Updated: How to take advantage of mobile retailing

Introduction and the mobile marketplace

Note: Our mobile retailing article has been fully updated. This feature was first published in December 2013.

2015 is a tipping point for retailers and their customers. Where the internet has reigned supreme, with e-commerce transforming the retail environment, the rise of the smartphone will eclipse the massive success of e-commerce as m-commerce becomes the preferred way to shop.

Massive opportunity

With the love affair with apps showing no signs of diminishing, how can your business ensure it is ready to take advantage of a market that RetailMeNot estimates is worth nearly £15 billion (around $23 billion, AU$31 billion) in 2015 alone?

The UK m-commerce market is more than a fifth bigger than Germany (£12.4 billion) and 152% larger than France (£5.9 billion) – the largest markets in Europe, after the UK. Barclays is estimating a 9% expansion to £32 billion (around $48 billion, AU$67 billion) by 2019.

"Mobile is now the driving force behind e-commerce growth, accounting for more than one in four pounds spent online in the UK this year," says Giulio Montemagno, senior vice president of International at RetailMeNot.

"However the true impact of mobile on retail is much greater than this. Our research suggests that mobile is becoming a 'shopping companion' for many Brits. Almost three-quarters of mobile users regularly visit retailer's websites to browse or make purchases, with some retailers seeing as many as one in two visits to their websites come through mobile."

Nearly half of all e-commerce transactions in the UK are on mobile devices

In its report into mobile commerce, RSR concluded: "Just as they did with early attempts to sell their products on social media, retailers are learning that the mobile space is more about consumers arming themselves with valuable content that helps them to make the best choices to suit their lifestyle needs than it is about transacting (although consumers may choose to do that too).

"For consumers, mobile isn't a destination like a store or an e-commerce site. Instead it's both a way for them to express themselves and to become more independent. The challenge for retailers now is in how to participate in such a world in a way that helps build loyalty to the brand without being intrusive."

Spending across all retail channels shows growth on mobile devices

Twin pillars

For businesses, understanding who is using their mobile to buy and what they want to purchase are the twin pillars that support the burgeoning mobile retail marketplace.

According to research from Barclays, m-commerce sales are highest across entertainment and books, where mobile devices account for 17.1% of sales – and over half of mobile shoppers (57%) browse or research products at least once a week using mobile devices, and 25% purchase goods.

With smartphones now ubiquitous, retailers can expect their customers to own these devices

Consumers want to use their phones to shop – it's as simple as that. However, retailers are being slow to move their e-commerce offerings to mobile. Simply having a responsive website isn't enough, as consumers increasingly would rather use an app to make purchases and not visit a mobile website, as the latter invariably doesn't have a particularly user-friendly design.

How your organization's payments solution can affect its business model

App commerce and m-commerce checklist

App commerce

What is becoming increasingly clear is that the app will dominate mobile commerce. Apps are now used whenever a customer is in shopping mode. Often this will be to check and compare prices and features, but retailers are now making even closer connections using technologies like beacons, which identify a customer when they come into a store.

Linking mobile commerce to physical stores with beacons will become more and more commonplace

Expanding the experiences that consumers can have with their mobile devices is the future of m-commerce. Deloitte Digital concluded: "Our data found that consumers want to interact with retailers – evidenced by the fact that 30% of shoppers surveyed that used their smartphone on their last shopping trip used a retailer's mobile app or website.

"Our survey also shows that 74% of consumers surveyed who used a retailer's native app or site during their most recent shopping trip actually made a purchase that day, compared to only 66% who didn't use the retailer's app or site."

The use of apps as the primary way to access a retailer's online store will continue to expand. "The customer purchase journey has become increasingly complex as consumers have stopped using a single device to make their purchases," says Jonathan Wolf, chief product officer, Criteo. "Delivering an engaging app experience and connecting seamlessly with consumers across multiple devices are key to capturing e-commerce sales in this new world."

Having access to thousands of stores in their pockets no matter their location is a powerful shift in the customer/brand/retailer relationship. Businesses that can quickly evolve their e-commerce services to embrace the mobile space will become destination sites. There is still work to be done regarding how products and services are presented to customers, with payment options and security still a concern, but mobile is the future of retailing.

Your m-commerce checklist

Research carried out by Centre for Retail Research (CRR) for VoucherCodes.co.uk revealed over £6 billion (around $9 billion, AU$12.5 billion) is being lost by retailers due to a lack of investment in their mobile services.

Says Claire Davenport, media and internet, strategy and management, VoucherCodes.co.uk: "The growth of online and mobile spending has already had a hugely positive impact on the retail sector. However, there is still a great opportunity being missed – and it is worth billions for retailers. Customers have expressed their intention to spend more on mobile devices, so now is the time to revisit mobile strategy to capitalise on this."

And social media will also increasingly become a retail space. Already visual marketing across Pinterest and Instagram with embedded 'buy now' buttons on all major social media networks means retailers have a range of channels to reach their customers – all via a device they always have with them.

Innovations such as Apple Pay will resolve how goods and services will be paid for on mobile devices

Is your business ready to embrace the m-commerce revolution now taking place? Follow these four steps to ensure that it is:

Multi-screen is essential

Your customers now use multiple channels for researching and shopping. Integration with your website, mobile and in-store is vital and demanded by today's mobile consumers.

Personalised communications

With consumers checking their phones up to 150 times a day, there is plenty of opportunity to connect with them. Push notifications are a powerful marketing tool all businesses can use to reach out to specific customers about their goods or services.

Engage with content

With 4G now available to consumers, retailers can use rich content to showcase their goods or services. Video is the most popular type of content online – especially across social networks – so using video for your marketing can be highly effective.

Customer service

With a direct channel to your customers, high levels of personalised customer services have consistently been shown to improve sales and brand awareness.

Google states: "WWW now stands for "What I want, when I want, where I want it." This is true none more so than in the mobile commerce environment. There is no doubt that this retail landscape will expand and become the dominant way to shop – just make sure you and your business are ready.