Retailers moving online, going mobile
The retail industry is going online and mobile, according to recent studies conducted by market research firms and the Federal Reserve.
Just this week, Frost & Sullivan predicted that online retail revenues would reach $4.3 trillion in 2025, nearly 20 percent of all retail revenue. And much of this is expected to come from mobile shoppers.
These trends will change the face of retail, as retailers merge digital, virtual and physical spaces into a single "bricks and clicks" model, judged Archana Vidyasekar, Frost & Sullivan visionary innovation research group analyst.
"The proliferation of connected devices and the availability of faster Internet speeds have catalyzed a change in shopping behavior and fueled market expansion. Innovative business-to-consumer logistic models and the growing influence of social media, along with the convenience of online product research, comparison shopping and competitive pricing, have helped convert many online browsers to online shoppers," Vidyasekar said.
For example, virtual store apps for mobile devices are using emerging technologies like augmented reality. Retailer Tesco launched a virtual store home shopping app in South Korea, and the firm's online sales increased by 130 percent within months of the launch.
"Virtual stores are being introduced in transit zones such as subways or airports and as virtual posters on buses and stalls, highlighting its importance to the future of global retailing. As similar on-the-go shopping models rapidly become popular, traditional credit cards and paper currency will give way to more convenient, easily-available mobile payment channels," observed Vidyasekar.
Frost & Sullivan is by no means the only research firm predicting great things for m-commerce. For example, Juniper Research forecast that m-commerce transactions would reach $3.2 trillion by 2017, up from $1.5 trillion this year. Mobile banking is expected to make up the "lion's share" of the transaction value.
In addition, shoppers are increasingly using mobile devices in stores for comparison shopping and product data gathering, according to Forrester Research. One in five U.S. smartphone owners has used his or her device to look up information while in a store, or to read a consumer review, while 16 percent of U.S. tablet owners have used their devices to research a product while in a store.
Forrester's research is similar to a survey conducted by GfK for the U.S. Federal Reserve, which found that 42 percent of smartphone owners have used their devices to compare prices online while in a store, and close to one-third have used a barcode scanning application for price comparisons.
While not technically m-commerce, the increasing use of mobile devices for comparison shopping is likely to translate into actual purchases using those devices in the near future.
There are obstacles to overcome, such as a continuing reluctance of consumers to use mobile devices for actual purchases and a lack of standardization for mobile payment technologies. But these hurdles can be cleared with sustained effort by retailers, financial institutions, mobile vendors, standards bodies and governments. - Fred