Technology | Media | Telecommunications

Monday, January 13, 2014

Upside for Mobile eRetail Payments will Reach $707 Billion

Mobile payments continue to represent one of the most dynamic and fast-evolving arenas of our connected society. This evolution encompasses what we now buy via the mobile commerce ecosystem, the payment mechanisms we use to buy it and the devices on which we shop for a selected product or service.

Juniper Research now forecasts that annual retail payments on mobile handsets and tablets are expected to reach $707 billion by 2018, representing 30 percent of all eRetail by that time. This compares with mobile retail spend of $182 billion in 2013, when mobile accounted for around 15 percent of eRetail.

The latest market study by Juniper found that leading retailers were increasingly developing strategies built around mobile, using it as a hub facilitating payment, product discovery and customer retention. As a result, it found that the size and scale of purchases across both smartphones and tablets was increasing strongly.

However, for users owning both devices there was a strong trend towards browsing on the smartphone while completing the purchase on the media tablet -- and by the end of 2013 global per month retail spend on tablets had eclipsed that on handsets.


Addressing the In-Store and Online Competition

The study also highlighted the increasing trend towards what's referred to as the "showrooming" phenomenon, where consumers examine retailer products in-store while simultaneously browsing on their smartphone to compare prices online.

Juniper argued that retailers need to adapt their strategies to incorporate this activity, by deploying tablets equipped with mPOS (mobile Point of Sale) capability throughout the store, while also introducing a price match option.

"This means that not only is the retailer proactively offering the consumer the opportunity to price check in-store, but that the purchase can be made immediately, without having to queue elsewhere in the store," said Windsor Holden, research director at Juniper Research.

However, Juniper also cautioned that while retailers were increasingly optimizing their sites for mobile phone handsets, only a small minority had done so for media tablets.

Other findings from the market study include:
  • Cyber Monday in 2013 saw retail sales via mobiles and tablets approach $400 million in the U.S. market alone.
  • For digital goods purchases, storefronts that implement direct carrier billing solutions can monetize younger demographics and unbanked users for the first time.