E-Commerce: The Single Most Critical Channel For Growth
The writing isn’t just on the wall, it might as well be in the sky – e-commerce is going to continue driving retail growth for the foreseeable future. While in-store sales have been essentially flat, e-commerce is the shining light that’s helping retailers improve profits and revenue. A recent comScore presentation, “State of the U.S. Online Retail Economy in Q1 2014,” demonstrates just how significant the e-commerce impact has been. According to the presentation, sales at brick-and-mortar retail stores were up by only one percent year over year in the first quarter, while e-commerce showed 13 percent growth. Overall, desktop sales accounted for 88 percent of e-commerce revenue, raking in $56 billion in the first quarter. Some other key measurements for desktop sales also showed significant growth, with the number of U.S. shoppers purchasing online up by 9 percent to 190 million, and average order values up 10 percent to $78. Desktop e-commerce sales are what’s adding real revenue right now, but the future is definitely in mobile devices. Mobile commerce accounted for nearly 12 percent of all digital dollars in the first quarter, a one percent increase from a year earlier, but over the past year the shift in people’s browsing habits continues to skew more toward mobile. In March 2013, 53 percent of all time spent browsing retail sites came from mobile devices, and a year later that number increased to 62 percent, with time spent browsing on smartphones and tablets both experiencing gains. Smartphone browsing went from 37 percent of total time spent in 2013 to 43 percent in 2014, while tablet browsing went from 15 percent to 19 percent over the same period. In addition, mobile is making its mark within the growing trend of omni-channel commerce as well. While purchases made on mobile devices will be extremely important, and figuring out how to improve mobile conversion rates is currently a challenge for everyone in the industry, it’s also important to understand the additional impact that mobile can have on other channels. Among mobile phone searches that ultimately result in a purchase, 73 percent of those purchases are made in a store, 16 percent are made over the phone and only 11 percent ultimately result in an online purchase. The big takeaways from comScore’s data are that e-commerce is, and will continue to be, the largest channel for growth and more specifically, mobile is playing an increasingly important role. Retailers must keep an eye toward improving the digital experience for their customers, which could encompass a number of strategies including websites and apps for desktops, smartphones and tablets. This is the only way they’ll survive in the omni-channel world that their customers have come to expect.