2. Mobile is changing the way consumers engage in commerce at
an unprecedented speed. Sectors are being disrupted by
innovative business models and consumers are switching their
preferences to mobile first businesses overnight.
As an app or web developer, you know the importance of
building for mobile is higher than ever. You are an expert at
building products to capitalise on the rapid shift to mobile. You
know the benefit of using a mobile first approach.
But the case for change is often hard to communicate. Many of
your current and prospect clients are confused by mobile and
unsure whether they should invest in this ‘new’ channel.
Judo has put together this report packed with useful data and
information to help you pitch for increased investment in a
mobile first approach to your clients. Starting with the most
frequently asked questions and objections, we’ll arm you with
some data to communicate the case for change.
Introduction
3. Customers’ rapid shift to mobile
Client says: ‘I think my customers would prefer to browse and purchase our products
on a bigger screen. I read that not that many people actually buy on mobile’
—
We are past the tipping point in the shift to mobile with
smartphone ownership nearing full penetration and phones
actually being used for their ‘smart’ features.
In the UK, mobile adoption is rapidly growing, driven by the
introduction of increasingly affordable mobile devices (e.g.
Tesco’s Hudl tablets, Samsung’s Galaxy Ace smartphones). 72%
of the UK population now own a smartphone and 59% of
households own at least one tablet.
Consumers are rapidly taking advantage of the ‘smart’ features
afforded by smartphones. Up from the low single digits in 2012,
today nearly ⅓ of all page views in the UK occur on mobile
devices.
Downloading apps, browsing websites, the smartphone is finally
more than a glorified feature phone and the collective consumer
expectation on mobile is being set high by mobile first
innovators.
30%
Q1 2011
51%
Q1 2012
62%
Q1 2013
75%
Q1 2014
UK smartphone penetration
4. Growth in time spent on mobile
Smartphone and tablet users are spending a hefty amount of time
on their mobile devices. On average, smartphone users spend 3.3
hours a day on their phones.
While online search is the most popular activity among global
internet users, 77% of searches take place on mobile even when a
PC is nearby. Why get off the sofa to log on to your PC when you
can just do a quick search on your phone/tablet?
The graph above illustrates the average consumer mobile
behaviour throughout the day. Smartphones are reported to be
the preferred device for ‘life/task’ purposes (e.g. tapping away
your to-do list on the go) and tablet for ‘leisure/entertainment’
purposes.
Mobile devices usage has deeply ingrained into our lives – we
hardly put them down, let alone turn them off.
80
%
60
40
50
70
20
30
10
0
Wake up Meal time Work After work Shopping Waiting Commuting Break time TV time Bed time
Tablets
Smartphones
Consumers’ mobile usage throughout the day
5. Nearly all growth in digital commerce now comes from mobile
While the growth of e-commerce has plateaued, mobile
commerce growth is rocketing. In 2012, Amazon was already
reporting 87% audience growth on mobile (vs. flat on desktop),
and Apple had nearly as many unique visitors on mobile than PC.
Consumers are getting more and more willing to spend on their
mobile devices. In the UK this year, mobile will account for an
estimated 24% of online retail sales, and will rise to 35% by 2017.
The graph below shows that almost all growth in e-commerce now
comes from mobile, with 100% of growth coming from mobile in Q1
of 2014.
Can your customers afford to under-invest in this channel?
Q1
2011/12
Q2
2011/12
Q3
2011/12
Q4
2011/12
Q1
2012/13
Q2
2012/13
Q1
2013/14
Q2
2013/14
Q3
2012/13
Q4
2012/13
16
18
20
%
12
8
10
14
4
6
2
0
Total online
retail excluding
mobile
Total online
retail
Year on year comparison · Total online retail vs. Online retail excluding mbile
6. Not having a mobile first strategy to take advantage of this
channel means your client is essentially leaving money on the
table. Research revealed that 75% of mobile users would spend
more through their mobile devices if more websites were
optimised, while 80% of business still don’t have a mobile
responsive site. Consumers are eager to purchase on mobile, but
businesses are slow to deliver the seamless mobile shopping
experience that will boost conversion. If your customer invests in
mobile today, they will stay ahead of the curve and capture
additional market share.
69%Mobile optimised sites
run faster
58%
Spend more time on
mobile optimised sites
37%
Leave for another site if
not mobile optimised
Consumers’ opinions on mobile optimised sites
75%More likely to purchase on
mobile optimised sites
7. Client says: ‘I don’t know enough about mobile to make the switch. What if I invest a
large amount into mobile and it doesn’t work out?’
—
Below are high level comparisons of pros and cons of each
mobile channel to help tease out your customer’s needs…
Not investing in mobile today will lead to spending a lot more in
the future to win back lost customers.
There’s no reason why a mobile first strategy can’t be developed
in stages. But how exactly should your clients prioritise
investment? Native app(s), mobile optimised website, a separate
website for mobile; tablet vs. smartphone? Let’s take a look:
Determine what you need for your target
audience
To overly simplify, native apps are for customer loyalty while
mobile web is for customer acquisition. Tablets are similar to
desktop devices (large-ish screens, on WiFi) while smartphones
are used differently.
Before your client starts thinking about what to develop, first ask
them what their business goals are. What do their current
customers want? How could they better serve their customers?
How do prospective customers find them? How does/can mobile
improve the value proposition?
NICE TO
MEET
YOU…
…GOOD TO SEE
YOU AGAIN!
8. Mobile website and mobile responsive website
Consider the type of services or products that they are providing.
If they are a consulting firm that is hoping to get more visitors
onto their site to read their content on any device, a mobile
optimised site is perhaps enough for that goal.
+ PROS - CONS
• Single URL to manage and promote (only applicable to mobile
responsive website)
• Cheaper to develop
• Easier to make changes or update
• Wider audience reach – good for customer acquisition
• Have to manage more than one URL (only applicable to mobile
website)
• Rely on WiFi or data connection
• One size fits most, but not all – not tailored specifically for mobile
• Doesn’t use features on user’s smartphone or tablet
9. Native mobile app
When businesses already have a strong customer base, native
mobile apps will help boost brand loyalty and conversion.
A successful native mobile app will become a habit in their
customers’ lives, providing customers the easiest way to repeat
their purchase from your clients.
+ PROS - CONS
• Works even when user is offline
• Best possible user experience
• Incorporate device’s features in user’s journey
• Remain on user’s device after installation
• Higher cost of development
• App store approval needed for each update
• Developed specifically to user’s device operating system
• Additional marketing strategy needed
10. However, if they are a retail brand that has a brick-and-mortar
presence, then they can benefit from investing in both a native
mobile app to boost loyalty, and a mobile responsive site to
enable lead acquisition on all devices.
Therefore, when your clients say they are unsure about what to
develop first, discuss their business goals and budget with them,
determine which mobile channel they need, and work out a
development plan that works for their goals and budget.
PAST · RETAIL 2.0 – MULTICHANNEL NOW · RETAIL 3.0 – OMNICHANNEL
• Each channel (e.g. store, e-commerce) is operated
independently
• Created higher rate of confusion within customer journey due
to possible inconsistency
• All channels are operating together to provide a seamless brand
user experience
• Customer interacts with physical elements and digital elements
simultaneously
• User journey spans across multiple devices
11. Which OS to develop for first
Android devices are more common than iOS devices, but iOS
takes a disproportionate amount of spend, app downloads, and
investment. Research has shown that iOS users spend almost 5
times as much online as Android users.
While Android has a lot of advantages, one disadvantage is the
proliferation of device sizes and operating systems that can
complicate Android app design.
If your client is looking to build a native app, iOS is likely the better
first step. But to truly be relevant and have a bigger reach, Android
should not be overlooked.
80
%
60
40
50
70
20
30
10
0
Q2 2012
Tablet market share
Q2 2013
Key: iOS devices Android devices
80
%
60
40
50
70
20
30
10
0
Q2 2012
Smartphone market share
Q2 2013
$30,000
$15,000
$20,000
$25,000
$5,000
$10,000
$0
Q2 2012
Cumulative platform app revenue
Q2 2013 Q1 2014
12. Client says: ‘Return on Investment (ROI) on mobile is rather unclear. I’m not sure if it’s
worth it’
—
Hold on. Your client should be considering the growth of mobile
as a channel and the potential of lost customers if they lag
competitive movements. The channel shift introduced by
e-commerce in the early 2000’s is repeating itself. But this time,
the shift is 3-4x faster leaving less time to ‘wait and see’.
Understanding ROI helps focus investment and speaks to the
bottom line of your decision maker.
There are some tools available online to measure their
quantitative ROI easily.
Here are two that we would recommend…
Google’s Full Value of Mobile Calculator
http://www.fvm.withgoogle.com/fvm/en/d/
This handy tool from Google lets you put in concrete numbers for
each mobile channel you have and return with ROI figures to you.
You can either enter data manually, or upload your AdWords data.
Tagman’s Conversion Loss Calculator
http://www.tagman.com/conversion-loss-calculator/
This calculator actually measures how the increase in page load
time impacts conversion rate. It’s a great tool if you want to
convince your clients to invest in a mobile channel that loads
faster than their current solution.
13. The general process of calculating the quantitative ROI of a mobile channel involves the below steps:
1 · Define the goal of each mobile channel
Some of the common goals for a mobile channel are: user
acquisition, lead acquisition, mobile influence, and customer
retention rate.
2 · Assess development costs
Then add up all the development costs: implementation,
hardware, integration, and maintenance.
3 · Develop measurable KPIs
Give each goal above a measurable KPI. Let’s walk through some
helpful formulae to calculate this.
Acquisition cost per user = Total Cost of Ownership (TCO) /
Total number of users
Acquisition Rate = [Leads through mobile / Total leads] x 100
Influence rate = [Mobile order or influenced revenue / Total
revenue] x 100
Retention Rate = [Repeated customer / Total users] x 100
4 · Weigh KPI measurement vs. costs
Once you have all the figures, weigh the total quantitative benefit
against the Total Cost of Ownership (TCO) to calculate the ROI.
ROI = [Average revenue per month x 12 months] - [TCO for the
first year] / [TCO for the first year] x 100
Besides qualitative ROI, your client should also keep in mind that
some benefits from a mobile-first strategy are actually soft
benefits, meaning that your client should also measure the
qualitative ROI of a mobile channel.
Some of the elements that contribute towards qualitative ROI are:
• Customer satisfaction level
• Customer loyalty
• Access to customer data
• Brand recognition and position
• Learning how to win in a new channel
14. Mobile is past the tipping point. Our changing behaviour and
expectations as consumers requires every business to evaluate
their business model and invest in mobile development. Helping
your client understand the speed of change and sharing positive
success examples will make convincing them to invest in a
mobile first strategy easy.
At judo, we work with businesses of all sizes to ensure that the
critical piece of payments works beautifully across every device.
But getting to payment starts with well designed products across
all devices that are tailored to the needs of your clients.
We hope you have found the material and data in this report
helpful. We’ve also included all graphs in PowerPoint and PDF
format.
You can reach our mobile experts at any time by emailing us at
help@judopay.com or calling us on +44 (0) 203 503 0600.
Conclusion
Sources: IAB Research · ExactTarget · comScore · Jumio · Deloitte · Forrester · Kissmetrics · The Guardian · Verdict · eMarketer · Econsultancy
