Retailers shift their ad spending from TV, radio and print ads to digital ads.
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At RueLaLa, which features limited-time offers of fashion apparel and other items, smartphones and tablets split mobile traffic 50/50 and 40% of traffic and 35% of sales come from mobile devices. In 2010 mobile traffic was 2%, in 2011 15% and in 2012 40%—in 2013 it will reach 70%, predicts Steve Davis, president of RueLaLa. What's more, he predicts mobile sales will top 50% next year.
Convenience is king
While urgency drives shoppers to use mobile devices to buy from flash-sale sites, other retailers are finding ways to make certain types of purchases more convenient on a mobile phone.
Walgreen Co., for example, enables customers to use its mobile app to scan the bar code on a prescription bottle to order a refill. After the scan, a confirmation window pops up with the pharmacy location and when the prescription will be ready; the customer taps a button to confirm. Today, 40% of Walgreens' digital prescription refills come through the feature. A consumer can't scan a bottle with her PC; hence the convenience of mobile commerce.
Online travel agency Orbitz LLC caters to travelers who are by nature on the go and looking for convenience. In the second quarter of 2012, 20% of all Orbitz hotel bookings were made on mobile devices. It's No. 4 in the Mobile 400 and reports m-commerce sales will hit $700 million in 2012. That's up 300% from $175 million in 2011, Internet Retailer estimates, making Orbitz one of the top 10 fastest-growing players in m-commerce.
In June, Orbitz enabled consumers to book via an app called Orbitz Flights, Hotels, Cars for iPhone complete travel packages—air, hotel and car. Orbitz has not disclosed the number of downloads, but says its smartphone and tablet apps combined have been downloaded millions of times. 20% of all Orbitz traffic stems from mobile devices.
The online travel company compared its mobile booking time to those of four competitors and found Orbitz was twice as fast, cutting booking time by 7 minutes, says Chris Brown, vice president of product at Orbitz LLC.
That's the kind of convenience mobile consumers are looking for. As more retailers, travel firms and ticket sellers discover ways to deliver convenience through mobile devices their mobile traffic and sales seem sure to grow. That can only put pressure on competitors to up their investments in mobile initiatives.