There’s an ongoing meme about millennials that suggests some online tasks are so simple they can be done on a smartphone—like buying shoes—while some remain “serious” enough to warrant the use of a computer, such as purchasing plane tickets. But how did we arrive at a point where mobile devices, with their tiny screens, have become the go-to tool for shopping and conducting business?
The evolution of mobile devices and m-commerce has shaped our consumer behavior, making purchasing goods with only the device in our pockets easier than ever. When did this shift occur and how does it impact our day-to-day tasks?
Online Cart or Store Aisles: Where’s Your Next Purchase Coming From?
In 2023, one in five retail sales occurred online, projected to exceed 22% by 2027 [source]. While physical stores still dominate as the primary sales channel, there is a clear trend toward online shopping. Despite the fact that there are still more offline transactions, online consumer spending doubles in-store spending, highlighting the growing influence of e-commerce in the retail landscape.
One of the driving factors of this change was the pandemic, which accelerated a shift in consumer shopping habits and forced many to adapt to purchasing goods online. This transition has led to a lasting change, with many consumers now preferring the convenience of shopping online over traditional in-store experiences. Additionally, there is increased demand for a wider variety of products and the expanded marketplace allows consumers to find niche items that may not be locally available.
Focus on Mobile Commerce
The rapid advancement of mobile technologies is a major factor behind the growing number of sales made via mobile devices, increasing the popularity of mobile commerce (m-commerce) solutions. Improved internet connectivity and innovations in payment methods, like Google Wallet and Apple Pay, have simplified the transaction process, making it more accessible than ever. Currently, digital wallets account for 49% of total online commerce transaction value, highlighting their increasing relevance in modern commerce [source]. Additionally, many m-commerce solutions now feature well-designed UX flows that allow users to complete orders in just a few taps.
Modern solutions leverage smartphone capabilities to meet user expectations to create a more engaging and personalized shopping experience. Features like virtual try-ons or size scanning, powered by augmented reality, enhance the experience by offering tailored solutions. As a result, consumers can research, compare offers, and purchase virtually anything from anywhere using their mobile devices, making shopping more convenient and intuitive.
Therefore, to cater to consumers’ evolving needs and to maintain an online presence, modern retailers must offer not only the option to order via desktop but also a seamless mobile experience that meets growing demand. This is especially important when targeting younger audiences, as 67% of millennials prefer online shopping, while 72% of seniors still tend to favor in-store shopping instead [source].
Mobile Apps Reign Supreme
The best mobile solutions can be achieved by designing a responsive website optimized to touchscreens and mobile device capabilities or by developing a dedicated mobile app. A mobile app, in particular, allows businesses to deliver a more tailored experience, incorporating hardware-dependent features like augmented reality, GPS tracking, or enabling faster, more secure transactions through biometric authentication. A well-designed user interface that is optimized for the device and free of distracting pop-ups helps keep users engaged.
Additionally, offline functionality and push notifications drive engagement and boost sales by keeping users interested in the product. Apps also offer the ability to collect valuable data across multiple apps for personalized marketing, allowing businesses to understand user behavior and preferences better. Regular updates and seamless integration with social media platforms further enhance the user experience, fostering brand loyalty and increasing visibility.
What About Doing it Even More (A)Intelligently?
Introducing the power of artificial intelligence to online commerce brings multiple enhancements that can significantly improve user satisfaction and, in turn, boost sales. When combined with the capabilities of mobile device hardware and on-device computing, it creates an even more personalized experience tailored to meet consumer needs.
From refining recommendation systems to delivering mind-blowing visualizations, AI in m-commerce can better align with consumer expectations. While some of these solutions can be integrated into desktop e-commerce platforms, many thrive in a native app environment, where they can fully leverage mobile-specific features for optimal impact.
How AI Knows What You Want Before You Do
First and foremost, AI plays a critical role in enhancing product recommendations on commerce platforms. It drives significant sales growth by promoting products tailored to users based on their search history, preferences, or even how long they glance at certain items—a metric easily captured in native apps. Presenting a list of products aligned with consumer preferences significantly increases the likelihood of purchases, helping users discover items they may not have considered otherwise.
Additionally, AI models are capable of predicting future behaviors by analyzing purchase history and identifying recurring patterns, allowing for product suggestions at appropriate intervals. Such recommendation methods effectively align with consumer needs, as demonstrated by Amazon’s AI-powered recommendation engine, which is responsible for 35% of all sales and estimated to add $50 billion in additional revenue annually [source].
Another great example of leveraging the power of AI can be seen in eBay taking the recommendation system to the next level by introducing a new feature called Shop the Look. It allows users to explore AI-generated outfit suggestions based on browsing and purchasing history. If a user is interested in a specific item, the app uses visual search technology to find similar items from the available listings that match those in the outfit suggestion. This feature design makes eBay a major player in using AI to enhance the shopping experience.
Try It Before You Buy It
Combining camera technology with AI expands the possibilities for a personalized shopping experience, allowing consumers to evaluate products and find the best options for their needs. Camera integration is widely used across various platforms.
For example, IKEA’s app lets users visualize how furniture will look in their space, while Amazon’s tool allows customers to try on shoes virtually. Similarly, La Roche-Posay uses AI-powered scanning to analyze a person’s complexion and skin issues, recommending a tailored set of skincare products specifically suited for their skin type. This fusion of AI and camera technology offers a more engaging and customized shopping journey.
Augmented reality and AI-powered virtual try-ons create an interactive way for consumers to explore products while ensuring realistic representations. Thanks to hardware capabilities with real-time image analysis, these solutions can suggest size recommendations instantly, enhancing the shopping experience and helping reduce dissatisfaction from unmet expectations or incorrect sizing. Incorporating virtual try-on technology has been shown to lower product return rates by as much as 60-64%, making it a powerful tool for both customer satisfaction and cost reduction [source].
Alexa, Buy a…
Furthermore, with the growing capabilities and adoption of personal assistants like Alexa, Google Assistant, and Siri, m-commerce continues to gain significant advantages. As AI technologies like Apple Intelligence and Siri’s context-aware functionality evolve, researching products within a mobile app through voice assistance can make the shopping process more accessible than ever. This seamless integration not only enhances user convenience but also increases the attractiveness of mobile commerce by offering a hands-free, intuitive shopping experience.
The Future of Shopping at Your Fingertips
Bringing commerce to mobile devices presents a significant opportunity to boost customer engagement. Developing a standalone mobile app that allows clients to explore and purchase products offers a chance to introduce unique features that help retailers stand out from the competition.
Such solutions not only improve conversion rates but can also enhance overall profitability by reducing costs. If you want to learn more about integrating modern solutions, including leveraging AI for profitability, stay tuned for upcoming publications featuring case studies and in-depth explorations of how AI can transform the retail business.