Mobile traffic surpassed desktop traffic for large retailers in May 2015 – and mobile revenue will soon follow. In fact, for some of retailers, it already has.
The inferior performance and user experience typically available on mobile browsers has prevented mobile revenue from overtaking desktop, even after becoming the dominant source of traffic. But that’s about to change on a broad scale. Technology has emerged to create faster, more app-like mobile web experiences that drive conversions.
These high-converting websites will drive mobile revenue higher than desktop revenue, and sooner than you may think. Retail leaders will see mobile revenue surpass desktop just in time for Black Friday 2017.
Mobile has been an important part of holiday shopping for the last few years, but in 2017 it will be crucial. Typically, mobile conversions lag behind desktop by around 30%. If you improve your mobile shopping experience, you’ll convert more customers from your busiest source of traffic. However, if you ignore your mobile customers, you may as well accept that your biggest shopping days of the year will be a bust.
The Rise of Online
Let’s first take a step back and look at the whole picture – which includes offline shopping. US census data covers 17 years of retail sales online versus offline, and the first thing you’ll notice is almost continuous growth rates since 2001, except for during the recession years when offline sales were hit hard.
What’s impressive is that online sales still continued to grow even during those years. 2015 was the first year that saw more of an increase in absolute dollars from online sales than from offline sales. The revenue increase from online versus offline sales was neck-and-neck in 2016, and it will continue to fluctuate over the next of couple years. But by 2019, the majority of the increase in retail sales will consistently come from online sales.
Mobile Driving Ecommerce Growth
By zooming in on ecommerce, we can see that online sales have grown almost perfectly exponentially at 16.2% per year, and ecommerce revenue has doubled over the past 5 years.
So where is that 16% growth in ecommerce coming from year after year? You guessed it – mobile.
Salesforce Commerce Cloud (previously Demandware) got it right when they said, “Phones represent the biggest disruption to retail since commerce went digital.”
While overall mobile traffic surpassed desktop traffic in October 2016, it happened even earlier for the retail industry. In May 2015, Google reported that mobile searches surpassed desktop searches for the first time, and mobile traffic in the retail industry soon followed suit.
Timeline based on Google Analytics’ benchmarking tool:
- May 2015: Mobile searches surpassed desktop searches on Google and mobile traffic surpassed desktop traffic for large retailers
- Mar 2016: Mobile traffic surpassed desktop traffic for medium retailers
- May 2016: Mobile traffic surpassed desktop traffic for small retailers
Mobile traffic isn’t slowing down either. Salesforce Commerce Cloud predicts that mobile will reach 70% of ecommerce traffic by the end of 2018.
Mobile Revenue Will Dominate by Black Friday 2017
We took data from a sample of our U.S. enterprise ecommerce customers up to and including January 2017. Using the Holt-Winters exponential smoothing function, we can see that retailers will see mobile revenue overtake desktop revenue in Q4 2017, just in time for the busiest shopping season of the year.
Just as we saw with mobile traffic, not every retailer will experience the revenue flip at the same time.
- Mobile Leaders: Leaders will see mobile revenue surpass desktop in Q3 2017; some are already seeing mobile revenue dominating.
- Mobile Median: Mobile revenue will be the dominant driver of ecommerce revenue for the median in Q4 2017.
- Mobile Laggards: The laggards won’t see the revenue flip happen until Q3 2019 – that is, if they survive that long.
4 Reasons Mobile Revenue Has Grown
1. The Shift to a Mobile Culture
Mobile screen time is increasing year after year and consumers have made mobile a large part of their lives. By spending more time on phones, they’ve become more comfortable with tapping, swiping, and general phone navigation – making the transition to shopping on mobile much easier.
2. Faster Phones/LTE Networks
Speed has a direct impact on conversions. Amazon ran a split A/B test where they deliberately slowed down their site to quantify the impact of speed, and found that an increase of 100ms in load time decreases sales by 1%.
3. Bigger Screen Sizes
Larger screens are highly correlated with higher conversion rates. From 2007 to 2014, the average screen size grew from 3” to 5”, enabling UX designers to provide shoppers with a much better user experience.
4. Better Mobile UX
The old method of shrinking and squeezing a desktop site onto a mobile phone didn’t make for a good experience, but mobile user research and A/B tests have made great strides toward making fantastic mobile user experiences. Check out this comprehensive guide to over 30 mobile commerce UX best practices.
The Mobile Revenue Tipping Point
While the factors above have brought mobile shopping a long way, they still haven’t driven mobile revenue to a tipping point. According to Fluent’s 2017 Devices and Demographics report, the 4 factors that would make it more likely for consumers to shop via mobile are easier navigation, increased speed, one-click purchases, and enhanced security.
Emerging technologies and new user experience (UX) research are solving these issues and removing the barriers to purchase on mobile, which is why we will see mobile revenue surpass desktop this year. Retailers who take advantage of these – ASAP – will be among the mobile leaders that see mobile revenue surpass desktop revenue in time for Black Friday 2017.
Here’s what to.
Mobile sessions tend to be shorter, as they’re often interrupted. People look at their phones when they’re commuting, waiting to meet someone, or bored. With the limited time per session, navigation is critical.
What to do:
- Use data to personalize content and make it easier for the shopper to find what they need. If you know a user is in Chicago, show them information for your Chicago locations and events. According to Google, 61% of smartphone users are more likely to buy from companies whose mobiles sites customize customer information to their location.
Speed and conversions are directly correlated, so a slow mobile site will hinder your ability to drive revenue on mobile. There are major innovations in mobile commerce technology that are having a huge impact on speed.
What to do:
- Implement a Progressive Web App (PWA). PWAs deliver an app-like experience on the mobile web. After the initial page load, Progressive Web Apps pre-load content to improve page speeds by 2 to 4 times. Mobify ran an A/B test for one of our customers, PureFormulas, and found that speed had a big impact on revenue. The only material difference was that the PWA website was faster, and it saw a 23% increase in revenue.
- Use Accelerated Mobile Pages (AMP) for your most popular landing pages. AMP is a lightweight version of a page that Google caches. This allows organic traffic to load your first page almost instantly. Your PWA can then load in the background to make every subsequent page load fast as well. By combining PWAs and AMP, you can “start fast, and stay fast.”
The next thing shoppers are looking for on mobile is one-click purchases. Internet Retailer survey data also confirms that 40% of online buyers would be more likely to shop online if the checkout was streamlined.
What to do:
- Offer technologies that allow users to avoid filling out billing and shipping information like Apple Pay, Android Pay, and the Payment Request API.
- Utilize new real-time communication channels like web push notifications to save abandoned carts. These notifications are automatically triggered by cart abandonment and link right back to the cart where the shopper can quickly complete the transaction.
- Implement UX best practices to streamline checkout. You can check out a comprehensive list of best practices in our Mobile Commerce UX Best Practices Guide.
Finally, security is still top of mind for many mobile shoppers – 13% of checkouts are abandoned due to fear of credit card security.
What to do:
- Use new web payment options like Apple Pay, Android Pay, and Payment Request API to allow shoppers to skip giving their credit card information to retailers altogether.
- Add lock icons and the the word “secure” to your checkout buttons – studies show that the larger the icon, the more secure shoppers feel.
Sink or Swim
There are no more excuses for your mobile conversions to be lower than desktop. The technology and user research needed to make mobile your dominant source of ecommerce revenue is available.
Whether mobile commerce is your domain, your boss’, or a colleague’s, it’s time to light that fire – this is a sink or swim moment for your entire company. Mobile revenue will dominate by Black Friday 2017, the question is, will you be one of the retailers riding the wave, or scrambling to stay afloat?
Get in touch with us today to learn how a Progressive Web App will ensure your brand is ready for a successful Black Friday.