M-commerce becomes part of the shopping experience
With retailers making it easier to make purchases on smartphones, mobile e-commerce sales in the U.S. are estimated to hit $250 billion by 2020.
Gone are the days of waiting to get home to sit down at a computer and order that must-have item.
With retailers making it easier than ever to make purchases with a few taps of a smartphone, mobile e-commerce (m-commerce) sales are estimated to hit $250 billion by 2020 alone—comprising nearly half of all online orders in the U.S.
Why the rush for m-commerce? “It all comes down to one word: convenience. We’ve become a mobile society, with cell phones or tablets within easy reach 24-7 for most consumers,” says Ashlyn Booth, Senior Vice President, Retail Property Marketing, JLL. “Increasingly, retailers are seeing that when it comes to certain products, people are more willing to trade the personal service of a bricks-and-mortar experience for convenience.”
Booth says that’s particularly true for simpler products like household staples that we don’t have an emotional connection to, or that require easy judgment calls: “You might still prefer to talk to a real salesperson about the ins and outs of a big electronics decision, for example, but do you really need that for paper towels?”
Whether ordering groceries, shoes or furniture, retailers are working to ensure consumers can find what they want with just a few touches from wherever they may be. Already this year, retailers have overcome some of the key technological challenges to m-commerce by investing in technology that ensures mobile shopping sites are easy, secure and function consistently across different screen sizes and devices.
“Most companies understand their websites have to have a responsive, consistent design,” says Booth. “So, the experience on your phone or tablet has to be the same as if you were sitting at a desktop. They’re also upping security measures and offering greater choice, with more pay options like PayPal, Apple Pay and other one-click payment services that mean people don’t have to re-enter payment details several times. It all helps people to feel more comfortable with shopping on the go.”
Customer support chatbots are becoming a common feature across a range of retail sectors from Starbucks to Nordstrom and H&M, responding to customers in real time even when physical stores have closed for the day. Chatbots can also help the company learn more about a consumer’s behavior and preferences, to better tailor future experiences to their tastes.
And these Big Data insights help with future marketing from determining which offers are best suited to send out to different groups of customers via text to building relationships through personalized messages.
Adaptive real estate strategy
The growth of m-commerce is already affecting real estate decisions, according to Booth. For starters, demand for warehouse space is rapidly growing across the U.S. while rents are now at an all-time high as customer expectations on delivery speeds put retailers under increasing pressure. And that’s only going to become more of a challenge. “As m-commerce technology improves,” Booth says, “so too must the logistics strategy needed to deliver all those mobile orders.”
Moreover, m-commerce is often closely linked with the physical store experience. Many retailers are advancing hybrid models, such as “click-and-collect” programs where customers can purchase online, then pick up their order in-store at their convenience. Mobile strategies can also help drive in-store sales, as shoppers often scout out products on their smart phone first, before venturing to the store to see—and potentially purchase—them in person. According to a Nielsen report, 60 percent of online shoppers do exactly that. If those people can be converted to buy online instead, the impact of m-commerce on the retail industry would be profound.
For all the growth of e-commerce and m-commerce in recent years, clicks aren’t fully replacing bricks anytime soon. After all, even the best mobile display can’t fully convey the texture of high-thread-count bedding or how this season’s jeans will really look with a favorite pair of boots even with nascent augmented reality technology.
“People still appreciate the touch and feel of in-person shopping. But old standards aren’t going to attract mobile shoppers into the store, and vice versa,” says Booth. “It’s important that the experience is clear and consistent throughout the entire brand environment, whether someone is shopping from their phone, or a good old-fashioned grocery cart.”