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Mcommerce sales growth for physical goods outpaces all other categories: report

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July 10, 2015

Comfort levels with mcommerce continue to grow

Comfort levels with mcommerce continue to grow

Mobile online shopping generates $19 for every $1 spent through in-store proximity purchasing, and with the sale of physical goods quickly growing via mobile applications and browsers, shoppers’ comfort levels with the channel are clearly on the rise, according to a new report from Javelin.

Physical goods were the only product type on mobile devices to grow significantly from 2013’s purchasing levels, according to Javelin’s new report, Mobile Online Retail Payments Forecast 2015. The increase in purchases for physical goods over digital goods is an indication of consumers’ growing comfort with the mobile phone as a buying channel.

“Mobile is becoming a central purchasing channel,” said Daniel Van Dyke, mobile analyst at Javelin. “The $217 billion consumers will spend using mobile apps and browsers and apps in 2019 represents a very significant proportion of overall retail commerce.

“In perspective, that figure will make up nearly 45 percent of all online commerce (including PCs) that and will be equal to 5 percent of the physical point of sale payments in 2019,” he said.

“Mobile online shopping is the larger and more mature market than mobile proximity shopping today. Many retailers could do more to address the immediate demand for consumers to shop online on their mobile devices.”

Low-friction experiences
Javelin predicts that mobile online shopping will top $217 billion by 2019, making it a significant contributor to overall online sales.

Mr. Van Dyke expects that mobile proximity payments will overtake mobile online commerce sometime between 2020 to 2025.

In terms of which product categories mobile online shoppers are purchasing, physical goods are most common, purchased by 51 percent of mobile users. Next are games, purchased by 38 percent, music by 38 percent, apps by 37 percent and ringtones by 18 percent.

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An important takeaway from the report for retailers is the need to limit the steps involved in mobile checkout as consumers are increasingly expecting low-friction experiences thanks to the growth in buy buttons and one-click shopping experiences.

Retailers with an ecommerce presence are increasingly seeing 50 percent or more of their traffic coming from mobile, supporting Javelin’s findings. This is why many retailers have optimized their Web sites for mobile and launched shopping applications.

Proximity payments
Mobile proximity payments are just beginning to take off while mobile online retail payments made through apps and mobile browsers are a much more mature market.

The strength in mobile online shopping is driven in part by the fact that it is an extension of online shopping, which is an established behavior at this point. In comparison, the use of a mobile wallet to complete a purchase in-store is a new behavior and it likely to take time for consumers to adopt.

“Apple Pay and Android Pay have only just begun to penetrate the market, whereas online shopping has been around for 20 years,” said Maya Mikhailov, co-founder and chief marketing officer of GPShopper. “It’s safe to anticipate that as more consumers become comfortable with proximity-type payments like mobile wallets, the use of them will spike.

“That being said, it took ten years for online shopping to reach full market penetration, and mobile adoption is accelerating at a much faster pace,” she said.

Eventually, mobile proximity shopping is likely to overtake mobile online shopping in volume.

“[Mobile proximity shopping] addresses the $5 trillion dollar in-store market rather than just the online market,” Ms. Mikhailov said.

“It’s hard to tell when this will happen, in the sense that it depends on the number of mobile proximity shopping options exist for consumers,” she said. “If enough stores accept NFC payments, Apply Pay and Android Pay, or even incorporate their private label credit card into their apps like Lane Bryant just did, the ramp-up process will be faster than the market may anticipate.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York

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