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Another Mobile Holiday Shopping Spree

The 2012 holiday shopping season once again confirmed that mobile devices continue to emerge as a dominant tool in consumers’ search for the best and most convenient way to make purchases. As one article said, “Stores may remember 2012 as the breakthrough year for mobile with several major retailers reporting huge jumps in their sales made through smartphone devices this season.

The season kicked off with a remarkable start - consumers spent over $1 billion on online purchases on Black Friday, and $1.5 billion on Cyber Monday, both all-time highs. Online sales increased more than 30 percent on Cyber Monday compared to 2011. Many of these transactions were powered by mobile broadband. More than 18 percent of consumers used a mobile device to visit a retailer’s site - an increase of 70 percent over 2011. One report estimated that $1 out of every $4 spent online came from a mobile device. These staggering numbers illustrate the trend that has been developing for some time: consumers turning to their smartphones and tablets to make purchases in a streamlined and convenient manner.

Shopping-focused apps were prevalent this year, offering consumers the ability to check and compare prices, easily find deals and use their smartphone as a payment method. 25 percent of all mobile traffic came from applications performing a variety of functions to make the shopping experience quick and painless for consumers. Many apps this year helped consumers save money on their holiday shopping, an especially useful feature in a challenging economy. One app, “Decide,” uses algorithms and data trends to predict the best time to purchase particular items to get the lowest price. Another, “Gift Plan,” allows the user to keep track of all of the gifts that have been purchased or still need to be purchased, organized by recipient and monitoring how much money has been spent on each individual to help avoid overspending. “Shop Kick” provides rebates and coupons for consumers making purchases through their smartphones, and “Red Laser” allows consumers to scan bar codes to compare prices across the web. This practice of “showrooming,” where customers in a store compare prices on specific items using their smartphones and determine the least expensive place to make a purchase, was especially prevalent this year. A survey indicated that 48 million shoppers were predicted to showroom during the holiday season, up 134 percent from last

Use of smartphones as a payment option has increased dramatically as well. Online payment service PayPal saw nearly triple the mobile payment volume compared to last year, and eBay more than doubled its payment volume. In addition, PayPal recorded a 166 percent increase in the number of customers shopping with mobile devices on Cyber Monday compared with last year. And even more promising, this does not appear to be an isolated event. On December 2, total global mobile payment volume for PayPal exceeded that of Cyber Monday by more than $1 million, making it the biggest mobile shopping day in the history of PayPal. December 9 was eBay’s biggest mobile shopping day, up 133 percent over the biggest day in 2011. Mobile has become a driving force within eBay—one out of every three eBay purchases made globally include a mobile touch point.

The numbers indicate the need for retailers to devote appropriate attention to the mobile shopping experience, especially in relation to shopping-centric holidays. On Black Friday, mobile searches increased by 17 percent on smartphones and 40 percent on tablets over an average day. Online advertisers should take note as well - ad clicks from smartphones were up 61 percent, while clicks from tablets were up more than 100 percent.

Even traditional brick-and-mortar retailers took advantage of the benefits of mobile devices, integrating smartphones and apps into the consumer shopping experience. By providing interactive maps of stores, categorized deals and customizable shopping lists, stores utilized mobile devices as a supplement, rather than an alternative, to in-store transactions. Walmart created a Store Mode app, which uses geolocation data to detect when a customer is in a store. When they enter, the app provides coupons for that location, as well as product scanners and self-checkout via the mobile device. Customers can even see their location and the location of the items they seek on an interactive maps. In addition, exclusive promotions for mobile users enticed shoppers to access the mobile sites for stores, drawing more traffic for retailers.

As CTIA explained in our filing “Mobile Commerce: Leveraging Ubiquitous Wireless Connectivity to Put Main Street in the Palm of Your Hand” with the FCC earlier this year, mobile commerce is quickly becoming a dominant driver in the U.S. economy. This year’s holiday season is further evidence that consumers have an increasing appetite for the convenience, innovation and numerous benefits of wireless technology.

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