Overall holiday ecommerce sales slow to 11pc, but mobile commerce grows: report
A surge in mobile commerce may indirectly cause a relatively slower growth in other types of ecommerce this holiday season, according to a report from NetElixir.
In the report, titled 2016 Holiday Forecasts, NetElixir looks ahead to the upcoming season to see what ecommerce and mobile commerce retailers should be looking out for. Overall, NetElixir forecasts a slower growth for ecommerce and a continued rise in mobile commerce.
“Mobile purchases have an average order value, per our research, of 22 percent lower than desktop purchases,” said Udayan Bose, CEO of NetElixir. “Till not so long ago, 100 percent of all purchases were happening from desktops.
“Now, 30 percent is projected to happen from mobile phones.”
Overall, ecommerce sales growth has slowed in the past year. The growth rate has dropped dramatically from more than 50 percent in Q1 to just less than 10 percent in Q3.
Back-to-school sales have also seen flattened year-over-year growth compared to last year and the year before.
In fact, the only companies that have seen ecommerce growth have been dominant figures in the industry such as Amazon, whose growth rate will remain at 28 percent for the next year.
All in all, ecommerce sales will be at slower than usual year-over-year growth rate of 11 percent this holiday season. But mobile commerce will rise in its share of overall ecommerce revenue.
Mr. Bose explains it using math.
“Let us assume the average order value of desktop = $100 (and AOV of mobile = $78).
“A few years back, for 100 ecommerce purchases the revenue realized was = 100 x $100 (AOV) = $10,000. Now, for 100 ecommerce orders, revenue realized = 70 x $100 + 30 x $78 = $9340.
“That makes the revenue Gap = $660.”
People tend to spend less when shopping on mobile than when they shop on a desktop. Because of this, as the share of ecommerce that goes to mobile increases, overall sales slightly decrease.
Despite those lower-than-normal numbers, that has not stopped some brands from doing everything they can to make the back-to-school and holiday shopping seasons as lucrative as possible.
Staples made use of both mobile and chatbots by letting parents send photos of their back-to-school shopping lists to a Staples branded bot and receive recommendations for what products to purchase (see story).
As the share of online sales that come from mobile grows, retailers need to make sure that their mobile commerce strategies do not fall behind.
“There are three simple ways to do that,” Mr. Bose said. “The most important is to have a mobile customer acquisition strategy in place, since mobile consumer behavior is different from desktop and therefore mobile strategy needs to be different.
“This should be needless to mention, but have a mobile Web site – many retailers still do not. Finally, build mobile-specific campaigns and measure success separately from other channels.”