Oct 17th 2011

Consumer spending on mobiles devices set to top £19 billion by 2021

Food and groceries remain the most popular ‘on the go’ mobile purchase as shoppers prepare to spend 15 times more through mobile devices over the next decade

British consumers are set to spend £19.3 billion using their mobile phones and tablets within the next ten years, compared with £1.3 billion spent today, according to new research by Barclays Corporate.

The convenience of amending shopping lists, making payments and arranging delivery times via mobile means food and groceries remain the most popular ‘on the go’ mobile purchase, ringing up sales of nearly £300 million for supermarkets and grocery stores this year. By 2021 this figure is expected to top £5 billion.

Electricals are the second most popular mobile purchase with £290 million due to be purchased via a smart phone or tablet this year. By 2021 sales are predicted to reach £2.1 billion but, the purchase of electrical goods will fall back in the rankings to fourth position, in value terms. Personal care, which includes hair care, beauty, dental and baby products will enjoy the strongest growth with m-commerce sales rising from £63m in 2011 to £3.1 billion in ten years time.

Richard Lowe, Head of Retail & Wholesale at Barclays Corporate, said: “M-commerce is still a relatively niche channel accounting for 0.5 percent of total retail spend. However, with little new shop space coming into play the real growth opportunities lie on the virtual high street and those retailers which are prepared to invest will be at a significant advantage to the competition”.

During the next five years m-commerce will enjoy growth of 55 percent, the fastest of any retail channel. This compares to expected growth of 8 percent for online sales and 1.6 percent for in-store sales. Mail order is expected to shrink by 1.2 percent. The growth of mobile sales will, in part, be driven by increases in smart phone penetration and technological improvements such as 4G and Near Field Communications. Total 2021 total retail sales are expected to be worth some £390 billion – m-commerce will account for 4.9 percent of sales.

Direct spend is only part of the picture with more than half of all consumers (52 percent) already using their mobile devices at one or more stages of the purchasing process, whether it be to research before buying, making price comparisons while browsing in store or actually making a purchase. For example Argos, Tesco, Asda and Next are among the ten most visited websites via mobile, but despite increases in the amount of money migrating online, this does not mean the end of the traditional high street. By 2021, more than three quarters of retail spend will still pass through tills.

Richard Lowe continued: “Stores have been the mainstay of retail for centuries and this is not about to change, particularly for those purchases which require a high-level of customer interaction such as clothing and footwear. The real value to be found in m-commerce is through its role as a multi-channel integrator and the indirect sales boost it generates by connecting physical stores with online”.

M-commerce: Fast facts

• £19.3 billion – total m-commerce spend by 2021 (2011: £1.3 billion)

• 55 percent – expected growth rate of m-commerce over the next five years

• 52 percent – proportion of consumers already using mobile devices at one or more stages of the shopping process

• Food and groceries – top ‘on-the-go’ mobile purchase

• £5 billion – total m-commerce spend on food and groceries by 2021 (2011: £300m)

• Baby, health and beauty products (personal care) – fastest growing sub-sector

• £3.1 billion – total m-commerce spend on personal care by 2021 (2011: £63m)

-Ends-

Notes to Editors:

The research was carried out by Verdict Consulting on behalf of Barclays Corporate.

An electronic copy of the full report is available on request:

The following graphics are also available for media use on request:

– Forecasted mobile spend (by sector) 2011, 2016, 2021.

– Forecast for average annual retail growth across shopping channels 2011-2016.

For more information please contact:

Katharine Simon

Babel PR for Barclays Corporate

Tel: +44 (0) 207 434 5550

Email: [email protected]

About Barclays Corporate

With a clear focus on quality relationships, Barclays Corporate provides integrated banking solutions to businesses with an annual turnover of more than £5 million in the UK and large local companies, financial institutions and multinationals in non-UK markets. We facilitate the success and growth of our clients by providing lending, risk management, cash and liquidity management, trade finance and asset and sales financing. Additionally, our clients benefit from the breadth of the Barclays Group, through access to the investment banking services of Barclays Capital including debt and equity capital markets, the private wealth management expertise of Barclays Wealth, and the card and payment services of Barclaycard. Barclays Corporate employs over 10,000 people globally. For more information please visit www.barclayscorporate.com.

About Barclays

Barclays is a major global financial services provider engaged in retail banking, credit cards, corporate and investment banking and wealth management with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 145,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com.