Commentary

iPhone And Tablet E-commerce Booming With An Email Push

According to a new study by Custora, whether it’s commuters immersed in their tablet on the subway, toddlers with Sesame Street apps, or a shopper buying toilet paper on her phone to save a little and avoid the hassle of carrying it home, mobile computing is doing everything except slowing down. The study explores this mobile shift to learn how it’s impacting the way people shop online.

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The analysis of US e-commerce data from over 100 retailers, 70 million consumers and $10B in transaction revenue shows that mobile purchasing on iPhones and tablets is booming driven by email marketing, but not so on social media, says the report.

  • Mobile e-commerce is now a $40 billion market, up from $2 billion in 2010. More than a third of visits to online stores now come from mobile devices, up from just 3% in 2010
  • Email marketing does surprisingly well driving purchases on phones and tablets; social media — not so much
  • iPad reigns with 80% of tablet orders, but Samsung and a startup called “Amazon” are nibbling away at the Apple with 12% and 4% and of orders respectively as of March, 2014
  • Cross-device shopping isn’t quite here yet. As of Q1 2014, 88% of customers only use one device to make purchases

Additionally, interviews were conducted with online marketing professionals excelling in mobile e-commerce, and online shoppers for their perspectives on the current state of mobile e-commerce.

In the past four years, the percentage of traffic to e-commerce sites from mobile devices (phones and tablets) jumped from 3% to nearly 37%. Mobile internet is faster, hardware is better, and it’s common to use a phone or tablet frequently and in more settings, says the report.

These shifts are reflected in e-commerce browsing: at the start of 2010, only 3.4% of total visits to e-commerce sites came from mobile devices (phones and tablets). Now, four years later, 36.9% of site visits are from tablets and phones.

Share (%) Of E-Commerce Site Visits By Device, 2010- Q1 2014

Device

2010

2011

2012

2013

2014 Q1

Desktop

96.6%

88.7%

84.1%

73.1%

63.1%

Phone

3.4%

11.4%

10.6%

17.6%

24.5%

Tablet

5.4%

9.3%

12.4%

 

 

Source: Custora E-commerce Pulse, September 2014

In the past four years, the US mobile e-commerce market grew 19-fold: from $2.2 billion in 2010 to $42.8 billion in 2013, says the report. 2014 is off to a strong start with $12.2 billion in mobile e-commerce sales in Q1 alone; it’s likely that mobile e-commerce will hit $50 billion in sales in 2014, says the report.

Us Mobile E-Commerce Revenue ($ Billion)

Year

2010

2011

2012

2013

2014 (Q1)

Revenue ($Bil)

$2.2

$7.9

$21.2

$42.8

$12.2

Source: Custora E-commerce Pulse, September 2014

Mobile devices drive site traffic, but shoppers mostly purchase on desktops. In Q1 2014, mobile visits comprised 36.9% of all e-commerce site traffic, while mobile orders and revenue only accounted for 23.1% and 18.2% of total e-commerce activity, respectively.

E-Commerce Share Of Site Visits, Orders, And Revenue Q1 2014

 

Desktop

Phone

Tablet

Visits

63.1%

24.5%

12.4%

Orders

76.9%

13.8%

9.3%

Revenue

81.8%

8.6%

9.6%

Source: Custora E-commerce Pulse, September 2014

Vishal Agarwal, Evp & Cmo, Nomorerack, notes that the “… trend is evident… traffic is on mobile, but conversion is missing… we target desktop…the conversion is so much better… “

Average E-Commerce Conversion Rate (%) Jan 2013 - Mar 2014

Device

Conversion Rate

Desktop

4.3%

Phone

1.4%

Tablet

2.8%

Average

3.2%

Source: Custora E-commerce Pulse, September 2014

Phone orders are smaller, while tablets keep pace with desktop.

Mobile phone conversion and AOV are both markedly lower compared to desktop computers. This might stem from “showrooming,” app browsing, and shoppers’ preference to buy high ticket items at the comfort of their bigger desktop screens.

Average E-Commerce Order Value Jan 2013 - Mar 2014

Device

Relative Order Value

Desktop

+6.6%

Phone

-13%

Tablet

+6.4%

Source: Custora E-commerce Pulse, September 2014

Apple’s mobile supremacy remains but continues to be challenged, most notably by Samsung, and more recently, Amazon. Over the last two years, Apple’s share of e-commerce orders went down from 75.1% in January 2012 to 53.6% as of March 2014. Samsung devices have more than quadrupled their share of orders over the same time period, growing from 6.9% in 2012 to 30.5% in 2014.

iPad still accounts for the biggest share of tablet e-commerce orders, though share of orders made from Samsung tablets increased substantially in the past year and a half: from 1.9% in January 2012 to 12.4% as of March 2014. Amazon has also quickly become a player, as purchases made on Kindle Fire tablets account for 4.1% of all tablet orders.

Share (%) Of E-Commerce Orders By Brand, 2012-2014

Device

Apple

Samsung

 Amazon

Google

Other

Phone

 

 

 

 

 

   2012

75.1

6.9

 

 

 18.0

   Q1 2014

53.6%

30.5

 

 

15.9

Tablet

 

 

 

 

 

   2012

93.6

1.9

 

 

 

   Q1 2014

79.9

12.4

4.1

1.1

2.5

Source: Custora E-commerce Pulse, September 2014

Summarizing, the report notes that customers responding to email marketing and shoppers navigating directly to online stores (including app traffic) accounted for the highest share of purchases on phones. When comparing the online marketing channels driving purchases on mobile devices to those driving purchases on desktop computers, the most notable differences are with direct traffic, email marketing, and online search (both free/ organic and paid).

On mobile phones, email marketing generated 26.7% of sales, says the report, compared to only 20.9% on desktop, and 23.1% on tablet. This is a surprising data point considering the challenges of displaying email correctly on mobile devices, and deep-linking into mobile apps.

Direct traffic also drove a larger share of purchases on mobile phones, with 32.9% of sales coming from shoppers going straight to the source and bypassing search - organic search drove 16% of phone sales compared to 23.5% of desktop sales, and paid search (Search Engine Marketing / SEM) drove 13.35% of sales on phones, compared to 18% on desktop.

On tablets, however, paid search was the leading marketing channel, driving 24.8% of sales. The difference between SEM’s share of orders on different devices might stem from many retailers not spending as much on mobile phone ads and the phone’s small screen that displays a smaller number of ads per search.

N.B. Estimates are based on US Department of Commerce figures for total US e-commerce revenue, 2010-2014, and Custora’s estimates for the share of mobile e-commerce.

For more from Custora, please visit here.

 

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