Mobile Commerce – The Future of E-Commerce
The top 500 retailers operate in highly competitive markets and their ability to innovate is often the defining factor between category leaders and the rest of the industry. For Top 500 retailers this growth has stemmed in large part from integrating e-commerce into their strategies.
Today, mobile commerce (m-commerce) is beginning to be a valuable tactic for any commerce strategy. If the top 500 retailers don’t make the shift to investing in m-commerce solutions, they’re bound to lose customers to more nimble, mobile-oriented competitors.
How do we know this? Well, in the last full calendar year (2012) mobile commerce revenue increased by more than $11 Billion dollars – from $13.63 billion to $24.81 billion. That’s meaningful revenue.
By 2017, eMarketer estimates that this growth will continue – with m-commerce generating more than $108 billion in retail sales in the United States alone.
Now, we understand that when you compare this to the total retail sales in 2012 of $3.09 trillion dollars, $24.81 billion doesn’t seem very significant. But if you recognize that the growth rate is staggering, it’s impossible to ignore that this is an area for investment. In fact, mobile commerce already represents over 10% of total e-commerce business ($24.8 Billion for mobile vs. $225 billion for e-commerce)
Putting it another way, e-commerce represented 7.3% of the total U.S. retail sales in 2012, but it accounted for 25.4% of its growth.
Companies are improving their e-commerce strategies by utilizing web analytics, survey tools, and other data to better understand their customers. In comparison to e-commerce, mobile commerce is still in utero, but as more tools are built to understand the mobile customer, companies will have better insight into their customer bases than ever before.
Are Any Retailers Using Mobile Already?
Many of the top retailers are grabbing the opportunity to move to the mobile platform. As of 2012, 322 of the Top 500 retailers had at least a mobile site and many even had a mobile app. More importantly, these retailers are generating significant business through their mobile channels. RueLaLa, for example, earned more than 15% of it’s total e-commerce sales of $399.9 million dollars through mobile.
Companies such as Target and Walgreens are leveraging their mobile apps to acquire new customers and improve customer engagement with their brands in ways that e-commerce or other traditional methods could never achieve. Even in the financial industry, mobile commerce is driving a whole new level of engagement for banks and credit score companies.
As the number of devices increases we will only see mobile become more integral to business. Companies that make their inventories easy to browse and buy through mobile devices will create more customers. A customer can now be anybody who is waiting for a bus or looking to make a purchase before hopping on a plane.
Mobile commerce does more than create opportunities to become a customer anywhere. With mobile apps companies can offer coupons, rewards, or other campaigns that drive customers back to their stores. Mobile commerce is a direct channel between a brand and consumer driving revenue on and offline.
Mobile devices drive more purchases. Fact.
According to Business Insider, in approximately three years the number of tablets will overtake the number of PC’s. As tablets already account for 40% of traffic to e-commerce websites they will easily become the primary shopping tool for all online consumers.
All signs point towards mobile commerce continuing to grow more rapidly than any other form of commerce.
Don’t Ignore Mobile Commerce
Mobile commerce may not yet have the staggering numbers compared to total retail or e-commerce retail sales, but to ignore mobile commerce is to ignore an increasing percentage of customers. It takes research, practice, and therefore time to be successful in the mobile landscape.
Integrating new strategies isn’t always easy, especially for larger companies, but placing an emphasis on adopting new tools, such as mobile devices, into the e-commerce strategy will produce positive results. On the other hand, avoiding change or adapting slowly to mobile commerce will be detrimental.
As the capabilities of m-commerce increase in the next couple years, the companies that embrace the mobile customer will rule the marketplace. There are over $3.09 trillion dollars in the retail space and the greatest growth is coming from e-commerce, and driving e-commerce is the new V8 mobile commerce engine. Don’t be left in the dust.
How do you think mobile commerce will shape the future of retail and business? Have you had any experience with mobile commerce? Please share any comments below.