5 Ways M-Commerce is Disrupting Retail

Mobile commerce sales are expected to hit $3.5 trillion in 2021 globally, reaching astounding 72.9% of total online sales, says Statista. The rapid proliferation of mobile purchases has pushed retailers to change their sales strategies and rethink their in-store operations, which has become an insurmountable challenge even for the domain leaders. Sears’ shocking bankruptcy in 2018 proves that retailers unable to adapt to the new market reality pay an incredibly high price.

As the shift towards mobile shopping won’t fade, retailers that still lag behind should take action. In this article, we will explore five key ways in which m-commerce changes retail and key points businesses should focus on to be successful in the m-commerce era.

1. M-commerce reshapes loyalty programs

M-commerce apps prompt retailers to rethink the way they manage and promote loyalty schemes. Previously, different parts of these programs were disparate. Promotions were carried out through one set of channels, such as email or SMS, while rewards were collected using another channel, more often loyalty cards.

Luckily, m-commerce apps allow both customers and retailers to manage everything in one place. This means that users can access incentives, promotions, and rewards with greater ease. Branded apps can also drive deeper personalization at all stages of the buyer journey, both online and in-store. The multi-functionality means that options for tailoring mobile apps to unique customer needs are numerous.

Nike set a great example of a successful m-commerce loyalty program. Having partnered with other well-known brands, including Apple, Classpass, and Headspace, Nike offered their customers to use their mobile apps during workouts. While training with the apps, users win reward points that can be then exchanged for exclusive products and offerings from Nike and their partners, say, five free classes at Classpass or a month of free Apple music subscription.

2. M-commerce geography gets more diversified, which spurs retailers to innovate

It’s easy to assume that m-commerce is a phenomenon limited to the Western world. However, developing countries are also seeing the widespread use of mobile devices, which broadens the m-commerce presence. According to Newzoo's Global Mobile Market Report 2018, the United Kingdom has the highest level of smartphone penetration, with 82.2% of the population owning a smartphone. But emerging economies like Malaysia and Romania, with smartphone penetration at 57.5% and 53.8% respectively, aren’t far behind.

Meanwhile, the Asian region experienced tremendous growth of ecommerce in 2018, with China being an incontestable leader. That’s where global retailers can draw experience for their m-commerce advance. Deloitte’s 2019 Retail Outlook reminds that already in 2017, the volume of mobile payments in China reached $13 trillion, compared to $50 billion in the U.S. With a huge millennial population, Chinese retailers had to find new ways of attracting shoppers. Following their customers’ devotion to social media, Chinese retailers shifted the entire shopping cycles to social mobile apps, like WeChat, enriching them with interactive purchases, shopping communities, and built-in payments.

3. Omnichannel portals are vital to increase conversions

Although smartphone conversion rates equal to only a half of those on desktop, together, mobile phones, tablets, and other wearables surpass desktops almost 1.5 times. In Q3 2018, conversion rates for m-commerce, on the whole, equaled 5.75% against 3.94% for traditional ecommerce. It’s worth noting that the biggest share in m-commerce conversion belongs to tablets, which almost caught up with desktops (3.78%) (Monetate e-commerce Quarterly).

Moreover, there’s a trend for m-commerce share in the overall conversion to increase, and this trend is pushing retailers to adopt a genuinely omnichannel approach to designing their shopping portals. To cater to the broadest range of preferences possible and increase their chances of e-shop visits turned into real purchases, it’s essential that retailers allow customers to buy goods with any device and at any location.

4. People keep using mobile in-store

Even though online purchasing represents the most common use of smartphones in a retail context, it’s also important to highlight that customers are using their mobile devices while shopping in brick-and-mortar stores. To add more, 61% of customers prefer to shop at a retailer that can offer both an online and a physical store.

All in all, there is significant activity at all stages of the buying process, before and after a purchase is made. Smartphones are customers’ frequent assistants in searching for specific products or services, comparing them and making shopping decisions. Retailers can take advantage of this trend by offering a range of in-store mobile options, including in-app payments and checkout without queues, as well as store-specific discounts and reward balances.

5. AR and AI bring in unique m-commerce experience

Smart technologies penetrated all business domains, and ecommerce is not an exception. AI and AR are now part of any e-tailer’s development strategy and everyday reality of online shoppers.

AI lets ecommerce companies learn their customers’ mobile behavior profoundly, thus predicting their preferences, launching targeted m-commerce campaigns, and adjusting their offerings according to consumers’ expectations. For example, Pinterest leveraged the power of AI, particularly image recognition, to enable their mobile users to search for items from any photo and find analogs on the platform.

At the same time, according to AR developers from Iflexion, AR transforms the way people shop. Online customers feel great about using their AR shopping apps to try out goods before buying them. IKEA is one of the well-known retailers that offered their customers the opportunity to visualize furniture right inside their homes using a branded AR app. Sephora is another retailer with a successful AR app enabling customers to see how beauty products look on their faces.

It’s high time for retailers to become part of the m-commerce game

The trends in the retail industry are constantly changing, so there is no chance for retailers to relax. While technologies are galloping ahead, it’s worth saying that the majority of retailers are still adapting to online, and particularly mobile, buying behavior; that’s why m-commerce is at its maturing stage. At the same time, by accepting new rules of ecommerce and leveraging opportunities effectively, retailers of all sizes stand to benefit from the global shift to mobile-enabled shopping methods.

Many of these opportunities have a technical dimension, and it’s vital to seek out the right expertise to properly take advantage of them. As advanced technological capabilities become more widely available and easy to implement everyone can benefit from them.


About the author

Tatyana Shavel

Tatyana Shavel is a VR/AR Technology Analyst at Iflexion. She works in the intersection of business and technology exploring the practical use of augmented and virtual reality for smarter business and a better world. In addition to keeping a constant pulse on industry trends, she enjoys digging into data and conducting research.

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