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The Mobile Revolution is Happening Faster amongst the Less Affluent

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Retailers make a big fuss about having a mobile presence, but what concrete trends should they keep in mind for the future? It’s too easy for mobile development to take a scattershot approach, whether it be developing too many separate apps (Target) or forgoing mobile site development for an app only strategy (Flipkart). With so many retailers experimenting within a field that has yet to gel, it would help to set a parameters for the future and then guide development within those parameters.

One important parameter is who uses their mobile phones the most. Ironically enough, it might be the people that have spent the least amount of time with them historically. New data from the US Census Bureau and mobile spending data from Euromonitor indicate that “leapfrogging” is pervasive amongst people with less purchasing power across the world. Those without access to prior internet networks are now being ushered into an era of low-cost technology and connectivity while those who have previously enjoyed these features continue to cling to the old modes of access. Retailers would do well to keep this in mind, especially if they cater to customers of all income levels. Lessons learned here will definitely be useful as digital shopping habit calcify for a new generation of shoppers that will likely see their purchasing power rise alongside m-commerce itself.

It’s happening everywhere in the US, but more so amongst the underprivileged

New data from the US census shows just how much can change in two years (see chart below). There are a couple of clear trends here.

  1. Everyone is using using mobile more exclusively, regardless of income.
  2. Those with less income are doing so at an even faster rate.

So while mobile may matter for everyone, it clearly will matter more to the less affluent. Those who rely more exclusively on mobile for internet access are likely doing so because this is the first time that they have had reliable access to the internet. The important thing to note is that browsing and purchasing patterns for these types of consumers have yet to be formed. Mobile-first marketplaces like Wish and WaNeLo are already starting to figure out what works, with a focus on low-cost goods, easy visual browsing, and using push notifications to encourage return visits to the apps.

On the other hand, this data suggests that mobile access at home for the more affluent is not as important. These households can afford to have different types of access to the internet and will likely switch between those types depending on the occasion. There are still limitations to browsing and buying via a smaller touch screen and if you couple those technical concerns with the power of human inertia, it is not unrealistic to expect a slower transition amongst the more well-to-do.

Internet Access by Household income

Source: US Census Bureau

Emerging markets show an even strong trend to mobile retailing

This trend towards mobile connectivity is a worldwide one. The combination of cost and convenience are finally approaching levels that allows those who are relatively poor on a global standard to begin to have access to the same online networks and capabilities as everyone else. This leapfrogging of previous technology ensures that a higher percentage of all e-commerce comes from mobile even faster. Mobile’s share of e-commerce in countries like Nigeria are a snapshot of how heavily e-commerce relies on mobile when the old technologies remain too expensive for most people in certain countries. If retailers in developed countries thought that they were under pressure to figure out how to sell on mobile, the risks of falling behind the curve are even greater for those in developing nations.

Mobile Share of Internet Retailing by Country

The real target for the future

There’s one final reason to cater to the low-income via mobile apps—the young. Even amongst the wealthy, most children have very little (but not zero) purchasing power. They will grow up in an era where they associate the internet more with mobile phones than desktop computers. Their online habits have yet to be set, but they will eventually settle as a they come of age. Figuring out how to cater to either the young or the more permanently low-income could lead to a platform that appeals to the other. Apps that become commonplace now could become staples of the future, where purchasing power is nearly guaranteed to rise for everyone.

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