Mobile Commerce

Mobile Tops Retailers’ Priorities — Except In Budgets

Smartphones’ share of online retail sales jumped 50 percent in 2014, and mobile continues to top retailers’ marketing priority lists, according to a new report from Forrester Research.

The 2015 State of Retailing Online study from Forrester and the National Retail Federation’s Shop.org reported that 58 percent of retailers said mobile was their top marketing priority, up from 53 percent a year ago.

Sales through smartphones grew from 8 percent of online sales in 2013 to 12 percent in 2014. Sales through tablets grew more modestly, from 13 percent of online sales in 2013 to 16 percent in 2014. That puts mobile’s total online-sales share at 28 percent, up from 21 percent a year ago.

Many retailers said their digital marketing budgets remain relatively small, because with consumers driving the shift to mobile, a hard push isn’t necessary. Almost a third (32 percent) of retailers reported spending less than $100,000 on smartphone marketing development, with 68 percent reporting less than $1 million. For tablets, only 4 percent said they spent between $100,000 and $250,000 last year. But about 80 percent said they will increase mobile budgets by at least 20 percent this year.

The Forrester/Shop.org study also found that omnichannel came in as the second priority for retailers behind mobile, as most chains still struggle to make in-store and digital a seamless experience. Almost half of retailers (45 percent) said they plan to improve or launch programs such as buy-online-pick-up-in-store, ship-from-store and inventory visibility. That’s nearly double the 26 percent that gave omnichannel efforts a high priority last year.

Marketing optimization came in third on the consensus priority list, with retailers focusing on customer retention and acquisition. Marketing costs per order and new customer acquisition costs per order increased last year for over 40 percent of retailers, the study found.

And because of the high cost of apps, compared with mobile-optimized websites, 56 percent of the retailers surveyed said apps aren’t a key component of their mobile marketing strategy. “Apps are simply too expensive to build and maintain for most retailers,” said Forrester analyst Sucharita Mulpuru, who directed the study. Nearly half of retailers are now focusing their mobile efforts on responsive-design websites, she said.

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