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Comment: The rise of mobile in retail

Over the last decade, the internet has drastically altered the nature of commerce. Traditional bricks and mortar stores are no longer the easiest way for consumers to browse and buy goods. Retailers are now just as likely to concentrate their efforts on eCommerce, which enables them to reduce their distribution costs and increase their reach. As a result, online retail is now thriving, with users enjoying the ability to browse a myriad of markets and purchase products from the comfort of their own home.

Until recently, this was an activity largely restricted to desktop PCs and laptops, but this is changing rapidly. Recent data from an array of online retailers reveals a surge of sales via mobile. For example, the latest quarterly results released by fashion retailer, New Look, revealed sales through its mobile channel had increased 97% over the last three months and that its mobile site now accounted for half of overall web traffic.

The mass-market penetration of smartphones (now with over 2 billion users worldwide) has quickly led to mobile displacing PCs and laptops as the primary device people use to access the internet. During last year’s Black Friday in the US, 60% of internet traffic was through mobile, and according to the Global Web Index, 2015 will be the year when smartphones owners will reach parity with PC and laptop owners.

This displacement could easily be explained by mobile’s small size and portability, which has introduced the notion and practice of the continuous connection. However, there is more to the story than this – mobile technology is also advancing at a much greater pace than PCs and laptops. On average, users replace their mobile handsets every 18 months, compared with replacing their laptops every three years and PCs every five. This has been a game changer, because there is a much greater incentive for those in the mobile ecosystem to significantly improve devices year on year.

This has led to a wide range of innovations across a number of different verticals, including commerce, in which mobile is driving innovation. Mobile money apps that support peer-to-peer (P2P) payments such as M-Pesa, WeChat and Alipay have been immensely popular since their launch, and all have combined payment functions with other services such as messaging, delivery tracking and restaurant booking which has further increased their appeal.

Other developments such as digital couponing is where mobile can play a crucial role in improving the customer journey and making the commercial experience more interesting. For example, smartphones can be used to access information and offers online or on the high street, which can be easily stored in a mobile wallet app.

High street retailers have already shown themselves to be receptive to new ways in which mobile can be used to market and pay for goods. For example, some retailers offer beacons (WiFi or NFC) in their stores to interact with customers. On top of this, the recent rise of NFC point of sale (POS) solutions, which can be used in conjunction with mobile wallets, is another indicator mobile commerce is about to take off sharply.

Improvement to network infrastructure, especially in the form of 4G, will further accelerate the growth of mobile commerce. And according to GSMA Intelligence, the number of unique SIM cards registered on the mobile network and used in a smartphone will increase to 5.8 billion by 2020, giving us more reason to believe that the role of mobile in retail will be vital in years to come.

The reality is mobile is becoming increasingly central to consumers, shaping how people search, socialise, pay and promote. As such there is a huge opportunity for retailers, operators, device manufacturers and app developers to create new and innovative retail services and solutions.

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