Smartphones are Local Search and Shopping Devices

Theres a reason why search companies, advertisers, payment processors and local merchants are so interested in smartphones. Its because theyre turning out to be a powerful and popular tools for people looking to search locally, act quickly and improve their shopping experience. Thats the conclusion of a new smartphone user study commissioned by Google .

Google obviously has a big stake in these results, which were culled by research firm Ipsos OTX from 5,013 U.S. smartphone users at the end of 2010. But the numbers underscore why Google, Facebook, and Groupon as well as a host of marketers, app makers and merchants are so hot for smartphones. Its because they really do fit certain use cases that unlock money-making opportunities.

The survey found that 95 percent of smartphone users have looked for local information, with 88 percent of these users acting on information within one day, most often contacting or visiting a business. This is consistent with other survey results, and it really brings home how intent-driven users are when they search on a phone. They are often looking for something specific and theyre ready to move quickly. Thats a huge opportunity for merchants and brands to get in front of users who are on the cusp of making a purchase decision. As weve noted earlier, Google is already seeing great results with its click-to-call feature in local search ads, which leverages this behavior.

The key point here is that smartphone users are ready to take actions: Nine out of ten smartphone searches end in an action. And search engines are the most commonly visited websites at 77 percent, ahead of social networking, retail and video sharing.

Smartphones are playing a growing role for shoppers, who are wielding them to find deals, pull up research and locate businesses. The survey found that 79 percent of respondents used their smartphones for shopping and three out of four smartphone users make purchases either in store or online using their phones. Seven out of ten smartphone users turn to their phones while shopping in a store, showing that the phone is in use often from the time research begins until the moment a purchase is made.

The survey also found that smartphone users spent a median of $300 on purchases in the past year through their smartphone.This is consistent with other news weve heard. For example, eBay said global mobile sales hit $2 billion last year while Scanbuy reported that mobile barcode scanning activity was up 16x in 2010 over 2009. This also points up the growing importance of mobile payments, which will be a big battleground for players like Square, Paypal and others.

For advertisers, the smartphone is providing a new chance to reach users who are often ignoring online a! ds. Seve nty-one percent of users conducted a search based on an ad exposure and 82 percent notice mobile ads, with half of them taking some kind of action, most often making a purchase (49 percent) or visiting a website (35 percent). This is consistent with what Ive been hearing from mobile ad executives, who say mobile ads are a new opportunity because theyre more effective and memorable, particularly more rich mobile ads.

Overall, the survey highlighted how wedded people are to their smartphones. Ninety-three percent of people use smartphones at home with 39 percent admitting the use of their smartphone in the bathroom. The study found 72 percent of users used a smartphone while consuming other media, including a third who watched TV.

Thats what makes the smartphone so potent. Its with people at all times and its a versatile tool in the hands of consumers, who are only going to use them more and more. The implications for retailers, merchants and advertisers is huge. They need to optimize sites for mobile, make themselves visible to mobile phone users, consider launching mobile apps and they need to figure out how to engage this mobile audience because theyre much more informed and active then previous shoppers. For many merchants, it makes increasing sense to formulate multi-channel strategies that cover mobile, social and in-store campaigns. The smartphone is changing everything and businesses need to catch up if they want to take advantage of all this upheaval.

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