Want to Catch an Affluent Consumer? An iPad Is Good Bait
No wonder an iPad still remains somewhat of a status symbol. A recent study has found that most of the users of the newest version of the iPad are confined to wealthier, coastal states.
Although Apple's new iPad has been on the market for about a month, it already accounts for about 9 percent of all iPad traffic, according to Chitika Insights, the independent research arm of online ad network and data analytics firm Chitika.
After seeing this rapid rate of adoption, Chitika took a closer look at the traffic coming from these devices. Using Census Bureau information as well as data pulled from the Chitika network, the firm discovered a close relationship between states with high median income and a high share of new iPad traffic.
California, Hawaii, Nevada, Washington, D.C., and Washington State topped the list of states with the highest share of new iPad traffic, Chitika said.
Considering the price of the device starts at $500 and can cost as much as $829, it may not be surprising that people with higher levels of discretionary income are the ones purchasing it. But the study drives home a point that retailers should keep in mind: If you want to reach affluent consumers, your website better be equipped to handle traffic coming from these devices.
“They are the consumers with a higher median income and an increased level of discretionary income,” said Gabe Donnini, Chitika’s data solutions engineer. “They are able to spend more on entertainment and spend more on luxury goods.”
Luckily, it appears that retailers have taken the hint. About 30 percent of retailers polled in a new survey say they are planning to invest more than $100,000 in mobile commerce, according to a report in Internet Retailer. That study, which was conducted by the research and advisory firm the E-tailing Group, shows merchants are getting more aggressive with their mcommerce strategies.
No doubt the big increases in traffic coming from smartphones and tablets are behind this. The report said 26 percent of retailers are currently receiving 10 percent or more of their online traffic from mobile devices, while another 25 percent report they get between 5 percent and 9.9 percent of their traffic from these gadgets. In 2011, only 9 percent of retailers had 5 percent or more mobile traffic.
And the revenue trends are mirroring the increase in traffic. As we have seen in other studies, shoppers who are using a tablet, which is most likely an iPad, can be more likely to buy than other shoppers. In the study, about 22 percent of retailers said the conversion rate for shoppers on tablet was “significantly or somewhat higher” than that of PC shoppers. For 21 percent, the rate was about the same, while 23 percent said it was “significantly or somewhat lower,” and 22 percent said they don’t know.
This will become more important as sales continue to shift online and to mobile devices. By 2015, U.S. retail ecommerce sales are expected to reach $279 billion, according to a recent student by PwC. And the acceleration of the trend may be even more profound on a global basis.
PwC’s study, which was based on a survey of more than 7,000 consumers around the world, discovered 20 percent of consumers had made their first online purchase within the past year, suggesting a large runway ahead.
That said, consumers are very confident about their shopping savvy, and that is going to be a challenge for retailers because many are lagging behind what consumers expect from them.
Consumers turn to online and mobile devices because they are easy and convenient 24 hours a day, according Lisa Feigen Dugal, PwC’s U.S. retail and consumer sector advisory leader, and Ian Kahn, the firm’s U.S. advisory director. They said retailers have to become more innovative with their online and digital offerings, improve their brick-and-mortar stores to focus on quality and customer satisfaction rather than price and selection, and focus on satisfying customers across all channels, instead of viewing digital channels as a competitor.
“Retailers are just getting to the point where they are beginning to integrate and understand what that means,” Dugal said.