How $10 Million Can Lose You $250 Million


Image copyright Ilin Sergey

Every company is seeing a rise in mobile traffic, but often can’t figure out why direct revenue from mobile isn’t increasing at a rate proportional to traffic. While mobile still represents a seemingly small percentage of overall revenue — generally between two percent and 10 percent depending on the business — the growth rate is impossible to deny. A recent study by IBM found that mobile commerce grew by 31 percent in Q1 of 2013, outpacing all e-commerce at 20 percent and in-store at 3.7 percent. Any statistician will tell you that percentages are only as good as their perspective size, coercing many marketing strategies to focus on other “channels.” However — to be blunt — mobile is not a channel. It begins, reinforces and sometimes completes all channels. By not understanding the influence that mobile devices exert in all revenue centers, any company is susceptible to losing revenue at 25 times that of direct mobile revenue.

Applying research from a March 2013 Deloitte study, mobile can influence traditional in-store purchases by an astounding 17x. In addition, BloomReach’s internal data anonymously connecting mobile and Web usage on the same merchant shows that mobile can influence a desktop e-commerce channel by up to 7x. So, hypothetically, a company that loses $10 million in yearly mobile revenue that provides poor mobile experiences stands to lose $70 million from desktop revenue and an additional $170 million from in-store purchases — totaling a whopping $250 million. Think it’s not possible? Well, a recent Harris poll found that 90 percent of consumers think negatively of a brand if they have poorly performing mobile experiences, and Google found that 61 percent of consumers will leave a mobile site immediately if they don’t find what they want right away.

While many companies have responded with a mobile “skin” around traditional websites using responsive design or mobile proxy solutions, consumers want more relevant, more intuitive content in less time. Each situation is obviously unique, but below I’ll discuss five elements to consider and understand when taking a mobile-centric view of brand-to-consumer experiences.

  • Mobile is the channel “glue”
    Have you ever taken a moment to look up at a group of passengers waiting to board a plane, heads bowed with the dull reflection of a mobile-device screen on their face? Probably not, because you also were checking your email, perusing social media or reading the newest gadget review on AllThingsD. Mobile devices — especially smartphones — are the most personal device in history. Constantly tethered to your side, they help you compare prices, find brick-and-mortar locations or see what your friends are interested in buying. Thus, understanding traffic origin can provide you with distinct clues behind the nature of a shopper. For example, analyzing metrics like time-on-site, bounce rates and number of pages discovered from each channel (even while in-store) can intuitively advise you about the best content and site navigation to provide.
  • You have a data problem, not a design problem
    What good is a beautiful mobile site when product discovery is frustrating, causing visitors to leave in aggravation? It sounds obvious, but that’s one of the top frustrations that lead to lost sales and negative brand associations on mobile sites. Companies have invested thousands into building gorgeous imagery, social features and catchy copy, but mobile sites ultimately boil down to utility and relevance. In a perfect world, we could just access a Siri-like interface that easily interprets our language and automatically determines our intentions, returning appropriate results and suggestions that fit our patterns and past behavior. While I’m speaking somewhat futuristically, the underlying point is the same. Being able to collect, correctly predict and intuitively respond to the data/signals provided by shoppers is key to maximizing conversions. If done well, shopping on a mobile device can feel like browsing through a brick-and-mortar store with a personal shopper helping you to get closer and closer to the perfect product. Conversely, if the data is poor or incorrectly interpreted, then shoppers can be left with a frustrating series of dead-end searches and irrelevant products. For example, just because a visitor’s time-on-site is high doesn’t mean they’re satisfied. They could be aimlessly bouncing from page to page through category hierarchies — a common characteristic of infrastructures built for desktops a decade ago.
  • Email is mobile
    American Eagle Outfitters recently cited that 70 percent of its loyalty emails are opened on a mobile device. While optimizing emails to be viewed on a smartphone may be a no-brainer, it’s more important to correlate the mobile-site experience when they click through. A landing page should be consistent with the email look, feel, content and offer. With what content did they engage, and are there easily accessible links to other elements of the email offer? We are bombarded by marketing emails daily, so unlike other channels, consumers give very valuable insight simply because they are inspired by the subject line. Even if they ultimately don’t access content directly in-line with the ever-important subject line, providing a dynamic experience that promotes effortless discovery of the intended purpose gives invaluable information — which includes engaging a loyal mobile shopper after the first landing page. However, one thing is certain. With email click-through rates hovering around 4.5 percent, one or two bad landing pages following an email click-through will leave you in the other 94.5 percent or completely opted-out.
  • Location, location, location
    Store locators are still one of the top reasons that consumers visit mobile sites. However, it’s important to remember that shoppers use their smartphones at every step on the path to purchase, including in a physical location. A retailer must connect users’ location-based signals with items in stock and correct prices. There is nothing more frustrating than finding the perfect product on sale in the right size only to find out that the item is out of stock at the desired location. This makes real-time data integration extremely important. Consumers don’t care if a company “just ran out” or is “expecting a shipment.” And, if a mobile shopper is looking at a product page (especially on an in-store Wi-Fi network, which 36.5 percent use to connect to that same store’s website — the No. 1 mobile destination for the in-store shopper), help them find out where they can buy it right away or provide an expected delivery time, if absolutely necessary.
  • Checkout
    While mobile commerce has seen tremendous growth, consumers are still extremely uncomfortable with whipping out a credit card while on the go. Clumsy fingers and security concerns severely limit the full revenue potential. As much as 90 percent of consumers don’t log into a brand’s sites (mobile or Web), so checkout should be convenient and fully functioning (e.g., avoid too many pop-up steps or unclear completion notices), without scary and invasive tactics. Consider having simple integrations with a device’s email or social-messaging functions where a consumer can be reminded about intended purchases or liked items. Plus, it’s a good way to combine past behavioral data to make enhanced and deeper product discovery more relevant.

These are just five of the top things to consider and constantly improve. But the types of available data, ways to slice it and methods to act upon it far exceed where responsive design or mobile-commerce platforms have taken the mobile-commerce industry thus far. It was a good place to start, but it has become more the norm rather than the solution. The differentiating factors lie in the data a brand can crunch and integrate externally, in concert with internal data across channels. In the end — at least to this point — mobile is the connective tissue that binds together all marketing efforts, and can make or break any initiative. With giants like Amazon and Walmart Labs investing billions on technology to churn through terabytes of data where every nuance of consumer experience is optimized, developing data-driven strategies that are mobile-centric provides the best chance for survival.

Raj De Datta is a three-time entrepreneur who helped found two successful technology startups before co-founding BloomReach Inc. with Ashutosh Garg.

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