Spending on mobile devices set to top £53 billion a year by 2024
Consumers are set to spend £53.6 billion a year using their smartphones and tablets by 2024, compared with the £9.7 billion spent today, according to new research by Barclays.
However, the influence of mobile on spending is expected to more than double these figures to £18.4 billion today and £112 billion in 2024 respectively over the same period. By 2024, nearly half (42%) of all retail sales will involve a mobile device in some way or another, making mobile the fastest growing retail segment. This comes as consumers are targeted with location specific in-store marketing, initiatives such as augmented reality, and convenient click and collect services.
Richard Lowe, managing director and head of retail and wholesale at Barclays, said: “Online retail was once seen as a threat to bricks and mortar stores. However, retailers are starting to discover that mobile technology doesn’t just enable them to compete in the same space as pure play competitors but also provides an opportunity to increase sales through stores.”
The number of tablet users has doubled in each of the past two years, with almost half of adults now owning one, while smartphone penetration has rocketed since 2007 following the launch of the first iPhone. In 2009, 14% of consumers aged 16 or over owned a smartphone. By 2014 the number had more than quadrupled to 61% and by 2019 around three quarters of adults are predicted to own one.
Almost as many consumers use their mobile devices on the move as do while at home (75% versus 84%), so the accessibility of mobile internet when shopping on mobile devices has become a big issue for customers. Also, 47% of consumers cite signal problems as the number one issue with mobile in general, while 40% point to connections problems with accessing mobile internet once they have coverage.
Unsurprisingly then, when consumers were asked, 57% suggested that all shops should offer free Wi-Fi, with a further 42% saying they are always on the lookout for free Wi-Fi hotspots when out and about. Currently though, only 14% of retailers offer in-store Wi-Fi and only 7% more plan to invest in it in the future.
Moreover, less than 3% of retailers believe their business is at the cutting edge when it comes to being mobile ready and a further 70% said they did not currently offer a mobile website or a mobile app for consumers. Retailers claim their reluctance to invest is because they feel that rather than generating new sales, mobile has simply shifted sales around. They are also concerned that mobile adds substantially to the cost of doing business online.
Lowe added: “Getting consumers into stores is challenging enough, but once they are there it is important that retailers can offer the technology driven services that consumers now demand. Wi-Fi is a basic commodity but its very presence and the services retailers can deliver through it clearly has an important part to play in high-street sales.”
Despite much lower ownership rates, tablet owners were more than twice as likely to make a purchase using that device than smartphone owners were (43% versus 19%). With smartphone and tablet device ownership continually rising, it is no surprise that almost half (46%) of retailers claim that at least some of their sales are already generated through a mobile device.
Lowe continued: “Inevitably, practises such as ‘showrooming’ leads to some sales shifting online but, with almost three quarters of consumers using their mobile devices whilst out and about, ignoring this trend would be a missed opportunity. Ultimately, the easiest way to drive sales is to make the shopping process as simple as possible, and retailers must cater for the mobile consumer in order to remain relevant; engaging with them through a platform that they have become increasingly reliant on.”
