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Poor mobile coverage is depriving UK retailers of up to £1.3 billion

A survey commissioned by Ebay has found that the UK retailers could be losing out to the tune of £1.3 billion as poor mobile phone networks discourage many consumers from shopping via their phones.

GENERAL MERCHANDISE

Poor mobile coverage is depriving UK retailers of up to £1.3 billion

A survey commissioned by Ebay has found that the UK retailers could be losing out to the tune of £1.3 billion as poor mobile phone networks discourage many consumers from shopping via their phones.

The research conducted by retail experts Verdict, claims that mobile shopping could deliver a £4.5bn boost to the UK economy by 2016 and a further £13bn by 2021 as consumers become more comfortable with shopping on their handsets. However, it warns that the market is currently being held back by unreliable mobile broadband which is driving shoppers away.

Ebay said it was calling on regulators to take action to enable m-commerce  to support the UK’s economic recovery. In a submission to communications regulator Ofcom, Ebay calld on policy-makers to do more to address consumer frustrations when rules for the fourth generation (4G) of mobile networks are agreed later this year.

The research showed that 16% of the UK is an “m-commerce not-spot” where mobile spending is at least 20% below the national average. Sparsely populated areas, such as the Scottish highlands and islands, rural Wales and rural counties of England are the worst affected.  But the evidence also shows that mobile shopping is underperforming in certain heavily populated areas like central London. More than a third of consumers have failed to complete a purchase on their mobile due to issues with mobile broadband, according to Ebay.

Although network coverage (79%), the reliability (85%) and speed (86%) of mobile internet connections rank highly as barriers to mobile shopping, consumers were also heavily put off by the cost of data (80%), said Ebay. 

When asked their views on what should be the top priority for mobile networks and regulators, the cost of data came out top (over half), with improving coverage in rural areas in second place (23%). One in ten thought improving the reliability of internet connections in urban areas (14%) should be the priority, followed by providing better internet coverage on transport routes (13%).

Angus McCarey, UK Retail Director for Ebay UK said: “Mobile shopping represents a massive opportunity not just for retailers, but for the economy as a whole. But our research shows that consumers and retailers are missing out as the cost and reliability of mobile broadband prevents shoppers from spending.

“High quality and reliable mobile broadband coverage throughout the UK has to be our ambition, giving consumers choice over when and how they shop, encouraging spending, thereby benefitting online and high street retail, and giving a much needed boost to the fragile economic recovery.”

MP Rory Stewart, a leading campaigner for mobile broadband, confirmed the importance of m-commerce to small businesses: "Growth in Britain is going to come from small businesses and it will be driven by mobile broadband. In rural areas, our businesses depend upon online activities, e-commerce and increasingly Ebay and m-commerce. This is another fantastic example of why we must take this opportunity to expand mobile broadband coverage as far as possible."

Ebay said that mobile was the fastest growing part of its business, with global mobile sales set to double again in 2011 to over $4 billion.

The auction site pointed out retailers also have a role to play in harnessing this opportunity and reflecting the demand from consumers, with 88% less likely to shop via mobile because many shopping websites are not optimised for mobile. 

Neil Saunders, consulting director, Verdict Research commented: “With the increasing proliferation of smartphones, more and more consumers want make the most of the convenience of being able to shop on the move. Retailers need to move fast to optimise their websites and capture this growing market.”

Ebay said the UK’s top 10 mobile shopping “not-spots” where mobile spend is significantly below the national average were Outer Hebrides, Lerwick, Llandrindod, Jersey, London WC, Inverness, Galashiels, Perth and the Isle of Man.

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