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The iPhone Turns 10: A Look at the Growth of Mobile Commerce Over the Last Decade

Becky Ryder

Posted in Mobile

25/08/17

The iPhone’s launch ten years ago was historic in many ways. Not only did it set a new bar for mobile technology, but it would also change the retail landscape forever. The influence of Apple’s most beloved creation on modern commerce is undeniable, as shopping from handheld devices has become ingrained in our culture and contributed to the success of many online businesses. Today, mobile shopping is as commonplace as nipping to the corner shop. Last year, UK online sales increased 15.9% to £133bn, with mobile commerce accounting for much of the growth – in fact, it’s set to take over all other forms of commerce.

A New Dawn for Retail

Of course, now that we have more buying choice than ever before, it’s easy to forget that we didn’t always have the facility to purchase anything we wanted right at our fingertips. But the mobile shopping revolution didn’t happen overnight. The earliest incarnation of m-commerce came in 1997 in the form of Coca-Cola vending machines in Finland, which could accept payment via SMS. Following that, were the early noughties’ downloadable ringtones (Crazy Frog anyone?), progressing to flight and rail tickets and mobile parking payments. Then in 2007, the iPhone launched and everything changed…

Crazy Frog ringtones were the first mobile transactions

The Smartphone Effect

The BlackBerry’s popularity, mainly in the US, had previously seen it nicknamed the ‘CrackBerry’ due to its addictive nature, but it would soon have nothing on the competitor about to knock it from its mantle. Apple entered the market with the first-generation iPhone in 2007, which combined the MP3 player with the smartphone.

The world became obsessed with this new class of mobile technology which would became an item of worship, turning us into internet fanatics and spawning the heads-down generation as we know it. Its large display, sleek design and touch screen technology made both organising our lives and seeking immediate entertainment easier and more enjoyable than ever before. Accessing the internet via mobile no longer felt like a poor imitation of desktop or laptop use; it was acknowledged as the natural next step in how we would browse and access everything we wanted. A year later, the App Store was launched and history was made once again.

Apple changed technology forever in 2007 with its first mobile phone, the iPhone

The World Gets App-Happy

When the App Store was unveiled to the world in July 2008, it contained 500 apps and in the first weekend alone, 10 million downloads were recorded (and only 25% of them were free). By November the same year, 10,000 apps were made available, with 50 million downloads recorded less than two months later. In April 2009, just over nine months after the App Store’s launch, a total of one billion apps had been downloaded.

Android, Nokia, Blackberry and Windows have all attempted to make their mark on the app market, but none have surpassed Apple. The App Store gave online retailers a whole new way to grab our attention; by dominating our home screen, willing us to enter their site and staying in regular uninitiated contact via notifications about new offers and products, the possibilities were endless.

Today, retailers are smarter about the implementation of apps. Mobile users increasingly look to streamline their home screens now, to save on memory and disable notifications in a bid to quieten the noise of their ever-dominant mobiles. Many businesses are realising the importance of focusing on quality mobile sites and devoting ad spend to social campaigns, rather than often-unnecessary app development, which may not add anything to their brand.

The Apple App Store launched in 2008

Mobile Payments

In 1998, PayPal was founded and paved the way for peer-to-peer transactions; the emphasis on convenience lending itself perfectly to the upcoming age of mobile. When the Google Wallet app came along in 2011, it changed the game in becoming the first app which could store payment information, making mobile shopping transactions ever more straightforward. By 2012, it was reported that 41% of smartphone customers had made a retail purchase on their mobile, as confidence in handheld technology continued to soar.

In 2014, Apple Pay launched and opened up a whole new world of accessibility. It was created to replace the debit card for iPhone (or Apple Watch) users and allowed customers to use contactless payments in physical stores. With the Touch ID function enabled on the app, it became safer than using a contactless debit or credit card as only the customer’s fingerprint can authorise payments.

It was reported early this year that use of Apple Pay was set to double in 2017, to an astonishing 86 million users. There are now 10 million Apple Pay-friendly contactless terminals worldwide.

Apple Pay Contactless Payments for Mobile Shopping

The First Billion-Dollar Shopping Day

On Black Friday 2016, the first ever billion-dollar mobile shopping day was recorded in the US as buyers accessed the best deals more conveniently than ever before.

Online sales via tablet and mobile increased by 33% on the previous year (a total of $1.2bn), with buyers’ ever-growing confidence in shopping via mobile thought to be owed in part to the rise of easy payment methods such as Apple Pay, Android Pay and PayPal One Touch.

Mobile transactions comprised more than a third of the overall total ($3.34bn), which is pretty incredible considering the sheer volume of footfall seen in bricks-and-mortar stores alone on retail’s most anticipated day of the year.

Black Friday 2016 marked the first billion-dollar mobile shopping day

2017: The Year of Mobile

This year, mobile commerce was predicted to surpass desktop for the first time ever, following a 45% surge in growth during the year up to December 2016. With Google announcing its new, mobile-first indexing as a result of the imminent mobile takeover, online retailers everywhere are now scrambling to get their mobile sites up to scratch, with either responsive web design or mobile content which matches the desktop site in quality. So what does the future hold for mobile shopping?

Many believe that wearable technology is catching up, but with anticipation for the iPhone 8 as hyped as ever, the frenzy is far from over. There is also our evolving use of social media, as social networks such as Facebook with Marketplace and Shops, and Instagram with Instagram Shopping, are no longer seen as facilitators of purchase decisions, but marketplaces in themselves. Even Whatsapp increasingly hints at plans to evolve into a commerce channel; with over 1.2 billion users per month and its trustworthiness as a news source, marketers are starting to see the appeal of taking notice of the messenger app.

In any case, the iPhone is sure to play a big role. Studies last year showed that the iPhone was both the conversion leader and the top email client, so its importance to marketers cannot be overstated. It has been predicted that by the end of this year, over two billion mobile or tablet users will make an m-commerce transaction. With the tenth anniversary iPhone release rumoured to be less than a month away, both consumers and marketers the world over are poised to get in on this next landmark in mobile technology.

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