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International e-tailer expects massive increase in its online sales driven by increased m-commerce and tablet adoption

International e-tailer expects massive increase in its online sales driven by increased m-commerce and tablet adoption


Rakuten, operator of Japan’s largest online retailer, owner of the UK’s and the world’s third-largest online retailer by sales, said it expects the spread of smartphone and tablet devices to drive a significant increase in its online sales traffic – at least ninefold over the coming years.


While mobile devices such as smartphones have been an important driver in the growth of online sales, it is the increased use of tablet devices that Rakuten has said it believes presents a particularly significant opportunity for online retailers. The group, which also recently acquired Canada’s Kobo e-reader business, has seen growing evidence that consumers tend to buy more on mobile devices than on their PCs.


Higher conversion rates


“Our figures show that when PC users start using feature phones for online shopping, their transactions will typically increase 1.5 times, with a further 1.5 times increase when they migrate to full smartphones and another jump by 1.5 when our preinstalled apps are used,” said Kenichiro Nakajima, chief mobile officer at Rakuten. “Given the convenience and quality browsing experience delivered by tablets we would expect to see a similar level of growth driven by tablet devices.”


According to Google and the British Retail Consortium (BRC), the total volume of mobile online retail searches rose 216% year-on-year between the second quarter (Q2) of 2010 and Q2 2011. This tallies with analyst Forrester’s prediction that m-commerce will be worth $31 billion (£19.5bn) by 2016. Meanwhile, IMS Screen Digest has found sales of tablet devices are growing rapidly with 70 million devices forecast to be shipped in 2014.


Part of multichannel strategy


The e-tailing giant said that, while many consumers still value the physical shopping experience, it is clear that retailers must adopt multichannel strategies, factoring in the social elements of the online experience. With data released in July 2011 by Hitwise indicating that one Facebook fan is equal to 20 additional visits to a retail website in the course of a year, it urged that retailers must have a clear strategy around how social tools can be used not just for brand awareness, but for product development and customer service too.


“Online sales can be an important complement to traditional retail sales for many brands, making a proper multichannel approach absolutely vital,” said Nakajima. “M-commerce is an exciting and rapidly growing retail channel, but this must not come at the expense of the more social and service-centric elements that consumers associate with visiting shops. Retailers must build a strong presence across all channels – physical, mobile and social – to deliver a service which allows the customer to shop as they prefer.”