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Mobile Influenced $2 Trillion In Retail Sales In 2016

But as Forrester notes, retailers are still under-invested in mobile.

Mobile devices helped drive roughly $2 trillion in offline retail sales last year, comprising two-thirds of all shopping in that category for 2016, a Forrester study found.

But as impressive as that number is, Forrester’s report, The Biggest Prize In Mobile Commerce Is Influencing Offline Sales, it could be higher.

Consumer shopping on smartphones has not yet peaked: By 2021, consumers will spend $152 billion directly on mobile phones, or almost 24 percent of total online sales. More importantly, mobile phones will influence $1.4 trillion in offline sales within the next five years. Overall, Forrester projects that smartphone retail sales will grow at a compounded annual growth rate of 20.4 percent over the next five years.

The report serves as a complement to a previous Forrester analysis earlier this month with the NRF, which found that digital touchpoints actually impacted an estimated 49 percent of total U.S. retail sales.

Source: Forrester

“Influencing sales with mobile is the big prize, but it’s also expensive and technically challenging,” Forrester notes. “Consumers’ direct spend on smartphones pales in comparison to the total revenue that smartphones influence. Total retail sales in the US in 2016 were $3.39 trillion; mobile influenced one-third of those sales because consumers use their mobile phones as tools to find products locally. However, to use mobile channels to influence customers, companies must be fundamentally digital, with digital inventory, store maps, coupons, loyalty cards, and more. Digitizing a retail business costs tens, if not hundreds, of millions of dollars.”

Omnichannel Obstacles

But the progress on omnichannel is being hindered by several perennial problems.

Among the issues dragging on retailers’ ability gain the most from connected consumers is the fact that stores and brands continue to “under-invest” in mobile, Forrester says.

Retailers appear to view mobile as a channel for direct sales rather than a medium that can greatly shape consumers decisions of what and where to make a purchase. Retailers still don’t see mobile as a tool that can improve the overall customer experience online and offline in their stores.

While consumers expect quick, contextual, streamlined experiences in apps, about one-fifth of retailers still offer the same experience in both mobile channels, “often through a shrunken and squeezed responsive website,” Forrester says.

Among the other issues inhibiting the growth of omichannel sales:

Consumers remain plagued by privacy concerns:  Just 9 percent of US online adults would like retailers to use their mobile location to personalize shopping experiences. And less than one-quarter will even share basic contact information. The bottom line is that brands must provide a clear — and safe — value exchange in order for consumers to share where and who they are.

Mobile browser beats app experience: The appeal of a walled garden such as an app makes perfect sense to retailers. There are no ads from rivals and there’s a direct line allowing for purchasing. But most consumers prefer to shop and search more broadly, hence the persistent strength of the mobile web browser as a driver of shopping experiences. But consumers are turned off by the shoe-horning of a desktop view into a mobile screen. Plus, consumers would rather not take time to sign up, enter their info on a mobile phone to buy an item. They just want to know where they can get it quickly. Google’s investment in the Physical Web, which bridges the browser and app experience, could solve some of the issues here for brands and consumers.

Data drain: Suffice to say that consumers still worry about turning on their Bluetooth to engage with a beacon or location services because they worry about the perceived data and battery drains involved with those functions. Here too, the idea of a clear value exchange, along with education, can address those concerns.

When it comes to solving some of these problems, Forrester advises retailer to “own as many mobile moments as you can.”

“Mobile moments are your moments of truth: i.e., when a customer opens your app; visits your website, store, or branch; or calls you,” Forrester says. “These are your best opportunities to serve customers, but they are not your only ones in mobile or digital more broadly. Start to think more widely about a portfolio of experiences that includes messages (e.g., push notifications and in-app messages), experience components on third-party platforms (e.g., ordering a Domino’s pizza on Facebook Messenger), and virtual assistants (e.g., Amazon’s Alexa, Google, or Siri).”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.