Smartphones, Smarter Holiday Shoppers

Have you heard? The holiday shopping season is upon us. (Of course you have heard that; we’ve written that phrase ourselves several dozen times in the last week.)

Retailers are facing new challenges as savvy shoppers hunting for holiday deals have a powerful new discount-seeking weapon in their pocket: their mobile phone. Mobile apps are just one of the ways that consumers are optimizing their time and spend during this busy shopping season, and this presents a new set of challenges and opportunities for merchants.

Different shoppers use their mobile devices, well, differently. Generational gaps, gender-based preferences, varying levels of comfort with technology, and even geographic and socio-economic realities all factor into how consumers use their mobile devices as a shopping tool. There’s been a lot of discussion here on PYMNTS and around the Web about how consumers are using mobile devices to research and purchase products both in-store and online. One emerging trend this holiday season is the use of discount mobile shopping apps.

According to Consumer Reports, about 40 percent of the 2,180 subscribers surveyed last year said they used their phone to check for a coupon or promotional code, or to see if a product was being sold for less by a competitor. Meanwhile, 15 percent said they used reward cards from a mobile app to make a purchase. The technology that can expedite these processes, thus allowing shoppers to complete their purchases faster, are highly valuable to retailers, and app developers know it.

With each passing holiday season, more and more shopping apps appear on the iPhone and Android marketplaces, offering shoppers access to deals, coupons, discount codes and access to loyalty rewards programs. Whether offered by third parties or white-label solutions that are fully branded, shoppers have come to rely on these apps to make better shopping decisions faster and ensure that they don’t make a holiday shopping misstep.

So how do these shopping apps work? As PC Magazine reports, some apps operate by capturing the barcode of an item and performing a search for that same item both at nearby retail locations or online. Others offer predictive pricing, letting shoppers know if it’s a good time to buy based on the likelihood that the price will drop or that a new model will be released soon. All of these functions help to decrease buyer remorse and increase the sense that they’ve found a “good deal.”

Some apps, like Clutch, work to store all of your digital coupons and loyalty rewards cards in one place, allowing shoppers to take advantage of their earned rewards and saved coupons when in-store without having to dig through multiple apps, emails and websites. Another app, Goodzer, lets shoppers type in an item they are looking for and find out where they can buy it locally. Pounce, on the other hand, allows users to snap a photo of a coupon or advertisement from the local paper and complete a purchase using that coupon in a few short clicks, cutting down on the time to complete a purchase by storing payment and shipping information in the app so mobile shoppers can avoid the clumsy task of re-entering it for each purchase.

And lest we forget about the large holiday spend that will go toward entertaining this year (and with apologies for the phrasing), there’s an app for that, too. Favado compiles data on common grocery store items from over 65,000 grocery stores and drugstores nationwide to compile the best prices on each item. The app also allows users to hone in on their immediate geographic area and compare only local prices.

The American Research Group pegs the average holiday spend for this year at $882, and shoppers are under a lot of pressure to find even small savings on their wishlist items. While brands debate the merits of offering deep holiday discounts and others move away from the holiday discount concept all together, it cannot be denied that mobile discount apps offer retailers a distinct opportunity to keep shoppers in their stores and on their websites, if positioned correctly.

Retailers can also win brand affinity points if they help shoppers save even a small percentage off their total holiday shopping list. Those sorts of positive experiences can go a long way in creating brand loyalty, resulting in repeat visits by shoppers throughout the year.