Mobile devices used for shopping online (m-commerce) will experience substantial growth this holiday season. According to eMarketer, m-com sales will reach $314 billion in 2020 which is $200 billion more than four years ago and represents over 44% of all e-commerce sales. The pandemic has acted as a catalyst for older generations to adopt the technology as shoppers are worried about their safety and are reluctant to shop in stores. A recent holiday survey by the buy now, pay later company, Sezzle, found the older the shopper, the less likely they will be to shop in-store these holidays. Veronica Katz, CRO of Sezzle, said, “With this new normal of retail, e-commerce and online purchasing options are going to skyrocket, especially on mobile devices as shoppers prioritize their safety and health.” Sezzle reported nearly 80% of shoppers have found themselves shopping more on mobile since the start of COVID. Retailers have enabled the explosive growth of mobile by rapidly bringing online the necessary technology.
Andrew Lipsman, principal analyst eMarketer, stated, “Every year, m-commerce spikes slightly in holiday and is accelerated during concentrated activity. With the step change of customers using their mobile devices more often, it will be an extra boost this year.”
Katz adds, “We’re in uncharted waters here, so every shift in retail is being watched with detail. In years past, shoppers lined up at retailers and slammed into one another, a sight we surely won’t be seeing again.”
Holidays are being planned differently by retailers and behaviors by shoppers have changed
Additionally, the PayPal survey revealed that more than one-third of retailers expect holiday sales to be lower than last year. Stores are generally planning for lower inventories and promotions will start much earlier, even by October. Many retailers have already planned to close on Thanksgiving day and move Black Friday promotions to earlier in the season.
Closed on Thanksgiving and fewer promotions on Gray Friday
Digital Commerce 360 notes that Walmart
Lipsman said in an interview about the holidays that with many physical stores closed, Thanksgiving Day becomes “Couch Commerce Day” and predicts that since people are in shopping mode it will be a huge day for m-commerce (possibly the largest to date), setting the pace for the rest of the holiday.
The desire of customers to have contactless shopping experiences will drive mobile payments
The PayPal survey found that 46% of merchants are planning to offer curbside pick-up to foster limited contact and retailers can offer cashless options to further reduce in-store contact. PayPal reported that 34% of retailers selling in stores are implementing mobile payment options such as PayPal, Google Pay, Apple
Lipsman discussed that retailers have made mobile payments much more streamlined and easier to use than in the past few years, increasing the usage rate by consumers. The mobile monetization gap (the variance between browsing on the mobile device and purchasing) has been greatly reduced both from the retailer and consumer perspective since last year.
Buy now, pay later is taking off across online retailers
Online retailers have introduced buy now, pay later payment options and experience higher order volume over the holiday season. The options allow customers to make a purchase by paying a small amount of the total purchase price, receiving the product, then making additional payments (without interest) to complete the purchase amount over time. The PayPal survey indicated 26% of retailers are likely to offer buy now, pay later options to customers this holiday season. Forty-five percent of those retailers already offering buy now, pay later expect it to drive an increase in their holiday sales. PayPal notes that retailers can convert browsers into actual shoppers with flexible payment options.
Digital-first strategies will lead the holiday selling season
COVID has accelerated the adoption and usage of mobile devices for shopping and payments. By 2024 m-commerce will be over $570 billion and represent 53% of total e-commerce sales. As retailers increase digital initiatives such as curbside, in-store pick-up and contactless payments over the holiday season and continue to integrate better e-commerce experiences on mobile devices, a massive step-change in behavior will occur: A large portion of traditional shopping (in-store or on a website) will move over to m-commerce for the holiday and into 2021.