By the SMG Mobile Team

In the UK, M-Commerce is growing quickly as an increasing number of UK shoppers are making purchases via their smartphones. In Q2 2011, 3.3% of e-commerce sales were made from mobile devices in comparison to only 0.4% at the beginning of 2010. Overall 8% of UK adults buy through their mobile phones, while 21% of them plan to do so in the near future according to the Econsultancy’s Internet Statistics Compendium.

That future potential of M-Commerce is where we have to focus our attention. With Christmas coming and M-Commerce growing, are we going to see a boom in sales on mobile devices?

In order to really understand what will make UK customers more likely to buy using their mobile phone, we first need to understand what M-commerce is nowadays, what trends are emerging in the space, and how it is impacting classic commerce and e-commerce model.

A strong M-Commerce 2011 year

Mobile Internet usage started to become commonplace in 2007 starting with basic searching and browsing but users widely started to purchase more and more applications on their phone in 2008. 2010 was the real beginning of M-Commerce, when it became frequent to use a tablet or a smartphone as a proper purchasing device. 2011 is now the year of innovation where mobile has an increasingly important role in our daily routines and is now vital to how we consume media on a daily basis.

Using IAB study “Consumers view on M-Commerce”, we saw a +10% increase in M-Commerce users in the UK. With 45 million mobile media users in the UK in 2010 and 51% of them using M-Commerce (22,9 million), the UK population has taken the lead on going mobile. Stronger, 2011 now counts 48,5 million mobile phone users in the country with more than 25+ million people using their device for M-Commerce (52% of total mobile users).

This is also pushed by the progress made in technology; particularly the implementation of NFC in devices (we still need an entire ecosystem to exist in order for consumers to fully embrace the technology - even if 74% of UK consumers see the technology as a good idea), the possibility to browse offline stores, and faster 3G networks, etc. Improved technology, changes in consumer behaviour and the superior handset quality (wider screen, long-life battery, multi-tasking...) have made it clear that the mobile shopping experience is improving.

Nearly all UK smartphone users are predicted to be future mobile shoppers, if they aren’t already. The encouraging evolution we’ve seen this year indicates that an increasing number of brands are investing in developing a well-designed and optimised mobile site based on a proper M-Commerce strategy. More importantly, mobile payment is becoming more convenient and enabling consumers to buy products whenever and wherever they want – a key reason why Commerce will continue to grow massively in 2012.

Merry Mobile Christmas

As we all know, Mobile shopping still represents a tiny fraction of purchases but this is accelerating every day. USA Today research shows that mobile has grown to a 9% share of online sales worldwide and this could rise during the Christmas period. Impressively, the growth in online sales is very much aligned to mobile sales indicating that M-Commerce will be bigger following the E-Commerce explosion.

Nowadays, the internet seems to be the most popular shopping destination for certain individuals (especially leading up to Christmas), in part due to the many available discounts. But, while finding competitive prices online, consumers have begun to realise that tablets and smartphones are platforms that facilitate added convenience. Moreover, touch-screens have enabled new experiences and M-Commerce has become more than just a way to find the lowest prices. It has potentially become a new and entertaining way to find a Christmas gift whist using features like zoom, 360 degree rotation, and streaming video.

“People aren’t really waiting anymore” said Claudia Lombana, shopping specialist at PayPal. Even if that statement can be applied to both an E-Commerce and an M-Commerce situation, Christmas should confirm this trend. Beyond simply refusing to wait anymore, many consumers are time poor and doing things whilst “on the move” may be their only option.

Even when people aren’t completing an online transaction via their phones, mobile still plays an important role in the purchase funnel. Many savvy shoppers tend to check and compare prices via their phones before completing a purchase in-store. This trend has become so significant that Amazon has even recently gone as far as offering customers a $5 incentive to scan barcodes in store and complete purchases via their mobile site during the lead-up to Christmas.

However, it doesn’t stop at Christmas shopping. Last year, certain retailers reported an average increase of 300% in online traffic during the Christmas weekend. This indicates that customers may well have been browsing for discounted products or potentially tracking orders. It would not be surprising if a new record high was achieved over the holiday period this year. The fact that Apple’s sales and independent research figures indicate that between 4 and 5 million iPads in the UK are likely to be turned on at some point around Boxing Day is promising indeed.

This may therefore be the first veritably Mobile Christmas. According to the UK Retail Gazette, £1.64 billion is expected to be spent during the Xmas period by UK consumers and more than 35% of them have admitted to planning on using their phones for some type of shopping. In fact, the same research has shown that 45% of M-Commerce and E-Commerce activity in Europe is driven by Britons!

...and if you still haven’t been convinced that M-Commerce has taken off in the lead-up to Christmas, Starbucks have announced this month that 1 in 4 of their transactions are now taking place via Mobile. A warming and refreshing stat indeed.