IBM predicts mobile consumer spending spree

Everyone knows that online consumer purchasing increases as the holiday season nears. However, IBM’s latest  Online Retail Index, comprised of roughly 500 online retailers in the U.S., projects tremendous growth in mobile sales during the holiday season over the same period last year.

While the projected 3.1% overall increase in online sales is consistent with past growth associated with holiday shopping, IBM anticipates mobile purchasing will constitute 20% of online holiday sales this year.

This percentage has consistently doubled over the past two years—hitting 5.5% in 2010 and 11% in 2011. Jay Henderson, global strategy program director for IBM’s Enterprise Marketing Management division, doesn’t anticipate a slowdown of mobile purchasing activity in the coming years. “I do think at some point we’ll likely see mobile plateau, but it’s got a long run until we get to that point,” Henderson says, attributing the increase to the proliferation of smartphones and tablets.

During the holiday season, IBM will further break down spending figures on mobile phones versus tablet devices; at this point, it doesn’t differentiate between spending on mobile apps versus mobile web pages.

Regardless of how consumers purchase on mobile devices, mobile audiences are now big enough to “mandate that retailers must deal with them and design the online experience to better enable people to shop in this fashion,” Henderson says.

When it comes to online shopping overall, IBM also predicts that home goods and department stores will perform best; online sales of home goods—which includes companies that sell home furnishings and decorations—is expected to grow 8.9%, whereas online sales from department stores is expected to grow 3.9%.

“These are some bright spots we’ve seen when we look at particular segments within retail,” Henderson says. Growth in the home goods sector in particular is a trend that IBM noted began earlier in the year.

IBM also began reporting overall sentiment around ads for the first time, noting that positive sentiment grew 21.3%. Henderson concedes that this could be due to the fact that as the holiday season approaches, consumers are more aware of new products, and ads often showcase deals and discounts, which would inflate overall sentiment.

However, he also notes that brands are developing better online advertising campaigns. “We also see the elements of the creative associated with online advertisements [in which] the entertainment factor comes into consideration,” he adds.

In measuring consumer response to ads, the study looked predominately at online display ads and television advertisements, measuring sentiment based on blogs and social media information.

Related Posts