State of Mobile Commerce 2014 (Sucharita Mulpuru)

#monetatesummit
StateofMobile
Commerce2014
SucharitaMulpuru, VP and PrincipalAnalyst, Forrester

© 2013 Forrester Research, Inc. Reproduction Prohibited
Agenda: 5 Questions
1.How big is m-commerce now?
2.What are shoppers doing on different devices?
3.How much of a problem is mobile conversion?
4.What is important to know about retail apps?
5.How much are companies investing?

What are the data sources?
›Forrester’s forecasts and consumer surveys
›Data on mobile shopping from Bizrate Insights from
2011-present
›Data from Shop.org: The State of Retailing Online surveys
›Commissioned thought leadership papers

Agenda: 5 Questions
›How big is m-commerce now?
›What are shoppers doing on different devices?
›How much of a problem is mobile conversion?
›What is important to know about retail apps?
›How much are companies investing?

First, some definitions (for these slides)
≠
Phablets, yes
200MM smartphone subscribers
Mini tablets, yes
100MM tablet owners
TabletSmartphone
MOBILE

How much will phones generate in commerce?
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$46$42$37$32$26
$16
Source: Forrester’s Smartphone Commerce Forecast (do not distribute)
US Smartphone Commerce $B
(Physical goods and media)

Other m-commerce categories make the figure
even higher
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$36
$31
$26
$21
$17
$12 $46$42$37$32$26
$16
US Smartphone Commerce $B
Travel and other
services

How much will tablets generate in commerce?
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$176
$141
$110
$81$56$34
US Tablet Commerce $B
(Physical goods and media)

The fully loaded tablet number
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$39
$33
$28
$21
$15
$8
$176
$141
$110
$81$56$34
US Tablet Commerce $B
Travel and other
services

© 2013 Forrester Research, Inc. Reproduction Prohibited Source: Forrester Forecasts; only includes physical goods and media categories
2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$222$183$148$113$82$50
Phone and tablet commerce ($B)
How this fares relative to the overall retail pie

2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$192$202$207$212$212$213 $222$183$148$113$82$50
Other eCommerce($B)
Source: Forrester Forecasts; only includes physical goods and media categories

2013 2014 (F) 2015 (F) 2016 (F) 2017 (F) 2018 (F)
$2,389$2,322$2,259$2,197$2,136$2,080
$192$202$207$212$212$213 $222$183$148$113$82$50
Non eCommerce/mobile sales ($B)
Source: Forrester Forecasts; only includes physical goods and media categories

The iPhone is still important for online buyers
2011 2014
69%
54%
% of web shoppers owning smartphones Types of devices owned
Source: Bizrate Insights/Forrester Mobile Commerce Studies and Forrester Technographics 2013
Base: recent web buyers * Includes iPod Touch
49%
30%
3%
11%
iPhone*
Android-based
phone
Blackberry
Other phone
with web
browsing

iPads dominate the tablet space
2011 2014
51%
12%
% of web shoppers owning tablets
Base: tablet ownersBase: recent web buyers
9%
16%
16%
55%
iPad Mini
Samsung
Galaxy
Amazon Kindle
Fire
iPad
Types of devices owned

Mobile devices are used everywhere
“Where do you use each of the following devices to access the Internet?”
Source: The State of Consumers and Technology, Benchmark 2013, US

Time on tablets is cannibalistic of PCs
With the addition of your iPad/tablet to the devices that you
already use to go online, do you spend more, less, or the
same amount of time online?
More time online Less time on PCs
With the addition of your iPad/tablet to the
devices that you already use to go online, how
is your desktop computer/laptop usage
affected?
2011 2014
46%49%
2011 2014
48%47%
Source: Bizrate Insights/Forrester Mobile Commerce Studies

2011 2014
47%
40%
2011 2014
49%
41%
This applies to phones too
Since getting your smartphone/small screen mobile
device, do you spend more, less, or the same total amount
of time online (including using your computer and other
devices you access to go online)?
If you own both a smartphone/small screen
mobile device and a desktop computer/laptop,
then has the smartphone/small screen mobile
device decreased the amount of time you use
your desktop computer/laptop?
More time online Less time on PCs

More consumers are buying on phones
Phone shopping breakout of smartphone owners
2011 2014
0%0%
0%
0%
0%
0%
Buyers
Browsers
Non-buyers
% of shoppers owning
smartphones 54% 69%
• Balanced between
genders 
• Heaviest buying among
Gen Y and Gen X (under
44) 
• $150k+ incomes slightly
more than average

And of course on tablets too
Tablet shopping breakout of tablet owners
2011 2014
0%0%
0%
0%
0%
0%
Buyers
Browsers
Non-buyers • Buying balanced between
genders 
• Gen X heavy (30-44) 
• $75-100k and $150k+
incomes heaviest tablet
buyers
% of shoppers
owning tablets 12% 51%

Top shopping activities on phones vs tablets
1 Read emails from retailers Browse or research products
2
Receive texts with special offers from
retailers
Read emails from retailers
3 Locate retail stores/hours/directions Compare prices while shopping online
4 Browse or research products Read product or store reviews
5 Download or redeem coupons Identify where products are sold
Please note which of the following you do with your mobile device(s) with respect to
any online retailer.

© 2013 Forrester Research, Inc. Reproduction Prohibited Source: A commissioned study conducted by Forrester Consulting on behalf of VISA, September 2013
Where the shopping journey starts on different devices
Base: 1003 smartphone shoppers (research or purchase)
Search is important on all devices
26%
42%
54%
Email message from a
retailer
I search for something
specific on a retailer's site
I search for something
specific using a search
engine
38%
60%
69%
27%
51%
57%

Email is also essential
81% of web buyers read emails on
phones because the phone is
always with them; 48% like that the
phone has no email login
67% of web buyers say that they
were inspired to buy something after
opening an email on a mobile phone
Desktop
Smartphone
Tablet 22%
37%
75%
I read promotional emails from [merchant X]
on my…
Source: Bizrate Insights Industry Hot Topic Q4, 2013

Mobile conversion is generally terrible
August 2012 August 2013
Smartphone 0.6% 0.6%
Tablet 1.6% 1.5%
Desktop 1.9% 2.2%
Conversion rates of US retail websites
Source: Adobe Digital Index

Phones are just not easy for buying
How easy would you say it is to complete an online PURCHASE using the device(s) listed below?
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Very easy Easy Neutral Difficult
Type of device rated
Base: 834 consumers who purchased on PCs/laptops; 377 consumers who purchased on tablets; 640 consumers who purchased on smartphones
Source: A commissioned study conducted by Forrester Consulting on behalf of Visa, September 2013

Source: A commissioned study conducted by Forrester Consulting on behalf of VISA, September 2013
Under $50
$50-$99
$100-$499
$500+ 3%
15%
26%
56%
Transactions are smaller on phones too
“About how much have you spent on products and services when PURCHASING on these
devices online in the past month? (Including shipping and handling.)
14%
34%
31%
22%
6%
21%
32%
41%

Mobile buyers are more likely to switch devices
Thinking about [the last online shopping experience], did you use multiple devices during that experience?
Source: A commissioned study conducted by Forrester Consulting on behalf of Visa, September 2013
Multiple devices
49%
53%
23%
42%
PC
Tablet
Phone
One device
45%
Can’t recall
5%
One device
44%
Multiple devices
52%
Can’t recall
4%
Multiple devices
39%
One device
54%
Can’t recall
7%
46%
36%
39%
PC
Tablet
Phone
53%
22%
43%
PC
Tablet
Phone
Deviceswitchedto
whenswitched

“Why haven't you
PURCHASED a
product on your
device?”
Shoppers often
prefer PCs
Base: 228 mobile non-buyers Base: 89 tablet non-buyers
47%
58%
67%
I don't want to store my
financial information on my
phone
It is more comfortable to sit at a
computer and shop
The screen is too small
39%
43%
22%

Agenda: 5 Questions
›How much are retailers investing?

These are the most common retail apps
Which of the following types of online shopping apps, if any, have you downloaded
to your smartphone/small screen mobile device?
42%
8%
15%
33%
I have not
downloaded an
app
Fashion trends
or tech reviews
Comparison
shopping
Retailer-
specific apps
2011 2012 2013 2014
41%
7%
15%
36%
37%
7%
16%
40%
33%
9%
14%
45%

Shoppers discover phone apps mainly through
word of mouth
How do you learn about the apps that you install on your device?
Base: recent online buyers who own smartphones or tablets
14%
6%
11%
20%
21%
25%
59%
I don't install apps
Sign in a retail store
Retailer websites
An ad on TV/radio/print
The app store
Social media (e.g. Facebook)
Word of mouth (e.g. friends,
family, colleagues)
12%
6%
11%
21%
26%
25%
55%
Base: recent online buyers who own smartphones or tablets

How do you learn about the apps that you install
on your device?
›“My husband does it”
›“My children”
›“What I need at a particular time”
›“I ask teenagers”

© 2013 Forrester Research, Inc. Reproduction Prohibited #156
Few customers say they need a retailer’s app
If you have interacted with [MerchantName] on a mobile device, then which experience
do you prefer?
37 %
7 %
6 %
19 %
30 %
Accessing the standard website (i.e. the same
view you would see on your computer)
Using the mobile version of the site (i.e. the site
may have less content but is optimized to look
Using an app (if this retailer has one available
for download)
I don't have a preference
I have never interacted with [Merchant] from a
mobile device

#157
The challenges for apps remain large
›Apps can often be cumbersome to download
›Apps are difficult to fine
›Apps need to be upgraded
›Most apps do not get repeat usage
›Apps could be subject to privacy restrictions

Yet, more than 40% of mobile phone transactions happen on apps
“Thinking of the last time you bought something on your
smartphone, how did you complete your transaction?”
Source: A commissioned study conducted by Forrester Consulting on behalf of Amazon.com, January 2013
“Thinking of the last time you bought something on your
[tablet or PC], how did you complete your transaction?”
59%
41%
On a smartphone
through a website
On a smartphone
through an
application
Base: 528 mobile phone buyers Base: 311 tablet and PC buyers
(of non-phone buyers)
4%
14%
83%
On a tablet through
an application
On a tablet through
a website
On a computer
59%
41%
On a smartphone
through a website
On a smartphone
through an
application
Base: 528 mobile phone buyers Base: 311 tablet and PC buyers
(of non-phone buyers)
4%
14%
83%
On a tablet through
an application
On a tablet through
a website
On a computer

Agenda: 5 Questions
›How much are companies investing?

Mobile is the top priority for web retailers

#161
Store associates
are expected to
use mobile
devices

Ensuring different types of connectivity in
stores could be useful
Base: mobile consumers who research or buy in physical stores
How do you usually access the internet on your various devices?
80%
71%
32%
1%
0%
3G/4G connection
On a password protected WiFi connection
On an open WiFi connection
Using dial up
Don't know
Most
common
store
options

Companies just aren’t spending that much on
mobile yet
Source: Forrester Research eBusiness Survey

Takeaways and summary
›Mobile phones are used more than tablets but phone sessions are arguably far less
valuable; device switching is also a given
›Offline shopping is a significant outcome of phone browsing
›Non-buyers on mobile don’t buy because of screen size and/or privacy concerns; more
will become buyers over time
›Every venue is now a place where shoppers use phones and tablets
›Tablets drive most of the m-commerce revenue
›Apps convert well but need to master “mobile moments”
›Time online has changed significantly; even phones are now cannibalizing the PC
›Entire mobile budgets remain modest for most eBusinesses; mobile uncertainty remains
a concern

Thank you
Sucharita Mulpuru
smulpuru@forrester.com
!
!
!
forrester.com

State of Mobile Commerce 2014 (Sucharita Mulpuru)

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