Mobile growth slower than expected as retailers fail to impress

The retail industry has been collectively pursuing mobile shoppers, and for good reason. But new data from Javelin Strategy and Research suggests that mobile may not be growing quite as rapidly as some think.

The company's "Mobile Proximity Payments Forecast 2015" found that just 9 percent of all online payments are made on mobile, while in-store mobile payments only account for 1 percent of all retail sales.

Many shoppers still rely on mobile mostly as a resource for researching and finding products, not necessarily for making the purchase on that platform. When it comes to making digital purchases at home, most shoppers still prefer to use their desktop or laptop computer, and new mobile initiatives such as beacon rollouts are currently focused on driving traffic or engagement, rather than actual sales made in the moment.

"Power has shifted to the consumers with smartphones, and vendors must adapt and respond in new ways," said Daniel Van Dyke, mobile research specialist at Javelin Strategy and Research, in a statement. "The merchant's own app can be used to offset competitors' shopping apps, by using targeted rewards, discounts and loyalty points."

Part of the slow growth can be attributed to the fact that many retailers are still not sure how to leverage mobile with the in-store experience. Brands have implemented new loyalty programs with mobile in mind, but many of those have missed the mark, while uninspired ideas like beaming coupons to shoppers' phones have failed to move the needle.

In-store mobile payments, meanwhile, are still very much in their infancy. However, the Javelin study did find that Apple Pay has had a significant impact on iOS users' willingness to pay with their phones. In fact, 17 percent of iOS smartphone users reported making an in-store payment with their phone in the last month, compared with 9 percent for Android owners. The median purchase amount for those transactions was also higher for iOS users at $20.00, more than the $18.82 that smartphone owners in general spent. Android owners came in below the median for the general smartphone population with a median spend of $15.00.

That said, Javelin still predicted that mobile payments would reach $54 billion by 2019, indicating that there's a tremendous upside. Retailers just need to figure out how to make spending on mobile worthwhile for shoppers.  

For more:
-See this Javelin Strategy and Research press release

Related stories:
Is Home Depot next in line for Apple Pay?
Samsung Pay to challenge Apple Pay later this year
PayPal testing NFC option as Q3 eBay split approaches
Caribou adds mobile app and payments, finally
Mobile payments are retail's new frontier

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.