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Mobile is a bright spot for retailers this holiday season

While reports are mixed about how strong the holiday sales have been overall so far this year, one thing is for certain – mobile is a bright spot for retailers this holiday season.

Holiday sales got off to a brisk start over the Thanksgiving holiday weekend but some reports suggest that store traffic and sales have weakened since, with retailers introducing more aggressive promotions to drive shoppers into stores in a move that will impact their bottom lines. At the same time there are numerous reports from retailers that mobile sales are up significantly.

“This was certainly the year that mobile broke out,” said Steve Davis, president of flash sales site Rue La La, Boston. “The results have been absolutely incredible.

“Last January, mobile was 2 percent of our sales and this holiday season, one out of three sales is coming via mobile,” he said. “Every month I think we’ve hit a high in terms of mobile growth and the next month it keeps growing.”

“Last week was our strongest week to date for sales and there is no question that mobile is a huge bright spot and a critical factor in driving the growth. It takes the prize as being the largest driver of our growth this year.”

Traffic down, sales up
Rue La La saw an almost 200 percent increase in mobile sales on Cyber Monday compared with a year ago.

Year to date, mobile sales for Rue La La have grown more than 250 percent. 

Other retailers are also reporting significant increases in mobile. 

PayPal said it saw a 397 percent increase in the number of consumers shopping via PayPal Mobile on Cyber Monday 2011 compared to 2010.

On Black Friday, JoS. A. Bank’s mobile checkout saw an increase of mor than 3,000 percent compared to its previous daily average.

“Mobile shopping could very well be saving retailers’ bottom line this season,” said Diane Buzzeo, CEO and founder of Ability Commerce.  “We all know how popular online shopping has become and the continued advancement of mobile technologies, including tablet PCs, has made the process even easier for customers.

“They’re essentially making purchases anywhere, at any time,” she said. ” So far this holiday our clients have nearly unanimously seen dramatic increases in site visits, orders and revenue coming from mobile devices.”

Overall retail sales were weak early in December, with ShopperTrak reporting that retail sales increased just 0.2 percent for the week ending December 3, 2011 compared to the same week in December 2010.

However, sales have picked up since with the National Retail Federation recently revising its holiday forecast, saying it now expects sales to rise 3.8 percent this year instead of the 2.8 percent predicted earlier.

However, this figure is still lower than the 5.2 percent the retail industry saw last year.

One of the more interesting trends is that store traffic is down this year, with the biggest factor in traffic shrink and improving sales being the growth in consumers accessing the Internet via desktop computers, smartphones and tablets, according to ShopperTrak.

As Christmas approaches, mobile will continue to play a strong role as shoppers look to mobile to help meet their last-minute shopping needs. 

“Mobile promotions are a newer form of marketing but we do expect them to increase as we get closer to the holiday,” Ability Commerce’s Ms Buzzeo said. “As we know, shoppers are often spontaneous buyers.

“With shoppers carrying their smart phones and iPads nearly all the times, mobile promotions provide the ability to reach shoppers nearly instantaneously,” she said. “This may prove crucial in reaching last-minute shoppers.”

The iPad factor
The iPad has been a significant part of the mobile success story this year as well as Apple devices more broadly.

According to a recent survey from Zmags, 87 percent of tablet owners are holiday shopping using their tablets and will spend an average of $325. Tablets owners cite convenience and ease of use as reasons why they like to shop via the devices.

Rue La La is also seeing strong shopping activity via tablets, specifically the iPad.

“With one in three sales taking place via mobile, 40 to 50 percent of that is iPad specifically,” Mr. Davis said. “Of the other 50 to 60 percent that is mobile, Apple devices dominate and account for about 90 percent.”

Another trend that Rue La La is seeing is the strength of mobile apps relative to the mobile Web.

“We have had tremendous growth and share increase for our mobile apps,” Mr. Davis said. “Apps are clearly front and center for consumers – they love downloading them and they love the experience they provide.”

Rue La La launched an enhanced mobile app for the iPhone, iPad and Android right before the holiday shopping season began with a key functionality the ability to let users see what other members are buying in real-time.

To take advantage of consumers’ last-minute shopping needs, Rue La La has extended the time when a shopper can place an order and receive it in time for Christmas.

“Extending the shopping hours is really a big driver of mobile sales,” Mr. Davis said. “People are really time crunched.

“The app has taken the level of engagement up significantly with the amount of time spent on our mobile apps going up tremendously as a result,” he said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York