The Path to Purchase Is More Mobile than Ever: xAd Study

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Location-based marketing firm xAd has released its fourth annual Mobile Path to Purchase study, a reliable barometer of the evolving, increasingly serpentine customer journey. It will come as a surprise to no one that the path to purchase is more mobile than ever.

Among the highlights of this year’s report:

  • Mobile surpasses desktop (44 percent to 43 percent) as the most important purchase decision tool for the first time. The importance of the desktop has steadily declined while mobile has increased. Millennial smartphone owners are three times more likely to regard their devices as a primary information source than over-55 consumers.
  • Consumers are mobile but always not on-the-go. A growing majority (58 percent) of smartphone use occurs at home, up from 53 percent last year and nearly double the rate from 2012, the first year of the study. One-third of these smartphone owners are just browsing at home, while 41 percent are in consideration mode and 43 percent plan to make a purchase within a week or more. This latter cohort, xAd found, rose 79 percent from last year. This trend has significant implications for where, how and when in the path to purchase merchants target always-on consumers.
  • On-the-go usage correlates more highly with immediate purchase intent. In contrast to at-home smartphone users’ more gradual path to purchase, 42 percent of on-the-go smartphone users expect to make a purchase within the hour. These users convert at a higher rate (69 percent to 60 percent) and tend to do so in-store to a greater extent. The top purchase method for at-home users is on the device.
  • In-store smartphone usage has exploded. This, too, will come as no surprise to retailers, who likely see customers browsing their screens as much as store shelves. In-store usage has quadrupled since 2013, xAd found, with a growing percentage of these shoppers looking to make a decision immediately. Retailers shouldn’t fear showrooming, the xAd study indicates, as 60 percent of in-store shoppers convert in-store, vs. 21 percent on their smartphones and 14 percent later on the desktop.
  • Always-on means always shopping. Greater connectivity has led to increased demand for immediate gratification. Instant access to information is no longer enough; brands and business owners must be able to satisfy consumers’ desire for near-instant access to products and services as well. That means proximity and speed are at a premium.

To add context to the findings, I put the following questions to Sarah Ohle, xAd’s senior director of global research:

What were the most significant findings in the report?
Over the past four years xAd has conducted the Mobile Path to Purchase study, we’ve seen how mobile and mobility is fundamentally changing consumer behavior in three very distinct ways:

  1. Mobile dependence. This one device has become not only an important platform for communication between consumers and marketers but also the very source of data and insights that are essential for marketers to understand in order to connect with consumers in a unique and compelling way.
  2. Immediacy. Consumers expect to have their needs fulfilled on demand. Many are looking to make purchases soon — even for big-ticket purchases like cars that take a great deal of research and consideration — and expect to be able to make those purchases within close proximity. Location provides the key indicators that enable marketers to meet and even anticipate those needs.
  3. Impulse. Mobile has allowed marketers to capitalize on impulse shopping like no other media before by taking the power of “point-of-sale” marketing and bringing that out of the store and aisle.

How and to what degree have consumers’ changing mobile behaviors been reflected in clients’ ad-buying and targeting tactics? 
Location is quickly becoming an essential part of any mobile ad buy, both for local and national advertisers. BIA/Kelsey reported earlier this year that location-based mobile ad spend will increase to over $6 billion in 2015. And by 2019, location-based spending is forecast to make up over 40 percent of total US mobile ad spend. Marketers aren’t only using location more, but also using location smarter. As we saw in the study results, location is much more than a targeting tactic; it’s a powerful indicator of consumers’ intent and immediacy of needs. So in addition to using location for proximity targeting, understanding how people move throughout their days in the physical world can paint a very robust picture of who they are as consumers — providing marketers with essential real-time information needed to make a meaningful connection with consumers along the entire journey from initial awareness to ultimate conversion.

Do you find more brands incorporating a location dimension into their campaigns as a result of these shifts? Have they changed where in the path to purchase they’re targeting consumers?
We’ve definitely seen a shift towards brands using location as part of their campaigns. More brands and agencies now understand the unique potential inherent in mobile advertising. This greater understanding of mobile and the ability to use mobile insights have created more opportunities to reach consumers at different points along the path to purchase. Today, location isn’t just about driving consumers who are in the immediate proximity of a location in the door anymore. Since smartphones are used at home, on-the-go, and in store — for everything from general browsing to getting directions to price checking — there are multiple touchpoints to reach these active mobile shoppers.

Has this changed the objective and frequency of their messaging? Have you found there’s more emphasis on branding and influencing consumer choice now vs. driving direct response?
Marketers are learning the right type of messaging to use based on the actual location of the user and the frequency, meaning the number of times the consumer has seen the ad. xAd calls this sequential or mindset messaging, which allows a marketer to still engage consumers with messaging along their path to purchase, altering the message and ad creative users receive based on where they are their journey. For instance, a user might receive more of an awareness message while at home where she is more likely to be earlier in her decision process.  To reach that person on the go, ad creative may show her where she can purchase or find the product or service she recently saw. Furthermore, if she visits a store location, marketers can provide more detailed information or reviews on the product while she is at a critical point in the purchase process.

It’s also important understand how the consumer journey differs by category and how marketers can leverage these insights to drive more relevant ads throughout the path to purchase. As an example, if a campaign is intended to increase visits to a fast food restaurant, using close proximity targeting and a dynamic creative message that shows consumers where the nearest location is have proven to be the most effective approach. However, if a brand is more interested in increasing brand consideration for a large-ticket purchase such as a new car, location might be used to identify the best audience and reach them while they are more likely to be in the information-gathering part of their purchase decision.

Noah Elkin is Street Fight’s managing editor.

This interview has been edited for length and clarity.