Report: Blocking Access to Wi-Fi Could Hurt Retailers

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lWe’ve known for a while that wi-fi connectivity impacts the way in which consumers shop, but it’s starting to affect where they shop as well, according to a new report by JiWire.

The study, which surveyed users across the company’s ad-supported wi-fi network, found that one out of two mobile consumers are influenced by the availability of in-store wi-fi when deciding where to shop. That number peaks for the Generation Xers with 58% of respondents between ages 35-44 saying wi-fi influenced their decision.

Given that the bulk of JiWire’s business comes from ad-supported wi-fi, the data should be taken with a grain of salt. But one thing is clear for retailers: blocking users from accessing the web is no longer a viable defense against “showrooming” (the consumer practice of trying out products in physical stores and then ordering them online for the lowest price).

“We’re always talking about whether ‘showrooming’ is a real risk to retailers, and that’s always been a little bit of what has held retailers back from wanting to provide great connectivity,” said JiWire’s president, David Staas. “What we found was that [consumers] are using wi-fi to enhance the shopping experience, and engage with the retailer’s brand as well as others. “

Among the top four activities for which smartphone owners said they used in-store wi-fi, only one activity — price comparison (60.8%) — falls under the “showrooming” umbrella. The others — finding product reviews (57.3%), accessing deals or offers to use in-store (47.2%), and browsing the store’s website (36.5%) — center on augmenting the consumers’ in-store experience and facilitating a deeper relationship with the seller.

“If you look at the mobile landscape, there are so many different enablers and companies helping move consumers on different parts around that path [to purchase],” says Staas. “Understanding the things that are happening inside the store are very informative to begin to understand how traditional ideas of where to influence someone in the shopping process changes dramatically with mobile and connectivity.”

The startup ecosystem has framed mobile wallets as a coming cornerstone of the in-store shopping experience, but adoption has been slower than expected. The percent of respondents who said they used a mobile wallet (with no constraint of frequency) ticked up from 37% in Q1 of 2012 to 49% of Q4, but the number of consumers who said they had not tried a mobile wallet, but would, remained static. PayPal appears to be the only initiative that’s gaining traction with 32% of respondents saying they’ve used the service to make a purchase in that last 30 days — nearly triple the engagement of other platforms like Google Wallet.

The takeaway for marketers is that mobility combined with ubiquitous connectivity fundamentally contorts the local purchase funnel. It’s no longer a linear path from discovery to research to purchase, and retailers need to adjust their marketing strategy accordingly. The window for marketers to respond to consumer intent has shrunk, but it’s now closer than ever to the point of purchase.

Steven Jacobs is deputy editor at Street Fight.