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Eight out of 10 retailers to increase mobile budgets in 2015: report

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February 10, 2015

woman and man hands with smartphone and tablet pcEight out of 10 retailers in a recent survey said they plan to increase their mobile budgets by at least 20 percent in 2015, according to the 2015 State of Retailing Online report from Shop.org and Forrester Research.

Online retailers are seeing a boost in mobile sales, as the report also finds that mobile, as a percentage of online sales, increased 50 percent in 2014. Simultaneously, as mobile becomes a growing priority for marketers, budgets allocated to the channel are increasing.

“Consumers are flocking to retailers’ mobile sites at a faster pace and with more interaction than ever before, so naturally they expect retailers to offer fast, well-designed mobile services that meet their needs,” said Vicki Cantrell, senior vice president at NRF and executive director at Shop.org, New York. “With that in mind and with several years of mobile commerce now under the industry’s belt, retailers feel confident in their mobile investments.

“For retailers, when it comes to mobile strategies, small but continuous incremental changes really do go a long way to keep their savvy customers happy,” she said.

Mobile on the rise
According to the report, mobile remains as a top priority for retailers, and 58 percent of surveyed retailers placed it at the top of their list, which is up from 53 percent last year.

The survey also found that smartphone sales as a percentage of online sales grew from eight percent in 2013 to 12 percent in 2014, an increase of 50 percent. Tablets’ share of the space also grew from 13 percent of online sales in 2013 to 16 percent in 2014.

Many of the surveyed retailers that listed mobile as the top priority also stated their digital marketing budgets remain modest, knowing consumers are coming to their mobile sites, whether they are ready for them or not.

Of those retailers surveyed, 32 percent reported spending less than $100,000 on their smartphone development efforts in 2014. Sixty-eight percent reported spending less than $1 million on smartphone developments last year.

Regarding tablets, only four percent said they have invested between $100,000 and $250,000 last year. However, eight in 10 surveyed plan to increase their mobile budgets by at least 20 percent this year.

The State Of Retailing Online research series, which aims to provide ebusiness and channel strategy professionals with annual industry benchmarks of marketing and business investment and activities, surveyed 71 companies in November and December 2014. Industries surveyed included apparel, footwear, general merchandise, home furnishings, and personal care.

Apps versus mobile Web
Once again, there is additional evidence that supports mobile Web over mobile apps, according to the report.

High costs to develop and manage company-specific apps, compared to optimizing mobile Web sites, have changed how some companies are prioritizing their mobile marketing budgets, the report says.

More than half (56 percent) of retailers surveyed said apps are not a key component of their mobile marketing strategy, and an even greater percentage agreed apps are not critical to their employee strategy either.

Still, omichannel presence is still a priority.

Retailers surveyed cited omnichannel efforts as their second priority behind mobile. The survey found 45 percent hope to improve or invest in programs, including buy online-pick up in store, ship-from-store and inventory visibility, which are up significantly from 26 percent who listed omninchannel efforts as a priority last year.

Additionally, nearly four in 10 (38 percent) surveyed said marketing optimization is their third priority for 2015, which includes initiatives around customer retention and acquisition.

“Apps are simply too expensive to build and maintain for most retailers, begging the question: what’s after apps?, said Sucharita Mulpuru, vice president and principal analyst at Forrester Research, New York. “We’ll see retailers focus spending on redesigning the core site, which benefits the site experience beyond mobile, and embracing responsive design, an approach that retailers favor over apps, with nearly half already applying it to their mobile site.”

Final Take
Caitlyn Bohannon is an editorial assistant on Mobile Commerce Daily, New York

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