How Big Will Mobile Be This Holiday Season? It's A Numbers Game

New figures from a National Retail Federation (NRF) survey suggest that mobile shopping will soar this holiday season. But digging deeper into the numbers suggests something much more nuanced. It shows a surprisingly large number of American consumers predicting they'll shop by phone as well as comments from younger, "practically married to their smartphones" consumers saying they'll not be using their phones for shopping—not even for research.

The story behind the numbers also gets into some definitional questions. Consider a 19-year-old who poses a question to a Facebook forum about which car to buy. Does that consumer think of such an inquiry as mobile research or merely talking with friends? Retailers are likely to see it as quintessential M-Commerce research, but the consumer—who is answering these survey questions—is more likely to see it as hanging with friends and say "no," said Pam Goodfellow, a senior analyst with Big Research, which managed the NRF survey.

"Is texting research? Should it be?" Goodfellow asked.

That distinction might suggest the numbers of those who will be making—or researching—mobile purchases should be even higher than the survey shows.

Another detail suggests the numbers are lower than reality. The survey of 8,767 consumers began October 5 and ended October 12. "In early October, [many younger consumers'] minds may very well be elsewhere," far away from the practical matters of holiday shopping, Goodfellow said.

Consumers may say they won't be doing any M-Commerce research or purchases, but they very well might when December arrives, she said. That's key for retailers to consider when reviewing expected M-Commerce usage stats.

As for those stats, let's take a look. Of the consumers who said they had what they considered to be smartphones, 26.8 percent said they would use their smartphones to either research or make a purchase this holiday season. That number jumps to 45 percent when limited to those aged 18 to 24.

There are a few troubling practical issues with those numbers, issues that deal with how the questions were phrased. The problems don't make the answers less useful, but they do rob us of the ability to analyze them much further.

The survey does ask a question of U.S. consumers who did not necessarily say they had a smartphone. That's great to get a sense of the bulk of the population. But the only M-Commerce question respondents were asked was, "This holiday season, will you use a smartphone (i.e., iPhone, Droid, etc.) to research or make holiday purchases from a retailer?"What if they want to use their non-smartphones to research a holiday purchase? Basic texting and other features make that possible. By not asking that group about M-Commerce purchases broadly, we can't tell much.

Also, the survey never differentiated between intended M-Commerce research and intended M-Commerce purchases. Although both are important, not knowing how many 18- to 24-year-olds even intend to consummate any purchases is a huge loss.

To be fair, it was a long survey, and it could only cover a small number of M-Commerce questions. But there is probably more than enough interest to do a study solely on M-Commerce.

Those concerns aside, the numbers themselves are fascinating. Given the immaturity of the mobile space—coupled with the relatively small number of major retailers who have put any serious marketing muscle behind their young M-Commerce moves—it's pretty impressive that almost half of that particular age group plans to do that much M-Commerce activity.

But it can also be flipped. We're not merely talking about all 18- to 24-year-olds. The universe for this question is the subset of 18- to 24-year-olds who happen to have smartphones. Of that group, the majority (55 percent) apparently plan on zero holiday M-Commerce purchases and just as little M-Commerce research. That answer suggests most of that very mobile-loving group says they won't do a single comparison shop, price scan, check-in or inventory check, let alone make a purchase directly.

"Considering that mobile is still in its infancy, I think that [45 percent saying they will do M-Commerce] is pretty tremendous," said NRF VP Ellen Davis.

Consumers in that age range use their smartphones "for a whole host of reasons other than shopping," such as texting, games, checking E-Mail, Facebook, getting directions and taking/sharing photos, Davis said. "Shopping may be the farthest thing from their mind. It's important to remember that, when it comes to smartphones, the mobile shopping component is secondary to a lot of people."

Goodfellow echoed that sentiment, saying the 18 to 24 segment is "a very fickle age group" who sees shopping as "a very social experience."

In other words, the act of getting together with friends at the mall or at a department store may be much of the fun of holiday shopping. The efficiency of M-Commerce—and, to a slightly lesser extent, E-Commerce—appeals to someone who wants to get the purchases made as quickly and painlessly as possible. Those people want to simply get to the destination, if you will, rather than enjoy the journey.The social nature of 18- to 24-year-olds might push them to embrace in-store more, while the time-strapped older consumer might find the faster purchase more attractive.

Beyond being time-strapped, those older consumers (please note the unease with which I describe anyone born before 1986 as "older") are also often cash-strapped. Therein lies another M-Commerce differentiation. M-Commerce (and E-Commerce) research is often focused on product price comparisons, with an eye on finding the best deals possible. That's often less of a priority for younger consumers, which suggests another reason why their M-Commerce research is not as high as it could be.

But statistically, this is a balancing act. Although the older consumers may have more practical reasons to use M-Commerce, they do not have the extreme comfort (bordering on co-existence) that many younger consumers have with their mobile devices.

The percentage moved from the 45 percent for the 18 to 24 age group to 43.5 percent for 25- to 34-year-olds and then plunged to 26.4 percent for 35- to 44-year-olds. At the 45 to 54 age group, it plummeted again, this time to 15.3 percent, while the 55 to 64 age group registered a 10.4 percent M-Commerce intent and "65+" went single digits, with 6.9 percent. (Ever get the sense that the survey writer who chose to lump 98-year-olds in with 65-year-olds is probably not in that age range?)

For what it's worth, the only salary distinction offered (less or more than $50K annually) made relatively little M-Commerce-embracing difference, with the less-than group at 23.3 percent and the more-than group at 30.3 percent. Geography also made almost no difference, with the four regions mentioned (Northeast, Midwest, South and West) all showing results in the twenties. The Northeast and South were essentially the same (28 percent and 28.3 percent, respectively) and the West was trivially lower (27.8 percent), with only the Midwest showing any deviation (22.8 percent). But with everyone in the twenties, even the Midwest drop is hardly significant.

So what does this all mean for retail IT and E-Commerce execs who are trying to plot out mobile investment levels? StorefrontBacktalk recently partnered with Forrester Research, and that retail exec survey revealed an alarmingly high percentage of retailers (21.3 percent) who said they have no plans for any M-Commerce programs in the next 18 months. And almost half of those surveyed choose "none of these" when asked if they allow customers through a mobile site or a dedicated application.

This result suggests that quite a few chains are taking a wait-and-see approach. I think the NRF numbers make it clear that although consumers may plan on using mobile for different things, it's still a key part of their lifestyle. The low numbers (which aren't really that low) are more likely consumers who are simply not seeing that many interesting mobile offers being made.

In short, launch those aggressive mobile programs and you'll find a willing audience.