Danai Pathomvanich
Jul 28, 2015
As smart phone penetration continues rising, mobile commerce is fast becoming a major part of ASEAN retailing.
Much can be learned from South Korea where two-thirds of its citizens own smart phones.
A recent McKinsey article “Learning from South Korea’s mobile-retailing boom” explains how omni-channel commerce, where physical stores and online shopping complemented by mobile retailing is quickly transforming everyday family purchases.
Using their smart phones, South Koreans purchased goods of 10 trillion won, or $9.8 billion in 2014, a four-fold jump since 2012.
Mobile shoppers more impulsive
Consumers who shop primarily on their phones or “mobile first” consumers” the authors said tend to more impulsive and emotional than shoppers in other channels.
In South Korea they primarily purchase apparel, fashion accessories, shoes or buy groceries and children’s items.
Most importantly, South Korea’s mobile shoppers want quick satisfaction.
“For its mobile dedicated shopping platform, for example, online market 11th Street has reduced its total number of SKUs to only 7,000 and emphasizes deals of the day.”
Four critical areas
To succeed in mobile retailing, companies must consider four critical areas.
1. Reach: Tap into the uniqueness of mobile-first consumers
Mobile-channel buyers have distinct demographics. Sixty per cent of all transaction in South Korea are conducted by women.
Additionally, most are in their 30s and are likely to have preschool-age kids and surprisingly, many are full-time housewives. In the past, most companies assumed that m-commerce was dominated by busy working moms.
The authors’ said working moms spend much more time in front of PCs, mostly at their jobs, while housewives or moms with young kids are more likely to shop on smartphones.
Increasingly, these consumers can only be reached through their smartphones.
While South Korea’s offline and in-store marketing motivates only 7 percent and 2 percent of mobile purchases, mobile ads or promotions influence three out of four mobile purchases.
2. Curate: Trigger impulse purchases through well-crafted offers
Because it’s much more difficult to compare products and study details on a phone’s small screen, mobile shoppers deliberate less when making purchasing decisions.
“Our research shows that more than half of mobile consumer decision journeys—from considering products to purchasing—last just a single day, compared with only 36 percent online.”
“In essence, m-commerce consumers are driven much more by impulse than by product features or prices: some 17 percent of mobile transactions in South Korea are made without prior research, compared with just 6 percent of online transactions.”
3. Entertain: Make shopping fun and easy, not just cheap
Moreover, in contrast to the bargain-hunting mentality that pervades online, mobile shoppers place the greatest value on intuitively easy navigation and convenient shopping experiences.
“More than 60 percent of South Korea’s mobile shoppers cited convenience as their top priority, compared with 44 percent of online shoppers.”
To connect with mobile buyers, successful retailers must provide less information on their mobile sites.
“Quick delivery of products is also essential for many regular mobile shoppers, particularly those who buy groceries and other staples.”
4. Lock in: Capture mobile shoppers loyalty early
Mobile consumers are more likely to go directly to a retailer’s site or app than use a search engine, meaning there is a significant opportunity for retailers to lock-in customers.
South Korea’s m-commerce players use multiple tactics to drive repeat visits, offering mileage points or coupons to those who interact at least once each day with their mobile site or application.
“Connecting the mobile-shopping experience to physical stores also goes a long way toward building a true omnichannel experience and locking in customers.”
For instance, Hypermarket Emart features a virtual-store application that shows products displayed in the same layout as in its physical stores to provide an easy, consistent shopping experience.
