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Mobile sales volume projected to reach 2.05B by 2020: report

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April 29, 2016

Larger smartphone screens are good news for retailers

Larger smartphone screens are good news for retailers

Consumers’ growing adoption of smartphones with larger screens will contribute to the rapidly growing pace of digital commerce, with mobile-enabled sales volume projected to reach 2.05 billion by 2020, according to a new report from Ovum.

The report, “The Future of Ecommerce: The Road to 2026,” also posited that the breadth of retailers optimizing their sites for mobile shopping will help spur additional smartphone sales by enabling consumers to engage in product discovery, search comparison items and easily make payments. In the forthcoming years, contextual location will become even more paramount in the retail experience, meaning that brands must adopt the necessary measures now to ensure they will excel in this respect in the near future.

“Retailers will have to be able to recognize rapidly changing trends and have the ability to change with them,” said a spokesperson for Criteo. “This includes adopting promising new technologies and embracing partnership opportunities and organizational agility.

“Mobile devices are already a key platform for digital content and communications, and the same is becoming true in the retail and commerce domain. The traditional notion of a universal, linear shopping journey that all consumers dutifully follow is already disintegrating, and by 2026, the concept will be completely outdated.

“Due to the proliferation of connected technology, the consumer journey in 2026 will increasingly look like a pretzel that twists, turns and loops back on itself,” the spokesperson said. “Consumers can start and end their shopping experiences on a mobile platform, in-store or online.

“It is a fluid movement that by 2026 will be even harder for retailers to keep up with or predict because it will include a growing number of devices and touch points.”

The report was commissioned by performance marketing technology company Criteo.

Mobile at the forefront
Although mobile is already at the front and center of many brands’ retail strategies, the medium is set to experience an even more meteoric rise in sales growth volume, which is projected to hit 2.05 billion in the next four years.

Within the next 10 years, contextual location will have cemented its status as a staple in the retail world. Using mobile technology, retailers will be able to better target users’ exact proximity to stores and deliver timely and contextual messages or offers.

While many brands have already begun implementing hyperlocal commerce initiatives, many of these efforts are still in beta mode. By 2026, hyperlocal commerce apps will likely be more prolific, thanks to growing reliance on Bluetooth Low Energy beacons.

Beacons will help retailers engage with consumers both in-store and after they have left a bricks-and-mortar location.

For example, if consumers visit an electronics store and spend a half-hour browsing television sets – but do not make a purchase – the store can follow up with them post-trip and attempt to capitalize on fresh purchase intent by serving them a mobile coupon.

However, retailers must undertake caution when rolling out hyperlocal commerce apps until all consumers are comfortable with them.

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Courtesy of Ovum

One major reason for the expected uptick in smartphone sales volume is the trend of consumers purchasing mobile devices with larger screens, which enable them to more readily browse items and complete checkout forms.

“The widespread adoption of smartphones with larger screens is improving the mcommerce experience,” Criteo’s spokesperson said. “To stay relevant and succeed today and in the future, retailers need take the lead now to optimize their sites and identify technologies that will empower them to engage shoppers across platforms, especially on these mobile devices.

“By 2026, contextual location will be an integral part of the retail experience, driven by mobile technology,” the spokesperson said. “The ability to identify a user’s location and deliver targeted, timely, contextually relevant information, advertising and marketing messages is a powerful, compelling proposition.

“Moreover, the real-time aspect of location analytics will offer a more adaptive approach to marketing, enabling retailers to change their marketing and engagement in real time to meet an individual consumer’s needs.”

Mobile payments boom
Per Ovum, online services and goods will experience a strong growth period in mobile payments over the next five years. Additionally, mobile will reign as the dominant platform for loyalty programs in the near future, which will likely have an effect on sales.

Mobile proximity payments – which include in-store contactless payments – are seeing modest traction in many sectors, partly due to NFC not having received universal deployment across all retailers’ point-of-sale systems.

In turn, this hinders consumer adoption, alongside low awareness of these payment options. However, Ovum predicts that NFC will reach scale and become the dominant technology for mobile-enabled proximity payments.

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Courtesy of Ovum

Android-based smartphones are poised to eclipse their Apple counterparts in the global market as well, suggesting that services such as Android Pay and Samsung Pay will stumble upon massive scaling opportunities.

“We expect to see very strong growth in mobile payments for online goods and services over the next five years and beyond, from an estimated 452.78 million global users in 2014 to 2.07 billion users in 2019,” Criteo’s spokesperson said.

“Consumers are already gravitating to smartphones and now tablets for mcommerce, a trend that will accelerate going forward as the user experience continues to improve. Moreover, the number and value of mcommerce transactions are increasing, rapidly so in mature markets.”

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Alex Samuely is staff writer on Mobile Commerce Daily, New York. Reach her at alex@mobilemarketer.com.

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