MOBILE COMMERCE ROUNDUP
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1 January 2016 MOBILE COMMERCE ROUNDUP Retail mcommerce sales will account for a quarter of all ecommerce in the US this year. And mobile will also play a role in research and browsing for items that are ultimately purchased on other channels. emarketer has curated this Roundup of articles, trends and insights on mcommerce to help retailers and their partners understand the consumer journey. presented by
2 MOBILE COMMERCE ROUNDUP Overview Mobile still accounts for a fairly small share of total retail sales, and, in many markets, even of digital retail sales. But retailers are feeling the impact of mobile devices. In 2014, a little over half (57%) of retailers worldwide surveyed by payment solutions provider Payvision reported experiencing major growth in mcommerce sales. Among the total, 33% strongly agreed that growth was significant already a sizeable share. But by 2015 the evidence in favor of mcommerce was overwhelming. Nearly half of respondents were now in the strongly agree group, with an additional 34% agreeing more generally. Overall, 79% of retailers worldwide were undergoing major mcommerce growth this year. Retailers Worldwide that Have Experienced Major Mcommerce Growth, 2014 & 2015 % of respondents Not applicable Strongly disagree 12% Disagree Not 1% Disagree 3% applicable 2% 7% Neutral 24% Strongly agree 33% Agree 24% Neutral 15% Agree 34% Strongly agree 45% Note: via mobile phones and tablets Source: Payvision, "Key Business Drivers and Opportunities in Cross-Border Ecommerce: Entering an Omnichannel World 2015," Oct 30, More retailers around the world are getting into omnichannel as a result. This year, 91% of respondents said they offered customers the option to shop and pay across multiple devices. That was up from 84% last year. Nearly three in four respondents reported this year that such an option had boosted sales via digital devices. In addition, 71% of retailers surveyed said they were focused on offering seamless shopping across multiple devices as well as offline sales channels. emarketer estimates that in 2015, US consumers bought $74.93 billion worth of goods and services via mobile devices, up 32.2% over 2014 spending levels. This year, mobile accounted for 22.0% of all retail ecommerce sales in the US, up 3 points since last year. It still made up a tiny portion of total retail sales, however, at just 1.6%. In some other world markets, mcommerce is a bigger part of the picture. In South Korea, for example, mcommerce sales made up 46.0% of retail ecommerce sales and 5.1% of total retail sales this year, according to emarketer estimates. In China, 49.7% of retail ecommerce sales and 7.9% of all retail sales occurred via mobile devices in Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 2
3 For Many Shoppers, Mobile Is Essential When Researching and Purchasing Products Female shoppers research products via mobile more than males Mobile has become an important channel for shoppers as they research and purchase products. According to 2015 research, these shoppers mobile warriors skew younger as well as female. Y&R looked at different profiles of US shoppers and revealed that mobile warriors those who primarily research and purchase products via smartphone use their smartphones to compare prices, get information, receive coupons and make purchases. When it comes to the demographic profile of these shoppers, females make up 53.4%, while males account for 46.6%. This shopper also tilts younger; 31.7% of US shoppers who primarily research and purchase products via their smartphone are between the ages of 18 and 29. Additionally, 36.3% are ages 30 to 44. However, these smartphone shopping behaviors are not just limited to younger shoppers. Consumers ages 45 and older also use their device to research and purchase. Demographic Profile of US Shoppers Who Primarily Research/Purchase Products via Smartphone, Q % of respondents Gender Female 53.4% Male 46.6% Age % % % % Income <$ % $25K-$49K 23.6% $50K-$99K 33.5% $100K-$199K 19.6% $200K+ 3.6% Note: numbers may not add up to 100% due to rounding Source: Y&R, "Shopperstates: Six Dimensions of the New American Shopper," Dec 21, While mobile still accounts for a small share of total retail sales, retailers are feeling the impact of these devices. According to data from Payvision, in 2014, 57% of retailers worldwide experienced major growth in mcommerce sales. And in 2015, 79% of retailers worldwide were undergoing major mcommerce growth. Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 3
4 What Consumers Expect from Mobile Retail Sites Mobile makes up sizeable share of US retail ecommerce traffic When it comes to a retailer s mobile site, user reviews are the top feature that consumers expect to see, according to a September 2015 survey. Customer support is also key. EPiServer, a global software provider, polled 1,060 US internet users ages 18 and older about their top mobile retail site features. More than half of respondents said they expect to see user reviews on a retailer s mobile site. Additionally, 38% of internet users said they expected easy and direct customer support. That same percentage also counted on a mobile retail site having an automatic adaptation of screen size. Location-based functions or maps, as well as wish list functions, rounded out the top five list. Retailers understand the importance of mobile. Indeed, research from Demandware found that mobile devices made up a significantly higher share of US retail ecommerce site traffic in Q than they did a year before. But while a majority of time spent engaging with digital retail content is via mobile devices, the channel only accounted for 13% of US digital retail sales in Q4 2014, per data from comscore. Top 5 Mobile Retail Site Features that US Internet Users Expect to See on Retailers' Mobile Websites, Sep 2015 % of respondents 1. User reviews 54% 2. Easy and direct customer support 38% 3. Automatic adaptation of screen size 38% 4. Location-based functions or map 35% 5. Wish list functions 27% Note: ages 18+ Source: EPiServer, "Mobile Commerce Report 2015 US," Dec 14, US Retail Ecommerce Traffic vs. Order Share, by Device, Q & Q % of total Q Traffic share Order share Q Traffic share Order share 58% 30% 12% 74% 12% 13% 48% 42% 10% 69% 19% 12% Desktop/laptop Smartphone Tablet Note: represents activity on the Demandware network, broader industry metrics may vary; numbers may not add up to 100% due to rounding Source: Demandware, "Shopping Index Q2 2015," Sep 10, Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 4
5 Retailer Apps May Be for Serious Brand Fans Most smartphone users say the most important thing is just being their favorite By and large, mobile users prefer apps for most of their activities, and most time with the mobile internet is spent using apps. But many retailers have found it difficult to gain traction for their mobile apps. One perennial question is whether shoppers want any given retailer s mobile app. In September 2015 polling, GPShopper and comscore found that the most important feature for a retailer s mobile app was simple: Be the mobile user s favorite brand. More than half of US smartphone users said this. This factor could explain another finding of the survey. A plurality of respondents (43%) reported having had a retailer s app on their smartphone for more than a year, suggesting people have already downloaded their favorites and stuck with them. Other things counted, though. Two in five respondents placed a lot of importance on loyalty club activities in the app, and 38% said they wanted mobile-exclusive offers. The same number demanded an app experience that was better than the retailer s mobile website seemingly a necessity for retailers that expect a shopper to download an app and devote space on their home screen to its icon. Once they do make that commitment, though, the survey suggests they are loyal. Five percent reported using a retailer s app daily, with another 23% doing so two or three times each week. Nearly a third interacted with retailer apps weekly. According to Criteo, 58% of US retail mcommerce transactions in Q occurred via mobile app, with the remaining 42% happening in browsers. August 2015 research from comscore Mobile Metrix and Cowen & Co. also found that some retailers saw a strong majority of overall time spent occur on mobile apps rather than browsers, suggesting that among specific customer bases mobile apps may have very high penetration, almost Most Important Features of a Retailer's Mobile App According to US Smartphone Users, Sep 2015 % of respondents My favorite store/brand 53% Loyalty club activities 40% Mobile-exclusive offers 38% App experience better than mobile website 38% Location-specific tools 27% 20% One-touch mobile payments Note: ages 18+ Source: GPShopper and comscore Inc., "2015 Holiday Mobile Shopping Survey," Oct 30, Mobile App vs. Browser Share of US Retail and Travel Industry Mcommerce Transactions, Q % of total mcommerce transactions Browser Browser 42% App 51% App 58% 49% Retail Travel Note: represents activity on Criteo's platform, broader industry metrics may vary Source: Criteo, "State of Mobile Commerce Q3 2015"; emarketer calculations, Sep 28, to the exclusion of other platforms. For example, 99% of time spent on Apple mcommerce properties occurred in apps. That s an extreme example due to Apple s unusual position, but there were other stark results: 83% of time spent with ebay-related mcommerce occurred via the property s app, as did 74% of time spent with Target, 72% of time spent with Etsy and 72% of time spent with Amazon. At the other end of the spectrum were Best Buy (18% app) and The Home Depot (31% app). Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 5
6 Ecommerce Site Traffic from Smartphones Up Worldwide Conversions remain tiny Smartphones are continuing to make up an increasingly important ecommerce access device around the world, according to data from multichannel retail solutions provider Monetate. In the US smartphones accounted for 22.9% of ecommerce site traffic on Monetate s network in Q2 2015, up from 16.6% a year earlier. It also represented a quarterly gain of 2 percentage points in share. Annual gains were even larger in Great Britain, where 30.5% of ecommerce site traffic came from smartphones in Q That was up 12.2 percentage points since the prior year, though it was down slightly since Q The worldwide share of smartphone traffic followed a pattern similar to that in the US. Ecommerce Site Traffic Share in Great Britain, the US and Worldwide, by Device, Q Q % of total on Monetate's network Q Q Q Q Q US Desktop/laptop 67.2% 65.0% 62.1% 62.6% 61.5% Smartphone 16.6% 18.5% 21.1% 20.9% 22.9% Tablet 16.2% 16.5% 16.8% 16.5% 15.6% Great Britain Desktop/laptop 53.2% 51.1% 49.6% 51.6% 49.5% Smartphone 18.3% 28.8% 29.0% 30.9% 30.5% Tablet 28.6% 20.2% 21.4% 17.5% 19.9% Worldwide Desktop/laptop 67.2% 65.1% 62.1% 62.5% 61.1% Smartphone 16.2% 18.1% 20.7% 20.6% 22.7% Tablet 16.5% 16.8% 17.2% 16.9% 16.2% Note: represents activity on Monetate's network, broader industry metrics may vary; numbers may not add up to 100% due to rounding Source: Monetate, "Ecommerce Quarterly EQ2 2015: The Offline Impact," Sep 10, Smartphones are not, however, as successful when it comes to closing the deal. The devices had just a 1.5% conversion rate in Great Britain, 1.2% in the US and 1.2% worldwide. US Mothers Depend on Smartphones Throughout Shopping Process Smartphone ownership among US mothers grew immensely since 2009 Smartphones have become an integral part of the shopping process for US mothers, who rely on the device throughout the purchase funnel. BabyCenter polled expectant females and mothers with children under the age of 18. A majority of activities conducted throughout the shopping process by these respondents happened online. However, mobile was not far behind. In fact, the channel is increasingly becoming a key touchpoint in the purchase process. Activities Conducted via Smartphone Throughout the Shopping Process by US Mother Smartphone Users, % of respondents Compare prices 28% 45% 60% 68% 64% Compare features 21% 37% 49% 62% 60% Find coupons or deals 22% 31% 48% 59% 59% Decide where to buy 16% 30% 36% 49% 56% Get product ideas 20% 36% 45% 58% 55% Get product/brand recommendations 17% 33% 42% 58% 52% Note: expectant females or mothers with children under age 18; when shopping for a new product Source: BabyCenter, "2015 US Mobile Mom Report: Smart Shopping Goes Smartphone," Oct 26, Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 6
7 Since 2011, smartphone activities conducted throughout the shopping process have increased substantially. But for most shopping activities, mothers reached peak smartphone usage last year. Since then, most activities have either plateaued or dipped. Separate data from Edison Research shows just how much smartphone ownership among US mothers has grown. In 2009, only 8% of respondents said they owned a smartphone. Fast-forward to 2015 and 84% of US mothers own one. But one activity deciding where to buy a new product has been continually growing year over year. Indeed, this activity increased 7 percentage points in 2015 compared to 2014.What Does Your Retargeting Budget Look Like? Smartphone Ownership Among US Mothers, % of respondents 84% More moms are relying on mobile when it comes to shopping-related activities this year vs. last year. Behaviors like visiting a retailer s site, redeeming a mobile coupon and reading product reviews have increased. Using a retailer s app, in particular, has grown by 9 percentage points in 2015 vs Meanwhile, usage of price comparison, deal sites and photo recognition of products have decreased by 1 or 2 percentage points, mobile is certainly influencing how these mothers shop. 8% % % % % % Source: Edison Research, "Moms and Media 2015" sponsored by Triton Digital, May 8, By 2016, Most Digital Travel Bookers Will Use Mobile Devices Travel sales booked via desktop continue to decline It seems Americans don t mind booking accommodations and airfare on small screens. In 2016, 51.8% of travelers who book trips via digital means will do so using a mobile device, according to emarketer s latest estimates of digital and travel research and booking. That will be up from 43.8% this year. US Mobile Travel Bookers, millions, % change and % of digital travel bookers 35.9% 44.1% % % % % % Since its Q2 forecast, emarketer has adjusted its figures upward for smartphone bookers and downward for tablet bookers, as people grow increasingly comfortable booking trips on small-screen devices. Out of the 48.5 million US adults who book trips via mobile this year, 78.6% (38.1 million) will use a smartphone to do so. Fewer travelers, 31.3 million, will use a tablet to book a trip in 2015 or 64.4% of all mobile travel bookers % % % % % 2019 Mobile travel bookers % change % of digital travel bookers Note: ages 18+; mobile device users who have booked travel via mobile device at least once during the calendar year Source: emarketer, Nov Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 7
8 Hotels, airlines, and online travel sites are better optimizing their websites for mobile bookings. As a result, people are finding a simpler and easier path to purchase and booking their trips right on their devices. This bodes well for the industry as a whole, said Oscar Orozco, emarketer forecasting analyst. US Mobile Travel Bookers, by Device, millions and % of mobile travel bookers % % % % % % % % % % % % Sales of travel products and services booked on mobile devices continue to grow, while desktop- and laptop-based sales decline in absolute terms. In 2015, travel sales booked via PCs will be $ billion a decline of 1.8% from That decline will continue through at least 2019, the end of emarketer s forecast period. While travel sales booked via mobile are smaller, at $52.08 billion this year, the segment will continue to eat away at desktop s share. Mobile will represent 31.0% of digital travel sales this year. That number will climb to 46.0% by Americans are also increasingly researching trips on their mobile devices. This year, 62.6% of Americans who research their travel options digitally will use a mobile device to do so, up 25.9% over last year. By 2016, 73.0% will use a mobile device to research a trip. Again, the smartphone is the device of choice. This year, 91.0% of those who research travel options on mobile devices will use a smartphone to do so, compared with 69.3% who will use a tablet Smartphone travel bookers Tablet travel bookers Note: ages 18+; mobile device users who have booked travel via mobile device at least once during the calendar year; numbers may not add up to 100% due to overlap among smartphone, tablet and other mobile device users Source: emarketer, Nov US Digital Travel Sales, by Device, billions and % change $ $31.95 $ $52.08 $ $65.01 $ $75.85 $ $86.20 $ $94.80 $ $ $ $ $ $ % change Desktop/laptop -1.6% Mobile -1.8% -0.3% -1.6% -1.6% -0.6% 95.3% 63.0% 24.8% 16.7% 13.6% 10.0% Total 10.0% 12.0% 7.5% 5.0% 4.5% 4.0% Note: includes online leisure and unmanaged business travel sales booked via any device; numbers may not add up to total due to rounding Source: emarketer, Nov Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 8
9 How Baby Boomers Make Purchase Choices Online and on Mobile Lori Bitter President and Senior Strategist The Business of Aging; Author of The Grandparent Economy Although the baby boomer generation is broadly defined as consumers between the ages of 51 and 69, the demographic is heavily stratified. When it comes to mobile device adoption, there are key differences driven by gender and age. Lori Bitter, consultant at The Business of Aging and author of The Grandparent Economy, spoke with emarketer s Maria Minsker about those patterns. emarketer: Is there a gender gap among baby boomers that suggests men are still using mobile devices more than women? Lori Bitter: We see women attached to their tablets. They like them for book reading and for going online. They appreciate the portability. Men also use them to read, but they re not quite as attached as their female counterparts. Women are, however, a little behind in terms of smartphones. Men use more of their apps and women haven t caught up yet. emarketer: Are baby boomers browsing the mobile web, or are they more likely to use apps? If there s a niche in the boomer market, it s people who want to have the newest, fastest and best technology early on. Bitter: The ones who have smartphones do use the mobile web. Boomers like peer reviews of restaurants and store experiences, and are beginning to use tools like Yelp or OpenTable. But they still mostly choose to search [the web]. In focus groups, boomers seem to be confused about when they re actually in an app vs. when they re online on their phones. Apps are not part of their adoption curve yet. emarketer: Do the baby boomers who were early adopters use mobile devices differently than late bloomers? Bitter: If there s a niche in the boomer market, it s people who want to have the newest, fastest and best technology early on. They behave like any other consumer there s a peak when it s new but eventually interest falls away. The novelty wears off. emarketer: What are some misconceptions that marketers may have about baby boomers? Bitter: A lot of marketers think of baby boomers and picture great grandparents or older grandparents people in their 70s and 80s. They re not thinking about who baby boomers really are and the fact that despite their age, they have had this technology in the workplace for most of their careers. Boomer women are also one of the fastestgrowing categories on Facebook and Pinterest, so don t count them out. Boomer women are also one of the fastest-growing categories on Facebook and Pinterest, so don t count them out. They have money to spend, and often they re not just spending on themselves. They re spending on children, grandchildren and perhaps an elderly loved one. They control dollars across a number of generations. emarketer: How can marketers boost engagement on mobile devices? Bitter: For younger generations, their smartphone is their life, but boomers have to be led there. For example, some consumers can t keep track of their rewards programs, but marketers can remind them to use those points at checkout. Baby boomers think about points and coupons differently than younger populations, but that doesn t mean they don t like a deal. Building in reminders through mobile is a [good idea]. Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 9
10 emarketer: Do you think that baby boomers are more skeptical about the value of new technology than other generations, since they ve seen the next big thing come and go so many times? Bitter: The baby boom generation has probably seen more change than arguably any generation in history. I don t think they re afraid of it, but they do have a been there, done that mentality. They might not have bought the iphone 4, and skipped right to the iphone 6. They re willing to wait. In general, creating urgency is very difficult with this population. Outlining Opportunities and Challenges with Marketing on Mobile Wallets Jen Todd Gray (not pictured) Michael Puffer Director, Mobile Solutions and Strategy HelloWorld Senior Vice President, Marketing and Creative Services HelloWorld The emergence of mobile wallets offers new ways for brands to provide more convenient, contextual commerce experiences to consumers. But getting there doesn t happen overnight. Marketing agency HelloWorld s Michael Puffer, director of mobile strategy, and Jen Todd Gray, senior vice president of marketing and creative services, spoke with emarketer s Bryan Yeager about the mobile wallet opportunities and challenges their clients are dealing with today. emarketer: What opportunities do you see in your clients using mobile wallets for marketing purposes? Michael Puffer: We re seeing a whole host of new use cases for [mobile wallet] technologies, and we re starting to see a lot of growing adoption, although there is still some fragmentation that exists. We really see a tie-in to digital loyalty cards, the ability to see transaction history and being able to reward customer behaviors with points, punches or other incentives based on their behavior with wallets. What gets us excited is the level of customer data that it s yielding, the increase in loyalty, as well as the frequency of purchase. It s a way to quantify what wasn t as readily available and much more difficult to implement previously. If you look at the retail sector, clients are looking to manage offers, discount codes and things like that across a wide series of channels especially those that are taking the omnichannel program approach to get a 360-degree view of the customer. A lot of them are chasing the ability to deliver the same offers in their websites, in their mobile messaging programs, in and also within their mobile wallets. emarketer: What are some challenges your clients run into when trying to take advantage of marketing on mobile wallets? Puffer: The technologies present a series of challenges for them. We re seeing a lot of them struggle with the infrastructure. Using Apple s Passbook and Apple Pay requires them to update their systems. Many of them are not prepared for those changes or don t necessarily have the budget to do that right away, so it is a longer-term initiative for them. The mobile wallet presents a new layer of analytics and customer behavior data that [marketers] have to be thinking about. Jen Todd Gray: In the quick-service restaurant (QSR) space, you have a lot of different point-of-sale (POS) systems that can be a barrier. They have to navigate Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 10
11 around that, especially if they re franchisees, to have one consistent system across the country to make it work. We work with a lot of national brands and it s a big endeavor to roll out one program nationally when there are barriers to adopting new tactics and technology. We are seeing more of our clients do pilots in certain regions on a smaller scale where they can prove that a beacon technology or a certain coupon integrated into their stores work, and then they can roll it out further. Puffer: Another challenge is factoring in active dates and expiration dates on all those offers, and attributing participation back to the customer. That has been a tough challenge, especially if they look to revamp their data warehouses and data structures. [The mobile wallet] presents a new layer of analytics and customer behavior data that [marketers] have to be thinking about. Mobile Commerce Roundup Copyright 2016 emarketer, Inc. All rights reserved. 11
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