Peak smartphone and the future of online search
By: Karl Miklis
This is the final article in our series exploring the role of data in understanding the acceleration of online retail and the implications for FMCG suppliers.
We may have reached peak smartphone.
It’s a bold suggestion, but from a retail point of view, we’re confident in saying that we’re already spending so much of our time and our wallet on these devices that future improvements in uptake might seem rather incremental. After all, when half of children aged 6-13 are carrying a smartphone, the scope for market expansion seems limited.
Since February, COVID-19 has only accelerated screen behaviour: According to the OECD, Australia has the eighth highest rate of mobile data penetration in the world. More than a quarter of our purchases are currently made from mobile devices and retail businesses across the board are scrambling to keep pace.
Smartphone saturation is having a number of significant effects on FMCG business models:
- Page and search placement are the online planogram
Impulse buys in physical retail are largely driven by shelf placement. Today, top of page means top of mind for the consumer and the edge to keep your product competitive. And as smaller screens become the norm, your slice of the real estate becomes even more precious in the battle for consumers’ attention.
Merchandising online is just as critical, and perhaps even more so, than in bricks and mortar retail. On a small screen, being in the top few search options or otherwise holding visual prominence is critical if your product is to have any chance of being selected. There are only a few options per screen for any given search and promotions are not necessarily noticed as easily as in-store.
More broadly, traditional strategies to influence purchase behaviour beyond consumer intention are more limited in an online marketplace. Tactics such as gondola ends have no equivalent, and impulse purchases are far less likely online than in-store. Instead, data-driven strategies around retargeting, “next-best” recommendations and abandoned carts are fast becoming the front-line for FMCG marketers.
- Shopper lists are changing the loyalty game:
Appearing on a shopper’s list is essential. If you’re successful, you’re likely to stick, as shopping lists make online shopping much more convenient and time-efficient. Remember, if shoppers are engaging online, they are probably seeking convenience and efficiency and are subsequently going to spend less time searching for alternatives.
- Smartphones are the most important channel:
Retailers previously designed their websites to be viewed from a desktop or laptop device, but as smartphone and tablet usage has increased, more customers are doing their online shopping on the go. FMCG businesses need to start thinking about customers through their device.
- Voice is next:
The next evolution is the continued development of voice control. 2.9 million Australians already own a smart speaker and this number is expected to grow exponentially over the coming years. Key to understanding voice search is accepting the importance of unbranded searches, and optimising your presence accordingly.
As the effects of the pandemic spark changes in consumer habits, FMCG businesses need to understand that optimising their online presence will become increasingly important to profitability, whether through third-party online purchasing, direct to consumer, or simply as marketing for offline retail.
Regardless of your end goal, managing the confluence of data from your online and physical retail operations is key to your future profitability.
If you’re ready to leverage the power of data, we’re ready to help. Reach out today to discuss how we can put eighteen years of experience in FMCG analytics, along with retail customer and banking transaction insights from over ten million customers, to work for your business. One of our client leads who is a specialist in your category will take you through our learnings one-on-one and discuss the consumer trends impacting your business and opportunities for growth.