US Smartphone Owners Use Devices to Aid Shopping

Two-thirds of US consumers with smartphones have used the devices to aid shopping, according to a report by research firm Leo J. Shapiro and Associates. The February 2012 survey also found that 38% of respondents researched products on their smartphones while shopping at a physical store.

Customers are using web-enabled devices for a variety of purposes, but the highest percentage of respondents, 47%, said they relied on smartphones to find out more information about a product. Thirty-six percent of those polled had used their phones to read product reviews on retail websites. Price-comparison was also a popular activity, with about one-third of smartphone owners looking up prices at other stores, and slightly fewer researching prices on retailer websites.

Interestingly, the research found that 54% of US smartphone owners used their phones to shop before arriving at a store. A smaller number said they had used their phone after getting to a brick-and-mortar location. This indicates that customers are “pre-shopping” on smartphones before deciding whether a trip to a retail location is worth it.

Once near the point of sale, more than one in 10 smartphone owners used their phones to compare prices at different stores or websites, according to the report. This finding relates to growing concerns among retailers over the practice of “showrooming,” when customers research products in-store, but then purchase them elsewhere. Retailers can help address that problem by ensuring that prices are consistent across multiple channels—in stores, on mobile apps and on their websites. By doing so, they give shoppers fewer reasons to walk away from a purchase.

eMarketer estimates that there will be 115.8 million smartphone users in the US by the end of 2012, with that number growing to 176.3 million by 2015.

Source eMarketer

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Facebook Buys Instagram for $1 Billion

Emineo Media instagram_logo

Facebook is not waiting for its initial public offering to make its first big purchase.

In its largest acquisition to date, the social network has purchased Instagram, the popular photo-sharing application, for about $1 billion in cash and stock, the company Emineo Media instagram_logosaid Monday.

It’s a notable move for Facebook, which has exclusively focused on bite-size acquisitions, worth less than $100 million.

With Instagram, Facebook will get a formidable mobile player – an area that is seen as a weakness for the sprawling social network. Founded two years ago, the service — which lets users share photos and apply stylized filters – has become one of the most downloaded applications on the iPhone, with some 30 million users. Instagram released a version of its application for Google’s Android operating system last week.

On Monday, both companies expressed their commitment to run Instagram as an independent service.

Pool photo by Yuriko NakaoMark Zuckerberg, the chief executive of Facebook, which is expected to go public next month.

In a post on his profile page, Facebook’s chief Mark Zuckerberg said Instagram would continue to work with rival social networks. That will allow users to post on other services, follow users outside of Facebook, and to opt out of sharing on Facebook.

“For years, we’ve focused on building the best experience for sharing photos with your friends and family,” Mr. Zuckerberg wrote. “Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.”

In a separate blog post on Instagram’s Web site, the company’s chief executive, Kevin Systrom, also reiterated plans to preserve the service’s functionality and said he looked forward to leveraging the new parent company’s resources and talent.

The announcement comes as Facebook prepares for its highly anticipated initial public offering, widely expected to take place next month.

Though Facebook is known for smaller acquisitions, Instagram’s surging momentum likely compelled the social network to swiftly put together a billion-dollar offer. Last week, Instagram, which has just a handful of employees, closed a financing round worth more than $50 million with several prominent investors, including Sequoia Capital, an early backer of Google, Thrive Capital, the firm run by Joshua Kushner, and Greylock Capital, an early investor of LinkedIn. AllThingsD first reported last week that Sequoia was in the process of leading a $50 million round in Instagram.

That latest funding round valued Instagram at about $500 million, according to one person with knowledge of the matter, who requested anonymity because discussions were private. Facebook’s purchase, one week later, means that investment has now doubled in value.

The deal is expected to close later this quarter, according to Facebook’s statement.

Here is the news release from Facebook:

“Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.

“The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.”

Mark Zuckerberg, founder and chief executive of Facebook, posted about the transaction on his Facebook page:

“I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.

“For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

“We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.

“That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

“We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

“These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

“We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.”

Source NYtimes

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Consumers Engage Differently on Email and Social Media

Discounts and offers drive participation, but social media followers also want to show support

Consumers connect with brands both via email lists and by “liking” companies on Facebook. While users want to receive discounts and special offers via both channels, connecting with a brand on social media is an added public display of support.

Chadwick Martin Bailey analyzed why consumers engage via email and Facebook and found that receiving discounts and special offers was the top motivation. Of the US respondents who had an email account, 58% cited that as a reason for subscribing to email lists. Other reasons for email participation included taking part in a specific promotion (39%) and because the consumer was a customer or supporter of the business or nonprofit (37%).

On Facebook, the desire to receive discounts and special offers was also the top reason for “liking” a brand, but it was only cited by 41% of US Facebook users, a smaller percentage of respondents than those that subscribed to email lists for the same reason. Additionally, 25% of respondents said they “like” a business or nonprofit’s Facebook page because they want to show their support, and 22% said they wanted to also demonstrate their support to others on Facebook.

Both email and Facebook can be great ways to connect with customers and supporters of a business or nonprofit. Email lists have their benefits, including the ability to have a database of contact information of supporters or customers, but with Facebook, there is the added advantage that the consumer is publicly showing support via a social recommendation. A 2011 study from 8thBridge found that consumers most often “like” a retailer on Facebook because they purchased a product and liked it; they then used Facebook to provide a straightforward recommendation for friends to see.

It still holds that consumers want discounts and deals when they connect with a business or nonprofit via email or Facebook. But, especially as consumers live more of their lives on social networks, connecting to a business or nonprofit on Facebook is not only about promotions, but a way to show public support for preferred businesses and nonprofits.

Source eMarketer

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