Criteo mobile commerce report q42014

Copyright © 2014 Criteo

State of Mobile Commerce Q4 2014


Executive Summary

Mobile commerce adoption is far ahead of expectations. Globally, mobile now accounts for 30% of eCommerce

transactions. Mobile will be 50% of US eCommerce transactions quite soon, as conversion rates reach Asian levels.

There are five new mobile shopping trends eCommerce marketers need to consider:

• Mobile is now about purchasing, not just researching: Conversion rates are high, across all devices and retail categories.

• Think smartphones: smartphones now generate more transactions than tablets.

• Yes, you will buy a designer handbag from your phone: a third of fashion transactions now come from mobile, with average order values close to desktop levels.

• Top quartile US retailers generate almost 40% of their ecommerce transactions from mobile, against 27% for US overall.

• It’s not just Apple: Android phones now generate a third of US smartphone shopping transactions, and much more internationally.

Methodology – This reports findings come from individual transaction level data sourced solely from Criteo based on a selection of over 3,000 online retail and travel businesses globally who have approximately 1.1 billion transactions per year on their desktop and mobile sites, resulting in approximately $130 billion worth

of annual sales. The data analyzed is for consumer browsing and shopping behavior in October 2014, across desktop and mobile (smartphone + tablet) devices including iPhone, iPad, and Android smartphones and tablets.

These trends come from Criteo’s first quarterly State of Mobile Commerce Report, based on its unique pool of online

shopping data covering more than a billion transactions totaling over $130Bn of annual sales.


The 5 New US

Mobile Shopping

Trends



#1Mobile is now about purchasing, not just

researching.


Mobile conversion rates are high

US, Q4 2014

Conversion Rate = (No. of Sales) / (No. of *Users)

* Users include those with more than a single **event on the websites

** Each time a visitor sees a web page, adds a product to the basket, or makes an online payment, etc., it is counted as an event.

Mobile

Overall

• Overall, mobile users look at more products than desktop users before they purchase. As a result, mobile accounts for 27% of all eCommerce transactions in the US, but mobile traffic share is much higher at 38%.

• Tablet converts better than smartphone today. This partly reflects larger screensizes, but also weaknesses in smartphone-specific site optimization.

• Apple and Android devices have very similar conversion rates.

Android

SmartphoneiPhone

Android

TabletiPad

Mobile Retail Conversion Rates

2.5%2.2%

2.0%

3.0% 3.1%


Shoppers are purchasing on mobiles across all categories

Travel

Mass

Merchants

Health &

Beauty

Home

Mobile Share of Total eCommerce Transactions

Fashion &

Luxury

Sporting

Goods

33%

27%

26%

23%

20%

15%

US, Q4 2014

• The Fashion and Luxury category has a high level of mobile adoption, a pattern we see globally.

• In contrast, the share of mobile transactions are low in the Home vertical, which includes home improvement, gardening and interior design products.


#2Top quartile retailers

generate almost 40% of transactions

from mobile.


Significant opportunity to increase mobile sales by adopting best practices

Mobile Share of eCommerce Transactions, Top vs. Bottom Quartile

30%27%

35%

9%6%

Travel

Top Quartile

Average

Bottom Quartile

Retail

39%

• Mobile share of transactions for the top quartile of retail and travel players is 35-40%, while the bottom quartile generates less than 10% from mobile.

• This big variation is driven by factors including the quality of the website’s mobile optimization, and the type of products being sold. For example, fashion and luxury items are purchased more on mobile than home improvement products.

US, Q4 2014

Note -Top quartile consists of retailers with the highest share of mobile transactions, and bottom quartile consists of retailers with the lowest share of mobile transactions.


#3Smartphones have

overtaken tablets in mobile transactions.


Smartphone vs. Tablet Share of Mobile Transactions

Majority of mobile transactions are now on smartphones,

both for travel and retail

• Tablets dominated mobile transactions a year ago, but now the majority of mobile transactions in the US come from smartphones. Tablets have higher conversion rates, but smartphones generate more transactions due to significantly higher traffic.

• This reflects rapid increases in smartphone usage, improvements in mobile websites, and increasing consumer familiarity with smartphone purchasing.

• Impact of Screensize is a frequent topic of discussion, which we will examine in a future report.

US, Q4 2014

Smartphones Tablets


Smartphones are particularly strong for fashion and travel purchases

68%

53%

51%

51%

38%

35%

32%

47%

49%

49%

62%

65%

Smartphones

Tablets

• The smartphone, rather than the tablet, is particularly big in travel, fashion and luxury.

• In contrast the Home vertical, which includes home improvement, gardening and interior design products, sees both low smartphone transactions and low overall mobile transactions.

US, Q4 2014

Smartphone vs. Tablet Share of Mobile Transactions

Travel

Fashion &

Luxury

Mass

Merchants

Health &

Beauty

Sporting

Goods

Home


#4Mobile average order

value is reaching desktop levels.


Mobile average order value is close to desktop levels for most categories

Mobile Order Values Compared to $100 Spent on the Desktop

• Consumers are comfortable buying on mobile and mobile order values are reaching desktop levels.

• Tablet order values are as high as desktop in most categories and smartphones are very close.

• Smartphone order values are lower for travel, home and mass merchants.

US, Q4 2014

Fashion &

LuxurySporting Goods

Health &

BeautyHome

Mass

MerchantsTravel

$87

$102 $100 $99 $100

$92

$89 $86 $82

$66 $64$57

TabletsSmartphones


#5It’s now importantto reach Android

shoppers.


• Nearly half of US smartphone travel transactions are now on Android. These figures are much higher in other countries, as we show later.

• In retail, Android smartphone is gaining significance with over 5% of all transactions, though still smaller than iPhone.

• Apple continues to dominate on tablets. iPad generates 11% of retail transactions vs. 2% from Android tablets.

• Due to the ongoing growth of smartphone commerce, Android looks set to grow its share of all retail sales.

Android matters today on smartphones

iPhone and Android Smartphone Share of all eCommerce Transactions

US, Q4 2014


iPhoneAndroid Smartphone

8.7%

10.7%

5.5%

8.5%

Retail

Travel


Global

Mobile Commerce

Trends



49%

45%

41%

28%

27%

26%

24%

24%

21%

20%

10%

Mobile now accounts for 30% of global online retail sales, with Asia

leading the pack

Glo

ba

l Ave

rag

e =

30

%

Mobile Share of Online Retail Transactions, by Country

• Japan and South Korea are advanced markets for mobile shopping with over 45% of online retail transactions coming via mobile devices.

• UK leads the Western Markets with 41% of transactions from mobile.

• Emerging markets like Brazil and Russia have lower share of mobile transactions than Western markets.

Japan

South Korea

UK

Spain

US

Germany

Italy

Netherlands

France

Russia

Brazil

Asia

Western

Markets

Emerging

Markets


Smartphone shopping is preferred in Asia, while tablets are

important in the West

South Korea

Japan

UK

Spain

US

Italy

Germany

Netherlands

France

Russia

Brazil

Smartphone and Tablet Share of eCommerce Transactions

• Asia leads the way in smartphone purchases with close to 45% of eCommerce transactions happening on smartphones and very little tablet share.

• In the rest of the world, tablet issignificant, and sometimes still representing more than half of mobile transactions.

• UK leads the Western markets in share of both smartphone and tablet transactions.

• Brazil and Russia have fairly low levels of smartphone purchasing. However, share of tablet transactions in Russia is high and similar to most Western markets.

Smartphones

Tablets

45%

44%

16%

15%

14%

12%

10%

9%

8%

7%

6%

1%

5%

25%

13%

13%

11%

15%

16%

13%

13%

4%

Asia

Western

Markets

Emerging

Markets


59

68

68

70

100

107

123

136

161

202

Japanese eCommerce sites have mobile conversion rates double the US

Mobile Conversion Rates Compared to the US (Benchmarked at 100)

Japan

South Korea

Germany

UK

Netherlands

US

Spain

France

Brazil

Italy

• Mobile conversion rates in Japan are much higher than the US. This partly reflects a market where advertisers have been delivering transactional mobile websites for longer.

• The improving quality of mobile websites, greater usage of larger screen smartphones, and improvements in mobile payment methods are likely to boost conversion rates across Western markets.

• If US conversion rates matched Japan, then mobile commerce would deliver almost half of all US ecommerce.


Retail

Travel

Android now generates more transactions than the iPhone

in many countries

South Korea

Brazil

Spain

Italy

Germany

Russia

France

Japan

US

UK

86%74%

71%

60%

61%71%

56%

55%

59%

52%

48%

40%

44%

45%

43%

43%

39%

44%

36%

36%

Android Share of Smartphone Transactions

• Given South Korea is Samsung’s home base, it might not be surprising that Android is responsible for 86% of retail sales on smartphones.

• Share of eCommerce transactions from Android is now higher than iPhone in many countries including Germany, Italy, Spain, Brazil and South Korea. This is likely to mean greater focus on Android app development in these markets.

• Apple is especially strong in the US,UK and Japan.


What

will the future

look like?



The future

We see five big trends for 2015:

• Growth in mobile commerce is unstoppable. Asia will soon pass 50% of online transactions via mobile devices, while Western markets will catch up.

• Smartphones will continue to displace slower-growing tablets. Larger form factor phones are an added accelerant to an existing trend towards greater use of smartphones for shopping.

• Advertisers will focus heavily on improving their mobile websites. This will lead to dramatic improvements in conversion rates, especially as mobile payments become more seamless.

• Apple and Android continue to battle it out but both are winners. Total percentage of ecommerce generated by both will grow at the expense of Microsoft Windows.

• Understanding cross-device behavior will be the biggest challenge and opportunity for marketers in 2015, as a majority of users going through their buying journey interact with the same site through multiple devices.


AboutCriteo

Criteo delivers personalized performance marketing at

an extensive scale. Measuring return on post-click

sales, Criteo makes ROI transparent and easy to

measure. Criteo has over 1,000 employees in 21

offices across the Americas, Europe and Asia-Pacific,

serving over 6,000 advertisers worldwide with direct

relationships with over 8,000 publishers.

Criteo ads reach 994 million unique Internet users

(comScore, September 2014).

For more information, please visit

http://www.criteo.com.

This and future Mobile Commerce reports can be

found at www.criteo.com/resources/mobile-commerce

http://www.criteo.com/resources/mobile-commerce


Appendix:

Country Specific Data


Brazil mobile shopping trends

Smartphone vs. Tablet (% Mobile Transactions)

Share of eCommerce Transactions by Device

Android Smartphone iPhone Android tablet iPad Total Mobile

Retail 4% 2% 1% 3% 10%

Smartphones

Tablets


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

1.7% 1.3%1.9% 1.7%

3.4%

58%

42%

Retail


France mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

1.7%1.2% 1.3%

1.9%2.3%




Retail 4% 4% 3% 9% 21%

Travel 3% 3% 3% 9% 18%

Smartphones

Tablets40% 38%

60% 62%

Retail Travel


Germany mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

3.4%

2.5%2.8%

3.8%

4.6%




Retail 6% 4% 5% 11% 26%

Travel 2% 2% 2% 8% 14%

Smartphones

Tablets40%

30%

60%70%

Retail Travel


Italy mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

1.5%1.1%

1.5% 1.7%

2.2%




Retail 7% 5% 3% 8% 24%

Travel 7% 5% 3% 7% 23%

Smartphones

Tablets52% 58%

48% 42%

Retail Travel


Japan mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

5.0% 5.7%4.3% 4.7%

5.1%




Retail 19% 25% 2% 4% 50%

Travel 12% 15% 1% 4% 32%

Smartphones

Tablets

89% 83%

11% 17%

Retail Travel


Netherlands mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

2.7%

2.1%

1.9%

3.1%3.3%




Retail 5% 4% 3% 12% 24%

Travel 4% 5% 3% 13% 25%

Smartphones

Tablets35% 38%

65% 62%

Retail Travel


South Korea mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

4.0% 4.0%4.1%

3.2%

1.9%




Retail 38% 6% 0.4% 0.4% 45%

Smartphones

Tablets

98%

2%

Retail


Spain mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

1.8%1.3%

1.7%2.0%

3.0%




Retail 9% 6% 3% 10% 28%

Travel 7% 3% 3% 7% 20%

Smartphones

Tablets53% 50%

47% 50%

Retail Travel


UK mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

3.1%

2.4%2.3%

3.2%

4.0%




Retail 6% 10% 4% 21% 41%

Travel 3% 6% 2% 13% 25%

Smartphones

Tablets39% 38%

61% 62%

Retail Travel


US mobile shopping trends


Mobile

Overall

Android

Smartphone

iPhone Android

Tablet

iPad

2.5%

2.2%2.0%

3.0% 3.1%




Retail 6% 8% 2% 11% 27%

Travel 9% 11% 2% 8% 30%

Smartphones

Tablets52%66%

48%34%

Retail Travel

Documents

Criteo mobile commerce report q42014