We love a good bit of data here, and the recent Demandware Shopping Index certainly delivers. Measuring digital commerce growth, the Index reveals that ecommerce continues to show an upward trend, providing high growth and good news for ecommerce businesses. But the really interesting findings are those confirming a shift from the use of desktops to mobile devices for shopping online.
Globally, when comparing the first quarters of 2014 and 2015, sales using mobile phones have increased by 59% and now account for 18% of all sales. The trends in the UK are similar with sales from desktops down by 16%, whilst those from both tablets and mobiles up by 8% and 52% year over year, respectively.
It isn’t just the Shopping Index that is pointing to these kinds of trends. PayPal recently released a report on global mobile commerce, which shows that between 2013 and 2016, the annual average growth rate for mobile commerce is projected to be 42%, compared to 13% for ecommerce in general. As Anuj Nayar, Senior Director of Global Initiatives emphasises, “…mobile shopping is on target for meteoric growth. Mobile commerce is growing at three times the rate of ecommerce”. The data speak volumes and as Demandware have noted in their findings, “[it] affirmatively answer the question ‘do shoppers buy on phones?’”.
Mobile has been a consistent feature of digital strategies for some time now, but there has been hesitancy by ecommerce businesses to fully embrace its importance. This is largely because mobile generated sales have not been that substantial when compared to those via desktops. However, retailers are missing out – research by the Centre for Retail Research and Vouchercodes.co.uk reveals that the UK retail industry is sacrificing £6.6 billion annually due to lack of investment in their mobile presence.
As the tide begins to turn with mobile driven sales on the increase, and the share of people purchasing via desktops declining, it’s time for all retailers to start paying attention to the way they can capitalise on these developments. As a reflection of user behaviour, Google has even made changes to their algorithm to boost mobile friendly sites in mobile search.
So what is driving the trend?
We use mobile devices for pretty much everything and now more than ever they are being integrated into our consumer routines. There are a whole host of factors at play:
Improvements in payment processes
We have seen many developments that make payment transactions easier to complete and less fiddly. PayPal OneTouch, Amazon 1-Click technology, Klarna and One Step Checkout for Magento are all examples of moves to simplify the checkout process for consumers using mobile devices, and simultaneously make transactions more secure.
Better designed smartphones
PayPal reports that the top barrier to mobile commerce has been the size of the screens – and as a result, tablets have long had the edge over smartphones. However the introduction of larger screens from brands including Apple and Samsung is helping to overcome this – research by Criteo shows across the globe smartphones now have a higher share of mobile transactions than tablets.
Increase in responsive websites and ecommerce apps
Ecommerce businesses are acknowledging the value of investing in their mobile offerings, and as such there are lot more mobile-optimised websites available to consumers to browse and buy from. Mobile apps are also gaining popularity, and target loyal customers who are more likely to complete purchases using their mobile device.
Where is it headed?
To a lot of money! Research done by Goldman Sachs Group Inc. predicts that mobile commerce will account for nearly half of all ecommerce sales by 2018, compared to a little more than one quarter of total ecommerce retail sales in 2014. PayPal’s research also indicates that the rate of mobile spending is projected to rise by around $190 billion over the next three years. In the UK specifically, the latest research from Barclays on the future of mobile commerce indicates consumer spending on mobile will be just over £53 billion by 2024.
Despite this revenue potential, the Barclays research revealed that only 18.6% of retailers in the UK think that mobile commerce leads to increased sales. It’s clear that in order to stay competitive, retailers need to stay ahead of this growing trend and take mobile into serious consideration.
Responsive web design
The value of a responsive website cannot be underplayed. Making it easier for consumers to navigate and interact with products and website functionality is vital. The Shopping Index report places specific emphasis on this – “Retailers that underestimate the importance of devices and provide only limited mobile functionality or create friction in shopper experiences will feel the pain and sales reduction of an unsatisfied shopper”.
Research by Criteo reveals that in the UK, optimised sites see a larger mobile share of ecommerce transactions (46%) than non-optimised sites (34%). With responsive sites generating higher conversion rates and Google favouring mobile friendly sites, this one is a no-brainer. We have first hand experience of how decisions to redesign websites to be responsive can positively impact revenue – in one instance one of our clients saw just over a 150% increase in mobile generated sales.
Taking the consumers mobile shopping experience one step further by developing an app, is something retailers could benefit from. Consumers are drawn to the convenience and speed that an app provides, with PayPal’s research revealing that 64% of smartphone users reported using an app for purchases, compared to 52% who used mobile browsers. More often than not, apps are used by customers who have already developed a loyalty to the brand and therefore more likely to spend money.
Globally, 21% of shoppers chose to visit the same site with more than one device during the first quarter of 2015, up 18% from a year ago according to the Shopping Index. Cross-device purchasing is growing with Criteo research indicating that 40% of sales are already cross-device.
As Elana Anderson of Demandware highlights, “…it’s all about facilitating a comprehensive experience that weaves together the shopping journey regardless of where or how the consumer is interacting”. Developing seamless user journeys between devices offers retailers a number of opportunities to explore functionality and design between screen-sizes.
Businesses can now also track cross-behaviour in Google Analytics. This is a fairly new feature that can be implemented quickly.
Last week, Apple Pay was launched in the UK. We haven’t seen Apple Pay in full effect yet but expect that it will ease mobile shopping even further.
At LogicSpot we have extensive experience of creating responsive sites optimised to increase conversion rate. If you want to know more about what we can do for you, don’t hesitate to get in touch