Technology | Media | Telecommunications

Friday, July 17, 2015

Social Media Players will Monetize Apps via eRetail Sales

Across the globe, eCommerce is about to enter the next phase of market development. This transition started back in 2013, when the value of mobile and online physical goods sales exceeded $1 trillion for the first time and last year exceeded $1.4 trillion.

Based upon the ongoing adoption of smartphones and media tablets, the momentum for growth comes from the rapidly evolving mobile applications sphere -- with the Chinese marketplace, in particular, experiencing stellar increases.

According to the latest worldwide market study by Juniper Research, global eRetail sales are expected to reach $1.7 trillion in 2015 -- that's up by more than 17 percent on the 2014 total.

While recent growth had been buoyed by factors such as more free public Wi-Fi access and 4G cellular network deployments, the next wave of eRetail growth activity will be enacted by social media companies that use their mobile software apps to enable direct sales to consumers.

Juniper observed that leading social media players -- such as Twitter, Facebook, Pinterest and Instagram -- had already announced plans to launch "buy now" buttons as the first key step in supporting direct retail sales from their mobile apps.

Juniper claims that these social media companies are also likely to enhance their online sales prospects through strategic retailer partnerships -- as an example, with Twitter already enabling users to link their accounts to Amazon.


Demand for In-Store and Online Integration

The research also uncovered that online retailers were increasingly seeking to reduce time-to-consumer by launching same-day home delivery, while local retailers now widely offered next-day in-store collection -- often charging a premium for this option.

However, the Juniper research analyst cautioned that all retailers need to deliver a consistency of message, branding and shopping experience across all delivery channels.

Moreover, integration between in-store and online is also critical if the retailers want to apply big data insights to help them maximize the extent to which they can identify a unique individual's omni-channel shopping habits.

"The key is to ensure that consumers are allowed to choose their own path to purchase, rather than have it effectively mandated by channel limitations," said Dr Windsor Holden, managing director at Juniper Research.

Other key findings from the market study include:

  • Smartphones will account for more than 40 percent of eRetail transactions by 2020.
  • While carrier billing should provide content providers with a key mechanism for monetizing digital content, its use for physical goods purchase is likely to be limited by comparatively higher share of revenues demanded by mobile network operators and billing platforms.