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M-Commerce To Be Majority Of E-Commerce By '18
- by Sarah Mahoney @mahoney_sarah, May 12, 2014
While actual sales made through mobile phones and tablets haven’t yet made a tremendous impact on e-commerce, Forrester’s just-released prediction is that those transactions will amount to $293 billion by 2018, a whopping 54% of all online sales.
Tablets are expected to drive $219 billion of those purchases, and smartphones $74 billion. And by the end of this year, writes analyst Sucharita Mulpuru, combined table and mobile sales are expected to total $114 billion, powered by media products, clothing and consumer electronics.
And while smartphone users currently outnumber tablet users by some two to one, Forrester predicts that tablets’ larger screens will lead them to top the total percentage of smartphone buyers within four years. Overall, she says U.S. online retail sales are still growing, and she expects a compound annual growth rate of 9.5% for the next five years, hitting $414 billion by 2018. (That’s about 11% of all retail sales, compared with its current 9%.)
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In the larger e-commerce picture, apparel and consumer electronics continue to be the biggest purchases, generating more than 25% of the total volume this year.
Devices are driving online sales, with consumers’ myriad “mobile moments” a key factor. “These consumers are accessing the Web more than ever, in more diverse environments than before, primarily while in rooms of their home other than an office (e.g., living room or kitchen) or in stores,” she writes, with some retailers reporting as many as 20% of sales coming from mobile devices. The digital adeptness of Gen Y, many of whom have been using the Internet since kindergarten, is also a key factor. “In fact, the 32.5 million U.S. consumers who comprise Gen Y spent an average of $563 online in the last three months, more than any other demographic group.”
But clever online marketing for some merchants also deserve some credit, such as Zulily, which she reports has grown nearly 100% in the last year, and even Amazon, which added 1 million new Amazon Prime customers during the critical holiday shopping season. (The report notes that online retail does significantly better during the holiday period.)
She says retailers, many of whom declared mobile platforms to be their No. 1 priority for this year, need to be even more intently focused, and created mobile experiences that are more than simply scaled-down versions of platforms designed for desktops. Consumers are adopting devices rapidly, with 200 million in the U.S. owning a smartphone, and 100 million a tablet, compared with 62 million and 8 million in 2010.
“Today, a minority of mobile phone and tablet owners are actually purchasing products on these devices. In fact, we estimate that only 38% of
smartphone owners and 31% of tablet owners will purchase on those devices in 2014,” the report says. “We expect that figure to grow to 55% and 61%, respectively, for smartphones and
tablets by 2018.”
"Mobile Shopping" photo from Shutterstock.
6 comments about "M-Commerce To Be Majority Of E-Commerce By '18".
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We can clearly detect whether a user is browsing from a true mobile device "TMD", a cell phone, or whether they are browsing from the much larger screen computer called a tablet. User habits are clearly defined and different based on these two devices. Yet we continue to lump "tablet" in as a mobile device? Why do marketers continue to combine these two points of access clearly knowing that user habits are as different as say age groups or gender?
Look, a user sitting at home using WiFi on their tablet, or a user sitting at a coffee shop using the cell network on their tablet is VERY different than the user on his cell phone in the exact same scenarios above. They react very differently and receive different information based on the device. Therefore, why do we continue to lump them together as if we expect a 70 year old female to respond the same as a 15 year old male.
@Giff. The reason tablets are considered "mobile" is so we can get the biggest number we can and get headlines like "M-Commerce To Be Majority Of E-Commerce By '18". Unless moving around inside your own house is considered "mobile", there's no reason to lump tablets together with smartphones. By the author's own logic, she would consider a laptop to be a mobile device if used in the living room instead of the office. Tablets are desktop replacement devices and are shown the same content as desktop devices. It makes more sense to group tablets with desktops than with smartphones. Though any article worth half its pixels would break them out separately...
We at TDG have made the same argument for some time: there are two very different products packed into the industry use of the term "mobile" and they should be separated. Consider, for one, that 75% of tablet-based video viewing occurs in the home over a WiFi network, not outside over the home over a 4G connection. You would think, then, it would be reasonable to distinguish "portable" (where we put laptops, notebooks, and netbooks) from "mobile" (where we put smart phones).
Oh, but it's not that simple, as the "industry" and the press that supports it are not so eager to make any change, and for precisely the reasons B. Zhang noted.
Just making eCommerce sites mobile friendly is not enough. The path to collecting money goes through the Shopping Cart, which is still the same process as we did 15 years ago. Entering credit card information, billing and shipping addresses on the tiny phone keyboards is not acceptable to shoppers. That’s why, according to Google, "shopping cart abandonment on mobile devices is now an outrageous 97 percent". Only 3% of shoppers are actually buying. This is a horrible.
So what is the solution to this payment friction on smart phones? PayPal is one, but you need to type in your email address and cryptic password (typing uppercase, lowercase, and number on a phone keyboard is painful). The login, go through 4-5 steps and then return back to the mCommerce site to conclude your transaction. Well, this is no fun, and it won’t incentivize users to buy from your site.
There is a third option today. We can bring the convenience of Amazon’s 1-Click purchase process to mobile eCommerce sites, without Amazon. Curious? Watch http://v.sekur.me/Tw1B or http://v.sekur.me/1m
What J. Bicer refers to above is dubbed "frictionless commerce" and is good until a major security breach occurs (e.g. Target). I wrote about this very topic last week on one of my blogs: http://mshopper.com/frictionless-mobile-commerce-vs-secure-mobile-commerce/
Hi Michael, secure mobile payment and authentication can also help with data breaches. If Target had used Sekur.me, they would have avoided the data breach.