The Forrester Research Mobile Commerce Forecast, 2012 To 2017 (US) indicates that nearly 40% of US mobile phone owners will become mobile phone shoppers by 2017. While this statistic sounds impressive, it means that the majority of consumers will be reluctant to purchase products on their mobile phones. Why aren’t all customers attracted to the unprecedented convenience of anywhere, anytime mobile shopping?
Forrester’s Consumer Technographics® data shows that while consumers use the mobile channel to research competitive product pricing while they’re in a store, they often prefer to purchase their desired product off the shelf, even if the physical item in front of them is not the cheapest option. Consumers are driven by convenience, sometimes at the expense of price:
The rapid growth and ubiquity of smartphones has led many to conclude that a significant portion of Internet activity, including shopping, will migrate to these mobile devices. To help eBusiness professionals in retail get a better sense of the real size and opportunity that exists, Forrester has released its “US Mobile Retail Forecast, 2012 To 2017.” Retailers beware: while mobile commerce is growing and undeniably shifting how some consumers buy, the pertinent facts are that:
Total US mobile retail is still small. Forrester estimates that of the 132 million US mobile Internet users in 2012, only a quarter of those users have ever made purchases via their phones. While we expect the retail mCommerce penetration rate to double by 2017, it’s still a tiny portion of eCommerce — and, consequently, a minuscule share of overall retail.
Significant impediments exist for mobile retail. The main road block to mobile sales is the checkout experience; it’s the single most important feature when it comes to driving conversions on mobile devices. Adding an easy checkout experience, like PayPal Express, will enable users to more easily convert – even with the smaller screen – but how much that moves the needle remains to be seen.
Consumers prefer the mobile Web to apps, despite retailer investment. Consumer awareness of and/or interest in retail apps is low: Only a tiny share of any given retailer’s shoppers appears to download their app. Most shoppers who access a retailer’s mobile presence get there by clicking on links from mobile search engines or from mobile emails.
This week, the National Retail Federation (NRF) held its 102nd Annual Convention and EXPO —Retail's Big Show 2013. Attendees gathered from around the world to demo products and services and exchange ideas about the future of retail, including mobile payments. Mobile payments have captured the attention and imagination of industry insiders, venture capital investors, and innovators. Although retailer investment and consumer adoption have been nascent to date, we see that changing. Forrester forecasts that US mobile payments will reach $90B in 2017, a 48% compound annual growth rate (CAGR) from the $12.8B spent in 2012.
In my new report out today, titled “US Mobile Payments Forecast, 2013 To 2017”, I outline the growth drivers and inhibitors for the three mobile payments categories: mobile proximity, or in-store payments; mobile peer-to-peer (P2P) and remittances; and mobile remote commerce, or mCommerce. Here are the key takeaways:
Mobile payments adoption will be fueled by unprecedented growth in proximity payments. Mobile proximity payments are currently the smallest category within mobile payments, but we expect it to be the fastest growing. Proximity payments will reach $41B, making up nearly half of all mobile payments in 2017. Lower barriers to adoption, increased convenience, and early entrants striving for scale will be important drivers of growth.
One of the key things that differentiates mobile phones from any other device is their ability to deliver a constant stream of real time data coupled with the processing capability to help consumers make a wealth of decisions based on this information. Tablets — we're going to leave home without them, and the majority of connections are over Wi-Fi. Wearable technology collects real-time information and may have applications/display, but we aren't yet seeing devices with the same flexibilty as the phone. The highly anticipated Pebble may yet be the device, but for today, it is the phone. (My colleague Sarah Rotman Epps writes a lot on these devices — see the rest of her research for more information).
With that fact established, my open question is, "Who is making my life better with this ability to process information near instantaneously to help me live a better, healthier life . . . or at least how I choose to define it?" I think the key to measuring mobile success must lie here — from the perspective of the consumer first before mobile will deliver huge returns in the form of revenue or lower operating costs.
Let’s take a step back, first. You started as the “mobile person” two to three years ago. You siphoned a hundred thousand dollars or so from the eBusiness team budget and got a mobile optimized web site and maybe an application or two built. You measured your success by engagement – web traffic and application downloads. Maybe you measured direct revenue. Life was easy.
Two to three years later, as eBusiness professionals, you’ve got some experience with building, deploying and maintaining mobile services. You’ve added tablets to your portfolio. Hopefully you’ve convinced your organization that you need at least a 7-figure budget. Most industries have seen clear financial returns on these investments so that hasn’t been too hard. As eBusiness professionals working on mobile, you were feeling a lot of love.
In 2011, you benchmarked yourselves versus your competition. You looked at native applications by platform and key functionality on mobile web and applications. You took a deep breath and said, “ok, we’ve done it. We have mobile services. We’ve checked the box. Mobile web traffic and sales are growing. We’re good.” Perhaps others with fewer services are thinking, “I can see what we need to do. I think we can catch up if I can get some budget.”
The thing you are seeing though is – the finish line is out of sight. Mobile has only gotten more complicated – not less. No one feels comfortable. No one feels they can slow down, stop spending, or rest. Anxiety levels are high.
A year ago, Forrester fielded our Q3 2010 Global Mobile Online Survey. We interviewed more than 200 executives in charge of their companies’ mobile strategies around the globe (40% in the US, 40% in Europe, and 20% in the rest of the world). You can see the results from last year’s survey here.
To help eBusiness executives benchmark and mature their mobile consumer strategies, we’re updating this survey.
Planning and organizing for the use of mobile technologies is a complex task. Some players are laggards and think they still need to get the basics of their online presence right, while others are clearly ahead of the curve. Yet two questions we consistently hear are: “Where is my organization compared with others in the use of mobile?” and “How can we mature our mobile consumer approach?”
Here’s how you can help:
If you’re in charge of your company's mobile consumer initiative or if you’re familiar with it, then please take this survey.
I booked my first hotel night via a mobile device a year ago.
I didn’t even think about the fact that it would be considered an “mCommerce” transaction, as I simply booked it directly on the hotel group’s Web site via the browser of my mobile phone. The site wasn’t actually optimized for mobile devices, but it was possible to enter my credit card details via a secure Web transaction. That’s not ideal, so I wonder how many mobile transactions that firm has missed simply because it doesn’t provide a compelling user experience.
European mobile commerce is still at an early stage. Digital content is still the primary product purchased via mobile devices, but European consumers show growing interest in using their mobile phones for all sorts of shopping activities. I have recently contributed to a new report on the state of mobile commerce in Europe, written by my colleagues serving eBusiness Channel and Strategy Professionals. The report reveals that: