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Mobile commerce is taking center stage

illustration of a person standing next to a large monitor with arrows signifying the m-commerce process

No matter how you slice it, mobile commerce is growing. It’s being driven by an increasingly on-the-go and multi-tasking consumer who wants convenience. Also known as mobile shopping, m-commerce is the process of buying and selling items through a smartphone or tablet.¹ 

Mobile retail ecommerce sales are a subset of retail ecommerce sales — a small but fast-growing portion of the giant multi-trillion-dollar volumes of U.S. retail sales annually. 

In 2021, retail m-commerce sales reached $359.32 billion in 2021, an increase of 15.2% over 2020, according to estimates published in May 2021 by eMarketer. By 2025, retail m-commerce sales (on mobile devices) are expected to more than double, reaching $728.28 billion and accounting for 44.2% of retail ecommerce sales in the U.S.²

The estimated market share of m-commerce as a percentage of total U.S. retail ecommerce sales varies. Statista reported that m-commerce is already a whopping 72% of all U.S. ecommerce sales, while eMarketer calculated a more modest 44%.³

Despite ubiquitous smartphone usage, conversion rates for mobile are still lower than desktop. This is due to clunky user interfaces and ecommerce checkouts that aren’t optimized for mobile. U.S. online shoppers tend to place orders desktop more often than they do on mobile devices. According to Stastista, 3.7% of ecommerce website visits via a desktop computer were converted into purchases, versus 3.3% on tablets, followed by 2.2% for smartphones during the third quarter 2021.⁴

Blurring channels and O2O retail

What starts on mobile may not necessarily stay on mobile. The smartphone plays a key role in hybrid shopping experiences, such as BOPIS, BORIS, and other online-to-offline retail journeys. This includes ordering online from your smartphone and checking in for curbside pick-up on the retailer’s app when you pull up to the store. Or scanning a  QR code in the store to learn more about a product, or order an item online that’s currently sold out. 

Social commerce is another growing mobile shopping arena that’s inextricably linked to m-commerce. Some 49% of brands plan to increase their investment in social commerce in 2022, according to the Shopify eCommerce Market Credibility Study, a commissioned survey conducted by Forrester Consulting on behalf of Shopify in 2021.⁵ 

Social commerce features such as product tagging, in-app checkout, and livestreaming events make staying within a social media app to shop a win-win for consumers and merchants alike. For instance, brands can integrate their product catalogs directly into the platform through an API, and overlay products on livestreams. 

The apps have it

Mobile payment apps are the lifeblood of m-commerce, whether specific to a retailer or more aggregated retail such as Shopify’s Shop app, where customers can browse products across a range of brands, see recommendations, and speed through the checkout process.⁶

Rewards and cash-back apps are another category of mobile commerce that can complement established mobile payment apps such as PayPal, Google Pay, and Apple Pay, among others. Buy Now, Pay Later shopping apps like Klarna and AfterPay are also increasingly popular as consumers take advantage of deferred payment plans to afford higher-value items.⁷ 

It’s no surprise that mobile shopping apps tend to have a higher conversion rate than ecommerce websites on mobile browsers. For both apps and websites, niche providers and app developers are making it easier to offer m-commerce. Mobile-friendly ecommerce apps that help brands and retailers build their ecommerce websites—several thousand in the Shopify store alone—enhance mobile functionality and entice the consumer to purchase with the click of a button.

While small screens can impede the shopping experience, more digital storefronts are enabling “responsive” features to adjust the presentation of content to the device screen size, and offer shoppers fast, easy scrolling without having to wade through a site map.⁸

Mcommerce gets smarter

Advances in technologies such as AI and the speed and connectivity of 5G cellular networks are adding to the power of marketing and m-commerce strategies, helping to boost conversion rates and average order value.

Customer conversion, retention, and marketing campaigns are also using AI to make intelligent product recommendations, recover abandoned carts and send push notifications (that replace or supplement retargeting ads and other campaigns) with automated messages about sales events, back-in-stock announcements, and the like. 

Lastly, artificial intelligence is fueling customer service-related features like digital live chat and smart chatbots which are gaining use. Research by Invesp found that retail ecommerce has the greatest customer acceptance of chatbots, with 34% of online retail customers accepting AI chatbots, over other major industries like healthcare and banking.⁹

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