Transcript
6
M -Commerce I TODAY & TOMORROW
M -Commerce I TODAY & TOMORROW
This year, retail sales generated by mobile devices are projected to account for
15% of total retail e-commerce sales in the US, representing 38.4 billion dollars
in consumer spending – a 55.7% increase over just last year. By 2016, m-
commerce spend will reach $86.9 billion,1 creating a mushrooming opportunity
for retailers. Much of this growth can be attributed to rising numbers of
smartphone and tablet owners , in addition to a rapidly growing appreciation of
the immediacy of shopping via mobile .
But retailers must look at this growth in context. Today, all e-commerce
comprises just 7% of total retail sales, and revenues from m-commerce, which
include sales from smartphones and tablets, represent less than 1% of this
total.1 Still, mobile presents retailers with a much larger opportunity than just
sales. The mobile influence is an underestimated power that can be used to
create strong connections and unparalleled engagement between consumers
and brands.
Mo
bile
To
da
y Nearly 70% of moms shop on their mobile
devices2
Almost 25% of site visits originate from a mobile or tablet device3
75% of non-daily deal retail mobile transactions are come from the media and consumer electronics categories alone4
Mo
bile
To
mo
rro
w
50% of all sales traced to a non-PC device will occur on a tablet by 20155
M-commerce will grow at a compounded annual rate of 39% through 20164
U.S. mobile users will surpass PC users by 20151
Source: eMarketer 1 1
M -Commerce I TODAY & TOMORROW
Over the past two years, mobile traffic has quadrupled.2 But the $8 million in
retail sales generated from smartphones accounted represents just 3% of total
e-commerce sales in 2012.4 The gap between this low percentage and the 15%
share claimed by all m-commerce sales last year was made up mostly by
tablets, which not only drove more traffic to online retailers than did
smartphones, but more completed purchases as well. (Note: A small portion of
m-commerce sales are also attributed to e-readers and other mobile devices.)
M-commerce will continue escalating at an aggressive pace, with the largest
part of that growth expected to come from tablet users. Consumers in the US
are projected to shop to the tune of $24 billion on their tablets in 2013, and this
number will almost double by 2015. Retail sales on smartphones will rise at a
slightly slower pace, generating over $13 billion this year to over $20 billion in
20151. The average affluence of tablet owners is higher than that of tablet
owners, and tablet consumers spend even more than PC-based shoppers5.
So Do Tablets Trump Smartphones?
Not necessarily. While it’s true that retail conversions on tablets were almost
three times higher than on smartphones in 2012 6, consumers use tablets and
smartphones differently, and both play unique roles in the buying cycle.
Research from Nielsen revealed that consumers turn to tablets more frequently
for browsing, video viewing, and long-form content, as well as usage during
evenings. But the mobility of smartphones offers advantages of its own. Users
check e-mails more frequently from smartphones, providing ripe opportunities
for e-mail and SMS promotions. Smartphones are also better suited for popular
emerging technologies such as location-based targeting, QR code scanning,
and in-store usage of mobile devices, which is becoming increasingly popular
for activities like comparison shopping and accessing product reviews. Perhaps
most compelling is this: For consumers who own both a smartphone and tablet,
the primary device is the smartphone (88%).7
Read more: Read more at
72% of
consumers aged
20-40 in the US
and the UK use
mobile devices
while in-store to
compare prices8
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
$-
$20.00
$40.00
$60.00
$80.00
$100.00
2011 2012 2013 2014 2015 2016
US Retail M-Commerce Sales, by Device, 2011-2016 (in billions)
Tablet Smartphone Other Mobile Devices Total % change
Location services are on
the rise and are being
driven by consumer
incentives to check in.
Younger demographics
are more likely to check in
(35%) versus senior at
18%7
Ownership is equally
distributed between
males and females
across mobile
platforms (Android
versus Apple)7
2
M -Commerce I TODAY & TOMORROW
Mobile Apps Today
Today’s mobile experience has become almost synonymous with the usage of
apps. App usage dominates total consumer time spent on both tablets and
smartphones, and more than doubled between 2011 and 2012, as available
apps and smartphone owners have both skyrocketed1. But the rampant growth
of app usage also presents retailers with technical and strategic challenges.
Creating loyal app users isn’t easy; once downloaded, 69% of mobile users
open an app10 or fewer times, and more than a quarter of them open the app
just once.9 Another big barrier to app development is cost. While it’s
challenging enough to create a popular app for a single device, developing
them for multiple devices is abundantly harder. With market share and demand
for various mobile devices constantly shifting, how can retailers prioritize which
one to develop an app for?
Mobile Apps Tomorrow
Over the next 5 years, increasing numbers of buyers will become multiple
mobile device owners, using both tablets and one or more smartphones. But as
Google, Apple, and others continue producing new operating systems and
devices, developing native apps for all of them is a costly ambition. Retail
executives have voiced concerns about unclear ROI on retail apps, and are
confounded by which devices to target for app development.4 A promising
alternative is investing in web apps, which use the emerging HTML5
technology. Cheaper and faster to develop, a single web app will function on all
devices (mobile and PC), and can be maintained and updated more easily than
their native counterparts. Although web app capabilities are not quite on par
with native apps yet, the technology is quickly advancing, and there is a real
possibility that they may completely replace native app development in the
foreseeable future.
Shopping Apps
Shopping activities are gaining
momentum on mobile devices, and
time spent on shopping apps
increased six-fold between December
2011 and December 2012. Among the
various types of shopping related
apps, retailer apps saw the highest lift.
eBay, Amazon, Target, and Walgreens
were among the top 10 shopping apps
in 201210, however, not a single retail
app made the total top 10 list of apps
downloaded on any device.11
525%
247%
228%
178%
126%
274%
132%
Retailer Apps
Price Comparison
Purchase Assistant
Online Marketplace
Daily Deals
All Shopping Apps
All Apps
Growth in Time Spent per Shopping App Category
Source: Flurry — The Rise of the App & Mortar Economy
Source: Adobe Systems – Adobe 2012 Mobile Survey Results
Device Popularity Varies by Segment, Currently Led by Android and Apple
3
M -Commerce I TODAY & TOMORROW
QR Codes
While QR codes have been accused of being
“overhyped”, they continue to gain traction
with mobile users, and these early adopters
represent a valuable customer segment.
38% of young and 40% of middle age groups
report scanning QR codes in the last three
months. Of these, 31% spent over $500 over
the past year on consumer products using
mobile devices, compared with only 16.5% of
those that hadn’t used QR codes.7
With the ability to be used just about
anywhere—from TV commercials to in-store
displays to magazine ads, QR codes offer
retailers the opportunity to explore innovative
new ways of engaging consumers pre and
post sales.
Location based personalization:
This emerging technology offers retailers a
big opportunity to engage with a younger
demographic. With the rise in consumer
“check-ins” through services including
Facebook, Foursquare and Yelp, retailers
have the ability to target customers precisely
when and where a purchase transaction is
most probable to take place. Retailers can
then deliver personalized mobile interactions
in real time, including promotions, discounts,
and personalized product recommendations.
Second Screen Engagement
With consumer multi-tasking on the rise,
second (and third!) screen usage is
becoming increasingly common. While
watching television, shopping is the fourth
most popular second screen activity, (behind
checking e-mail, surfing the web, and using
an app), and more than doubled between
2011 and 2012. This is a key opportunity for
retailers to integrate expensive television
advertising with much more cost-effective
mobile initiatives. According to Nielsen
Media, 26% of surveyed viewers used their
second mobile screen to look up product
information about an ad they saw on TV, and
22% used it to look up deals and coupons
related to a TV ad.12
The earliest adopters of emerging mobile technologies are often the biggest online spenders.7
Retailers can capture these valuable customers by innovating with emerging mobile
technologies.
4
M -Commerce I TODAY & TOMORROW
The mobile market has unlocked a vast new
advertising channel for retailers. Worldwide ad spend
for mobile search and display ads is anticipated to see
a compound annual growth rate of over 50% from
2010 to 2015, representing display and search ads
alone14. From SMS promotions to display ads to
advertising built into apps, mobile advertising presents
retailers with unprecedented opportunities for
customer targeting, and personalization. But retailers
must engage customers without being disruptive or
too invasive.
Mobile ads have shown the highest click through rates
of any digital channel. A large percentage of
consumers report clicking mobile ads presented in
both mobile websites and apps, with 42% click
through ads on mobile websites, and 37% on mobile
apps8. On the other hand, mobile ads garner the
lowest consumer trust ratings compared with other
forms of advertising. Just 27% claim to trust mobile
display ads, compared to figures close to 50%
television, magazine, and newspaper advertising12.
One explanation for this is that users often click on
mobile ads unintentionally, due to smaller screens and
touchscreen features. This makes sense, given that
the percentage of users that has actually made a
purchase using a mobile device remains quite low6.
33% of smartphone owners and 20% of
tablet owners think advertising is
acceptable on their mobile device12
Almost 70% of women redeem grocery
and consumer retail goods based
coupons1
Mobile users are more than 2x as likely to
click on an interactive ad than a static
one16
20% of mobile ad spending now goes to
Facebook ads15
42% of men and 32% of women are likely
to click through on mobile ads presented
within mobile apps8
Source: Nielsen Media Research — Courting Today’s Mobile Customer
Consumer Trust for Mobile Ads is Low
5
M -Commerce I TODAY & TOMORROW
Despite flourishing projections for the mobile channel,
retailers remain highly conservative with their investments
as they grapple with questions about ROI. According to
Forrester Research, key concerns cited by retail
executives were low direct conversion rates on mobile
sites, single-digit percentages of overall sales, and that
“consumers actually prefer experiences that are similar to
those they experienced on desktop devices”.4
The problem with this view is that it approaches mobile as
a direct sales channel rather than a robust marketing tool,
and using traditional metrics doesn’t tell the whole
picture. For example, smartphone users are 14% more
likely to convert in-store than non-smartphone
shoppers.17 In a another survey conducted by Accenture
Interactive, 60% of respondents reported using mobile
devices to research online prices and were enticed into
stores, but, 48% still went home to purchase the products
from that retailer via PC.8 A conventional approach to
ROI measurement would fail to account for these results,
which do have a significant impact on overall sales.
6
Mobile-Influenced store sales vs. mCommerce and eCommerce sales
M -Commerce I TODAY & TOMORROW
The key to maximizing returns on m-
commerce isn’t about identifying and isolating
the most effective mobile activities – it’s about
using them together. Even for brands with the
most successful retail apps, the mobile web
remains a more effective channel to reach
device owners. According to a new study from
Nielsen, the mobile websites of Amazon,
Best Buy, eBay, Target, and Wal-Mart
consistently had nearly double the reach as
their apps. But the combined reach of both
was always highest, underscoring the
importance of an integrated approach. 21
Mobile campaigns should be mapped against
each phase of the customer lifecycle,
deploying mobile initiatives where they most
intuitively fit buyer needs. The focus in this
consumer-centric approach is increasing the
lifetime value of customers via an end-to-end
mobile experience, not just POS conversions.
Awareness Knowledge & Consideration
Selection Satisfaction Loyalty &
Engagement Advocacy
Mobile SEO
Mobile Ads
Social Media
Geo-targeting
QR codes
Product info &
reviews
Social Media
Shopping apps
Landing pages
QR codes
Second screen
strategies
Mobile
catalogue
SMS promos
Couponing
Mobile Wallet
Data Security
Showrooming
Mobile support
Apps
Feedback
Loyalty program
Couponing
Personalized
Content
Gaming
Social Media
Texting/Sharing
Mobile gives retailers the opportunity to influence consumers throughout their buying journey.
To realize the full value of mobile, retailers must evolve from focusing only on sales
conversions to providing value through mobile throughout the customer lifecycle.
Mobile site optimization
Engaging Mobile Consumers Across the Buying Journey
7
M -Commerce I TODAY & TOMORROW
Sephora generates a third of its e-commerce traffic
from mobile devices. With more than half of its
emails being opened on smartphones and tablets,
Sephora improved its mobile offerings to generate
a 167% increase in mobile orders between
December 2011 and December 2012. Sephora’s
mobile strategy includes smartphone and tablet
apps, Passbook integration with its loyalty program
and gift cards, and an interactive mobile site with
easy navigation and checkout.18
With more than four million downloads and
counting, Gilt Groupe has applications for iPhone,
iPad, and Blackberry devices. The luxury retailer is
known for offering mobile-only deals such as flash
sales access to pre-sale events. According to Hilt,
roughly 30% of its revenues now come from
mobile, and allows the company to “witness
engagement metrics over and above our
website”. 20
Debuting its m-commerce presence just this year,
Benefit Cosmetics is a shining glimpse into the
future of web apps. It’s mobile website functions
like a native app, where users can swipe through
products, navigate through an expandable sidebar,
and watch videos and makeup tutorials.19
Sephora, Benefit Cosmetics and Gilt Groupe are three mobile retailers that represent how
inventive mobile strategies can transform the consumer’s brand experience and power real
business impact.
8
M -Commerce I TODAY & TOMORROW
Some of the roadblocks in today’s mobile user experience, such as
speed and performance, transaction processes, and ability to load
websites will clear as technology races forward. Others, such as user
tracking and consumer privacy, device-specific optimization, and
consumer trust, will require careful consideration on the part of retailers
as they interlock with these advancing technologies. But the biggest
mobile challenges—and opportunities—faced by today’s retailers may
actually lie within themselves.
According to Forrester Research’s 2012 report on the State of Retailing
Online,4 executives are struggling with a “rapidly evolving mobile
landscape that is challenging in terms of knowing which platforms and
mobile offerings to invest in — and in what order of priority”, The report
found lack of clear ownership, concerns about security, and insufficient
collaboration between internal teams and third party agencies as key
contributors to this confusion, As consumers become increasingly irate
with irrelevant, disruptive ads and inoperative mobile sites, brand
perceptions are heavily impacted by mobile experience. Thus, retailers
must have a sense of urgency about tackling organizational issues and
defining an internal vision are prerequisites for mobile success. Today’s
leading m-commerce retailers, including Amazon, Groupon, eBay and
the Gilt Groupe, have all made mobile a core part of their overall
business strategies.
Business objectives for mobile initiatives are
unclear
Lack of experience in other areas, e.g., design for a smartphone versus
a tablet format
Staying up to date on market/customer needs
and uses for mobile
Working with third parties on mobile initiatives is
difficult
Obtaining adequate budget for mobile
initiatives, including staff,
Staying up to date on mobile development
innovations
9
M -Commerce I TODAY & TOMORROW
Mobile Success Comes From the Inside Out.
Mobile commerce may be an emerging technology, but
its success still relies on a familiar mantra: the 360° view
of the customer. With an ever-growing base of
connected consumers using multiple devices—often at
the same time—creating a seamless experience across
customer touchpoints has become more important than
ever. Mobile campaigns should always be part of an
integrated , customer-focused multi-channel strategy.
Retail executives must learn to redefine the way they
evaluate mobile success, attack the organizational
hurdles that are keeping them chained to outmoded
technologies marketing tactics, and innovate with
emerging technologies to capture high-spending early
adopters.
Start with Site Optimization
Optimizing websites mobile devices must be every
retailer’s topmost mobile priority. It may seem like a no-
brainer, but several companies have launched mobile
ads or SMS promos, only to lead the user back to a site
that isn’t mobile-optimized. Big mistake. Mobile web is
the most effective way to reach mobile shoppers.
Invest in Web Apps
While device market share will continue to change at
unpredictable rates, investing in quality web apps will
circumvent this challenge, yield time and cost
effectiveness, and fit into the app landscape of the
future.
Consider Emerging Markets
As of this year, China has overtaken the U.S. as the
world’s top country for active Android and iOS
smartphones and tablets. Mozilla has inked deals with
multiple mobile carriers and plans to release the first
mobile OS built entirely with HTML5 technology later this
year. The new smartphones will cost roughly a fifth of the
iPhone, and will be target customers in Brazil, India,
China, and southeast Asia. Apple has also hinted at
creating a lower cost iPhone to expand its global reach.
Smartphone penetration in these massive, unsaturated
markets presents a huge opportunity for international m-
commerce.
Be Disruptive
Leading retailers in the mobile space , like Sephora,
Benefit Cosmetics, and the Gilt Groupe, have paved
their paths to success by melding technology with a
deep understanding of customer needs. But a common
thread to all of their success stories has been
willingness to experiment, finding fresh new ways to
reach their customers and keep them engaged.
Mobile offers retailers the unprecedented opportunity to reach consumers during every step of
the buying cycle – and even engage them afterward to create loyalty and advocacy. As the
channel continues to skyrocket, the key to retailer success is making mobile part of a holistic
cross-channel strategy that recognizes and responds to buyer needs.
10
M -Commerce I TODAY & TOMORROW
1. “Record Retail Sales on Smartphones, Tablets Take Great Ecommerce Share,” eMarketer, January 20,
2013.
2. “Mobile Traffic Has Quadrupled in Last Two Years,” Heather Leonard, Business Insider, January 10, 2013.
3. RKG, Digital Marketing Report: Q4 2012, Rimm-Kaufman Group, January 2013.
4. Mobile Commerce Forecast: 2011 to 2016, Forrester Research. June 17, 2011.
5. “BI Report: Why Mobile Commerce is Set to Explode,” January 30, 2013.
6. How Tablets are Catalyzing Brand and Website Engagement, Adobe Systems, 2012.
7. Adobe 2012 Mobile Consumer Survey Results. Adobe Systems, 2012.
8. Today’s Shopper Preferences: Channels, Social Media, Privacy and the Personalized Experience,
Accenture Interactive, November 2012.
9. “A Look at How People Use Mobile Apps,” Joseph Walker, Wall Street Journal, June 26, 2013.
10. “Which Smartphone Apps do Savvy Shoppers Use Most,” Nielsenwire, August 6, 2012.
11. “Nielsen Tops of Digital: 2012,”Neilsenwire, December 20, 2012.
12. Courting Today’s Mobile Customer, Dan Lee, Nielsen Media Research. July 18, 2012.
13. “Improving the Business of Mobile Coupons,” Josh Constine, TechCrunch, May 11, 2012.
14. “Worldwide, More Money Goes Mobile,” eMarketer, January 4, 2013.
15. “Study: 20% Of Ad Spend On Facebook Now Goes To Mobile Ads,” Josh Constine, TechCrunch, January 7,
2013.
16. Acquity Group: Enriching the Mobile Customer Experience. Peppers and Rogers Group. 2013.
17. The Dawn of Mobile Influence: Discovering the value of mobile in retail, Deloitte Digital, 2013.
18. “Sephora Sees 167% Boost In Mobile Orders During 2012,” Alicia Fiorletta, Retail Touchpoints, January 25,
2013.
19. “Gilt Groupe Reveals its Success with Mobile and Social,” Brandon Gutman, Forbes, May 27, 2011.
20. Mobile 2013 Intelligence Report, L2, Scott Galloway, February 2013.
21. “A Store in Your Pocket: Retailer Mobile Websites Beat Apps among US Smartphone
Owners,” Nielsenwire, March 12, 2012.
top related