SALESFUEL TODAY

M-Commerce to Account for More Than Half of Online Sales by 2018

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Sales made through mobile phones and tablets are just beginning to have an impact on e-commerce, however, those transactions are expected to reach $293 billion by 2018, or approximately 54% of all online sales.

Tablets are expected to drive $219 billion of those purchases, and smartphones $74 billion. And by the end of this year, according to Forrester Research analyst Sucharita Mulpuru, combined tablet and mobile sales are expected to total $114 billion, powered by media products, clothing and consumer electronics.

And while smartphone users currently outnumber tablet users by some two to one, Forrester predicts that tablets’ larger screens will lead them to top the total percentage of smartphone buyers within four years. Overall, U.S. online retail sales are still growing, and are expected to have a compound annual growth rate of 9.5% for the next five years, hitting $414 billion by 2018. (That’s about 11% of all retail sales, compared with its current 9%.)

In the larger e-commerce picture, apparel and consumer electronics continue to be the biggest purchases, generating more than 25% of the total volume this year.

Devices are driving online sales, with consumers’ myriad “mobile moments” a key factor. “These consumers are accessing the Web more than ever, in more diverse environments than before, primarily while in rooms of their home other than an office (e.g., living room or kitchen) or in stores,” Mulpuru writes, with some retailers reporting as many as 20% of sales coming from mobile devices. The digital adeptness of Gen Y, many of whom have been using the Internet since kindergarten, is also a key factor. “In fact, the 32.5 million U.S. consumers who comprise Gen Y spent an average of $563 online in the last three months, more than any other demographic group.”

But clever online marketing for some merchants also deserve some credit, such as Zulily, which has grown nearly 100% in the last year, and even Amazon, which added 1 million new Amazon Prime customers during the critical holiday shopping season. (The report notes that online retail does significantly better during the holiday period.)

Retailers, many of whom declared mobile platforms to be their No. 1 priority for this year, need to be even more intently focused, and create mobile experiences that are more than simply scaled-down versions of platforms designed for desktops. Consumers are adopting devices rapidly, with 200 million in the U.S. owning a smartphone, and 100 million a tablet, compared with 62 million and 8 million in 2010.

“Today, a minority of mobile phone and tablet owners are actually purchasing products on these devices. In fact, we estimate that only 38% of smartphone owners and 31% of tablet owners will purchase on those devices in 2014,” the report says. “We expect that figure to grow to 55% and 61%, respectively, for smartphones and tablets by 2018.”

According to Ad-ology Research, m-commerce shoppers – or consumers who shop via mobile devices such as cellphones and tablets – are slightly more likely to be women, but significantly more likely than the average consumer to be between the ages of 18 and 44.  When this audience was surveyed about  local news sources, 26.9% said emailed news/offers was best for bringing sales to their attention, followed by 24.7% who preferred TV, and 9.9% who said newspapers.

AudienceSCAN data is available as part of a subscription to Ad-ology PRO. Media companies can access AudienceSCAN data through the Audience Intelligence Reports in AdMall.