1.
© 2016 eMarketer Inc.
Made possible by
Mcommerce Trends—Behind the
Rapid Growth
Yory Wurmser
Retail Analyst
June 16, 2016

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© 2016 eMarketer Inc.
How quickly are mobile
commerce sales growing?

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© 2016 eMarketer Inc.
Mobile influences
45%
of all US shopping journeys
(Source: Facebook IQ, Feb 2016)

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© 2016 eMarketer Inc.
Context: Mcommerce will account for 2.7% of
total US retail sales in 2016

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© 2016 eMarketer Inc.
This year, mcommerce’s share of total retail
sales will be more than double 2014’s figure
 Mcommerce will
account for a third
of US retail
ecommerce sales

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© 2016 eMarketer Inc.
Mcommerce’s increasing share is being driven by
its rapid sales growth
46.8%
Mcommerce
15.7%
2.6%
Ecommerce Total Retail
US Retail Sales Growth, 2016

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© 2016 eMarketer Inc.
Smartphone mcommerce will grow even faster
46.8%
Mcommerce
15.7%
2.6%
74.2%
Ecommerce Total RetailSmartphone mcommerce
US Retail Sales Growth, 2016

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Growth in US
smartphone
mcommerce
accelerated in
2015 and will
continue to
expand
rapidly
through 2020

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© 2016 eMarketer Inc.
Why is smartphone commerce
growing so quickly?

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© 2016 eMarketer Inc.
1. More buyers: The number of smartphone
buyers continues to grow

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2. Higher
conversion rates:
Smartphone
conversion rates
improved 33.4% in
2015
Conversion rates on
smartphones were one-third what
they were on desktops, but that
was up from one-quarter in 2014

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3. Conversion rates on apps outperform desktop
 Mobile web drove more than twice (2.1 times) the
number of visits as apps in 2015 (Source: Morgan Stanley, September 2015)
 BUT apps drove 54% of mobile transactions in Q4 2015
(Source: Criteo, February, 2016)
 AND apps had conversion rates 20% higher than
desktops in Q4 2015 (Source: Criteo, Feburary 2016)

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Tablets vs. Smartphones

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Smartphone shoppers will outnumber tablet
shoppers in the US by nearly 35 million in 2016
165.8 million
(up 16.5m YoY)
131.4 million
(up 8.0m YoY)

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Tablet buyers will still outnumber smartphone
buyers, but the gap is closing rapidly
87.8 million
(up 9.5m YoY)
101.7 million
(up 6.1m YoY)

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Tablet
shoppers
have become
slightly less
likely to buy on
tablets—the
opposite of
smartphones

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© 2016 eMarketer Inc.
Starting this
year, tablets
will no longer
by responsible
for a majority
of US retail
mcommerce
But retail mcommerce
sales on tablets are still
growing by double digits

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iPads absolutely dominate in tablet commerce
 More than four
in five retail
orders on
tablets came
from iPads, and
this percentage
is increasing

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iOS vs. Android

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The majority of US smartphones are Android
 Both Android and
iOS are increasing
share at the
expense of
Blackberry and
Windows Phone

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But a majority of mobile traffic and sales come
from iOS devices

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Most iPhones have the latest OS, but Android
phones are more fragmented
 43% of
smartphone visits
to retailer sites
came from iPhones
running iOS 9 in Q4
2015
 More than
two-thirds of
iPhone visits came
from latest version

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The gap in conversion gap by OS is narrowing on
mobile web, but remains as large as ever on apps
“If you look at behavior
on high-end devices
on Android, it is very
similar to iOS [on the
web].”
—Michael Langguth,
Co-Founder, Poq
“At the app level, it hasn’t
tightened up. Even with a
high-end Android … the
participation and usage of
those devices is much
lower than that of iOS.”
—Chris Mason, CEO and
Co-Founder, Branding Brand

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What’s driving higher
conversion rates?

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Factors driving higher conversion rates:
1. Larger phones
2. Mobile optimization
3. Native mobile search

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1. Larger
phones

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Smartphone
screens will
continue to
get bigger
Phablet share of global
smartphone devices will rise
from 29% in Q4 2015 to 59% in
Q2 2017

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Smaller screens have lower conversion rates
“There is a distinct correlation between the size of the screen
and conversion rates. With a smaller screen, it is harder to
fill out an online form, bringing conversion rates way down.”
—Josh Keller, CEO of Union Square Media, as quoted in Adweek, March 21, 2016

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2. Mobile optimization
62%
of B2C sites were responsive in September 2015
(Source: Gorilla Group, September 2015)

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Responsive design is just one part of mobile
optimization
“Even though you can provide a responsive
experience, it’s not enough. A lot of retailers
are spending time and dollars on
optimizing for speed of the site.”
—Haresh Kumar, Vice President, Marketing,
Moovweb

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© 2016 eMarketer Inc.
Responsive design can slow down load times,
which increases bounce rates
 27% of US
digital shoppers
are unwilling to
wait more than
3 seconds for a
page to load
 Only 34% will
stick around
after 5 seconds

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Faster load times = higher conversion rates
Load Time
2.4 seconds
3.3 seconds
4.2 seconds
5.7 seconds
(Source: Soasta, September 2015)
Conversion Rate
1.9% (peak)
1.5%
1.0%
0.6%

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Average load time for a retailer mobile site is the
fastest of any industry
3.1 seconds
average load time
(Source: Radware, March 2016)

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Mobile Optimization 2.0: Focused on enhancing
speed and consumer journey
 Adaptive elements
 Simplified code
– React
– AMP
 Commerce embedded in faster platforms

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© 2016 eMarketer Inc.
Flipkart had good results from creating a
progressive web app
 Cached data allows app-like behavior
– Faster load times
– Offline functionality
– Persistent sign-in and home screen icon
 Performance improved vs. old website
– Time spent up 200%
– Conversion increased 70%
– 60% of visits via home screen icon

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Checkout optimization: Simplified payment is
central for mobile optimization
“When you can leverage Apple Pay or a
credit card from a prior purchase, the
experience goes from something that takes
10-plus clicks … into one with one or two.”
—Satish Kanwar, Director of Product, Shopify

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3. Emergence of mobile-optimized product search
Visual SearchApp Indexing Voice Search

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App search has been enabled by deep links
~50%
of Internet Retailer 100 use deep links
(Pure Oxygen Labs, 2016)

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© 2016 eMarketer Inc.
Image Search:
Google and
other companies
are developing
image
recognition
technology to
index images

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© 2016 eMarketer Inc.
Image search can also refine searches and drive
iterative merchandising
(Images sourced from Sentient Technologies)

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© 2016 eMarketer Inc.
Pure visual search continues to spread
VivinoNeiman Marcus Amazon
(Image source: iTunes) (Image source: iTunes)(Image source: Yory Wurmser)

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© 2016 eMarketer Inc.
Voice search is still in its infancy, but is growing
rapidly
 Half of US mobile
phone owners had
tried or regularly
used a
voice-controlled
personal assistant
as of June 2015

43.
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20%of queries on Android are spoken queries
(Google I/O, May 2016)

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© 2016 eMarketer Inc.
The next steps for
mcommerce

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© 2016 eMarketer Inc.
1. Conversational
Commerce:
Commerce
embedded within
AI-enhanced
conversations
(Images source: Kik)

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© 2016 eMarketer Inc.
All of the major platforms are working on
conversational personal assistants
Facebook MGoogle Assistant Siri
(Image source: PCWorld.com)
(Image source: Apple)
(Image source: Amazon) (Image source: Microsoft)
(Image source: Gigaom.com)

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© 2016 eMarketer Inc.
Messaging apps are positioning themselves as
platforms for conversational commerce
 Facebook Messenger introduced:
– Conversations with brands, mostly around
clienteling or customer service (2015)
– Ride requests for Lyft and Uber (2015)
– Chat bots and Send/Receive API (April 2016)
 Kik introduced a bot store in April 2016
Image source: Facebook
Image source: Kik

48.
© 2016 eMarketer Inc.
Nearly a third
of WeChat
users in China
had initiated a
purchase via
WeChat as of
January 2016
Up more than 100%
in 2016 vs. 2015

49.
© 2016 eMarketer Inc.
Facebook will have a challenge convincing many
consumers to use Messenger for commerce
 Just under a
third of US
Messenger
users are at
least somewhat
likely to connect
with brands on
Messenger

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© 2016 eMarketer Inc.
2. Embedded commerce: Buy buttons move away
from retailer sites
Social Media Content Sites Related Services
Image source: Pinterest Image source: iTunes Image source: Button

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© 2016 eMarketer Inc.
There has been limited active demand for buy
buttons on social media
 Less than a fifth
of consumers
worldwide
polled in
November 2015
were interested
in buy buttons
on select social
media sites

52.
© 2016 eMarketer Inc.
Content apps are
transforming into
marketplaces with
buy buttons
There were 35 million
Houzz users in Q4 2015
(Source: Houzz, November 2015)
Image source: iTunes

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© 2016 eMarketer Inc.
Related services: Deep links can create order
buttons for a variety of services in a single view
Resy app
Button for Uber
Image source: Button

54.
© 2016 eMarketer Inc.
Recap
 Mcommerce will grow 46.8% in 2016, with smartphone
mcommerce growing even more quickly at 74.2%
 Mcommerce growth will come from:
– More buyers
– Better conversion rates
 Conversion rates are improving because of:
– Larger phones
– Mobile optimization
– Native mobile search
 Conversational commerce and embedded commerce are the
next step in mcommerce

55.
IBM Marketing Cloud helps you use customer
behavior to deliver custom experiences and
messages across the entire buyer journey.
So you can reach the right people,
with the right content, at the right time.
Visit ibmmarketingcloud.com

56.
© 2016 eMarketer Inc.
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Yory Wurmser
Mcommerce Trends—Behind
the Rapid Growth
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