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Merchants up investment in mobile as traffic, revenue grow

By
April 24, 2012

Twice as many merchants plan to invest $100,000 or more in mobile this year versus last year, according to a new report from the e-tailing group.

With 19 percent of merchants saying they will invest $100,000 or more in mobile in 2012 compared with eight percent in 2011, the results show that merchants are focused on mobile to connect with customers. Mobile commerce, in particular is a big interest, with 85 percent of respondents saying mobile commerce is a focus in 2012, up from 68 percent in 2011, according to the e-tailing group’s 11th annual merchant survey, “Making the Right Choices in a Connected World: Customer Experience Escalation.”

“What is exciting from a mobile perspective is that merchants are investing, there is traffic and the traffic is delivering conversions,” said Lauren Freedman, president of the e-tailing group, Chicago.

“Contrary to social, the merchant believes in mobile,” she said.

“I think it happened faster than expected.”

HTML5 investment
While 85 percent of merchants are focused on mobile commerce, only 68 percent said mobile applications are a focus in 2012, up from 61 percent last year.

One of the biggest areas where merchants plan to invest over the next 12 months is in an HTML5 mobile Web presence, with 32 percent of respondents saying this is where they plan to put their money.

Additionally, 29 percent plan to invest in tablets, 23 percent in non-HTML5 mobile Web, 22 percent in Android native apps, 20 percent in iPhone native apps, 18 percent in SMS text alerts to subscribers, 17 percent in 2D bar codes for their print advertising and/or catalogs and 12 percent in BlackBerry native apps.

One reason for the growth in investment is that traffic from mobile browsers and mobile applications continues to grow for many merchants, with 26 percent reporting that over 10 percent of their traffic comes from these sources in 2012. In 2011, no merchants reported mobile traffic at this level.

Additionally, 25 percent say that between 5 percent and 9.9 percent of their traffic comes from these sources in 2012, up from 9 percent in 2011. In comparison, the number of merchants shrank who reported that 4.9 percent or less of their traffic came from mobile sources.

Not only is mobile traffic growing but so is the revenue from mobile, with 28 percent saying that between 1 percent and 2.9 percent of their revenue comes from mobile in 2012, up from 20 percent last year. Additionally, 12 percent say between 3 percent and 4.9 percent of revenue comes from mobile, 18 percent say between 5 percent and 9.99 percent comes from mobile.

Five percent say more than 10 percent of their revenue comes from mobile.

At the same time, the number of merchants declined who said that less than 1 percent or none of their revenue comes from mobile.

Tablets a goldmine
The results also point to the important role that tablets are playing for merchants, who are finding higher conversion rates on tablets than from their mobile Web and native apps efforts, with 22 percent of merchants saying they are seeing a significantly or somewhat higher conversion rate for tablets than for their Web site.

“The merchant realizes that they have to understand and figure out this customer,” Ms. Freedman said. “If you have a goldmine of a customer base, you want to tap into it and insure that you are getting the most out of it.”

In terms of return-on-investment, respondents said mobile keyword search offers the highest ROI value followed by customer service, product ratings, ability to refine and sort search results, social media, video, store locators, product locators, 2D bar codes, geolocation, gift certificates and frequent buyer programs.

“To see customer service come up so high was really interesting,” Ms. Freedman said. “It shows that people are thinking about the phone and that they can just click on a link and get in touch with the retailer.”

“Over the past holiday season, merchants really saw the potential of mobile activity,” she said. “How quickly the revenues really followed suit has been a surprise.”

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One Response to “Merchants up investment in mobile as traffic, revenue grow”

  1. Nitin Says:

    In regards to the statement “Not only is mobile traffic growing but so is the revenue from mobile, with 28 percent saying that between 1 percent and 2.9 percent of their revenue comes from mobile in 2012” – Do we mean that the revenues from mobile are between 1 and 2.9 % of online revenues or total retail revenues? – Would be very helpful to clarify the same – Nitin

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