Mobile commerce is the largest segment of the mobile market, but it has the fewest developers focused on it. Find out why Matt Asay thinks this needs to change.
Businesses still struggling to figure out how to make billions from mobile apps probably need to pivot. Sure, you could get rich with the next Candy Crush, but you definitely won’t.
And that’s probably not your core business, anyway. However, selling things probably is.
As pointed out in a new report from Criteo, which analyzed data from more than 3,000 online retail and travel companies worldwide (to the tune of 1.4 billion transactions), mobile apps now generate more than 50% of e-commerce transactions for retailers who make apps a priority. These apps outperform all other channels, including the desktop.
But not just any apps. As Criteo’s research suggests, the difference between the haves and have-nots of mobile commerce comes down to how much they invest in optimizing the mobile experience.
Commerce becomes mobile and fast
Just seven months ago, Goldman Sachs pointed to 2018 as the year that mobile commerce would consume half of all e-commerce sales, but as Criteo’s analysis suggests, we’re headed for that tipping point again. earlier, mobile dominating 40% of retail sales for first quartile retailers (Figure A):
Mobile dominates commercial sales.
Among these transactions, Android has maintained its share of total spending (5.5% and 5.6% over the last two quarters, according to Criteo), but Apple dominates US mobile commerce: 66% of smartphone transactions, compared to 61% on the last two quarters.
With 800,000 new mobile developers hit every year, according to VisionMobile research, the biggest sum of money in the very big mobile jackpot is e-commerce (Number B):
The biggest money in mobile is e-commerce.
Right now, it’s a small minority of developers who focus on mobile commerce. Considering the potential payout, there should be more.
However, collecting this prize in cash is not as easy as building a mobile app and watching the money pour in.
The secret to mobile success
Unsurprisingly, the secret to making the mobile cash register ring true is optimization. That is to say, an experience optimized for mobile devices. (And, as I noted, while apps need to be considered, one app isn’t the right approach for every business.)
It sounds intuitive, but given that many companies haven’t bothered to optimize their mobile sites despite Google’s warning (and saw their page rank take a hit), it is clear that not everyone has read the memo.
As Criteo details, a little optimization goes a long way. For mobile sites (not apps), the conversion rate more than doubles, from 1.6% on an unoptimized site to 3.4% for optimized mobile sites. This optimization improves performance throughout the shopping experience, with the number of products viewed, add to cart rate, and purchase rate all higher on optimized sites.
As good as it is for mobile optimized websites, it gets even better with apps (Figure C):
The apps have a better sales conversion rate.
As noted in Criteo’s deck, this improved conversion rate stems partly from experience and partly from engaged users. Most applications don’t take up much of our time. But for those who are loyal to a particular brand, an optimized app experience will result in a much higher volume of transactions.
However, the report does not mention that a better mobile app experience also helps generate this user loyalty in the first place.
Such optimization must go beyond the mobile application, despite its importance. We are no longer a single channel, as Criteo notes: in 40% of purchases, consumers use multiple devices to visit the same retailer before buying. And while it is more difficult to track offline purchases, it is certain that many so-called offline purchases are strongly influenced by online behavior.
What to do now
It might not be you. Maybe your business isn’t selling stuff.
But whatever your business, it most certainly involves mobile … even when it doesn’t.
Because, as Andreesen Horowitz’s Benedict Evans postulates, the mobile scale allows entrepreneurs to quickly dismantle entire industries, as shown by Uber and AirBnB (Number D):
Mobile is increasing businesses on a large scale.
The taxi industry was not a mobile business and certainly not a mobile commerce business, but Uber did.
The hospitality industry was not a mobile business and certainly not a mobile commerce business, but AirBnB insisted otherwise.
And so it will continue. For mobile developers looking for the next big thing, look no further. It’s mobile, and it’s business. It’s almost certainly not about making a game.