Online retail sales reach ‘tipping point’

A ‘major digital tipping point’ has been reached in the UK, with the percentage of online retail sales made through mobile devices exceeding 50% for the first time, according to IMRG.

New figures from the UK’s industry association for e-retail IMRG (Interactive Media in Retail Group) reveal that smartphones and tablets accounted for 51% of online retail sales in Q4 2015/16. This is a substantial increase on the 45% recorded in Q3 – and up from 40% in Q4 last year.

The percentage split between the types of channel is desktop/laptop (49%), tablets (33%) and smartphones (18%).

Visits to retail websites via mobile devices accounted for two-thirds (66%) of traffic in Q4, up from 63% in the previous quarter. This compares with 53% in Q4 last year.

IMRG said this leap in mobile penetration appears to be being driven by increased confidence in using smartphones for online shopping. Sales growth through these devices rose sharply in 2015, while growth through tablets reached a record low in December 2015.

IMRG chief information officer Tina Spooner said: “Smartphones have played an important role in the overall online shopping process for a long time. They are often used for research and comparison on the go.

“But over the past year, they have really started to become a major component of the checkout process too, and that is what is driving this leap in mobile penetration.

“In January sales via smartphones grew 95.6% year-on-year for example – over seven times the rate of those via tablets.

“In 2014 the rate of growth via smartphones appeared to be slowing down, but in 2015 it shot up again.

“The main reason for this is likely to be related to the design trend for larger screens, but many mobile retail sites have improved significantly to give a far better experience and inspire confidence in shoppers.

“There is also the fact that we increasingly use our smartphones for managing so much of our lives. It’s only logical that completing purchases on retail sites would gravitate over to these devices as well.”

Richard Tremellen, retail insight and data specialist at Capgemini, which is a leading provider of consulting, technology and outsourcing services, commented: “This is a very significant milestone in the history of the online retail sector and reflects the work that retailers have put into improving the customer experience on smartphones.

“Not only have mobile platforms become more secure, but the payment process is also much slicker. The result is smartphone conversion rates that are 70-80% higher than this time last year.

“The figures illustrate that retailers have well and truly embraced the potential that the mobile channel can offer in reaching customers, and given that mobile advertising and geo-location marketing are yet to hit maturity, you feel there is more growth to come.”

Two department store chains have given their views on the findings.

Mark Felix, director of online trade at John Lewis, said: “Mobile is undoubtedly our fastest growing sales channel. In 2015, convenience remained the number one priority for customers and mobile gives them the opportunity to shop whenever and wherever they wish.

“Importantly though, mobile is becoming the glue between our shops and online. Increasingly, customers are using the two channels combined and, for example, use their mobiles to check ratings and reviews and further product information when in store.”

Andy Harding, chief customer officer of House of Fraser (http://www.houseoffraser.co.uk), said: “We’re not surprised by the growth of mobile devices. Mobile has been clearly identified as a priority area for House of Fraser, with over 40% of online sales coming from a mobile device last year and growing at a rate of over 100% year-on-year.

“The key to our success is the consistency of our customer centric approach: providing a personalised shopping experience, by linking all our channels to market together.

“Being a truly multichannel retailer means having a seamless offline and online offer, and engaging with customers through mobile devices will continue to be an essential part of this.

“We expect to see continued growth in the online retail market, with mobile devices being a real driving force of this growth.”

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