order with Amazon.

Thanking the bewildered store manager, shedeparts the store and receives a prompt on hersmartphone from the Starbucks next door remindingher of the $5 coupon she received from a friend whoparticipated in the retailer’s Tweet-a-Coffee cam-paign last week. While savoring a Café EspressoFrappuccino, Dr. Gonzales happily congratulatesherself on the decision to save $50 on the steamerpurchase and notices a message from the nearbywine shop advertising a $30 bottle of CaliforniaChardonnay in a buy-one-get-one-half-off sale. Us-ing her phone, she texts her social wine communityto gather opinions about this wine. She receives animmediate response back from ‘Wineman’ in SanFrancisco, recommending this selection. She quick-ly checks consumer wine reviews on her smartphoneand then texts a close friend who is knowledgeableabout wine, and immediately receives a responseendorsing her choice. She makes the purchase,efficiently and successfully completing all herdinner party shopping. Dr. Gonzales’s shoppingbehavior illustrates her status as an innovator in

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The mobile shopping revolution: Redefining the consumer decision process 3

the mobile shopping revolution. She employedmobile technology effectively at several points tomake her shopping more efficient.

2. Impact of connected consumers onthe retailing community

In this article, we identify and discuss three majorareas in which consumer use of mobile technologiesimpacts the retailing community. The first areaentails a paradigm shift that requires retailers tochange focus from influencing the consumer’sdecision outcome to proactively influencing theconsumer’s decision-making process. In the secondarea, we identify the pillars that form the founda-tion of this revolution and represent the essentialways and means through which retailers can employmobile technologies to interconnect, empower, andengage mobile consumers. Finally, we discuss threestrategic areas that retailers should emphasize inorder to better influence the mobile shoppers’decision-making process and achieve a sustainablecompetitive advantage in the mobile shopping era.

3. Decision outcome to decisionprocess: A paradigm shift

The four distinct situations described in Dr.Gonzales’s weekly shopping excursion demonstratehow a paradigm shift is occurring in today’s retailenvironment. This environment is increasinglyimpacted by consumers’ use of mobile technologies

Figure 1. Traditional versus mobile decision shopping pr

that are, in turn, facilitating a dramatic alterationin the decision-making process (Zmags, 2012). Inthe past, this process was well known to retailersand consisted of several sequential steps: beginningwith problem recognition followed by informationsearch, alternative evaluation, choice decision,and culminating with post-purchase evaluation(see Figure 1). Retailers influenced the processthrough well-crafted marketing mix strategies,derived from the 4-Ps framework (product, price,place, and promotion), with the retailer’s primarygoal being to impact the choice-decision stage(see Figure 1).

Because of mobile technologies, the m-powered(Martin, 2013a) consumer’s decision process is nowmore accurately depicted as a seamless and itera-tive activity that results in a more personalizedinteraction between retailer and consumer. Asillustrated by Dr. Gonzales’s shopping adventures,“consumers no longer go shopping; they always are[emphasis added] shopping” (Martin, 2013b). Theestablished five-stage sequential model fails tocapture this dynamic decision-making process,which often entails simultaneously interminglingdecision activities in both time and place. Theemerging mobile shopping decision process is nowa continuous rather than discrete activity thatrequires retailers to adopt a more holistic mindsetthat focuses on influencing the process rather thanfocusing exclusively on the consumer decisionoutcome. The new model, depicted in the lowerportion of Figure 1, consists of three stages thatoften occur together in real time and potentiallyoffer retailers opportunities to more directlyinfluence the decision-making process through the

ocess

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Figure 2. The four pillars of mobile shopping

4 D.J. Faulds et al.

use of communications targeted to consumers atkey decision points in their shopping journeys.2

Retailers have been slow to embrace this newperspective, which requires them to shift “toward aconcierge model geared toward helping consumers,rather than focusing only on transactions and deliv-eries” (Brynjolfsson, Hu, & Rahman, 2013, p. 24)and alter their approach from the traditional pushmarketing strategy to one that acknowledges theexistence of a consumer-controlled pull processthat more accurately captures the reality of thecontemporary shopping environment (AccentureConsulting, 2016; Berman, 2016; Deloitte, 2014;Wallace, 2016). Martin (2014) notes that althoughmany retailers have acknowledged the importanceof mobile technologies and their influence on theconsumer shopping process, the retailing communi-ty has yet to fully understand or leverage thepotential of this technology to influence consumerpurchase behavior or to implement a sustainablecustomer-centric strategy that would improvelong-term financial performance.

The consumer use of these technologies is alsochallenging many long-standing retailing heuristicsthat shaped successful strategies in the past(e.g., ‘location, location, location,’ ‘well-bought iswell-sold,’ and ‘a satisfied customer is a loyal cus-tomer’). As Dr. Gonzales’s example aptly illustrates,the specialty cooking store’s strategy of selectingprime malls and store locations within those malls,offering high-quality merchandise, and emphasizingcustomer satisfaction were all simultaneouslymarginalized when she utilized her smartphone topurchase the 5-quart steamer set from Amazon.

These technologies will continue to present theretailing community with opportunities andunanticipated challenges that will require thedevelopment of creative strategies and a newmindset focusing on resetting and more activelyinfluencing the consumer’s path to purchase.

4. Four pillars of mobile shopping

The mobile shopping environment is characterizedby four interrelated pillars that impact everystage of the new consumer decision process anddefine the framework of the emerging retailshopping landscape. As shown in Figure 2, the

2 Martin (2013a) defines the mobile consumer shopping processas consisting of six stages: the pre-buy, in transit, on location,selection process, point of purchase, and post-purchase. Wepostulate that Martin’s six stages can be condensed into threestages: pre-purchase, purchase, and post-purchase.

four pillars–—consumer-retailer interconnected-ness, consumer empowerment, proximity-basedconsumer engagement, and web-based consumerengagement–—are often at play individually inreshaping the decision-making process, but theyare also highly interconnected and simultaneouslyinfluence the shopping experience for both theconsumer and the retailer in new and distinct ways.Although previous research has yet to identifythese pillars as the mobile shopping revolution’sconceptual foundation, they clearly represent theessential ways and means through which retailerscan employ mobile technologies to interconnect,empower, and engage with consumers. To besuccessful in this new era, retailers must thoroughlyunderstand the implications of these pillars onconsumer behavior and integrate them into theirretail strategies.

The technologies used in mobile shopping formthe foundation for the four pillars. This revolution isbuilt upon the use of consumer-based devices suchas smartphones, tablets, and other emerging tech-nologies. In 2015, Pew Research reported that 68%of American adults age 18 and over owned smart-phones and 45% owned tablets (Anderson, 2015).The use of both types of devices is expected to growover the next few years (Statista, 2015). Recentstudies indicate that mobile consumers are alreadyhighly dependent on these technologies (Anderson,2015; Bank of America, 2014) and this dependencyis “expected to grow as people use their phones for

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The mobile shopping revolution: Redefining the consumer decision process 5

things like shopping” (Gibson, 2011). As consumersbecome more dependent on these devices, retailerswill feel more pressure to be more innovative intheir use of these technologies to satisfy consumerdemands (Kibo Inc., 2016).

Figure 3 lists significant in-store and out-of-storeactivities facilitated by mobile devices during eachstage of the shopping process and suggest that theyhave changed shopper mindsets, behaviors, andexpectations for the shopping experience (MotorolaSolutions, 2012). Figure 3 also confirms Martin’s(2014) observations about the continuous natureof the shopping process as undertaken by the mobileconsumer as well as the need for retailers to con-stantly monitor the consumers’ adoption and use of

Figure 3. Partial list of retailer and consumer activities

these technologies and rapidly adjust theirmerchandising strategies and tactics accordingly.

4.1. Pillar 1: Consumer-retailerinterconnectedness

In the mobile era, retailers and consumers caninterconnect anytime, from anywhere in order toindividualize the shopping journey for bothparticipants across all stages of the purchaseprocess. Successful retailers have adopted theconcierge approach (Brynjolfsson et al., 2013) tocraft a more hyper-relevant experience thatconsumers like Dr. Gonzales now demand. Thisorientation is built on data collected from the

in the mobile shopping process

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two-way flow of information between the partiesand extends beyond traditional in-store activitiesto include out-of-store dimensions of shopping,delivering better value, efficiency, savings, andengagement directed at fulfilling personal shoppingneeds.

Merchandisers can now individualize, influence,and reset a consumer’s path to purchase byanticipating purchase habits and providing relevantcommunications at key location points in theshopping journey. In the case of Dr. Gonzales,Woodman’s tailored a personalized message togreet her as she entered the parking lot, providedher with targeted coupons and promotions based onher previous purchases, reminded her in real time offorgotten items, and directed her to the location ofsought-after products within the store. However,the engagement went far beyond these activitieswhen the store associate used his mobile device toassist the doctor by locating a nearby specialtycookware retailer that stocked the steamer setshe had included on her shared shopping calendar.

This interconnectedness also influenced hershopping journey in other settings when sheinteracted with the specialty cookware store,Starbucks, and the wine shop. At the specialtycookware store, the instant pricing informationshe retrieved via her mobile phone regarding thesteamer set altered her purchase decision at a keypoint. Starbucks was able to detect her proximity tothe store and reminded her of a forgotten gift via amobile phone message. The wine shop targeted herwith a discount offer that resulted in her decision toround out her party menu with a previouslyunanticipated purchase of Chardonnay. All ofthese actions were the direct result of effectiveand timely communications made possible bymobile technologies that enhanced the shoppingexperience for the customer and improved the salesperformance of the retailers she interacted with.

Recent research indicates that 90% of mobileshoppers use their mobile devices for many of theshopping activities listed in Figure 3, and almosthalf of these shoppers use these devices for15 minutes or more per store visit (Google ShopperMarketing Council, 2013). This 15-minute window ofengagement is expected to increase in the nearfuture (Bank of America, 2014), and a growingbody of research documents the impact mobilecommunications have on altering various aspectsand outcomes of the consumers’ in-store andout-of-store shopping journeys (Hui, Inman, Huang,& Suher, 2013; Sciandra & Inman, 2014). Use ofthese technologies to establish a sustainableinterconnection between retailers and consumersis rapidly emerging as a key factor in differentiating

successful retailers from their less successfulcompetitors. The timing, context, relevancy, andcontent of such communications are critical com-ponents in creating the hyper-relevant shoppingexperience that mobile consumers will demandfrom retailers.

4.2. Pillar 2: Consumer empowerment

Access to real-time information, which in the pastwas asymmetric, is rapidly tipping the scale ofempowerment toward the m-powered consumer,and these technologies are enhancing both theconsumer’s sense of empowerment and the actualreality of empowerment (Deloitte, 2014). This wasrevealed in Woodman’s test marketing, whichindicated that mobile technologies gave consumersthe sense that they were “more in control of theshopping process” (Angrisani, 2013, p. 28) than everbefore. Nordstrom CEO Erik Nordstrom recentlymade the same observation about the effectmobile technologies have on Nordstrom shoppers(Nordstrom, 2016).

All of the activities, assistance, and informationlisted in Figure 3 promote this sense of empower-ment, resulting in a more informed, independent,and demanding consumer. This newfound sense ofcontrol may be due to the instantaneous accessconsumers have to information made possible bymobile technologies and their ability to “shopwherever and whenever they want, often withoutstepping inside a store” (Cillium Corp, 2015). Infact, according to a recent Motorola Solutions(2012) survey, “61% of mobile shoppers believe theyhave access to more information about productsthan store associates.” This independence is illus-trated by the fact that “73% of these shoppers wouldprefer to use their smartphone rather than engage astore associate” (Motorola Solutions, 2012) duringtheir in-store shopping experiences. Use of mobiledevices by shoppers has also produced demandingconsumers with a want-it-here-want-it-now men-tality who are “less willing to compromise on howthey want to shop” (Nordstrom, 2016). This, in turn,is resulting in a focus on the omnichannel strategyadopted by retailers to create the endless aisleshopping experiences that m-powered consumersnow expect (see Section 4.3).

Mobile consumers like Dr. Gonzales are rapidlybecoming more cognizant of their empowerment,particularly in the areas of pricing, productselection, and customer service. For example,the doctor was empowered to engage in pricenegotiations with the store manager when she usedher mobile device to compare the price distributionof the steamer set between local brick-and-mortar

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4 Mobile consumers fall into one of two categories: seekers or

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retailers and online providers. With this informationin hand, she used the specialty cookware retailer ina showrooming context to make her productselection with Amazon based on price andavailability (Quint, Rogers, & Ferguson, 2013).3

Communications with members of her winecommunity and personal friends made via hermobile phone gave her confidence in selectingthe wine for her dinner party, which was reinforcedby wine reviews and consumer ratings she was ableto retrieve on demand. A number of researchers(e.g., Mangold & Smith, 2012; Simonson & Rosen,2014) have emphasized the importance of consumer-generated ratings and opinions on influencingthe consumers’ decision-making process because“retailer-sponsored content–—advertisements, userguides, retailer blogs–—are losing out to user-generated content and reviews as the predominantinfluencers of purchase decisions” (Deloitte, 2014).This user-generated content now can be retrievedat any point in the shopping journey, and retailershave yet to fully acknowledge how this informationempowers consumers and adjust their strategies,tactics, communications, and promotions according-ly (Fiorletta, 2015).

Woodman’s, like other sophisticated retailers,has responded to its empowered and demandingmobile customers by personalizing the shoppingexperience through the use of communicationsdirected at these consumers during key points intheir shopping journey. Welcoming messages,digital shopping lists, in-store navigation tools,individualized coupons and promotions, andconvenient checkout procedures are all customerservice activities made possible by the use of mobiletechnologies that enhance consumers’ sense ofempowerment. Consumer empowerment alsoextends to the purchase-from-anywhere-deliver-to-anywhere reality that mobile technologiescreate and has changed the role played by storeassociates, as described in Dr. Gonzales’s scenarioand elaborated on in this section. The empower-ment afforded by these devices is resulting in theparadigm shift discussed in this article and is radi-cally changing the customer-retailer relationshipfrom transaction-based to more value-based, thuscreating sustainable brand loyalty for the retailer

3 Showrooming occurs when a shopper visits a brick-and-mortar retailer to inspect a product but then purchases theitem from an online retailer. This consumer-driven practicehas increased with the use of mobile devices by shoppers andis requiring retailers to adopt a more customer-centric approachin servicing the m-powered consumer.

and delivering the hyper-relevant experience thatmobile shoppers now demand.

4.3. Pillar 3: Proximity-based consumerengagement

The ability to instantaneously identify the geo-graphical location of consumers and then targetthem with customized communications is theessence of the mobile shopping revolution (Costa,2014; Martin, 2014). For the first time in the historyof merchandising, retailers now have immediateaccess to information on the geographical locationof consumers that can be used in conjunctionwith other data to influence the decision-makingprocess through carefully crafted messagesand marketing tactics. Location-based marketing“allows consumers to ‘check in’ at restaurants,coffee shops, stores, concerts, and other placesor events” (Goodrich, 2013) and affords retailersthe ability to identify the location of consumersand target them with communications at keygeographical points during their shopping journey(Goodrich, 2013).

Dr. Gonzales’s shopping activities illustrateproximity-based engagement as well as her fluidtransition between a ‘seeker’ versus ‘cruiser’type of mobile consumer (Martin, 2013a).4 In theWoodman’s phase of her shopping journey, thedoctor was in the seeker mode given her specificshopping objectives, which she shared withWoodman’s, allowing the store to initiate andcapitalize on location-based marketing activitiesand communications when it sent her greetingmessages as she entered the parking lot andreminded her of forgotten items, targeted her withpromotions and coupons, and gave her in-storedirections for finding sought-after products. Byidentifying the doctor as a regular and valuedcustomer, a Woodman’s store associate was ableto immediately engage the doctor and assist her infulfilling her other shopping needs. Research hasshown that location-based marketing practices

cruisers. “A seeker is a customer who is destination bound with aspecific purchase intent in mind. This is the shopper who hasdone all the research and is now headed to the store.” A cruiser isa “consumer roaming with no specific purchase intent in mind”(Martin, 2013a, p. 64). The key difference between these twotypes of mobile consumers is the situation and mindset theybring to the shopping experience. This information can provideretailers with insights on the situational relevance of theconsumers’ shopping journey, which can be used to craftthe hyper-relevant, customer-centric experience thatm-powered consumers now demand.

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delivered at key location points can increase basketsize, unplanned purchases, and customer loyalty(Google Shopper Marketing Council, 2013; Sciandra& Inman, 2014), and mobile technologies allowretailers to engage more precisely and proactivelyin these types of marketing efforts.

Likewise, Starbucks and the wine shop couldquickly react to her status as a cruiser–—“a consum-er roaming with no specific purchase intent in mind”(Martin, 2013a, p. 65)–—and target her withcommunications that resulted in her unanticipatedvisit to Starbucks for coffee and her serendipitouspurchase of the Chardonnay.

While at Starbucks, the doctor also engaged inconsumer-to-consumer communications when shegathered opinions from her social media-basedwine community, obtained information via textmessage from a personal friend, and retrieved winereviews and consumer ratings from the internet,resulting in her visit to the wine shop. Thesesynchronous and asynchronous communicationsfrom other consumers at key location points inthe doctor’s shopping journey altered her purchasedecisions and enhanced her shopping experience.Knowledge of the consumer’s location combinedwith demographic and socioeconomic data, pastpurchase behavior, and the consumer’s immediateshared purchase intentions allows retailers tobetter understand the situational relevance of aparticular shopping encounter and better influenceand add value to the consumer’s shopping journey.With information on customer location, sharedpurchase intentions, and situational relevance,retailers can now realize the full potential thatmobile technologies offer in crafting a hyper-relevant, customer-centric experience.

4.4. Pillar 4: Web-based consumerengagement

Web-based engagement played an important role inDr. Gonzales’s shopping journey and she utilized thetwo primary mediums available for retailers toengage with their m-powered consumers: appsand mobile websites. Woodman’s app allowed thestore to deliver an exceptional experience for thedoctor by providing tools that made her shoppingjourney faster, more convenient, and personalized.Amazon’s mobile app allowed her to instantlycompare the price of the steamer set with thebrick-and-mortar specialty retailer’s price, andthe wine shop’s mobile website included consumerratings and reviews for the Chardonnay wine.

These two mediums are the primary waysretailers can interact with the mobile shopper,and each is used by m-powered consumers for

different purposes and at different stages inthe purchase process (Forrester Research, 2016;Millward Brown, 2015). Although 85% of consumers’mobile moments are spent on various types of apps,only 5% is spent on shopping apps. Recent researchindicates that m-powered consumers “frequentlychoose to use a mobile website to perform themajority of their shopping-related activities”(Forrester Research, 2014) such as those identifiedin Figure 3. However, retail apps are often usedwhen consumers frequently engage with a retaileror when they “crave the convenience of an app foran activity they do regularly” (Millward Brown,2015, p. 5).

An early response from the retail community tothe m-powered consumer was to develop andlaunch apps indiscriminately, which engenderedan app-a-mania wave of deficient apps thatdid not incorporate the essential conceptsembodied in the four pillars discussed in this article.These apps were temporarily adopted and thendiscarded by dissatisfied shoppers. Retailers havesince become more aware of the challenges theyconfront in developing apps that will incorporatethe concepts of the four pillars and better meet themobile consumers’ needs. Although 87% of retailersincreased their expenditures in mobile technologiesin 2016 (Bedgood, 2016), most retailers have real-ized that not all components of these technologiesare strategically equal in the mobile shopping era,with 60% now reporting that “apps are not a keycomponent of their mobile strategy” (ForresterResearch, 2016). Research indicates that consumerswho do use apps do so for the convenience,speed, efficiency, and the personalized shoppingexperience they can create.

The experience that apps potentially offer cancontribute to producing the hyper-relevant,customer-centric focus envisioned in the mobileshopping revolution. This focus “drives more fre-quent app usage, but it also drives more effectivemarketing opportunities” (Forrester Research,2014); therefore, the challenge retailers face isin gaining consumers’ cooperation in providingthe data necessary to deliver a personalizedshopping experience. Many consumers are reluctantto provide retailers with their location information,receive excessive push notifications, or providepersonal information. In the case of Dr. Gonzales,she provided all such information, which allowedher to leverage the full power of mobile technologyand enabled various retailers to create apersonalized, hyper-relevant shopping experiencefor her. For some retailers, a mobile app is essentialfor delivering the customer-centric focus thatm-powered consumers now demand. For example,

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Walgreen’s prescription refill app, Starbucks’ pre-loaded payment cards, and Amazon’s showroomingfeatures app all provide convenient servicesthat enhance the shopping experience for theirconsumers.

Mobile websites are frequently used by shoppersin the early stages of the shopping journey to gatherinformation on multiple brands and make pricecomparisons among them and may represent notonly the first mobile exposure the consumer haswith a retailer but also “one of the last onlinetouchpoints before a consumer visits a retaillocation” (Millward Brown, 2015, p. 3). The mainadvantages mobile websites offer retailers andconsumers include “broader accessibility, compati-bility, and cost-effectiveness” (Summerfield, 2016).As Dr. Gonzales’s shopping experiences illustrate,retailers frequently need both mobile websitesand apps to meet the needs of the m-poweredconsumer. However, as Summerfield (2016) noted:“It rarely makes sense to build an app withoutalready having a mobile website in place.” Giventhe m-powered consumers’ preferences for mobilewebsite engagement, successful retailers arecontinuing to focus their mobile strategy onimproving their websites to meet the needs of theirmobile customers more effectively.

5. Strategic implications for retailers

Based on our review of the trade literature,academic research, and discussions with industry

Figure 4. Key areas for achieving a sustainable competi

experts, we have identified three key strategicareas that retailers can use to achieve a sustainablecompetitive advantage in the mobile shopping era.These areas, shown in Figure 4 and described in thefollowing sections, include customer analytics,employee empowerment and engagement, andomnichannel marketing. These key strategic areasare the primary vehicles that retailers can use tocraft a customer-centric approach and shape theconsumer decision process.

5.1. Customer analytics

A recent report by Cisco Systems Inc. (2015) em-phasized that in the mobile shopping era, “insight iscurrency and context is king” for better identifyingand meeting the high expectations of the demand-ing and sophisticated digitally equipped mobileshopper. Although retailers are becoming awarethat the skillful collection and use of data onconsumer shopping behaviors are key factors inestablishing a sustainable competitive advantage,they are still “struggling to integrate online andoffline data in order to understand and connect”(Forrester Research, 2016) with their consumers,particularly the in-store shopper. Connecting withthis segment is critical given that brick-and-mortarretailers account for 92% of all sales and are stillprojected to account for 85% of these sales in 2025(MacKenzie, Meyer, & Noble, 2013). As Reddy (2015)noted, brick-and-mortar retailers realize that towin and retain loyal customers they “need to focusmore on the customer relationships than on the

tive advantage in the mobile shopping era

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products, and access to big data and new marketingtechnologies” allows them to craft what theCisco Systems Inc. (2015) report described as amore hyper-relevant, customer-centric shoppingexperience.

However, crafting this experience goes farbeyond collecting and analyzing traditionalsocioeconomic and demographic data (Snyder,2014; Trendwatching, 2014). In the case of Dr.Gonzales, Woodman’s had extensive data on herpast purchases and used it to supplement thetraditional types of information she provided whendownloading its app. The combination of theseinformation sources allowed Woodman’s to craftreal-time personalized messages they sent herduring her shopping visit to their store.

Providing Dr. Gonzales with a hyper-relevant,customer-centric experience also requires collec-tion and use of data that “reflects the context of theshopping journey” (Cisco Systems Inc., 2015), whichrepresents the missing link for retailers to morefully understand shopping behaviors. This type ofdata can be gathered from such technological toolsas GPS sensors, in-store beacons, and consumer-owned mobile devices and allows retailers to offershoppers a more efficient, engaging, cost-effective,and relevant shopping experience (Howe, 2014).

With the real-time information Woodman’s hadat its disposal, it went far beyond digitally greetingthe doctor when she entered the parking lot tooffering her conveniences and efficiencies in hershopping activities, such as providing her withcustomized promotional offers that appealed toher preferences for locally grown organic products,reminding her of forgotten items, directing her tothe location of sought-after products, and facilitat-ing a secure, convenient, and time-saving checkoutprocess. AWoodman’s associate was also notified onhis mobile device that the doctor had entered thestore and was able to identify her location. With thisinformation, along with access to her digitalshopping list and calendar of that day’s shoppingactivities, he immediately engaged with her andoffered valuable assistance in locating several itemswithin the store and provided her with informationon nearby retailers that carried the 5-quart steamerset she had included on her shopping list. Thus, thestore associate was able to add unexpectedvalue to the doctor’s shopping experience. All ofthese services created a hyper-relevant shoppingencounter for her that would not have beenpossible without the effective use of informationcollected via mobile devices and other in-storetechnologies.

To be effective in creating a sustainablecompetitive advantage, omnichannel marketing

and supply-chain management must be guided byreal-time information on consumers and otheraspects of retail operations. As noted by ForresterResearch (2016): “In-store technology focusing ondriving digital operational excellence and digitalcustomer experience . . . represent two sides ofthe same coin: what’s good for operations is goodfor shoppers.” Therefore, retailers must evolve andequip their facilities with digital technologiesthat connect them to all elements of the retailecosystem, including store personnel. By excellingin the collection and creative use of relevant dataon consumer shopping behaviors, retailers cancreate a sustainable competitive advantage overtheir less technologically sophisticated competitorsand deliver the hyper-relevant experience thattruly fulfills the customer-centric vision articulatedby the four pillars (see Figure 2).

5.2. Employee empowerment andengagement

Several recent studies have documented thepositive impact that empowered and engaged em-ployees have on various measures of organizationalperformance (Aon Hewitt, 2014; Dale Carnegie &Associates, 2012; Farrow, 2013; Hay Group, 2014;Mangold & Miles, 2007). In retail, particularly inthe brick-and-mortar segment, empowering andengaging store associates can enhance their rolesas brand ambassadors and contribute to creating asustainable competitive advantage. For example,mobile devices and beacon technology enabled theassociate at Woodman’s to immediately identifyand engage Dr. Gonzales in her shopping activities,thus greatly enhancing her in-store shoppingexperience while simultaneously contributing tothe associate’s role as a brand ambassador.

The critical function that associates carry out isaptly described in a report from Retail TouchPoints(2015b): “Associates still play vital roles in stream-lining and enhancing the shopping journey, particu-larly when they leverage technology that providesthem with deep data about products, real-timeinventory levels, and shoppers.” Employeeengagement and empowerment were also acknowl-edged in another Retail TouchPoints (2015a) surveywhere 100 executives identified them as keycomponents for developing associates as brandambassadors. In the report, 49% of the respondentsindicated that empowering their associates withmobile devices greatly enhanced employee-to-customer engagement, employee-to-managementengagement, and employee self-engagement. Thegreatest benefit came in the area of employee-to-customer engagement, which materialized in

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higher conversion rates, increased basket size,an uptick in customer loyalty membership, andimprovements in on-floor, one-on-one interactionsbetween associates and customers. The secondgreatest benefit reported in the survey involvedemployee-to-management interactions, which in-cluded improved overall communications betweenmanagement and associates and, more specifically,improvements in real-time operational issues suchas inventory availability and tracking, real-timeinformation on pricing and promotions, andemployee scheduling. Finally, the benefits resultingfrom employee self-engagement included increasedretention rates, increased levels of job satisfaction,and a higher likelihood of employees becomingpositive brand advocates.

The importance of empowering associates withmobile devices is further reinforced by a MotorolaSolutions (2014) shopping study that found that 55%of mobile shoppers prefer retailers that have mobilecapabilities and 67% prefer retailers that have as-sociates who are well trained and knowledgeable inthe use of these devices. These mobile shoppersalso indicated that they are willing to drive farther,pay more, buy more per visit, and shop more fre-quently at retailers that equip their associates withsmartphones or tablets. In the same survey, 65% ofthe associates believed that they could better servecustomers if they were empowered with mobiletechnologies and 75% indicated that store manage-ment could be more effective in managingemployees and operational processes if they werealso empowered with similar technologies.

As brand ambassadors, associates can use mobiletechnologies in at least three ways to reinvigoratethe in-store customer experience: removingbarriers to the completion of transactions at thepoint of sale (POS), facilitating endless-aislecustomer experiences, and personalizing the rela-tionship between customers and associates. Forexample, to reduce inefficiencies associated withcustomer purchases, Moosejaw now uses mobilePOS to complete 70% of all in-store transactions,and other retail technology innovators–—UrbanOutfitters, Home Depot, Starbucks, andNordstrom–—have implemented such technologiesto expedite customer transactions. However, “tomake mobile POS a true partner in associates’transformation to brand ambassadors, thetechnology needs to do more than simply ring uptransactions” (Retail TouchPoints, 2015a) andinstead provide associates with the ability toinfluence key elements of the customers’ shoppingexperience, including payment, scheduling deliveryand pick-up options, and handling product returnsand exchanges. When associates can use mobile

technologies to actively engage customers infulfilling their shopping activities, they becomeindispensable and valuable to both the retailerand consumer.

Another opportunity that mobile technologiesoffer associates is the ability to provide customerswith critical product information at POS. As statedin the Retail TouchPoints (2015a) survey: “Whencustomers perceive associates less as salespeopleand more as problem-solvers, staff become farmore effective brand ambassadors.” Mobiletechnologies allow associates to function moreeffectively as problem solvers by accessing aretailer’s complete inventory at the POS, thusdelivering an endless-aisle experience that makesthe inventory immediately “visible and available toevery shopper in every store” (Retail TouchPoints,2015a).

Activities such as removing barriers at the POSand providing an endless-aisle experience toshoppers naturally lead to a closer bond betweenthe customer and the associate, which can beextended via the use of the additional functionalcapabilities that mobile technologies offer. Forinstance, using beacon technology that interactswith mobile devices, store managers can now easilyidentify and locate high-value customers within thestore and direct associates to these individuals.This proactive approach further personalizes therelationship between the shopper and the associateand can enhance the associate’s status as a brandambassador (Howland, 2016; Taylor, 2016).

The role of associates is rapidly evolving frombeing simply a source of static information to being“facilitators of exceptional [shopping] experien-ces” (Forrester Research, 2016). However, only29% of shoppers perceive associates to actuallybe knowledgeable and helpful in the shoppingprocess (Forrester Research, 2016). By redefiningthe role of these valuable employees and fullyempowering them with mobile technologies,retailers can achieve a sustainable competitiveadvantage over their less technologicallysophisticated competitors.

5.3. Omnichannel marketing

Omnichannel marketing has emerged in retailing asa result of the widespread use of mobile technolo-gies by shoppers, which in turn has dramaticallyaltered the ways retailers engage, respond, andinterconnect with their respective consumers(Baird & Kilcourse, 2011). Omnichannel marketingis “the ability to deliver a seamless shoppingexperience to customers across all channels bysynchronizing technologies, services and processes

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in a centralized, interoperable way” (Mindtree,2014). From a consumer’s perspective, informationcan be gathered and transactions initiated in oneretail channel while continuing the engagement inother channels. If done well, “the retailer improvesconsumer engagement, increases sales and conver-sions, and builds loyalty” (Schaeffer, 2015), trulyachieving a complete customer-centric outcome.

Although many retail executives have identifiedomnichannel marketing as one of the major trendsemerging in the retail sector, implementing such astrategy has been difficult and elusive for mostretailers (Motorola Solutions, 2014; Pierre AudoinConsultants, 2015; RIS News, 2014; WBR Digital,2015). Forrester Research (2014) concluded that“there is a significant disconnect between whatconsumers want from an omnichannel retailerand the omnichannel capabilities that retailersare providing.” With heightened expectations fromm-powered consumers, 71% of these shoppers nowexpect to view in-store inventory online and 50%will purchase products on-line with the expectationof in-store pickup. Forrester Research (2014) alsoindicated that “only a third of retailers haveoperationalized even the basics [of omnichannelmarketing] such as store pickup, cross-channelinventory visibility, and store based fulfillment.”

Helgeson and Mauerer (2015) have identifiedfive of the most common obstacles to successfullyimplementing omnichannel marketing: insufficientinvestment, siloed technology, inventory intelli-gence, customer identification, and fragmentedfulfillment. To overcome these obstacles, Krueger(2015) suggests focusing on measuring shopperbehavior, providing relevant and local retail infor-mation, and creating an organizational structurethat supports omnichannel marketing. Carefullymonitoring and tracking shopper behavior canaddress the issues of customer identification andfragmented fulfillment, while gathering anddisseminating relevant information on inventory,delivery schedules, and other key aspects of retailoperations help overcome problems associatedwith siloed technology and inventory intelligence.Finally, creating an organizational structure thatsupports this form of marketing continues to beone of the most difficult aspects of implementingan omnichannel initiative (Furrow & Manas, 2014;Pierre Audoin Consultants, 2015).

Popovec (2014) observed that “although noretailer has completely mastered the art of omni-channel selling,” several have been effective in“seamlessly connecting with customers throughall available means.” Nordstrom, Walgreens,Crate & Barrel, Oasis, Starbucks, and Sephora(Trout, 2017) implemented successful omnichannel

strategies by incorporating and synthesizing theessential concepts articulated in the four pillars(see Figure 2). These retailers have addressedoperational procedures by revising their organiza-tional structure to empower, engage, and connectwith the mobile consumer more effectively.

Human resources also play a prominent role inimplementing omnichannel marketing. Compensa-tion programs must include metrics that reflectcross-channel sales success, and employeeincentive plans must encourage store associatesto maximize total sales regardless of the deliverychannel (Retail TouchPoints, 2015b). Likewise,store associates must be equipped with technologi-cal skills that allow them to function digitallyacross multiple-channel environments to ensureconsistency in cross-channel fulfillment (Furrow &Manas, 2014).

Effective supply-chain management (SCM)represents the operational mechanism that enablesretailers to provide seamless integration of theconsumer shopping experience across all channelsand simultaneously ensure omnichannel fulfillment(Baird & Kilcourse, 2011; Deloitte, 2015). Torespond to mobile shoppers’ want-it-here-want-it-now attitude, retailers are “revisiting the designof their supply chain much more dramatically thanthey have in the past” (Gibson, Defee, & Ishfaq,2015) with the objective of creating an agile andresponsive supply chain that aligns closely withtheir omnichannel strategy. The multitude of chan-nel options entailed in omnichannel marketing hasdramatically increased the complexity of SCM(Baird & Kilcourse, 2011); but mastering this com-plexity can become a major source for achieving asustainable competitive advantage (EY Advisory,2015) given that SCM “is positioned squarely atthe crossroads of omnichannel retailing success”(Ishfaq, Gibson, & Defee, 2016). Retailers that havesuccessfully aligned their supply chain with theiromnichannel strategy realize that “consumersdon’t care about channels, but they do care aboutfinding solutions to their lifestyle needs” (Baird &Kilcourse, 2011), and these retailers have focusedon providing a seamless experience across allchannels that emphasizes direct fulfillment,inventory visibility, and operational efficiencies.

In their benchmark analysis of successfulomnichannel retailers, Baird and Kilcourse (2011)noted that these firms have structured their supplychain to be more flexible and allow the sharing ofinventory across different channels and distributioncenters to ensure cross-channel fulfillment anddelivery. These retailers realize that the mobileconsumer’s path to purchase is not restricted toany one channel and the supply chain must be

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structured to allow m-powered consumers “to buyany available inventory from any selling channel,anywhere and at any time” (Baird & Kilcourse,2011). These retailers have made substantialinvestments in inventory management systems,information technologies, and warehouse anddistribution centers with the objective of integrat-ing the entire retail ecosystem to better deliver aseamless shopping experience across all channelsthat encompass all activities present in thethree phases of the consumer shopping process(see Figure 3).

Interacting with consumers across multiplechannels is a daunting task that requires carefulattention to issues related to the creative collectionand use of data on individual consumers (Howe,2014) and employee empowerment and engage-ment (Parker Avery Group, n.d.). Therefore, thesuccess of an omnichannel marketing strategyultimately depends on the retailer’s commitmentto these areas as well as the acknowledgment oftheir close interrelationship.

5.4. Strategic areas influencing theconsumer decision process

As described in Section 2 and illustrated in the lowerportion of Figure 1, the use of mobile technologiesby shoppers has caused a paradigm shift in theemerging consumer decision process. This processis now better depicted as a seamless and iterativeactivity that often entails intermingling the variousstages of the purchase cycle–—pre-purchase,purchase, and post-purchase–—in both time andplace. We contend that this paradigm shift requiresretailers to adopt a more holistic mindset thatfocuses on the process rather than the push strategyemployed in the past that focused exclusively onthe decision outcome. The four pillars discussed inSection 3 and shown in Figure 2 represent clearlythe essential ways and means through whichretailers can employ mobile technologies to inter-connect, empower, and engage with shoppers toinfluence and shape the consumers’ shoppingprocesses, behaviors, expectations, and demands.Figure 3 presents a partial list of activities retailersare currently using to influence and respond to them-powered consumer. As shoppers’ expectationsand demands increase and mobile technologiesevolve, the list in Figure 3 will undoubtedlycontinue to grow in unforeseen ways.

From the retailers’ perspective, success in themobile shopping era will be greatly determined bytheir ability to leverage the power and conceptsembodied in the four pillars in order to offershoppers a more efficient, engaging, cost-effective,

and hyper-relevant shopping experience (Howe,2014). Retailers will deliver this experience inlarge part by skillfully integrating and emphasizingthree strategic areas–—customer analytics,employee empowerment and engagement, andomnichannel marketing–—to achieve and maintaina sustainable competitive advantage in the mobileshopping marketplace. These areas are also instru-mental in determining the extent to which retailerscan successfully implement a customer-centricstrategy that allows them to, directly and indirect-ly, influence the consumer decision-making process(see Figure 4).

Customer analytics involves the skillful collec-tion and use of data drawn from various sourcesand provides the knowledge and insight required forretailers to better manage the retail ecosystem,customize the shopping experience, and thusinfluence the consumers’ decision-making process.The information gleaned from such data cancomprehensively address the universe of issuesrelated to the five Ws–—who, what, when, where,and why–—of consumer shopping activities. In themobile shopping revolution, the old adage“information is power” takes on new relevance.Marketing strategies, tactics, and communicationsmust be formulated based on accurate data thatallows retailers to understand, predict, andinfluence shopping behavior. The example of Targetsending coupons for maternity items to a teenagegirl based on its knowledge of her purchase historyof other non-maternity products that frequentlyindicate maternity status is well known(Hill, 2012). This textbook example illustrates thepower of customer analytics in answering thequestions implied by the five Ws and the newfoundability of retailers to anticipate and influence theconsumer decision process.

In the case of Dr. Gonzales, four of the fiveretailers that she interacted with–—Woodman’s,Amazon, Starbucks, and the wine shop–—employedsome form of customer analytics to directly orindirectly influence her decision making. However,no amount of data could have predicted Dr. Gonza-les’s behavior in the specialty cookware store whenshe informed the store associate of her decision topurchase the cookware set from Amazon. Employeeempowerment (or the absence of such empower-ment) was key to this interaction in that the store’spolicy on price negotiations was inflexible and didnot allow the associate to meet Amazon’s price.Employee empowerment extends far beyond theconfines of the brick-and-mortar store to scenarioswhere customers now interact digitally withassociates during the various phases of the purchasecycle. This interaction, whether occurring within

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the store or digitally from a distance, providesretailers opportunities to utilize the vast bank ofinformation already collected on consumers torespond to the individual needs of their respectiveshoppers and influence the decision process in realtime.

Omnichannel marketing, the third strategic area,has evolved as a direct result of consumers’ use ofmobile technology. This technology allowed Dr.Gonzales to inspect the 5-quart steamer set in abrick-and-mortar environment and yet place heronline order in real time with Amazon. As retailersare becoming aware, “consumers don’t look atonline and in-store as different channels” (KiboInc., 2017); instead, they focus on solutions to theirindividual shopping needs, which often entail usingvarious channels at different stages in the purchasecycle. To leverage the full power of omnichannelmarketing, retailers can use information collectedon consumers to equip and empower their storeassociates in order to better influence the consum-ers’ in-store decision process and their out-of-storeshopping behaviors.

6. The new role of the retailer

Based on our extensive review of the literature anddiscussions with industry experts and practitioners,the consensus is that the mobile shopping revolutionis still in its infancy. With the newfound power ofmobile technologies, consumers can now rangefreely over both the real and virtual retailenvironments simultaneously while accumulatingvast amounts of information pertaining to theirimmediate shopping needs.

Although retailers are increasingly recognizingthe influence these technologies exert on consumershopping behaviors, the retailing sector continuesto struggle and adjust to the needs of the mobileshopper.

In this article, we have identified three areas thathave not been addressed in the extant literature butwill greatly influence the success of retailers as themobile shopping era unfolds. First, we argue thatretailers must adopt a new mindset that focuses oninfluencing the consumer decision process ratherthan the decision outcome. This new mindsetredefines the role of the retailer to include amore customer-centric focus that seeks to provideconsumers with a hyper-relevant shoppingexperience. The new approach also encompassesall aspects of the retail-ecosystem and challengesmany longstanding practices and heuristics thathave defined retailing success in the past.

Second, retailers must embrace the conceptsembodied in the four pillars discussed in this article.These pillars represent a new conceptual frame-work that retailers can employ to more effectivelyinterconnect, empower, and engage withconsumers. Finally, the use of mobile technologiesby consumers has greatly magnified the importanceof three areas: customer analytics, employeeempowerment and engagement, and omnichannelmarketing. These three areas offer retailers theability to directly and indirectly influence the con-sumer decision-making process and form the basisfor achieving and maintaining a sustainablecompetitive advantage in the mobile shopping era.

The ongoing changes and developments inmobile technologies, both hardware and software,preclude an in-depth discussion in this article ofthe likely trajectory and impact they will have onthe future of retailing. However, if current trendspersist, major changes in retailing practiceswill most likely define the future landscape ofmerchandising.

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