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Many Devices, Checking Them Twice

Online retailers must have been light on the naughty and heavy on the nice last year, as once again they smashed sales records for the holiday season and contributed far more than their share to overall retail growth. Online’s joyous holiday selling season rang out the world’s first $1 trillion ecommerce year, with the United States pitching in nearly $350 billion of that total. 1eMarketer, “Ecommerce Sales Topped $1 Trillion for First Time in 2012,” 2/5/13

Again this year, mobile saw huge gains in both traffic and sales, and affirmed once and for all that the age of the multi-device shopper is here to stay. Well over half of consumers used a smartphone to visit a retailer’s website or app at some point in their shopping process, and over 40 percent used a tablet, though the PC was still by far the preferred device for actually completing a purchase. 2IBM Smarter Commerce, “Black Friday Report 2012,” IBM Digital Analytics Benchmark, 11/12

Performance-wise, the season was remarkable for its lack of remarkable news. Aside from some minor hiccups on the mobile side on Cyber Monday, retail performance was basically solid. “In some ways this was a surprising year,” observed Keynote Director of Global Testing Services Donald Foss. “It’s been the best year I’ve seen for lack of outages. Most of our customers did really, really well.”

Record-busting billion-dollar sales days It was just two holiday seasons ago, on Cyber Monday 2010, that the first $1 billion online shopping day was logged. Cyber Monday once again set the record for the single largest online retail day of the year, with sales reaching nearly a billion and a half dollars. But this year, billion-dollar days were practically the norm. Eleven days surpassed the $1 billion mark in the 18-day stretch from Black Friday through the Tuesday following Green Monday. Sales for the week ending December 16 tallied $7 billion, a new one-week record. 3comScore, Inc., “Five-Day U.S. Online Spending Total for Most Recent Workweek Surpasses $5 Billion as Four Individual Days Surpass $1 Billion in Sales,” 12/16/12; “First Ever $7 Billion Online Spending Week Brings Holiday Brings Holiday Season Spending to $35 Billion, Up 13 Percent vs. Year Ago,” 12/19/12

Shoppers focused online early, with the ten biggest days happening before December 14; Free Shipping Day, Monday December 17th, didn’t make the top ten list, even though it was a billion-dollar day. On the brick-and-mortar side, except for Black Friday, the top shopping days were December 15 or later. 4Internet Retailer, “E-commerce brings nearly half of holiday retail growth,” by Katie Daetsch, 1/9/13

Online creates retail’s silver lining

Overall holiday online spending totaled $42.3 billion, a 14 percent year-over-year increase. That number is impressive in itself, but behind it is an even more impressive result: While online made up 14.5 percent of overall holiday spending, it accounted for more than 45% of overall retail growth. Brick-and-mortar store sales grew just 2.5 percent, or $6.1 billion, compared to online’s growth of $5.1 billion. 5Internet Retailer, internetretailer.com, “E-commerce brings nearly half of holiday retail growth,” by Katie Deatsch, 1/9/13 Without online’s inordinate contribution to sales growth, it would have been a scroogey holiday indeed.

Mobile madness

With the majority of shoppers now carrying smartphones, mobile put up huge growth numbers — again — for the holiday season and proved its legitimacy not just as a shopping channel, but as a buying channel. Mobile sales on Black Friday grew upwards of 60 percent to 16 percent of total online sales. Cyber Monday mobile sales virtually doubled, to 13 percent of total online sales. 6IBM Smarter Commerce, “Black Friday Report 2012,” “Cyber Monday Report 2012,” IBM Digital Analytics Benchmark, 11/12; Overall for December, nearly 23 percent of retail website traffic came from mobile, accounting for nearly 16 percent of sales, according to IBM. 7Mobile Commerce Daily, “Mcommerce sales to account for 15pc of total ecommerce volume this year: report,” by Chantal Tode, 1/11/13

Overall for the year, mobile captured 11 percent of total ecommerce sales, a leap of 81 percent. That percentage is expected to grow to 15 percent in 2013. 8ibid Amazingly, eBay reports $13 billion in total mobile sales for 2012, up 120 percent, and PayPay processed $14 billion in mobile payments for the year, a 250 percent gain. These latter numbers highlight the advantage of solving one of the biggest headaches that keeps mobile shoppers from becoming mobile buyers: entering payment data. EBay and PayPal demonstrate that, when you make it easy for consumers to pay, they’re more than willing to consummate purchases on mobile devices.

Tracking the multi-device shopper

While mobile payment remains a significant hurdle for many consumers, it’s not stopping them from making mobile a cornerstone of their shopping process. Whether or not they finish the purchase on their phone or tablet, shoppers are giving retailers lots of good reasons to focus seriously on the quality of the mobile experiences they deliver. Mobile is an important tool in their shopping arsenal, whether it’s to look something up in their living room because the PC is too far away, to check a price in a store, or to pick items out while they’re riding the subway to work.

Google calls the phenomenon “sequential screening,” the process of moving from one screen to another to complete a task — for example, smartphone to tablet, or smartphone to PC. Smartphones enjoy the highest number of user interactions per day, and they are the devices most commonly used to initiate sequential screen activities. According to Google, 67 percent of shoppers start on one device and continue to another; two-thirds of the time, the device they start with is a smartphone. 9Think With Google, thinkwithgoogle.com, “The New Multi-Screen World: Understanding Cross-platform Consumer Behavior,” August 2012

A Cisco study reaches a similar conclusion, finding that roughly a third of the “digital mass market,” an active subset of online shoppers, start a search on a mobile device and end up making the purchase in-store or on a PC. Twice as many start on a PC and end up buying in-store, and on the flip side, four in ten start in a store and end up buying online (not necessarily from the same retailer — the “showrooming” phenomenon). 10Marketingcharts.com, “Mobile Starts the Purchase Journey for 3 in 10 US Digital Shoppers,” 1/17/13

So what are shoppers doing with their mobile devices short of actually making purchases? As indicated in the accompanying chart, smartphone users are primarily looking for a store, checking prices, and researching items. Tablet users are researching items, checking prices, and reading reviews.

What all this data points to is the fallacy of siloing customers as mobile customers, PC customers, or in-store customers. Even viewing the market strictly in terms of purchasing, to not focus resources on the one in ten, or 1.5 in ten customers who buy on mobile devices is to willingly give up ten percent or more of potential revenues. But when viewed in context of the actual process that occurs — the employing of multiple devices to research, price and buy an item — to settle for delivering anything less than a stellar experience on any device could be an act of retail suicide.

The app vs. website question settled

As retailers have tried to sort out mobile strategies in holiday seasons past, many sweated over the question of whether to channel scarce mobile resources into a dedicated app or a mobile website. Shoppers have stepped up and answered the question: Both. While shoppers prefer mobile websites to apps by a significant margin, a quarter to a third of them are using apps — and time spent in retailer apps grew an eye-popping 525 percent this December versus last. 11TechCrunch.com, “Time Spent In Retailers’ Mobile Apps Grows More Than Five-Fold In A Year, Flurry Finds,” by Kim-Mai Cutler, 1/25/13

A big advantage for mobile websites is discoverability — you can’t search for an app on the Web, only in an app store. And except for those true diehards who live to shop, consumers aren’t necessarily eager to clutter up their phones with apps for all the stores they may be interested in. On the other hand, if you’re a regular Target shopper or a serious Walmart bargain-seeker, for example, you may decide to put their apps on your phone.

Apps have major pluses, if you can convince consumers to load and use them. Personalization has huge potential  — delivering relevant deals — and an app can take far greater advantage of built-in smartphone functionality than a website can. Walmart is one retailer that’s leveraging that functionality in clever ways. When the app detects that you’ve entered a particular Walmart, it switches to “store mode,” showing you that week’s specials, announcing what’s new in that store, and letting you check prices and keep a running total for your purchases by scanning barcodes. You can even check out Walmart.com to look for an item that may be out of stock in the store, or to compare online and in-store pricing — which can stimulate immediate purchases in the store. The enhanced app seems to be working so far — more than 12 percent of in-app purchases are made while the customer is physically in a Walmart store. 12Wired.com, “Walmart.com CEO: We Embrace Showrooming,” by Marcus Wohlsen, 11/23/12

“Retailers are using apps to deal with the virtual showroom conundrum,” Foss says. “They’re focusing on how to keep people in the store — altering the user interface to be more functional and usable, and adding functionality like the ability to check inventory for an item without having to find a sales associate. They need to take advantage of the immediacy, the ‘I want it now’ attitude people have when shopping, to get them to stay in the store and buy the item, or if they’re going to buy it online, to buy it from that store’s site or app and not a competitor’s.”

The big retailers have deepened their mobile pockets and for them, having a dual website-app strategy is a mandatory. But given the way the mobile numbers have been and are almost guaranteed to continue trending, just about every serious retailer needs to find the budget needed to secure a successful presence on every mobile front: smartphone and tablet, app and website.

Happy performance holidays

Despite bigger-than-ever website traffic, performance was remarkably robust across the board. There were no reports of major outages for any of the big retailers. Aside from some slowing on the mobile side on Cyber Monday, both desktop and mobile performance held up well for the full holiday season.

“Overall, desktop numbers held in ranges that are within best practices,” says Aaron Rudger, Keynote marketing owner/Web performance. “Our measured user experience time hovered in the 2.5-3.5 second range.

“On the mobile side, load times were not particularly slow, except for the week that included Cyber Monday, when average load time crept up about three-quarters of a second. That was largely due to Cyber Monday itself, when there was a heavy surge in traffic and things bogged down — load times nearly doubled to more than 18 seconds, and that brought the whole week’s average down. This indicates to me that retailers need to focus more sharply on mobile performance in high peak-demand periods. We’re learning that, even when retailers are projecting significant growth in their mobile traffic, they might not be projecting high enough. Consumers are just flocking to mobile for shopping in greater numbers than even the experts have predicted.”

Mobile or desktop, consumers are embracing the Web to shop in greater numbers than ever seen before. Akamai reports that Cyber Monday retail traffic exceeded 8.5 million page views per minute, the biggest retail traffic spike in history. Amazon captured almost 35 million visits that day, nearly double second-place Walmart’s 18.6 million visits, which itself was close to twice as many as third-place Best Buy’s 9.34 million visits. 13ReadWrite.com, ReadWrite Mobile, “Cyber Monday Scorecard: Web Users Win, Mobile Users Wait,” by Mark Hachman, 11/28/12

One reason for the generally solid performance for the holiday season is that more retailers are expanding their testing and measurement program — or in some cases, starting it up for the first time.

“A lot of the bigger players are doing load testing for their entire ecommerce infrastructure, doing mobile and desktop browser testing at the same time,” Foss says. “Anecdotally speaking, I’d say mobile Web and app testing is up 50 percent or better for our clients. And what we’re seeing from the most forward-looking retailers is that they’ve created a separate program manager just for mobile — that’s a new best practice.”

The 2013 holiday season starts now

Here’s what the 2012 holiday season told us: To maximize revenue, don’t focus on where people buy, but instead on where people shop, and that’s on every device they own. No matter how big a role you think mobile is going to play, it will be bigger; plan for it. On smartphones, shoppers are going to use both websites and apps; if you want to be the leader of the pack, build both. And of course, your best-laid plans are for naught if your sites and apps don’t perform to user expectations; test early and often, and monitor continuously. Let the 2013 holiday season begin!

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