Meat eaters and vegetarians alike are both probably digital omnivores, accessing the web via a mix of smartphones, tablets and desktop or laptop computers, depending on time and place, according to Gian Fulgoni, executive chairman and co-founder of comScore Inc. 156 million U.S. consumers own smartphones, a number increasing by 24% annually, and 82 million own tablets, growing by 57% annually, he said.
Fulgoni joined Internet Retailer director of research Mark Brohan in presenting today in a session titled “State of the mobile market and how it’s evolved” at the IRCE Focus: Web Design + Mobile Commerce conference in Orlando, FL.
Not only are consumers today browsing more on mobile devices, but the devices have mainly been responsible for a doubling of the amount of time consumers spend on the Internet over the last three years, Fulgoni said. From June 2010 to June 2013, the amount of consumers’ Internet browsing time on smartphones increased 359%, compared with 4% on desktops. Tablets hadn’t yet emerged in 2010, he said, but in coming years he expects those devices to dwarf the other devices’ growth rates. By 2016, he predicts that tablets will account for at least 50% of total mobile browsing time.
“The interesting thing to know is the way consumers are using these devices varies pretty dramatically depending on the type of site they are visiting,” Fulgoni said. For example, coupon web sites garner the largest share of traffic from mobile (88%) compared with desktops (12%) among all retail categories. On the opposite end, computer hardware merchants’ sites have very little mobile traffic.
Additionally, the retail web sites with the highest number of unique monthly visitors all share a common mobile trait: a third of their total traffic comes from mobile-only visitors, that is, consumers who access those sites via only a smartphone or tablet, Fulgoni said. Moreover, a full 80% of the time consumers spend visiting a retail site on mobile is through an app, he said. Web-only retailers like Amazon.com Inc., eBay Inc. and Etsy Inc. lead the way in generating the most mobile app traffic, he said. Large multichannel retailers on the other hand—with the exception of Target Corp., which draws 50% of its mobile traffic from its app—fall well behind, with most of their mobile visits coming through mobile web browsers.
“Apps are critical,” Fulgoni said. “Retailers have to have a mobile strategy today to be effective.”
Data from the recently published 2014 Internet Retailer Mobile 500 Guide support that statement. In 2013, U.S. mobile commerce sales grew 63% year over year to $34.2 billion, Brohan said in the presentation. That growth came largely from increasing sales through tablets, he said, dubbing 2013 the “year of the tablet.” “Tablets are the perfect device for browsing and buying,” he said.
For some retailers, such as Costco Wholesale Corp, No. 14 in the Mobile 500, tablet shoppers more and more resemble those on desktops, Brohan said. In part, that helped Costco to increase its mobile sales by 75% year over year in 2013, to $215 million from $123 million, handily beating the overall U.S. m-commerce growth rate. Although its conversion rate was on the low side last year—1.09%—its average ticket on mobile was a hefty $385, he said.
“Mobile is not just for the big merchants,” but is the way forward for many merchants, Brohan continued. Brazilian shoe retailer Netshoes, for one, is betting much of its future growth on mobile, he said. The retailer was one of the fastest-growing in the 2014 Mobile 500, with 2013 sales of $19.2 million, up 309% from $4.7 million in 2012. Although Netshoes has said the mobile market in Brazil is roughly five to six years behind the United States, the retailer realized that the country was bypassing a traditional telecom infrastructure as its economy rapidly grew. Instead, it became a mobile-browsing nation, Brohan said.
Elsewhere in the world, mobile is driving digital commerce growth. In Japan, for instance, half of web transactions are through smartphones or tablets, as Japanese shoppers make the most of long hours spent on train commutes, Brohan said. And although China will grow mobile commerce to only about half the size of the mobile market in the U.S. within the next two years, select retailers in that country will grow mobile much faster. Chinese online grocery retailer Yihaodian, of which Wal-Mart Stores Inc. owns a 51% stake, for example, expects to transact more than half of its sales via mobile devices within the next two years, Brohan said.