1.
© 2015 eMarketer Inc.
Made possible by
Six Trends in the Shifting World of
Mcommerce
Yory Wurmser
Retail Analyst
July 9, 2015

2.
© 2015 eMarketer Inc.
Agenda
 Forecast for US mcommerce sales
 Trends within overall mcommerce
 Evolution of the mobile user experience that will affect
mcommerce

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© 2015 eMarketer Inc.
1. Mobile commerce is
becoming mainstream

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© 2015 eMarketer Inc.
Sales on mobile devices are still relatively small:
1.6% of total US retail sales in 2015
$4.458 trillion
in offline retail sales
$74.93 billion
in mcommerce sales
$265.68 billion in
other ecommerce sales

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© 2015 eMarketer Inc.
… But growth will be rapid in 2015
 32% YoY
jump in retail
mcommerce
sales
 22% of retail
ecommerce in
2015 will come
from
mcommerce

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© 2015 eMarketer Inc.
Majority of US digital buyers will make a
purchase with a mobile device in 2015
 121.8 million
mobile buyers
 63.7% of digital
buyers
Increase in
mobile
buyers:
17 million
in 12 mos.

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© 2015 eMarketer Inc.
Rapid
diversification:
Digital media
downloads and
in-app purchases
account for a
shrinking share
of mobile sales

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© 2015 eMarketer Inc.
Even within
digital media,
the product
mix is
changing

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© 2015 eMarketer Inc.
Fashion and
luxury lead in
mobile
transaction
share

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© 2015 eMarketer Inc.
2. Smartphones are
catching up to tablets

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© 2015 eMarketer Inc.
Smartphone shoppers will continue to
outnumber tablet shoppers in the US in 2015
123.2 million149.3 million

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© 2015 eMarketer Inc.
… But US tablet owners are far more likely than
US smartphone owners to buy via their device

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© 2015 eMarketer Inc.
Tablet buyers will outnumber smartphone buyers
in the US in 2015
99.7 million78.3 million

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© 2015 eMarketer Inc.
… And tablet
conversion
rates and
average order
value (AOV) far
exceed those
on smartphones

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© 2015 eMarketer Inc.
Tablets
produce the
majority of
mobile
revenue, but
their revenue
share has
peaked

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© 2015 eMarketer Inc.
Smartphones’
share of US
mcommerce
will continue
to increase

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© 2015 eMarketer Inc.
Even so, the
absolute
growth rate of
tablet sales
will remain
strong

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© 2015 eMarketer Inc.
3. iOS outperforms Android
but the gap is narrowing
(slightly)

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© 2015 eMarketer Inc.
iPads generated nearly half of US mcommerce
sales during the 2014 holiday season
48%
(Source: Adobe, “2014 Holiday Shopping Recap”)

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© 2015 eMarketer Inc.
iPhones generated nearly 60% more retail sales
than Android phones in Q1 2015

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© 2015 eMarketer Inc.
Android phones outnumber iPhones

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© 2015 eMarketer Inc.
Even with an
iPhone 6
bounce in Q4
2014, Android
easily outsells
iPhone most
quarters

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© 2015 eMarketer Inc.
iOS generates more mcommerce than Android
because of its higher conversion rates and AOV

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© 2015 eMarketer Inc.
High-end Android devices have conversion rates
on par with iOS devices
“Everybody likes to pick on Android
conversions, but when we looked at our Black
Friday data, high-end Android devices that
people have to pay for [had conversion rates
that] were equal or better [than those on] iOS.”
—Laurent Meynier, head of marketing at Moovweb

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© 2015 eMarketer Inc.
The gap between iOS and Android conversion
rates is narrowing
 In January 2015,
iOS and Android had
nearly equal
conversion rates on
phones
 iOS owners still
shop on their
devices more often
 iPads still lead
Android tablets

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© 2015 eMarketer Inc.
4. Better user interfaces
equal more buying

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© 2015 eMarketer Inc.
Three major improvements in mobile interfaces
will increase mobile sales
 Bigger screen sizes
 Optimized websites
 Easier checkout

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© 2015 eMarketer Inc.
There is a
direct relation
between
screen size
and conversion
rate

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© 2015 eMarketer Inc.
Screen sizes
are getting
bigger

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© 2015 eMarketer Inc.
The trend should continue with rapid growth of
phablet shipments
 Phablets
accounted for
8.5% of global
smart device
shipments in 2014
 Will account for
24.7% of global
smart device
shipments in 2019

31.
© 2015 eMarketer Inc.
Mobile optimization is still not universal
44%
of Fortune 500 sites were not ‘mobile friendly’
in early April 2015
(Source: Boulder Marketing Technology, cited in Techcrunch, 4/12/2015)

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© 2015 eMarketer Inc.
Google’s ‘Mobilegeddon’ is pushing companies to
prioritize mobile optimization
 Update began on April 21
 Google now prioritizes
mobile-optimized
websites
 Google saw a 4.7%
increase in
mobile-friendly sites
between March and April
2015 (Source: Search Engine Land, 4/21/15)
Image from Search Engine Land, 4/21/15

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© 2015 eMarketer Inc.
Responsive
design has
become a
major mobile
priority for US
retailers
Over half of retailers listed
responsive design as a
high (1 or 2) priority when
polled in October 2014

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© 2015 eMarketer Inc.
Easier checkout
is the leading
factor that would
increase mobile
buying, according
to US digital
shoppers

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© 2015 eMarketer Inc.
1- or 2-click buying is expanding beyond Amazon
 OS-level payment systems: Apple Pay & Android Pay
 Web-based payment systems: e.g., PayPal’s One Touch
 Buy buttons in ads: Google and XpressBuy
 Buy buttons in social media

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© 2015 eMarketer Inc.
Apple Pay and Google Wallet are still relatively
lightly used
 More US mobile
payment users
had used
Starbucks mobile
payments in the
year to December
2014 than used
either Apple Pay
or Google Wallet

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© 2015 eMarketer Inc.
5. Web dominates mobile
sales, but apps gain in
importance

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© 2015 eMarketer Inc.
Mobile web is the default platform for casual
visitors
“The mobile web has
to be a workhorse. If
you know nothing about
Sephora and you’re on
the phone and you type
[a beauty brand], the
mobile web is where
you’re going to land.”
—Johnna Marcus, senior
director of Sephora’s
Sephora Innovation Lab
“Mobile web
dominates. It has
to do with
discovery. A lot of
shoppers will still go
to Google when they
are figuring out where
to shop.”
—Sonia Nagar, senior
director of mobile product
strategy at RetailMeNot

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© 2015 eMarketer Inc.
Most retailers prioritize mobile sites for five
reasons
1. Easier for discovery and search
2. Cheaper to design
3. Universal
4. Not limited to core shoppers
5. Landing page for emails

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© 2015 eMarketer Inc.
Only about a fifth of US consumers use a
shopping app
 40% of respondents
had downloaded a
shopping app as of
October 2014
 Of those who had
downloaded a
shopping app, only
39% used it for
purchases

41.
© 2015 eMarketer Inc.
But an outsized portion of revenue comes from
apps
42%
of mobile revenue comes from apps
(Source: Internet Retailer, August 2014)

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© 2015 eMarketer Inc.
App shoppers are heavy buyers
“Mobile app users are probably enrolled in your
loyalty program. If there is a store credit card,
they’re probably enrolled in that as well. So it’s
a subset of your customer base. But that
20% of your customer base is actually
your most valuable 20%.”
—Maya Mikhailov, chief marketing officer and
co-Founder of GPShopper

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© 2015 eMarketer Inc.
People spend
more time on
retailer apps
than on
websites

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© 2015 eMarketer Inc.
Apps will increase in importance
1. Much faster than the mobile web
2. Necessary for complex integrations—e.g., with device
sensors, mobile payments, loyalty programs
3. Majority of mobile time spent is on apps
4. Apps are becoming publishing platforms for
notifications

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© 2015 eMarketer Inc.
Slow load time is a leading cause of frustration
among mobile shoppers

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© 2015 eMarketer Inc.
Apps are necessary for complex integrations
Mobile Payment Device Sensors Loyalty Cards
Image source: Sephora via
iTunes
Image source: Walmart via
iTunes
Image source: Staples via
www.businesswire.com

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© 2015 eMarketer Inc.
US
smartphone
and tablet
users spend
most of their
mobile time
on apps

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© 2015 eMarketer Inc.
Better notification layers are turning apps into
publishing platforms as much as destinations
“We’re already seeing a shift towards a notification
layer, where content can be shown in that layer
rather than in an app…. Businesses shouldn’t
be thinking about the app as a
destination, they should be thinking
about the ecosystem in which it exists.”
—Paul Adams, vice president of product at Intercom

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© 2015 eMarketer Inc.
Scale remains an issue for retailer apps
Only 12%
of US consumers use a retailer app
(Source: Epsilon, 2015)

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© 2015 eMarketer Inc.
Increases in app commerce will likely come from
third-party platforms, including:
 App publisher networks
 Mobile wallets
 Social media apps
Images from: Freckle IoT

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© 2015 eMarketer Inc.
Social media apps introduce simple shopping
Instagram Pinterest Twitter Facebook
Image source: FacebookImage source: TwitterImage source: PinterestImage source: Instagram

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© 2015 eMarketer Inc.
6. Search is evolving for
mobile shopping and
buying

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© 2015 eMarketer Inc.
Search is a huge opportunity for additional sales
 89% of US
smartphone
users will search
with those
devices in 2015
Source: Placecast, 2014

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© 2015 eMarketer Inc.
Four innovations in search will enable more
mcommerce:
1. Deep linking
2. Buy buttons
3. Visual search
4. Predictive search

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© 2015 eMarketer Inc.
Deep linking lets marketers have their app
content indexed
 Google and Bing now send
searchers straight to an
in-app landing page
 iOS 9 will include deep
linking in iOS search
 Quixey and URX are start-
up app search engines
based on deep linking Image from developers.google.com

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© 2015 eMarketer Inc.
Google confirmed in May that it will add a buy
button to its Product Listing Ads

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© 2015 eMarketer Inc.
Visual search will simplify real-time search and
buying
Image from Google Play
Neiman Marcus VivinoAmazon’s Firefly
Image from Yory Wurmser
Image from Neiman Marcus

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© 2015 eMarketer Inc.
Predictive search anticipates needs
Vurb
Pinterest
Guided SearchGoogle Now
Image from www.Google.com Image from iTunes Image from iTunes

59.
© 2015 eMarketer Inc.
6 major trends in mobile commerce:
1. Mobile buying is becoming mainstream
2. Smartphones are catching up to tablets as a sales
platform
3. iOS leads in sales performance, but the gap with
Android is narrowing
4. Better user interfaces will increase mcommerce
5. Mobile web dominates in sales, but apps are gaining in
importance
6. Search is evolving to fit mobile shopping

60.
| Copyright 2015 Quantcast
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61.
| Copyright 2015 Quantcast
The Mobile Opportunity
194
minutes
38%
spent on Mobile
devices every day.
of retail sales
came from Mobile
this year.
Source: eMarketer
But… only 12% of total media ad spend
is on mobile.

62.
| Copyright 2015 Quantcast
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63.
| Copyright 2015 Quantcast
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64.
© 2015 eMarketer Inc.
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Yory Wurmser
Six Trends in the Shifting
World of Mcommerce
 US Mcommerce 2015: eMarketer’s Forecast and Trends
 Back-to-School Ecommerce Preview 2015: Forecast and
Trends for Retail’s ‘Second Season’
 Visual Search & Recognition: On the Cusp of a New Era in
Retail
 Omnichannel Trends 2015: Mobile is the New Retail Hub