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Mobile's impact on eCommerce reporting and investment

It is difficult to ignore the success of smartphones and the advantages they have given people in recent years. Around 60% of adults in the UK now own a smartphone and among 16-24-year-olds, this rises to around 90%. The challenge for retailers in recent years therefore has been to monopolise on this rapid growth and establish themselves on mobile platforms – defined as anything smaller than a tablet device.

However, despite mobile as a platform growing very quickly in popularity, its utilisation for retail and commerce is still relatively low. In fact, there has been no increase in mobile revenue despite ownership and traffic having risen.

Resources Are In Place but No Sale

Since the introduction of 4G, mobile internet performance has increased and this among many things, has improved how people view internet content such as on demand video services like Netflix and BBC iPlayer. Between 2013 and 2014, the number of people subscribing to 4G services in the UK rose by nearly 800%, according to Ofcom. Mobile devices make up half of website traffic but they convert at the lowest rate of sale.

The complex transactional execution on mobile devices means that there are high levels of purchase abandonment that do not necessarily lead to a sale on desktop devices or the physical shop.

Apps

Mobile apps have become very popular in recent years and their success can be attributed to how quickly people have the ability to access content and services. 86% of mobile usage is through apps, leaving 14% to mobile browsers. Retailers have discovered that customers find shopping apps challenging to use compared to conventional desktop sites and in some cases, the mobile version has a reduced amount of content compared to the standard site.

The challenge that most people face is how difficult it is to process a payment on an app and find it inconvenient and a security risk to manually input their card details every time they want to make a payment. The rates of commission which Apple take for app sales has been yet another barrier for retailers, pricing some of them away from developing their presence on mobile.

The fact is that research tells us shopping apps account for such a low share of the global app market, their data isn’t even included in the results. Most activity consists of gaming, social media and on demand video – all of which are entertainment and do not relate to retail or productivity.

Issues Going Forward

The mobile challenge which retail is facing centres on an inability to analyse data effectively enough to derive useful revenue and process information. Despite gaining valuable information regarding engagement rates, it is very difficult to then link these with desktop data and there is almost no way of monitoring whether purchase abandonment on mobile leads to the sale going through on desktop or in store.

At this point we should elaborate further on mobile browsing. In the past few years, especially since the introduction of 4G, businesses have put a lot of effort and resources into making their websites accessible for mobile users.

While some of them have succeeded in producing webpages with cleaner, simpler menus and including features that do not rely on a mouse click, lots have neglected to invest in producing mobile-friendly sites. This then raises the questions, if it is so difficult to purchase via a mobile browser, will people still always revert to desktop platforms for their online shopping? Or should retailers be absorbing the high costs of developing a usable app which supports card saving facilities?

An app that saves card details and promotes one-click ordering is definitely how most mobile users see the future of online retail and Amazon executes this very effectively.

Amazon's size ensures that costs can be absorbed and their legal teams pre-prepared for when things go wrong. But for smaller companies, it is just not worth the risk and responsibility of holding customer payment information to support one-click purchasing.

Change is Needed

Our view is that companies need to have a better understanding and analysis of the data before embarking on ambitious mobile investment. This would involve being able to accrue data on what point customers make the decision to exit the purchasing process, what aspects of the payment system make it difficult for the user and whether customers convert to the desktop website or physical store to complete their purchase, should they not complete on mobile.

Conclusion

Unfortunately, it is impossible to use mobile user engagement to drive sales unless you have well blended, well understood insight with which to create hypotheses for driving improvement. Mobile user engagement is only going to continue growing going forward so retailers have no option but to develop their mobile content. It is imperative therefore that their investment is tailored appropriately to account for the testing which needs to take place prior to implementation.

With the likely explosion of smart watch ownership in the coming years, usable and effective mobile platforms will need to be widely adopted very soon.

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James Hammersley is the co-author of Leading Digital Strategy a guide to eCommerce strategy published by Kogan Page. He is a founding partner and director of Good Growth, a digital change consultancy which has worked with organisations such as The Economist, The Co-operative, O2 and Manchester United. 

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