Article Published by Mobile Payments Today
Mobile commerce has certainly grown over the last several years. Even so, it’s important to note that it still represents a very small percentage of total retail sales.
As a whole, e-commerce contributed to just 7.8 percent of total U.S. sales in the first quarter of 2016, according to data from the U.S. Census Bureau. Mobile commerce accounts for just 30 percent of those digital sales, Internet Retailer reported, putting mobile-based sales at a relatively modest 2.5 percent of the total retail mark.
While at first glance these figures might suggest consumers simply aren’t ready to transition to smartphone-based shopping, mobile devices actually play an integral role in the buying process – but right now, it isn’t about executing purchases.
Marketers can still leverage mobile devices
Today, more than 80 percent of Americans aged 18-50 own a smartphone, according to the Pew Research Center. With the devices now practically ubiquitous and their iterative innovation beginning to slow, marketers are turning up the dial on what was once only interested experimentation, kicking off a full-throttle race to figure out how best to take advantage of consumers’ new purchasing power.
As they look to the future, many marketers believe mobile commerce is destined to become America’s favorite way to shop online. They see the smartphone as a more convenient computer, whose ease – and frequency – of access will see mobile commerce soon outpace all other forms of e-commerce to become the primary avenue for digital purchases.
As tempting a narrative as this would be to embrace, it indicates a relatively rudimentary understanding of how consumers use their phones. Observed more holistically, mobile commerce is more likely to develop alongside e-commerce and traditional retail as a complementary channel, not as a replacement. Here’s why:
People don’t want to make purchases on their phones
As noted above, mobile devices are quite popular, albeit not for making purchases. Instead, as many as 82 percent of consumers use their phones to look up product information while in a physical store, according to Google. This behavior suggests that even though only a few shoppers tap “buy” on their smartphones, a vast majority actively use them to make informed purchasing decisions. Of course, this begs the question: If consumers have their phones out and ready while they’re shopping, why don’t they use them to make purchases? The answers to this question are inherent in the nature of smartphones, and explain why mobile commerce isn’t going to surpass e-commerce anytime soon.
-Limited bandwidth: Despite the performance upgrades predictably packed into each new smartphone, mobile devices are limited by the networks that feed them data. Consumers are unlikely to fight against slow page downloads in low-service areas, especially when they have to navigate several screens just to check out. While cellular providers will eventually upgrade their networks, the process will take several years and billions of dollars. In the meantime, limited connectivity will continue to dissuade consumers from pursuing purchases on their phones.
-Restricted real-estate: One of the most obvious hurdles marketers and developers have to overcome when designing a mobile shopping platform is the size of smartphone screens. With little real estate available, companies can’t showcase their products in the same way they can on a full desktop browser. Beyond visuals, web designers have to rethink the entire user experience with mobile in mind, from the way recommended products and reviews appear on the page, to the checkout workflow a prospective customer will need to follow to make a purchase. While retailers will surely come up with creative ways to engage with shoppers on their small screens, mobile will continue to be a step behind desktop e-commerce until we see breakthroughs in virtual or augmented reality that will expand the viewing area.
Mobile as a complementary tool
Even as smartphone saturation approaches 100 percent, the above restrictions will push people to choose other methods of shopping over using their mobile device. But that’s not to say there’s no place for mobile in the buying process. Smartphones are packed full of technology marketers can leverage to engage their customers in a more dynamic and personalized manner. An enhanced customer experience sales will improve overall.
To get the most out of their mobile commerce channel, marketing executives should view the mobile device as a tool that can deliver greater specification to shoppers in fewer steps. If shoppers can consistently find answers about products in a quick and engaging manner, they’ll be more likely to come back to that retailer when it’s time to place an order. For example, a mobile retail app that allows shoppers to call up product reviews and specifications by simply scanning a barcode would streamline the research process consumers are likely to perform in the store anyway, increasing conversion rates, customer engagement and even spend.
Companies can also use mobile technology to make the shopping experience more personalized. Connecting retail app accounts to social media or email profiles can give retailers a wealth of information about their customers, helping them develop personalized offers and suggestions for each shopper based on his or her interests.
Perhaps the most effective mobile strategies, however, will be those that reach completely outside the box as they come up with a new way for mobile technology to add to the in-store or online shopping experience. Ideas like Starbucks’ mobile ordering use the best features of mobile – location services, mobile wallets and on demand access – to add an entirely new dimension to the experience of buying coffee at a physical store.
So, while m-commerce might not capture a lion’s share of total U.S. retail sales anytime soon, forward-thinking retailers will be able to use mobile channels to drive sales across their business.