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Mobile commerce will post impressive growth this holiday season: Deloitte

September 27, 2011

Mobile plays small but quickly growing role in holiday sales

Retailers that integrate in-store with timely information via mobile will be well-positioned to lead the way this holiday season when non-store sales are expected to see a double-digit increase, according to a new forecast from Deloitte.

Overall, holiday retail sales are expected to increase between 2.5 percent and 3 percent. However, non-store sales are expected to 14 percent and mobile will grow significantly off a small base.

“Online is still only 10 percent, in some cases 20 percent, of retailers’ overall sales,” said Allison Kenney Paul, vice chairman and U.S. retail leader for Deloitte, New York.  “And, mobile is a fraction of that.

“But, I think mobile will still post really impressive growth,” she said. 

“I think it will continue to grow as the apps get easier to use and more prevalent.”

Putting mobile to work
Overall, it may prove difficult for retailers to post a gain on top of last year’s results, when holiday sales increased 5.9 percent following several years of poor performance.

Retail sales are expected to reach between $873 and $877 billion during the Nov.-Jan. holiday period, according to Deloitte.

The problem is that waning consumer confidence, persistent weakness in the housing and employment sectors as well as pressures from the European debt crisis is threatening to stall growth in consumer spending, which had been on the rise for several months.

Deloitte also reports that prices for food, apparel and other categories are markedly higher compared with the previous holiday season.

However, the growth in the non-store channel has given retailers a boost and those that put online channels such as mobile to work for their physical storefronts will have an advantage.

Close to three-quarters of non-store sales take place online, according to Deloitte.

There will be more mobile activity this holiday season not only from a commerce perspective, but retailers are also expected to use mobile more heavily to communicate with consumers and provide them the information they are looking for.

“Last year was a year of experimentation, with retailers putting out their own apps,” Ms. Kenney Paul said.

“This year, you are going to see a lot more use of mobile from a number of different standpoints,” she said.

To take advantage of the growth in mobile, retailers need to have a digital strategy that is flexible and focused on a personalized experience.

Store associates also need to be well versed on any special offers that mobile users receive.

Ms. Kenney Paul expects to see more retailers be mobile friendly this year, enabling in-store shoppers to access the mobile Web to research prices and products.

Additionally, retailers are expected to use mobile to support their loyalty programs.

“Retailers with loyalty cards are starting to use mobile communications to entice consumers to use their cards in store,” Ms. Kenney Paul said.

“You can’t put a lot of information on a smartphone screen but you can take advantage of that one-to-one relationship and communicate in a more intimate way,” she said.

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

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