The Mobile Retail Revolution is Now
By Chris Withers, Head of Smarter Commerce for retail, IBM Europe
Our yearly seasonal online retail Benchmark for the UK 2013 has been published. For anyone who may still be in doubt, the message from the report is loud and clear: mobile now rules retail.
Online retail continued its inexorable rise in Christmas 2013, with sales increasing by 12.9 percent over November to December. Sales on Boxing Day, which were modest in comparison to other shopping days, still swept by the forty percent mark in growth. The strong increase on that day was due largely in part to mobile, which accounted for 45.3 percent of all online sales and grew 63 percent over 2012.
In fact this Boxing Day, for the first time ever, traffic on mobile devices overtook visits from a PC. This means that a majority of online retail browsing took place on a mobile device on that day. This is a highly significant shift, with important implications for retailers. As such the Boxing Day results deserve closer inspection.
One explanation for the continuing increase in online sales is that retailers now tend to offer the same discounts online as in store. Hence the sharp growth in Boxing Day sales, displacing and re-positioning a time when traditionally shoppers would have visited the high-street to indulge in post-Christmas discounts. Retailers would previously have promoted the best deals in store, but they are beginning to train consumers that the same or better deals can be had online.
Retailers generally prefer to sell excess stock through stores, as this avoids the logistic costs of bringing items to the central warehouse before dispatching them back out to the consumer when they are ordered online. However, if retailers started to fulfil directly from store, this could actually spell the end of the rush to the shopping centres on Boxing Day.
This is not the only potential disruption revealed by the report.
I don't believe the Boxing Day statistic is a one-off event, and predict that mobile traffic for retail will exceed other online traffic throughout this year, with sales following in 2015 or 2016. This accelerating trend leaves retailers in a quandary as many are spending disproportionate amounts of their budgets online, while traffic and sales are migrating to mobile. The smarter retailers see their eCommerce sites as sales platforms, which provide 'commerce' services to all the other channels - online, call centre and mobile, including smartphones and tablets. These other channels are the ones on which a majority of consumers now rely.
Online sales have increased, shopping behaviours are changing, smartphones are used to browse products and tablets are used to make purchases. Delivered just as Ofcom, the UK regulator for the communications industry, declared the UK a nation of online shoppers, many of the findings of the report are expected. What the latest Benchmark does herald however, is a new era of mobile in which retailers who are still getting over the transition to web now need, as a priority, to make it easy and compelling for consumers to shop on mobile.
Interested in this topic? Take a look at MyCustomer and IBM MyGuide: The mobile commerce guide