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Mobile shopping transforms holiday retail season

| Saturday, Nov. 30, 2013, 9:00 p.m.

If the crowds at the mall seem a bit thinner this holiday season, it may be because more shoppers are at home, buying gifts on an iPad.

This year, more consumers than ever are expected to rely on their mobile gadgets as holiday shopping companions. There's even a name for it: “couch commerce.”

“We've been talking about mobile for the last five or six years, but 2013 really is the year of mobile,” said Pat Dermody, president of the U.S. operations of Retale, a mobile application that collects weekly retail ads.

Consumers are turning to smartphones and tablets not only to make purchases, but for coupons and promotions, to search for gifts and compare prices.

Retailers are responding, too, trotting out snazzy apps and mobile websites to encourage shoppers to buy their brands.

Some experts say that retailers' ability to connect with shoppers on their mobile gadgets may determine the success of their holiday season — and their entire year. Many retailers rely on the holiday shopping season for up to 40 percent of their annual revenue.

“It's becoming a bit of a tipping point,” said Kelly Pedersen, retail and consumer director for global research and consulting firm PwC in San Francisco. “There is a pretty big basket of spending going to mobile.”

There's a lot to lose for retailers who aren't on mobile, where consumers do 30 percent of their online shopping. According to an Adobe study, retailers with well-developed mobile sites get about 20 percent of their total online sales from a smartphone or tablet, with the highest sales this holiday season expected to have been on Thanksgiving. Mobile spending is expected to approach $10 billion during the last three months of this year, according to Internet technology company comScore, up from $5.8 billion in the third quarter. Consumers spent about $7.2 billion on mobile devices in the fourth quarter of 2012.

More than 40 percent of shoppers will use their mobile devices for holiday shopping this year, and almost 70 percent of all smartphone owners will shop for gifts from their iPhones or Android devices, according to several studies from research groups including Google and Deloitte. Experts say tablets have been one of the biggest drivers of mobile browsing and purchases — about 41 percent of consumers will shop from their tablets in the next few weeks, making them almost as popular as desktops for holiday shopping, according to research group Burst Media.

“People prefer to be at home on their couch shopping from their laptop and iPad,” said Gidi Fisher, founder and chief executive of PoachIt, an online coupon service and price tracker. “There's more variety, there's better prices and it's just easier.”

The number of consumers who shop from the couch was up nearly 350 percent between 2011 and 2012, said PayPal spokeswoman Jennifer Hakes.

And they're not only buying only CDs, books or cheap Secret Santa gifts; PayPal reports shoppers are buying diamond bracelets from their smartphones.

Retailers that have evolved with their high-tech consumers are rolling out mobile sites that load more quickly and fit inside a smartphone screen, as well as apps that offer more perks and services than a shopper may get in the store, experts say. Macy's app gives consumers access to videos, product reviews, gift registries, instant coupons and a mobile payment system. The Disney Store recently relaunched its app to send messages to shoppers on their mobile devices with exclusive discounts.

And to encourage shoppers to move their tablets from the couch to the stores, retailers have created mobile features that make the in-store shopping experience quicker and easier.

Nordstrom has mobile checkout, much like Apple stores. Other stores provide customers with tablets to browse the entire store inventory and apps for in-store navigation, so shoppers don't have to search for items. Toys “R” Us has built an app that lets shoppers — or their children — use a smartphone to scan the bar code on items to create a Christmas list. Toys “R” Us will match a competitor's prices if shoppers come into the store and show the advertisement on their smartphone.

“Mobile commerce is our most rapidly growing channel,” said spokeswoman Alyssa Peera.

Chris Hill, vice president of marketing at Mobidia, which tracks app use among 2 million mobile users worldwide, said mobile apps from big brands, such as Wal-Mart, Best Buy and Gap, are used as frequently among the consumers who download them as any other app on their phone except for Facebook and Twitter.

Still, while the number of retail apps is on the rise, some niche and high-end brands are just starting to tap the mobile market. Some are hiring Silicon Valley tech companies to build their apps, while others have scraped together resources to build their own.

“To build a good mobile app takes a significant investment — $50,000 to $100,000 at the low end,” Hill said.

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