M-Commerce is the Present and Future of E-Commerce

When GlobeSt. asked a bevy of retail experts where the e-commerce share of retail will end up in coming years, Brandon Isner, CBRE’s Head of Retail Research, gave us the most bullish prediction.

“Our latest data suggests that, overall, the e-commerce share of total retail will grow to 29.3% by 2030,” Isner told GlobeSt. “Consumer preference is the primary factor, as we have more agility and choice than ever before.”

When we asked Isner what was making him so confident about the growth potential for e-commerce, he told us he’s betting that the rise of “m-commerce” will fuel the growth of online market penetration.

CBRE’s top retail guru believes mobile commerce—online sales on social media platforms by shoppers using mobile phones—will become the dominant form of e-commerce within the next three years.

“M-commerce is the present and future of e-commerce,” Isner told us. “The convenience of being able to connect to a retailer’s supply chain network while having coffee at an outdoor café is truly a benefit to the consumer. Retailers who aren’t strategizing how they will cultivate this activity for their business will be left behind.”

Colliers is projecting that what it calls the “global social commerce industry”—embraced by Gen Z and amplified by influencers—will grow three times as fast as traditional e-commerce in the next three years, from a 2021 estimate of $492B to $1.2T in 2025.

“Social commerce has the potential to reach a broad audience, but its effectiveness will depend on the specific platform, target audience and marketing strategy [that is] used,” Nicole Larson, Manager, National Retail Research, Colliers, told GlobeSt.

James Cook, JLL’s Head of Research, agrees that social media platforms like TikTok and Instagram are “incredibly powerful” marketing tools but notes that the cost of customer acquisition will be a hurdle.

“Unfortunately, for on online retailers, the cost of new customer acquisition on a social media platform can be quite high. Having a bricks-and-mortar store in a high-traffic area is often cheaper in terms of customer acquisition,” he said.

The experts we talked to told us that bricks-and-mortars stores are being adapting to the rapid embrace of mobile commerce by millennials and Gen Z, and agreed that the most successful post-pandemic retailers are those who optimize all of their sales channels.

“The retail industry’s future will involve a mix of online and in-person shopping. We expect retailers to focus on the ‘optichannel’ approach versus ominchannel—optimizing all channels in play,” Larson said.

“By combining the convenience of online shopping with the personal touch of in-store experiences, retailers can provide a more comprehensive shopping experience for their customers,” she said. “It’s all about flexibility for the consumer.”

The combined approach is shaping retailers’ decisions about optimizing store footprints. The post-pandemic model is somewhat smaller than a Big Box outlet—with a significant portion of the footprint reserved for in-store fulfillment of online orders.

“It is a rare retail store today that does not do some form of click-and-collect,” Cook told us. “In the future, such a store will be even rarer.”

“Any store that does a moderate amount of pickup activity needs to have a significant amount of square footage devoted to storing, staging and pickup,” he said. “Many chains are still determining what the perfect store size will be. I expect that we won’t see stores get significantly smaller on average in the future.”