A Forrester Research report analyzes the early successes and failures of Apple’s mobile payments system.
The leading mobile commerce technology vendor to the 2015 Mobile 500 reveals to Internet Retailer that web traffic to its key clients from smartphones and tablets has now surpassed 50%, and measurement firm comScore says U.S. online retail has hit the mobile tipping point.
Guess what? You now work in an industry dominated by mobile devices.
Branding Brand, the technology vendor with the most clients (57) in the newly published 2015 Internet Retailer Mobile 500, today has revealed exclusively to Internet Retailer that last month mobile traffic to the 26 retailer clients it has benchmarked for years surpassed 50%—50.7%, to be precise. These 26 retailers, out of the vendor’s more than 200 clients, generated $180 million in web revenue in August 2014, 27.3% of which stemmed from smartphones and tablets.
Further, web and mobile measurement firm comScore Inc., which uses the “time spent” metric to gauge online retail activity by consumers, tells Internet Retailer that in July 2014, 56% of time spent with U.S. online retail occurred on a mobile device.
And if that weren’t enough, earlier this week, technology consultancy Capgemini and U.K. e-retail association Interactive Media in Retail Group , or IMRG, reported that in the second quarter of 2014, mobile traffic to U.K. retailers for the first time surpassed 50%—52%, to be precise.
“Mobile is now the primary access point to online retail for most consumers,” says Andrew Lipsman, vice president of marketing and insights at comScore. “As a result, retailers really need to rethink how they deliver their online shopping experience.”
Even aggressive growth estimates did not correctly calculate how fast this mobile majority would occur, says Chris Mason, CEO and co-founder of Branding Brand.
“And it comes right before the 2014 holiday shopping season, and right before Apple releases two new iPhones, so this holiday season, unlike any before it, is going to be extremely focused on mobile,” Mason says. “Retailers can no longer have a single view of a customer starting with a desktop web site or a store. Just like what happened with usage of Instagram and other social media players, retailers now have customers who only know the merchants from mobile. Mobile-first and mobile-only customers represent a significant pivot in online retail.”
Indeed, Scot Wingo, CEO of ChannelAdvisor Corp., which facilitates retailer sales through Amazon.com and other web marketplaces, recently told Internet Retailer that retailers need to prepare for the mobile-only customer.
“Frankly, all of us in e-retail have been surprised at how fast mobile has ascended,” Wingo says. “Two years ago, we all envisioned a multi-device world where people would discover on the smartphone, browse on the tablet, and land back on the desktop to buy. Well, multi-device shoppers are there, but they are transitioning to much more mobile. To some extent we were wrong about multi-device usage. The largest growth area in shopping and on the web is mobile-only consumers.”
But while 50.7% of traffic was mobile for Branding Brand’s clients in August, 27.3% of revenue was mobile. Similarly, 21% of total web sales are mobile for the 500 leading merchants in mobile commerce worldwide in the 2015 Internet Retailer Mobile 500. When will revenue catch up with traffic? With the popularity of larger smartphones (to be pushed by Apple’s two new iPhones) on the rise and with advances in mobile technology that make it easier for consumers to transact on smartphones (such as Apple opening its fingerprint scanner to developers for one-touch log-in and checkout), probably sooner than many people think, mobile commerce experts say.
“The fingerprint scanning technology stands to have the largest impact on online retail as that can remove the most friction from the process of purchasing on a phone,” Lipsman says. “Smartphones with larger screens should boost sales, especially for categories where seeing the detail of a product is very important. For example, we have seen that with people who shop apparel on tablets versus those who shop apparel on phones, the bigger screen size is a key enabler of purchasing.”
When retailers optimize for larger screen phones and begin incorporating new tools like fingerprint scanning, mobile conversion rates will spike dramatically, Mason says.
“But even without the latest advances,” he adds, “people are just getting more and more comfortable buying things on their smartphones.”
Follow Bill Siwicki, editor of the 2015 Internet Retailer Mobile 500 and managing editor, mobile commerce, at Internet Retailer, at @IRmcommerce.