Post-World War II, technology has been the primary engine driving the retail industry’s transformation through three powerful megatrends. As we approach the perfect vision year 2020, this article summarizes the state of the third and most important megatrend—mobile communications and the smartphone.
The term “smartphone“ first appeared in 1995, three years after IBM introduced Simon, which was the first phone that combined a cell calling capabilities with a Personal Digital Assistant (PDA). Simon was on the market for six months and only 50,000 units were sold.
Fifteen years after Simon, in 2007, Steve Jobs introduced the iPhone by saying, “Every once in a while, a revolutionary product comes along that changes everything.” Apple and all the other competitive smartphone variations are forever disrupting multiple industries including retail.
Mobile Eats the World
According to the latest GSMA Mobile Economy 2019 research, “by the end of 2018, 5.1 billion people around the world subscribed to mobile services, accounting for 67% of the global population.” Over the next seven years, 710 million people will join the mobile revolution, bringing to total to 5.8 billion (71% of the global population).
Of critical importance to retail and all other industries are the number of mobile internet users. Currently 3.6 billion people are connected to the internet via mobile and this number will surge to 5 billion by 2025.
IoT, Smartphone, and 5G Global Penetration by 2025
Global Internet-of-Things (IoT) revenue will grow at an annual rate of 23% to 2025 reaching $1.1 trillion, a fourfold increase from 2018. By 2025, IoT connections will be nearly 3X from 2018 at 25+ billion.
Seventy-nine percent of all mobile connections by 2025 will be on smartphones, a critical gateway for retail e-commerce.
5G also continues to make progress. “Following commercial launches in the US and South Korea towards the end of 2018, 16 more major countries will have launched 5G networks by the end of 2019.”
A Deeper Dive into Smartphones
Of interest in the GSMA report is the smartphone penetration by region.
The data confirms that smartphone adoption will vary greatly by region and by countries.
For retail, smartphone adoption is a key growth opportunity for faster opening of new markets through strong branding and e-commerce. China being number one by 2025 is not a surprise, especially if you listened to my Rethink Retail podcast.
A Deeper Dive into IoT
The surprise in this report are the laggard activities for IoT for the retail industry.
For smart buildings, “energy efficiency directives continue to drive adoption of IoT technologies in lighting, HVAC and building automation, where the reduction of energy consumption becomes the key compliance metric for building owners to meet emissions reduction targets.” The other high growth IoT sector is smart home where to date nearly $2 billion has been invested globally in emerging companies.
Mobile and the Future of Retail
As the latest RIS Shopper Megatrends 2019 study points out, “the omni-shopper purchases more online (73%) and on smartphones (61%) than five years ago.” Mobile is the critical technology that bridges between channels with 70% of omni-shoppers using the retailer’s mobile app to check prices, product descriptions, and in-stock availability. “Importantly, 71% of shoppers will allow location-based services while they are in the store.”
The smartphone is an important gateway to new services such as click-and-collect which bridges the gap between digital and in-store shopping.
In physical stores, mobile empowered associates are also increasingly critical. Nearly half of associates report in-store mobile devices help them provide a better shopping experience by enabling them to:
Consumers and store associates as brand ambassadors plus immersive customer experiences are the future of the retail industry. Mobile is the vehicle for the increasingly digital transformation technology conversation which I agree with Steve Jobs, “changes everything.”