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“We’re only in the second inning.”

Mobile commerce is big. But we've just scratched the surface.

Alan Gershenhorn | UPS

To say that mobile has become big isn’t news anymore. With smartphones now packing as much processing power as the supercomputers of yore, mobile devices have become our phone, our watch, our camera, our TV — and increasingly, our wallets.
But what’s truly remarkable is this: We’ve only scratched the surface in what smartphones can do. To use a baseball metaphor, we’re only in the second inning. And nowhere is that truer than in retail, where mobile devices are reshaping the shopping experience.

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 We’ve only scratched the surface in what smartphones can do. To use a baseball metaphor, we’re only in the second inning.

Our research partners at comScore, an online and e-commerce consultancy, estimate that roughly one in every six online purchases are now made on a mobile device.

And the trend shows no signs of slowing: eMarketer predicts that U.S. retail mobile commerce sales will exceed $132 billion by 2018 — nearly triple the sales recorded last year. What’s more, mobile purchases will constitute more than a quarter of all online transactions in four years.

The New Swiss Army Knife

Our latest study of 5,800 avid online shoppers with comScore shows how mobile devices — primarily smartphones and tablets — are increasingly used for research and purchasing in today’s omnichannel world. The mobile device has become the Swiss Army knife for a new generation of consumers that we call the “flex shoppers.” These shoppers move seamlessly between stores and websites, constantly balancing price with assortment and immediacy.

The latest UPS Pulse of the Online Shopper survey paints a detailed picture of exactly how smartphones and tablets are shaping the retail experience for these “flex shoppers.” Researching products serves as the foundation for all digital shopping and mobile follows suit. We found, for example, that a quarter of the mobile device users are using smartphones or tablets for research on a weekly basis before they even enter a store.

Sixty-eight percent are using mobile devices while they are in the store, where comparing prices and reading peer reviews are both high on the mobile usage list. Checking current inventory in another store or on the retailer’s website falls closely behind.

Our study confirms how and why mobile will also grow in importance. For instance, 24 percent of shoppers express an interest in using their device for self-checkout. Perhaps most importantly, mobile shopping will trend upward — 51 percent of tablet users and 41 percent of smartphone users already have made purchases on these devices.

Room for Improvement

Our online shopping study also shows there are opportunities to improve on customer experience with mobile, particularly in integrating mobile devices into a transparent and seamless, end-to-end shopping experience.

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The mobile device has become the Swiss Army knife for a new generation of consumers [who] move seamlessly between stores and websites — balancing price with assortment and immediacy. 

Consumers said they still preferred to purchase online via PC (44 percent) and in store (41 percent) with all forms of mobile devices still in the single digits. It’s also interesting to note that for those taking advantage of mobile apps, less comparison shopping is taking place. That, in turn, means fewer abandoned carts.

The main reason shoppers revert to PCs, they say, is that the product images on the retailers’ mobile sites are either too small or lack detail, leaving them hesitant to hit the “buy” button. They also report that checking out on a mobile device is either too difficult or takes too long.

Privacy and security are also mentioned. Newer technologies always face this obstacle but successful shopping experiences will likely mitigate this issue over time. These are all areas where retailers must invest, starting with a comprehensive set of images and video to give the customer the confidence to buy.

Guidelines for Enhancement

Our research offers useful guidelines for other mobile-relevant enhancements as well.

  • For example, 40 percent say they use their devices to find or redeem coupons, and slightly more than one-third pay their bills with a mobile device.
  • Thirty percent use smartphones to store loyalty cards, and nearly as many consumers use the devices to track packages. Retailers will want to optimize these capabilities to function smoothly and clearly as adoption grows.

Notably, email is already an important part of mobile interactions with retailers. Two-thirds of marketing emails were opened on mobile devices in last year’s fourth quarter, for example.

“Flex shoppers” will continue to take advantage of mobile to gather information, find the best price, and make purchases, mandating that retailers optimize experiences across every device.

So while mobile shopping is having some growing pains, ultimately the desire by consumers to use their smartphones for virtually everything will inevitably lead to a strong third inning. For retailers who have been slow to seize on the opportunities in mobile commerce, the good news is the game has just begun. goldbrown2

ALG
Visit Alan Gershenhorn's Linkedin profile page. Alan Gershenhorn is Executive Vice President and Chief Commercial Officer for UPS, directing strategy, marketing, sales, product and solution development, customer experience management and key growth strategies.

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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.

1 Comment

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