BII REPORT: Inside The Explosion In Mobile Commerce

The explosive growth of mobile commerce has left many brands and retailers wondering how they can take advantage of this market.

As recently as late 2010, mobile commerce was only 3% of e-commerce. By the end of last year's holiday shopping season, that number had risen to 11%, according to comScore.

That's approximately $18.6 billion in consumer spending - and that doesn't even include travel-related purchases, which comScore counts separately. Thanks in part to a new ecosystem of retail and shopping apps, mobile-generated retail spend could rise to 15% of retail e-commerce by the end of this year.

In a new report from BI Intelligence, we examine the three main reasons why mobile commerce is exploding, dig deeper into the numbers underpinning the explosive growth, and analyze new mobile merchandising trends — merchandising being the art of selling people products they didn't know they wanted — like mobile catalogs and coupons.

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Here's a brief overview of the rise of the mobile shopper:

• The critical mass of mobile consumers is a primary driver of this growth: The proliferation of Android and iOS devices, particularly tablets, have led to new mobile usage habits such as "lean-back" shopping and driving a huge explosion in mobile commerce. Currently, 54% of adults in the U.S. own smartphones and about 25% own tablets. In roughly three years, the number of tablets alone will overtake the number of PCs. By 2016, about 450 million tablets will be sold annually worldwide. Statistics already show that a disproportionate share of mobile traffic to e-commerce websites comes from tablets. With only a 25% penetration rate, tablets account for well over 40% of mobile traffic to e-commerce sites.
  
• Brands are experimenting with mobile merchandising trends - such as mobile catalogs and coupons - that are proving to be very successful: Mobile coupons have helped major retailers and brands increase foot traffic into physical stores, and are a great way for them to collect data on offline purchases and close the mobile-to-offline purchase loop. Mobile coupons are also proving to be a path into mobile for large consumer packaged goods brands that have previously shunned the medium. By 2014 the number of mobile coupon users is expected to increase to 53.2 million a year. At roughly 10%, the redemption rate of mobile coupons crushes that of print coupons, which hovers around 1%.
• The changing demographics of e-commerce will continue to drive business: For close to 50% of 12-17 year old smartphone owners, the smartphone is their primary internet access device. It follows that for younger consumers mobile commerce and buying via smartphones and tablets will be a habit and much less of a novelty than it is for older consumers. Mobile commerce is driving incremental e-commerce revenues that would not have happened without the availability of tablets and smartphones as new shopping mediums.

In full, BI Intelligence's report on Mobile Commerce:

• Examines the three main reasons why mobile commerce is exploding
• Digs deeper into the numbers underpinning the explosive growth
• Analyzes new mobile merchandising trends — merchandising being the art of selling people products they didn't know they wanted — like mobile catalogs and coupons - that are proving to be successful in driving mobile business

To access BI Intelligence's full reports on Mobile Commerce, sign up for a free trial subscription here.