How Mobile Is Changing E-commerce

After Facebook’s IPO, its user base was shifting to mobile far more quickly than expected. At that time, the transition was happening so fast that the company didn’t have a monetization plan in place for these mobile users. While Facebook has rallied quickly with a significantly updated mobile app and deeper integration to Apple iOS6, the episode raises an important question: if Facebook, one of the world’s leading mobile sites, could be caught off guard by the shift to mobile, who else will be blindsided? One answer: the entire e-commerce industry.

The truth is, most e-tailers haven’t optimized for mobile. In fact, many large companies in the Internet Retailer 500 don’t even have mobile-optimized websites, let alone mobile-optimized shopping experiences. Why am I making a big deal out of this? Simple: over 20% of all e-commerce shopping sessions are already happening on mobile devices – and that number is growing by 2-3x each year. This means that over the next 18–36 months, most customers will be using their mobile device as their favorite way to shop online.

But here’s the catch: conversion rates are 75% lower on mobile when the site isn’t optimized for mobile shopping. That represents a significant loss in sales for most e-tailers. This consumer behavior shift makes the mobile user experience paramount.

When I talk with traditional e-commerce players about what’s happening on mobile, they’ll typically say, “my users aren’t there yet,” or “my products are higher dollar items and people won’t buy them on mobile devices.” But when they check their logs, they’re stunned because they are, in fact, seeing 20% or more of their visitors coming from mobile, yet their conversions rates from those mobile visitors are extremely low.

Most customers turn to mobile when they are looking to complete tasks or fulfill desires in spare moments during the day, such as taxi rides, in between meetings, or while half-watching children swarm the soccer field. They want shopping experiences that make it quick and easy to fulfill those needs or desires -and if one site doesn’t, then they’ll find another that does. They won’t go back to their laptop to purchase later. E-tailers like Fab.com and One Kings Lane know this secret and have optimized for mobile extraordinarily well. They’ve both publicly discussed having higher conversion rates, higher average ticket prices, and more repeat purchases from mobile users.

Here’s how to make mobile work for you, rather than against you:

  • Provide a better mobile shopping experience. Nothing kills the shopping mood faster than having to fumble through an interface better suited for a desktop-sized screen or wait for images to load over a slow mobile connection. Format your m-commerce site so it’s easily navigable on a smartphone without the need to pinch and drag, and use lightweight renditions to make sure your images load quickly.
  • Make mobile purchases seamless. Make sure your mobile shopping experience is optimized all the way to the end. Retailers can better capitalize on shopper interest and provide instant gratification through a single-click checkout. Users are willing to type in credit card details and shipping information on laptops and desktops, but not on mobile devices. You’ll also want to be backed by high-speed transaction processing that is optimized for low bandwidth. Many legacy e-commerce and payment providers require numerous round trips between the mobile device and the server to complete a transaction, which slows the user down and increases the likelihood of purchase failure.
  • Make mobile devices work for you. What if you could whisper in a consumer’s ear that the item they’ve been looking for is now available, and put a coupon for it right in their pocket? A push notification to a smartphone does exactly that. And it can go even further with a one-click payment link that completes the purchase right then and there, without the need to visit a store – or open a laptop.
  • Merchandise for mobile. On a desktop or laptop, consumers might enjoy browsing or searching through 500 available items – but on a smartphone, they’re filling spare moments in small intervals of time. They need a site that shows them what they want right away; and if you do, they’re much more likely to complete the purchase. Your site will have a much better ability to track usage and preferences, and present the most desirable items right away, if you get users to log in, particularly with a cross-platform authentication scheme such as Facebook or Twitter.

These are just a few ideas to get you started. Think of mobile as a core part of your business for the next ten years, just as the online user experience has been important for the last ten years. The e-tailers that don’t pay attention to their mobile user experience will be left behind by those that do, just like the brick and mortar retailers that were left in the dust by e-commerce a decade ago. The only difference is that this time around, the shift to mobile is happening even faster than the initial shift from brick and mortar to e-commerce. It’s time to get ready.

You can read our full article at Forbes.

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Bill Ready Bill is the SVP, Global Head of Merchant and Next-Gen Commerce at PayPal. Previously, Ready was the CEO of Braintree, leading the company through the 2013 acquisition by PayPal for $800 million. More posts by this author

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