The average return on Facebook ad spend rises 26% in Q3, according to social media advertising firm Nanigans.
It's time for retailers to design a road map to stay ahead of the t-commerce trend.
Tablet ownership is poised for rapid growth, a development with big implications for online retailers.
We estimate tablet users in the U.S. will grow at a compound annual growth rate of 51% from 2010 to 2015 and that by 2015 82.1 million U.S. adults will own tablets.
And the 2011 holiday season provided strong evidence of the rapid growth of tablet commerce; a study by Compuware APM based on more than 70 retailers and more than 140 million web page views shows that Black Friday and Cyber Monday, the Friday and Monday following Thanksgiving, saw about three times more traffic from tablets than smartphones. In other data, 16% of online buyers said they shopped with mobile devices over the Thanksgiving weekend, up from 9% from 2010, according to a Forrester Research/Bizrate Insights survey of recent U.S. online buyers.
While smartphone ownership will outpace that of tablets, Forrester Research believes tablets have a unique ability to influence and drive online sales. In the recent study conducted with Bizrate Insights, Forrester found that 9% of online shoppers own tablets. Even with that rather limited adoption, retailers surveyed by Forrester report that more than 20% of mobile traffic came from tablets. And we predict that percentage will continue to grow for the following reasons:
- Users prefer tablets to smartphones for shopping. Sixty percent of consumers who own tablets use them for shopping. Furthermore, more than half of tablet owners say they use their tablet more than their smartphone for shopping-related activities, and more than 50% agree that it is as easy to visit and/or buy from retail sites using a tablet device as on a PC. These figures aren't surprising as tablets combine the best of both worlds: large screens, portability, and feature-rich mobile experiences.
- Tablets are cannibalizing the use of other devices. Almost 30% of both Gen X and Gen Y tablet owners said they bought a tablet to replace a PC or laptop. Also, 42% and 45% of Gen X and Gen Yers, respectively, said that they use tablets more than their PC or laptop when both are available. Gen X includes anyone born between 1965 and 1979; Gen Y from 1980 to 2000.
- Tablets drive incremental web usage. Forty-nine percent of tablet owners surveyed said they spent more time online with the addition of these devices. More time online creates a greater opportunity for e-commerce retailers to engage with and sell to tablet owners.
Tablets in stores
Tablets can offer retailers supplemental benefits beyond additional web traffic. Forrester predicts the successful multichannel retailers will "digitize" their in-store experience, using tablets as an extension of sales and service strategies. While only 30% of the retailers surveyed said they planned on having tablets in-store, the opportunity for tablets to displace and replace current in-store technologies is ripe. Forrester sees the most promising opportunities as:
- Kiosk substitutes. Not only are tablets significantly less expensive than the average kiosk installation, but they can be used "on the go" as a more effective means of supplying information, looking up additional products online, and effectively saving sales of out-of-stock items.
- POS devices. Tablets promise to be, at least for some retailers who have heavily assisted sales floors, a new type of point-of-sale device. This enables sales associates to assist customers by helping to configure products, provide alternate product ideas, or access a customer's account while also empowering them to complete transactions and receive direct credit for the sale.
- Customer service tools. The most intriguing new customer service capability that tablets enable is video chat. While this technology is most commonly used for desktop-based interactions, the ability to use this to support shoppers who are in physical stores and who are in need of very detailed product support is a much more compelling opportunity. For example, cosmetics retailer Sephora uses the iPad 2's forward-facing camera to give shoppers assistance with makeup. Benefit Cosmetics uses tablets to provide billboard-like messaging in bricks-and-mortar stores. Oakley Inc., the manufacturer and retailer of sunglasses, leverages the iPad's accelerometer to enable a customer to pan a landscape and simulate what various types of lenses look like in different settings.
Time to act
While tablets are poised to become a significant part of future mobile transactions, challenges exist: slow retailer spend on developing customized content for tablets, limited consumer adoption of tablet PCs, and the ongoing argument around benefits of app development versus mobile-optimized sites. These will slow tablet commerce development.
Even taking into consideration the present challenges, Forrester recommends that retailers design a tablet commerce road map to stay ahead of consumers. Even if retailers don't have budget or staff to dedicate to tablets, it is critical to have a discussion around the role of the device given its projected rapid adoption and the ability to provide a mobile selling experience that goes beyond couponing or price comparisons.
To this end, companies that could be affected by tablet commerce need to: monitor sales through tablet devices separately, conduct quality assurance tests on your site to make sure it is optimized for tablet traffic, keep an eye on innovative emerging solutions, and explore the cross-channel opportunity that these devices enable.
Tablets present a unique and growing opportunity for deeper customer engagement that make the Internet shopping experience much better for discovery, inspiration, and interactivity (and much better than social networks and smartphones ever could).
Sucharita Mulpuru is a vice president and principal analyst at Forrester Research Inc., serving e-business and channel strategy professionals. Douglas Roberge is a senior research associate at Forrester.