By Matt Vella
December 21, 2012

By Verne Kopytoff, contributor

FORTUNE — A harried commuter riding home on the bus uses his smartphone to buy last-minute holiday toys for his kids. An office worker sitting outside during lunch browses fashion sites on her phone and buys the latest Ugg boots before returning to her desk. Online retailing executives describe scenes like these — people shopping on the go — when touting mobile commerce and its potential. The reality is far different, however.

Mobile shopping is largely done on tablets, and not smartphones. Moreover, the term mobile shopping is somewhat of a misnomer. Yes, people use mobile devices to window shop. But much of the buying is done at home from the living room sofa, and not from a park bench, subway or the sidelines of a children’s soccer game, according to analysts. “The smartphone is actually a terrible device to complete a transaction on,” says Sucharita Mulpuru, an analyst for Forrester (FORR), the technology consulting company. “There’s no question that the tablet is easier.”

Last year, tablets accounted for 3.2% of all U.S. online retail sales, more than double the 1.5% share for smartphones, according to a survey of 55 online retailers by Forrester. The reasons for the gap boil down to this: Smartphone screens are so tiny that browsing products online and entering credit card information is a pain.

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Of course, compared to overall e-commerce, mobile shopping is miniscule. But it is growing quickly and is expected to account for a far greater share of online retailing in the coming years. Mobile shopping represented 10% of e-commerce in the quarter ending in September, according to comScore (SCOR). On certain days, like Black Friday, the shopping-crazy day following Thanksgiving, mobile devices accounted for 16% of all sales, IBM (IBM) said.

Companies like eBay (EBAY) consider mobile shopping to be critical to their futures. John Donahoe, eBay’s chief executive, predicts that shoppers using mobile devices will spend $10 billion on his site this year, double the amount in 2011.

Despite the high expectations, retailers are still grappling with how to deal with the shift in consumer behavior. The field is so nascent that it’s difficult for companies to know what to do or how to measure success. Experimentation is common. Spending a lot of money can be hard to justify in the short-term, however, because of the limited sales generated.

At eBags, an online retailer in Denver, tablets accounted for 10.8% of overall traffic in the latest quarter and around 10.4% of sales. Meanwhile, smartphones represented 8.4% of overall traffic, but only 2.9% of sales. Peter Cobb, chief executive for eBags, explained that tablet users behave much like people on desktop computers or laptops. Shoppers on tablets meander around retail sites, watch product videos and buy what they want – all while sipping wine in front of the television.

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Smartphone users, in contrast, are more pressed for time and on a “search and destroy” mission, as Cobb put it. People want to get in, compare prices and get out until they go home and complete a purchase using their home computer, so to avoid any hassles in the check out process. “The reality is that there are two different shopping experiences,” Cobb says.

The greater success in getting tablet users to buy comes despite a big disadvantage in numbers. There are around 137 million smartphones in the United States compared with only 61 million tablets, according to Forrester. The relative numbers show just how little sales smartphones drive, at least directly. Average order sizes on smartphones are also smaller at $134.37 versus $159.28 for tablets.

Still, smartphones play an important role for retailers. People use them to research products before making purchases from home. Additionally, many shoppers do so before visiting a bricks and mortar store. Comparing prices inside stores and scanning QR codes is also common.

Such behavior, known as showrooming, is a sore point with some retail executives, who complain about shoppers eyeballing products in their stores that they intend to buy from online rivals. Nordstrom’s (JWN), Target (TGT) and Saks Fifth Avenue (SKS) have taken an opposite approach by installing Wi-Fi in their stores to help customers connect online through their smartphones.

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Ignoring the fact that customers are using smartphones in stores is futile, the theory goes. In any case, smartphones can potentially drive more business if retailers use it to their advantage. A study this year by Deloitte Consulting, for example, that found that mobile phones influence 5.1% of all in-store retail sales, or around $159 billion in transactions. That amount far exceeds the $12 billion consumers will spend via direct mobile shopping, the study said.

Cobb, from eBags, says that he plans to make a number of adjustments to his mobile site over the next year to make it more appealing to shoppers using smartphones. By then, he’ll have a better idea of what to highlight by tracking the products that shoppers click on a lot versus the “dead spots” that get relatively few clicks. Expect bigger buttons, he said, so that customers can more easily use their smartphone screen to navigate. Letting customers search by brands is another key feature because smartphone users generally knowing what they want.

“I do believe it is our job to unlock the potential of smartphones because it’s only going to keep growing,” Cobb says.

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