Forrester Research forecasts the future of mobile commerce in Europe
Long-time Shop.org partner Forrester Research recently released its first m-commerce forecast for European markets. Focusing specifically on commerce via smartphones, Forrester projects that m-commerce will grow from EUR1.7 billion in 2011 to EUR19.2 billion in 2017. Principal Analyst Martin Gill gave us further insights into this exploding area of retail, how m-commerce buyers are the new “avant garde” customer, and why southern European markets will see faster adoption than traditional e-commerce leaders such as Germany and the U.K.
Tell us a bit about the recently released EU Mobile Commerce Forecast (2012-2017). What does this study encompass and how did you conduct the research?
This is the first time we have produced an m-commerce forecast for Europe. It is based on our existing online retail forecast, but factors in mobile (i.e. smartphone) sophistication of the various European countries from both a consumer use and a retailer enablement perspective. This has allowed us to build a view of smartphone transactions for the next 5 years for retail, travel and daily deals across seven key European markets : UK, France, Germany, Netherlands, Sweden, Spain and Italy. (Please note that this forecast is exclusively mobile phone - we exclude tablets.)
Over the next five years, you found that the UK, Germany and France will lead in terms of overall revenue growth (spend), but that the most rapid growth will actually happen in southern European markets who haven't been the traditional online market leaders. What are the dynamics at play here?
The UK, France and Germany will see the largest net growth in terms of numbers of mobile shoppers and overall revenues. That’s primarily because they are the largest e-commerce markets with large numbers of people who are already used to shopping online. In southern European countries like Italy, proportionately fewer people shop online at the moment, so as Italians begin to embrace mobile we are more likely to see a “mobile first” approach where shoppers jump straight to mobile commerce. This is reflected in the fact that we are forecasting mobile commerce to be a higher percentage of online sales in Italy than in, say, Germany.
Martin Gill, Principal Analyst, Forrester Research
Web shopping has become a mainstream activity in most European countries - particularly in the more mature northern European markets. But mobile buying is still new. Mobile buyers tend to be typical early adopters - younger, male, well-educated and of higher income. This will change with time as enabling technologies like smartphones become more mainstream, but right now mobile buying hasn’t hit mainstream adoption in Europe.
So what are European mobile consumers buying on their mobile phones - and how will that change over the next five years? Will current screen size limitations persist and dampen growth prospects for some categories?
Low cost, impulse categories are selling well on mobile. Books, DVDs and CDs where there is little research and the basket size tends to be low. Additionally, time dependent items like event tickets and deals are strong sellers. But mobile commerce isn’t limited to just these products. Many retailers are finding that any product they can sell online can and is being bought from mobile devices.
How else are European mobile customers using their mobiles as part of the shopping process - regardless of where the transaction is ultimately concluded?
Mobile buying is really just the tip of the iceberg. Many retailers are seeing a significant portion of their site traffic coming from mobile devices, and increasingly from shoppers who are physically standing in their stores. First movers like British retailer John Lewis are capitalizing on this by WiFi-enabling their stores and positively encouraging shoppers to use their mobile to check their competitive prices. In fact, smartphone users in particular are far more likely to use their mobile phone to inform their offline shopping behavior via tools such as price checkers, store locators, etc. than they are to actually buy using their mobile. It’s vital that retailers consider the physical aspects of the mobile touchpoint in their strategy and understand how shoppers are using their phones to inform every aspect of their shopping experience.
In addition to immediacy and location as key mobile shopping drivers, you note that a variety of technologies will evolve in the next 5 years to "transform the smartphone into a 'multichannel shopping enabler". How should retailers tackle these factors in the near and longer term to offer their customers the optimal mobile shopping experience?
Retailers must consider every point in their customer life cycle and think about how mobile can bridge the physical and digital worlds. Focusing solely on the point of transaction is missing the bigger picture. Mobile can influence how shoppers discover, engage, buy and become loyal brand evangelists. So while the growth of m-commerce will be rapid, it is critical to think beyond simply optimizing the mobile channel to sell and think about how mobile can bring the best of the digital world into the physical, and vice versa.