Visitor Monitoring Holiday 2012 | Keynote

Holiday 2012

The high holiday shopping season is just a few short months away, and for retailers, the race is on – not just to get their products and employees ready, but to chase down ever-more-elusive customers armed with an array of connected devices that power their shopping sprees. For years now, industry watchers have heralded the rise of the mobile shopper. But 2012 will likely mark the official dawn of the post-PC shopping era. This year, the plus-or-minus impact of mobile shopping on a retailer’s bottom line will be significant, with as much as 20 percent – fully one in five shoppers – arriving at websites via something other than a computer. 1IBM

In 2012, “mobile” doesn’t just mean logging on via a smartphone or tablet. The “mobile” customer is jumping from smartphone to laptop to tablet, at the office, in the car, on the sofa, in the store. Today’s customers just won’t sit still, and their attention spans and patience are short and getting shorter.

Retailers who don’t have a mobile strategy, or at least a mobile-optimized website, will wish they had one this year. But now there’s a lot more to it than just making sure your site looks and loads OK on a smartphone. There’s not one stream of visitors shopping the desktop site, and another stream shopping the smartphone site, and another shopping the tablet site. They’re bouncing from one to the other depending on where they are and what they want to do, and they expect a site to be similarly satisfying no matter how they’re viewing it. Which means if you lose a shopper on the smartphone or tablet, you may lose them on the desktop, too; you might even lose them for good.

Chasing down the multi-tasking, multi-device shopper requires a commitment to delivering outstanding experiences – and insisting on outstanding performance – on all three screens. But this is the year to definitely think of putting mobile first. Last year’s results are positively an indication of where things will go this holiday season.

2011: Another record-breaking year

Holiday online sales in general, and mobile in particular, continued to smash records in 2011, despite a continued sluggish economic recovery. The November-December period saw a 15 percent jump in online sales, to $37.5 billion, including 10 days that broke the $1 billion mark. 2comScore, “U.S. Online Holiday Shopping Season Reaches Record $37.2 Billion for November-December Period,” press release, 1/4/12 Brick-and-mortar stores saw just 4 percent growth in sales.

Mobile traffic to retail sites more than doubled year-over-year in December, to 14.6 percent, and sales fully doubled to 11 percent. 3IBM, “Mobile Shopping Doubles Over December 2011 Holiday, Reports IBM,” press release, 1/10/12 In other words, $1 out of every $10 came in via a mobile device. On Christmas Day itself, 18.3 percent of traffic and 14.4 percent of sales were via mobile, again more than doubling 2010. 4Internet Retailer, “Mobile commerce played an integral part of the 2011 holiday season,” by Bill Siwicki, 1/6/12

2012: Fasten your seat belts

No retailer can afford to gamble with 10 percent of its sales. And in 2012, consumers are likely to literally double-down on their mobile purchases. This spring, IBM tracked site traffic originating from mobile at 18 percent (tripling the 2011 number) and mobile sales at a "remarkable" 13 percent; IBM projects mobile site traffic to break the 20 percent mark for the upcoming holiday season. 5IBM Enterprise Marketing Management, “5th Annual Online Retail Holiday Readiness Report,” IBM Smarter Commerce, June 2012 Overall, online sales are expected to grow nearly 12 percent to $226 billion in 2012.

Still a game of catch-up for retailers

One would think that with the continued impressive growth of mobile traffic and sales year after year, retailers would be clamoring to create high-performing mobile presences that deliver satisfying user experiences. But available data indicates that this is far from the case.

According to an Internet Retailer survey, among the "Mobile Commerce Top 300" – a mix of chain retailers, catalog merchants, Web-only merchants and consumer manufacturers – almost 60 percent rate mobile commerce as "very important" to their future, but almost as many, 57.8 percent, do not even have an m-commerce site or app. 6Internet Retailer Mobile Commerce Top 300, “Internet Retailer Survey: Mobile Commerce,” pp 38-39, 2012 IBM estimates that 46 percent of retail marketers actually do have a mobile site, and 45 percent have an app, but it’s not clear how much overlap there is between the two groups (many larger retailers have both). 7IBM Smarter Commerce – Redefining commerce in the age of the customer, “Will this 2012 Holiday Be Remembered as the Year of the Couch?” by Jay Henderson, 7/27/12

In either case, the conclusion is alarming: something in the neighborhood of half of online retailers are doing nothing special for mobile, which means their full desktop site – which is likely heavy in features and images and dependent on a high-speed broadband connection – is being pushed across a sluggish and crowded wireless carrier network onto a device small enough to be held in the hand. This is not a recipe for satisfaction on any level. (On the bright side, if the user is holding a tablet and is on a WiFi network, while the site may be a bit slow and not touch-optimized, the experience could still be acceptable.)

Obviously, step one is to build for mobile. But first, it’s important to understand how shoppers are using their arsenal of devices.

The habits of highly effective online shoppers

The online retailing process would seem pretty straightforward–have the right products at the right price, a smooth checkout process, good overall site performance, done. Those are all a given, but just part of the story. So what are consumers really doing when they go online to shop?

According to Forrester Research, 20 percent of shoppers do product research on Google; another 19% visit for product info. Ultimately, 67 percent make a purchase in a brick-and-mortar store, while 58 percent are highly likely to buy online using their computer. 8Internet Retailer, “Product research starts at Google and Amazon,” by Allison Enright, 8/27/12 While that information is not particularly germane to building a site, it does indicate how shoppers start the process, and that minding Google search results is a critical task.

On the mobile side, shoppers make practical, tactical use of their smartphones. Thirty-five percent use them to find a store or to research products and prices., “How Mobile Trends Are Shaping E-commerce,” (infographic), by Kate Freeman, 8/22/12 While they’re actually in the store, one quarter of smartphone owners do price checks, and about a quarter look up online reviews. Nearly 40 percent call somebody to get buying advice. Once they gather their information, 35 percent purchase the product at the store they’re in and 19 percent make the purchase online (not necessarily on their phone). And 37 percent don’t buy anything at all. 10Pew Internet, “The rise of in-store mobile commerce,” by Aaron Smith, 1/30/12

Comparing smartphones and tablets, a solid majority prefer the smartphone for finding a store or checking a price, but prefer the tablet for doing research and reading reviews. When it comes to actually making a purchase, the tablet is preferred by a wide margin – 41 percent to 29 percent – likely because of a combination of the larger form factor and perhaps a greater feeling of security. 11NielsenWire, “How US Smartphone and Tablet Owners Use Their Devices for Shopping,” 5/3/12

How do shoppers feel about the channels available to them? By a large majority, they view brick-and-mortar stores as most reliable and safest. But online via a PC is their overall favorite, and online either via computer or mobile is considered both easiest and most convenient. 12NielsenWire, “Shopper Sentiment: How Consumers Feel About Shopping In-Store, Online, and via Mobile,” 6/6/12

What all this data says is that an effective retail strategy means being everywhere all the time with an experience that’s going to make a consumer pause on their here-there-everywhere shopping journey. The mobile site has to provide quick and easy access to locations, pricing, and some product details. The tablet site has to be rich with product details and reviews. The full site has to give them everything. And of course, the checkout process must be smooth and effortless, including touch-friendly controls as needed.

Even with the advent of responsive design, there’s no “one site fits all.” Each channel needs to address the needs and tasks of the user and the device they happen to be on at the time. Given that smartphone share and tablet share keep getting bigger and bigger, and that there’s no reason to believe that trend will change for a long time to come, a three-screen strategy is the only way a retailer can be confident that they are maximizing their revenue. Performance management is an essential pillar of that strategy.

Racing to the checkout

When it comes to holding shoppers and converting them to buyers, milliseconds count. Take it from the world’s largest retailer. WalMart observes a "sharp decline" in conversion as site load time increases from one to four seconds. From one second to two seconds it plummets by half, and then tails off until it more-or-less levels out at five seconds and beyond. 13

For a long time, four seconds was considered the threshold for acceptable home page load time on a broadband desktop connection, but many performance-minded Web managers are halving that number. Keynote research confirms the wisdom of aiming for faster, with 48 percent of respondents in a recent survey saying they expect two seconds or less. When asked what their performance target is, Walmart Web team members simply respond "faster than it was yesterday." 14ibid

Web-only retailer had a record-breaking holiday last year, logging a 32 percent jump in sales year-over-year, and is expecting similar results this year. eBags is not quite as coy as Walmart in talking about its goals.

“At a high level, our directional performance goals are under two seconds for desktop page load,” says Mike Frazzini, vice president of technical operations. “And that’s all in – all dependent requests and any third party objects that may be called on the page.” achieved that speed last holiday season. On mobile, they "add a second," although that is admittedly an ambitious goal. Page speed is a real challenge in mobile, and slow speed is a top frustration for mobile users, according to the Keynote study. Two-thirds of smartphone users want a site to load in less than four seconds, and 60 percent of tablet users expect less than three – basically, people want desktop speed no matter what device they’re using. 15Keynote Competitive Research, “2012 Mobile User Survey,” 2012 Being fast is a tough feat on mobile, but it is nonetheless a priority for the bottom line. According to the Aberdeen Group, just a one second delay in mobile load time results in a seven percent drop in conversion. 16Adobe Systems, “Adobe 2012 Mobile Consumer Survey Results,” 7/12

Monitor performance always, load test as needed

High-performance websites have performance engrained into their culture; it’s a nonstop focus, 365 days a year. walks the walk, practicing ongoing performance management for both desktop and mobile. They also have a scalability and performance task force that continuously digs into the data to find ways to squeeze more performance out of their properties.

“Fortunately our CEO and CTO and senior leadership highly value performance,” Frazzini says. “They understand that it’s not just a hygiene factor for e-commerce, it’s a motivator. It can improve conversion rates and it certainly improves the experience.”

In addition to ongoing performance management, it’s vital for retailers to stress-test desktop and mobile sites in anticipation of the holiday rush. A crush of visitors on Black Friday or Cyber Monday can bring even a normally well-performing site to its knees and take a significant chunk of revenue down with it.

Don’t be complacent about latency

Mobile, or more specifically over-the-air wireless, presents formidable performance challenges, many of which are inherent in the network itself. The main culprit is latency, that dreaded pause as the signal is relayed back and forth between the mobile device and the cellular network. Every round trip request carries a latency penalty of from 100 to 1000 milliseconds,, “Latency: The New Web Performance Bottleneck,” by Illya Grigorik, 7/19/12 and as the saying goes, 100 milliseconds here, 100 milliseconds there and pretty soon you’re talking real time.

“Every misstep in mobile is magnified because it’s inherently slower,” says Ben Rushlo, Keynote’s director of performance consulting. “Instead of a 100 or 500 millisecond penalty, it’s five seconds on mobile, and that’s the difference between a good and a bad experience.”

Best practices for mobile site construction are mostly intended to address the latency issue, and include these basics:

  • Reduce HTTP requests to 10 or less per page
  • Combine and compress objects including JavaScript, CSS, and images
  • Use fewer domains and redirects
  • Avoid unnecessary third-party objects and content

Keynote’s Mobility blog offers many more tips and resources for boosting mobile performance.

An early holiday present

Creating a uniformly delightful, consistently successful experience across myriad devices is no easy task. It takes an understanding of user goals for each class of device, resources to build the experiences, and a commitment to making sure site performance is exceptional across the board. Retailers that vet the performance of their desktop sites and make the investment in creating high-performance mobile experiences can anticipate better results throughout the holiday season and beyond.

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