Research says that by the year 2018, 45% of online shoppers would be using mobile phones for shopping and the fact that it is carried by them all the time makes it a lucrative medium to reach out to. The year 2018 would mark the 10 year anniversary for the Apple App Store and for the Android Market, which says a lot about how far they have come. Studies suggest that the total consumer spending among all mobile app stores would reach $110 billion in 2018 which is a 30% rise since last year.
A recent research from Penguin Apps Builder reveals that the number of people creating online shopping or value online shopping apps in 2017 has gone up by 92% as compared to 2016. Another interesting thing to note here is that the number of women making these apps have risen by a solid 65% too which shows that the trend has now crossed the gender barrier to shed the tag of being a male dominated industry. The trend is going to continue in the coming year and it is expected that the number of app makers in the category would grow by another 100%!
The estimated online retail sales all over the world which stood at USD 2.3 trillion, 10.1% of the total retail sales in the year 2017 is estimated to reach USD 4.5 trillion by 2021 and constitute 16% of the total retail sales. For the year 2017, mobile commerce would account for more than 70% of ecommerce sales in both China and the India, and 59.0% in South Korea.
Nearly one in four online shoppers shop online at least once a week which indicates the market and the brands need to move ahead with the times and give the customers what they are looking for, an online ecommerce portal for their shopping needs. Survey findings indicate that 35% of the online shoppers state that their mobile or smart phones would become their main tool for shopping while 59% are looking for real time offers and deals that are tailor made or personalized as per their interests and buying behavior.
What does this tell you, as a layman? A whole lot more people are interested in online shopping or value shopping online this year as compared to last year! But is that all that there is to this? What does this say about the consumer needs or demands? What does it say about the consumer psyche? What does it say about the options for online shopping available to the consumers? What does it say about the quality of service and the change in it as compared to last year? What does it say about the number of players in the world of online shopping? Turns out – quite a lot!
As a player in the mobile app development world, it is important that you learn to ask the right questions and at the right time, so that the answers you get can help you define the future trajectory of your app.
Mobile or Smart Phone Penetration
Mobile devices have established themselves as a key platform for digital content and communications, and today they are rapidly evolving as chosen platform in the retail and commerce domain. It is expected that by the year 2020, the volume of smartphone sales would reach a total of 2.05 billion. As more and more powerful smartphones with larger screens are being adopted, the entire m-commerce experience is only getting progressively enhanced. It is as a response to this impressive development that a large number of retailers are optimizing their sites for mobile shopping. The new age smartphone is equipped to provide a holistic shopping experience that supports everything from product search and discovery, to drawing comparisons between chosen options, finding recommendations & reviews for the coveted product, and finally payment.
It is further predicted that the mobile payments for online goods and services would experience a strong growth as the 452.78 million global users in 2014 would are estimated to reach 2.07 billion in 2019. Also, in terms of transaction value, m-commerce is rapidly becoming the largest m-payment segment expected to grow from $50.92 billion in 2014 to $693.35 billion by 2019.
80% of the shoppers today use a mobile phone for the purpose of finding recommendations, looking up product reviews, make comparisons across criteria between chosen options, or to look for alternative store locations. This trend has replaced the past practice of visiting the physical stores for initial research and recommendations for an imminent buy. However, it is interesting to note that it is only about 40% of the retailers who are currently engaging with their customers by way of any kind of a loyalty app.
Significant Proponents Of Online Shopping
Today, there might be an erratic concern about sharing personal data over any mobile app, but recent research indicates that by the year 2026, consumers would look forward to and demand a high level of convenience and personalization while interacting with the retailers and brands and would make peace with the fact that it would be possible only through sharing of personal data.
88% of the consumers in a survey accepted that they would prefer to shop with retailers who would have the ability to deliver personalized and connected cross-channel experiences. On the other side of the spectrum, 94% of the companies have attributed higher engagement and conversion rates to their commitment towards an evolved customer experience.
This is in a scenario when it has been established through research that nearly three fourth (74%) of the consumers get disappointed with online portals when the content including offers, ads, or promotions are appearing on their screens that are not aligned with their interests.
Need For Personalization
These data clearly indicate that the trend of personalization may be exploited as an extremely effective tool for proliferation of business and for retaining consumers. This desire to have a personalized approach goes deeper than we know. Our parents’ generation and even the millennials remember visiting the “Mom & Pop” styled stores where they’d recognize the owners and staff, and be acknowledged as they made their purchases, get a recommendation from the shop-owner who would remember their frequent purchases and sometimes suggest products based on offers, deals and their interests. It is this relationship and recommendation that the consumer is craving for in the online forum and is looking desperately to sate this aspect of service. The impersonal aspect of online shopping needs to change and give way to an era of personalized service for the new age online shopper.
As opposed to this, when the customers are confronted with a barrage of generic ads with a “one size fits all” philosophy, it only leads to further frustration. This has been seen to finally lead to the customers giving up on that brand and even deleting the app from their mobiles. When the content dispersed by the brand through push notifications, recommendations or any other means is curated based on the personalized interests of the consumers, the image for the brand gains quite a few brownie points and the customers are more inclined to return to the app and even end up buying more. 59% of the consumers have mentioned that their shopping decisions are greatly influenced by the personalized information they might have received from the brand. 77% of the consumers have even accepted to paying more, recommending, or chosen a brand that has been providing them with a personalized service or experience. The nagging concern of security that most of the consumers had about providing any personal data has also mellowed down as the consumers are willingly giving it up in exchange for a personalized experience with trusted brands. In spite of recognizing the impact that personalization has on the business, it is less than 10% of tier I retailers who believe that they are highly effective at personalization. Research indicates that the smart personalization engines with the capability to identify customer intent would be able to help the digital businesses up their profits by as much as 15%. Some of the biggest challenges confronted by the digital retailers are garnering a timely insight (40%), having optimum data (39%), and inaccurate data (38%).
Online Reviews & Recommendations
One big factor in influencing an online purchase is definitely the online reviews published on various portals. We are a part of a digital generation which has come to have a parallel digital society that they are a part of. It is for this reason that 88% of the consumers have come to trust online reviews as much as personal recommendations. The buying behavior has incorporated the habit of consulting the online reviews among 68% of the buyers who create a shortlist based on the reviews they read. It is this transformation in the online buying behavior that has influenced how the online retailers are addressing their service and products on offer. The customers’ grievance redressal has garnered importance for the brand and the online customer has gained confidence, trust, and power in this evolving digital ecosystem. It takes just three negative reviews for most of the buyers to decide not to buy your product or service. Further research has established that four or more negative pieces written about your brand or the product may convert into a loss of 70% of the potential customers.
Delivery Or Shipping
The delivery dates, charges, and other associated factors are extremely important to the online shopper as delivery of the product finally gives them the gratification they crave for the most. Surveys indicate that 48% of the online shoppers give a lot of importance to the guaranteed delivery dates and adherence to them at the time of checking out online. There is however a chunk of consumers, 31% to be exact who look forward to some kind of expedited shipping options while checking out online that would get them the orders earlier than standard delivery times. The shipping charges quoted for delivery act as deterrent for 85% of Amazon customers who hesitate to complete their purchase due to them whereas slow shipping manages to deter 60% of the prime customers and 41% of non-Prime customers. Delving deeper into the consumer behavior it may be stated safely that one of the most sought after incentives for an online shopper is free shipping or no delivery charges.
The Influence Of Social Media
Another proponent in the trend of online shopping among mobile users is the influence of the social media. Social media has managed to infiltrate every aspect of our life and online shopping is no exception. The modern social group or society that we hang out with consists majorly on the digital platform, hence a lot of our shopping decisions, recommendations, purchases etc. all come from this dynamic source. Among the online shoppers about 34% mentioned that various channels of social media influence their buying decision while about 23% of online shoppers have actually bought at least one product on the social media network. The extent of influence of each social media is different though depending on the target consumers and the user base that the media caters to. For example the referrals from Instagram tend to spend the longest time on eCommerce portals where the average session stands at 192 seconds which is almost twice that of facebook and triple that of Pinterest. But Facebook has the highest conversion rate for all social media eCommerce traffic at 1.85%. Members of the digital social media are more diversely connected and 71% of the consumers who have had a good social media service experience with any brand are likely to recommend the brand to their network. Social media platforms have in fact exerted a pressure to respond and address the customers’ issues as survey findings indicate that 78% of the customers who express their dissatisfaction and reach out to the brand on Twitter expect a response in less than an hour.
While these are the major proponents that define the shape of the future of online shopping through mobile devices in the global market, the phenomenon of online shopping is perpetually evolving and asks for constant innovation. The principle of selling and buying take on a new form as the parameters change and the marketplace finds its new face with mobile devices gaining popularity as a preferred tool for online shopping.