A prominent e-commerce figure tells how to figure out your mobile revenue.
I had a chat yesterday with a prominent figure in web retailing, Scot Wingo, president and CEO of ChannelAdvisor Corp. Talk turned to m-commerce, and he offered a thought-provoking tidbit I just had to share.
“If 5% of your traffic is coming from mobile devices and not generating orders,” he says, “apply your normal conversion rate and that will give you the size of the opportunity you have today if you build a viable mobile store.”
OK, you don’t have a mobile-optimized site, and 5% of your traffic is bouncing—bouncing to some other retailer that does have a mobile site that enables these shoppers to buy then and there. Let’s be conservative. Say your average ticket is $100, the industry average according to Forrester Research Inc. Say your conversion rate is 3%, the industry average according to Forrester. And your monthly unique visitors tally is 500,000—a modest number among Internet Retailer Top 500 e-retailers. 5% (the percent of traffic coming from mobile devices) of 500,000 is 25,000. 3% (the conversion rate) of 25,000 is 750. 100 (the average order value) times 750 is 75,000.
You’re losing $900,000 a year by not offering mobile device users an m-commerce site. And the percent of traffic from mobile devices is only going to increase—substantially.
Is this a no-brainer, or is it just me?