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£3.5bn of Christmas sales to be purchased on or influenced by smartphones, finds Deloitte

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£3.5 billion of Christmas retail sales will be purchased on or influenced by smartphones, according to business advisory firm Deloitte. The influence of smartphones far outweighs the value of direct sales made through them, with consumers using their device to research prices, store Christmas shopping lists, engage with friends and family using social media, but also increasingly to make payments for goods.

In fact, Deloitte anticipates around £3.2 billion of in-store Christmas sales will be influenced by smartphones, with another £330 million of sales made directly through the devices. A further £500 milllion in sales will be made through tablets.

Deloitte also forecasts another strong year for online retail with sales increasing this Christmas by 17% with total UK retail sales edging up by 1%.

Colin Jeffrey, head of multichannel retail at Deloitte, tells us: “As with recent years, the strongest growth will be found online, with purchases completed on mobile phones double or even triple that of last year. It is also going to be a click-and-collect Christmas with those retailers who have invested in this service in line to do well as these customers spend more and collections drive footfall in to stores. Retailers without flexible collection options and mobile services are failing to meet basic customer expectations and will suffer as a result.

“The rapid adoption of tablets and the high number received as gifts this Christmas will drive a sharp increase in transactions through these devices. However, whilst transaction growth is slower for smartphones, their broader influence is far greater. Whilst we forecast 10% of in-store sales will be influenced by smartphones in December, by 2016 we predict this figure will be as high as 18% for the full year, equivalent to £43bn of sales.

“We are also beginning to see the power of social commerce with more and more consumers using Twitter and Facebook to share reviews, offers and product information. Retailers are also starting to use social media as a forecasting tool, monitoring buzz around certain products to predict demand.”

Mark Haviland, MD of Rakuten LinkShare says: “Deloitte’s prediction that £330m of festive purchases will be made directly on smartphones this Christmas and a further £500m via tablets is great news for retailers that have developed a strong mobile offering. However, the m-commerce industry is not just about conversion – sales completed from a mobile or tablet – it’s about the full purchase journey. It’s great to see the industry is grasping this, with Deloitte predicting that £3.2 billion of sales will be influenced by smartphones this Christmas.

The ways in which smartphones and tablets can influence a consumer’s decision to make a purchase are incredibly varied, ranging from innovative location-based services that link the online and offline world, to lifestyle sites that drive interest through dynamic content. By working with a CPA network (cost per acquisition), brands and retailers can ensure their content is reaching the right consumers, on the right device, at the right time. On top of this, tracking which of these actions result in a purchase is key, whether the final purchase is made in-store, online or on mobile. The days when online and in-store are competing against each other for sales should be considered over, as brands look to engage the multi-channel consumer.”

Ian Geddes, UK head of retail at Deloitte, puts it into context: “[Deloitte] remain cautious on the long-term outlook for UK retail, but there are more reasons to be optimistic than pessimistic this Christmas. Consumer confidence has gradually improved over the course of the year and despite the recent increase in inflation, it is much lower than it was 12 months ago easing the pressure on households. Whilst it is not certain whether this will translate into higher spending, with consumers continuing to show a desire to save, we believe it will be enough to generate modest growth.

“However,” he continues, “whilst we forecast the value of retail sales to be in positive territory, once you account for inflation running at 2.5%, this equates to a fall in volume. Yet with retailers increasing their focus on stock control we would expect to see better use of strategic, targeted sale activity as opposed to the blanket application of discounts across stores seen in recent years.

“As food prices continue to increase, we would expect general merchandise to be flat at best and very possibly experience a slight fall as consumers decide to save the Christmas dinner. However, this hides a more complex story. Increasingly, we are seeing examples of certain retailers performing strongly and others weakly within the same sector. Shoppers are responding to those retailers that combine the right products with exceptional customer service across all channels, dynamic and exciting online and mobile sites and a brand that they want to be associated with and invest in.”

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