5 Paradoxes Shaping the Future of Mobile Commerce
Remember when it took 23 clicks to find movie showtimes on your mobile phone? While that may seem like an eon ago, in reality it’s just been a few short years. The mobile evolution has been advancing at a break-neck pace.
“Mobile is ramping up faster than any other technology we have seen in the past,” says Mary Meeker of Kleiner Perkins. Mobile web adoption is happening eight times faster than traditional web adoption in the late ’90s.
With that growth comes a new set of user behaviors and consumer trends. What’s the reality when it comes to the new mobile commerce landscape? Here are five facts that will have striking implications for the future of mobile commerce.
1. Customers Spend More Time on Their Mobile Devices Than Desktops.
My company powers about 20,000 ecommerce sites. The average desktop order in 2011 was $95.19, and the average mobile order amounted to $96.92. The difference of $1.73 per order may appear small, but that 2% increase in average cart size can dramatically affect a company’s bottom line.
While multiple factors contribute to this data, the most important may be the power of the tablet, which has quickly emerged as the third digital screen in consumers’ lives, in addition to desktops and smartphones.
Consistent Shopping Experiences: Lessons from the 2011 Holiday Season
The flurry of the 2011 holiday shopping season has passed and we’re starting to see some data and larger trends emerge.
The 2011 holiday season saw more retail sales, but fewer in-store shoppers, with sales growing 3.5% but foot traffic declining 3.1%.
Where did the additional sales come from?
Facebook IPO: the Mobile Story revealed in S-1 Filing
Since the Facebook IPO is all over the news we thought we’d examine the facet of the story that interests us the most – the mobile story and what was revealed in their S-1 filing.
Background and Context
A few months ago we looked at a snapshot of Facebook’s sharing data on mobile and found that 57% of all sharing was through the mobile web, with all apps on all platforms combined – iPhone, Android and Blackberry – contributing 40%.
(Click for full size image.)
Combine that data snapshot with ongoing rumors of a full HTML-5 version of Facebook, fit for the mobile web and codenamed Project Spartan, and we can start to see the macro trend of Facebook’s business and users is to embrace the mobile web as essential.
Mobile Summary of S-1 Filing
In Facebook’s S-1 Filing, we saw more details on mobile usage, growth and revenues that caught our eyes.
(The S-1 is a form companies use to describe their business when they go public. Here’s more background on S-1 filings.)
And a few of the mobile details that stood out in the coverage:
- Facebook reports 845 million Monthly Active Users (MAUs)
- 57% of monthly active users visit Facebook every day and are classified as Daily Active Users (DAUs)
- 425 million of those monthly active users (~50%) used Facebook mobile products in December, 2011
- Facebook does not serve advertising on its mobile experience so increased mobile usage actually hurts their revenues
- Facebook are nervous about mobile because “user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control”
As covered by ReadWriteWeb in Facebook’s Biggest Risks Explained, quoting Antone Johnson in point form:
“No revenue currently generated from mobile advertising; unclear how much mobile use could be monetized; failure to solve this puzzle combined with a dramatic shift toward mobile usage could be a serious problem for FB; and per the next risk factor, they don’t control the iOS and Android platforms.”
So mobile presents a paradox for Facebook: huge growth, no current revenues.
Mobile is how their users are increasingly choosing to access Facebook but they haven’t figured out how to insert their key revenue driver – advertising – into the experience.
Mobile: Engine of International Growth
Reading the Facebook S-1 and knowing a lot about international mobile traffic, we can see that a heavyweight driver of Facebook growth around the world is the mobile web.
From the Facebook S-1:
There are more than two billion global Internet users, according to an industry source, and we aim to connect all of them. We have achieved varying levels of penetration within the population of Internet users in different countries. For example, in countries such as Chile, Turkey, and Venezuela we estimate that we have penetration rates of greater than 80% of Internet users; in countries such as the United Kingdom and the United States we estimate that we have penetration rates of approximately 60%; Increased mobile usage was a key contributor to this growth. DAUs as a percentage of MAUs increased from 54% in December 2010 to 57% in December 2011.
And as move towards 2014, the year when mobile becomes the #1 way to access the web, mobile will increase its importance as the engine for international growth of online businesses.
Reading into the numbers, it’s apparent that Facebook see the popularity of the mobile web today and also a dominant future for the mobile web around the globe.
So it will be interesting to watch their evolution as a public company, as they are required to share more information publicly.
If early indications are accurate, mobile apps will be part to their mobile strategy and the mobile web will be essential.
2012: Year of the Tablet
In 2012, Mobify served 167 million people mobile pages – equal to around 20% of all smartphone subscribers.
Of those people, most of them used their mobile phones to access the web.
However, there has been a huge surge in tablet traffic, specifically from the iPad.
Data shows that smartphone users are more like than desktop to purchase online.
On top of this, tablet users are more likely than smartphone users to purchase – and when they do, they, on average, spend more.
Despite this, many retailers do not have a tablet optimized site.
20% of Smartphone Subscribers Have Used a Mobify-powered Site
In 2011 166,781,543 unique visitors around the globe tapped, scrolled, and swiped their way around a Mobify-powered mobile website.
That’s more than the entire population of Japan and Canada combined.
That’s also equal to around 2.4% of the world’s total population.
This works out to around 20% of all smartphone subscribers in the world, based on Morgan Stanley’s estimate of 835 million smartphone subscribers worldwide.
The Mobify Platform in 2012
Looking ahead to 2012, we continue to see huge growth in mobile traffic overall and in more incredible grwoth in mobile traffic on the Mobify Platform.
In 2012, we are on track to exceed:
- 5 million unique visitors a day on mobile
- 1.3 billion visits
- 30 pages served / second
These are predictions for the Mobify Platform and they’re echoed by other industry giants.
In a speech at Marketforce’s Broadcasting and Digital Entertainment conference in London, YouTube’s director of content partnerships Ben Wilson revealed that they project mobile usage will surpass desktop usage in 2013, if not sooner. He made the prediction based on YouTube’s current data – serving three billion views a day – 15% of which already comes from mobile devices.
The big picture change we’re witnessing is the acceleration of mobile usage beyond projections from years ago.
Mobile is growing faster than projected and much, much faster than almost everyone is preparing to serve.
Are you ready?
