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Retail in 2020

This year’s Thanksgiving and Black Friday data from IBM shows a continuing pattern of growth for mobile devices. As the graph below shows, in the five years since 2010 mobile devices grew from 5% of the online shopping traffic to 50%.  Traditional computing (desktop and laptop) made up the difference.

Screen Shot 2014-12-01 at 10.34.30 AM

The graph also shows that sales value via mobile devices crossed over 25% of online spending. The fact that mobile shopping is not equal to mobile spending is due to the convenience factor of mobile. It’s more likely that users will spend idle time scanning for bargains or tracking down ideas from friends but wait until they are at home to make the final purchase decisions in front of a computer.

The transition to spending directly from a device is a slower process, but that process was also one that online had to undertake as buyers became comfortable with online commerce. When it comes to payment, buyers are understandably more cautious.

This does not change the prediction made last year that “the transition to post-PC consumption will also be practically completed by 2020”. That leaves six years for mobile saturation and a total transition time of one decade.

At that point I expect 90% of browsing and perhaps 75% of spending to be happening on devices. Some of this will undoubtedly be enabled by biometric authentication as shown by Apple Pay. Trust and ease of use in this technology will undoubtedly accelerate the transition making mobile payments more comfortable and secure than on the legacy computer.

What is less predictable is how much those devices will also be used to transact payments for the physical retail stores. In some scenarios it’s possible that by 2020 a majority of all shopping will be enabled by devices.[1] That would subjugate the retail segment to the power politics of mobile platforms.

It is interesting therefore to note the mix between the platforms in the graphs above.

Notes:
  1. There is also the matter of in-store discovery and advertising via NFC and bluetooth i.e. iBeacon []
  • Jared Porter

    I bet the iOS share of online purchasing increases next year because of Increased ApplePay familiarity. The fingerprintID scanner on the newest ipads and the iPhone 6 facilitates safer, more convenient purchasing/ordering routines, obviating the necessity to finger-type in billing addresses and credit card numbers, expiration dates, etc. it’s safer not to give merchants and the open internet your credit card numbers.

  • Walt French

    Based on my experience this weekend, by the time mobile becomes a significant part of online, online will not be much different from brick & mortar.

    I looked for a wifi iPad Air2 with 64GB of memory. Various stores touted direct discounts, gift cards or rebates, from $50 to $140 savings vs the normal price. But despite visiting multiple stores multiple times, items became “unavailable online” AFTER I’d clicked on the BUY button, once even AFTER I entered the shipping address.

    I’d like to believe that the device was unexpectedly in demand, but today (Monday), everything is back in stock—at the regular price. The clear implication is that stores NEVER intended to have enough of these teaser deals, and hoped, as they do in physical stores, to keep my interest once I was in the store.

    How anybody expects that online is a mystery. That they expect it on mobile is laughable.

    I saw a news article that several physical stores vowed they’d match online in convenience, availability and pricing. I didn’t try to brave the crowds at 6AM, but I think indeed, e-tailers managed to throw away all of consumers’ burgeoning expectations that they’d offer clean, simple shopping with honest prices.

    • absolut

      perfect example of how online retail became a commodity business – in Buffet’s words “everybody at the parade standing on their tows”. so they’re stooping to the level of tricks, which will work once, but totally dilutes the meaning of the Black Friday in the long run. classic MBA thinking vs long term. I bet it wouldn’t happen in Apple Store.

    • Sid

      On the other hand, I woke up at 6am on Black Friday, picked up my iPhone with bleary eyes, somehow ended up on Best buy website, surprised to see a $100 discount still available on a 64gb iPad Air 2 immediately hit the “Buy” button, and voila, Safari prefills the entire purchase form, and my credit card saved on Safari immediately finished the transaction. All in a matter of less than 10 seconds.

      A minute later, I’m lying in my bed contemplating what just happened! Could I have done this even couple years back? I wouldn’t have gotten up to get my wallet, and perhaps would have missed the deal.

      I also agree with you Walt, as I had the same thought as you did. Why in the world would Best Buy offer such discount on their website? Browsing a website is so different than going to a store and ending up spending hundreds of unnecessary dollars on stuff you never intended to buy. Perhaps it’s got to do with moving a portion of fixed inventory that Apple requires all partners to purchase at a minimum. It’s likely counted as the cost of owning the mindshare on the crucial day.

      Nevertheless, I am still surprised with the speed of transaction capability that mobile devices are starting to offer to us all.

      (Posting from my new iPad Air 2, Gold)

      • Walt French

        I did see the gold ones listed as available but my wife had just said “no” to white & gold, making my choice very specific.