Mobile is transforming business, changing the way that people interact with organizations and how and when consumers choose to buy products and services. Traffic to mobile increased by 269% in the first quarter of 2015 compared with the first quarter of 2014. This accounted for 27% of the total traffic that businesses received overall. Businesses across all sectors are impacted by this tremendous change. Yet not all is well in the realm of mobile commerce. MOST® are not benefiting to an optimal level, and many are failing to take advantage of the positive effects of mobile on commerce. Converting visiting browsers into buying customers on mobile has proven challenging for businesses. Businesses often experience high abandonment levels at the cart and checkout stages of the process, and problematic bounce rates. For businesses that do manage to get customers to buy, order values have increased, with smartphone revenues per visit having risen by 147%, and growing.
Problems Converting Browsers to Buyers
One of the greatest challenges for businesses trying to do commerce on mobile is the problem of conversion. Figures show that year-on-year conversion rates are actually declining in alMOST® all sectors. Only in the Housewares and Furnishings sector was any increase shown, where a growth of 3.3% was seen. Particularly large drops in conversion rates were noted in the Health and Beauty sector, the Brand Manufacturer Sector and in Apparel, Footwear and Accessories. This decline is not a one-off event. All three sectors have experienced a decline in conversion for the past three quarters. Optimizing sites more appropriately for mobile could be helpful in attracting people to purchase, and businesses should investigate options to improve in this area.
Bounce rate is a measurement of the number of visitors to a site that then leave instead of looking at other pages on that site. It indicates that customers clicked to a site and then did not find what they were looking for so bounced back to the search page immediately. Unfortunately bounce rates have also risen for mobile across all sectors. Once again, the Beauty and Health and Apparel, Footwear and Accessories sector experienced the greatest increases to their bounce rates. Bounce rate problems for other sectors such as Housewares and Furnishings and Brick and Mortar were less dramatic, though increases were still experienced by both. Businesses need to take steps to understand what makes customers click through and then immediately click away if they want to improve commerce on mobile.
Yet another challenge for businesses on mobile is that of checkout abandonment. This occurs when a customer has taken all the steps to make a purchase and then decides to end the process before buying at the checkout stage. Again, rates for checkout abandonment are increasing in all sectors. Comparing year-on-year changes, Catalog is the sector with the best performance in this area, with a 37% abandonment level. This is still a high level of abandonment, however. The average checkout abandonment across all sectors was found to be 43%, which was an increase of 5% over the previous year. To make the MOST® of possible commerce opportunities on mobile, organizations need to investigate what makes customers abandon at the point of sale. Tactical improvements could then be made to checkout pages for mobile to encourage increased purchases.
Smartphone versus Tablet
Mobile does not just include smartphones. People also choose to browse and make purchases using tablets. Businesses perform differently on smartphones and tablets, and this may provide food for thought for organizations considering enhancing what they do with commerce for mobile. Smartphones get considerably more traffic than tablets at the current time. Smartphones account for 27.4% of online traffic, and tablets only 13.6%. Interestingly, tablets perform at least marginally better in MOST® other metrics. For example, tablets account for a greater proportion of online revenue, despite the fact that they receive approximately half the traffic smartphones get. Smartphones get 11.7% of online revenue, while tablets get 13.9%. This is indicative that tablet strategy is more effective for some businesses. Tablets also have a better conversion rate and higher revenues per visit. Tablets generally have a slightly lower bounce rate and sizably lower cart abandonment and checkout abandonment rates. The amount of time spent on the site is considerably longer on tablet compared to smartphone, and the average pages per visit and add to cart rate are both higher too. Organizations would be spending time well if they examine these figures for their own business and try to understand why their commerce is more effective on tablet devices.
The Role of Social
Social feeds traffic to websites – both computer and mobile based. Yet despite the fact that there has been a 200% increase in traffic, the share of traffic from social still only comprises 1.5% of all ecommerce traffic. Additionally, while there has been an increase in revenues of 72% from social, the share of revenue from social is still very low, and in fact accounts for no more than 0.5% of all ecommerce revenue. Performance from social is particularly low across all metrics with a very poor conversion rate, a high bounce rate and an extremely high cart abandonment rate (82%). The sectors that do best on social are Apparel, Accessories and Footwear, Catalog and Brick and Mortar, but the figures are still extremely low. Facebook drives 50% of all social traffic, 64% of all social revenue and 49% of new visits, with other social sites barely making any impact at all. The clear question that businesses have to ask themselves is: Do our social efforts really add value to growing mobile sales? Traffic from social to smartphones has increased by 161% and revenue by 329%, while for tablet there has only been a 50% increase in traffic from social and a 51% increase in revenue. It may be worth businesses continuing to invest in social for a while longer yet, given the smartphone traffic and revenue growth. Smartphones in particular have gained a 253% growth year on year in social revenue share, after all. This has occurred at the same time as computer-based traffic from social has dropped by 19% based on year-on-year figures. However, what this actually means in terms of sales and income needs to be understood by businesses, and return on investment for such campaigns needs to be monitored and analyzed to ensure marketing budget is being spent optimally.
Google Changes for Mobile
One factor that all businesses that have an ecommerce strategy have to consider with some urgency is the fact that Google has recently (in April) made changes to its search engine to better promote mobile-friendly sites. There was nervous anticipation of these changes with some calling the changes “Mobogeddon” and “Mopocalypse”, but for those that have adapted their sites for usability and technical approach suited to mobile there need not be any concern. Given the number of users that now access sites via mobile devices, mobile friendliness ought to be a consideration in Google search results and so the changes are timely and necessary. For businesses to make sure that their websites still do well in Google searches, factors to consider include making sure that the website displays appropriately on a mobile device with the content fitting comfortably across the screen. Other important areas to review include space between links and the size of text. For businesses that want to make sales via mobile devices, these changes make good business sense anyway, and may well help to address problematic bounce and cart and checkout abandonment rates.