Forget about what’s new with mobile commerce. Now is the time to talk about what’s more with mobile commerce.
There are only so many ways to say that mobile is eating the world, as venture capitalist Marc Andreessen might say. (Here’s Andreessen’s take on software eating the world in a subscription-required Wall Street Journal piece. This Wired story mentions it, if you skip to 2009.)
But the speed with which mobile is becoming the digital commerce platform is stunning, no matter how often we’ve heard about the intense focus and frustration that the channel attracts and provides.
“The topic that has to be a part of any analysis of the market right now is mobile,” Rick Kenney, Demandware’s head of consumer insights, told me. “It gets almost tiresome to talk about, but it is the most transformative thing to happen to retail since it went digital.”
I met up with Kenney last week at Shoptalk in Las Vegas, where the agenda was peppered with sessions on designing for mobile, searching on mobile, paying on mobile, harnessing mobile as part of a multi-channel strategy and more.
Mobile is the conversation in commerce. The smartphone is the undisputed shopping engine. It is how consumers hunt and gather and increasingly how they buy — though desktop is still the king of conversion. That said, mobile is on a roll that shows no sign of letting up. Conversions are increasing dramatically. The mobile movement is gathering velocity so quickly that it is hard to keep up.
How much velocity? I sat down with Kenney during a quiet moment at the big retail trade show to get his latest reading. He shared some of the findings in the e-commerce platform provider’s upcoming quarterly Shopping Index, which analyzes the e-commerce market and consumer behavior based on 400 million shoppers worldwide.
Q1 was the first full quarter where, globally, phones drove more traffic than any other device,” he said. “It happened a couple of days, a couple of periods, during in the holiday season and before, but globally, mobile first is here. And if you’re not there yet, the shopper is, putting more visits on this small device than they are on other devices.”
Kenney said Demandware expects that by the end of next year, 60 percent of e-commerce traffic will come from smartphones. As much as 40 percent of the world’s digital purchases will be happening on mobile by March 2017. (Mobile means smartphones, Kenney explained, as tablets are quickly falling out of favor as devices on which to buy.) And he said a metric the company uses to rate how well mobile traffic converts is also on the rise — doubling in the past three years.
“We’re predicting that by the end of 2017 mobile will drive more orders, meaning shoppers will place more orders on phones, than any other device.”
And, Kenney noted, a number of innovations and improvements in the mobile world will only accelerate conversion-rate increases. Increasingly, retailers and others will be improving site search on mobile, already a key to purchases on desktop websites by digital retailers’ best customers.
“I think we’ll see some very big changes to site search,” he said of mobile sites. “The results on mobile have to be better than ever.”
And improvements and expansion of mobile payment options are bound to take some of the frustration out of completing a purchase on a phone, Kenney added.
“If payment actually does improve on the mobile device, if we see, for instance, Apple Pay actually become part of the mobile web instead of just mobile applications. If we see higher adoption of other wallet technologies, PayPal included certainly in that too, that can actually accelerate and drive that order share higher on the phone.”
The rapid evolution of consumer habits has all sorts of ramifications, which was evident from the shop talk retailers were engaged in at Shoptalk. First off, Kenney says the mobile revolution calls for new ways to measure success.
Conversion rate, for instance, has become less meaningful, Kenney argued. Think about it: If the rate is calculated by dividing the number of visits ending in conversion by the total number of visits, the mobile explosion is watering down the figure. (As are bots.) In the mobile era, visits are skyrocketing.
Shoppers visit sites while standing in the supermarket line. They leave the site when it’s their turn to check out in the real world. They visit again to continue their shopping excursion while waiting for the train, then exit when the train comes. They get home and visit again to buy. Or they visit again and then head for the desktop in the den to finish their transaction.
For his part, Kenney prefers to track “orders per shopper,” a statistic that reflects customer retention. The more orders, the more valuable that customer is and the more successful your strategy is.
The growing dominance of mobile clearly has retailers thinking differently about the role of mobile in all sorts of ways. During a panel discussion called “Creating and Managing Omnichannel Customer Experiences,” Banana Republic’s Aimee Lapic explained that 80 percent of the store’s purchases are influenced by mobile, but that actual mobile purchases are “a small, small fraction” of all purchases. That’s generally the case for all retailers.
And so, she says, it’s important to think of mobile in terms beyond conversion by adding features like fit guides and well-told stories that will interest consumers.
“It’s really important to be not just putting the resources and the time and the energy against actual conversion,” she said. Which is not to say that conversions aren’t both important and desirable, she added.
Paul Gaffney, Home Depot’s senior vice president for IT, put it another way when discussing mobile apps on another panel.
“Does the app have to be all about conversion? No,” he said. “But should it be about outcomes that matter? Yes.”
It can be tricky to measure success when you’re dealing with metrics other than conversion, Gaffney acknowledged, but he added: “You can connect your effort to an outcome measure that matters, even if it’s a step away.”
For example, Gaffney said, Home Depot has an app that lets customers see what various colors of paint would look like on a particular wall.
“We have this app that millions of people use on a regular basis,” he said. “We actually don’t know if it’s sold any paint, but we know that people enjoy it.”
That sounds like a success. But Gaffney said the next step is to “figure out a way to assess, are we selling any paint because people like using this tool?”
HotelTonight is on more solid ground in evaluating a feature that allows those who book certain rooms through the app to get concierge-like suggestions on restaurants etc. from a real, live human.
“We’ve already seen a 30-percent conversion on bookings that have this available,” said Amanda Richardson, HotelTonight’s vice president of product. “And our repeat rate is up 25 percent in this cohort.”
Though the feature has been a big success in the conversion department, interestingly, the original motivation for adding it to the app was to better customers’ experience using HotelTonight.
And while Home Depot is big enough and HotelTonight is specialized enough that mobile apps make sense. There are plenty of improvements that others can make to mobile websites. (See accompanying box.)
That said, it’s clear that Home Depot and HotelTonight are going with a strategy of more features. And why not, given that we have moved past new mobile and are now firmly ensconced in the era of more mobile.
Photo of Rick Kenney courtesy of Demandware. Shoptalk photo by Mike Cassidy.
Mike Cassidy is BloomReach’s storyteller. Contact him at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.