Expanding not cannibalising

By the end of 2012, shopping on mobile in the UK will account for 8% of total online spending. So says a study by the Centre for Retail Research for Kelkoo. Back in 2010, many dismissed mobile retail as a niche offering and something that needn’t trouble too many retailers. Well, chaps, with a growth rate of 584% in the UK between then and the end of 2011, I think we can safely say that mobile is a force to be reckoned with.
But the study also reveals that the explosion in mobile retailing is largely confined to the UK. The UK market for mobile retailing is more than twice that of France and a third as big again as that of Germany. It is also by far the nation of big spenders on mobile, with each user averaging at around £192 each in 2011.
But why the disparity? Well, the UK has always led the way in mobile usage. The Italians and Scandinavians do have more phones than head of population, but the Brits have always embraced mobile’s many tools – text, web access, email, IM, apps and games – while others have been locked into, well, just talking.
But I think there is also the Brits love of shopping – especially online. The penetration of smartphones in the UK is pretty high (around 46% of the mobile owning population by the end of 2011) and the thirst to shop online is well served by the technology.
Of course, if the bulk of this mobile shopping boom is being driven by the 46% of mobile users who have a smartphone, there are more than half of mobile users who are using it much less. But herein lies the opportunity. As these users start to upgrade to smartphones driven by an increasing number of lower-cost smartphones running Android and even Nokia Windows Phones and as wifi becomes ever more prevalent and low cost (or indeed free) the number of people shopping on mobile will become enormous: bigger even than the Centre for Retail Research-Kelkoo research realizes.
But, with times tight, much of this growth will come at the expense of the high street and, in some circumstances, the online retailing world. That said, increasingly, mobile shopping will be just online commerce on a different device. But still, you see my point, there will be a lot of growth in mobile retail, but it will be a cannibalization of existing retail sales to a large extent just changing platform.
This is all good for the mobile community, but not really what the retail industry needs right now.
But fear not, there is growth to be had: in making mobile an integral part of both the high street and online experience. Mobile payments are now a reality and will continue to make life easier for consumers. There is also the fledgling app economy which is also starting to fly – as Juniper Research also reports in this issue of M-Retailing.
The key thing is to look at how mobile can be used to expand your business rather than cannibalise it. And that is the mission for 2012.
And you can learn more about how to improve your business through the power of mobile at the Mobile & Social Retailing conference at Internet Retailing Expo on 21-22 March at the Birmingham NEC. Sign up here

Paul Skeldon, Editor, m-retailing.net