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Is Mobile Commerce Growth Really Happening?

20/04/2016
Is Mobile Commerce Growth Really Happening?

How do businesses catch up with mobile commerce growth, and how to capture and convert mobile shoppers. What are the key m-commerce trends right now and how to streamline mobile payments. Find out here.

The expansion of mobile over the recent years has big ramifications for retailers, particularly for online commerce. Mobile commerce already accounts for 30% of US e-commerce and is expected to grow faster. Mobile accounts for 1 in 5 online holiday purchases. Shoppers have been using mobile devices to compare prices, look for product information, and making more direct purchases. M-commerce has a steeper growth curve than e-commerce recently. Larger smartphone screens, mobile-friendly websites and new retail apps add to the trend.

M-commerce in the UK made up 65% of all e-commerce, the highest figure globally in Jan’16 – eMarketer.

The Rise of M-Commerce

Mobile commerce growth is indisputable, consequently driving a number of innovations in mobile payments. New global markets, wide use of tablets and smartphones, new developments in secure mobile payments are the driving force for m-commerce. In recent years some of the biggest tech brands (Apple, Google, Samsung, Amazon) have introduced various mobile payments solutions in a chase for growing market of global mobile commerce. How and where mobile users make transactions is evolving too. Several social platforms are planning for increase of payments with new Buy Now buttons, that could also lead to lower customer acquisition costs and better conversions.

The shift from e-commerce to m-commerce happened quite rapidly, too rapidly for many retailers actually. Another new paradigm in 2016 is the move from shopping in mobile browsers to shopping in mobile apps. A combination of well-designed mobile apps with good UI, enhanced smartphone capabilities, push notifications, and new mobile payment tools have led to an explosion in mobile shopping. This also brought a new agenda in sales (retail) strategies for businesses to keep customers engaged and retain to come back.

Image by Thinkmobiles
Image by Thinkmobiles

Сommerce goes mobile in China. Asia, and particularly China, with its immense population are leading in the increase of internet use. Mobile is so huge a factor now in China, that cities build sidewalks for mobile phone use. In 2015, one out of two Chinese made online purchases. And they usually do it on a smartphone. Also, Alibaba, the main Chinese online shopping portal, is growing in numbers unstoppable. It’s sales on Singles day in November equaled in total to $14.3 billion, with 70% of sales via mobile. That’s 2 times more than in previous year.

Browsers are losing to mobile apps in shopping. Especially in retail. Flurry states that mobile users spend 86 percent of time on mobile apps, and 14 percent on the mobile web. And those spending more time on apps are proving to be more valuable customers, market practice suggests. Customer expense per purchase via mobile app has elevated to $116, which outspends transactions made via desktop and mobile browser. Furthermore, their conversion rates are significant. According to some studies, 25% of m-commerce app users adding products to their carts proceed to purchase, while the figure for the mobile web is 14%. That’s an impressive +11% advantage of m-commerce apps that start from $20 K in development and pay out in approx 6 months.

Do you want to make m-commerce app from $20 K?

It’s not hard to see the reasons for the aforementioned mobile commerce growth. Mobile apps are just better than browser-based shopping experiences for either side, retailers and customers. For the latter, apps are a better way to conduct shopping, more smooth and streamlined. Even in offline mode some of the apps can provide product-viewing ability.

Image by Thinkmobiles
Image by Thinkmobiles

Trends & Mobile Commerce Growth

Physical and Online worlds continue to come together. Customers across the globe are already engaging in shopping across multiple devices. Often at once, as most of them own 2 digital devices and some own all 3 – a PC, smartphone, tablet. Interaction with brands now is blurring the lines as well, times between online shopping and purchases in stores overlap. In this regard new options are available, including mobile commerce apps (own and third party), online reservation and purchase of goods and services, same-day delivery of items with mobile payments, targeted offers, loyalty rewards and mobile payments. 2016 is the year when retailers leverage any possible technology.

Mobile apps play a vital role in mobile commerce growth, but still struggle. 85% of mobile time is spent in apps, which is obviously stunning. On the other hand, most of the app time is solely spent in an individual’s top 3 apps. While mobile web drives double the traffic of apps across industries. Mobile applications certainly play a great role in mobile strategies for the business, for customer loyalty in particular. And due to Google’s better indexation of the content with mobile element traffic to apps will continue to rise in 2016. In regards to revenue driving, the mobile web undoubtedly still holds the leadership over apps.

Image by Thinkmobiles
Image by Thinkmobiles

Focus on mobile inevitable due to consumer expectations. As users rely on smartphones in mobile moments throughout the day (approx. 90% are on a mobile device while completing another tasks), they expect to get exactly what they need. Product search over breakfast, or store locator feature – in these mobile moments companies can provide their customers the information of interest. Contextual and relevant details becomes even more important than adapting desktop experiences to mobile. Retailers need to tackle the limitations of responsive design, for example by applying mobile experience optimization (MEO) which is one of the hottest tools.

Loyalty over convenience. Mobile wallets do not still offer enough convenience to change user behavior, that is a challenge. So an urge for mobile payments in 2016 is being driven by retailers themselves, via commercial apps. The success of this lies in the loyalty rewards connected to payment apps. Starbucks app, for example, informs you about the number of visits and when you are due for a free cup. Mobile wallets that integrate loyalty rewards will challenge retailer apps. But the general issue here is improving the mobile customer experience.

Starbucks drives 16% of its total transactions from payments via its mobile app.

IoT and wearable devices still undetermined. The Internet of Things offers the opportunity to drive revenue, lower operating costs and provide better customer experiences. The loudest IoT trend in 2016 are wearables – smart watches and alike. Opportunities here for customer engagement are: rewards (the wrist is a convenient place for shoppers to use at the register), flash sales (smartwatches a perfect medium for quick tips for immediate action), mobile payments (Apple Watch can be used to pay for purchases via Apple Pay), or notifications.

Optimizing mobile checkouts. Over two out of three users adding items to their online shopping cart then leave without a purchase. The numbers are even worse on mobile. However, in 2015 mobile commerce has undergone a 45% increase in traffic and 82% increase in revenue. So with the forecast of further mobile commerce growth and possibly overcoming the conventional e-commerce, more companies will be implementing a seamless checkout  experience.

Impact on Customer Experience

Already, this new mobile era is impacting human life, shopping activities in particular. It is happening both in and out of stores, but the move to mobile is really just starting to emerge. Customers and business lean to more real-time and mobile experience, pushing one another and coming closer in many instances. Mobile is increasing conversion – Deloitte survey states 20% higher conversion rates of mobile consumers than of those not using mobile devices. Here, mobile analytic tools are helping the business to visualize marketing channels and are proving the importance of the focus on mobility.At the same time, customers have already become accustomed to staying informed about the items available and the moment when it can be picked up at the nearest store.

Digital interactions made 64c of every dollar spent in stores in ’15, a total of $2 trillion – Deloitte.

Data becomes of a strategic value to attract mobile shoppers. Shopping data analysis can both improve and hurt the customer experience. If data is inaccurate, appearing often from unconfirmed sources, and is used to devise strategies, it may be deadly for business. Even back office workers floor employees can no longer rely on paper reports alone. At every level, retailers or shoppers or the supply chain, the daily use of mobile data is the new normal.

Mobile purchases indicate mobile commerce growth

Brands with a skin-close understanding of mobile shopping behaviors are now favored to bigger revenues. This means developing more engaging experiences on smartphones and tablets. Businesses can bring out better strategies by: advertising differently – major advertising platforms allow to compose campaigns by device for better click-through rates, aimed at specific audiences; implementing great UI – as mobile shoppers are more inclined to spend time on apps with easy-to-navigate interfaces, with no excessive info shoved onto them; improving loading speed – or “the faster, the better” because people now quick browsing and attention spans are shortened.

Mobile commerce growth impacts the customer support as well. M-commerce is not only buying and selling on mobile devices, in-app direct messaging with customers to solve their issues is a brand new channel. M-commerce is in the moment. Existing support methodologies (phone, email, web) fall behind the mobile in fast responses. Immediate replies for real-time requests are the winning way nowadays, businesses need to adapt and many of them already do with training staff and changing workflows. With abundant information customers rely on, like Yelp and Google reviews, companies must provide proper support. Support both timely and location sensitive.

Messaging will have a big role, as messaging apps are popular as never before and continue to grow. Users rely heavily on chat apps like WhatsApp (950 million people) and Messenger (800 million people). These same users are also engaging in mobile retail and on-demand services, thus are hoping for fast customer support resolution. That is why messaging should be integrated within app interfaces. In-app messaging enables customers to connect directly with the company and therefore leads to a fine customer loyalty.

Want to know more about in-app messaging?

Choosing the right tactics for a mobile-friendly strategy is the task to be taken carefully. According to MobilecommerceDaily, businesses need to take every aspect of the customer experience into consideration, and build an engaging environment. 4 ways to boost mobile engagement are:

  1. Integration with other platforms – because if users open your application doesn’t mean they necessarily engage with your brand, and pushing content can create some awareness but is not always the most efficient way.
  2. More ways to purchase – as smartphones offer many opportunities for engagement, try to make your messages more appealing by providing easy ways to purchase items or save to a wish list.
  3. Social engagement – for example, by offering free wi-fi to customers who are streaming media content and promoting the option in your location.
  4. Exclusive offers – users love deals and are glued to phones in expectation when they know about such possibility, so with timely and personalized content the customer base can be expanded.

Risks & Challenges

About 90% of consumers abandon shopping carts on mobile devices. Definitely a huge challenge. And that is partly due to complexity of entering payment information from a smartphone. Or a lack of mobile payment options at all. The good news is that solutions by Google Wallet or PayPal for instance allow going through the checkout process without a need to type a 16-digit credit card number. A quick integration of even one of the payment solutions improves the situation for customers.

Image by Thinkmobiles
Image by Thinkmobiles

The performance is also often ignored, hurting the perception. A back-end element is crucial to consumer’s lasting use of a mobile shopping app. Performance issues cause people to have a lower opinion of the company, and then we all know what happens – deleting the app. A mobile app needs to initially load in 4 seconds or less, and have further response times of 1-3 seconds. To address this, it is required to arrange and use a mobile-first infrastructure. Many businesses are tempted with looks and fashion, focusing all efforts on the app’s UI/UX and less on the functionality. That comes from the fact that with more features and functionality comes the risk of slower performance. The fear is to lose customer bases because of poor speed and performance.

App developers are urged to seek the optimal back-end solutions, analytic tools, app acceleration tools, and more to stand out from the competitors. All numbers and trends point to app-driven mobile commerce growth for upcoming years. In winning position are going to be those who openly face consumer expectations and are planning to deliver accordingly.

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