May 1, 2014
By Sarah Sluis,

Mobile Sales to Represent Half of E-Commerce by 2018

M-commerce will represent nearly half of all global e-commerce by 2018, according to a report released by Goldman Sachs.

The analyst firm also concluded in a recent report that purchases made with mobile and tablet devices will total $626 billion by 2018, more than four-and-a-half times the 2013 total of $133 billion. Currently, mobile accounts for just 11 percent of all e-commerce sales and a fraction of all purchases made online and in stores. But to take advantage of this growing market, retailers need to pay attention to their mobile experiences now.

"If we can't get mobile to work, we're not going to have much of an e-commerce business in a year's time," forecasts Stuart McMillan, deputy head of e-commerce at Schuch, a shoe retailer in the United Kingdom owned by Genesco. Currently, desktop traffic is in the minority, and it continues to shrink. Schuch sees 24 percent of its traffic from mobile phones, 23 percent from tablets, and the remaining 43 percent from desktops. Smartphone and tablet traffic combined are growing 1 percent a month in market share for the site.

Mobile conversion rates tend to be lower than those on the desktop, according to "The State of Retailing Online," a recent report from Forrester Research. But although fewer visits result in sales, mobile devices provide other valuable services. "There are many microconversions on a Web site," McMillan says. "We have people who leave reviews for our store immediately after visiting. If [a user] were to look at a store locator, any retailer would say it's a valuable thing."

Many retailers started out with separate mobile sites, but the current trend is for responsive design, which will adjust to the size of the user's screen. Fifty-three percent of retailers listed mobile optimization or responsive design as a top priority for 2014, making it the most popular area of focus.

Responsive design also ensures a customer has a consistent and cleaner experience across devices. "Responsive design strips out all the clutter, because the screen has to be suitable for the smartphone. That has a big impact on encouraging people to buy things," notes David Moth, deputy editor of digital marketing research firm eConsultancy.

When consumers want to buy on their mobile phones or tablets, they often have trouble entering information into the mobile app. The most creative vendors get around that. The Walgreens app, for example, enables consumers to refill prescriptions by taking a picture of the bar code on the prescription label. Major retailers such as Amazon require users to enter minimal information after logging in for the first time and store credit card information a user has entered on the desktop.

Responsive layouts distinguish between tablets and smartphones, enabling retailers to better separate the two experiences. "Tablets are used for leisure really. They don't leave the home that much; they're used for shopping, watching videos, doing research," Moth explains. "On smartphones you tend to be out and about and might use it for research, look up a shop, or bookmark something, then make the purchase on a computer or in-store."

Even as retailers deliver better mobile experiences, connecting a consumer across devices is still a goal, not a reality. "What [retailers] need to do is get better at tracking people across devices," Moth says.