Smartphones play a role in 67% of online sales, and retailers plan to invest in the small screens this year, according to a new report.

Smartphones influenced more than two-thirds of online retail sales in 2016, Forrester Research Inc. estimates.

This is key for retailers to keep in mind: Smartphones have a huge impact on total sales even if conversions on smartphones are small, writes Fiona Swerdlow, vice president of research at Forrester, in the new report “The State of Retailing Online 2017” by, a division of the National Retail Federation and conducted by Forrester. The report is based on an October study of 74 retailers. 54% of those retailers generate at least half of their sales from physical stores, 21% are web-only retailers or primarily web-only retailers, 12% are multichannel retailers that generate about half of their sales online and half in stores, 7% catalogue retailers and 7% brand manufacturers.

Mobile-related improvements are the top initiatives for retailers in 2017, as 54% of retailers say mobile projects such as responsive design, mobile site optimization and app development are a priority. Marketing at 46% and site merchandising at 42% were the next most popular initiatives.

68% of retailers say they plan to increase their spending specifically on smartphone initiatives this year. It’s wise to prioritize smartphones over tablets, Swerdlow writes, as 42% more U.S. consumers bought something on a smartphone than a tablet in 2016.

The top smartphone initiatives retailers say they plan to develop or enhance (retailers could select more than one response) in 2017 are:

  • 50% smartphones browsing or research products
  • 47% mobile payment options
  • 46% product or store reviews
  • 45% mobile-optimized email with a mobile-specific call to action
  • 41% locate retail stores/hours/directions

Swerdlow notes that retailers should not only increase smartphone initiatives tied to sales and site design, but also focus on mobile projects that communicate with shoppers in stores and all the time, such as mobile messaging, which includes  push notifications via an app or SMS.

“Obsess about your customers, not your m-commerce numbers, or you’ll wind up with a tiny keyhole view of a much bigger and more intricate picture of how your customers actually use digital to interact with and buy from you,” Swerdlow writes.

48% of retailers say mobile has had a significant positive impact on their business, and sales via smartphones grew 65% year over year for the surveyed retailers. Still, the average mobile browser conversion rate among the survey retailers is 1% compared with desktop’s 3% and 2% in mobile apps.



The survey also finds:

  • 62% of retailers say their website conversion rate increased in 2016 over 2015.
  • 48% of retailers said their IT spending increased year over year. Retailers spent 10% of their online revenue on IT, compared with 5% in 2013, according to the same study in that period.
  • 46% of retailers spent at least $1 million on digital marketing in 2016.
  • Of the 37 retailers with a mobile app, only 24% designed the app entirely in-house and 22% developed the app entirely in-house.
  • Retailers say customer service features, such as live chat, are top priorities not yet deployed but that will receive investment in 2017.
  • A  retailer’s return rate, on average, was 12% in 2016.