Contact
us

Another Mobile Christmas

Now that the dust has settled and the figures are clear, it is evident that mobile has yet again provided its worth for retailers in the Christmas period.

Whilst sales figures have increased as part of a broad trend, online sales growth has outstripped in-store sales by a significant margin. The following data from ONS shows that store sales figures are quickly being dwarfed by online sales with mobile leading the charge, a conclusion long predicted by the mobile marketing agencies. In fact the majority of retailer financial results now show mobile retail income as a separate line item, and with eMarketer estimating that mCommerce makes up around 15% of online sales in the UK, it is no surprise.

Mobile first retailers leading the way

The growth in online shopping has translated into strong results for high street retailers that have embraced digital commerce. Argos, part of the Home Retail Group, was buoyed by increased sales of tvs and tablets, and saw Mobile sales grow 75% on year-on-year basis, Mobile purchases now account for 20% of total sales. In addition, Shopdirect reported 64% growth in mobile sales, up 28% on a year-on-year basis and that mobile sales now account for 43% of all sales. The group also said that over half of all visits to the websites came from smartphones and tablets over Christmas, and expect that by 2015, mobile will be part of the customer journey for every transaction.

Grocery retailers also saw significant mobile sales with Tesco stating that more than a third of its online grocery orders were placed on a mobile device in the runup to Christmas. In addition, Marks & Spencer said orders from tablet computers had more than doubled, while sales via phones were up 80%. This activity continued through Christmas with John Lewis revealing that three-quarters of Christmas Day online traffic came from phones and tablet computers, making it the UK’s first ‘mobile Christmas’.

Mobile first services equal success

For those adept at making the most of mobile, Christmas has become an even better time of year. Argos’ recent performance has been helped by pioneering “click and collect” and making the online experience the most user friendly of any retailer, coming first in a European wide survey conducted by Forrester Research. According to research for mobile operator O2 by Conlumino, more than a third of shoppers use click and collect services, and use is expected to rise by 12% this year. John Lewis saw click and collect sales rise 60%, while Tesco said 70% of its online orders for fashion and homewares were collected in stores. Retailers are driving the trend with a range of new ideas, from Asda’s pick-up points or Amazon lockers spread across convenient points in cities and the rise of Collect Plus, which lets shoppers pick up items from thousands of local convenience stores.  Offering such services are so clearly aligned with the best performers this year that we expect the vast majority of retailers to implement similar services in 2014.

Tablets sales also driving profits

Whilst smartphones and tablets have become an important channel to purchase products and consume media, they are also an important revenue stream in their own right. Tablets now account for four of the ten most popular items sold in John Lewis. 200 million tablets were sold across the globe in 2013, startling considering the format was only really introduced in 2010. The market for tablets has already split between high and low specification products. The introduction of the Tesco Hudl tablet and the Aldi Lifetab gave consumers the option of a more affordable tablet, and greater opportunity for the retailers to sell more of their products through mobile channels. Any retailers not factoring in tablets this Christmas will lose out on an considerable amount of business.

Another vintage mobile year?

The impact of mobile commerce will only grow further as 4G becomes more widespread allowing for more immersive shopping experiences. The 4GEE Mobile Living Index, a report from EE, was based on its own network data covering 1.2m 4G users and an independent survey of 1,000 of such users by TNS. It found that 39% of 4GEE users planned to shop on a smartphone or tablet in Christmas 2013, more than double the 15% who did in 2012. The busiest times for this activity were early morning (8.30am) and late afternoon (5.30pm) as the daily commute was utilised for retail pursuits. EE suggested that retailers with quality mobile apps and websites optimised for mobile users were set to be big winners and we wholeheartedly agree.

Whatever happens this year, mobile will separate the best performing retailers from the pack and having a solid mobile strategy is more important than ever. For example, Argos and Shopdirect, two retailers who have implemented different approaches to being mobile first, but have achieved great successes over the past year  – Argos has managed to change its image of a high street stalwart into an easily accessible digital retailer, and Very.co.uk, one of Shopdirect’s brands, had turnover similar to Asos for 2013, with Asos being heralded as one of the great successes of the digital economy. For 2014, expect another vintage mobile year.

M&C Saatchi Performance is a performance marketing agency focused on driving measurable results for organisations in all industries. Feel free to get in touch with us about your new project.