With Americans spending hours every day on their mobile devices, it’s no surprise that smartphones are driving growth for retail.
According to a new report from Business Insider Intelligence, e-commerce is growing nearly five times faster than physical store sales — propelled by a surge in spending through mobile phones. Although shoppers continue to spend more via desktop, mobile is expected to account for nearly 40% of e-commerce revenues in less than five years.
About 52% of time spent by adults on the internet is via smartphones, with desktops taking a 44% share and tablets nabbing 4% of people’s time. Even more compelling is the time spent on apps versus mobile search engines: Americans are using an average of 123 minutes each day on in-app browsing, versus the 13 minutes on the web, according to the study.
Meanwhile, as an increasing number of retailers test out innovative ways to draw consumers to their mobile apps — and tap into the momentum of this fast-growing channel — it appears the old-fashioned discount is still a key driver. A recent study from B2B research firm Clutch, and also cited in the BI report, found that about 65% of respondents chose e-commerce apps for markdowns and special offers. At the same time, the ability to compare products and prices was important for 54% of shoppers — emphasizing the importance of price transparency and a good deal. Those numbers may help explain why 70% of mobile purchases in the North American region are done via apps, compared with 30% through browsers on smartphones, per data from BI Intelligence.
Overall, the researchers expect the retail industry to hit $5.5 trillion by the end of the year, rising to as much as $6.4 billion in sales by 2023. While traditional brick-and-mortar still makes up the vast majority of revenues, e-commerce — particularly shopping through mobile phones — is forecasted to take an even bigger slice of the retail pie as it continues to grow at an exponential pace.
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