In-Store Use of Mobile Technology and Observational Learning Effects

Brick-and-mortar retailers face increasing competition from online merchants who often provide better customer experience than incumbents. However, digital technologies enable brick-and-mortar retailers to improve customer engagement and retention. In this study, the authors investigate how the in-store use of mobile technology can exploit the social nature of offline shopping to enhance customer engagement with a retailer’s promotions. Analyzing two large data sets of a nation-wide retailer, they find a significant effect of social contagion of in-store use of the retailer’s mobile app both on other shoppers’ use of the mobile app as well as on the number of m-coupon redemptions. Social contagion also reduces interpurchase times between subsequent app usages. The effect of social contagion persists over time as users gain more experience with the app. However, in-store advertising reduces the effect of social contagion on the number of m-coupons redeemed per app usage. The study thus contributes to research both on the introduction and design of digital retail technology as well as on shopper engagement in the customer journey