Four out of five adults in the UK now have a smartphone according to research published by Deloitte late last year. For retailers, this means an opportunity like never before, the chance to tap into consumers wherever they are, and whenever might be appropriate. But what does this actually look like and how can the retail industry drive mobile purchases, not simply mobile views?
This article based on the Deloitte research shows just how much smartphones are now ingrained into the lives of UK adults. One in three and half of 18-24s admitted they checked their phones in the middle of the night while a third regularly used it when with friends or watching TV. The pervasive nature of the smartphone, therefore, cannot be underestimated.
Data from Statista estimates that the number of smartphone users will rise from 21.6m in 2011 to a predicted 46.4m next year in 2018. If this is viewed alongside figures showing half of all UK ecommerce purchases were made on mobile during the first quarter of 2016, then it is blindingly obvious to retailers where the growth market for both customer acquisition and conversion to purchase are.
The switch to mobile first
A quick search on the internet for information around the decline in retail purchases made via desktop shows that even back in 2013 the warning signs were there identifying consumers were gravitating away from buying items using their computers. Many of these pieces point to this decline having the natural effect of both mobile (smartphone and tablet) spend, and mobile as a percentage of sales, rising year on year. It is said by many experts though that retailers have in places been too slow to grasp this fundamental change in habits. Despite this huge mobile growth and the influence of social media to convert purchasing, m-commerce has perhaps not seen as great a shift in support and design and spend as its bigger online sibling, the retailer's main website, did in its infancy.
In UK magazine The Grocer, this topic takes centre stage in this blog from Martijn Bertisen, UK sales director at Google, who points out the discrepancy between investment in content and technology compared to actual usability and functionality on mobile. A 2017 report from PwC looking at retail in Ireland also suggests retailers there need to adopt a mobile first strategy in order to capture new customers and keep them interested.
The shifting sands to mobile’s huge importance were also signalled early last year with news that mobile ad spend in the UK would surpass that of desktop in 2016 with a prediction that by 2020, mobile would account for three times the spend of desktop. We can see here from Capgemini and IMRG that in 2016, online retail sales jumped 16%, driven by smartphone sales, which rose 47% year on year.
The challenge now for retailers with mobile
The publication of Internet Retailing’s UK Top 500 2017 cites six companies that are leading the way in ecommerce and multichannel. But the question could be asked as to how many of this 500 are tackling mobile-first and mobile responsiveness heavily? Back in early 2016, experts at both John Lewis and House of Fraser were citing the importance of mobile commerce to their businesses and its fast-paced rate of growth. Predictions from the Centre for Retail Research (CRR) and online retailer VoucherCodes.co.uk suggests mobile spending will increase this year (2017) by 26%.
But while OC&C Strategy Consultants point to smartphone shopping accounting for two thirds of UK e-commerce by 2020, its research in conjunction with Google and PayPal UK finds UK retailers aren’t as adept as their international rivals when it comes to mobile. It said load times lag way behind those in the US for example. Is this a case of not enough investment in mobile from IT departments or C-Suite priorities coupled with a lack of forward-planning and understanding being in the wrong place?
Right now IT departments at retailers are still wrestling with the perfect mobile responsive interface, one that works across browsers and consumers' differing device habits. It must be scalable and easy to use with much investment in A/B testing to make sure each element is optimised for conversion, such as different colour call to action buttons.
Performance is also still a big issue on mobile devices. The speed of content delivery can cripple the retailer who is not ahead of the curve with their back-end infrastructure serving information fast and robustly. Basket sizes and retention rates on mobile are rising hugely but to capitalise fully on this, retailers will need to introduce a mobile strategy that now thinks 10 years into the future, not just a couple of years.
So what does the future hold for mobile retailing?
A decade ago, we were only just about to see the iPhone become a reality, and now look at how important it is to the mobile retail landscape. But at this year’s Mobile World Congress 2017, held in Barcelona, much of the talk on the showfloor was about 5G technology and the superfast speeds it will bring to the mobile experience, when it finally becomes a consumer reality. Major handset manufacturers and Telecoms are investing heavily in readiness for this but while it could be many years yet before this technology filters down to widespread customer use, retailers should already be thinking about its impact. With speeds tens of times faster than 4G, the opportunity for retail video content alone is obvious.
Improvements to the biometric security of devices and the ability for mobiles to not only be used to buy goods but also pay for goods should not be underestimated. M-Payments made in-person are predicted to soar by five times as we approach 2021 according to Forrester. Much of this will be down to changing habits and tastes brought through the generations as Generation Z becomes a dominant force in consumer spending. They are widely regarded as the first mobile-first generation.
Augmented Reality and Virtual Reality will also become a huge part of the retail experience overall, driven again by mobile – and showing how mobile does not have to purely be thought of us a purchase mechanism. It can instead be used to drive consumers to make more in-store purchases, ensuring bricks and mortar still has a place within the multichannel environment. This piece in MIT Technology Review looks at this idea in depth.
In the short-term, however, retailers will need to take a 360-degree view of their mobile strategy, looking at how it works from beginning to end. This means a tight focus on ensuring a seamless approach throughout; from browsing to buying to tracking orders and delivery and then returning goods via the mobile interface. This has to be the key concern now for retailers if they wish to convert audiences to the power of using a smartphone or tablet as their primary way of purchasing. A positive, engaging and enjoyable mobile experience should be viewed just as important, if not more so, as good customer service in-store. Only then will brands drive mobile loyalty and return visits against their competitors.
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