Retail Sales

Smartphone shopping not yet off the ground

The Seattle TimesJanuary 20, 2013 

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Kathy Schwobe, of Duluth, uses her smartphone to shop as she looks for shoes for her daughter Gabi, 17, (not pictured) at Off Broadway Shoes in Sugar Loaf Mills in Lawrenceville, Georgia, December 5, 2012. (Jason Getz/Atlanta Journal-Constitution/MCT)

JASON GETZ — MCT

— For all the buzz around mobile commerce, many retailers are surprisingly lukewarm about its ability to get digital-savvy shoppers buying more from their websites.

A new report by Forrester Research for trade group Shop.org shows that smartphones generated a small portion of online sales last year — about $5 billion of a $226 billion e-commerce market.

Retailers will continue to invest in mobile strategies, but the bulk of their technology spending in 2013 will be on the basics, such as improving online checkout, product descriptions and the overall user experience, according to the report, which is based on a survey of stores with e-commerce operations, as well as Internet pure-plays.

“Retailers have been burned getting very, very hyped up over mobile,” Forrester Research e-commerce analyst Sucharita Mulpuru said in a presentation at the National Retail Federation’s annual convention recently in Manhattan. “Even though consumers have these phones, the number of transactions on those phones is still small.”

More than 27,000 people attended the federation’s conference, which was highlighted by the presentation of the organization’s annual Gold Award to Jeff Bezos, chief executive of Seattle-based Amazon.com Inc.

At the conference, retailers discussed a number of topics, including mobile commerce.

Mulpuru said one challenge of mobile commerce is an ever-growing list of tablet devices, including Amazon’s Kindle Fire and Microsoft’s Surface. She said that makes things “messier from a design and development perspective,” adding rhetorically, “What device do you develop for?”

The Forrester survey’s retailers reported average online-sales growth last year of 28 percent. But Mulpuru warned that the explosive growth won’t last forever, noting that the number of new online shoppers has begun to taper off. She predicted that e-commerce will max out at 20 percent of a retailer’s sales, up from about 10 percent today.

“Be prepared for the party to end. It has to end at some point,” she said.

The retail federation reported this week that U.S. nonstore sales during the holiday season increased 11.1 percent from a year ago. That was well above the 3 percent gain for all holiday sales but down from last year’s 15 percent rise in e-commerce.

Altogether, the Commerce Department reported Tuesday that all retail sales reached $415.7 billion in December, an increase of 0.5 percent.

For the year, retail sales in the U.S. increased 5.2 percent, according to the Commerce Department, compared with a 7.9 percent surge in 2011.

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