x

Cashing in on mobile: converting casual consumers to customers

8 min reading • Posted on January 27, 2016
By Mikaela Andersson

The e-commerce market has seen rapid growth for several years. With the adoption and use of smartphones and tablets booming, m-commerce, or mobile commerce, is set to become an even bigger contributor to this growth in the future.

In order to capitalise on the changing digital landscape, online retailers need to consider how their store performs in a mobile environment. Consumer behaviour on mobiles di ers from their behaviour on desktops. Keeping it safe and simple is key – and this is particularly true for mobile payments.

As mobile devices permanently alter the digital landscape, it is crucial that online retailers keep up with the changes and o er convenient ways to shop and pay online using smartphones and tablets. This white paper provides an overview of the growth of mobile devices and m-commerce, and o ers advice on how to best adapt websites and mobile checkouts to improve conversion.

Mobile shopping is set to keep growing

Mobile devices have long been expected to change the landscape of online commerce. Today, devices like smartphones and tablets are ubiquitous. The prediction that mobile web access would eclipse desktop access by 2014 was recently con rmed by a comScore report. This trend is not expected to abate anytime soon. According to eMarketer, the number of smartphone users is expected to surpass 2 billion worldwide in 2016 and exceed 2.5 billion in 2018.
In line with the increase of mobile usage, mobile commerce is also projected to increase dramatically in the coming years. In 2014, it was estimated that 535 million consumers made mobile purchases around the globe. By 2018, Goldman Sachs expects that number to exceed one billion.

Quick facts and statistics

✓ 81% of all smartphone purchases are spontaneous

✓ 85% of users report, “being able to shop on mobile devices increases

the likelihood of actually making a purchase”

✓ 40% of mobile users report having turned to a competitor’s site after a bad mobile experience

✓ 52% of tablet users prefer shopping using their tablets rather than their PC

✓ Nearly 60% of Amazon.com customers shopped using a mobile device during the 2014 holiday seasondiscounts, make sure that your copy and layout convey this sense of urgency.

Compared to e-commerce in general, mobile device users are expected to account for nearly half of online retail revenue in just a few years. Goldman Sachs forecasted that mobile commerce would reach $204 billion in 2014, constituting 27.2% of e-commerce in total, and reach $626 billion in 2018 – by then making up a full 46.6% of all e-commerce.

More recent statistics from Branding Brand seem to confirm the trend. In February 2015, sales via smartphones and tablets accounted for 31% of all online revenue on its platform – a 24% increase from February 2014. Interestingly, smartphones were responsible for the entire revenue growth in the mobile segment during this time frame, whereas the tablet share remained identical.

Obstacles to further growth

While mobile shopping continues to grow, many online retailers still struggle with converting mobile users into customers – especially smartphone users. In the third quarter of 2014, the average conversion rate for smartphone users was 0.80% globally, compared to 2.78% for traditional sources (PCs), according to Monetate. This further highlights the importance for online retailers to adapt to the new online landscape.

For maturing e-commerce markets to keep developing, retailers need to focus on perfecting the mobile experience. The challenge lies in retaining your customers from product selection through checkout to order con rmation, ensuring that they actually complete the process on their mobiles.

Today, many consumers use multiple devices at the same time, often switching from one to another in order to complete an activity. For instance, 61% of people surveyed by Google stated that they had begun their shopping process on a smartphone and finished it on their laptop. However, it has also been shown that only a minority of shoppers complete their purchase on a computer after experiencing problems with a mobile transaction.

Therefore, treating smartphones as a research medium – with the goal of getting the customers to finalise their purchase on a computer – is not an ideal solution, as it will inevitably lead to a significant share of drop-offs. Inadequate mobile payment solutions are indeed costly for online retailers. During last year’s holiday shopping season in the U.S. alone, retailers were expected to lose as much as $8.6 billion in mobile sales due to payment friction.

This shows that despite the m-commerce boom, some consumers are still hesitant to buy on handheld devices. Which are the main reasons for this hesitation? Too complex and unsafe checkout processes. “Shopping cart abandonment is one of the major issues merchants are facing when it comes to mobile,” Jason Oxman, CEO of Electronic Transactions Agency (ETA), said ahead of TRANSACT 14, held in April 2014. “The ability to make payments is a significant part of the issue – after all, without successful payment, no transaction can be completed. Making mobile payments faster and easier is a big driver for the types of mobile technology that are being developed.”

Capitalising on mobile

Consequently, being able to capitalise on the purchasing power of mobile users is of highest importance for online retailers today. Just because a retailer has been successful in e-commerce up until now, it does not automatically mean that they will be successful in the future, when m-commerce commands a much greater share of the e-commerce pie.

According to MoPowered data, 30% of mobile shoppers abandon a purchase if the experience is not optimised for mobile. Therefore, in order to convert as many users as possible into buyers, it is imperative for any online store that the entire shopping experience adapts seamlessly to smaller screens.

Optimising your website for mobile devices

There are multiple approaches to optimising a website for mobile users. One alternative is to use entirely separate desktop and mobile sites, which usually means redirecting mobile users to a subdomain such as ‘m.example.com’. Another option is to use the same domain and URLs, but to serve di erent content to di erent devices. Yet another approach, which is recommended by Google, is to use so- called responsive web design.

Responsive web design advantages:

✓ Consistent user experience across devices

✓ Same URLs on desktop and mobile; easier to share and interact

✓ SEO advantages– preferred by Google

✓ No redirects that increase loading time

✓ Cost-e ective–only one site to maintain

✓ Consolidated reporting and analytics

Responsive web design means serving the same content and URLs to all devices, using a technique that automatically adapts to the device’s screen size and resolution. There are several advantages to this technique, not least that the user experience is consistent across devices – an important aspect in e-commerce, where 67% of online shoppers still use multiple devices sequentially.

Many retailers also use mobile apps as part of their marketing e orts, but this should not be seen as a replacement for a mobile-optimised website. Apps that add value to the shopping experience can be highly e ective and useful tools, but it is also important to bear in mind that as many as 7 out of 10 users prefer mobile websites to mobile apps.

Converting consumers on mobile devices – optimising the checkout

When an e-commerce website works perfectly – regardless of the user’s device – browsing and selecting products is the fun part of shopping. The most important and somewhat less exciting part remains, however.

Shoppers on mobile devices are often concerned with the safety aspect of making a payment. Ensuring the security of systems, services and personal data is vital in order for the average consumer to be completely comfortable with making purchases on mobile devices. Paying is the necessary evil of the shopping experience and needs to be as simple as possible without compromising on security.

Well-designed online stores with streamlined checkouts can bene t tremendously from their user-friendliness. People use mobile devices, particularly smartphones, on the go and need sites that are simple to navigate and that react quickly – without added friction.

Data collected from retailers with well-functioning checkouts show that their conversion rates have signi cantly increased since updating their checkout solution. This con rms that consumers are willing to buy on mobile devices as long as it is simple. Thus, when it comes to shopping, the amount of clicks and information needed to nalise a purchase must be reduced to a minimum in order to retain as many customers as possible.

Four fundamental ways that simplify the buying experience for consumers

✓ Adapt your site to mobile devices

Consumers have no patience with sites that are not optimised for mobile. With the growth of m-commerce, retailers need to adopt a mobile- rst point of view. Both the store as a whole as well as the checkout needs to be adapted to ensure usability and a smooth user experience. Using a responsive design ensures a consistent user experience across devices.

✓ Offer a simple checkout process

Studies show that consumers want to minimise the amount of text they have to insert in order to pay on a mobile device. They also like to keep the process as short as possible, only lling in information on a single page. The least bit of friction could deter them from completing their purchase.

✓ Keep the payment process transparent

Consumers like to know where they are in the checkout process. Therefore, retailers need to be transparent as to how many steps they expect their customers to complete before they have finalised their purchase.

✓ Make sure to offer safe checkout options

The primary concern for many consumers is the safety aspect of mobile payments. Only ask for personal information that is absolutely necessary, and if possible, use a payment solution that does not incur any extra risk for consumers. For instance, card payments are popular across most markets, but digging out a credit card on a bus is neither simple nor particularly safe. Built- in solutions that only require top-of-mind information are best suited for mobile devices.

Conclusion

Mobile commerce has grown rapidly and will keep growing at a very fast pace in the coming years. As markets grow increasingly mature, optimising the user experience will be key for online retailers to succeed and increase their conversion rates.

Retailers need to remember that mobile users have high demands on how sites perform on their devices, and these demands grow even more acute when they are shopping. Slow-processing sites with too many steps to complete or requirements of too much information will not be viable in a mobile environment.
Be smart. Make the user experience simple, fast and safe. In mobile more than anywhere, keeping it simple is key.


Sign up for more articles like this one

Sign up for more articles like this one. From this point onwards, we'll share content on topics you want to hear about. Just enter your email below to get started.