If there’s one thing that any conversation with an online retailer touches on these days, it’s mobile. The recent Shop.org webinar, “The State of Retailing Online 2012: Mobile Marketing Edition” explored the latest findings from the annual SORO research study conducted by Shop.org and Forrester Research, this year focusing specifically on numerous aspects of mobile across the retail organization. Sucharita Mulpuru, Vice President and Principal Analyst with Forrester Research, provided some insights from this initial set of mobile-focused research, augmented by “real world” observations and experiences from Chris Wilson, CMO at eBags, and Jeff Klonowski, Manager of eCommerce Mobile at Recreational Equipment, Inc. (REI). Here are a few of the trends these experts covered.
Growth ahead for the mobile market. Forrester forecasts that U.S. smartphone commerce specifically (i.e. excluding sales via tablet devices) will grow 67% between 2011 and 2012, from $6 billion to $10 billion, and will grow another 40% by 2013, to $14 billion. That’s compared with about 13% year over year growth for e-commerce overall. That said, Mulpuru observed that “Tablets are coming of age, and representing a significant portion of mobile revenue.” Indeed, “They are converting much better – and the tablet is the device that is eating into a lot of our desktop PC activity.” For eBags, Wilson noted that, at this point, “Combined smartphone and tablet are accounting for 17% of our traffic overall, and a little north of 12% of sales.”
Key metrics highlight tablet’s potential. The SORO study found that, among retailers surveyed, the average site conversion rate now is 1% on smartphones and 2.4% on tablet devices. The majority of retailers surveyed indicated that their site conversion rate and the average order value (AOV) are lower for sales via smartphones than for sales via the desktop website. However, almost half also reported seeing higher AOV for sales via tablet devices than on the desktop website.
Looking at this data, Wilson noted that the conversion rate on tablets for eBags actually is “…a little bit lower than the desktop – which could be a function of the really high adoption rate we have for tablets. A year ago, tablet conversion rates were well above the desktop site, now they’ve settled a little bit below.” In line with the research findings, Wilson continued, “Smartphone conversion is significantly lower than either of the other devices (i.e. tablets and desktop).” eBags is also seeing higher AOV for tablet devices, which is in line with retailers surveyed, who on average pegged AOV for purchases via tablet devices at $159.28, versus $134.37 on smartphones.
Email is a primary traffic driver to mobile. Almost in lockstep, traffic on both smartphones and tablets is originating largely from search engines, email, and when consumers directly type the URL. Retailers surveyed also noted that, on average, 20% of emails opened in a given campaign are opened directly on a mobile device.
Contrary to predictions of impending doom, “Email has had something of a second wind with mobile.” Mulpuru mused. eBags sees email open rates on smartphones “well north of 30%.” Wilson said that they had “experimented with a number of other approaches,” but ultimately, “we’re really focused on keyword advertising and email – primarily to phones,” and that these two have been most effective for them.
REI’s Klonowski further underscored email’s importance. “That’s a tremendous opportunity, when customers click on that link, driving them to an optimized experience versus the full site. We view that as a very strong point of focus moving forward for us.”
Email is a lot about “ease of access,” Klonowski continued. The phone is the device that is “there whenever or wherever you need it.” The key for making email on mobile work, of course is optimization. REI sees email optimization composed of two key components. Step one is making sure your email renders appropriately on your device. “We’re actually doing a lot of testing around responsive layouts for emails.” For example, if a user opens an REI email (or, “Gearmail”), on a tablet, that user will get the full site version experience. Now, Klonowski continued, “We’re doing several tests where we optimize the email view to your screen.” Step two consists of “…[making] sure that the mobile experience that you’re sending the customer to on the mobile website is actually optimized for mobile. I’ve seen very few companies do this well so far… when we have a major call to action in our Gearmail, we make sure to have the mobile experience built out.” The trick to building out the mobile experience: it “requires good coordination between internal teams.”
Measuring sessions across devices is important – but requires skill. Mulpuru asked how eBags and REI measure browse sessions (many of which are anonymous) across platforms and devices – for example, if the consumer views the email on his or her smartphone and then goes to the Web browser on a desktop device to research further and buy. As Wilson acknowledged, “That [cross-device situation] is a huge percentage of [our] traffic, especially on smartphones.” He explained further that they have “incrementally moved to add new ways to ‘stitch customers together’ across devices.” For Wilson, the two most important ways of measuring is by “recognizing those email opens across devices, [which] is critical,” as well as “stitching together” orders that the customer makes on multiple devices.” Furthermore, the “pretty substantial” eBags Business Intelligence group “is very skilled at parsing through Web logs” and piecing together a lot of disparate information.
SMS / text marketing is still nascent. Among retailers surveyed for the SORO study, very few reported SMS / text marketing to be a top driver of mobile traffic. Wilson noted that eBags has done a few inbound campaigns to drive email sign up, but they haven’t yet done outbound campaign. That said, eBags is considering using SMS / text capabilities first for customer information and service alerts, such as shipping and delivery notifications, which in turn “…will help us understand how customers want to interact with text messaging with our company.”
Mobile usage in stores helps both multichannel retailers… At REI, Klonowski emphasized, “We view the stores as a tremendous opportunity for mobile, both from the employee perspective and the customer perspective.” For employees, REI has rolled out a mobile version of the store POS using iPod Touch devices, so that store associates (“Green Vests”) can help customers check out. Over the longer term, REI plans to build out functionality for the store associate to help the customer via access to store inventory, product reviews, product specifications, and the like. As for customers, REI has been analyzing which features the customer most wants when he or she is in the store. “The first step in the process is that we now offer Wi-Fi in store,” ensuring the customer has connectivity. As their next step, REI is exploring a number of features to help customers, such as proactive marketing, whether via QR codes, push notifications based on your location, and so forth.
… as well as pureplay retailers. Wilson noted that, while they have no direct information, they do have “some circumstantial evidence” that they are getting traffic from customers who are standing in a store. ”Over 60% of our sales on smartphones come through the SEO or keyword advertising channels – which is much, much higher than it is for either tablet or desktop,” Wilson elaborated.“Entries on a product detail page as a percentage of total are much, much higher on a smartphone than either of the other devices, so it seems to be very targeted and we assume that a certain percentage of that is happening in stores.”
Want more insights from Mulpuru, Klonowski or Wilson? Shop.org members can download the webinar deck outlining the results of this study (the full report will be forthcoming at the end of June) or view the full webinar playback.