The Thanksgiving holiday shopping weekend showed how mobile has grown from a retail investment-and-innovation channel to a true pillar of US commerce.
On Cyber Monday, mobile commerce crossed a new threshold with $2 billion in sales, according to data from Adobe. Black Friday of 2016 was the first time US shoppers spent more than $1 billion on mobile devices in a single day.
Mobile commerce growth is driven largely by retail and ecommerce technology catching up to consumer habits, said Roger Woods, Adobe’s director of mobile product and strategy.
“Investments in responsive sites, search-and-suggestion data, checkout processing and delivery options are starting to bear fruit,” he said.
Adobe’s weekend data also showed small retailers (defined as less than $10 million in annual revenue) converting mobile site visitors at a 30% higher rate than retailers with more than $100 million in annual sales, which Woods said is a “sign that the ecommerce product set is readily available across the market.”
Shopify, an ecommerce software provider that works with 500,000 small and medium-sized merchants, drove more than $1 billion over the Thanksgiving weekend for the first time, with mobile representing more than 60% of sales and outpacing growth in desktop for the third consecutive year, according to data released by the company.
Desktop orders on Black Friday dropped below 50% of all ecommerce for the first time across the 3,000 merchant sites connected to Salesforce Commerce Cloud, said Rob Garf, group VP for industry strategy and insights.
“Mobile browsing and buying has been pretty clunky,” Garf said. “Retailers have invested heavily to break down that friction and we’re seeing the consumer preferences for mobile fill in the demand.”
Bigger retailers are also continuing to invest in mobile checkout offerings that leverage their store footprints.
Big-box chains like Sam’s Club and Home Depot have driven a “material percentage” of sales through the mobile shopping app Ibotta through store pickup offers, said Ibotta founder and CEO Bryan Leach. Retailers and some manufacturers prefer store pickup to the costs of home delivery, he said, “and it gives the retailer a chance to build on that transaction at the store.”
Mobile transactions in the US (non-Amazon purchases, at least) have historically been one-off product buys, said Tony Zito, CEO of Rakuten Marketing, an ad and product retargeting company owned by the Japanese Rakuten ecommerce giant. Someone sees a product online or on a social feed, decides to buy and goes through the hassle of uploading credit card and contact details.
But now “retailers are getting users to shop across channels and to drive up the value of individual carts,” Zito said. Rakuten Marketing’s 23% revenue growth compared to the 2016 Thanksgiving weekend was driven by a 10% increase in the average transaction value.
Getting your shoppers to add more to their carts can be as important or more important than adding new mobile shoppers.
Retailers have been spending heavily, sometimes even taking short-term losses, to refocus on generating lifetime value in ecommerce instead of single-sales or digital metrics.
Some Rakuten Marketing merchants sell certain products at a loss on Black Friday or Cyber Monday with the expectation of converting first-time shoppers to loyal customers, and over time covering the costs of upfront price discounts, Zito said.
The idea isn’t new, he said, but the returns this year show retailers are doing a better job executing on the strategy – and thus avoiding painful losses when discounted products are snapped up and lifetime value doesn’t accrue to the seller.
Jet.com and the Jet app, which Walmart acquired last year for $3.3 billion, tend to have more repeat customers buying consumer products like groceries and household supplies, said Lauren Picasso, Jet’s director of mobile marketing. Consumables were still top sellers for Jet this year, but a spike in electronics, toys and game sales “shows our loyal customers are open to doing more cross-category shopping on mobile,” she said.
As Jet has matured, the ecommerce company has “started focusing not just on customer acquisition but on retention,” Picasso said. Much of its prospects for future growth will be measured not in new sign-ups, but in user willingness to venture beyond the products they typically shop for on mobile.
This post was syndicated from Ad Exchanger.