Mobile Commerce Heading To $284 Billion, 45% Of Online Spending

Consumers continue to shop on mobile but buy online.

Much to the dismay of many major retailers, mobile shopping is via browser rather than often highly superior apps and it doesn’t look like any change is imminent.

However, mobile will continue to account for a progressively larger portion of e-commerce, which is also projected to continue its growth, based on a new report.

Mobile accounted for 12% of the $303 billion in U.S. e-commerce sales last year, but by 2020 will be 45% of the $632 billion in total e-commerce sales, according to the Mobile Checkout Report by BI Intelligence.

While U.S. adults spend more their screen time on mobile devices, most of their dollars are spent on desktop and other channels.

And the growth of digital commerce is outpacing overall retail. While retail sales increase 2% from the same quarter a year ago, digital commerce grew 15%, according to the U.S. Department of Commerce.

And mobile continues to grow in commerce significance. As e-commerce becomes larger portion of total retail sales, mobile commerce will become a larger portion of e-commerce sales.

While the percentages may not seem significant, the dollar numbers are. BI Intelligence estimates that consumers this year will spend $55 billion on mobile, or 16% of total e-commerce, rising to $284 billion by 2020.

Despite that, smartphones still are mainly a tool for browsing rather than buying.

For example, on Thanksgiving and Black Friday, smartphones made up 45% of online shopping traffic but only 21% of online sales, according to IBM.

Consumers spend 59% of their time but only 15% of their dollars on mobile, according to comScore. That compares to 41% of time and 85% of dollars on the desktop.

Conversion rates on smartphones also are lower than on desktops. Even worse, smartphone owners add considerably fewer items to their carts and abandon those carts considerably more often, according to Monetate.

Some of the obvious deterrents to mobile purchasing are small screen size, lack of mobile-optimized sites, speed from spotty connections while on the go and perceived lack of security, according to the BI Intelligence report.

But with more than three-quarters of U.S. adults owning a smartphone, retailers can’t afford to stand by and simply watch.

And this is where mobile wallets may come into play, suggests BII. For example, mobile wallets allow consumers to enter their card information one time, and then pay online by a quick fingerprint touch. This also addresses the issues of speed and security, since the payment is relatively fast and mobile wallets typically use encryption.

However, mobile wallet adoption has been slow with a small percentage of consumers using options such as Samsung Pay, Apple Pay or Android Pay. The picture for millennials is somewhat different, with 27% of them having made a purchase in store with their phone in the last month, according to BII.

Despite all of the mobile Web browsing, BII sees it likely that as mobile commerce rises in the near term, the gains will be driven largely by app-based purchases, where mobile wallets provide simple payment experiences.

The battle between mobile websites and mobile apps rides on into the new year.




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