Consumer spending on mobile devices set to top £53 billion a year by 2024
Consumers are set to spend £53.6 billion a year using their smartphones and tablets by 2024, compared with the £9.7 billion spent today, according to new research by Barclays.
Sales resulting from mobile channels can be split into two: direct sales transacted on a mobile device, and indirect sales influenced by the mobile channel – such as when a phone is used to check prices or reserve in-store products for collection. The influence of mobile on spending is expected to more than double the direct mobile transaction figures from £18.4 billion in 2014 to £112 billion respectively by 2024. This means that nearly half (42%) of all retail sales will involve a mobile device in some way or another, making mobile the fastest growing retail segment.
Despite much lower ownership rates, tablet owners were more than twice as likely to make a purchase using that device than smartphone owners were. (43% vs. 19%) As With smartphone and tablet device ownership continually rising, it is no surprise that almost half (46%) of retailers claim that at least some of their sales are already generated through a mobile device.
However, less than 3% believe their business is at the cutting-edge when it comes to being mobile ready and a further 70% said they did not currently offer a mobile website or a mobile app for consumers. Sales made through apps now account for a third (33%) of all retail spend on mobiles, despite only 10% of retailers offering one.
When asked about future strategies, less than a third of retailers said they had a clear plan of action when it comes to future investment in mobile with more than two thirds (68%) conceding that they have no specific plans. Of those that did, developing a mobile website (13%) followed by a mobile app and offering mobile payment options (11% respectively) were top priorities.
Richard Lowe, Managing Director and Head of Retail & Wholesale at Barclays, said: “The size of the retail opportunity is clear for all to see. The question every retailer should be asking themselves is what they are doing about it to not only satisfy today’s consumer but, also tomorrow’s.
“Mobile devices offer excellent opportunities for location based marketing (LBM), and as the supporting technology develops, it will allow retailers to pinpoint the precise location of shoppers and send personalised offers relevant to their vicinity. LBM is a relatively low cost way to reach consumers directly while they are on the move, and can be used to increase the efficiency of the multichannel process in store by enabling the pick-up of click and collect orders and speeding up in-store fulfilment.”
“With almost three quarters of consumers using their mobile devices whilst out and about, ignoring this trend would be a missed opportunity. Retailers must cater for the mobile consumer in order to remain relevant”.
Shopping via mobile devices peaks in the evening (between 8 and 9.59pm), with 43% of consumers shopping during this time. 40% of 18-24 year olds, the most active mobile users in general, make their purchases in the afternoon.
Unlike the retail sector as a whole, where baby boomers will represent the vanguard of retail spending, younger spenders will lead the m-commerce sector over the next five years. In 2014, consumers aged 25-44 accounted for 51% of all retail spend on mobile devices, which is set to grow to 58% by 2019. Shoppers in the 65+ category will continue to favour visiting physical shops despite a growth in mobile penetration, and their contribution to direct mobile spending will actually shrink proportionally.
Interestingly, the most commonly cited situation for consumers using their mobile devices was ‘second screening’ while watching TV (62%), with consumers using their ‘mobile’ phones at home more than on the go (84% vs. 75%).
Lowe adds: “Ultimately, the easiest way to drive sales is to make the shopping process as simple as possible, engaging with them through a platform that they have become increasingly reliant on and one that connects them to every touch point in their lives.
“It’s not just about driving sales via mobile though, but about making sure mobile marketing strategies are put in place to deliver results in all channels. Mobile must integrate with other marketing strategies if retail is to make good on market growth predictions.”