The Growth of Mcommerce In The US: $123 Bln Market in 2016 [REPORT]

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While the smartphone industry may have hit a major road block in 2016, the impressive growth and penetration that it has managed to achieve in mature markets like the US, have now started to influence other industrial sectors as well. Today we take a look at the M-commerce industry in the US that in recent times has been fuelled strongly by the active smartphone users. In a recent report from eMarketer, it has been revealed that the total evaluation for retail Mcommerce sales in the US is expected to be at around $123.13 billion in 2016!

While it’s a jaw-dropping statistic on its own, what’s even more surprising is that at 39.1%, a massive section of e-commerce has been wrestled away from the traditional desktop by tablets and smartphones. While traditionally smartphones have been at fault for low conversion rates despite high impressions, it seems that the advent of larger smartphones with bigger and higher resolution screens coupled with wide coverage of LTE has swung the tide firmly in favour of our mobile companions. So what changes can we expect from an e-commerce industry that will be headed towards a primarily mobile audience? We discuss that and much more in today’s investigation!

M-Commerce Claims More Than A Third of US E-Commerce


Analysts predict that m-Commerce will continue increasing at a rapid pace in 2016 as well with larger phones and phablets fuelling the growth rate at nearly 40% YoY, and with 2.6% of the total retail pie, m-commerce would have nearly doubled their share that they had a couple of years back. Coming in at just under one-third of the total e-commerce sales for 2016, smartphones and tablets are rapidly becoming the devices that people choose to surf shopping websites from.


However, in a reversal of initial trends where we saw people favoring the larger-screened devices like tablets and desktops for m-commerce and e-commerce respectively, we see a change in growth potential where smartphones now are outstripping tablets in terms of m-commerce revenue for 2016 and beyond.


Although tablets still retain the majority of m-commerce sales in the US, at 50.6% in 2016, it is hanging onto its lead by a thin sliver. But as we look forward to the future, analysts forecast that the growth rate of tablets at 30.7%, will be overshadowed by that of smartphones. In fact, by the end of 2017, their roles would have been reversed and for the first time, smartphones would be contributing more than half of the m-commerce sales in the US.

Although tablets do continue to have an impact on M-commerce in the near future, posting double-digit growth figures till at least 2020 rolls in, the focus would have firmly by then shifted towards the smartphone.

Tablets are still growing but at a lesser extent than we’ve seen in the past,” said Marissa Tarleton, CMO of North America at digital coupon marketplace RetailMeNot. “As we partner with our retailers, we’re optimizing for smartphones.”

What are these optimisations that can help make drive up sales figures for smartphones? We find out in our final segment!

Final Thoughts & Key Takeaways

Late 2015 saw for the first time in the history of the Internet; Google searches from mobile surpass their desktop counterparts. Not only are people searching from their smartphones more, but they’re also buying more from their smartphones. Thus, it comes as no surprise that smartphones are at the helm of retail m-commerce in the US nearly doubling in value to $39.40 billion in 2015, a 95.8% year-over-year increase. However to reach the $100 billion mark and that too before tablets do it in 2020, there are a few strategies that e-commerce players must employ.


We have broadly outlined just a few of them in the points below.

  • Optimising E-commerce Portals for Apps: As the future of m-commerce lies entirely in the hands of smartphone users, it makes sense that for the e-commerce players to optimise the UI of their apps so that smartphone users find it most convenient to use their apps while ordering a product online. As we see phones with ever larger screen sizes like the Xiaomi Mi Max appear, App developers are tasked with keeping the UI usable across all screen sizes and resolutions.
  • Increasing the Effectiveness of Search: The denizens of the mobile age are an impatient bunch and if an app cannot provide efficient search results then the chances of a user buying the product plummet as the consumer gets more frustrated wasting time searching through irrelevant results. Amazon has been one of the pioneers in this field beating out even Google when it comes to e-commerce and effective search algorithms.
  • Creating a More Personal and Immersive Experience: Smartphones are our constant companions and as a result, we stuff them with loads of apps that more often than not get neglected and often forgotten until the day they’re installed. To make a successful impression on the consumer and not just become one of the 27 apps that average US citizen uses once a month, companies will have to come up with innovative ways to drive up user engagement with their app.
  • Integrating A Social Element: A large portion of the time for most smartphone users is spent on social media and messaging apps. Using these platforms such as Facebook’s Messenger or WhatsApp to reach out to consumers could prove key to driving up user engagement with a particular brand and app.
  • Convenient Payment Options: One of the primary reasons for shopping on smartphones has been the convenience attached to it. By integrating different mobile payment options like Apple Pay and Samsung Pay, m-commerce players can make shopping on their apps a more seamless experience for shoppers on the go.

“Over the past year we’ve seen consumers’ willingness to purchase on mobile increase a lot, to the point where the share of transactions taking place on the smartphone has doubled since late 2014.” says Bob Sherwin, senior director of acquisition at ecommerce furniture company Wayfair.

Now that the consumers have finally put their faith on m-commerce and on their handhelds, the onus lies on the app developers and e-commerce giants to make the most out of this new trend. Shopping has now truly gone mobile.


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