By John Squire
Director, Product Management, Enterprise Marketing Management Group
IBM Industry Solutions
Around this time last year, Susan Etlinger, an analyst with Altimeter Group, said something that stopped me in my tracks. In the context of discussing e-commerce, Susan asked, “what’s a store, anyway?”
Not that long ago, it would have been clear that a store is where you go when you want to buy something. Obviously it had to be a physical place. But starting in the 90s, people began shopping online using their PCs and a web browser. We had to come up with the terms “brick-and-mortar” and “e-commerce” to distinguish a physical store from one on the Internet. Now with the rise of mobile commerce, stores have become entirely portable; since most people never leave the house without a phone, a store can go wherever you go.
That conversation with Susan came back to me as I started thinking about what this year’s online retail trends were likely to be. It doesn’t take a crystal ball to say that this is going to be a breakout year for mobile shopping. IBM data released today suggests that an unprecedented 15 percent of people will shift their shopping from the PC to a mobile device this holiday season. This prediction is based on October 2011 figures which show that nearly 11 percent of people who logged onto a retailer’s site used a mobile device, up from the 4.2 percent recorded on October 2010. Furthermore, if current consumer trends stay true to form, we expect that 15 percent of all online sales—not just traffic—will come from mobile devices. That means people are using their mobile devices not just to browse for or research products and services, but to buy them.
What we’re watching is the rise of the post-PC consumer (by the way, here’s a detailed read on IBM’s strategic decision to sell its PC division to Lenovo, by Mark Dean, one of the original engineers who created the PC) and that’s where Susan’s observation about the changing nature of stores gets really interesting.
Global brands need to think about their consumers in an entirely different way. IBM data shows that mobile shoppers are even more laser focused than their PC-using counterparts: 44 percent of mobile users will abandon a site if they don’t find what they want on the very first page, versus an overall online rate of just over 37 percent. Mobile users, it would seem, don’t have the patience or the inclination to sift through a site for what they want. And why should they? With a simple flick of a finger across a screen, they can obliterate one brand in favor of another.
Over the long haul, this trend is only going to get bigger. Right now, we’re experiencing the voracious adoption of mobile phones across the globe. Relatively tech-savvy people with some amount of money to spend are driving the spike in mobile commerce. But in the future, mobile shopping will spread everywhere. Think about the many millions of people who don’t have broadband access in their homes and who don’t own a laptop (and perhaps never will). We can anticipate that one day, when these people shop online, they’re going to do so using a mobile device.
The onus is on retailers to remember that their brands have become entirely portable. The empowered consumer quite literally has retailers, their brands, and their stores right where he wants them: in the palm of his hand. That means that relevance—a tailored, personalized, wow-they-really-know-what-I-like approach to marketing—is more important than ever.