How cell phones are changing shopping

More and more people are doing their Christmas shopping on their cell phones.

Shopping on cellphones and portable tablet computers like iPads accounted for about 5 percent of online sales in November, while last year mobile shopping sales were too insignificant to measure, according to Coremetrics, an e-commerce measurement service.

“There were early adopters last year, but it’s absolutely real this year,” said Kelly O’Neill, director of industry marketing for ATG, which provides online and mobile commerce technology to retailers like Best Buy and J. C. Penney. And mobile shoppers are buying high-ticket items like diamond rings and cars, not just virtual goods and ring tones. 

EBay is so convinced of the future of mobile phone shopping that on Wednesday it acquired Critical Path Software, a mobile phone app developer, to speed its move into this new arena. 

An interesting reference to Best Buy, because that company and similar stores aren't doing very well.

The challenges faced by electronics stores were highlighted this week when Best Buy, the world’s largest consumer electronics retailer in revenue, reported that third-quarter net income fell 4.4 percent, to $217 million, and sales fell 1.1 percent, to $11.9 billion. Sales at stores open for more than a year declined 5 percent. 

“The market, which is already weak, is dramatically shifting away from stores and toward online,” said Colin A. McGranahan, a senior analyst at Sanford C. Bernstein & Company.
Online sales in the United States are forecast to account for 20 percent of total consumer electronics sales of $250 billion by the end of this year. 

This doesn't include shoppers using their phones to check prices in stores.

Marketers must contend with shoppers who can use their smartphones inside stores to check whether the specials are really so special, and if the rest of the merchandise is reasonably priced.

"The retailer's advantage has been eroded," says Greg Girard of consultancy IDC Retail Insights, which recently found that roughly 45% of customers with smartphones had used them to perform due diligence on a store's prices. "The four walls of the store have become porous."

Power to the people.