Mobile ads drive grocery sales

A new Schibsted study shows that mobile advertising drives people to stores and increase sales. Until now many retailers have been doubtful about the effect, given its short exposure time and the huge advertising clutter that exists today.

Eight out of ten Swedes use internet on their mobile phone daily and mobile is the medium with the largest reach (even greater than tv, radio and out of home advertising). Despite this the advertising effect has been particularly unclear for the retail industry which main focus is offline; to get more customers to the store and increase sales.

In the study Schibsted added mobile advertising to six Ica Maxi stores’ existing advertising (consisting mainly of direct mail, social media and local press).

The result was clear: there was an increase of 1 percent additional visitors to the stores, 15 percent more goods sold and 14 percent increased sales of the product that was displayed first in the mobile ad.

”We also believe in an even greater effect when the store itself selects the products that works best in the local area and when consumers become used to finding this type of advertising online”, says Linnéa Bergman, Insight specialist and project manager for the study.

With stores that are more easily accessible to consumers than Ica Maxi, the traffic increase is likely even higher than this study shows.

Stronger effect among younger people

The study also showed that with mobile advertising you reach mainly people younger than 49 years old. They are the ones who have primarily seen the mobile ad (both among those who have been exposed to the digital campaign and among the people interviewed in-store). This means that the effect of advertising is strongest in this group both in terms of the attitude towards the Ica Maxi brand (+ 18 percent in consideration and preference as well as + 30 percent in buying intention) and attitude towards this type of advertising.

And the effect is even stronger when it comes to people younger than 30, they are hard to reach via direct mail, since they’re not using that channel as much as the older age groups. In the study we also asked store visitors how they would like to have access to Ica’s offerings in the future. This confirmed that people younger than 49 years old mainly want access to offers through the digital mobile ad, while those older than 49 years old still want it by direct mail.

These results show how important it is for retailers to start digitizing their offerings to the younger target groups, but at the same time maintain the traditional medium to the older costumers – until they have become more digital.

Schibsted Retail Study is done in collaboration with Retail Academics. The study is made in a Latin Square Design, a model that allows us to isolate the effect of mobile advertising and thus reduce the noise that is otherwise great in a retail environment.