The first e-commerce wave brought incredible convenience, endless choices and great prices to our desktops. It revolutionized the retail industry, first by disrupting and then annihilating traditional retail of commodity products such as electronics, books and CDs. Soft-goods retailers had a bit more breathing room to figure out their e-commerce strategies, but now, for example, clothing and home goods are the two largest e-commerce verticals, and retailers that have innovated are thriving, but those that didn’t adapt are dead. The recession of 2008-2009 accelerated extinction of merchants with undifferentiated product and channel, see Mervyn’s and Linen ‘n’ Things for detail.
Now, with more than half of America using smartphones and tablets, we don’t even have to step to our desks; stores are in our hands round the clock, and new technologies make shopping even easier. Phones fully equipped with high-resolution screens, real-time notification and easy-to-use interfaces, browsing and fulfillment …shoppers’ budgets best watch out, the shopping experience is good. I spent last Black Friday curled up by the fire with my iPad rather than in a parking lot at 5am, and I wasn’t alone. 18.3% of all 2011 Christmas Day shopping came from mobile devices, which was 8.4% higher than 2010. (Source: Retail Industry)
There is no doubt that mobile commerce will continue to rise dramatically. We are more likely to leave the house without our wallet then without our phone. It’s predicted that by 2015, mobile shopping will account for $163 billion in sales worldwide, 12% of global ecommerce turnover. (Source: ABI Research, 2010)
So how are consumers using their mobile devices to shop?
Content to Commerce
Mobile shopping, especially on tablets, mixes the lean-back leisure of flipping through a magazine with the lean-forward capabilities of search to help a shopper buy both the items she knows she needs with the delight of surfacing things she didn’t yet know she wants. As retailers have taken the mantle of defining style by mixing in editorial content, as for example, at Net-a-Porter or StyleMint, they close the cycle between consideration and purchase.
Flash sales and auctions have spurred the use of mobile to catch the deals. Hot mobile apps like Gilt and RueLaLa have seen more than 20% of sales coming from mobile (Source: Internet Retailer) and master auction site eBay attributed $5bn to mobile sales in 2011, more than 2x the previous year (Source: Mobile Marketing Watch). Consumer shopping habits can be stoked at the stroke of the hour, even during a pesky meeting or long commute.
Are mobile phones turning into the new sales clerk? 66% of US smartphone owners use their phone to aid in shopping. (Source: Leo J. Shapiro and Associates, 2012) Whether that is reading reviews, looking at competitive prices or seeing if it comes in another color, consumers are turning to their phones and tablets to make an informed buying decision.
Clipping coupons has gone mobile. 21% of consumers search for a coupon on their mobile device while in a store (Source:Mobile Audience Insights Report from JiWire, 2012) and 55 % of consumers express an interest in mobile coupons but only 10% have actually received one from a merchant (Source:Mercator Advisory Group, 2012). Missed opportunity? Definitely.
These innovations are driving emerging opportunities for mobile commerce, mobile marketing, mobile commerce infrastructure and mobile payments. Perhaps this Black Friday, I’ll be curled up with my iPad, DocuSigning a termsheet for a company leading the way in mobile commerce. Or sooner.