Groupon says its focus is on the bottom line, rather than top-line growth.
But retailers must make it easier to shop from mobile devices to boost conversion rates.
U.K. mobile commerce is growing—a lot, according to Interactive Media in Retail Group, an e-commerce trade association in the U.K. Sales via mobile devices were up 254% for March 2012 compared to March of last year. However, while mobile sales may be increasing, there’s still much room for growth in mobile conversions, the IMRG Capgemini e-Retail Sales Index finds.
Mobile conversion rates did rise in March—doubling from .7% in March 2011 to 1.4% for March this year. However, mobile conversions still pale in comparison to the conversion rate for traditional PCs of 4.13%, according to the index, which analyzes sales of more than 100 U.K e-retailers, such as Top Shop and ASOS.
That could be because many U.K. shoppers visiting e-retailers from their smartphones today are shopping on traditional e-commerce sites. Navigating an e-commerce site on a mobile device can be frustrating because a consumer is forced to pinch, zoom and swipe extensively to see products, and the content- heavy pages can take more than a minute to load. M-commerce sites are designed to fit the screen and needs of the mobile consumer.
The index only measures retail sales through a mobile device and does not distinguish if consumers were sent to a mobile site or a traditional web site designed for PCs, a spokesman for IMRG says. 107 of the Internet Retailer Top 400 Europe retailers have m-commerce sites or apps; so, odds are most of the shoppers in the IMRG study were shopping e-commerce sites, not m-commerce sites. Mobile commerce experts in the U.S. and retailers with m-commerce sites say once an m-commerce site is offered, conversion increases significantly.
Chris Webster, head of retail and technology at Capgemini, says U.K. retailers need to improve the ways in which consumers can shop on a mobile device.“It is very interesting to have the growing significance of m-commerce confirmed, and should encourage retailers to factor in mobile devices to their total retail strategy,” Webster says. “The growth rate is important, but so too is the conversion rate, and the mobile customer experience must be improved to harness its potential.”
As U.K. e- retailers see smartphone traffic increase, some are taking notice of the rise of the on-the-go mobile shopper—and the potential she brings with her.
“Mobile really is a game-changer,” says Adam Plummer, head of e-commerce for The Body Shop, which participates in the index.
Plummer says one in five visits to The Body Shop’s e-commerce site stem from a mobile device. Indeed, visits to U.K. online retail sites via smartphones and tablets surged to 8.2% in 2011 from 2.6% in 2010, the benchmarking index finds.
“The shift to mobile becoming the primary device of choice is well under way,” Plummer says. “As we begin to understand the desires and motivations of our customers and the technology that best serves them, we have seen our conversion rates steadily rise. While our sales growth through mobile has been phenomenal, it has been the general level of interaction that has seen exponential growth.”
When it comes to mobile marketing, analysts and retailers with experience in mobile commerce recommend creating a mobile-optimized site before investing in acquiring customers via mobile display ads and paid search. Once a mobile site is created, they suggest sliding the term ‘mobile’ into search ads or into the ad copy URL to assure mobile shoppers they will be able to shop easily and efficiently. Consumers having to shop e-commerce sites on mobile devices, as was seen in the IMRG study, more often than not don’t convert because shopping is too difficult. And this has the effect of keeping costs per click in mobile paid search lower than in desktop search—which can be a boon for retailers with mobile-optimized sites.