Based on research performed on the South Korean market McKinsey & Company present the follow findings:
1. Reach: Tap into the uniqueness of mobile-first consumers
Mobile-channel buyers have distinct demographics. In South Korea, women account for 60 percent of transactions. Additionally, most are in their 30s and are likely to have preschool-age kids. They are also, somewhat surprisingly, likely to be full-time housewives. There has been an assumption that m-commerce is dominated by busy working moms; in fact, working moms spend much more time in front of a PC, mostly at their jobs, while housewives or moms with young kids are more likely to use their smartphones to shop. Companies have noticed: social-commerce player Coupang has aggressively targeted mobile-savvy young moms by offering baby gear such as diapers at low prices.
Yet mobile shoppers, regardless of their age, gender, or life circumstances, seem united in turning away from stores and online retailing. Our research found that among those who shopped on a mobile device, 13 percent did not shop in stores, and 53 percent did not shop online. Increasingly, these consumers can only be reached through their smartphones: We found that offline and in-store marketing motivates only 7 percent and 2 percent of mobile purchases, respectively. Yet mobile ads or promotions influence three out of four mobile purchases.
2. Curate: Trigger impulse purchases through well-crafted offers
Since it’s harder 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 addition, mobile shoppers visit on average fewer than two sites before making a purchase, versus 2.75 for online shoppers. 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.
For retailers, this has enormous implications. While it has been critical for online retailers to keep a long tail of products in order to capture whatever consumers are searching for, mobile shoppers want quick satisfaction. Their purchasing decisions are often governed by impulsive or emotional factors (which encompass product categories including apparel, fashion accessories, and shoes) or habit (such as buying groceries and kid/baby items). 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.”
3. Entertain: Make shopping fun and easy, not just cheap
In contrast to the bargain-hunting mentality that pervades online, mobile shoppers place the greatest value on intuitively easy navigation and convenient shopping experiences. In our research, 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, many successful retailers are providing 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. To satisfy this consumer demand and expedite the delivery of products purchased on mobile, GS Shop opened a mobile-dedicated warehouse, for example, and many mobile-commerce players now offer next-day delivery for grocery and kid/baby items. GS Shop has opened a mobile-specific call center so shoppers can get specialized assistance with a single click, and players are also adopting new payment solutions such as KakaoPay, a social-media-based payment system.
4. Lock in: Capture the loyalty of mobile shoppers early
Consumers are known to buy online from a smaller number of retailers than they use when they shop in brick-and-mortar stores. Similarly, mobile consumers are more likely to go directly to a retailer’s site or app than to use a search engine, meaning there is a significant opportunity for retailers to lock in customers. As a result, 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. The mobile application for retailer Lotte, for example, offers an “in-store mode,” where shoppers get real-time mobile notification of promotions and coupons when they step into one of its department stores and pass a specific brand’s area. Hypermarket Emart has a virtual-store application that shows products displayed in the same layout as in its physical stores to provide an easy, consistent shopping experience.
Please find the full article @ http://www.mckinsey.com/insights/consumer_and_retail/Learning_from_South_Koreas_mobile-retailing_boom?cid=other-eml-alt-mip-mck-oth-1504