In five years, will tablets and smartphones surpass PCs in e-commerce sales?
The gloves are off
What does the future hold for m-commerce. We asked and you answered.
We polled our readers and the best answers were printed in the April issue of Direct Marketing News. Check to see what our readers had to say and see below for our expert analysis.
YESMichael Miller, CMO at Hyper Marketing, 17 years of marketing experience
The shift from PCs to mobile devices is one of the most obvious lessons in path-to-purchase. A 2011 IconoCommunities study found more than 50% of people said they used a smartphone or website to help inform a purchase decision. Just five years ago this number would have been drastically lower.
Our behavior has changed. Now we learn through our network of identified friends and third-party reviews. We research products from professional sites, and when it comes to the final moment of truth we take pictures of ourselves with the product and share them. This is just the beginning of a sea change in which we'll see commerce shift from not just physical to digital, but from computers to mobile and tablets.
A 2011 report from eMarketer found that U.S. mobile commerce sales, including travel, surged 91.4% to reach $6.7 billion and are expected to hit $31 billion this year.
While this number is still relatively small when compared to the total e-commerce sales figures, consumers today are reshaping the whole commerce ecosystem by demanding a seamless experience from online to offline — and brands are expected to deliver. As e-commerce continues its upward trajectory toward a completely unified path-to-purchase, it will need to be delivered effortlessly between home, work and the retail store. The one asset that stays consistent with consumers is their growing reliance on tablets and mobile devices.
Ultimately we have the perfect storm of distribution, experience and mindset.
As mobile devices become cheaper and easier to get, brands need to be aware of the level of mobile enablement. While only about 50% of U.S. retailers are mobile commerce enabled, this is significantly trending upwards. As we saw during the 2011 holiday season with retailers like Gap, Zappos and Wal-Mart, an app-enabled shopping experience is the new norm.
With the experience level of computing focused on touch, sound and movement, today's operating systems are built with pure consumer centricity. Just recently, my daughter walked up to our TV and literally tried to change the channel by swiping her little hand across the screen. As devices continue to provide easier and more engaging experiences, consumers will come to rely on them for their everyday needs — including commerce.
Mobile activities are increasingly focused on downloading coupons, comparison shopping and communicating through social channels. Brands are now up against consumers who are well-versed in researching products before stepping into a store.
Millions of consumers are using their devices to enable and enhance their shopping journeys. It's just a matter of time before the computer is left behind and the entire shopping experience is led by mobile and tablets.
Will Klebenov, Director of business development at EyeSave.com, more than 10 years of marketing experience
I have a hard time seeing how smartphones as they currently exist can unseat the PC as the dominant driver of e-commerce sales in the next five years. Anyone who pays attention to this business knows that it is a rapidly expanding segment of the e-commerce world. That said there are simply too many inherent limitations to the mobile experience as it currently exists for me to accept the idea that it will become the main avenue for e-commerce in the next five years.
Smartphones are an increasingly convenient way to shop. Mobile platforms offer consumers the ability to shop pretty much anywhere, any time. They untether us from our laptops and enable us to do price comparisons on-site. These are significant advantages that will drive the percentage of mobile sales. However, the current mobile platforms are also beholden to inconsistent network coverage, limited bandwidth and screen size constraints that do little to diminish the shopping public's trepidation about buying items sight unseen.
Of these the issue that is most likely to limit the growth of mobile is the inherent screen size limitation. Simply put, people like to be able to see what they are buying. Even if we are able to overcome the network issues that currently dissuade shoppers from utilizing their mobile devices for shopping we will still be faced with this limitation.
My business partner likes to tell the story of his conversion to mobile— he went out to grab some lunch near our office and walked past a construction site. He noticed that all of the workers were making use of their breaks to go online with their phones. After that he says he really started to notice the ubiquity of the smartphone.
Clearly mobile platforms have the potential to win some percentage of sales from the PC, but for the time being the conveniences of point-of-sale comparison and portability are at least partially trumped by bandwidth constraints and diminished image size.
That said I'm looking forward to seeing the evolution of this platform. Please, mobile device makers, prove me wrong: Innovate an unforeseeable set of innovations that smooth out the mobile shopping experience and make us wonder how we ever managed to get by using cumbersome desktop computers to shop.
But until then I can't see the explosive growth of mobile e-commerce creating an experience equal to the desktop shopping experience. Just as e-commerce has yet to obviate the need for brick and mortar stores, I see the eventual situation being a complimentary one and not one in which the mobile platform replaces the PC.
King Hill, SVP, digital strategist at Marcus Thomas, 29 years of marketing experience
Asked to predict the future of digital at my first company in the mid-90s, I'd say, “If you've seen it on Star Trek, it'll probably happen soon.” Switch Star Trek to The Matrix and the principle is no less true today.
However, there more workaday reasons why we can expect smartphones and tablets to replace PCs as the top online commerce destination:
- People are less deskbound. According to Cisco, by 2016 the number of mobile devices — over 10 billion — will top the number of people.
- Small is the new big. It doesn't take a rocket scientist to see that computers are getting smaller and more powerful. The Compaq PC in 1982 weighed 28 pounds. The iPad 2 weighs under a pound and a half. Guess which has more computing power?
- For many, mobile is their only access to the Internet. Already in 2011, a Pew study found over 28% of the U.S. population used a mobile device as their primary access to the Internet.
- E-commerce is expanding. eMarketer predicts online sales will grow by nearly 45% over the next four years. New converts to online shopping will expect handset access.
- Mobile transactions — everything from online shopping to banking — are already booming. Yankee Group, a leading mobile research and advisory firm, estimates that the value of all global mobile transactions will approach $1 trillion by 2014.
- Mobile devices may even replace the wallet. The PayCloud mobile wallet and a variety of products from Google and others, plus emerging near field communications devices, suggest a growing trend.
- Commerce loves impulse and impulse loves mobile. Why pull out your wallet when your phone is already in your hand?
- Tablets present shopping cart content very well, minimizing any hurdles that previously existed in a mobile shopping environment.
- Mobile devices can serve the role of a desktop or laptop PC, but not the other way around. People gravitate to the devices that help them the most.
I can only imagine a similar question back in the early days of credit cards. “Will credit cards outpace cash as the currency of the future?” I think we know how that worked out.
Norm Shearer, Partner and creative director at Cactus, 15 years of marketing experienceWhen my family got a new TV about a year ago I watched in fascination as my 12-year-old daughter immediately opened up YouTube on it (no manual, of course), to see a music video, not to watch a show.
All of the sudden our TV is part computer — and that is what will keep it in the lead when it comes to digital commerce. Over the next several years the computer will move from the desktop to the wall and become more ingrained in our lives and our entertainment than ever.
Yes, tablets and smartphones will continue to grow and mobile technology will adapt and evolve, but they won't overtake the home computer once it moves to the wall. No one wants to gather around a smartphone or tablet for family movie night or simply to unwind.
No matter how you define them, families spend money and when it comes to entertainment, they like doing things together — TV, movies, games, music. Sure I've seen the stats and there are always those moments when each family member is on a personal device. Still, families continue to gather around the TV.
Like water, technology flows down the path of least resistance, which in this case means inevitably toward consumer convenience. Imagine: You're watching your favorite TV show and notice it's shot in Colorado. Instead of thinking “I'd love to take the family skiing” in your head, you say it out load to your TV, which promptly brings up Colorado flight and hotel info. Maybe it doesn't even stop there. Perhaps the TV also checks your work schedule, the kids' school schedules and recommends some suitable weekends.
Convenience rules. Integrate the computer with home entertainment and the possibilities start to seem limitless — and pretty cool. When it comes to advertising and branding, it's going to be quite fun for us all to play with.
Tablets and smartphones will certainly help me find deals and make purchases while out and about, but I'm looking forward to the day when I can come home, hang those itsy-bitsy devices up, then kick my feet back, watch some good old computer TV and, of course, buy something.
Direct Marketing News Decision
The trend toward mobile commerce cannot be denied, and neither can the fact that smartphones and tablets have become ubiquitous. For many, these mobile-enabled devices are consumers' primary connection to online, social and commercial channels. However, prudent marketers should make sure not to neglect still popular and well-performing traditional channels. While it is clear that the technological landscape is in constant flux, and it does seem likely that mobile will ultimately trump the PC in the long run, marketers should take an integrated approach and remain aware of the digital immigrants in the audience.
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