Retailers shift their ad spending from TV, radio and print ads to digital ads.
Mobile shopping grows, and more retailers take note
On average every month from February through April 2010, 7.3 million mobile phone users accessed m-commerce sites, up 46% from 5.0 million for the same period a year earlier, according to web measurement firm comScore Inc. And on average every month from February through April 2010, 2.7 million smartphone users accessed mobile commerce apps, up 93% from 1.4 million.
Today, 157 retailers engage in mobile commerce: there are 150 m-commerce sites, and 71 retailers offer numerous mobile apps. The size of these merchants runs the gamut, with half appearing in the Internet Retailer Top 500. Mobile commerce is not pie in the sky, it's reality.
A big dose of reality came early this year when eBay Inc. became the first merchant to report m-commerce sales figures: a hefty $600 million for 2009.
Few other merchants have released sales figures, showing that sales likely are still modest. But some have given hints. The Finish Line Inc. says 3% of its recent e-commerce revenue comes from mobile commerce (the retailer earned $80.2 million in web sales in 2009, according to Internet Retailer estimates). And 8% of its online customers in May accessed its mobile or traditional sites though mobile devices, up from 3% in September. It's stats like these, says Roger Underwood, senior vice president of e-commerce, that show the importance of developing a mobile strategy.
Consumers are getting comfortable with mobile commerce, with more than one in five having used a web-enabled mobile phone to shop online, consulting firm Deloitte LLP says. In a survey of 1,052 consumers from May 1 through May 3, Deloitte found that 21% of consumers used a web-enabled mobile phone to assist them in shopping in various ways. Of the 21%:
- 36% used their phone to go to a web site to shop for products or services.
- 35% compared product prices.
- 29% researched product information.
- 25% purchased a product online.
Growing use of smartphones is behind the growth in mobile commerce. All smartphones are web-enabled; some standard mobile phones are, some are not. And all smartphones offer a rich—and getting richer—web experience, enabling retailers to provide a more colorful and enticing shopping environment.
In the fourth quarter of 2009, 21% of U.S. wireless subscribers were using smartphones, up from 14% in Q4 2008, according to measurement firm The Nielsen Co. The firm predicts 35% will be using smartphones in Q4 2010 and half of all wireless subscribers will be on smartphones by Q3 2011.
"We are at the beginning of a new wireless era where smartphones will become the standard device consumers will use to connect to the Internet," says Roger Entner, senior vice president of research and insights in the telecommunications practice at Nielsen. "The share of smartphones as a proportion of overall device sales has increased to 29% for phone purchasers in the last six months, and 45% of respondents to a Nielsen survey indicated their next device will be a smartphone. If we combine these data points with falling prices and increasing capabilities of these devices along with an explosion of applications, we are seeing the beginning of a groundswell."
Smartphone users expect a great mobile web and app experience, and most retailers have turned to vendors to build and maintain mobile commerce sites and apps.
85.3% of the 149 m-commerce sites today were built by technology providers, according to Internet Retailer research.
However they choose to build, retailers in mobile today are the pioneers, and they're preparing for the smartphone revolution, which will push m-commerce further into the mainstream of shopping.