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Social media retail activities boosting online purchases

17 Jul 2015

Global eretail sales are expected to reach $1.7 trillion this year, according to new data from Juniper Research. 

The new figure is up 17% from 2014. 

Juniper Research says that while recent growth has been buoyed by factors such as public Wi-Fi deployments and 4G rollout, in the medium term sales would receive a strong fillip from the trend of social media companies to act as direct sales platforms.

The new research, Mobile & Online Purchases: Cards, Carrier Billing & Third Party Payment Platforms 2015-2020 observes that players such as Twitter, Facebook, Pinterest and Instagram have already launched ‘buy’ buttons from their mobile apps.

The research says such players are also likely to enhance their sales prospects through strategic retailer partnerships, with Twitter already enabling users to link their accounts to Amazon.

Juniper Research says in-store and online integration is critical.

The research argues that online retailers are increasingly seeking to reduce time-to-consumer by launching same-day delivery, while ‘bricks and mortar’ stores now widely offered next-day in-store collection – often charging a premium for this option.

In 2013, the value of mobile and online physical goods sales exceeded $1 trillion for the first time. Overwhelmingly, the momentum for growth comes from the mobile (smartphone and tablet) sphere, with the Chinese market in particular experiencing stellar increases, Juniper Research explains. 

However, the sales of online goods, both physical and digital, is no longer the preserve of the pureplay online retailer, with a majority of mid-sized and large retailers transitioning to a hybrid approach to maximise their engagement opportunities with consumers.

However, findings from the research caution that retailers need to deliver a consistency of message, branding and shopping experience across all channels. It argued that integration between in-store and online is also critical if the retailers want to maximise the extent to which that can identify a unique individual’s omnichannel shopping habits.

“The key is to ensure that consumers are allowed to choose their own path to purchase rather than have it effectively mandated by channel limitations,” says Dr Windsor Holden, research author.

While carrier billing should provide content providers with a key mechanism for monetising digital content, its use for physical goods purchase is likely to be limited by comparatively higher share of revenues demanded by network operators and billing platforms.

According to the research, smartphones will account for more than 40% of eRetail transactions by 2020.

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