From The Editor

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By Matt Pillar, editor-in-chief

Everybody knows mobility is big and getting bigger. This week, we saw hard evidence of the prominent role smart phones are playing in the consumer-retailer relationship.

Less than three weeks ago, IHL Group and RetailConnections released Going Mobile, a major study on the use of mobile technology in retail. The study pulled data on the use of mobile devices in retail from a detailed survey of 66 retailers and 570 consumers. This week, the real world is proving their predictions about the use of mobile phones for shopping purposes, and retailers' strategies for engaging mobile shoppers. The report pointed not only to continued rapid adoption of smart phones, but increased consumer use of those phones to shop and purchase. With Black Friday behind us and Cyber Monday upon us, the game is in full swing and mobile devices are playing a starring role.

As for the IHL/RetailConnections prediction on smart phone adoption, Apple set a record in Q3 2010 with the sale of 13.5 million iPhones, a figure that analysts say was only limited by the company's production capacity. Motorola announced higher-than-anticipated profits late last month on strong Droid sales.

As it relates to consumer use of their new smart phones for shopping — iPhone and Droid apps designed to help shoppers find the best Black Friday and Cyber Monday deals were the hottest movers on the market last week.

But while a huge number of retailers already support iPhone applications, the stats revealed in the new IHL/RetailConnections study indicate an incredible and long-term growth opportunity for mobile as a shopping and sales channel. Market penetration of the iPhone is still in its infancy, but growing like a Butterball turkey. Per the study, only 25% of the cell phone market is comprised of smart phones, and only 28% of those smart phones are iPhones.

From these findings, study authors Lee Holman, Sean Alexander, and Jerry Sheldon deduce that the leading platform supported by most retailers is for a device that commands only 7% of the market. But Apple's momentum is strong — 56% of current smart phone users are considering the iPhone for their next device, giving iPhones a 12-point advantage over Androids. Only 24% of smart phone users are seriously considering a Blackberry for their next device.

Blackberry, which is waning in popularity but still owns the largest share of the smart phone market, is supported by 40% of the retailers surveyed. Android, while much newer than either of the previously mentioned platforms, is already supported by 50% of retailers, according to the study. Q3 2010 Android sales beat iPhone's performance with 20.5 million units moved, while RIM's Blackberry trailed on sales of 11.9 million.

The IHL/RetailConnections study also found that 41% of smart phone-enabled consumers have used their phones while shopping to check on a competitor's price. This survey was conducted before the 2010 holiday shopping spree, before so many smart phone apps that help shoppers do that very thing were released and downloaded over the past few weeks. Ask that question again next week, and I suspect that figure would nearly double.

The IHL/RetailConnections study suggests that consumers are 50% more likely to download a free application for their smart phones than they are to pay for an app. Back to those Black Friday shopping apps that were all the rage last week — the likes of Walmart, Best Buy, Amazon, and Target all had skin in the game with free apps and, at the very least, opt-in SMS notification services. Some device-specific apps not only combed sites for the best deals but also tapped GPS to help shoppers navigate their shopping districts and social media integration to share the news of deals with friends.

We'll continue to cover the findings of the IHL/RetailConnections project, which also explores the strategies retailers are using to deploy smart phones for management and operations functions. IHL and RetailConnections are offering a free download of the report here.

For richer cuts into the data, contact IHL at 1.615.591.2955 or ihl@ihlservices.com.