eCommerce: is mobile-first the key to future-proofing?
We have reached an adoption tipping point; more Generation Z consumers habitually shop using a smartphone than via traditional eCommerce. So how should online businesses be reacting to this shift?
It’s May 1984. And a 72-year-old from the English town of Gateshead called Jane Snowball is about to make a purchase that will change retail forever.
There’s nothing out of the ordinary about the items she’ll buy — a box of Corn Flakes, a carton of eggs and a tub of margarine. But the way she makes the purchase will transform how we shop.
Mrs Snowball sits in her armchair and picks up her TV’s remote control. She uses this to scroll through a list of 1000 items displayed on her television screen. Once she makes her selections, the TV uses her landline to communicate with the local Tesco, which arranges delivery of the items to her house.
And, just like that, she has completed the first online transaction ever recorded.
From ‘teleshopping’ to mCommerce
Online shopping has come a long way since that heady May afternoon 35 years ago.
British consumers now make 87% of their purchases online, spending an average of £34 (approximately €38 or $42) per transaction. Similarly, 76% of US adults shop online, with 25% doing so at least once a month and 16% completing one or more transactions per week.
But the most significant change isn’t that online shopping has become ubiquitous. It’s that consumers no longer have to be at home to do it. The smartphone has made it possible to shop from anywhere, at any time.
Minding the generation gap
It’s safe to say that consumers have embraced the immediacy and convenience of mobile shopping.
In the US, mCommerce sales hit $207.2 billion in 2018. And in the UK, the value of mCommerce transactions is expected to hit £49.27 billion (approximately $61 billion) by the end of 2019. By 2020, almost half of all online transactions — 49% — will take place on mobile.
That said, while it may have been a 72-year-old who pioneered online shopping, the consumers who are driving the growth of m-commerce are much younger.
Our latest Lost In Transaction study — which surveyed 6,000 consumers from the UK, Canada, the US, Germany, Austria, and Bulgaria — revealed a significant generational gap when it comes to the adoption of mCommerce.
79% of Millennials — those aged 25 to 39 — and 72% of Generation Z consumers — who are aged 24 or younger — told us they shop online with their smartphone. In comparison, only 54% consumers aged 40 to 54 — Gen Xers — and 27% of Baby Boomers — consumers aged 55 to 74 — use their phone to shop.
This means mCommerce is significantly more popular with consumers under 40. The vast majority of older consumers — 77% of Gen Xers and 78% of Baby Boomers — still shop online mainly from their desktop or laptop.
Making sense of the numbers
Having grown up with the internet and mobile technologies from an early age, it makes sense that younger generations would lead the charge when it comes to mCommerce.
Millennials and Gen Z have grown intimately familiar with their smartphone. They’re also more accustomed to the ease and convenience of shopping whenever and wherever they like.
So in an increasingly convenient eCommerce landscape, where ordering instantly and receiving items the next day are the norm, young consumers simply will not tolerate unexpected barriers to immediate gratification. They’re also constantly occupied by work and entertainment, so want to make the most of any ‘found time’ between activities, which inevitably means being productive on their smartphone.
By contrast, Gen Xers and Baby Boomers have spent most of their adult lives shopping on their desktop or laptop. It’s what they’ve grown accustomed to and, consequently, what they trust. So, it’s not surprising that they’d stick to what they know despite the proliferation of smartphones.
The tipping point for mCommerce is on the horizon. It’s time to adapt
While most consumers over 40 still shop mainly on their desktop or laptop, it doesn’t mean they’re not open to mobile shopping. Our study shows mCommerce adoption amongst older consumers is happening, albeit at a slower rate.
With 5G now promising lightning-fast speeds and a significantly enhanced shopping experience, the level of comfort with mobile shopping can only grow further across all generations. In fact, by 2025, the World Advertising Research Centre reckons 72.6% of internet users will go online exclusively from their smartphone.
But, more to the point, younger consumers’ spending power is set to skyrocket in the next few years. By 2020, Millennials will be spending close to $1.4 trillion a year. Meanwhile, Gen Z — who already spend a not insignificant $44 billion — will account for 40% of all consumers in the US alone.
As their spending power grows, keeping these tech-savvy younger consumers happy and offering them the kind of shopping experience they’ve come to expect will be key to online merchants’ future success. And this means making sure the mobile shopping experience is as frictionless and convenient as possible is no longer optional.
It’s a must for any online business that wants to survive and thrive in the next decade and beyond.
Want more insights on Generation Z’s attitudes to online shopping and payments? Download Lost In Transaction: Gen Z expectations at the checkout