Thursday, September 29, 2011

Mobile Commerce Struggling: Tablet Sales Outcasts Smartphones'

Mobile commerce is a hype issue. A lot of people foresee in the incredible growth of smartphone users the next  trend in E-commerce. And they must be right: People now are able to buy any kind of goods in any situation. This is all the purpose of ubiquity: People can access information wherever and whenever they want, so why would they have to wait to be home or in front of a computer to buy what they want?

martphones may be good for mobile shopping, but tablets are where buying gets done. That's the implication of new research from e-commerce software firm Ability Commerce, which shows the iPad has driven more revenues for retail clients than smartphones, even though handsets account for the bulk of their mobile traffic.
Data provided for the three m-commerce clients indicates that the majority of their traffic from mobile platforms comes from smartphones, and typically from the iPhone and Android devices. For each retailer, those two platforms accounted for between 69%, 71%, and 43% of their visits, respectively, over the last year.

The iPad typically had a smaller share of mobile traffic, reflecting the lower penetration of tablets compared to smartphones generally. About 5% of U.S. consumers surveyed by Nielsen in the first quarter had tablets, versus 36% that had smartphones.

The Apple tablet made up 17%, 15% and 49% of traffic for the three retail clients studied by Ability Commerce, respectively. In the last instance, the retailer had an iPad-specific app that helped boost its share of traffic.

When it came to generating revenue, however, the iPad accounted for a disproportionate amount of m-commerce activity. The retailer, with 17% traffic from the iPad, got 35% of its sales across mobile platforms from the Apple tablet. The one with 15% iPad traffic got 51.5% of revenues from that device, and the retailer with an iPad app got 91.5% of sales from the tablet.

"The trend we are seeing is that while there is a significant increase in Web site traffic due to mobile phones, there is still a much higher percentage of conversion rates on tablets," said Jennifer Tonisson, marketing manager at Ability Commerce.

Research has shown that people tend to use tablets more at home than when they are out. A first-quarter Nielsen survey found about 70% of tablet owners use the devices while watching TV. People used tablets least while shopping or running errands (21%), or commuting (20%). About the same proportion (68%) of smartphone owners use their handsets while watching TV. But 59% use their phones while shopping or running errands.

Taken together with the Ability Commerce data, that suggests people may browse or research retail purchases using their ubiquitous smartphones, but wait to make purchases at home using the iPad or another tablet model. The larger tablet screen naturally makes it easier to complete a transaction than on a smartphone.
"Shopping on a tablet isn't that much different from shopping on a laptop or a home computer," said Tonisson. "You see the same amount of information and product detail. Shopping on a mobile phone is different. Graphics are downsized, descriptions are shorter."
New research from Forrester indicates that among online shoppers who have tablets, most prefer tablets to smartphones when buying online. Most find their tablet as easy to use as their computer when doing so. Specifically, 72% of Gen Xers, 67% of boomers, and 65% of Gen Yers say they use their tablet more than their smartphone to shop online.

This article shows three main things:

1 - Tablets Are Well Designed For E commerce
Tablets, thanks to its tactile interface, allows the customer to easilly interact with the products they want to buy. This is good news for retailers, but that also means that to get the full potential of tablets, they will have to design specific interface and boutique for this new channel.

2 Mobile Commerce On Smartphone Requires Adaptation
I believe that this study shows out that buying on smartphones is something which still needs to be unfold. Some goods may be easy to be bought on smartphones, especially goods linked to smartphones (ringtones, music, videos, apps...), but maybe others are more difficult. Therefore, retailers need to innovate, and to find new ways to make the buying experience better on smartphones. I am sure there is a sky of opportunities for smartphone commerce, but yet, I haven't seen anything convincing so far. 

3 We Should Not Mix Tablet Commerce and Mobile Commerce
As shown in the article, tablets are most of the time used at home. So should we consider tablet commerce as mobile? I don't think so. The use of tablets in a mobile condition will for sure grow, but yet, the two devices are very different, in terms of use and size. A retail strategy on tablets should for sure be different than on a smartphone. Also, I believe that the type of products shopped on both devices must be very different, which explains why we have so much difference in data analysis.

What do you think about it?