UK retailers could be losing out on sales of £1.3bn as poor mobile phone networks discourage many consumers from shopping via their phones, according to a study.
The research, conducted for Ebay by Verdict, claims that mobile shopping could deliver a £4.5bn boost to the UK economy by 2016 and a further £13bn by 2021 as consumers become more comfortable with shopping on their handsets. But it warns that the market is currently being held back by unreliable mobile broadband and the high cost of data downloads.
In a submission to Ofcom, Ebay is calling on the regulators to do more to address consumer frustrations when rules for the fourth generation (4G) of mobile networks are agreed later this year.
The research showed that 16% of the UK is an “m-commerce not-spot” where mobile spending is at least 20% below the national average. Perhaps unsurprisingly these include sparsely populated areas, such as the Scottish highlands and islands, rural Wales and rural counties of England. But mobile shopping is also underperforming in a n umber of heavily populated areas like central London. More than a third of consumers have failed to complete a purchase on their mobile due to issues with mobile broadband, according to Ebay.
Although network coverage (79%), the reliability (85%) and speed (86%) of mobile internet connections rank highly as barriers to mobile shopping, consumers were also heavily put off by the cost of data (80%), said Ebay.
When asked their views on what should be the top priority for mobile networks and regulators, the cost of data came out top (over half), with improving coverage in rural areas in second place (23%). One in ten thought improving the reliability of internet connections in urban areas (14%) should be the priority, followed by providing better internet coverage on transport routes (13%).
Ebay UK retail director for UK Angus McCarey said: “Mobile shopping represents a massive opportunity not just for retailers, but for the economy as a whole. But our research shows that consumers and retailers are missing out as the cost and reliability of mobile broadband prevents shoppers from spending.
“High quality and reliable mobile broadband coverage throughout the UK has to be our ambition, giving consumers choice over when and how they shop, encouraging spending, thereby benefitting online and high street retail, and giving a much needed boost to the fragile economic recovery.”
MP Rory Stewart, a leading campaigner for mobile broadband, confirmed the importance of m-commerce to small businesses: “Growth in Britain is going to come from small businesses and it will be driven by mobile broadband. In rural areas, our businesses depend upon online activities, e-commerce and increasingly Ebay and m-commerce. This is another fantastic example of why we must take this opportunity to expand mobile broadband coverage as far as possible.”
Ebay said that mobile was the fastest growing part of its business, with global mobile sales set to double again in 2011 to over $4bn.
The auction site pointed out retailers also have a role to play in harnessing this opportunity and reflecting the demand from consumers, with 88% less likely to shop via mobile because many shopping websites are not optimised for mobile.
Neil Saunders, consulting director, Verdict Research commented: “With the increasing proliferation of smartphones, more and more consumers want make the most of the convenience of being able to shop on the move. Retailers need to move fast to optimise their websites and capture this growing market.”
