M-Commerce To Reach $6 Billion In 2011

The "m" in m-commerce might as well stand for "miniscule" as "mobile," according to a new Forrester forecast. The report says retailers can expect just 2% of their online sales to come through mobile devices this year and only 7% by 2016.

That translates into $6 billion in 2011, growing to $31 billion in five years. In short, m-commerce will see steep growth in the coming years, but will remain a small part of overall sales. (The figures don't include revenue from transactions done through tablets.)

Despite rising smartphone adoption and the burst to roll out new mobile payments, mobile "shopping" often isn't about buying. When consumers use their phones, it's usually to get product information or compare prices -- rather than actually completing a transaction. Shopping never ranks high on any list of Web activities.

Furthermore, retailers are not spending much to optimize their sites for mobile. They are also confused about the best way to approach the medium -- the mobile Web versus apps conundrum. While most retailers have not pursued apps, the potential for location-based services and other tools enabled by more sophisticated devices cannot be ignored.



"Unfortunately, such innovation is likely to drive paralysis in the retail industry as it explores which players to partner with to create this content and which use cases exhibit the most promise for shoppers and store associates," states the report authored by Forrester analyst Sucharita Mulpuru.

Another hurdle: most companies focus narrowly on mobile as transacting business via a mobile site, rather than as a way to boost in-store sales by arming associates with instant information and new payment acceptance capabilities.

"This is most likely driven by the fact that most mobile presences for retailers are owned by the Web division, which generally does not play a role in store capital expenditures or in supporting or training store associates," states the study.

On the plus side, the report also finds reasons for optimism. These include diminishing security concerns around mobile shopping and improving infrastructure in terms of things like upgraded handsets and the rollout of faster wireless networks. If retailers haven't yet poured money into their mobile sites, many have launched optimized sites; most and nearly all have some mobile strategy in place.

Among the steps the report recommends is outsourcing tasks such as mobile optimization, since any in-house IT team will have its hands full dealing with desktop traffic. It also suggests developing a mobile search strategy with more and more searches being conducted on phones. That means creating mobile-tailored landing pages for key mobile search terms that are relevant to a business.

The report also warns companies not to expect HTML5 to become a universal standard for mobile sites anytime soon. While more robust, the programming language will not render apps obsolete, since apps will still have capabilities not found in Web browsers.

Considering the relatively small amount mobile will contribute to sales, should retailers give it that much focus? Yes, because of its broader influence, according to Mulpuru. "Mobile commerce will transform retail, both because the transparency of pricing will force big-box stores to be much better merchants or die, and because store associates armed with mobile devices can now do everything from save lost sales, to carry a POS device in their hand," she wrote in a Friday blog post.

The most efficient retailers will shift more of that burden from staff to customers equipped to do more shopping-related tasks via mobile devices.

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