Smartphones are changing the way consumers and retailers interact, giving both parties greater flexibility and opportunities during the online holiday shopping season.
According to a new report released this week from IT market researcher IDC, 28 percent of the expected $127 billion that will be spent online this holiday season will be facilitated by smartphones and mobile devices like Apple's iPad.
The powerful combination of mobile devices and social networking makes it easier for shoppers to get the lowdown on the goods and services they want during the frenetic holiday shopping season and, at the same, gives retailers new ways to sway customers with tailored location-based services, discounts and promotions.
Mobile and social media (MSM) commerce opportunities abound for companies that are willing to invest the money it takes to build out the software, hardware and security apps required to make it work.
"MSM-commerce introduces a new consumer shopping model which changes how consumers shop, not simply when and where they shop, as e-commerce has already enabled," Greg Girard, program director of IDC Retail Insight's retail merchandise strategy group, said in the report.
"It is clear that MSM-commerce already has an influence on consumers' perception of brand value and their shopping intentions," he added. "We believe the retailers with superior mobile and social media commerce strategies in place will have a decided advantage."
Consumers are comparing prices from their smartphones, checking reviews on Facebook and setting up mid-shopping luncheons with their online community of friends and family. At the same time, local retailers and restaurants are offering discounts on meals and other merchandise to people who they detect in the vicinity of their establishments.
This combination of mobile empowerment and access is expected to fuel record online shopping receipts in the next two months and create some intriguing and controversial opportunities for folks on both sides of the register.
According to market researcher eMarketer, online holiday shopping will surge to more than $38 billion this holiday season, up nearly 15 percent from last year. And more and more of that revenue will be generated from iPhones, BlackBerrys and Droids than ever before.
According to IDC, adults 25 to 44 years of age will represent more than two-thirds of the mobile shopping audience, using their devices to buy, compare and inquire about products available both online and in bricks-and-mortar establishments.
Further, more than one third of smartphone users (roughly 24 percent of U.S. shoppers) are already using their devices for more than finding directions to a store or to place an online order. More and more, they're using the smartphone for instantaneous feedback on specific products, stores and prices.
The IDC report found that while social media doesn't have widespread influence on individual shopping decisions, the cumulative effect of people weighing in on a particular brand, location or service engenders a sense of trust that translates into more revenue for favorably reviewed retailers.
"Consumers' increased comfort with using their smartphones to go online anywhere combined with their plans to use them more in the 2010 holiday season signals the beginning of a significant shift away from the capacity of the store channel to hold sway over consumers as they move to a purchase decision," Girard added.
And as more and more smartphone vendors add near-field communications features to their devices, the marketing and advertising opportunities will surely grow exponentially.
"Mobile online shopping is reaching critical mass," wrote Mark Beccue, a senior analyst at ABI Research. "In the United States, mobile online shopping rose from $396 million in 2008 to $1.2 billion in 2009. While definitions of 'mass market adoption' vary, a more than threefold increase in one year indicates significant consumer interest."
Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.
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