6 trends that will affect mobile commerce in 2015
Under a technological standpoint, I believe the second decade of the 21st century will be remembered for a sudden spike in demand and usage of smartphones and other mobile alternatives to computers, especially in the younger segments of the population. I have already mentioned that for the first time, in 2011, smartphones have overtaken PCs in US sales, and tablets are expected to follow a similar trend in 2015. Mobile devices such as these are so widespread nowadays that I would argue market saturation will soon become a significant concern for the mobile industry. In the meantime, however, considering the huge audience these internet platforms boast, any retail store not capitalizing on them to offer its customers e-commerce alternatives to boost their sales would definitely be losing out on a huge opportunity to broaden their market. Mobile e-commerce, also known as m-commerce, is the latest in consumer alternatives to traditional shopping, and is being adopted at ever increasing rates in tandem with the growth of mobile sales themselves. Here are some trends that will shape the mobile commerce landscape throughout 2015:
1) People are spending more time on mobile
The mobile market is growing. The average American spends roughly one hour a day online, and an even greater portion of their day on their smartphone (34 hours/month). If you also consider that in 2013 smartphone and tablet internet usage in the States accounted for 55% of the total bandwidth utilized, once again overtaking computers on their native territory, it is not so outlandish to start considering the importance of e-commerce for retail stores. Furthermore, even among "traditional" shoppers, roughly 80% of smartphone-owning interviewees admitted to having tried online shopping at least once. Finally, consider that almost 70% of m-commerce searches led to the purchasing of a product within an hour, and it is not hard to see why I believe that e-commerce sites already provide an invaluable asset for all those willing to invest in them.
2) E-commerce is (still) the future
The previous numbers may seem promising, but they still are a static data-set. What about the future? Is mobile commerce a passing trend, or will is cement itself as a pillar of retail in the coming years? I believe the latter to be true, since sales and usage of both the platforms (smartphones and tablets) and the services (m-commerce sites) are shown to be steadily growing. Consider that, as of today, e-commerce accounts for roughly 6.5% of all retail sales on US territory, while in 2010, just 4 years ago, that figure was closer to 4%. Moreover, the mobile market may start to show some signs of slowing down, but only in certain segments of the population. The growth of mobile usage in the teen and young adult segment (18-24 years old) is still staggering: in 2011, only 36% of teens owned a smart mobile device. 3 years later, that figure is above 70%, effectively showing a 100% growth rate. And I have checked: the projections for the next 2 years envision a further (albeit slowed) growth in many demographic segments. Retail owners know this: 4 out of 5 of those interviewed plan to open some sort of online m-commerce platform in 2015.
3) Mobile payment systems
2014 has seen both Apple and Google wet their feet in the mobile payment market. Respectively spearheaded by Apple Pay and Google Wallet, both multinationals have seemingly thought in the long term, and have presented the buyers of their mobile devices with a way to make physical and online purchases from their smartphones. Essentially, these purchase methods allow for devices to be synchronized with credit cards, visas or other payment methods, and to substitute them at cash registers by swiping the phone itself on the counter, thanks to Near Field Communication (NFC) technology. Currently, with over 150'000 transactions in 3 days since the service's inception, Apple is overshadowing Google in this field, thanks to a simpler app, integration with MasterCard and a more effective marketing campaign. However, Google too has declared a 20-fold increase in usage of their service since its launch in 2011, and boasted that over 10% of retail stores in the US accept their Wallet as payment. Despite not showing a huge success in their short lifespan, these services are expected to become decisively more commonplace in 2015.
Ranging from simple fitness bracelets to full-fledged alternatives to smartphones, wearables are an even more recent technological innovation, aiming to shift your browsing solution from your pockets to your eye or wrist. I was skeptical about the success of such a specific market sector, especially considering that their function greatly overlaps with that of smartphones- providing a mobile browsing alternative to be used on the go- while their form's appreciation greatly depends on the personal tastes of customers. However, it seems like I underestimated the effect these new platforms could have on the market. Currently, over 19 million units of wearable tech have been sold worldwide, a figure which is expected to climb to 112 million in another 4 years (by 2018). Furthermore, young demographics are once again the tip of this market's iceberg, with over 48% of wearable tech owners being in the 18-34 age segment. But even in aggregate terms, over 15% of the US population is estimated to own and use a wearable device, providing a whole new channel for mobile commerce to develop into in 2015.
5) Mobile Beacons adoption
Another seminal trend that saw its beginning in 2014, and that is expected to become more widespread next year, is the diffusion of mobile beacons in retail stores. These small wall mounted devices communicate with smartphone apps to help direct customers to purchases and sales within stores, while providing store owners with useful location-specific analytics to improve their store layout and supplier purchases in the future depending on the passive customer feedback. Furthermore, the gradual introduction of online components to the shopping experience of even the most staunch defenders of the traditional retail world might also be important in converting greater segments of the offline population to the comforts of mobile commerce. Two huge US retail chains (Macy's and Walmart) have been early adopters of this technology in 2014, and seem to have no intention of abandoning them anytime soon. Mobile beacons are expected to be able to increase retail sales by almost 12% if used to the best of their ability. I predict we will see them become more commonplace in the coming years: a cheap, simple augmentation to brick and mortar stores propelling them to a more modern shopping experience for customers and employees both.
Thanks to cloud hosting services, retail store owners are already able to provide seamless and high speed services in e-commerce to their customers. However, the drawback of certain cloud services in the past was the scarce or absent integration of their services with customers using mobile internet. However, considering the ever more widespread diffusion of smartphones and tablets, it should not be surprising that many cloud services are nowadays tailored specifically to customers browsing on mobile. Apps that communicate with cloud hosted data will witness further optimization in 2015, giving users a faster and less bandwidth-heavy opportunity to shop online. However, I think the most fundamental innovation in this field will consist in the ability to use cloud applications at the same time from different devices, creating a potentially continuous experience for online shopping. Altogether, this will mirror more and more aspects on the traditional retail experience, while augmenting them with services impossible to recreate in the physical world.
We are living on the cusp of a systemic change in the way we view the very concept of trade. And we couldn’t be more excited!
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