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Overall sales to slow this holiday season, mobile purchases will jump

October 6, 2011

Mobile to play a bigger role in holiday shopping this year

While retail sales are expected to increase a modest 2.8 percent this holiday season, mobile will play an important role in driving shopping activity and sales, according to a new forecast from the National Retail Federation. 

In addition to the soft economy having an impact on how generous consumers are this holiday season, sales will also be impacted by the fact that last year’s sales were better than expected, increasing by 5.2 percent. With smartphone and tablet penetration growing throughout the year as well as brands’ mobile marketing activities, consumers this year are much more attuned to using mobile to look for and buy items.

“We will see a big increase in mobile commerce for the holiday season,” said David Hewitt, global mobile practice lead of SapientNitro, Boston. “A lot of folks are looking to avoid the holiday chaos but still want to have access to deals.”

“You will see mobile being leveraged for that impulse purchase opportunity and to encourage folks to do more things on the go,” he said.

“You will see more mobile-optimized campaigns this year.”

Smarter apps
The NRF forecasts that sales during the months of November and December of this year will total $465.6 billion. Helping to keep any sales increase to minimum will be continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and slow job growth.

To address any caution consumers are feeling about spending, retailers are expected to use a combination of strong promotions and lean inventory levels to address.

Mobile will also be an important tool this year for retailers.

This includes using apps to drive check-ins and other in-store activity.

“Enterprise and big box retailers are looking at how to make the native apps smarter so customers can check in through the app and not have to go to a third-party source like foursquare,” Mr. Hewitt said. 

“Retailers are looking to build more sophisticated tools and to do it in a way that is more connected to in-store environment,” he said.

Retailers will also use mobile to connect with consumers in more ways throughout the holiday shopping period and not just when someone goes to the shopping mall the day after Thanksgiving.

“The windfall is going to be that they are going to have a broader reach , which will enable more commerce over the holiday period,” Mr. Hewitt said

However, many retailers still do not have a mobile optimized experience across all of their marketing activity.

“We are seeing some getting better where the landing pages for their promotions are optimized,” Mr. Hewitt said. “We know there is a huge drop-off rate when these are not tailored for the small screen.

“Right now, most retailers will use mobile as an additional channel and are not sophisticated enough in their use of mobile to develop mobile-specific campaigns” he said. “That is around the corner for next year.”

With more consumers using iPads for shopping and browsing, retailers should also make sure they have an experience that is optimized for tablets.

“While sites show up on Safari ok, they are not terribly tablet-friendly as far as touching with your finger goes,” Mr. Hewitt said. “Retailers need to better optimize their dot coms for tablets, making some enhancements to make them more touch friendly.”

Retailers are also looking at mobile as one of the main tools for building longer-term and reoccurring conversations with consumers. As a result, one focus this holiday season will be on driving opt-ins for mobile programs so retailers can collect customer data to support their mobile CRM efforts going forward.

However, it may not be until next year that mobile is fully integrated with CRM programs.

“Next year, it will be more sophisticated in terms of the CRM integration as opposed to running basic mobile promotions,” Mr. Hewitt said.

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

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