Assessing The Impact of Mobile Technology On Consumer Path To Purchase

Shopper Marketing and the Role of In-Store Marketing
Mobile Shopper Marketing: Assessing the Impact of Mobile Technology on Consumer

Path to Purchase
Alicia Baik Rajkumar Venkatesan Paul Farris
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MOBILE SHOPPER MARKETING:

ASSESSING THE IMPACT
OF MOBILE TECHNOLOGY
ON CONSUMER PATH TO
PURCHASE
Alicia Baik, Rajkumar Venkatesan and
Paul Farris
ABSTRACT
We review the implications of the mobile technology for different stages
of the consumer path to purchase including awareness, search, evaluation,
store visit, and product choice. Real-time and location-specific access to
information and products are identified as distinguishing characteristics
of mobile devices. While the literature on digital marketing is well developed, knowledge of the effects on the consumer path to purchase in the
presence of dynamic and location-specific information is still scarce. Path
to purchase models need to recognize the central and powerful role of
user-generated content. Better management of marketing resources would
require models that connect investments in mobile marketing to sales,
and also model the synergies among different digital and offline media.
Shopper Marketing and the Role of In-Store Marketing

Review of Marketing Research, Volume 11, 1 25
Copyright r 2014 by Emerald Group Publishing Limited
All rights of reproduction in any form reserved
ISSN: 1548-6435/doi:10.1108/S1548-643520140000011001
ALICIA BAIK ET AL.
We conclude with a framework that connects mobile media impressions to

product choice, in the presence of other marketing media, and consumer
and firm feedback loops.
Keywords: Shopper marketing; mobile technology; mobile

promotions
Mobile penetration is rapidly growing in the United States. According to a

Pew Research Report, as of May 2013, 91 percent of American adults
owned a mobile phone, with 63 percent of adult cell phone owners using
their phones to go online. In fact, 34 percent of cellular internet users go
online most often using their phones instead of other devices such as a
desktop or laptop computer (Brenner, 2013). Mobile technology therefore
plays an important role in a majority of Americans lives and is having
a significant impact on shopper marketing.
Emerging technologies allow retailers to personalize the consumer
experience in real time. This is leading to a transformation of marketing
which is on-demand and tailored to customers desires (Dahlstrom &
Edelman, 2013). Real-time access to product and retailer information and
the ability to spread evaluations of their experiences blurs the lines and
creates new loops between stages in the traditional shopper cycle (Shankar,
2011) depicted in Fig. 1. The consumer decision journey, published by
McKinsey Quarterly proposes that consumers are moving outside the
traditional purchasing funnel (Court, Elzinga, Mulder, & Vetvik, 2009).
Purchase motivation, search, evaluation, category, and store choice are no
longer expected to be separate, linear stages of the shoppers path to purchase. Rigorous empirical research that develops the new purchase funnel
and identifies profitable marketing strategies for this new context is lacking.
INDUSTRY EXAMPLES
In this section, we provide some examples of firms using mobile applications (or apps) and review the potential of these to manage consumers
path to purchase. With regards to the awareness stage, Campbells
Pace brand and Catalina Marketing used mobile apps to deliver advertisements to consumers that were customized to consumers purchase history.
Mobile Shopper Marketing
Fig. 1.
Shopper Marketing Shopping Cycle. Source: Adapted from Shankar

(2011).
The app used the mobile device to communicate impressions of customized

advertisements from the Pace brand to their corresponding store sales for
70 million households (Johnson, 2013). Frito-Lay enhanced its promotions
using mobile phones to improve in-store consumer engagement and communicate with consumers post-purchase. Mobile technology has also been
used by Frito-Lay to enhance it co-branded campaigns with Activisions
Skylanders Giants1 series. Three in-store displays persuaded consumers to
download an app that showed the Skylanders Giants in 3D. Consumers
could unlock interactive content in the app after scanning the in-store
displays. Mobile phones in this case are helping brands attract consumers
to their in-store displays and also to measure the effectiveness of their
in-store marketing.
Mobile loyalty programs represent another avenue for firms to connect
out-of-store marketing to the in-store customer experience. Restaurants for
example are moving their old paper based loyalty programs to the mobile
platform. Firms like Papa Murphys International LLc in Kansas City,
MO, were able to reduce the inter visit time of their customers from an
average of 50 days to 22 days after introducing a mobile loyalty program
ALICIA BAIK ET AL.
operated by Front Flip (Jargon, 2013). Papa Murphy offered customers

who had not visited a store in 30 days a family size pizza for the price of a
medium pizza and customers who had been dormant for 90 days could buy
any size pizza at half-price. The mobile platform allows firms like Papa
Murphy to customize its rewards to individual customers.
In spite of successes like the ones detailed above, Rob Masri the founder
of Cardagin a mobile loyalty program (similar to Front Flip) has faced the
challenge of convincing restaurants of the value of rewarding their loyal
customers. The Cardagin mobile app allows consumers to use their smartphones to check out businesses, view offers, redeem coupons, earn loyalty
points and collect rewards. For example, through this app a consumer
could look for coffee shops within a mile of their location, and browse
offers such as a free Mocha Latte, provided by each of the shops, and also
see the points they have accumulated in each store. When visiting a store,
the consumers can easily pull up the relevant offers in their mobile phone,
and redeem the discounts at checkout. If they dont redeem an offer, they
can always show their personal Cardagin code on the mobile phone, and
receive points for the trip. The app is free for all consumers.
The same app allows businesses to record transactions and award points
when a purchase is made. For example, a store owner can use it to scan a
customers code, enter the purchase amount, and submit the transaction to
be recorded on Cardagins servers. On the merchants portal, the software
allows merchants to easily track the redemptions per offer, and spending
patterns of individual consumers. See Fig. 2 for some screenshots of the
mobile app.
Restaurant owners resisted providing coupons (or rewards) to their best
customers on Cardagins mobile loyalty program. The restaurants believed
that the loyal customers would visit the store anyway, so they did not see
the value of the mobile loyalty program. However, by monitoring customer
purchase and redemption patters on the mobile platform, Cardagin was
able to show restaurants that simply being exposed to the mobile coupon
persuaded consumers to buy products even if they did not redeem the
coupon. The ability to connect online and in-store consumer behavior on
the mobile platform was critical to discovering the exposure effect of
coupons (Venkatesan & Farris, 2012).
Another example of the mobile digital transformation is the evolution in
the retailing landscape from brick-and-mortar to online and mobile stores
(Bishop, 2011). Customers who have come to also expect personalized
experiences when shopping online increasingly expect brick-and-mortar
stores to tailor in-store experiences to their particular interests. Emerging

(a) List View
(b) Map View
(c) Business Storefront
(d) Business Information
(e) Points Screen
(f) Redemption Screen
Fig. 2. Screenshots of the Cardagin Mobile Loyalty Program. Source: Cardagin:

Local Mobile Rewards, University of Virginia (UVA) case study (UVA-M-0825).
Used with permission.
technologies give digital retailers an edge over brick-and-mortar stores

in this capacity. Retailers are responding to this demand by interacting
with customers through downloaded apps on their cell phones, providing
customized offers and tracking their behavior while in the store (Clifford &
Hardy, 2013). Even grocery stores which are woven into the fabric of
Americans weekly routines see that they need to respond to the digital
ALICIA BAIK ET AL.
trends. The 2011 Grocery Manufacturers of America Sales Committee

Report, Shopper Marketing 5.0: Creating Value with Shopper Solutions,
projected growing use of digital platforms and increasing importance for
ecommerce for Consumer Packaged Goods companies (Egol & Leisure,
2011). The industry examples show that both brands and retailers are
experimenting with several tactics to use mobile technology for real-time
and personalized engagement with consumers.
While the marketing landscape is quickly transitioning, little in the literature reflects the mobile and digital transformation of shopper marketing. In
our review of the literature, we have not found a conclusive framework for
how consumers shop in the digital age. Developing a comprehensive and
useful framework for understanding consumer choice in a context in which
consumers are not only exposed to advertising impressions, but are empowered to search for information and evaluate products is challenging. Yet,
such a framework will be required to enable marketers to analyze the shopper decision process and measure the effects of their multichannel marketing
campaigns including traditional media such as TV, print, and radio in this
new framework.
There is therefore a need in the literature for methodologies that enable
marketers to establish clear causal connections between mobile marketing
campaigns and sales. In particular it is still an open question as to how
mobile advertisements, mobile reviews, and mobile search interact to affect
customer acquisition and retention. The interaction of different marketing
media is also an issue of practical importance that has received very little
attention in the literature. In this chapter, we propose a framework for
developing research that will help marketers connect mobile marketing
campaigns to incremental sales and for also attributing credit for those
sales to the different media channels.
CONSUMER PATH TO PURCHASE MODEL

The different stages of consumer path to purchase include Awareness,
search, evaluation, and choice (store, category, and brand). Following
Shankar (2011), we define shopper marketing as the planning and
execution of all marketing activities that influence a shopper along
and
beyond the entire path-to-purchase. Research on consumer behavior in
digital media has generally not made a distinction among the platforms
used by the consumer, that is, desktop, mobile phone, or tablet computers.
We focus this chapter on this fast growing mobile medium, including tablets
and smartphones. In contrast to the desktop, the mobile device is available
everywhere to the consumer. We review the existing literature and hypothesize how to build on the dynamic and location-specific interactions
enabled by mobile technology.
We define mobile marketing as the interactions between marketers and
individual consumers, enabled through mobile technology, as customers
move along the path to purchase. In addition to mobile advertisements and
search, such interactions can include mobile device users communicating
with other potential customers, consuming digital content, alerting retailers
of their location, and engaging in online transactions. We are particularly
interested in how access to the internet on the mobile device changes
shoppers decision-making processes.
Our conceptual model draws on existing research that compares online
and offline shopper marketing and extends it to include mobile marketing.
The framework presented in Fig. 3 extends the traditional path to purchase
model to recognize the device consumers use to perform activities such as
search, price comparison, and brand choice. We propose that consumer
impressions of firm advertisements through mobile phones, emails, paid
or organic search, display, social media, television, print, and radio lead to
visits to the firms website, or directly to the resellers website or the brickand-mortar store. This visit can then translate into purchase or further
search. Firm advertisements generate product awareness and can also
motivate consumers to seek out product information and reviews generated
by other users or external rating agencies. We capture search through the
two-way arrows between firms website or brick-and-mortar store and
(a) firm advertisements, and (b) user-generated content.
Post-purchase, consumers provide product reviews, which can then affect
firms future actions in the different marketing media. The rate at which
impressions convert to store visit (firm or reseller website, or firm or reseller
brick-and-mortar store) is called the click through rate and the rate at which
store visit translates to purchase is the conversion rate. Firms also need to
recognize that traditional non-digital marketing such as TV advertisements
can improve click through rates. Existing product reviews can affect the
click through rates and the conversion rates. Any framework that connects
marketing media investments to sales should also recognize that firms have
feedback loops that change their investments in marketing media based on
prior sales and product reviews.
A unique aspect of the mobile device is that it allows firms to advertise
directly to consumers and for consumers to perform all activities including
ALICIA BAIK ET AL.

Evaluation
User Generated
Content
(e.g., reviews)
Digital Impressions
Mobile
Email
Search
Display
Website
(firm/reseller)
Sales
Social
Brick and Mortar Store
(firm/reseller)
Traditional Non-Digital
Impressions
TV
Radio
Print
Awareness
Search
Choice
Click Through Rate

Conversion Rate
Fig. 3.
A Framework for Understanding the Effect of Mobile Marketing on the

Consumers Path to Purchase.
search, evaluation, and choice on the same device. In our framework the
location sensitivity of the mobile device implies that consumers are able to
perform all the functions in their path to purchase in real time. For example, a consumer may be exposed to an advertisement from a retailer when
they close to the store. The advertisement could motivate the consumer to
look up the website of the retailer, and the reviews of products carried by
the retailer. The consumer could then walk over to the store and check out
the products in the store, and compare prices of the product in other stores
(through their mobile device), and finally decide to purchase the product
based on the cost and benefits tradeoffs. The hypothetical example illustrates that mobile device enables the consumers to pass through the different steps in their path to purchase more easily and quickly and straddle the
online and brick-and-mortar worlds better than the traditional devices
including the desktop computer.
Next we review existing research on consumer behavior in each stage of

the model. Based on the review we identify venues for extending current
research to the realm of mobile marketing.
WHAT DO WE KNOW?
We divide our review of the literature into the two stages of the consumer
shopping process and examine findings of research how mobile technology
affects the shopping processes out-of-store and in-store. Our out-of-store
analysis accounts for consumer awareness through advertising, reviews, and
the out-of-store search process. We then assess the literature on in-store
shopping behavior that includes evaluation and choice.
Awareness
Internet advertising is growing rapidly. According to the Price Water
Cooper led Internet Advertising Report, internet advertising totaled
$36.6 billion in 2012, a 15 percent increase over 2011. This makes internet
the second largest advertising medium after broadcast TV. Search adverting
is consistently the biggest revenue generator, accounting for about half of
the total internet advertising.
Mobile and video advertising were the two biggest drivers of digital
advertising growth. Mobile advertising increased 111 percent over 2011
with $3.4 billion in revenue in 2012. Revenues grew from 5 percent of total
digital advertising spending in 2011 to 9 percent in 2012. Mobile advertising
includes display, paid search, and messaging. Paid search accounts for more
than 50 percent of mobile advertising revenue, with display and messaging
accounting for the rest (San Mateo, 2013). These figures roughly mirror
the breakdown in overall digital advertising.
Paid Search Advertising
The literature has focused a lot of attention on paid search advertising,
given its preeminent place in digital advertising. Search advertising is largely
broken into two key categories: generic (e.g., hotels) and branded
(e.g., Hilton). Rutz and Bucklin (2011) examine the spillover effects of
generic search ads, which have higher costs using stand-alone metrics. In
their model, generic search ads increase awareness which leads to future
branded searches. This helps to justify the higher cost of generic search ads.
10
ALICIA BAIK ET AL.
Blake, Nosko, and Tadelis (2013) directly question the effectiveness of

search advertising with a large-scale field experiment done at eBay. The
experiments are designed to detect the causal effectiveness of paid search
advertisements. With randomized experiments, they turned off branded
search advertisements and found that searchers clicked on organic search
results when no advertisement was present. Results show that brandkeyword ads have no short-term benefits, and that returns from all other
keywords are a fraction of conventional estimates. They find, though, that
new and infrequent users are positively influenced by ads, but that existing
loyal users purchasing behavior is not influenced by paid search ads.
Display Advertising
The ability to track user behavior online and on mobile is improving the
targeting ability of advertisements. The promise of targeted ads is that they
are more effective than random ads. Goldfarb and Tucker (2011a, 2011b)
examine what influences the effectiveness of online advertising using data
from large-scale field experiments. They find that matching an ad to website content and personalizing an ad independently increases purchase
intent. However, when used in combination, these two strategies are ineffective. Advertisements combining the two strategies do worse at increasing
purchase intent than ads that do only one or the other. This result seems to
be related to privacy concerns since the negative effect is strongest for people who refuse to give their income and for categories in which privacy
matters the most.
Lewis, Rao, and Reiley (2011) examine whether mere correlations of
online behavior can lead to overestimates of the effects of advertising. The
authors measure the causal effects of online advertising on user behavior
using three controlled experiments. They show that purely correlational
data frequently lead to incorrect and inflated estimates of the impact of
online ads on sales. They identify an activity bias, a source of overestimating the effectiveness of online advertisements stemming from the fact
that users who tend to browse on one website of interest are also likely to
browse on a number of other websites which are all correlated. The endogenous participation with a number of websites overestimates the effectiveness of online advertisements. They show this bias exists in the context of
search and display advertisements.
Substitution between Online and Traditional Advertising
Increasing advertisements also can divert revenue from traditional modes of
advertisements. Goldfarb and Tucker (2011a, 2011b) examine the channel
11
substitution in search engine advertising. They find that online advertising

substitutes for offline advertising. Using data on the advertising prices paid
by lawyers for 139 Google search terms in 195 locations, they exploit a
natural experiment in ambulance
chaser regulations across states.
They find that when lawyers cannot contact clients by mail, paid search
advertising prices per click for search engine advertisements are 5 7 percent
higher. This substitution toward online advertising is strongest in markets
with fewer customers. This suggests that marketers need to target their
communications, mediates the relationship between online and offline
advertisements.
Search
The term mobile may be misleading, as it implies that consumers are on
the go outside their homes. However, according to a recent study conducted by Googles Think Insights, mobile search is always on, with a
majority of searches occurring in the afternoon and evening. They find that
77 percent of mobile searches occur at home or at work when customers
are likely to also have a PC available to them, while only 17 percent occurring while mobile users are on the go. This may imply that consumer are
couch surfing or multi-tasking. In any case, it will be valuable to know
more about where consumers are located when they search and what else
they might be doing. Additionally, according to their survey, 81 percent of
mobile searches are driven by speed and convenience. Mobile searches are
strongly tied to context, though, with shopping queries twice as likely to be
in-store. Finally, mobile searches trigger quick follow-up actions, with
55 percent of conversions (including store visits, phone calls, or purchases)
within an hour of the mobile search.2
Before addressing the effects of mobile technology on consumer search
behavior, it is helpful to consider frameworks for shopper search behavior
in a more general context. Models of costly search are often at the center of
many economic models trying to explain imperfectly competitive behavior.
Stiglers original 1961 model proposed fixed sample size search behavior
where consumers sample a fixed number of stores and choose to buy
the lowest priced alternative. McCall (1970) and Mortensen (1970) are
foundational studies in a different stream of the search literature referred
to as the sequential search models which assume that consumers cannot or
will not commit to a fixed sample size search strategy when the
expected marginal benefit of an extra search is greater than the marginal
12
ALICIA BAIK ET AL.
cost. De Los Santos, Hortacsu, and Wildenbeest (2012) test these different
models of search behavior using web browsing and purchase behavior.
Using online book industry data, the authors test whether consumer behavior aligns with the fixed sample or sequential search models. They specifically test the existence of sequential decisions to search again with analyses
that test if the decision to search again depends on the outcome of the previous search. Surprisingly, they find that in the context of online book
searches, the sequential search hypothesis is not a good model for consumer
search behavior.
Within each search model, research has focused on the extent to which
consumers search before purchase and the influence of search on consumer
price sensitivity. Seiler (2012) examines the effect of search cost on offline
consumer behavior. Looking at the sales of laundry detergent, Seiler develops a structural model with imperfect information in which consumers
engage in costly search. Consumers sequentially decide whether to search for
prices of laundry detergents by going down the laundry detergent aisle before
then deciding whether to purchase detergent. Customers decide whether to
search by weighing the expected benefits of learning about the prices in that
store with the search cost. Although varying promotions should entice
consumers to search for prices more often, because laundry detergent is
storable, the costs of examining prices each trip seem to outweigh the benefits. In other words, purchasing a larger SKU can reduce transportation
costs and this reduction outweighs potential savings or benefits from a
reduced price that can obtained in a future visit. Costs have a significant
impact on the choice to search. Seiler finds that consumers dont search for
laundry detergent on about 70 percent of their shopping trips. Further,
decreasing search costs by 50 percent led to a three-fold increase in the price
elasticity of demand, increasing sensitivity to prices and incentive to search.
Ratchford (2007) looks more closely at search behavior online and how
it acts as a substitute for offline search. Examining the automotive industry,
Ratchford finds that internet search on manufacturer and dealer internet
websites acts as a substitute for time spent at a dealership. Specifically, the
more time customers spend searching online, the less they spend negotiating prices and searching out third-party resources.
Product Evaluation
User-Generated Content
The internet has provided a platform from which new social networks are
developing. Ease of access to social networking sites have created a new
13
form of advertisement generated from customers. Two-way interactive

advertising is quickly gaining more attention away from one-way advertisements from retailers to consumers.
In a new era of marketing enabled by widespread access to digital technology, consumers are increasingly taking a more central role in determining which messages are most useful for them. Real-time mobile technology
is changing the landscape of the search process and is incorporating pastpurchase information as a key component of the decision-making process.
While traditional marketing was primarily one-directional with companies pushing messages onto potential customers, consumers are now participating by pulling information from companies and sharing information
on their experiences with other potential customers. As word-of-mouth
communication and product reviews increase in prominence, marketing
research is focusing more attention on post-purchase product reviews and
their impact on shopper marketing. Three important questions researched in
the literature are whether reviews affect sales, how reviews are generated,
and whether it is possible to predict choice with reviews.
Do Reviews Affect Sales?
The increase in prominence of product reviews does not necessarily indicate
an increase in influence of such reviews. The first step in understanding the
digital transformation of the path to purchase is to assess the impact of
product reviews on new sales. A better understanding of this connection
will help marketers know the usefulness of deeper analysis of this new
phenomenon.
Experiential goods, like books, are commonly reviewed online, and
stores often encourage customers to share their thoughts on their own store
websites. Chevalier and Mayzlin (2006) study the effect of word-of-mouth
on relative sales by examining online book reviews and sales at Amazon.
com and Barnesandnobles.com. The authors find that an improvement in a
books reviews leads to an increase in the relative sales at the site.
However, both sites carry reviews which are overwhelmingly positive, dampening the impact of five-star reviews relative to one-star reviews.
Product reviews are not the only form of customer input in the marketing process. Other forms of online communication also can have an impact
on new customers assessment of a product before their purchase. Rutz,
Sonnier, and McAlister (2011) look more broadly at online communications and consider the sales effect of the volume of positive, negative, and
neutral online communications. They find a significant effect of positive,
negative, and neutral online communications on daily sales performance.
14
ALICIA BAIK ET AL.
These results look beyond ratings, accounting for a broader set of consumer communications such as blogs and social media.
One reason customers may share and seek information from other customers is that it facilitates their learning process about the product. Zhao,
Yang, Narayan, and Zhao (2013) propose a structural model for consumer
learning from product reviews for experiential goods. Reviews enable consumers who have never tried a product to reduce uncertainty about the
quality of the product. In their model, the credibility of the review depends
on the precision with which the product reviews reflect the consumers own
product evaluation. Improvements in credibility increase the reviewers
effect on the consumers choice probabilities. They find that consumers
learn even more from online reviews of book titles than from their own
experience with other books of the same genre.
How Are Reviews Generated?
With substantial evidence that reviews affect sales, marketers want to have
a better understanding of how reviews are generated. While reviews propose to offer unbiased assessment of the products, often they are generated
as a function of social and emotional factors. Better understanding of the
factors which affect product reviews will help marketers understand how
this can be used to affect sales.
Peres, Shachar, and Lovett (2011) examine the drivers of online and offline word-of-mouth for 687 of the most talked-about national US brands.
They find that social and functional drivers are the most important for
online word-of-mouth while the emotional driver is the most important for
offline word-of-mouth. Additionally, brand characteristics play an important role in generating word-of-mouth, while the impact of those characteristics differs when the medium of the communication is online or offline.
Reviews often reflect factors beyond a customers own experience with
the product. Social dynamics including the arrival of others reviews may
affect an individuals willingness to post a review and potential customers
probability of purchasing the product. Moe and Trusov (2011) model the
arrival of posted product reviews to measure the impact of social dynamics
that may occur in the organic development of ratings on future ratings and
sales. They model the arrival of the product ratings and distinguish between
the social influences and the customers own perceptions of the product.
They, then, consider both direct and indirect effects on sales. Indirect effects
result from the influence of dynamics on future ratings and future sales.
They find that ratings behavior is significantly affected by previously posted
ratings and the effect on sales from this social dynamic is significant.
15
Are Reviews Predictive of Choice?

Archak, Ghose, and Ipeirotis (2011) argue that product reviews cannot be
captured by a single scalar value as is common in the existing literature.
Instead, they suggest that product reviews are multi-faceted and that the
textual content is an important determinant of consumers choices. They
use text mining and decompose textual reviews into segments describing
different product features, incorporating review text in a consumer choice
model. They estimate the model using a unique dataset from Amazon
containing sales data and consumer review data for digital cameras and
camcorders over a 15-month period.
Ghose and Ipeirotis (2011) again use the mining of text and reviewer
characteristics on multiple levels to examine the impact of reviews on economic outcomes like product sales. They explore a number of aspects of
review text such as subjectivity levels, various measures of readability and
the extent of spelling errors to identify important text-based features. They
also examine multiple reviewer-level features such as average usefulness of
past reviews and self-disclosed identity measures of reviewers. They find
that the extent of subjectivity, informativeness, readability, and linguistic
correctness in reviews affects the degree to which reviews are perceived to
be useful and to which reviews influence sales. Interestingly, reviews which
are only subjective or only objective are positively correlated with sales
while those with a mixture are negatively correlated with sales.
Decker and Trusov (2010) estimate aggregate consumer preferences for
products from product reviews. Using the review data from the mobile
phone market, they show that review-based results compare favorably with
consumer preferences obtained through conjoint analysis. This estimation
allows for inferences on the relative effect of product attributes and brand
names on the overall evaluation of the products.
The mean of online reviews is often used in the literature to predict product sales. Authors often assume that the mean reflects product quality.
However, Hu, Pavlou, and Zhang (2009) show that the mean of online
reviews is a biased estimator of product quality. Two self-selection biases
contribute to this overall bias: purchasing bias and under-reporting bias.
Econometric analysis using data from Amazon.com show that almost all
products have an asymmetric bimodal (J-shaped) distribution with more
positive than negative reviews. Conversely, when all respondents wrote
reviews during an experiment, reviews have an approximately normal
distribution with roughly equal number of positive and negative reviews.
They finally derive a new model to derive conditions for the mean to become
an unbiased estimator of product quality, integrating three distributional
16
ALICIA BAIK ET AL.
parameters mean, standard deviation, and the two modes of the product
reviews and product price and find that this model better predicts future
product sales.
Lurie (2004) finds that consumer information processing is a key component of the decision-making process. Failure to account for information
overload can lead researchers to incorrectly predict consumer choice outcomes. Search for goods online depends on others reviews. Positive reviews,
though, are often interpreted with skepticism, having a smaller effect on
sales. Researchers documented this tendency and labeled the phenomenon a
negativity bias in reviews. Lurie and Chen (2013) show that reviews written
right after a person ate at the restaurant are more valuable than those
written a long time after. Lurie, Weiss, and Macinnis (2008) similarly find
that in the context of forums for questions and answers, quicker responses
generate greater value for viewers. Additionally, those that seek information
to help them make decisions value providers with broader experience.
Lurie, Ransbotham, and Kane (2012) find in the context of Wikipedias
WIkiProject Medicine that the value of user-generated content depends on
the number of contributors, the degree to which users are able to engage
with others to enhance the product, and the newness of the content.
Online reviews do facilitate purchase of products which generally must
be experienced in order to be enjoyed. In Lurie, Huang, and Mitra (2009),
the authors empirically examine consumer behavior for search and experience goods online. They find that online retailing not only decreases the
cost of searching for and sharing information with others, but it also
decreases the distinction between search and experience goods. Customers
depend much more on product reviews when purchasing experience goods
than when looking for search goods.
Choice
Brick-and-mortar stores often lag behind online retailers in their ability to
track the behavior of potential and purchasing customers. However,
improvements in technology are allowing stores to track the physical movements and reactions of customers in their stores. Additionally linked with
mobile wireless tracking technology, stores are able to interact with and
track customers while they are in the store (Clifford & Hardy, 2013).
Stores have long watched the patterns of customers at an aggregate
level. The key distinguishing factor of recent technological developments is
that stores are now able to track customers at the individual level. Prior to
17
the advent of this technology, researchers have studied the shopping paths
of customers while they are in the store. We will review this literature and
propose questions that can be addressed for future work, linking mobile
technology with the current literature.
Improving unplanned or impulse purchasing is a major objective of
retailers analysis of consumer in-store path behavior. Such purchases are
the majority of purchases at the category level and are most likely to be
affected by the layout of the store or interaction with mobile technology
while in the store. Hui, Huang, Suher, and Inman (2013) analyze the pointof-purchase drivers of unplanned consideration and purchase by tracking
shoppers with video while in the store. They find that the longer in-store
travel distance and lower shopping efficiency are associated with more
unplanned considerations. Additionally, unplanned considerations are
more likely to convert to purchase when the shopper spends more time in
consideration, engages in more product touches, views fewer product shelf
displays, stands closer to the shelf, references external information, and
interacts with store staff.
Grocery stores seek to construct their paths to maximize consumer purchases while in the store. Hui, Bradlow, and Fader (2009a) examine three
behavioral hypotheses regarding customer purchase response to grocery
store paths. They find that first, as consumers spend more time in the store,
they become more purposeful. They are less likely to spend time on
exploration and more likely to make purchases. Second, they find that after
purchasing virtue categories, consumers are more likely to shop at locations
that carry vice categories. Finally, they find that the presence of other shoppers attracts consumers toward a store zone, but that the presence of these
customers also reduces consumers tendency to shop there.
Hui, Fader, and Bradlow (2009b) discuss more broadly about path data
in the marketing literature and discuss an integrated framework from
which researchers can build path models. They propose that path data will
become more important to help record consumers movements in a spatial
configuration, revealing more about how consumers interact with their
environment. They highlight two primary dimensions that they suggest are
important for developing path models: characteristics of the spatial configuration and characteristics of the agent. These two issues are key characteristics in recent technological developments as well.
Pricing is an important means through which stores market to customers
while they are in the store. Ramanathan and Dhar (2010) study the effect
of sales promotions on the size and composition of the shopping basket in
addition to the promoted brand. They find that cues such as the message of
18
ALICIA BAIK ET AL.
the sales promotion, the expiration date, and the familiarity of the brands
lead to more unrelated purchases in the store when they are compatible
with one another. They highlight the importance of taking into account
whether the customers are focused on saving money and being responsible
shoppers or on acquiring things and value from their shopping.
WHAT DO WE NEED TO KNOW?

Awareness
There remain some important questions to study in the awareness stage of
the path to purchase even though the literature in this stage is well developed. The biggest gap in the literature relates to the link between awareness
and sales. While click through and purchase intent are discussed, the literature has not made a clear connection between digital advertising and sales.
Additionally, how do real-time advertisements affect consumers shopping
behavior in their initial consideration, research, choice, and evaluation of the
product? For example, how does a real-time advertisement affect a customer
differently when she is at home watching TV versus in the store looking at
the product? In other words, how does real-time and location-specific mobile
advertising influence product search and purchase probability and how does
this compare to the influence of digital advertising in a desktop? How does
the effect of digital and mobile advertising on purchase intent translate into
sales? What is the carryover effect of digital and mobile advertising?
Search
The search literature has deep roots in the shopper marketing literature.
While search models have begun to examine the effects of digital search
on shopping behavior, the literature has not looked deeper into the implications of real-time search on consumer shopping. When shoppers carry
their smartphones on shopping trips, does the ability to search while
shopping compress their shopping cycle? Google research has found that
local mobile searches often lead to phone calls.3 Does real-time search
increase or decrease price and promotion sensitivity? Does the ability to
search real time lead consumers to spend less total time on search and
therefore decrease the exhaustiveness of search and the prices paid for
19
a product? How could the fixed sample search model evolve for real-time
and location-specific search models? How does mobile search affect customer purchase at brick-and-mortar stores versus online stores?
Evaluation
Reviews are increasingly becoming a key component in the marketing mix
models. Two-way interaction with customers and retailers through product
reviews provide advertisements and serve customers searching for information about products. Mobile devices enable even more real-time interaction
in this front. Some authors argue that reviews are inherently more influential in some product categories than others (Simonson & Rosen, 2014).
However, the ease of accessing reviews and the availability of other information may also affect the role of reviews in the consumer decision process.
For example, consumers might be unlikely to consult user reviews for overall preferences among fast food restaurants, but still use them to decide
whether to stop at a particular franchise location while traveling. Research
therefore needs to evaluate how the ability to upload reviews in real time
through mobile phones influences their relevancy? Are reviews more accurate and will they be perceived to be more accurate because they are
uploaded real time on mobile phones? When customers are able to review
experiential goods while they experience them, how does this affect the
credibility of the reviewer and thus the impact on sales? And how can
stores manage the review process to enable more sales, particularly as
reviewers can respond in real time? Does the availability of real-time
reviews increase their importance for product choice? How is this different
when the product is purchased online and in a brick-and-mortar store?
Choice
Customer usage of mobile devices while outside and inside the store has a
lot of potential for research. Stores are exploring the crossroads of brickand-mortar in-store shopping and digital technologies through tracking
customers on their wireless connections and interacting with customers on
their downloaded apps. There is a lot of potential research in this field.
How do location-specific promotions given in real time affect purchase
behavior of customers while they are in-store? How do privacy concerns
affect the degree to which brick-and-mortar stores can interact with
20
ALICIA BAIK ET AL.
customers through their mobile devices? How can purchases made in-store
be connected to online search behavior?
Pancras, Venkatesan, and Li (2013) examine the influence of mobile loyalty programs on consumer store choice, and spending. They find that consumer exposure to loyalty program reward coupons before a store visit has
a substantial effect on consumer store choice and spending. The effect of
consumer exposure to reward coupons is comparable to the influence of
consumer loyalty points accumulation. Stores on the mobile loyalty program also have a positive spatial agglomeration effect. Specifically, greater
availability of the mobile reward coupons from stores within a geographic
cluster increases the choice probability of each store in the cluster. This
study highlights the need to understand the role of mobile coupons and its
dynamic and location-specific effects on consumer path to purchase.
CONCLUSION
The path to purchase model provides a nice framework to understand the
influence of the mobile platform on shopper marketing. The mobile medium provides granular information of consumer behavior that was heretofore not available. This opens up a host of venues for developing better
models of consumer behavior and also more effective marketing interventions. Increasingly it is clear that mobile users who actually on the go,
shopping in stores, hurrying through airports, or on daily commutes are
using mobile devices differently than those who are using the devices at
home on the office. Data on location-specific usage of mobile and the
effects of mobile marketing are needed to test the real possibilities that on
the path to purchase may be quite different depending on how and whether
consumer are mobile while using mobile devices. For example, phone calls
may be much more likely methods for following up on many mobile
searches when the consumer as well as the device is mobile.
In this chapter, we identified four stages in the path to purchase model
that are relevant for mobile marketing: awareness, search, evaluation, and
choice. We further split the stages into out-of-store and in-store. While
awareness and search are to a large extent out-of-store activities, evaluation
bridges between out-of-store and in-store, and choice is primarily in-store
(offline or online). The literature comparing online and offline marketing
provides a good basis for deriving research questions relevant for mobile
marketing. We identified real-time and location-specific access to information and the ability to act on the information as the primary differentiators
21
of the mobile medium from a desktop. Based on the review of the current
literature we present venues for future research in Table 1.
We propose three major venues for future research. First, research connecting mobile marketing to sales is sparse. Brands have started to realize
Table 1.
Path to Purchase
Stage
Summary of Proposed Research Questions.

Research Questions
Awareness
1. What is the link of digital advertising to sales?

2. How does the effect of digital and mobile advertising on purchase intent
translate to sales?
3. How do real-time advertisements affect consumers shopping behavior in
their initial consideration, research, choice, and evaluation of the
product?
4. How does real-time and location-specific mobile advertising influence
product search and purchase probability?
5. How is this different from desktop digital advertising?
6. How do promotions such as coupons play into digital advertisements?
Search
1. How does mobile search affect customer purchase at brick-and-mortar

stores versus online stores?
2. Does the ability to search while shopping compress the shopping cycle?
3. Does real-time search lead consumer to spend less time on search and
therefore decrease the exhaustiveness of search?
4. Does real-time search increase or decrease price and promotion
sensitivity?
Evaluation
1. Does the availability of real-time reviews increase their importance for

product choice?
2. How is this different when the product is purchased online and in a
store?
3. When customers review experiential goods while they experience them,
how does this affect the credibility and impact on sales?
4. How do real-time reviews influence their relevancy? Are reviews more
accurate and are they perceived to be more accurate when uploaded in
real time?
5. How can stores manage the review process to enable more sales,
particularly as reviewers and stores can respond to one another in real
time?
Choice
1. How can purchases made in stores be attributed to online

advertisements?
2. How do privacy concerns affect the degree to which brick-and-mortar
stores can interact with customers through their mobile devices?
3. How can purchases made in-store be connected to online search behavior?
4. How do location-specific promotions given in real time affect purchase
behavior of customers while they are in-store?
22
ALICIA BAIK ET AL.
the potential of the mobile platform for connecting personalized communications (including advertisements and coupons) to in-store sales. For example, Kraft observed redemption rates close to 15 percent for cash back
offers that could be obtained when consumers scanned bar codes of the
product and uploaded pictures of their receipts (Johnson, 2013). These
examples indicate that the mobile platform is better than the desktop in
connecting firms communications (online as well as offline) to in-store purchases, especially offline.
Second prior research has only considered digital marketing in isolation
without accounting for synergies between different medium. Media allocation decisions in firms are typically considered across media rather than for
each individual media channel. Consider a situation where the CFO of a
company wants to reduce TV spending because majority of a brands sales
occur online and in response to email or paid search campaigns. TV however represents a big portion of the firms media budget and it not correlated strongly with brand sales. The CMO on the other hand believes that
would be a mistake because TV enhances the productivity of the email,
paid search, and mobile marketing campaigns. For example, the firms television advertising can improve consumers click through rates of paid
search advertisements on mobile phones.
Finally, research connecting marketing activities to different stages of
the path to purchase is lacking. For example, does display advertising
improve purchase intent and motivate consumers to search for product
reviews? Are consumers who take these steps in the purchase cycle more
valuable to a firm than those who respond to a mobile coupon offer and
directly purchase the product? Further, are consumers who respond to display advertisements more likely to search for product reviews than consumers who click through coupons?
The availability of granular data through mobile and digital marketing
media provide the potential for firms and academics to better understand
consumer behavior and to develop effective targeted strategies to influence
the consumer path to purchase.
NOTES
1. http://www.skylanders.com/.
2. Mobile Search Moments Study (2013).
3. Mobile Click-to-Call. Google Ad Innovations. http://www.google.com/ads/
innovations/ctc.html.
23
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MOBILE SHOPPER MARKETING:

Shopper Marketing and the Role of In-Store Marketing

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We conclude with a framework that connects mobile media impressions to

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Keywords: Shopper marketing; mobile technology; mobile

Mobile penetration is rapidly growing in the United States. According to a

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Shopper Marketing Shopping Cycle. Source: Adapted from Shankar

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operated by Front Flip (Jargon, 2013). Papa Murphy offered customers

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Mobile Shopper Marketing

(b) Map View

(c) Business Storefront

(d) Business Information

(e) Points Screen

(f) Redemption Screen

Fig. 2. Screenshots of the Cardagin Mobile Loyalty Program. Source: Cardagin:

technologies give digital retailers an edge over brick-and-mortar stores

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trends. The 2011 Grocery Manufacturers of America Sales Committee

CONSUMER PATH TO PURCHASE MODEL

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Mobile Shopper Marketing

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Click Through Rate

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Next we review existing research on consumer behavior in each stage of

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ALICIA BAIK ET AL.

Blake, Nosko, and Tadelis (2013) directly question the effectiveness of

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Mobile Shopper Marketing

substitution in search engine advertising. They find that online advertising

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ALICIA BAIK ET AL.

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Mobile Shopper Marketing

form of advertisement generated from customers. Two-way interactive

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ALICIA BAIK ET AL.

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