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Big spenders: Mcommerce not just for small purchases any longer

By
December 18, 2012

Size of mobile purchases is growing

With consumers spending as much as $48,000 on purchases made via mobile, it is clear that the medium is not just for small-ticket purchases any longer.

In the early days, many thought no one would use mobile for purchases other than small ticket items such as digital downloads. While several recent examples disprove this idea, the majority of consumers are still not comfortable making very large purchases via mobile.

“As consumers increase their use of mobile and become more comfortable on devices, we are seeing that this is leading to higher purchase amounts,” said Claudia Lombana, shopping specialist at PayPal, San Jose, CA.  “We are not seeing these every day, however.”

“It comes down to the flexibility and convenience on mobile, which is unparalleled so people are becoming  more comfortable making higher-end purchases,” she said.

$48k bulldozer
PayPal this week revealed that the largest mobile transaction it has processed so far this year was for a $48,000 bulldozer.

In comparison, the largest mobile purchase made last year via PayPal topped out at $40,000.

The payments provider also reported that the other top mobile transactions for 2012 include $46,500 for a diamond necklace, $46,000 for a coin collection, $40,000 for another diamond necklace and $40,00 for a painting.

While PayPal is not releasing data on the average order size for mobile, it is reporting significant growth in the volume of transactions made via mobile, with PayPal nearly tripling its mobile payment volume on Cyber Monday compared to last year.

The numbers reported by PayPal point to how quickly activities that were once popular on desktop are migrating to mobile.

Parent company eBay reports selling over 2,000 automobiles weekly via its eBay Motors app. Several airplanes have also been sold via the app.

“I look at these figures as a sign that people’s comfort level with mobile as a purchasing channel is pretty high,” said  Nikki Baird, managing partner at RSR Research, Miami, FL.  

“How long did it take from when the first eCommerce site went up until a purchase of that size was transacted over the Internet vs. being able to say the same thing for mobile,” she said. “I suspect it happened a lot quicker on mobile, in part because people tend to see mobile commerce as merely an extension of the Web site.”

Frequency gains
While the average purchase price on mobile may be trending upward, the more impressive gain is in the frequency with which mobile users are purchasing via their devices.

“Without a doubt, basket size and actual purchase amounts have increased over last year but the more exciting trend is the increase in purchase frequency,” said Joy Liuzzo, president of Wave Collapse, Washington.

“People are finding that mobile can satisfy a wider range of purchase motivations and purchase needs, which translates into them turning to mobile more often,” she said. 

Driving future growth 
Several issues need to be addressed by merchants for the average order price via mobile to continue to grow and for mobile commerce, in general, to continue to grow.

One of the key inhibitors to mobile commerce is the continued lack of an omnichannel experience, per Ms. Liuzzo.

“Very few companies are able to link our mobile and online shopping baskets, even when there is registration information,” Ms. Liuzzo said. “Shoppers are not always ready or able to make a purchase immediately and by locking them into coming back to the original shopping cart, companies are limiting their ability to complete the sale.” 

Another area that merchants need to address is leveraging mobile data to deliver offers to users based on what they have previously purchased.

“Affinity purchases – upsell/cross-sell – are going to be much more difficult on mobile than on traditional Web, just because of the real estate limitations,” RSR Research’s Ms. Baird said. “So retailers need to get very targeted and personalized to make sure that the few offers they can put in front of mobile shoppers are the absolute most relevant, best offers for that particular customer.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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