In today’s day and age, eCommerce has become a nearly ubiquitous part of our lives. Some refer to it as the age of Amazon, while others are in awe of the rise of Alibaba. Now, as we venture into an increasingly mobile world, this shift introduces a major opportunity for companies to capture significant user attention and drive revenues forward through mobile devices.
The Rise of eCommerce and mCommerce
Currently, eCommerce transactions represent approximately 11.9% of global total retail sales . Online sales are growing fast at 15%-23% annually, and are likely to constitute 17.5% of the entire retail market by 2021 [2–3]. Also, online shopping has proven to play a major role in offline retail, influencing over half — nearly 56% — of in-store purchases. Clearly, digital is the most significant path forward in retail .
Now, eCommerce is maturing and mCommerce is rapidly gaining leverage within the retail world. Currently, mCommerce accounts for almost 60% of total eCommerce transactions and 6% of global total retail sales. From 2016 to 2017, global mCommerce sales increased by 40.3%, totaling $1.357 trillion . According to Flurry analytics, the market for shopping apps is growing rapidly, expanding 54% year over year in 2017 . More than 1 out of 4 every eCommerce Desktop sales is preceded by a click on a mobile device .
Trends in mCommerce
Advancements in mobile retail can be attributed to technological developments that have shifted how we consider digital commerce:
On the user acquisition side, cost-per-install of shopping apps is decreasing substantially. In 2018, cost-per-install averaged $4.11, representing a 7.6% drop year over year. Furthermore, install-to-registration rates for retail apps are at 17.5%, growing at a rate of 20% annually. Data also indicates that the install-to-purchase rate for shopping apps, currently 7%, is up 20% year over year .
Challenges Facing mCommerce
Even with a positive outlook for mCommerce, there are urgent challenges facing this market:
Yet, the primary challenge facing the mCommerce market today is untapped retention potential. Companies are not fully capitalizing on methods to increase app engagement and retention rates. Many mobile retailers see spikes of engagement only when users need to purchase items but low rates the vast majority of the time. And, while retail apps see the highest retention rates among any vertical, there is an incredible amount of room to grow:
Mobile Means Context
It is no secret that push notifications can drastically increase app retention. On average, retail app users receiving any notifications are retained 110% more than those who don’t hear from their retail apps. In addition, push opt-in users are retained for far longer than those who opt-out to push notifications .
Unfortunately, however, mobile retailers are not doing enough to drive retention upward. Until recently, companies could only communicate with customers based on simple data points (i.e. gender, ad clicks, location). Yet, this data is in no way contextually relevant to the real-world conditions in which a person might find themselves at any given moment. Communication based on non-contextual data leads, in most cases, to low retention rates.
In our mobile-first, data-driven world, the commercial potential of increasing user retention by even a small fraction should be taken seriously. Using mobile engagement platforms to segment users and automate communication can provide some help in increasing retention. Using real-world user context for meaningful communication, however, will add a highly relevant dimension to user interactions, and will ultimately skyrocket user satisfaction, engagement, and retention.