Mobile is poised to become a mainstream channel for retailers

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Mobile is poised to become a mainstream channel for US retailers in the next few years, which should help propel m-commerce, a new LexisNexis study suggests. 

• Nearly half of all merchants have or are considering supporting m-commerce: 16% of more than 1,000 US merchants surveyed by LexisNexis currently have a mobile shopping channel, and another 32% are considering adding this channel in the next 12 months.
• M-commerce adoption is significant among e-commerce merchants: For example, 80% of e-commerce retailers with at least $50 million in annual sales offer or plan to offer m-commerce. This makes sense because e-commerce merchants by definition have already invested in a digital channel, making m-commerce the logical next step for their business as consumers migrate to that channel.
• Merchants with no online presence are still hesitant to embrace m-commerce: Only 23% of nonremote merchants, or merchants with solely an in-store business, that generate less than $1 million in annual sales, are considering m-commerce. This isn't necessarily surprising because this segment doesn't yet support online shopping. 

Growing merchant adoption of m-commerce will help drive up consumer spending on mobile. BI Intelligence, Business Insider's premium research service, expects US users to spend $284 billion on mobile by 2020, comprising about 45% of total US e-commerce that year. One of the essential growth drivers of this upward trend is that more merchants will give consumers mobile-based shopping options.

Some of these merchants will migrate to mobile from other channels, while others will offer mobile-only commerce experiences, like Uber currently does. We expect merchants to continue adopting m-commerce as long as consumers make smartphones their primary computing device. 

Mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

Here are some key takeaways from the report:

• In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
• Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
• Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.

In full, the report:

• Forecasts the growth of US in-store mobile payments volume and users through 2020.
• Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.
• Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
• Addresses the key barriers that are preventing mobile in-store payments from taking off.
• Identifies the growth drivers that will ultimately carve a path for mainstream adoption.

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