Mobile Devices. & Behaviour. How devices and operating systems influence the mcommerce journey. tradedoubler.com

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1 Mobile Devices & Behaviour How devices and operating systems influence the mcommerce journey

2 Know your phone: the key to effective mobile commerce Mobile consumers are not created equal. If advertisers and publishers are effectively to target the 71% of Europeans researching purchases on smartphones, they must first understand the very different paths to purchase followed by owners of different devices. Groundbreaking research from Tradedoubler has proved beyond question, how mobile devices are influencing purchase behaviour: 71% of Europeans research purchases using their mobiles and 53% have used their phone to make a purchase. Almost a third (32%) of smartphone owners research products every week, and 87% of those who do so have gone on to take further action: either finding out more information or completing a purchase. Mobile commerce is frequent, purposeful, and becoming increasingly important to the strategies of brands and retailers. However, the Tradedoubler study also shows that marketers looking to target mobile consumers must beware of adopting a one-size-fits-all approach. Consumer engagement varies considerably depending on the type of device being used, so a mobile commerce strategy needs to work across these multiple touchpoints, taking account of the part they all play in the purchase journey. 71 % Research purchases Mobile: integral to the purchase journey 32% research products every week 87% go on to take further action 53% have purchased on mobile The rapid growth in tablet ownership adds further complexity to the mobile commerce landscape. Our study shows that tablets cannot be ignored (23% of smartphone owners already own one and an additional 36% plan to do so within the next year) and that this growth represents a major opportunity if brands can adapt to the way that tablet owners use their multiple mobile devices.

3 Europe s smartphone mix The handset mix amongst smartphone owners in the survey broadly reflects the penetration of brands across Europe as a whole, with iphone and Samsung the dominant types of device and Android ahead of ios as the most popular operating platform. Smaller players find their influence restricted to specific markets, with BlackBerry achieving 17% penetration in the UK compared to 8% overall. However, the position of BlackBerry owners as the most affluent group in the survey, suggests that adapting solutions to fit their behaviour could still be a valuable approach in these markets. iphone: mobile s true believers iphone owners are the most engaged both with their device and with the possibilities of mobile commerce. They are likely to have chosen the iphone brand deliberately and may well have owned this type of phone for a year or more. They are familiar with its capabilities and have clear ideas about how they want to use their phone. On a basis, iphone owners are the most likely to access the mobile web (80% doing so), use apps (75%) and access social networking sites (56%). And this engagement is reflected in frequent, habitual mobile commerce. iphone owners are the most likely to research The European smartphone market is extremely fluid, with the recent patent case between Samsung and Apple potentially leading to clearer differentiation between iphone and the leading Android handset. The variation in behaviour patterns that the study reveals for iphone and Android owners makes the two platforms battle for 80% MOBILE INTERNET a dominant share of the smartphone market particularly interesting for those developing mobile commerce solutions. 75% USE APPS iphone: mobile s true believers 46% RESEARCH 20% PURCHASE products - 46% do so weekly - purchase products (20% doing so every week) and search for vouchers and coupons (28% doing so weekly). Predictably, this frequent activity is reflected in the degree of comfort that iphone owners feel when using their phone to make purchases: they are the most likely to agree that this is a liberating experience and no different to making a purchase on a computer.

4 65% MOBILE INTERNET Android: still getting to grips with mobile commerce Android devices may have a reputation as an alternative to iphone, with similar capabilities and a similarly stocked app store, but Android owners lag behind when it comes to engaging with their device and in particular, using it for mobile commerce. The proportion of Android owners accessing the web is 65%, 15 percentage points behind iphone owners and only 6 points ahead of BlackBerry owners on 59%. And the 60% using apps also trails iphone by 15 points. 60% USE APPS 30% RESEARCH 10% PURCHASE This reduced engagement with the capabilities of their smartphone has a big impact on mobile commerce: Android owners are less likely than both iphone and BlackBerry owners to research products, find vouchers and coupons and make purchases using their mobile. Only 30% research products for purchase every week, whereas the 10% buying products each week on their phone is only half the number of iphone owners who do so. Why are Android owners so much more conservative in their engagement with their mobile? Key factors are likely to be rapid growth, which means that many Android owners are experiencing a smartphone for the first time, and the ubiquity of the platform, which means that those owners may have chosen a handset for different reasons (look and feel, camera, free upgrade) and simply inherited Android capabilities as part of the package. Limitations of some Android handsets may also be a problem: Android owners are the second most likely group to describe mobile purchasing as a frustrating experience. Android: still getting to grips with mobile commerce

5 59% MOBILE INTERNET 37% USE APPS BlackBerry: active but frustrated 31% RESEARCH Blackberry: active but frustrated Frustration characterises the relationship BlackBerry owners have with mobile commerce; and the frustration must be all the greater as this group seem highly motivated to research and buy through their phone. They may be the most likely to describe mobile purchasing as a frustrating experience, and the least likely to agree that it is no different to buying products on a PC, but they are second only to iphone owners in 13% PURCHASE regularly researching products, hunting down coupons and completing purchases using their handset. Significantly, BlackBerry owners are the most likely to express satisfaction about the time they save making purchases this way. For a time-poor, high-earning group, mobile commerce makes a great deal of sense despite the frustrations that they encounter. 84% USE AT HOME 42% PREFER TO RESEARCH on tablets Tablets: the alternative mobile channel 35% PREFER TO PURCHASE on tablets Tablets: the alternative mobile channel When it comes to preferred ways of researching and purchasing products, only one mobile device can compete with the iphone and it is a device owned by many of the same people. The emergence of tablets is creating an alternative mobile commerce channel, with its own distinct behaviour patterns and rules of engagement. It is vital for brands, retailers and publishers to remember that an increasing number of smartphone owners also own tablets and to be aware that they are likely to prefer different mobile devices at different points in their purchase journey. Significantly, tablet owners do not cut back on their use of their smartphone in researching and purchasing; instead they conduct a greater volume of mobile commerce by using the two devices in tandem, with the tablet beginning to encroach on the PC as the preferred device for shopping at home and the smartphone being the device of choice in the in-store environment. The study shows that 84% of tablet owners use the device at home, more than ten times as many as have ever used it in a store. However, the tablet s slip-into-a-bag portability means that it can play a role in other environments as well: 42% use it when travelling, 60% PURCHASE MONTHLY on tablets 33% in hotels. Over a quarter (26%) of tablet owners use the device at work and 17% do so in restaurants, coffee shops and pubs.

6 Tablet owners are more likely to convert research on their device into purchase. For 42% their tablet is a preferred means of browsing retailer sites and 35% say it is a preferred means of purchasing products, with 60% buying products at least monthly. Tablet owners are significantly more likely to buy higher ticket items, including sporting goods, clothing and accessories, cosmetics and consumer electronics and their ceiling for spending is far higher than smartphone owners, with 38% having spent over 200 and 18% having spent over 500. The strategic questions for mobile commerce These varying patterns of behaviour across different devices leave marketers with two options when it comes to developing a mobile strategy: target solutions at the groups who are most engaged with shopping on their devices, or develop a strategy that can work across devices by side-stepping the limitations and frustrations of certain platforms. By targeting their investment carefully, brands and retailers may be able to achieve both. 20% LOYALTY CARD Targeting native apps at the point of purchase iphone owners stand out as the group using native apps most frequently and purposefully as part of their mobile commerce behaviour: they are as likely to buy through an app as they are through a mobile browser. Apps provide retailers and publishers with the opportunity to engage this valuable group at the point of purchase through integrated mobile features: 25% of iphone owners search for vouchers in-store, 35% scan barcodes, 25% scan QR codes, 22% receive location-based special offers and 20% use their phone as a loyalty card. Performance-based channels play a key role in their savvy, confident hunt for bargains, with deals apps installed on 23% of iphones and shopping comparison apps having a place on the screen of 21%. 21% PRICE COMPARISON 22% LOCATION BASED OFFERS 23% 25% DAILY DEALS QR CODES 25% VOUCHERS 35% BARCODES

7 Tradedoubler is driving a range of innovative solutions for its clients in the area of app-based commerce. We have a number of programs that enable mobile vouchers to be redeemed in-store as well as online or on a mobile. This is increasing conversions through apps and opening up the opportunity of in-store conversions that were previously off limits for web-based publishers. We are also implementing ground-breaking pure play affiliate app programs that drive customers to download and purchase within an app, all measured with our app download tracking on a CPA metric. This is bringing the performance marketing model, where payment is entirely results based, to the app download sector. The decision whether to invest in developing a native app comes down to resource and likely returns. And this is the case just as much for publishers as for brands and retailers. The Tradedoubler study proves that developing for the ios platform is likely to deliver the greatest returns where apps are concerned, especially given ipad s strong share of the tablet market. However, the most efficient approach for marketers may well be to leverage iphone-optimised voucher codes, deals and shopping comparison apps, which play such a prominent role in in-store shopper behaviour. This frees resource and budget for developing mobile sites that deliver a strong experience on iphone and ipad, therefore catering for the equal number of ios users who prefer to conduct mobile commerce through a browser. Mobile sites to engage the Late Majority For those targeting a broad mobile audience, an effective mobile site is essential. Android owners are far more inclined to research purchases using their mobile browser (19% list the mobile browser as a preferred channel for researching products compared to 9% who use apps). Much of this research takes place in-store, with 43% saying they use their phone during the purchase of a product for last minute price checks often through a barcode scanner (the mobile commerce app with the highest uptake amongst Android owners). A place on price comparison sites, particularly sites offering strong integration with barcode apps, becomes essential for influencing purchase decisions for this group.

8 The value of an integrated conversion strategy Driving this influence through to conversion requires a broader-minded approach than that required for iphone owners. For merchants and brands looking to target a wider range of mobile consumers, attractive options for converting mobile research into offline purchases are essential. The opportunity to redeem mobile vouchers or loyalty points in-store provides a route for converting those who struggle with the mobile purchasing experience and enables publishers to monetise in-store purchase opportunities for the first time. In one recent campaign run by Tradedoubler, which used vouchers to drive incremental sales, half of the voucher codes were redeemed in-store. The case for turning to tablets Tablets provide an alternative mobile channel for engaging with high value groups, such as BlackBerry owners, who have perhaps struggled with the mobile commerce experience on their smartphone. 27% of BlackBerry owners also own a tablet and it is likely that they will increasingly see this device as an effective means of side-stepping the frustrations of using their smartphone to research and make purchases. EFFECTIVE MOBILE WEBSITES APPS FOR USE IN-STORE An integrated conversion strategy will drive sales

9 Future-proofing mobile commerce strategies As the European smartphone market develops, changes in the mix of handsets and rival tablet devices will have significant implications for mobile commerce strategies. Patent battles between the key players, questions over the future competitiveness of BlackBerry and Nokia s bid to increase share through an alliance with Microsoft will all have a potential influence on the way mobile consumers engage in commerce. While price pressures may mean that iphone s overall market share in Europe may decrease slightly, its position as the leading choice for discerning smartphone owners appears secure and justifies investment in mobile commerce solutions that target iphone owners at a deeper level through apps and experiences optimised for the handset. The efficiencies of developing ipad apps in parallel to those for the iphone adds considerable further value, especially given ipad s domination of the rapidly growing tablet market (and the emergence of the ipad mini). However, this could change with the launch of the Android-based Kindle Fire tablet in Europe, which is estimated to have helped Android match ipad s share of the tablet market in the US, and the arrival of a new wave of Windows-based tablets. However, the biggest question for mobile marketers to consider is the future development of Android. Given the platform s growing share, it will become increasingly important to engage Android owners effectively. At the same time, the design of Android devices may undergo significant changes as a result of the iphone patent case. The Late Majority habits of Android owners argue strongly for an integrated mobile strategy incorporating offline and online conversions. And this flexibility is likely to prove the most effective means of future proofing mobile commerce strategies. The emergence of Android?

10 Mobile use isn t generic, so strategies shouldn t be The winners will be mobile marketers who understand the different paths to purchase followed by owners of different devices and build their mcommerce strategy around these differences. Find out more about Tradedoubler s mcommerce research please contact Jane Turner - Jane.Turner@ Or visit