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New research shows explosive growth in social commerce

Increasing numbers of Australian consumers are shopping on their mobile phones, but many businesses still have not optimised their websites for mobile commerce, and a significant potion have no plans to do so in future.

These are the findings of a new survey commissioned by PayPal Australia. Released annually, the PayPal mCommerce Index provides a snapshot of the rapidly evolving mobile commerce landscape in Australia.

The survey was conducted by ACA Research, which reached over 1,000 consumers and over 400 businesses nationally between 11 August and 21 August of this year.

This edition shows Australians are shopping on their mobiles more than ever with 72 per cent of respondents engaging in mobile shopping. However, only 51 per cent of businesses are currently optimised to accept mobile payments.

Despite this gap, online businesses have seen a 46 per cent year-on-year increase in the percentage of mobile sales, with nearly one in five transactions now occurring on a mobile device.

It has become increasingly clear that mobile commerce is a trend that is here to stay.

The index shows 48 per cent of Australians who buy via mobile do so at least once a week, up from 36 per cent in 2016.

When asked what was driving their adoption of mobile commerce, Australian consumers listed convenience and ease of use as the two main reasons for making a mobile payment or purchase.

Despite this, many Australian businesses believe customers don’t want to buy via mobile. Of the online businesses that are not yet mobile-optimised, 36 per cent said their customers don’t want to buy via mobile and 37 per cent have no plans to optimise for mobile in the future.

“M-commerce is clearly not a fad, but a consumer behaviour change that’s here to stay. Australian businesses have work to do to bridge the gap between consumer expectations of mCommerce and their ability to offer a streamlined mobile shopping experience,” said Libby Roy, managing director of PayPal Australia.

Social commerce, apps on the rise

In addition to data about m-commerce usage, the index also shows emerging trends within the mobile landscape.

Social commerce, or shopping via social media platforms like Facebook and Instagram, saw some interesting movements over the last year.

While consumer engagement with social commerce remained steady from 2016 to 2017 at 11 per cent, there was a huge jump in the number of businesses now accepting payments via social media platforms. Just 7 per cent did so in 2016, compared to 16 per cent 2017.

“When businesses can capture a sale on social media at the point of consumer discovery it drops the cost of acquiring dramatically,” said Roy.

“The current retail environment is more complex than ever and there are deep interlinkages between online, m-commerce, social commerce and in-store – which all have to integrate to achieve best results. Retailers now have to think about their overarching strategy across all engagement channels to effectively compete.”

Mobile apps have also become more widely accepted by Australian businesses, with 15 per cent of businesses now having an app, and 42 per cent planning to do so within the next three years.

But while the popularity of mobile apps for business is on the rise, 75 per cent of consumers delete apps or don’t use them again after downloading them for a specific purpose, with majority of respondents stating it was because too many apps clutter their mobile device.

Unsurprisingly, Australia’s youngest shoppers, Gen Z (defined as 18-22 years old) are the most likely to make a spontaneous purchase or payment on their mobile device, with 58 per cent doing so compared to 51 per cent of millennials and 36 per cent of Gen X.

Over 80 per cent of Gen Z use their smartphones for shopping.

“The emergence of Gen Z onto the shopping scene presents Australian retailers with an opportunity to engage with a generation whose buying power will only increase. It has never been more important for Australian businesses to invest in the future of their business with a mobile-first or even mobile-only approach,” Roy said.

However, user experience is especially critical with Gen Z mobile shoppers, who have higher expectations than millennials. Over half have abandoned a purchase or payment on a mobile device if it was too long or difficult, and 65 per cent are annoyed when sites don’t work on their mobile.

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