eMarketer Webinar: Six Trends in the Shifting World of Mcommerce

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Six Trends in the Shifting World of

Mcommerce

Yory Wurmser

Retail Analyst

July 9, 2015


Agenda

Forecast for US mcommerce sales

Trends within overall mcommerce

Evolution of the mobile user experience that will affect

mcommerce


1. Mobile commerce is

becoming mainstream


Sales on mobile devices are still relatively small:

1.6% of total US retail sales in 2015

$4.458 trillion

in offline retail sales

$74.93 billion

in mcommerce sales

$265.68 billion in

other ecommerce sales


… But growth will be rapid in 2015

32% YoY

jump in retail

mcommerce

sales

22% of retail

ecommerce in

2015 will come

from

mcommerce


Majority of US digital buyers will make a

purchase with a mobile device in 2015

121.8 million

mobile buyers

63.7% of digital

buyers

Increase in

mobile

buyers:

17 million

in 12 mos.


Rapid

diversification:

Digital media

downloads and

in-app purchases

account for a

shrinking share

of mobile sales


Even within

digital media,

the product

mix is

changing


Fashion and

luxury lead in

mobile

transaction

share


2. Smartphones are

catching up to tablets


Smartphone shoppers will continue to

outnumber tablet shoppers in the US in 2015

123.2 million149.3 million


… But US tablet owners are far more likely than

US smartphone owners to buy via their device


Tablet buyers will outnumber smartphone buyers

in the US in 2015

99.7 million78.3 million


… And tablet

conversion

rates and

average order

value (AOV) far

exceed those

on smartphones


Tablets

produce the

majority of

mobile

revenue, but

their revenue

share has

peaked


Smartphones’

share of US

mcommerce

will continue

to increase


Even so, the

absolute

growth rate of

tablet sales

will remain

strong


3. iOS outperforms Android

but the gap is narrowing

(slightly)


iPads generated nearly half of US mcommerce

sales during the 2014 holiday season

48%(Source: Adobe, “2014 Holiday Shopping Recap”)


iPhones generated nearly 60% more retail sales

than Android phones in Q1 2015


Android phones outnumber iPhones


Even with an

iPhone 6

bounce in Q4

2014, Android

easily outsells

iPhone most

quarters


iOS generates more mcommerce than Android

because of its higher conversion rates and AOV


High-end Android devices have conversion rates

on par with iOS devices

“Everybody likes to pick on Android

conversions, but when we looked at our Black

Friday data, high-end Android devices that

people have to pay for [had conversion rates

that] were equal or better [than those on] iOS.”

—Laurent Meynier, head of marketing at Moovweb


The gap between iOS and Android conversion

rates is narrowing

In January 2015,

iOS and Android had

nearly equal

conversion rates on

phones

iOS owners still

shop on their

devices more often

iPads still lead

Android tablets


4. Better user interfaces

equal more buying


Three major improvements in mobile interfaces

will increase mobile sales

Bigger screen sizes

Optimized websites

Easier checkout


There is a

direct relation

between

screen size

and conversion

rate


Screen sizes

are getting

bigger


The trend should continue with rapid growth of

phablet shipments

Phablets

accounted for

8.5% of global

smart device

shipments in 2014

Will account for

24.7% of global

smart device

shipments in 2019


Mobile optimization is still not universal

44%

of Fortune 500 sites were not ‘mobile friendly’

in early April 2015

(Source: Boulder Marketing Technology, cited in Techcrunch, 4/12/2015)


Google’s ‘Mobilegeddon’ is pushing companies to

prioritize mobile optimization

Update began on April 21

Google now prioritizes

mobile-optimized

websites

Google saw a 4.7%

increase in

mobile-friendly sites

between March and April

2015 (Source: Search Engine Land, 4/21/15)

Image from Search Engine Land, 4/21/15


Responsive

design has

become a

major mobile

priority for US

retailers

Over half of retailers listed

responsive design as a

high (1 or 2) priority when

polled in October 2014


Easier checkout

is the leading

factor that would

increase mobile

buying, according

to US digital

shoppers


1- or 2-click buying is expanding beyond Amazon

OS-level payment systems: Apple Pay & Android Pay

Web-based payment systems: e.g., PayPal’s One Touch

Buy buttons in ads: Google and XpressBuy

Buy buttons in social media


Apple Pay and Google Wallet are still relatively

lightly used

More US mobile

payment users

had used

Starbucks mobile

payments in the

year to December

2014 than used

either Apple Pay

or Google Wallet


5. Web dominates mobile

sales, but apps gain in

importance


Mobile web is the default platform for casual

visitors

“The mobile web has

to be a workhorse. If

you know nothing about

Sephora and you’re on

the phone and you type

[a beauty brand], the

mobile web is where

you’re going to land.”

—Johnna Marcus, senior

director of Sephora’s

Sephora Innovation Lab

“Mobile web

dominates. It has

to do with

discovery. A lot of

shoppers will still go

to Google when they

are figuring out where

to shop.”

—Sonia Nagar, senior

director of mobile product

strategy at RetailMeNot


Most retailers prioritize mobile sites for five

reasons

1. Easier for discovery and search

2. Cheaper to design

3. Universal

4. Not limited to core shoppers

5. Landing page for emails


Only about a fifth of US consumers use a

shopping app

40% of respondents

had downloaded a

shopping app as of

October 2014

Of those who had

downloaded a

shopping app, only

39% used it for

purchases


But an outsized portion of revenue comes from

apps

42%of mobile revenue comes from apps

(Source: Internet Retailer, August 2014)


App shoppers are heavy buyers

“Mobile app users are probably enrolled in your

loyalty program. If there is a store credit card,

they’re probably enrolled in that as well. So it’s

a subset of your customer base. But that

20% of your customer base is actually

your most valuable 20%.”

—Maya Mikhailov, chief marketing officer and

co-Founder of GPShopper


People spend

more time on

retailer apps

than on

websites


Apps will increase in importance

1. Much faster than the mobile web

2. Necessary for complex integrations—e.g., with device

sensors, mobile payments, loyalty programs

3. Majority of mobile time spent is on apps

4. Apps are becoming publishing platforms for

notifications


Slow load time is a leading cause of frustration

among mobile shoppers


Apps are necessary for complex integrations

Mobile Payment Device Sensors Loyalty Cards

Image source: Sephora via

iTunes

Image source: Walmart via

iTunesImage source: Staples via

www.businesswire.com


US

smartphone

and tablet

users spend

most of their

mobile time

on apps


Better notification layers are turning apps into

publishing platforms as much as destinations

“We’re already seeing a shift towards a notification

layer, where content can be shown in that layer

rather than in an app…. Businesses shouldn’t

be thinking about the app as a

destination, they should be thinking

about the ecosystem in which it exists.”

—Paul Adams, vice president of product at Intercom


Scale remains an issue for retailer apps

Only 12%

of US consumers use a retailer app

(Source: Epsilon, 2015)


Increases in app commerce will likely come from

third-party platforms, including:

App publisher networks

Mobile wallets

Social media apps

Images from: Freckle IoT


Social media apps introduce simple shopping

Instagram Pinterest Twitter Facebook

Image source: FacebookImage source: TwitterImage source: PinterestImage source: Instagram


6. Search is evolving for

mobile shopping and

buying


Search is a huge opportunity for additional sales

89% of US

smartphone

users will search

with those

devices in 2015

Source: Placecast, 2014


Four innovations in search will enable more

mcommerce:

1. Deep linking

2. Buy buttons

3. Visual search

4. Predictive search


Deep linking lets marketers have their app

content indexed

Google and Bing now send

searchers straight to an

in-app landing page

iOS 9 will include deep

linking in iOS search

Quixey and URX are start-

up app search engines

based on deep linking Image from developers.google.com


Google confirmed in May that it will add a buy

button to its Product Listing Ads


Visual search will simplify real-time search and

buying

Image from Google Play

Neiman Marcus VivinoAmazon’s Firefly

Image from Yory Wurmser

Image from Neiman Marcus


Predictive search anticipates needs

Vurb

Pinterest

Guided SearchGoogle Now

Image from www.Google.com Image from iTunes Image from iTunes


6 major trends in mobile commerce:

1. Mobile buying is becoming mainstream

2. Smartphones are catching up to tablets as a sales

platform

3. iOS leads in sales performance, but the gap with

Android is narrowing

4. Better user interfaces will increase mcommerce

5. Mobile web dominates in sales, but apps are gaining in

importance

6. Search is evolving to fit mobile shopping

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Yory Wurmser

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World of Mcommerce

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Transcript of eMarketer Webinar: Six Trends in the Shifting World of Mcommerce