E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
While conversion rates and average order value have long been important metrics for e-retailers, many are now seeing that mobile engagement serves a different purpose.
A dramatic shift in traffic to mobile devices led ModCloth in 2012 to quickly develop and launch a mobile-optimized site, Udi Nir, the web-only apparel retailer’s chief technology officer, told attendees at the Internet Retailer Conference & Exhibition last month. A year later, ModCloth had iPhone and Android smartphone apps, and a tablet-optimized site.
The share of its consumers using mobile devices to engage with, and purchase, items on its e-commerce sites has steadily increased. In the last quarter of 2013, 60% of consumers’ engagements with the ModCloth brand—social shares of products, customers reviews of products and what the brand calls “loves,” similar to Facebook Likes—come from consumers using mobile devices.
But sales haven’t followed as quickly. Only 30% of ModCloth sales come from consumers using mobile devices, Nir said, noting that consumers use devices for different purposes. Consumers use smartphones to research and browse, and tablets and personal computers to purchase. “Our goal is not to have her buy something every time she comes to the site, although we would love that,” he said. “The goal is to increase engagement.”
Nir’s experience echoes what many retailers said at IRCE this year: Consumers don’t think about their interactions with brands in terms of sales channels.
That point was also made on the first day of the conference during eBay Inc. CEO John Donahoe’s keynote address. Donahoe said the road to success is not based on a specific shopping platform but on making sure a consumer can get the information she wants when she wants it.
One way to do that is to listen to the consumer. In his keynote address on day two, online home furnishings retailer Wayfair LLC CEO Niraj Shah explained how Wayfair listened to its consumers about mobile. Mobile commerce accounts for about a quarter of the retailer’s web sales but, more importantly, mobile influences about 40% of sales, Shah said. Wayfair’s core customers are women 35 to 60 years old with a family and a busy schedule who like to shop when they have time, including on mobile devices. “One way we see mobile is that it helps them to start the process,” Shah said.
Engaging mobile consumers doesn’t necessarily require a fancy app. Flash-sale e-retailer Beyond the Rack developed a mobile-optimized site rather than an app because of the way its consumers interacted with the brand. More than half of the 12 million daily e-mails the e-retailer sends are opened on smartphones and tablets.
The retailer decided to develop a mobile site instead of an app because an app requires consumers to download and open it. But any smartphone can access any web site. “There is no barrier to the mobile web,” Richard Cohene, Beyond the Rack’s director of marketing said. Because so much of the retailer’s traffic comes from e-mails opened on mobile devices, it made sense to have those links go to web pages designed to be viewed on mobile phones.
When Beyond the Rack rolled out mobile-optimized e-mails in July 2013 to all of its 9 million members, its click-through rate increased by 15% and its revenue per e-mail increased by 7%.
Mobile’s role in e-commerce goes beyond serving as another place for consumers to buy products, the presentations and conversation at IRCE suggest. Retailers are using mobile to engage consumers and using that engagement information to direct future technology investments.