2. The rise of m-commerce
M-commerce shopping set to take off as smart phone usage booms
While m-commerce remains a small channel in terms of overall online spend +51.2%
accounting for just an estimated 0.6% of total online sales in 2009, it was the
fastest growing channel over the last decade and is set to continue to grow +37.2%
rapidly over the next few years as smart phone usage by the general public
starts to become mainstream. +19.8%
+2.5%
As the smart phone population grows and new technology developments such
0.0%
as 4G and NFC (Near Field Communication) improve the speed and Online
Physical Mail M- TV
convenience of using m-commerce as a shopping medium, the amount of
people using mobiles to actually make purchases will increase. By 2014 we stores order commerce shopping
estimate that the amount of people in the UK actively using mobiles to 2000-2009 average annual retail growth across various shopping methods
purchase products will reach 3.2 million, almost three times the number in
Note: M-commerce rate based on five year average 2005-2009
2009.
However despite the projected growth of m-commerce over the next few
3.17
years, it will continue to remain only a small part of online sales. M-
2.99
commerce’s real value will come from the smart phone acting as a marketing
2.76
tool and multichannel integrator, allowing retailer’s to interact with customers
more and connect with other channels, providing a substantial boost to online
and store sales. 2.25
1.69
1.08
23 2009 2010 2011 2012 2013 2014
UK m-commerce shopping population (millions)
3. A growing part of the purchasing process
Although consumers remain slow to adapt to buying products using m-commerce, we
expect the channel’s uptake across all parts of the purchasing process to increase rapidly
over the next 5 years
The population using mobile phones at any stage of the purchasing process
increased 85% from 2009 to 2010. Growth was driven by the rise in popularity
and number of smart phones available, retailers releasing dedicated mobile
applications and growing confidence in using the channel.
In 2010, mobiles were used by 16% of the population to research product, 79.3
77.3
prices, retailers and locations before embarking on a shopping trip, up from
71.8
12% in 2009. Researching whilst shopping, using services such as comparison
sites is a fast growing trend, as is reserving product and collecting from a 62.9
store. By 2014 we expect that 79.3% of UK consumers will use m-commerce at
any stage of the buying process, a 181% increase from 2009. 52.0
As confidence of using mobiles for online purchases grows so does the
number of consumers who will actually buy using this channel, which we
expect to rise 161% from 2009-2014. 28.2
2009 2010 2011 2012 2013 2014
9.8% % of UK population that uses m-commerce (at any stage of purchasing process)
3.8%
2009 2014
% of UK shopping population that shop online via mobile phone
24
4. M-commerce fuels multichannel shopping
Mobiles increase the probability of multichannel shopping by allowing for instant access to
a retailer, providing information immediately and improved convenience
Although m-commerce adoption rates are increasing rapidly, the volume of
direct mobile transactions is expected to be small. However, the opportunities
for m-commerce to benefit and enhance the multi-channel customer experience 35.1%
are endless. As retailers develop m-commerce sites as extensions of their
websites, access and product information becomes more readily available to the
consumer. The chart below shows the type of things the consumer can now do 23.4%
‘on the go’.
11.3%
4.5%
Research
2000 2005 2010 2014
Compare Availability Proportion of total retail sales going through multichannel 2000-2014
Price check Click & collect The convenience of using mobile on the go will inevitably drive up multichannel
transactions. By 2014, we estimate that 35% of retail sales will be made using
more than one channel up from just over 23% in 2010. Significantly, this means
Purchase Social/Opinion consumers will put much more consideration into their buying, something
retailers will need to take account of.
Locate
Mobiles enable and encourage consumers to shop using
multiple channels.
25
5. Multichannel shopping within the sectors
Today multichannel shopping is most evident in Electricals, however in the future we
expect a higher usage of multiple channels to support the purchasing process across many
sectors
As more consumers use multiple channels for their shopping it is vital that We expect multichannel shopping will become more
retailers understand what role each channel plays in the overall decision making
process. This will vary from retailer to retailer and from sector to sector. influential on more considered products, often with a
larger ticket value.
In broad terms, in sectors such as music and video where relatively intangible
products are sold, stores will become far, far less important as the place of
purchase and are already being rapidly replaced with online downloading or In the future, we expect multichannel shopping to become more influential,
ordering. In electricals the picture is different: here the internet is used especially in Food & Grocery, Clothing and DIY. As consumers remain cautious
extensively for checking but stores come into their own for ideas and inspiration about spending, more researching and comparisons will be done before a
and for making actual purchases. Clothing is different again and in this sector we decision is made. Also as information becomes more readily available online and
believe that both stores and online will be equal in terms of the role they play in researching on mobiles more sophisticated, the consumer will, quite organically,
the decision making process. think about purchases more.
The most preferred shopping source by sector The influence multichannel shopping has on sectors
Food & Music &
Electricals
DIY DIYClothing Clothing THE FUTURE
Grocery Video
Electricals DIY Clothing Food & Music &
Physical
Physical
Physical
Physical
Physical
grocery video
Online
Online
Online
Online
Online
High
impact
Ideas &
Inspiration
x x x x x x x
Check x x x x x x x
Low
Purchase x x x x x x x x impact
26