Shopping on a mobile phone or tablet will dominate in the next few years but many shopping categories have yet to capitalize on this growth.
This story first appeared in the October 2, 2015 issue of WWD. Subscribe Today.
According to research by Forrester, U.S. mobile commerce will reach as much as $252 billion by 2020, which is a 17 percent compound annual growth rate from 2015. Mobile commerce refers to both shopping in apps and on mobile-optimized Web.
Although this is significant growth, the research suggests that since the majority of mobile sales — as much as two-thirds — are limited to apparel, consumer electronics and media, most categories are “underpenetrated.”
The report also predicted that tablets will see more e-commerce sales than mobile phones. Forrester’s five-year mobile commerce forecast found that mobile phones would generate 15 percent of e-commerce sales by 2020, while tablets will generate 33 percent.
Although a larger percentage of sales will go to tablets, researchers found that retailers are focusing on smartphones. In 2014, it’s estimated that retailers spent on average $1.2 million on their smartphone investment and $550,000 on tablets.
There are some challenges as retailers continue to invest in mobile commerce.
The research found that mobile discovery and browsing did not convert into mobile sales. Although one-third of retailer Web traffic is from phones, only 11 percent of sales is on phones. Researchers recommended that retailers, although they traditionally focus on sales, Web traffic and conversion as key performance indicators, instead should look at what drives traffic to stores, sales on their properties and at partner sites like Google, which is reportedly working on a “buy” button, and Pinterest, which has already added one. In addition to weak conversation rates, slow download times presented another challenge.
In 2015, mobile commerce sales were expected to be $115 billion, which is about 35 percent of overall e-commerce. Thanks in part to a strong user experience, top mobile commerce leaders Amazon.com and eBay claim one-third of all mobile shopping in the U.S. (eBay recently relaunched its mobile app).
As more people use smartphones and tablets, retailers are encouraged to improve the mobile shopping experience; 38 percent of phone owners and 41 percent of tablet owners still say they prefer shopping on a desktop or laptop.