State of Mobile Commerce. - criteo.com · US come from smartphones. Tablets have higher conversion rates, but smartphones generate more transactions due to significantly higher traffic.

State of Mobile Commerce.Q4 2014.

JANUARY 2015

1

STATE OF MOBILE COMMERCE Q4 2014

Executive Summary.

There are five new mobile shopping

trends eCommerce marketers need

to consider:

Methodology – Findings in this report come from individual transaction-level data sourced solely from Criteo based on a selection of over 3,000 online retail and travel businesses globally who have approximately 1.1 billion transactions per year on their desktop and mobile sites, resulting in approximately $130 billion worth of annual sales. The data analyzed is for consumer browsing and shopping behavior in October 2014, across desktop and mobile (smartphone + tablet) devices including iPhone, iPad, and Android smartphones and tablets.

Mobile is now about purchasing, not just researching: conversion

rates are high across all devices and retail categories.

Think smartphones: smartphones now generate

more transactions than tablets.

Mobile commerce adoption is far ahead of expectations. Globally, mobile now accounts

for 30% of eCommerce transactions. It is expected that mobile will make up 50% of U.S.

eCommerce transactions quite soon, as conversion rates reach Asian levels.

A third of fashion transactions now come from mobile,

with average order values close to desktop levels.

Top quartile US retailers generate almost 40% of their

ecommerce transactions from mobile, against 27% for US overall.

It’s not just Apple: Android phones now generate a third of US

smartphone shopping transactions, and much more internationally.

FASHION &LUXURY

HEALTH &BEAUTY

TRAVEL

HOME

SPORTINGGOODS

MASSMERCHANTS

0% 10% 20% 30% 40%

4%

3%

2%

1%

0

MOBILE

OVE

RALL

ANDR

OID

SMAR

TPHO

NE

ANDR

OID TA

BLET

IPHON

EIPA

D

15%

20%

23%

26%

27%

33%

2.5%2.2% 2.0%

3.0% 3.1%

US, Q4 2014

2


The Fashion and Luxury category has a high level

of mobile adoption, a pattern we see globally.

In contrast, the share of mobile transactions is

low in the Home vertical, which includes home

improvement, gardening and interior design products.

Overall, mobile users look at more products

than desktop users before they purchase.

As a result, mobile accounts for 27% of

all eCommerce transactions in the US, but

mobile traffic share is much higher at 38%.

Tablet converts better than smartphone today.

This partly reflects larger screen sizes, but also

weaknesses in smartphone-specific site optimization.

Apple and Android devices have

very similar conversion rates.

Mobile Share of Total eCommerce Transactions

Mobile Retail Conversion Rates

The 5 New US Mobile Shopping Trends.

SHOPPERS ARE PURCHASING ON MOBILES ACROSS ALL CATEGORIES.

MOBILE CONVERSION RATES ARE HIGH.

#1 Mobile is now about purchasing, not just researching.

US, Q4 2014Conversion Rate = (No. of Sales) / (No. of *Users) *Users include those with more than a single event** on the website.** Each time a visitor sees a web page, adds a product to the basket, or makes an online payment, etc., it is counted as an event.

$100

$75

$50

$25

$0

FASH

ION &

LUXU

RY

SPOR

TING

GOOD

SHO

ME

HEALTH

&

BEAU

TY MASS

MERCH

ANTS

TRAV

EL

$89

$102

$86

$100

$82

$99

$66

$87

$64

$100

$57

$92

3


Consumers are comfortable buying on mobile and

mobile order values are reaching desktop levels.

Tablet order values are as high as desktop in most

categories and smartphones are very close.

Smartphone order values are lower for

travel, home and mass merchants.

MOBILE AVERAGE ORDER VALUE IS CLOSE TO DESKTOP LEVELS FOR MOST CATEGORIES.

Mobile share of transactions for the top quartile of

retail and travel players is 35-40%, while the bottom

quartile generates less than 10% from mobile.

This big variation is driven by factors including the

quality of the website’s mobile optimization and

the type of products being sold. For example,

fashion and luxury items are purchased more

on mobile than home improvement products.

MOBILE SALES CAN BE INCREASED SIGNIFICANTLY BY ADOPTING BEST PRACTICES.


#2 Top quartile retailers get almost 40% of transactions from mobile.

#3 Mobile average order value is reaching desktop levels.

US, Q4 2014Note - Top quartile consists of retailers with the highest share of mobile transactions, and bottom quartile consists of retailers with the lowest share of mobile transactions.

Mobile Share of eCommerce Transactions, Top vs. Bottom Quartile

Mobile Order Values Compared to $100 Spent on the Desktop

US, Q4 2014

RETAIL

TRAVEL

0% 10% 20% 30% 40%

TOP AVERAGE BOTTOM

SMARTPHONES TABLETS

35%27%6%

39%30%9%

SMARTPHONES TABLETS

SPORTING GOODS

FASHION & LUXURY

MASS MERCHANTS

HOME

TRAVEL

HEALTH & BEAUTY

0% 20% 40% 60% 80% 100%

SMARTPHONES TABLETS

65%

66%

49%

49%

47%

32%

35%

38%

51%

51%

53%

68%

RETAIL TRAVEL47% 34%53% 66%

4


Tablets dominated mobile transactions a year ago,

but now the majority of mobile transactions in the

US come from smartphones. Tablets have higher

conversion rates, but smartphones generate more

transactions due to significantly higher traffic.

This reflects rapid increases in smartphone usage,

improvements in mobile websites and increasing

consumer familiarity with smartphone purchasing.

The smartphone, rather than the tablet, is

particularly big in travel, fashion and luxury.

In contrast, the Home vertical, which includes

home improvement, gardening and interior

design products, sees both low smartphone

transactions and low overall mobile transactions.

Smartphone vs. Tablet Share of Mobile Transactions

Smartphone Share of Mobile Transactions by Vertical


MAJORITY OF MOBILE TRANSACTIONS ARE NOW ON SMARTPHONES, BOTH FOR TRAVEL AND RETAIL.

SMARTPHONES ARE PARTICULARLY STRONG FOR FASHION AND TRAVEL PURCHASES.

#4 Smartphones have overtaken tablets in mobile transactions.

US, Q4 2014

US, Q4 2014

ANDROID IPHONE

5


Nearly half of US smartphone travel transactions

are now on Android. The share of Android

is even higher in many other countries.

In retail, Android smartphone is gaining

significance with more than 5% of all transactions,

though still less significant than iPhone.

Apple continues to dominate on tablets.

IPad generates 11% of retail transactions

vs. 2% from Android tablets.

Due to the ongoing growth of smartphone

commerce, Android looks set to grow

its share of all retail sales.

ANDROID MATTERS TODAY ON SMARTPHONES.


#5 It’s now important to reach Android shoppers.

US, Q4 2014

iPhone and Android Smartphone Share of all eCommerce Transactions

RETAIL

TRAVEL

0% 2% 4% 6% 8% 10%

5.5%8.5%

8.7%10.7%

6


Japan and South Korea are advanced markets for

mobile shopping with more than 45% of online

retail transactions coming via mobile devices.

UK leads the Western markets with

41% of transactions from mobile.

Emerging markets like Brazil and Russia have lower

share of mobile transactions than Western markets.

Asia leads the way in smartphone purchases with

close to 45% of eCommerce transactions happening

on smartphones and very little tablet share.

In the rest of the world, tablet is significant,

and sometimes still represents more

than half of mobile transactions.

UK leads the Western markets in share of

both smartphone and tablet transactions.

Brazil and Russia have fairly low levels of smartphone

purchasing. However, share of tablet transactions in

Russia is high and similar to most Western markets.

Mobile Share of Online Retail Transactions, by Country

Smartphone and Tablet Share of eCommerce Transactions

Global Mobile Commerce Trends.

MOBILE NOW ACCOUNTS FOR 30% OF GLOBALONLINE RETAIL SALES, WITH ASIA LEADING THE PACK.

SMARTPHONE SHOPPING IS PREFERRED IN ASIA, WHILE TABLETS ARE IMPORTANT IN THE WEST.

RUSSIA

0% 10% 20% 30% 40% 50%

FRANCE

ITALY

NETHERLANDS

GERMANY

US

SPAIN

UK

SOUTH KOREA

JAPAN

US, Q4 2014

BRAZIL

ASIA

WESTERN

MARK

ETSEM

ERGIN

GM

ARK

ETS

SMARTPHONES TABLETS

US, Q4 2014

RUSSIA

0% 10% 20% 30% 40% 50%

FRANCE

NETHERLANDS

GERMANY

ITALY

US

SPAIN

UK

JAPAN

SOUTH KOREA

BRAZIL

ASIA

WESTERN

MARK

ETSEM

ERGIN

GM

ARK

ETS

49%

45%

41%

28%

27%

26%

24%

24%

21%

20%

10%GLO

BAL

AVER

AGE

= 30

%

45%1%

44%5%

16%25%

15%13%

14%13%

12%11%

10%15%

9%16%

8%13%

7%13%

6%4%

ITALY

UK

0 50 100 150 200

0% 25% 50% 75% 100%

BRAZIL

US

FRANCE

JAPAN

SPAIN

FRANCE

US

RUSSIA

NETHERLANDS

GERMANY

UK

ITALY

GERMANY

SPAIN

SOUTH KOREA

BRAZIL

JAPAN

SOUTH KOREA

RETAIL TRAVEL

7


Global Mobile Commerce Trends.

Mobile conversion rates in Japan are much

higher than the US. This partly reflects a

market where advertisers have been delivering

transactional mobile websites for longer.

The improving quality of mobile websites,

greater usage of large-screen smartphones, and

improvements in mobile payment methods are likely

to boost conversion rates across Western markets.

If US conversion rates matched Japan,

then mobile commerce would deliver

almost half of all US ecommerce.

Given South Korea is Samsung’s home base, it

might not be surprising that Android is responsible

for 86% of retail sales on smartphones.

Share of eCommerce transactions from Android

is now higher than iPhone in many countries

including Germany, Italy, Spain, Brazil and South

Korea. This is likely to mean greater focus on

Android app development in these markets.

Apple is especially strong in the US, UK and Japan.

Mobile Conversion Rates Compared to the US (Benchmarked at 100)

Android Share of Smartphone Transactions

JAPANESE ECOMMERCE SITES HAVE MOBILE CONVERSION RATES DOUBLE THE US.

ANDROID NOW GENERATES MORE TRANSACTIONS THAN THE IPHONE IN MANY COUNTRIES.

US, Q4 2014

US, Q4 2014

202

161

136

123

107

100

70

68

68

59

86%74%

71%60%

61%71%

56%55%

59%52%

48%40%

44%45%

43%43%

39%44%

36%36%

8


What will the future look like?

Growth in mobile commerce is unstoppable. Asia will soon pass 50% of

online transactions via mobile devices, while Western markets will catch up.

WE SEE FIVE BIG TRENDS FOR 2015:

Smartphones will continue to displace slower-growing tablets.

Larger-form-factor phones are an added accelerant to an existing

trend toward greater use of smartphones for shopping.

Advertisers will focus heavily on improving their mobile websites.

This will lead to dramatic improvements in conversion rates,

especially as mobile payments become more seamless.

Apple and Android continue to battle it out, but both are

winners. Total percentage of ecommerce generated by both

will grow at the expense of Microsoft Windows.

Understanding cross-device behavior will be the biggest challenge and

opportunity for marketers in 2015, as a majority of users going through

their buying journey interact with the same site through multiple devices.

Criteo delivers personalized performance marketing at an

extensive scale. Measuring return on post-click sales, Criteo

makes ROI transparent and easy to measure. Criteo has over

1,000 employees in 21 offices across the Americas, Europe

and Asia-Pacific, serving over 6,000 advertisers worldwide

with direct relationships with over 8,000 publishers.

Criteo ads reach 994 million unique Internet users

(comScore, September 2014).

For more information, please visit www.criteo.com.

Copyright © 2014 Criteo

About Criteo.

DECEMBER 2014STATE OF MOBILE COMMERCE Q4 2014

This and future Mobile Commerce reports can be found at

www.criteo.com/resources/mobile-commerce

State of Mobile Commerce. - criteo.com · US come from smartphones. Tablets have higher conversion rates, but smartphones generate more transactions due to significantly higher traffic.

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