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Mobile Commerce Poised to Eclipse Traditional Online Spend
Feb 18, 2015 |
TORONTO — New research from PayPal and Ipsos* shows that mobile commerce is growing at more than double the rate of overall e-commerce in Canada, giving Canadian retailers more reason than ever before to consider mobile as a strong sales channel. From 2013-2016, the compound annual growth rate for mobile commerce in Canada is projected at 34 per cent vs.14 per cent for overall e-commerce, including mobile commerce. This growth presents opportunities for Canadian retailers, as mobile commerce spend had already reached CAD $3.45 billion in 2013 – a number which is predicted to grow by 142 per cent next year.
“We are at the dawn of a mobile-first era,” said Alexander Peh, head of mobile and market development at PayPal Canada. “At PayPal, we’ve seen our mobile growth rise from less than one per cent of our payment volume in 2010 to more than 20 per cent in 2014.”
A Bright Future for Mobile Commerce
Mobile shopping is significant and growing in Canada. A fifth (19%) of online shoppers surveyed report having purchased from their smartphone in the past 12 months, and 15 per cent reported making a purchase from an Internet-enabled tablet. Millennials are the primary driving force behind the surge in smartphone commerce with more than half (52%) of smartphone shoppers between 18-34 years old. This same age group accounts for only 31 per cent of total online shoppers, which highlights the need for smart mobile e-commerce solutions for a forward thinking retailer.
“We strive to make our Indigo mobile app and mobile friendly online store a fantastic shopping experience for our customers. Mobile is a critical component of Indigo’s strategy and we’re constantly looking at ways to continue to innovate and add value through this platform,” said, Lauren Reimer, Vice President Online Merchandising and Marketing, Indigo Books & Music Inc.
Mobile Shopping Becoming Mainstream
Canadians have warmed up to including mobile shopping in their regular routine and 17 per cent of shoppers buy from their smartphone more than once a week. Another 10 per cent of Canadian smartphone shoppers pull out their cellphones to buy once a week. Millennials are the most active mobile shoppers, with 30 per cent making purchases at least once a week.
When it comes time to paying for those mobile purchases, Canadians prefer PayPal, with 42 per cent choosing PayPal as their digital wallet, far ahead of the next mobile payment method chosen (25%). Providing a quick, easy and secure mobile checkout platform for shoppers will help retailers drive more purchases through their mobile websites or apps.
Mobile Shoppers Prefer Apps to Mobile Browsers
Globally, 64 per cent of smartphone shoppers have purchased via an app and 52 per cent have purchased via a mobile web browser. In Canada, 55 per cent of smartphone shoppers had shopped from a mobile app and 52 per cent from a mobile browser. Nearly half (46%) of Canadian smartphone shoppers who have used both platforms prefer shopping on an app, while only 14 per cent prefer to shop through a browser.
Convenience is the key driver to people using their mobile phones to pay online, in-store or in restaurants. Smartphone and tablet users cited “it’s a convenient way to pay” (27%) and “it’s a fast way to pay” (25%) as the top benefits of using a mobile app. Retailers should take note of these benefits and consider how to integrate quick and easy mobile payment solutions to cater to mobile savvy shoppers.
Product Research Today; Nascent Features Tomorrow
Currently, product research is the most cited mobile commerce related activity among smartphone users: 25 per cent of Canadians said they had “searched for product information on my smartphone” in the past 12 months, 20 per cent had “used my smartphone to help locate/find information about a store or business” and 18 per cent had “read customer or user reviews from my smartphone”.
When smartphone users were asked how they would like to use their smartphones in the future, the top answers showed a desire for more well-rounded shopping experiences, from research to ordering ahead to payment. Canadians are looking to use their phones to compare prices while shopping in-store (17%), order their food or coffee ahead using an app or browser (14%), scan a barcode or QR code (11%) and tap their smartphone at the cash register to pay (10%).
Mobile Shopping: What’s Holding People Back?
A major reason that people have not yet switched to shopping on mobile devices is because they do not see any distinct advantage in shopping on mobile devices versus shopping on their desktop or laptop computer. Security concerns were also a key reason holding Canadians back from shopping on their smartphones and tablets.
Among Canadian smartphone users who have not used their smartphones to shop in the past 12 months, the top stated reasons were: “prefer to purchase online from laptop or desktop computers (41%)”, “concerned about security of online purchases made from a mobile device” (34%), and “prefer to access the Internet via other devices” (30%).
Those who have shopped on their smartphone in the past 12 months stated slightly different reasons for not doing so more often: “the screen size is too small” (38%) and “prefer to purchase online from a laptop or desktop” (38%).
“With low cost smartphones with larger screen sizes entering the market along with improvements to mobile device security, the entry barriers to mobile commerce will decrease,” continued Peh. “Those improvements combined with safer and simpler mobile checkout solutions from PayPal will make it easier and more intuitive for people to pay with their mobile phone.”
*On Behalf of PayPal, Ipsos interviewed a representative quota sample of c.800 (17,519 in total) adults (aged 18 or over) who own and/or use an internet enabled device* in each of 22 countries (UK, France, Germany, Austria, Switzerland, Italy, Spain, Netherlands, Sweden, Norway, Denmark, Poland, Turkey, Russia, Israel, UAE, USA, Canada, Brazil, Mexico, China, Australia). Interviews were conducted online between 9th September and 3rd November 2014. Data was weighted to known incidence of online shoppers in all countries, and to demographic profile of internet users in 7 countries. *Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic organizer / PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii)
** Figures cited in this article are a global average of the 22 markets surveyed and not weighted for population size.
At PayPal, we put people at the centre of everything we do. Founded in 1998, we continue to be at the forefront of the digital payments revolution, processing almost 11.5 million payments for our customers per day. PayPal gives people better ways to connect to their money and to each other, helping them send money without sharing financial information and with the flexibility to pay using their PayPal account balances, bank accounts and credit cards. With our 162 million active digital wallets, we have created an open and secure payments ecosystem where people and businesses choose to securely transact with each other online, in stores and on mobile devices. PayPal is a truly global payments platform that is available to people in 203 markets, allowing customers to get paid in more than 100 currencies, withdraw funds to their bank accounts in 57 currencies and hold balances in their PayPal accounts in 26 currencies.
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Ipsos is a global independent market research company ranking third worldwide among research firms.
We specialize in six areas: advertising research; marketing research; media, content and technology research; loyalty, quality and customer relationship management research; opinion polls and social research; and survey management, data collection and delivery. Our industry specialization model means we have an intimate understanding of our clients' brands, consumers and markets.
Canadian mobile commerce spend was $3.45 bn in 2013 and predicted to grow by 142 per cent in 2016.
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