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Smartphone share of ecommerce to stall out while tablets explode: Forrester

Tablets will be the bigger ecommerce driver going forward, with smartphones stalling out at around an 11 percent share in 2016, according to a new report from Forrester Research.

The Forrester report, “US Mobile Phone and Tablet Forecast, 2013 to 2018,” estimates that smartphone-enabled retail sales will total $26 billion this year, or 9 percent of total ecommerce sales. By 2016, smartphone retail sales will reach $37 billion, or 11 percent of total ecommerce sales, with smartphone retail sales remaining at 11 percent of total ecommerce sales in 2017 and 2018.

“Phone screens are smaller, so I don’t see it changing,” said Sucharita Mulpuru-Kodali, vice president and principal analyst at Forrester Research, Cambridge, MA.

“There is some focus on tablets, but not huge as no one knows what’s the right approach,” she said. “Desktop seems to be sufficient.”

Tablet commerce
Tablet-enabled sales for retail and daily deals sites are expected to be $61 billion this year, or 21 percent of total ecommerce sales. The overall volume and percentage will continue to grow during the forecast period, with tablets expected to account for $176 billion in sales by 2018, or 42 percent of total ecommerce sales.

The report estimates that $38 billion of total mobile commerce transactions – including retail as well as travel and food services – will happen on smartphones this year while $76 billion will take place on tablets, giving mobile a 29 percent share of ecommerce sales this year. By 2018, U.S. smartphone sales will reach $74 billion while tablet sales will hit $219 billion.

Forrester’s overall numbers for mobile commerce include travel and food services, where mobile transactions play a big role.

In 2014, smartphone sales for travel and food services are expected to reach $12 billion. By 2018, that number is expected to hit $28 billion.

Travel and food services sales on tablets will hit $16 billion this year and $43 billion by 2018.

Mobile investments
In a separate forecast focused on ecommerce, Forrester predicts that United States ecommerce sales will total $414 billion by 2018. While ecommece is approximately 9 percent of all retail sales, 69 percent of online consumers purchase regularly online with these consumers typically spending about 16 percent of their total budget in the Web channel.

The biggest categories for mobile phone retail purchases include media products, apparel and consumer electronics.

In recognition of the increasingly important role that mobile in playing in ecommerce transactions, retailers for the first time this year have made mobile phone investments their top priority, according to a recent study.

The biggest drivers of mobile commerce include rapid device adoption, growing numbers of consumers using their devices for purchasing, improved mobile and tablet experiences.

However, challenges still remain.

For example, conversion rates on mobile, smartphones in particular, continue to be low. Per Forrester, smartphones often have conversion rates that are one-fifth those of desktops.

Part of the problem is that most retailers have taken their desktop experiences and shrunk it down for a smartphone screen.

Forrester expects the best and most creative companies to create unique solutions for smartphones and tablets that could gain larger adoption.

For retailers to continue to see rewards from smartphones and tablets, they need to support cross-device use by enabling customers to email links of pages or shopping baskets to themselves, for example. By doing so, they acknowledge the shortcomings of mobile phones and tablets for certain types of transactions and help reduce friction for shoppers prone to cross-device purchasing.

Retailers should also look for ways to solve problems that take advantage of the immediate, time-sensitive needs that smartphones can help address.

Additionally, retailers should recognize that consumers are increasingly likely to use mobile phones in stores and looks for ways to address customer needs with innovative solutions.

“Retailers have a number of ‘mobile moments’ that are particularly well suited to stores: Finding out-of stock products, paying for products when a queue is long, or retrieving a coupon or loyalty card number for an item that a shopper may have forgotten at home,” Ms. Mulpuru-Kodali said in the report. “Retailers that effectively address customer needs with innovative solutions are likely to see greater mobile phone usage and transaction volume as a result.”

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