The holiday season which began with Cyber Monday on December 2nd 2013 has just ended and analyzing the impact on mobile commerce sales and location based services unveils some very interesting trends.
Firstly, at the macro level:
- Online shopping increased in the USA in 2013 by over 16% compared to 2012.
- From a mobility perspective, almost a third of all online sales (29%) were made from Smartphones or Tablets.
Clearly there are changes in the online marketplace, but in order to examine this a little further, let’s look at a few key questions to help understand what is happening in this marketplace:
- What are the major trends?
- Is mobile commerce just a US phenomenon?
- What impact does location based services have?
- Where are the main benefits coming from analytics?
- How is privacy fitting in to all this and how is the attitude of mobile consumers evolving?
As already mentioned, the increase in smartphone purchases is growing rapidly, and increased by 33% in 2013 over 2012.
Even more interesting is that, for Christmas Day 2013, 83% of online mobile sales came from only 16% of Android devices. What does this say, especially as Android has 51% of the US Smartphone market?
Clearly it appears that iOS is a market that can be monetized far more easily. Maybe it is a demographic factor? regardless, it is a hugely significant aspect to consider when …….
In the UK, specifically on the 26th of December, Mobile traffic grew to 58% of all online traffic, an increase of 42% over 2012. Sales completed via mobile devices were also strong, growing 63% year over year, and exceeding 45% of total online sales.
Expansion of Mobile commerce:
While the US had always been to the fore in mobile commerce, the holiday season in 2013 saw some significant increases in other parts of the world.
Some statistics from the UK makes very interesting reading:
- John Lewis reported online sales were 22.6% up with their Click & Collect program and were up 61.8% on last year for the five weeks up to 28th December 2013. -- This represented 31.8% of the total John Lewis business during this period.
- House of Fraser enjoyed its best Christmas trading period on record, driven largely by a jump in online sale,s up by almost 57.7%.
- Retail chain Debenhams has reported that online sales increased by 27% for the 17 week period to 28th of December 2013.
In the UK, Smartphones drove almost 30% of all online traffic with 28% for tablets. However tablet users drove almost 30% of online sales, which was nearly twice that of smartphones users, who drove 16%. In addition AOV (average order value) on tablets was £83.55 while AOV on all mobile phones was very similar at £78.06.
Global Variations in mobile commerce:
It is widely known that in the US, Cyber Monday (2 December 2013) tops the online shopping charts. It is very interesting to note that in places like France, the peak is after Christmas on January 8th -- mainly due to the winter sales from early January to mid-February. Furthermore, the Nordics have their peak shopping day of December 9th (peaking higher than even the US).
Growing impact of Location Based Services & Analytics:
Location Based Services combined with Big Data has enabled retailers to really utilize contextual promotions — mostly real-time push notifications based on consumers’ social media activity, tracking their locations, or capturing their interactions on the web and mobile devices.
Several physical retailers, including Best Buy and Kohl’s, also deployed location-based promotions to push notifications while the consumer is in or near the store, while other retailers used mobile apps to send contextual promotions based on tracking shoppers’ activities on the app and their physical locations with using it. Macy’s and J.C. Penney, for example, partnered with Shopkick (a shopping app provider) to reward brick-and-mortar shoppers with discounts or song downloads for trying on clothes, scanning barcodes, or making purchases.
Retailers have used Big Data to personalize their site content for several years. This was a competitive differentiator during this holiday season, however, as indicated by pre-holiday survey by Baynote, a personalized customer experience solution provider. The survey noted that eighty-one percent of retailers planned to upgrade ecommerce platforms to focus on customer experience, and to increase engagement, revenue, and ultimately lifetime value from improved relationships with shoppers. The goal is an enhanced customer experience and an improved conversion rate. In addition 2014 will see further enhancements of these capabilities, with more focus on integration of mobile commerce with location services and analytics to further improve the contextual engagement with the consumers.
Consumers still appear to find personalized promotions more invasive when in store than when shopping online, with a recent report showing that 67% of consumers finding in store personalized promotional tactics invasive, compared to only 55% when shopping on the Web.
Undoubtedly the rapid emergence of new technologies, such as facial recognition, location based services, geofencing and now Bluetooth-enabled beacons, enable retailers to use more targeted marketing techniques than ever -- but is the consumer ready to adopt this?
Forty-six percent of a recent ISACA survey respondents say they would find it invasive if a store texts them about specials as they walk past. An equal percentage would find it invasive if a store clerk they don’t know greets them by name and knows they’ve been there before. Surprisingly, older Millennials (age 25-34) are the group most likely to find these actions invasive. Among online shoppers, 35% find it invasive when a website knows their city or zip code.
Clearly this shows that consumers are very concerned about their data online -- an incredible 90% worry that their information will be stolen.
However an equally interesting statistic is the growth in online retail, 58% of those who use a work-supplied computer or mobile device will use it to do holiday shopping (up significantly from 41% in 2012). Also more than a third of these (36%) spend half a work-day (4 hours) or more shopping online, (again significantly up from 22% a year ago).
The holiday season 2013 really confirmed the power of online retail, with 36.8m items ordered theourgh Amazon on Cyber Monday alone(426 items per second!). As well as underlining firmly the growing dominance of mobile devices in the retail world.
Many of the leading retailers are making tangible plans to address this and delivering specific contextual information to customers regardless of the channel they intereact on. It is very clear that analytics, big data and location based services have a very important role to play in mobile commerce in the future.
2014 will be very interesting and I expect many innovations to emerge and push the pace of change even faster.
Cisco has a series of innovations to our CMX platform planned for 2014 that will align directly with these mobile and location based services trends.
Are you going to NRF next week? Come over and learn some more about Cisco’s solution for adapting to the location-based services trend in retail at Booth 1954.
For more information on CMX visit: www.cisco.com/go/cmx.