The year 2015 has become a time when payment, commerce and retail executives are focused on all things digital — a time when the terms digital media, mobile and omnichannel are being inserted into nearly every company’s quarterly update to shareholders and analysts.
Whether it be the banks, the retailers or those leading the mobile commerce charge, companies are quickly realizing that if they aren’t connecting their strategies to the digitally-minded, savvy consumers, then they’ve perhaps already fallen behind in the race to remain relevant. For eCommerce and retail, these trends are particularly important for understanding how to tap into current and longstanding revenue opportunities.
To better understand the trends that propelled from 2014 to 2015 — those that paved way for innovations that shaped the way consumers interact with digital platforms — comScore compiled research on the trends in its report “U.S. Digital Future In Focus 2015” to show how the digital media landscape has shifted, who is responsible for that shift and what that shift means for years to come.
“The digital world achieved enormous progress in 2014 as several transformative changes shaped how Americans interacted with technology and consumed media. Perhaps more so than at any other time in recent memory, changes were not merely incremental but rather seemed to represent key inflection points in the evolution of various markets and behaviors,” comScore wrote in its summary of the findings. “We saw platforms collide in ways that upended existing markets, reconfigured the economics of various industries, and suggested that we are embarking on a new era of digital that will look markedly different from its predecessor.”
If retailers want to keep up, now is the time to tune in.
To better dissect comScore’s research, we’ve taken apart the top stats as it relates to how the digital ecosystem trends may be shaping retail and eCommerce.
While mobile commerce grew 28 percent from the year prior — a notable figure — to $31.6 billion, it’s still only a sliver of what digital retail figures are overall. Research from comScore indicates that the retail digital commerce figures for 2014 grew 14 percent to $268.5 billion from the year prior. While that’s a notable jump, desktop-based eCommerce also jumped 13 percent to $236.9 billion.
“Although mobile commerce is growing at more than twice the rate of desktop eCommerce, there is still a significant mobile monetization gap,” the report said.
With the launch of the iPhone 6 and 6 Plus, and Samsung Galaxy S5 that continue to provide consumers with larger screens, research has shown that more consumers are apt to using their phone for browsing, and even in some cases for buying. But with the gap still existing with retailers who don’t have a fully mobile optimized site, the numbers may continue to show that consumers prefer to browse on mobile, but buy on desktop simply because the experience has less friction points.
There’s no doubt consumers are addicted to their screens. And while the staggering growth of digital media consumption over the past four years has skyrocketed, it still hasn’t impacted digital media consumption across desktops.
The report from comScore indicated that desktop media consumption has still grown 37 percent in the same four-year period, indicating, as highlighted in the report, that “the digital media pie continues to get bigger and Americans engage with screens during more occasions throughout the day than ever before.”
So what does this mean for retail and eCommerce? That now, more than ever, multi-channel approaches are needed. The research shows that more than 75 percent of adults are using desktop and mobile to search the Internet, and that gives retailers a larger chance to implement omnichannel solutions that can target the shopper who may be turning to both mobile and desktop for their shopping experience. More and more shoppers — at places like Target, for example — are actually turning toward mobile apps and mobile sites to shop while in the store.
So just where is the digital retail shift occurring? Overall, digital commerce dollars across retail saw a 14 percent increase, year over year. In its research, comScore also broke down digital commerce retail dollar growth by category to indicate just what types of shoppers are more likely to go digital. Here’s what the research shows on a year-over-year growth basis:
From looking at comScore’s media metric multi-platform breakdown by age, it’s no surprise that the age bracket of 18-34 is both the most digitally savvy and the most mobile-friendly audience.
The figures gathered in December 2014, when compared with those from December 2013, show that there was just a 3 percent increase (from 18-21 percent) of those in the 18-34 age range that are mobile-only consumers. Multi-platform figures rose from 67-74 percent in that time and desktop only dropped from 15 percent to 5 percent in that time. As the ages went up, the desktop only share was higher but still dropping each year and the mobile only was much slimmer. (5-6 percent for 35-55 and 3-6 percent for 55 and older).
While mobile-only is shifting upward, there’s still nearly an even split when it comes to the share of time spent when looking at retail figures. The report from comScore indicates that 51 percent spend time on desktop, versus the 49 percent that turn to mobile.
Mobile accounts for more and more digital retail engagement, but when it comes to converting that browsing into buying, there’s still a significant gap. The research from comScore indicated that mobile makes up for 60 percent of digital retail engagement, but only 13 percent of dollars spent.
“As friction gets removed from the mobile purchase process, gains in sales can be expected to accelerate, the report concluded, highlighting some of the factors mentioned above. Larger screens, better Internet connection speeds, better apps and better mobile websites. All of these must be better optimized for mobile to convert more sales,” comScore reported.
Mobile commerce is closing the gap, but there’s still a long way to go.
“Enough of the market enablers have aligned to accelerate m-commerce growth in 2015, and while it is expected to surge past 15 percent of digital commerce before the end of the year, it will still be far from realizing its full potential,” according to the research.
The research from comScore shows that the smartphone penetration rate has increased roughly 10 percentage points, hitting 75 percent penetration at the end of last year of the total mobile user base. That rate is expected to grow at an annual rate of 16 percent.
So why does that matter for retail? When it comes to those multi-channel approaches, retailers are going to have to adapt to the growing share of smartphone users who are looking to do more with their smartphones. As the research figures indicate, there’s more and more consumers turning to mobile and more and more consumers who are turning to both to optimize their retail and eCommerce experiences. What 2014 has shown is that retailers must adapt to the mobile-first customers and those who expect more out of their digital experience.
And let’s not forget about the “buy button” transformation that’s re-inventing the concept of social commerce. As comScore points out, Pinterest has started attracting attention from its promoted Pin native ads, which could be a potential market for retail to get into. That has the potential to open up a whole new realm of digital commerce.
“Reports of integrating a ‘buy button’ suggest Pinterest is looking closely at ways to more directly tie exposure to purchase behavior and demonstrate the effectiveness of these ads,” comScore’s research concluded. “Other social networks are also rumored to be working on ‘buy buttons,’ suggesting this is a theme to watch closely in 2015 as major companies look to diversify from predominantly ad-based revenue streams to those more closely associated with commerce.”
Surely, as we’ve learned just from the first few months of 2015, this will likely be the year for retailers to reshape and redefine what their digital and mobile commerce strategies truly are. Who’s going to come out on top in mobile commerce and who’s going to fall behind?
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