Retailers shift their ad spending from TV, radio and print ads to digital ads.
An IRCE speaker warns of missing major sales if there's no m-commerce plan.
While most retailers know that mobile web use and purchasing is growing, they might be shocked by just how much, Gian Fulgoni, chairman of web measurement firm comScore Inc. said today at the Internet Retailer Conference and Exhibition 2013 in Chicago. To succeed in online retailing today, merchants must enable shoppers to buy easily with a mobile device, Fulgoni said.
"Mobile is not an option," Fulgoni said in his presentation, entitled “Today's consumers: No longer constrained by walls or held in place by a wire.”
"If you don't have your web site tuned for mobile devices you are missing major sales opportunities,” he says. “Consumers are not only using these devices to get information whenever and wherever they want, but also but also to buy."
Fulgoni provided data from comScore's analysis of the online behavior of 2 million global web users to back up his statements as he gave attendees a glimpse into how consumers are using the web today. First, more than 137 million consumers in the U.S. own smartphones and well over 50% of U.S. mobile phones are smartphones, Fulgoni said. And about 60 million U.S. consumers own tablets. And if there is any question about tablets’ growing penetration, Fulgoni offered this nugget: For the first time ever, global shipments of tablets have exceeded global shipments of computers.
Consumers are using these mobile devices to access online retailers more than ever before. The amount of time consumers spent on retail sites via their smartphones has grown 385% over the past three years. That's compared to 17% growth over the same time period for visits to retail sites via computers. And 48% of total time spent on retail sites come from smartphone and tablet users.
Not only are shoppers visiting retail sites via these devices they are buying from them as well. Mobile commerce grew 31% year over year in Q1 2013 to reach $5.9 billion. E-commerce meanwhile grew about 13% and total retail grew 1%, Fulgoni said. Perhaps surprisingly, consumers are buying more via smartphones than they are tablets. In Q1 consumers spent $139 on average via smartphones and $91 buying goods and services via tablets, Fulgoni said.
"We are going through some technology changes with the Internet that is as profound as anything we've seen," Fulgoni said. "If that device that is in your pocket was available in 1985, it would be the most powerful computer you could buy."
Fulgoni also shared insights into how the looming possibility of an online sales tax might impact online purchasing culled from recent consumer research comScore conducted for shipping provider UPS. 54% of consumers in the poll say that having to pay taxes on online purchases would prompt them to spend less online, while 42% said online sales tax would have no impact on their online shopping. Two thirds of those polled were aware of the online sales tax bill.
Research also suggests that when consumers are required to pay sales tax on an online purchase, they seek out free shipping. Transactions that include sales tax are 48% more likely to have free shipping, according to comScore data. "Consumers compensate for having to pay sales tax by seeking free shipping," Fulgoni said.
And, free shipping is still a top request by consumers. In the UPS survey, 49% of consumers said free shipping represents the most important incentive for e-retailers to offer. That was followed by exclusive online deals with 26%. Not having to pay online sales tax came in third.
When it comes to how long shoppers are willing to wait to get their goods, the average amount of time is 7.2 days. And, 78% of those polled say the usually choose the least expensive shipping option available. Returns also matter, Fulgoni pointed out, as two thirds of shoppers review return policies before buying online, and shoppers are 67% more likely to buy if a retailer has a hassle-free return policy.
However, before a retailer concerns itself with how to handle returns, it must make the sale. And Fulgoni said an effective emerging tool to help make that happen is targeted advertising. Retailers have access to enormous amounts of rich data on consumers' online shopping behavior and they can use it to show them targeted ads across the web, Fulgoni said. Data collected on transactions is being used in online advertising, he said. And it's working. "The sales lift you get if you run targeted advertising is double than if you don't run targeted advertising."
E-retailers have amassed so much quality information on consumers shopping preferences that some brands are beginning to spend more of their web advertising dollars not on Google or Yahoo, but on e-commerce sites, particularly Amazon.com, Fulgoni said. Retailers, he said, can tap into another revenue stream by placing ads on their web sites.
"Commerce has become marketing and marketing has become commerce," Fulgoni said. "That's a good way of describing what is happening."