Mobile commerce broke numerous records during the 2012 holiday shopping season and is well positioned for a repeat performance this year, thanks to the growing number of consumers who own a smartphone as well as increasingly sophisticated mobile retail strategies.

On Black Friday alone last year, mobile accounted for 16 percent of online sales. This year, the number could exceed 20 percent and significantly higher for individual retailers, such as those in the flash sales category where mobile sales already top 50 percent on certain days.

“Right now, we are seeing 17.7 percent in terms of percent of transactions coming from the mobile device,” said Dave Haucke a strategist at IBM Enterprise Marketing, Armonk, NY. “We believe that not only are we going to break records again this holiday season but we could crack 20 percent.

“If you look at the trajectory of mobile commerce over the last two years, it has been growing something like 30 percent every year,” he said. “If we grow another 30 percent that puts us over 20 percent of online sales.

“Mobile is going to continue to grow this holiday season in terms of the transaction channel. That is good news, but it also means that it raises the stakes in terms of that customer experience because we are starting to see an increase in bounce rates and a decrease in time on site and pages visits.”

Rightsizing menus
As consumers become more comfortable with their smartphones, their expectations grow and they become less tolerant of bad experiences.

This means that not only do retailers have to have a mobile site and application, but they need to make sure that the experience is truly optimized for mobile from start to finish.

While not all retailers have mobile friendly sites or apps, many of the bigger names – such as Target, Walmart and Macy’s – do, and the number is growing. For those that already have these strategies in place, they are looking at ways to enhance the user experience.

For example, some retailers are insuring that drop down menus are big enough for fingers to use on a mobile device.

Additionally, the checkout process is being streamlined so that mobile users can easily complete a purchase without having to fill in multiple screens. For a growing number of retailers, this means adding one-click checkout options.

Omni-channel experiences
Retailers also need to deliver a better personalized experience, not only on mobile but across devices.

Since users often initiate research for a product on their smartphones when they have a few minutes to spare but then complete the purchase later on from their tablet or laptop, retailers need to be able to connect mobile activity with tablet or laptop activity. This way, if users are searching for red dresses on mobile, the retailer can serve them relevant options once the shopping moves over to a tablet.

“The biggest change this year compared to last year is that I think retailers are going to be doing a better job of tracking consumers when they go from device to device,” Mr. Haucke said.

“In the past, one of the key gaps was that they could see what shoppers were doing on the mobile site, but when they switched over to desktop, retailers couldn’t connect the dots,” he said. “Many retailers have overcome that this year and will deliver a consistent experience from one to the other.”

Driving in-store sales
A recent survey of retailers conducted by Baynote and the e-tailing group found that 55 percent of retailers expect mobile transactions to account for a significant part of holiday revenue, while one in three retailers predict mobile will drive more than 10 percent of total holiday revenue.

Retailers also expect mobile to drive renewed store interest for omni-channel merchants, with 38 percent saying mobile will drive incremental in-store sales.

Additionally, mobile is helping to drive the trend toward earlier promotions as users begin their product research via their smartphones when they have a few minutes to spare. The Baynote report found that 30 percent of retailers will begin promotions prior to Oct. 1, while over 40 percent wait until early November.

“We know the mobile customer likes to shop and discover more than they like to buy on that device,” said Dan Darnell, vice president of marketing and product at Baynote, San Jose, CA.

“As a result, targeted mobile offers must be designed and delivered in such a way that they entice the shopper to act now and convert for maximum results,” he said.

“Imagery will be important, the mobile purchasing interface will be critical and, of course, the time at which the offer is received may all impact effectiveness.”

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