UK mobile marketing retailers report receives IBISWorld update


Mobile Commerce

The industry research firm has updated its cell phone advertising forecast report.

Retailers that use mobile marketing in the United Kingdom have seen a number of challenges with the channel and it has been predicted that over the next five years beyond 2012 to 2013 will experience a 5.1 percent annualized decline.

This, even though consumer demand has been continuing to grow.

One of the primary problems is that the revenue growth is being impacted by the increase in competition among the various operators, which has led average cell phone prices to drop and therefore so have the product margins. Another factor influencing revenue is the trend regarding customer sentiment and their real personal disposable income.

The latest updates by IBISWorld to its Mobile Telephone Retailers in the U.K. industry has suggested that retailers of cell phones are expecting a flattened annual revenue growth over the next five years until 2017 to 2018.

Over the previous five years until now, smartphones have become the must-have item worldwide.

Though there have been significant and continuing advances in the technology and design of the products and there has been a solid growth in overall mobile phone connections, the retail market has not experienced these same conditions. Claudia Burgio-Ficca, an industry analyst from IBISWOrld, stated that “instead of experiencing record sales, industry operators have faced a difficult trading environment and revenue is expected to decline at an annualised 5.1% over the five years through 2012-13.”

The rising competition among operators has negated the strength of the consumer demand so that the revenue has not seen the growth that the consumer behaviors would otherwise indicate. That said, following the next five years of flattened and declining revenue growth, demand should continue to rise as smartphones become both a need and a want for consumers.

According to Burgio-Ficca, “sales will also be driven by changes in the way consumers use their mobile phones; consumers will increasingly demand mobiles to undertake e-mailing, rich messaging and social networking.”

Considering how successful mobile marketing and shopping have been so far, the future growth of this channel will also include the ability for consumers to buy products and services using their devices in a much more mainstream way.


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