Strong Housing Sales and End-of-Season Discounts Fuel 28 Percent Growth in Mobile Shopping, Reports IBM

Retailers increase investment in mobile marketing technology, spurring sales

ARMONK, N.Y. - As temperatures rose, so did consumer online spending in the second quarter, with sales up 15 percent over 2Q 2012, according to the IBM (NYSE: IBM) Retail Index. Led by big gains in health and beauty and home goods, mobile continued to dominate with mobile percent of sales reaching 19.4 percent, up 28 percent compared to 2Q 2012 for U.S. Retail overall. In comparison, in-store sales rose 4.6 percent in 2Q according to the U.S. Department of Commerce’s Census Bureau report.

Key findings of the IBM Online Retail Index include:

· Online shopping growth outpaced in-store by more than three times, 15 percent to 4.6 percent;

· Mobile sales near 20 percent, a 28 percent increase over 2Q 2012, with the Apple iPad generating more online traffic than any other mobile device;

· Health and beauty sales increased more than 55 percent over 2Q 2012, as warmer temperatures call for changes in personal care routines and an increased need for sun protection items;

· As U.S. home goods sales rose across all channels in the second quarter and stores looked to clear out summer merchandise to make room for fall goods, online sales of home goods increased by more than 56 percent year-over-year (YoY).

Specific highlights from IBM’s 2Q analysis include:

· Housing Recovery Fuels Home Goods Online Spending: According to the U.S. Commerce Department, new home sales in May were up 29 percent YoY. This growth is fueling more home remodeling projects, with online home goods sales up 56 percent YoY. Average order value online reached $413.23, a 26 percent increase over 2Q 2012, with the iPad generating more traffic than any other mobile device.

· End of Season Discounts Fuel Apparel and Health and Beauty Shopping, as Retailers Prepare for Back-to-School: As retailers look to purge their stores of summer merchandise and prepare for the fall season and the back-to-school shopping frenzy, consumers are reaping the benefits of deeper discounts. Reduced prices helped to grow online apparel sales, which saw a 21 percent increase YoY. Health and Beauty saw even higher gains. Although average order value was down almost five percent from 2Q 2012, online sales were up more than 55 percent over the same period, indicating deeper discounts and promotions on summer merchandise.

· Retailer investment in mobile technology fuels online spending: As online retailers look to take a MobileFirst approach to customer shopping, the number of consumers using a mobile device to make a purchase reached almost 20 percent in the second quarter – up nearly 30 percent compared to the same period last year. Consumers are using their mobile devices to research products both at home and in the store – the number of consumers using a mobile device to visit a retailer’s site reached nearly 27 percent, up more than 35 percent year over year. Apple continues to dominate the mobile device experience, with the iPad generating more traffic than any other mobile device at close to 11 percent of retail traffic – a 60 percent increase over Q2 2012. The iPhone closely follows, generating 10.5 percent of traffic, with Android devices generating 7.1 percent.