Why Mobile eCommerce is set to grow
Going Mass Market
With 116m global sales in the last quarter alone, smartphones are on the rise. Recent Ofcom data shows that almost 1 in 3 UK adults now own one – and most of these have been bought in the past 12 months.
As the smartphone market continues its rapid expansion, mobile retail has followed suit, with ABI Research reporting that over half of smartphone owners use, or plan to use, their handset to shop online. While predictions that by 2014 sales via mobile devices will overtake sales via PC (by Morgan & Stanley) may be ambitious, there seems little doubt that mobile commerce is only going to get bigger.
In the past mobile commerce has often been included as a part of online retail, reflecting that it is still an immature market – while phrases such as M-commerce, and MEcommerce have failed to catch on. More recently though, a distinction is being made between traditional “static” sales and mobile sales, as signs suggest a mainstream breakthrough is imminent. In fact it is already a significant area for sellers to target, with 55% of those who shopped online from their phones doing so outside the home; when they would often have been otherwise inaccessible to retailers.
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Instant Satisfaction
The 24/7 access, and convenient browsing have been major selling points for mobile commerce, and consumers have found that smartphones are perhaps most useful for impulse purchases, or cheaper products. Ease of payment is vital, and is often the main factor in persuading shoppers to buy, and some retailers even allow customers to pay by simply entering their phone number, instead of using a credit card.
Likewise buying computer games, apps, music or video content, software, and other virtual goods continue to gain in popularity, and are well suited to mobile purchasing. Partly because of the easy transaction method, but also because they can often be used on the smartphone from the moment they are purchased.
By combining web browsing, music and video, games player, camera, scanning, GPS, and of course phone as standard (along with other ‘lesser’ functions – calculator, alarm, torch etc.), smartphones have eliminated the need for many different products, and this has played a crucial role in convincing the public to adopt such devices. Many applications can be downloaded (often for free), which perform specific tasks – enhancing the standard features – and innovative results have been achieved by linking two or more of the different functions.
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Far East Movement
The market is probably at its most advanced in Japan and South Korea, especially with the younger generations who rely on smartphones to take care of many of their daily tasks. Consequently retailers have tested several new methods of selling to consumers, including a virtual supermarket on the Seoul underground:
Billboards display hundreds of pictures of food and drink, alongside the platform, and, after downloading the appropriate app., customers can hold the phone over a black-and-white QR (Quick Response code) just under each picture, the product then appears on the phone screen. Checkout asks when and where the products are to be delivered, with orders placed before 13:00 delivered the same evening.
There are plans to put virtual stores in other underground railway stations, especially those close to the city’s universities, and the company behind the scheme is keen to introduce it to other countries too. Such ideas, regardless of their success, are useful in gauging the public appetite and attitude towards similar uses. They also help identify areas which could offer value, offer a showcase of what is possible, and get the public used to the idea ahead of a more refined final product.
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The Same, But Different
To many the online market may not seem too dissimilar to the physical one, as many popular stores have become equally ubiquitous on the web. By using a consistent “multi-channel” approach, brands have aimed to make customers develop an affinity to them, independent of the situation. By incorporating mobile specific software, they can expand this familiarity to smartphone users, meaning the mobile market is likely to be dominated by many of the same names.
While some people still see shopping as a leisure pursuit, the smartphone has made in-roads even here, as some shoppers, on finding an item they like in-store, go straight onto their phone in search of a better price. Those predicting the death of the high-street however, look wide of the market, even if many of the larger national and multinational chains appear to maintain a physical presence stores solely to market their online operations.
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Here to Stay
In a survey of 600 users surveyed by eDigital Research, more than a quarter now use their smartphone to find product information on a regular basis, and users who said that they never shopped online has reduced from 70% to 49% in the last year. Perhaps surprisingly, more than 1-in-8 of smartphone owners already conduct more than 20% of their shopping via mobile, while 4% do more than 60%.
The desire for some form of mobile connection is now seen by many as essential, and with tablets bridging the gap between mobile and laptop, the market has covered all corners. Technological advances, such as flexible screens are on the horizon, and combined with faster and more stable wi-fi connections will only consolidate the existing market, and help attract new users.
While the growth in the smartphone market is expected to slow, and reach a plateau, over the next few years, no such slowing is predicted for mobile commerce, as consumers demand to shop “whenever, wherever”. With 93% of those using a smartphone to shop saying they would do so again, the main obstacle seems to be a lack of familiarity for those new to the process, something which can only ever improve.
