Holiday Retail Darling 2.0 - Mobile Commerce

"In 2008 and 2009 , mobile started out as a science project. It's accelerated so fast that it's becoming more mission-critical for retailers to deliver a mobile experience in a professional way."  

- Dave Sikora, Digby

In our 2009 post-holiday blog we declared online shopping as the holiday retail darling of the holiday season. But this year there' s a new darling in town - it's that handy portable device we call a mobile phone. Mobile commerce, or m-commerce, made a significant contribution as the new tech trend for the holiday season as more shoppers were going online than ever before.

People used their phone just like their computers at home for online shopping: comparing prices, purchasing items and finding the nearest store location as well as inventory in stock locally.


Retailers hopped on board as they invested in m-commerce to prepare for the holidays. That's a smart move considering how m-commerce promotions encourage impulse buys, and knowing the exact location of shoppers lets merchants deliver coupons and offers to users when they're most likely to spend. Mobile apps like Foursquare  encourages consumers to "check in" and retailers took advantage of the information. They offered the ability to scan barcodes or get discounts on their mobile device while out shopping. With moves like that, retailers presented a seamless shopping experience online and offline.


M-commerce expected to triple this year, and double again next year; but US lags behind others

• m-commerce is expected to triple to $3 billion in the U.S. this year and reach $6 billion next year
• However, U.S. consumers are still behind foreign consumers in terms of purchasing with a mobile phone
• 7.9% of U.S. consumers have bought something with a phone vs.
• 32% of consumers in Taiwan have bought something with a phone (This tops the list of major industrialized countries (per IE Market Research Corp)
• About 13% of consumers in Finland have bought something with a phone (#1 European country)

M-commerce played a significant role so far in the 2010 holiday online shopping experience

• Almost 60% of mobile consumers expect to use their phones to help with shopping plans and holiday celebrations this season
• Nearly 4% of all Cyber Monday shoppers used smartphones and other devices to make their purchases
• According to research data from Google/OTX:
• 52% of U.S. smartphone users plan to use their phone to compare prices during the holiday shopping season
• 40% plan to use their phones to read product reviews
• According to the 2010 eholiday pre-holiday survey from National Retail Federation
• Shoppers using smartphones will account for at least $127 billion, or 28%, of the $447 billion the NRF predicts consumers will spend this holiday season 
• Over one quarter of consumers said they definitely planned to use their smartphone to research or make holiday purchases

Are you planning to ride the m-commerce wave this holiday season? You won't be alone!

Image: Carlos Porto/freedigitalphotos.net 

Sources:

7.9% of U.S. consumers bought item on smart phone, SFgate.com, 12/3/10

It's a holly, jolly (mobile) Christmas, shop.org, 12/2/10
Best Buy, Amazon.com Try to Reach Shoppers Through Their Phones, businessweek.com, 12/2/10
U.S. Online Sales on Cyber Monday Climbed 16%, ComScore Says, bloomberg.com, 12/1/10
Cyber Monday sales hit record $1B, bizjournals.com 12/1/10

Retailers Seeing Green on Black Friday Weekend

Several predictions for the 2010 Black Friday weekend came true! 

1. There were more shoppers in stores and visiting websites over this Black Friday weekend 
2. More money was spent than a year ago  
3. Shoppers purchased more fun gifts (jewelry) instead of practical gifts (coffee makers)  

But hold on! Black Friday 2010 weekend looked good, but consumers are still concerned with the economy, so retailers are urged to continue their low pricing and can't-pass-up offers.

"As retailers look ahead to the first few weeks of December, it will be important for them to keep momentum going with savings and incentives that holiday shoppers simply can't pass up."

Matthew Shay, NRF President and CEO

By The Numbers...

• 212 million shoppers visited stores and websites over Black Friday weekend, up from 195 million last year
• The average shopper this weekend spent $365.34, up fro last year's $343.31
• Total spending reached an estimated $45 billion
• The number of people who shop on Thanksgiving day, both online and in stores, has doubled over the past five years, from 10.3 million in 2005 to 22.3 million in 2010

Consumers clad in PJs visited stores earlier than ever

• The number of people who began their Black Friday shopping at midnight tripled this year from 3.3% last year to 9.5% in 201
• By 4 a.m. 24% of Black Friday shoppers were already in stores

Some purchasing highlights

• The number of people who purchased jewelry over the weekend rose from 11.7% last year to 14.3% this year
• Gift cards rose from 21.2% last year to 24.7% 
• Toys came back from 32.2% to 33.6%
• Books and electronics rose from 40.3 last year to 42.1%

Department stores saw increase in traffic
Both department stores (52% this year vs. 49.4% last year) and clothing stores (24.4% vs. 22.9%) saw an increase in traffic while the percentage of people who shopped at discounters declined 7.2% from 43.2% last year to 40.3% this year

Retailers paid more attention to online deals, and shoppers responded
The percentage of people who shopped online this weekend rose 15.2% from 28.5% last year to 33.6% this year

Image: Simon Howden/freedigitalphotos.net 

Sources
NRF: Black Friday Weekend Sees Bigger Crowds, $45 Billion in Spending, nrf.com, 11/28/10

Gift card watch: consumers buying more gift cards

Retailers may be able to breathe a small sigh of relief when it comes to their gift card business.

According to a recent report by The Hartman Group, the number of consumers purchasing gift cards has significantly increased over the past six months. This interesting finding suggests that consumers may actually view gift cards as practical gifts in this tough economy. If this trend continues for the remainder of the year, it could spell good things for sales of gift cards at the holiday gift-giving season.

However, the report also notes that while more consumers are purchasing gift cards, consumers are actually spending less on gift cards. The study suggests that the lower rate of spending on gift cards can be attributed to consumers’ poor views of the economy. In addition to that, almost half of consumers are reluctant to purchase gift cards due to the myriad of retailer and restaurant bankruptcies.

We’ll be following what’s happening on the gift card front over the course of this year. Be sure to stop back for updates!

[via The Hartman Group: Gift Card Buying Trends, 2009]