Commentary

On the Magical 20% in Mobile Commerce

by Chuck Martin , Staff Writer, August 7, 2013

While the mobile commerce revolution is still in its infancy, it’s nearing that magical number around market share.

Until now, mobile commerce as a percentage of sales or of retail started in the single digits, finally moving into the teens.

Numerous new market tallies report the state of commerce.

A recent report from eMarketer says 15% of online retail sales this year will be made on a mobile device.
The Adyen Global Mobile payment Index shows that worldwide mobile transactions account for 14% of purchases, led by Europe (15%), Asia (12%) and North America (11%).
The IBM Online Retail Index showed the percentage of sales by mobile device at 19%.
Based on data culled from 76 million Web visits and more than a million orders, the Branding Brand Mobile Commerce Index shows that mobile accounts for 17% of both total orders and revenue.

But think about it, percentages in the teens don’t sound significant.

To say something is at 12% or 15% just doesn’t sound like it matters.

But hitting the magical number of 20%: that’s another story.

Then it means ‘one out of every five.’ It implies substance. A bigger piece of the pie.

As an aside, the percentages around mobile commerce growth from a year ago are significant. For example, the IBM study shows a 28% increase in mobile sales compared to the same timeframe a year ago.

While growth can indicate directions of trends, it’s the snapshot of today that looms large.

When 20% of sales are being done via mobile, merchants will need to pay attention. Who can ignore 20% of a market?

Twenty percent demands respect.

And wait until the number becomes one in every four.

mcommerce

6 comments about "On the Magical 20% in Mobile Commerce".

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David Gutting from Barkley, August 7, 2013 at 11:19 a.m.
I'm wondering how these studies define "mobile." Obviously, a smartphone is mobile. Is an iPad mobile? What about a laptop? The edge between laptops and tablets is getting blurred and will get more blurred. Does mobile mean that the interaction is run through an app, not a direct connection to a website?
Reply

Chuck Martin from Chuck Martin, August 7, 2013 at 11:27 a.m.

Good question, David. Most of the studies lump smartphones and tablets together as "mobile," then provide breakdowns of each. Also, in general, most all studies are showing higher transactions via tablets than by smartphones. Some of the studies deal only with apps, though a very large percentage of sales are coming through the mobile Web. Hope this helps.

David Gutting from Barkley, August 7, 2013 at 11:36 a.m.

I think we need to start looking at "mobile" as part mindset and part need occasion. While it's true that people are still sitting at desktop PCs browsing the web, that sort of behavior is rapidly declining. Just look at the workplace and how we use computers now.

The fact is that online buying on any device still has its challenges--it's still too clunky, too slow, and too cumbersome. If "mobile" can solve that problem, it will not only swallow up the non-mobile purchasing but will eat into the brick and mortar.

Seems to me we need a lot more granularity and detail in these studies, and when we get it we'll have a treasure trove of insight to work from.

Jeremy Geiger from Retailigence, August 7, 2013 at 5:04 p.m.

No doubt transactions conducted on mobile devices will continue to grow and reach the magical 20%. It seems a natural evolution as shopping increasingly becomes an “always on” option for consumers on the go. And you’re right, merchants must take notice and develop a strategy to capture their share of mobile-enabled sales, or lose out to competitors. Thinking of it more broadly beyond mobile transactions and instead focusing on mobile-enabled sales will be the most effective way for retailers and brands to capitalize on this growing opportunity. Growing sales on mobile devices is all well and good, but brands and retailers mustn’t forget that 90% of retail sales still occur in store. Taking this into account, a marketing and sales strategy that leverages mobile to optimize sales opportunities along every step of the path to purchase will be crucial – and this is where location-based solutions and product information come into the picture. Putting all of these data elements together will eliminate friction from the buying process, helping retailers increase in store sales across the board, whether shoppers want to buy in store, buy online/pick up in store, or close the sale on their mobile device. Keep in mind that today, among all people that start their shopping process online, more than 80% end up turning away from their computer/mobile, going out and buying in a physical store.

Chuck Martin from Chuck Martin, August 7, 2013 at 5:17 p.m.

We agree, David, which is how many of us look at mobile commerce, which is more holistically. Some of the studies do have a great level of detail included, though often well below the top line results. And you are right about the clunky factor, which is one of the reasons mobile shopping cart abandonment is so high.

Chuck Martin from Chuck Martin, August 7, 2013 at 5:19 p.m.

Right, Jeremy, just a matter of time. Good point about the shopping life cycle and the influence of mobile all along the way, though many of the public measurements (unfortunately) are based only on the transaction stage.