Business Trends

E-commerce Evolution — Element 1: The Internet and Mobile Devices

File Type: Report, Free Content
Release Date: July 2016
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man on his Ipad and a laptop

(Originally posted March 2014, updated July 2016)

The retail conversation has moved beyond brick-and-mortar versus online sales. No matter where they make a purchase, many people now get their first impression of a retailer from its Internet presence. According to Google, “the new store window is digital,” meaning that a retailer’s online presence is becoming increasingly vital to its success.

As online sales continue to grow, the platform on which those sales take place is slowly migrating from desktop and laptop computers (“traditional” e-commerce) to mobile devices such as tablets and smartphones (sometimes referred to as m-commerce). Those mobile devices are contributing to overall retail sales growth in two ways: first as sales vehicles, enabling consumers to make purchases on their smartphones and tablets; and second, as shopping research tools. The situation is further complicated by the fact that many e-commerce shoppers are now “crossing devices,” beginning their research on one device but completing it on a different one (and, possibly, making a purchase on yet another).

One-quarter of all e-commerce dollars spent on Thanksgiving and Black Friday 2013 were on purchases made through mobile devices. On Cyber Monday, 1.9 million separate e-commerce transactions were completed on tablets alone, contributing to a total of $237 million in mobile sales and $2 billion in total e-commerce spending that day. Sales of products and services in the U.S. via mobile devices were expected to reach $41 billion in 2013 (16 percent of total e-commerce sales), up a dramatic 68 percent over 2012, and eMarketer estimates that they will reach more than $113 billion by 2017 — when the vast majority of digital buyers will be doing at least some of their purchasing via mobile devices.

More than nine out of 10 American adults now own a mobile device. Mobile usage varies by age, with more millennials (young adults aged 18 to 34) using their smartphones to research and purchase (30 percent, versus 20 percent of adults over age 35).

The adoption of smartphones and tablets thus appears to have accelerated the pace of online sales and has resulted in a significant societal shift in when, where and how people shop. Retailers are scrambling to respond to the challenges posed by these changes, to understand how consumers use their tablets and smartphones to research products and services as well as to make purchases. Many expect to make mobile execution one of their top priorities in 2014, in part by investing in mobile-optimized websites, mobile apps, and/or responsive design, which makes a website display correctly no matter whether it is viewed on a desktop, phone or tablet.

While retailers currently are focused on adapting to handheld devices, no doubt some new software or technology will appear in the very near future that will disrupt the e-commerce configuration yet again. Retailers and CRE professionals alike will need to keep up to date on these evolving technologies as consumers adopt them, since they ultimately will drive where and how products are purchased, stored, transported, and even manufactured.